IonQ(IONQ) - 2025 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION Unaudited Financial Statements IonQ's unaudited financial statements reveal significant asset and equity growth driven by acquisitions and financing, alongside a substantial increase in net loss from operating expenses Condensed Consolidated Balance Sheet Highlights (as of June 30, 2025 vs. Dec 31, 2024) | Account | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Assets | $1,346.6 | $508.4 | +165% | | Cash and cash equivalents | $140.1 | $54.4 | +157% | | Goodwill | $370.7 | $9.9 | +3643% | | Intangible assets, net | $143.2 | $29.5 | +386% | | Total Liabilities | $168.2 | $124.5 | +35% | | Total Stockholders' Equity | $1,178.4 | $383.9 | +207% | Condensed Consolidated Statements of Operations Highlights | Metric (in millions, except EPS) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $20.7 | $11.4 | $28.3 | $19.0 | | Loss from operations | $(160.6) | $(48.9) | $(236.3) | $(101.8) | | Net loss attributable to IonQ, Inc. | $(176.8) | $(37.6) | $(209.1) | $(77.2) | | Net loss per share (basic and diluted) | $(0.70) | $(0.18) | $(0.87) | $(0.37) | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(85.6) | $(47.0) | | Net cash (used in) provided by investing activities | $(201.0) | $51.8 | | Net cash provided by financing activities | $372.9 | $1.3 | Notes to Condensed Consolidated Financial Statements Detailed notes to the financial statements highlight the significant impact of three 2025 acquisitions on goodwill and intangible assets, dramatic increases in stock-based compensation, and a subsequent $980 million equity offering and Capella Space acquisition - During 2025, the Company completed three acquisitions for a total consideration of approximately $466.3 million: ID Quantique SA ($118.9 million), Lightsynq Technologies Inc. ($306.8 million), and a market intelligence business (~$40.6 million). These acquisitions significantly increased goodwill and intangible assets[114][116][121] - As of June 30, 2025, the company has approximately $122.3 million in remaining performance obligations, with about 50% expected to be recognized as revenue within the next twelve months[151] Stock-Based Compensation Expense (in millions) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $76.2 | $11.6 | $93.6 | $23.9 | | General and administrative | $15.5 | $5.9 | $26.0 | $11.8 | | Total (net of capitalized) | $99.2 | $21.0 | $132.4 | $43.0 | - In July 2025, the company completed an equity offering, raising aggregate proceeds of $980.0 million, net of issuance costs. On July 11, 2025, the company also completed the acquisition of Capella Space Corporation[177][178] Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion highlights strong Q2 2025 revenue growth driven by hardware and acquisitions, significantly offset by escalating operating expenses, resulting in a wider net loss, despite robust liquidity bolstered by a recent equity offering Business and Technical Highlights The company achieved significant progress through strategic collaborations, including partnerships with KISTI and AIST, a $22 million deal with EPB, and key acquisitions of Oxford Ionics and Capella, funded by a $1.0 billion equity offering - Secured a landmark $22 million deal with utility leader EPB to create America's first commercial quantum hub[189] - Announced an agreement to acquire Oxford Ionics, aiming for 10,000 physical qubits by 2027, and completed the acquisition of Capella to facilitate a space-based QKD network[189] - Completed a $1.0 billion equity offering, strengthening the balance sheet to approximately $1.6 billion in pro-forma cash[189] Results of Operations Operations analysis reveals strong Q2 2025 revenue growth to $20.7 million, significantly offset by escalating R&D and G&A expenses, primarily due to stock-based compensation and acquisition costs, resulting in a widened net loss of $176.8 million Comparison of Three Months Ended June 30, 2025 and 2024 (in millions) | Item | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $20.7 | $11.4 | $9.3 | 82% | | Research and development | $103.4 | $31.2 | $72.2 | 231% | | General and administrative | $48.1 | $13.1 | $35.1 | 269% | - The increase in R&D expense for Q2 2025 was primarily driven by a $70.7 million increase in payroll-related expenses, which included a $64.7 million increase in stock-based compensation from new equity grants and acquisition-related awards[207] - The increase in G&A expense for Q2 2025 was primarily driven by a $14.7 million increase in payroll-related expenses (including $9.7 million in stock-based compensation) and a $19.6 million increase in professional service fees, including $14.1 million in transaction costs[210] Liquidity and Capital Resources IonQ maintained a strong liquidity position with $656.8 million in cash and investments as of June 30, 2025, further bolstered by a subsequent $980 million equity offering, expected to cover future capital needs despite ongoing net losses and cash usage in operations - As of June 30, 2025, the company had cash, cash equivalents and available-for-sale securities of $656.8 million[227] - In July 2025, the company completed an equity offering to raise additional capital, with net proceeds of approximately $980.0 million[177][227] - For the six months ended June 30, 2025, net cash provided by financing activities was $372.9 million, primarily from the 2025 ATM Offering Program which raised $358.3 million net[148][237] Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk exposures have occurred since December 31, 2024, with primary risks remaining related to interest rate fluctuations and credit concentration - No material changes related to market risks have occurred since December 31, 2024. The company remains exposed to market risk from changes in interest rates and credit concentration[245] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[247] - There were no changes during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[248] PART II—OTHER INFORMATION Legal Proceedings A securities class action lawsuit (Leacock v. IonQ, Inc. et al.) was dismissed with prejudice by the District Court of Maryland, upheld on appeal, and is now closed after the Supreme Court appeal deadline passed - The securities class action lawsuit (Leacock v. IonQ, Inc. et al.) has been fully resolved in the company's favor. The Fourth Circuit upheld the trial court's dismissal with prejudice, and the deadline for further appeal has lapsed, closing the case[144][251] Risk Factors This section outlines substantial investment risks for IonQ, including its early-stage status, history of losses, significant technological hurdles, intense competition, supply chain vulnerabilities, reliance on key personnel and IP, and financial risks like stock price volatility Risks Related to Financial Condition and Status as an Early-Stage Company This subsection details financial risks from IonQ's limited operating history, including ongoing significant operating losses of $160.6 million in Q2 2025, challenges in scaling and managing growth, and potential limitations on utilizing $224.2 million in net operating loss carryforwards - The company is an early-stage company with a limited operating history, making future results difficult to forecast. It has a history of operating losses, with a loss from operations of $160.6 million in Q2 2025, and expects to incur continuing losses[258][260] - The company faces challenges in scaling its business and manufacturing processes for quantum computers, which have never been produced at a commercial scale[263][264] - As of December 31, 2024, the company had U.S. federal net operating loss carryforwards of approximately $224.2 million, the use of which may be limited by ownership changes under Section 382 of the Code[282][283] Risks Related to Business and Industry This subsection highlights IonQ's significant technical and market risks, including challenges in producing a scalable quantum computer, intense competition from major tech companies and state-sponsored programs, and dependence on the nascent quantum market and cloud provider relationships - The company has not yet produced a scalable quantum computer and faces significant R&D challenges, including improving gate fidelity, error correction, and developing photonic interconnects to scale beyond single-core operation[286][289] - The quantum computing industry is highly competitive, with rivals including large tech companies (Amazon, Google, IBM), other public and private firms, and state-sponsored programs in China, Russia, and Europe[301][302] - The business is dependent on its relationship with cloud providers (AWS, Microsoft, Google), who are also competitors and could use their market position to disadvantage IonQ[299] Risks Related to Intellectual Property This subsection emphasizes IonQ's critical reliance on licensed intellectual property, particularly foundational patents from the University of Maryland and Duke University, alongside risks of patent infringement claims, and U.S. government rights over certain in-licensed IP - The company is heavily reliant on an exclusive license agreement with the University of Maryland and Duke University for foundational patents. Termination of this agreement would significantly harm the business[409][410] - The company faces risks of patent infringement claims that could be costly, result in injunctions, and require redesigning products or obtaining expensive licenses[420] - Certain in-licensed intellectual property was developed with U.S. government funding, subjecting it to federal regulations, including potential "march-in" rights for the government and a requirement for products to be substantially manufactured in the U.S[424] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[456] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[457] Mine Safety Disclosures This item is not applicable to the company - Not applicable[458] Other Information This section discloses that Director Robert Cardillo amended a Rule 10b5-1 trading arrangement on June 13, 2025, for the potential sale of 20,211 shares - On June 13, 2025, Director Robert Cardillo amended a Rule 10b5-1 trading plan for the potential sale of 20,211 shares[459]