IonQ, Inc. Q2 FY2025 earnings call

• Board change: Niccolo de Masi was appointed as Chairman, with Peter Chapman stepping down. - Revenue beat guidance, and completed a $1 billion capital raise. - Global footprint expansion: Signed MOUs with Japan's AIST and South Korea's KISTI, and announced a $22 million deal in the U.S. - Commercial applications: Launched collaboration with AstraZeneca, AWS and NVIDIA showing 20x performance speed up, and partnered with Oak Ridge National Laboratory on energy issues. - Acquisitions: Acquired Lightsynq, Capella, and planned to acquire Oxford Ionics to accelerate quantum computing roadmap. - Talent attraction: Chris Monroe assumed role of Chief Scientific Advisor, and other top quantum talent joined IonQ.

In the second quarter, IonQ recognized revenue of $20.7 million, beating the high end of guidance by 15%. Adjusted EBITDA loss for the second quarter was $36.5 million compared to a $23.7 million loss in the prior-year period. Total operating costs for the second quarter were $181.3 million, up 201% from $60.3 million in the prior-year period. Research and development costs were $103.4 million, up 231% from $31.2 million in the prior-year period. Sales and marketing costs were $10.9 million, up 77% from $6.1 million in the prior-year period. General and administrative costs were $48.1 million, up 269% from $13.1 million in the prior-year period. Cash, cash equivalents and investments as of June 30, 2025, were $656.8 million. In July, IonQ raised $1 billion in an equity offering, and pro forma cash balance as of July 9, 2025, was $1.6 billion.

• Raised 2025 full-year revenue guidance to between $82 million and $100 million, and expects third-quarter revenue to be between $25 million and $29 million. - Pending close of Oxford Ionics acquisition, integration and continued investments will widen adjusted EBITDA loss up to 30% to a total of $211 million.

Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the 10-Q filed with the SEC, such as risks that could affect financial performance and business operations.

Q: Congratulations on all the progress again this quarter. I wanted to start with the revenue that came in better than expected. You guys are diversifying the revenue stream now with the Quantum Key Distribution, quantum networking efforts. And I was wondering if you could give us some sense how much revenue are you starting to generate from the non-quantum computing efforts in the business? And then I've got a follow-up.

A: So thank you for those words and a great question. We are continuing to deliver on our plans for the year, and the beat on this quarter was primarily due to 2 projects for existing customers where we've been able to accelerate the pace of implementation.

Q: You guys on the -- I guess, in June, you announced the acquisition of Oxford Ionics, you were selected for the DARP quantum benchmarking program back in early April. And I guess, as you guys have pivoted the road map now or accelerated the road map with Oxford Ionics, can you just sort of address how are you feeling about progressing from Stage A to Stage B in QBI?

A: Yes. No, I'm happy to take this. It's Niccolo. Well, look, the fantastic thing about the talent density and the technology that we've assembled at IonQ is that Oxford Ionics itself was also put into the DARPA/QBI initiative earlier this year. So IonQ is in a fantastic position overall. Both ourselves and our announced acquisition, obviously, are considered fantastic businesses in their own right. On a combined basis, we think it's, of course, an even stronger offering. So I think it's safe to say that we continue to progress as 2 shots on goal, if you will, until the acquisition closes. But once it closes, we'll be progressing as a single unified road map that we think is extremely powerful when you think about not just how many logical qubits we're going to have pretty soon, but also the unit economics involved, we feel very good about our prospects, both in Phase B and ultimately in Phase C.

Q: Congratulations on all the really great progress. And I guess maybe first, Niccolo, can you kind of run through just kind of given how much progress you've had, all the exciting things that's going on at IonQ? Is there a way you kind of rank order what gets you most energized and maybe where you're most excited?

A: There's so much goodness going on in the last 6 months. I don't actually think of it that way. I think that we're in the business of quantum in every sense. And quantum for us is both on the compute side and the networking side. And we care about having the leading technical road map on both sides of the house. We also care about being the leading commercialization player or partner, if you will, on both sides of the house. And we believe that the interconnection of the 2 provides a moat that is very difficult to counteract or amount if you are a competitor of ours. The fact that we can build the world's best quantum networks, quantum computers and we can build the repeaters and we can maintain information security as it's transmitted between quantum computers gives us a phenomenal range of solutions to sell to nations and Fortune 100 companies. If you look at the acquisitions we made and the talent we've attracted, you can see that we are investing on both sides of the house to do exactly what I said. We want to make sure we always have the leading technical road map, the best unit economics and to make sure we continue to win market share. And we'll continue to invest to achieve all 3 or 4 of those objectives. I've been delighted with every acquisition that we've consummated since I assumed this position, and I've been really delighted with the acceleration in global technical talent and talent in general that we've been able to attract. And we're just getting started here, right? I've been in this role for 6, 7 months on a full-time basis. And so I think it bodes very well for the future. We want to carry on doing what we've done in the last 2 or 3 quarters -- in the next 2 or 3 quarters and the next 20 or 30 quarters. The reality is, I think people tend to underestimate how much progress we are making on a monthly, quarterly and annual basis. They tend to underestimate the progress that quantum computing at IonQ is making because of the double exponential nature of improvements in every generation. And they underestimate the need for quantum networking because of the threats, if you will, from not just bad state actors in a classical sense, but because there are bad state actors that are working on so-called Q-Day and cracking RSA2048. And so both sides of our business on the ground and up in space are poised, I think, to have inflection points in the coming quarters and years.