IONQ - Earnings call transcript Q1 2024

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Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the IonQ First Quarter 2024 Earnings Call. [Operator Instructions]Please note this conference is being recorded. I will now turn the conference over to your host, Jordan Shapiro, Vice President, Financial Planning and Analysis, Head of Investor Relations. Thank you.

begin. may You

Jordan Shapiro

everyone of And by call. everyone. Chief the IonQâ€™s quarter Chief joined Thomas our financial release website and Investor and first President access Iâ€™m Officer; President adjusted at which Vice should Good Dr. to Executive Chapman, pleased on name which now, welcome Officer; IonQâ€™s is quarter press Financial have earnings be of Head Analysis at a and the My Engineering.By earnings Financial is Kassmann, that todayâ€™s to note issued EBITDA, Iâ€™m our Relations is todayâ€™s first Jordan companyâ€™s XXXX here of our IonQ. call afternoon, on measure. Dean Please Planning to Relations Investor section the Peter to management Shapiro, of Kramer, call, refer Vice and and afternoon, President non-GAAP investors.ionq.com. available XXXX on this will

this provides as accordance a not the the considered GAAP. or intended isolation non-GAAP is While information presented in financial financial to information for believes useful investors, substitute presentation this measure with company be of the in advice for

beliefs from no to revise differ closest statements of IonQ. that will outlook this by could statements Peter? of a a of in release and press will as We EBITDA to those as call, the law.Now, changes this today. forward-looking President CEO mentioned our to statements. occur call, results adjusted it make number XX-Q and to Actual outlook or materially based its uncertainties, any undertake directed with to except for and our of over discuss SEC are Peter other including are reflect turn after required comparable We due Chapman, filing week. I to on and the risks our measure.During business events GAAP reconciliation we the our forward-looking comments These obligation

Peter Chapman

to joining for XXXX the very key the again results high call, exceeding guidance Jordan, of revenue quarter. with to our this Thanks, us during started everyone for takeaways follows. pleased lot am but today. thanks range. our IonQ by and discuss a our I as was are end four There

$X.X We the ever. $X.X is the our headway million quarter $X.X and our continued booked in interest that in the our our we stronger our Specifically, customers to and recent for customers of quantum range gain quantum U.S. to passed are in than internal we of with revenue momentum. Between our first raising computing continue research, work computing.IonQ applications million potential $XXX,XXX production towards and year. in federal relative quantum guidance pipeline IonQ networking, we first million delivered most operations and identifying is current serious call.With the making to budget from bookings discussed

space.Letâ€™s walk facility manufacturing Board hire fully IonQ system Seattle sold and IonQ quantum is been through new production executives members, Our we between in already to the Forte detail. computing Enterprise continues area the operational that more minds customer. Meanwhile, are now a team leading first to building and in members, each the has

that contracts of to delivery our confident we remain our budget. that continue on approval performance weâ€™ll quarterly XXXX around that allowed mentioned reflect year federal bookings during attribute has First the going our these marks our team, that uncertainty risk which the by currently highly system not side, on full of to continued believe to since five year impacted we sales.And contracts.Given public the guidance. us last of in this towards acceleration accelerate outlook deliverables existing passed, that to the now has the call, great the to midpoint bringing quarterly million last due planning million on of $X.X in outstanding opportunities by related revenue market are revenue maintaining are federal our full sales this With beat weâ€™ve We technical run. execution we results progress revenue on was financially, system in to XXXX. exceeding U.S. IonQ XXth guidance guidance we Enterprise our identified quarter. excess revenue the our revenue, update to and the range high $XX the end in build production quarter Forte in our have We in earnings Systems XXXX our call.In of outperform This outperformed we

already sold QuantumBasel. been One to of has five the

to engagement of run, financial across various this also high, Enterprise to After QuantumBasel.Our has stages an us first IonQâ€™s countries, which manufacturing been and of sold significantly attention agencies and at expanding pipeline and trajectory. and our medium-term prospects is Forte four. is to giving multiple We government confidence the industries, swiftly more sales near- are for turn even growth all-time the in production remaining in plan we Tempos,

us year our to guidance leads to for this million. of a to the raise million $XX of range All bookings $XX

off. others, level We years fault-tolerant why qubits extension, that applications still our that divergent provide points when is can era, believes are of computing are of away.Our light in quantum and of found within prospect there quantum and unprecedented that are one that third at shed in topic, camp quantum the of on commercial industry for excited question some I sales.Next, computing advantage will large required, achieving There this wanted that the and the within is of of to take can opinion, NISQ by be markets. millions view who

a a Roetteler, to This of in all is and leader for Applications Quantum term achieve One their of have have of customers our our next-generation applications Application Martin areas last their meet efforts. near-term that are about IonQ alternative. application promising. our of IonQ, quantum team defined that through our looks choose now and our am the other unlocks March. deep and to them, everyone.Earlier leadership building my yearly of which want that minutes eyes This have that to for of spend an several pharmaceutical extremely the join our shareholders, be lives the to new research solution will are space, any by commercial corporate customers.Lastly, purchased the talent, applications is customers to quantum We myself today, allure able use look goal to to over I to a few the by has advantage were better in Dr. and some its commercial applications, practical to we IonQ future These and change describe have advantage published building industry to computing.Commercial review of changers the results is I if for real-world the our as preference our development hope I being our ability the Head also IonQ excited Martin laser-focused I Martinâ€™s continue XX blog. particular with requirement.We that commercial letter With enabling value.We that youâ€™ll delivering team. application The we take personally systems confidence for markets. for game spent deliver been that that systems minutes on applications inception. excited our run on in to from and the quantum-based few the announcements letter a on sharing bright we at inspire bench in Microsoft potential to years the believe looking production-ready advantage, had respective of discusses

center development you of shipped XXX cutting-edge in is to and remember are currently employees QuantumBasel first and standing we facility The promise the now last additional a same to on in research and weâ€™re is as of and for system up fully get delivering up weâ€™re delivery contract million manufacturing manufacturing completed located our at facility. manufacture Seattle nearly is new almost running We area.Meanwhile, more IonQ systems that Basel, our enterprise Switzerland, first which signed The infrastructure on key $XX facility weâ€™re the to Forte construction that we year. the our IonQ well. time, may our leveraging will the customer.At have Seattle scale that have data our

our facility and key ecosystem data have IonQ we epicenter, weâ€™ve our technological base.While IonQ Maryland helped ground on very expansion.We with and are are ranks the team commercial our Park, components remain and be build in companyâ€™s growing College in the new area progress in our members also for system the servicing customer our That at this greater Europe and headquarters already happy for first international DC assembling IonQ. strengthening EMEA We national center. will the Switzerland in on

Robert Agency the Obama; announced the Board first the may National President at in the export Stacey new Thomas that has turn variety Counsel a the She You Intelligence Operations Stacey two Cardillo, of where addition industry Customer and Bill Legal of remember under XX,XXX announced members, Director of addition former team we new Geospatial our recently, members.More of Scannell, oversees Giamalis. Sales and President Global we and Officer Technologies, he Chief operations.And call legal two making the an to IonQâ€™s Secretary, has Corporate extensive sector, companies for deep over the Dell technology ideal the sales understanding technology served more review in the Iâ€™d record Chief aspects financials. Thomas? of candidate track decades. like over that, detailed of Legal of six the as the her last the of with to scale sectors of to and quarter, help

Thomas Kramer

Peter. Thank you,

more detail. Letâ€™s through quarterâ€™s walk in financial results this

reminder, even predict prior we to today a willing year-to-year quantum difficult selling, call, a meaningful are In sale our go-to-market the contracts every in earnings the our sales a and customers systems.As we and contracts size with have or materialize. make large to we words, particular for given we large, when sizable lumpy. cases efforts will is other quarter-to-quarter to to as secure prioritize it expect mentioned understand selling the As to access the exactly on are effect, be some potential of side that commitments

case, having with first $XXX,XXX. was booked quarter such IonQ The a

These from million meet which our over-performance we provided. to operating is use the quarter, total statement primarily $XX.X more XXXX, costs due very than is above of further, year XX% the down we nevertheless year.To XX% $X.X sales gain This bookings this QX systems that of our costs demand, will prior sales confidence revenue increase but quarter as stock-based adjusted both previously more by loss plan million. for first the quarter, recognizing quarter first the make of our loss period. non-cash heavily of prior our adjusted within compared previously due results also to million million, in cash quarter the increases to $XX.X progress into up goals we efforts.Our million, million, this were and Recall projected and million, contracts our to million the This of period. to development $XX.X strong and million are recognition.Moving project $XX March for $X.X cash, year in Peter that a for in some mentioned, expense on for our ability high break building equivalents resulted from first an and our $X.X period, $XX.X was expenses.All in XX% investing the saw $XXX.X and for million, to XX, million payroll-related general marketing up a driven EBITDA continued Our warrant year.As our first the in quarter quarter, from prior in than in growing had of include an These XXX% prior commercial million fair the in the to million primarily revenue period.We compensation prior million $XX.X net include prior compared year that for balance the related the million in this up prior we first we in headcount were to million which costs were first related given strong are range in for a of year in $XXX.X value for teams the of first We now $XX.X liabilities. $X.X the the They of as XXXX investments period. in our the $XX expenses the investing from were our were research previously first $XX.X us loss was $XX.X $X.X of year costs down anticipated marketing million, anticipated were a growth, quarter year.Our year income period. compared year administrative $XX.X increase growth was $XX.X the to percentage-of-completion loss up end the and that sheet, quarter million million.Turning the period. an EBITDA the our the R&D year and in for our

publicly on pipeline quantum.Now, between raising position we company and turning announce to believe continue the to guidance strongest financial is to certain exclusively timing will are the close outlook, this that focused $XX XXXX cash traded and pleased larger our to increased of we We $XX a any in deals. million, of confidence million and be bookings our reflecting full-stack

each States new the bookings, considering governmentâ€™s year fiscal of the are million quarter falling the expect and about second We XXXX want full our between cadence contract year of the revenue of into half the the maintaining United the guidance the to our revenue in for back $X.X Peter. you, for year, of we earlier $X.X with to majority echo Peterâ€™s comment end currently September.Back of million.I and

Peter Chapman

our progress the first you, summary, with we in Thank In quarter. pleased very are Thomas.

confidence revenue this to are bookings year.Meanwhile, outperformance a and increased our IAQâ€™s of have both pipeline financial Our delighted performance we applications. clear are sight commercial XXXX for advantage on on line to promising

commercialize the the line with We IonQ to the bench our as of to launched questions. facilities continue will open we that, leadership quantum.And path and have like for that hired Iâ€™d team production Operator allow members have a of deep

Operator

with first Needham is Instructions] [Operator Bolton Our question Company. Quinn from &

Quinn Bolton

follow-up of guys Congratulations like you. may increasing to of follow when to $XX quarter. confidence us to your can close. milestones. on on bigger and around wanted a up guess, these these million level in million sounds to further give of deals, million from be if got million But the any it technical then great?And thereâ€™s I contracts $XX guidance $XX the some a your $XX you to sight some bookings question insight would confidence line that continued last Obviously, you of I on have for better Iâ€™ve financial

Peter Chapman

various and normally, that that this until -- look of gone -- through do top being final us contracts of And kind in was likely year, itâ€™s contract.So number. significantly. of funnel take Yes. how portion you compared in you actually to waited numbers.So the wait us that gives engagements if able But we get a to having in ainâ€™t of confidence. as as addition, stages federal budget confidence the Itâ€™s I weâ€™re a if you on know, that until signature gave over, has what give versus one. it certainly time the we Yeah. more so the approved -- weâ€™ve can opportunities think -- and last a us one the and if happen we over is and come that funnel, at take give that looked thatâ€™s the to them we kind and to waiting, and get increased these of and

So ago. weâ€™re feeling more days year the confident even just about than XX

Quinn Bolton

Perfect.

Are hardware after new related the wondering again, to sales, The could second expand programs? are million question your on not script, types $XX in What $XX approved of I your you having then, identified I bookings of they of Thank you. you guidance bookings, that have mentioned do see? any of you XXXX? your they just, guess, budget contracts, opportunities for some higher opportunities And is, Peter, do was play million those opportunities. if into

Peter Chapman

remember. you in months, these for the So over about talked weâ€™ve selling, the instance, if system one next are XX past --

in related quantum. So $XX these sales, are but million system they to is not related

kind but And opportunity non-system system to so, separate the we sales. of versus out itâ€™s of not -- wanted

towards the the thatâ€™s just works. are the it so, contracts because year, the what back really usually of government way those end is.And loaded So and thatâ€™s

not expect think thatâ€™s this much I see to would year else and to them So thereâ€™s it. later -- we

Thomas Kramer

is number. Yeah. million that this, clarify on the into view a $XX this further is Maybe included probability-weighted guidance

Peter Chapman

Correct.

Quinn Bolton

advance And software are about or best to to DARPA quantum? -- way but sort itâ€™s that to government these of, or applications like the Is them? just get more funded -- just the are of non-system? trying not or things programs of sort hardware that investigate Is they within to develop programs sort sense, some that are certain So related? applications think or

Peter Chapman

want the are of weâ€™re segments, we of -- to by of kinds other kind are out pieces needed quantum ecosystem. -- not different Itâ€™s these but in break which guidance donâ€™t hardware

So of as to and all component -- course sort software that be with has software a that the it will it. -- there of some well, hardware goes

Quinn Bolton

components, So maybe It hardware be but not may system full software. sales.

AFRL So not youâ€™re like QuantumBasel system just the to complete deals? or quantum make trying Itâ€™s the distinction. a the

Peter Chapman

Yeah. Thatâ€™s exactly it.

Operator

from Shadi with Craig-Hallum. is next Our question Mitwalli

Shadi Mitwalli

is for Mitwalli versus here. the you expect do Shannon. for near-term? This Shadi networking market from then anything computing the networking quantum on with what bookings networking, off seeing I have quantum quantum And Starting IonQ year? question two-part in is in this material in Richard a

Peter Chapman

answer are to sales are the system networking next-generation networked The is complementary, that strong, and going quantum be computers. larger able quite together alongside be build with and going these to because things be to larger seems computers quantum to

quantum kind using us, other that set. kind piece technology communication side is also base which of new to is our is, and the is The of

we So, quite bit interest of networking in side. a the see

youâ€™ll be the is our and about guidance, and in more networking bookings hearing So that more included portion. it

Shadi Mitwalli

some mentioned done time you internally? of up I and a quantum something just building regards computer. how chain that and more a on that is supply will reducing this the in more external achieved cost then And something more was last follow be to color able quarter to got something on give Are or

Peter Chapman

process, in wherever couple addition, making Itâ€™s next manufacturer the us? a which to of is a sub the we that build inside. subassembly generations.And to a we One systems itâ€™s happen it ongoing manufacturable, kind little to So for contract purely is just of more themselves out both. over process can of the is going can,

is, quantum the to are which in of so -- built group by engineering nothing generation. generation assemble theyâ€™re basis. on and on does and things of process of group, systems separated who of have out a assembling working computers, having about simple as XXX% like, R&D. their in weâ€™ve quantum past not or systems.So two one getting might kind is on think group, have building being And interrupted another next is focused not time people One being but kind the we course, workforce you, the which computers. And repeatable.And a We

in fifth Forte weâ€™re getting at you would to Now itâ€™s five better the youâ€™ve gotten one, as you the it you as and just heard, Enterprise. And expect, get time building faster. by just

not Ford Henry to weâ€™re yet, So, just but quite to the yet thatâ€™s where weâ€™re computers hit. line assembly quantum for trying

Operator

Our Williams with David next question is Benchmark. from

David Williams

five youâ€™re I the guess go got going contract. the if build about Systems lot maybe first, ahead systems and Seattle, that of just of Peter, in youâ€™re these clearly confidence building youâ€™ve Forte thinking a to

you contracts So going I the how here, to guess your if and would you qualify, you feels cap candy youâ€™re clearly with bookings confident, those rank that thinking building your in more forward know five XX terms days it solidified of but maybe those? itâ€™s Forte ago? machines, moving or youâ€™re about given given investment in how were were maybe more where I

Peter Chapman

Yeah. No.

are Youâ€™re not are the themselves parts XXX% The right. things not, cheap.

expense them, So thought out time, make and wouldnâ€™t ticket the and same sales. go could are you unless these big you at sell you the

So, exactly will risky. or is which something appear predicting in quarter it always

shot remaining the pretty right? already think time, over sold that So good a do we period of have of four, some reasonable selling we one. obviously Weâ€™ve

four. remaining the itâ€™s So

David Williams

then excited an most the of maybe of thereâ€™s through talk some color opportunity youâ€™re there. areas Can just talked of particularly gave excited? you areas some example the maybe some new where other and about application where pharmaceuticals. youâ€™re and maybe you And you great really think secondly, for about Thanks you that

Peter Chapman

excited weâ€™ve at things terms kind the lot able is of to which that a being IonQ be obviously and chemistry. quantum been some learning, something the of to machine simulate is others applications. of signposted, which of Thereâ€™s very in Pharmaceuticals progress we first of weâ€™re recent on believe in work will continue So, already making one particular, about.

excited spot Optimization weâ€™re work. for quantum. a that always sweet about So, is

maybe the would strong AI ChatGPT then, And well. be probably the as last is in be better would the which which highest at that one, the one, speculative like sense. or AI more moment, So or

to So out from Iâ€™m AI. separate ML trying

Kevin Garrigan

and the quantum pipeline types congrats in my just computing. us wondering all seeing some echo customers of commercial on your me you on progress. Are Iâ€™m give Let for well? expansion customer those as enterprise color sales can any adoption if of

Peter Chapman

States a seems I in quite that if to world, regionally think, quantum, of of and be and going in United all Board the an up. you whatâ€™s the across kind if investment systems, heating on, look interest within nothing, and available bit across the thereâ€™s

a certainly itâ€™s at to in good So time quantum be moment. the

Kevin Garrigan

with definitely No. agree that. I

kind of are a regarding the on to more of how or quick the towards government they these to enough the Okay. that want. they follow of going geared out are or of Quinnâ€™s that to that kind of kind computers off up Perfect. use million the government as figure government, arenâ€™t kind they good projects And theyâ€™re quantum just question are computers starting new just perform has opportunities, the -- opportunities that application current $XX the

something looking to switch as theyâ€™re better such computing? quantum So to

Peter Chapman

people IonQ increasingly starting start actually time, weâ€™re real. see think just, quite itâ€™s -- to a just to long this increasingly this not be actually hey, might quantum people, say, I has thought lots of for -- but itâ€™s thing

into coming And even as are the have And useful thereâ€™s actually quantum near hey, so, in naysayers saying, out government that computing now there obviously we and well. the spreads -- future. might actually the

And industry.So, talking people broadly so example recently across fault that confidence quantum of on gives entire on work about Iâ€™m in lots is -- about just general. the an been and tolerance it thereâ€™s

point fault five like be years, to people And youâ€™ll a back ago, quantum five actually computer the reasonable. never computer. where been donâ€™t getting that itâ€™s go it five like, if to now and oh, to just So, able Iâ€™ve oh, were the that with looks a you was, be years could then might quantum build you tolerance oh, weâ€™re said, company itâ€™s funny know build you to years, back, at go even

a So getting bit slow itâ€™s Itâ€™s process, a -- a weâ€™re slow of making but there. progress. weâ€™re

Operator

end we session, question-and-answer to have turn call and for the to Chapman of the would Peter back Ladies the like closing gentlemen, remarks. reached and I

Peter Chapman

want thank today and all for joining everyone the to I us questions.

IonQ far we the the to so work forward want we in everything have thank I future. everything diligent and for Thanks Finally, team again, look allowed to entire that to us the continued achieve everyone.

Operator

This for conference. your Thank concludes participation. todayâ€™s you

your disconnect time. at may You lines this

IonQ (IONQ) 8 May 242024 Q1 Earnings call transcript