IONQ - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to IonQ Second Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jordan Shapiro. Please go ahead, sir.

Jordan Shapiro

Good afternoon, everyone, and welcome to IonQ Second Quarter 2024 Earnings Call. Shapiro, Analysis the Relations and IQ. Jordan Financial President here is and Planning Head name and Vice I'm of at My of Investor pleased our Chief by Officer; and today's and I'm Executive Financial joined IonQ's Chief Kramer, Chapman, President call Thomas Officer; Dr. be to Peter on Relations Technology. By on this company's of Kassmann, XXXX second section Dean and earnings Senior the afternoon, have investors.ionq.com. should press President Vice everyone our issued which quarter available is access Investor Engineering release at website of now, to our the Please adjusted note non-GAAP that refer on today's call, EBITDA, financial management will to a which is measure.

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

directed are its to comparable You a for our release adjusted to reconciliation EBITDA of GAAP measure. closest press

outlook comments due as including with this During Actual from in our number we mentioned forward-looking could differ statements and business discuss the beliefs and risks of filing our a make those our on materially week. outlook These the the other will of or XX-Q based results forward-looking and statements. to SEC events call, uncertainties, today. are

We reflect as after this any required undertake call, by statements obligation revise changes no except to to that occur law.

of Now I will Peter? IonQ. CEO Chapman, over to and turn it President Peter

Peter Chapman

lot of to and Jordan, to announcements today's call. you exciting thank Thanks, a today. are everyone There share joining

customers. demonstrates how than we commercial that our has working and bring We with ever compelling our will the quantum breakthroughs discuss it error closer technical believe recent that momentum we're been

Let's dive in. straight

$X.X the the which have of $XX.X we in the quarter, high of above end million for revenue revenue First, I'm our to $X.X excited for to that quarter. well range million recognized once million the delivering range was again say exceeded

depth. quarter goal will for our financials very meeting the and more $X We confident in discuss this are about Thomas year. also booked million our bookings

heard what different likely quantum technical cubits is mean? in computing. come race industry countries But race have environment between hardware outperform that cubit electronics computer that You to the cubits. a or or noise can companies, the like classical quantum and really the from that a This there his bedevils does that problem modalities computing. space can a It's noise themselves, the cubits. The any is with fidelity interact the produce control in

its company fidelity the production ability to of games a quantum start. is and the enough Key application to more computer and revenue of can applications cubits achieve to run in their any can when accuracy applications. increase run significant computational a and fidelity larger environment,

enables achieved yyterbium. With it the is to less announce error X fidelities forms I'm suggests has IonQ to XX.X% gate excited in barium the XX in gate move And because this correction required. fidelity a science barium. the better We native that of to chose all context, cubit than native or higher fidelity,

today's fidelity, gate announcement better To are towards native important gate gate better ahead. is to get techniques required. even fidelities fidelity other So milestone an beyond

correction, error of but cubic. of requires describe additional thousands tracked non on technique you've more hundreds particularly the Error physical group other In the platforms to results. each error-corrected large using promising produce even think is cubics quantum together past, reliable heard a correction Ion us or volume tens, is correct of and cubits per

It native the correlated of cubits. which also overhead, the fidelity with the is many ratio extra of as requires gates

industry out is use correction the error in meaningful today. for So reach of quantum

difficulties by given time sampling incurs companies, mitigation, can software from is us for Air about that ever-increasing but often computing the is that techniques mitigation the scaling results technique cubits. to error you've poses lengthen heard which requiring generally improve used costs without Another uses additional to commonly it solution. quantum

invented errors IonQ's many new Clifford reduces bringing commercial announce important the am correction a of applications. near-term which gates to used class different gates partial advantage. I with technique, for to thrilled much error computers, for the us quantum of The closer industry-first the accuracy to an within quantum technique Today, offers supercharge potential circuits

for This quantum We to about a Clifford in error algorithms, our algorithms in systems. physical and reduction only per technique more error Tempo requires X doubling of of reduced gates cubic IonQ feature this offer allows the ratio plan accurate but cubics modest X used. a

extend and we and believe SixX With XXXX achievement the systems of FiveX hardware to error in that XXXX using and combination XXXX in can ThreeX correction. of our that improvements, in software we bring production to

combination speeds, for gate applications revenue IonQ. physical along numbers of a with larger of gives confidence us about more and application improved much This, quantum cubics and near-term

For of these application some areas. our investigating revenue. earnings deliver and been where significant significant can we first will applications we generate next we time have value now, discuss call, At the

While side of this exciting development, has been a the been on commercial tremendous business. the IonQ's quarter it equally for technical has

the node for announce Security our ARLIS Intelligence research am applied computing. X delighted systems to process networking I that and quantum quantum bidding for IQ design First, to to blind selected competitive laboratory

based the contract quantum The total is quantum a design fiscal is for phase processed million information U.S. apparatus. security achievement award million. XXXX, a them is being IonQ and to the process ion Congress blind national Blind a initial through remain and XXXX the funded is for key In this of target the computing of computers processors. where on quantum of trapped research computers $XX a what for $X.X

the built work feel We and sales including for year, the X and working of In by ARLIS based is We to our expect the for addition hardware year. What on customers us sales this complete next this on in bookings project, and design. repeat guidance our strength the deals. confident the phase IQ of our to team's on confident have multiyear otherwise large we're the to focus, several large additional agreement. of makes the plans initial end systems ARLIS

system of X systems our construction begun enterprise have have forte manufacturing facility. our final we Washington Seattle, assembly more we at enterprise now started Basel. in Next, officially first And forte of Quantum

production build significant multiple at enabling Our already investment engineering while is off, up time to systems in manufacturing paying resources. tying our a us not now

that engine I pleased The world-class global to to quantum am exciting announce the to the quantum service our Amazon to we've improved of have contract want exclusive an AWS AWS leverage continue of computing. a extended and power set launched windows. computers that computing quantum cloud AWS Bracket. our Alongside developers offer new includes operations, extension, contracts also queuing to feature reservation with who via we and new everywhere XX/X

IonQ's has been another ever customers summary, success In quarter cutting-edge it make features our for for this computers. easier These than quantum strong benefit IonQ. to from

We ThreeXs Cuba of that technology barium have proven our can achieve fidelity.

production bring for developed Quantum partial have an sooner. error even industry-changing We correction reduction that technique for error applications could

to factored to like working of aggressive new AWS those with ARLIS into and for pass computing with have industry. quantum the and advancements road And next our we map to are in the generation over call customers We networking that, continued I'd an leadership like and build the Thomas. applications. quantum

Thomas Kramer

commercial Thank you, are in Peter. exception. quarter It and and has truly no been front an the financials our exciting technical

results through quarter's walk financial Let's in more detail. this

of percentage had we of that the which primarily some our million revenue anticipated on a ability mentioned, end revenue above Peter make $XX.X high due was the is progress As of overperformance provided. our use quarter, completion than to to contracts This more range recognition. recognizing we previously previously strong

contracts million booked of in also $X quarter. second We the sales

will As We when earnings year. we we calls, in since materialize. a year-to-year it in have sale quarter-to-quarter our difficult anticipate bookings is remain target even mentioned in particular or exactly our the lumpiness predict prior cases, to in bookings confident some for

statement. income the down Moving

XX% our QX year. operating prior the To for for and year total research $XX.X period, million, costs our break second were $XX.X from million, million from period. up quarter the within year our but the the million this in down the XX% were for quarter in development and For XXXX, second $XX.X expenses costs plan $XX.X further, prior up

Recall that investing more than projected we this given demand in heavily year. building previously R&D systems of anticipated and are

increase and growing the marketing our was quarter efforts. the teams sales second million, our prior from XX% us as This to investing due $X.X in our million both sales and continue into were costs year in we $X.X marketing Our period. commercial up

the million These increases and in primarily prior period. driven of $X.X administrative second in $XX.X expenses. million, an year were were $XX.X Our the XX% up increase by million quarter payroll-related from costs general in

net many. they pointed out $XX.X in of All quarter loss $XX.X the million million why resulted our have results. is have period. a to in confusing we prior the Accounting for impact of year always This is the compared second this in on warrants to

growth, which million noncash in second results expense for $X.X prior XXXX of $XX the quarter quarter for also of compensation million our current second gain the to results growth year value QX $XX.X our related include the in to related headcount These compared stock-based to warrant liabilities. These a fair include the was million period.

for million quarter a $XX.X year second saw period. million the We prior in of EBITDA loss an the $XX.X compared adjusted loss to

to continue the EBITDA for project adjusted We of $XXX.X year loss an million.

as to XXXX, now were Turning June cash investments balance of equivalents and million. Cash, our XX, $XXX sheet.

is cash continue full stack computing. company We publicly position the quantum strongest to this any traded focused believe on of exclusively

this in by rate have payments purchased have those offsetting collect including systems. we from recent IonQ's increased customers we are beginning while Importantly, full to years, IonQ's who enlarged

sales mentioning world now focus the related spending have run to as bring to is manufacturing ramping increases Our look in employee on also increasingly conservative behind talent We and worth portion up are to largely up investment that our us. a It of significant deals. in the costs is we IQ. large rapidly rate worked quantum best setting of to

financial to outlook. turning our Now

We that our contracts. our between million. revenue confidence between will range of of remain XXXX million guidance million completion of you, $XX of We and in million full quarter our are and a progress we We expect in Back announce to XXXX for the for $X million, be and our $XX increased year third reflecting $XX $XX million. Peter. to bookings to the pleased currently on confident revenue $XX percentage raising guidance

Peter Chapman

the yet you, IonQ boundaries industry era. Thank pushed quarter, the computing bringing to In has this of us the closer Quantum quantum Thomas. closing, again even

for our continue leadership. Our yet, new shifting technical paradigm map to technique road highest an error reduction fidelities and cubic aggressive introduced team a technical unveiled demonstrated our

our Firstly, products. not quantum work in long-term for potential meeting just gives confidence like ARLIS the us our in of exciting also quantum bookings our AWS the but computing year increased networking customers and new and targets with

Financially, we will pursue and ecosystem our bookings other strengthening towards for customers, that market, opportunities the high other believe $X and partnerships Quanta our and the propel for our our in our exceeded shareholders will we in revenue and year. greatly build position the posted end on a quarter goals million stakeholders. solid strong strategic we the range us of To benefiting

partners our and a We investors. I look the for year rest over forward it the to With great and that, with our turn the to customers, to session. of team our like QX question-and-answer ahead would operator our our

Operator

of The Instructions] question from Company. David have first we the Williams [Operator comes Benchmark

David Williams

is maybe does strong a Maybe been color you partial an earlier. map this this scheme really something maybe innovation that Or can towards? the air worked change and just first, other road progress developed that is on you've and Congrats working you on that seen here. as little mitigation? your has the you have had towards mentioned had give mitigation air maybe more How that

to of understand we how about going here the forward. and development this trying of should Just innovation think type

Peter Chapman

I with well. this, I team as have we'll tag when me you Dean here tell

talk take Dean, let maybe technology, So the the about I'll I'll business. you

Dean Kassmann

Yes.

is been right? of we not has part kind been this achieve full that technique have and to We've kind working out correction and So in hiring this that team. for perspective, of high-level on research build talked right and while, been we've that experts continued building development fault a terms where you're air just trying a team they're a to of that our tolerance. From up now, about of the approaches something before trying our is technical

different gates which are instead, comprised and used applications. applications Gates, of are many or trying that you're that problems. what called parts up different This causing system targets solve different But many make of target to are most circuits the to those are Clifford technique those the

one gates noisiest many Clifford the are computers. of in the quantum so And gates

can so to the us And basically reduce you better day. results part up at of end that this of with allows the most the end noisy those technique so circuits

are we approaching into it's the applications going applications, think factor And that the about of so way kind accessible. to

earlier So than the day, a set have what earlier is reachable of make does of at would end applications the larger we thought.

Peter Chapman

meaningful applications. kind little add applications frame up other and significant investments bit And of I'll give point, is we just to in going to time for been the for this of it's confidence Frankly Significant really it, this in plus things early revenue which a us the I starting actual that generation. to have many think speaking, revenue.

Some quantum years wasn't XX companies though yet. there started ago, application development computers even

I for the So now kind time milestone a of this the that of for call. significant is confidence next large terms And think, the kind first at development. to application about application of, is us getting we'll in earnings talk

David Williams

I XX And a press on secondly, and it different mean. maybe hope noticed help few just were contract. release, figures I Great. guess in there ARLIS XX%. X.X% saw like the even the what there me understand exactly I and then those seemed you could and

So of those me understand help just figures one please. what represent

Peter Chapman

on give I'm you color the to Yes. No, happy that.

customers, be existing that an important we opened things the that diving future. but customer. First, into is one another we've and this of like to not the is branch hope And multiyear even before done, into continues the our a relationship government IQ a up of one this, most

we're excited community and to working forward many a ARLIS with customer, we have as So intelligence look years the to them. and

to in As particular this this 'XX so fiscal far funded has 'XX, million. project Carver $XX for and contract

for first this an won of by the the multiphase And of hardware. And contract. a million. year is million expected The end contract $XX remaining the of to largely expect $XX we the million. phase to the win this of $X.X additional so we go have of to next phase the construction It's

of our the $XX.X the the it So bookings to 'XX. will in rest And in expect million contract of year. fiscal the we up contribute 'XX, remaining for goal ARLIS towards show roughly

David Williams

guess you've Perfect. lastly, are Okay. last some you were going the really progress I made maybe you if lots here over quarters and kind then you Great. And maybe are but just tremendous today, IonQ, how moving XX of just And here. think on you and it? boil where progress to down several do today pieces of ago, your we broadly, just about relative where pathway quantum where to sit do were progress? to maybe how real not about the you where months that from think you for But

Peter Chapman

think to overcome place and been think of kind companies continue the in We different there's of of we number and kind of before still of them great across many things not companies, of have modalities of technologies. lots We at a believe interesting I Well, that progress modalities. technical other getting to of a success. IQ, to lots lots do of look just many

new is We as generating which we think, from that and IonQ business, we good kind to next invest position going always hopefully we're think that return to start about of sales. than to do in be that's look the of on. that is rather a exciting phase in to we're for that. And a phase revenue the applications hardware And generating see getting

sales So look is which much on these more -- early I the it's where if it's we hitting at honest too, in significant. from out it's of to something to were think terms part transition even do you just our the from And estimates. be park -- we our we IPO, to beat going that think technical been is I continue financial do the we start what side, original to waiting said when kind and everyone's both we're which once to other of the again, of

thinking our normal on through, be ways sales would think, be public in those to a build million of gone to we via IPO record. mental $XXX with not I process. just going barrier, a which had spec, quite kinds to starting more a track about we public We're we're as mark significant So breaking sales would the

well. milestone I that's significant for So the company a as think

Operator

comes from we have Needham question & Bolton Quinn Co. next of The

Quinn Bolton

add on my about road the just fidelity. cubic to and especially financial maybe milestones, start at hitting to me wanted XX.X% to technical congratulations Let the gate map. I talked updated you

you for I that in map? road on Kind are updated tempo be map. technical updated based what highlights think June. the road back of expected on delivery milestones the targeting in Is published technology late still key you the Are just cubits, now what 'XX? to that the barium of are still

Peter Chapman

want you do Dean, take? Yes, to

Dean Kassmann

So right XX planning. still targeting remains road technical now, as It's We're the at the barium same. our in Tempo. AQ species. cubic map looking still We're

So the unveil in starting what bit right? So those and of cubic kind all fidelities, native a those there, other talked about our component enable terms of X we're our benchmarks more that to of of we've things little et numbers counts, are pieces some cubic is that detail benchmarks and to going cetera. are AQ

particular in you've have that's our this our And we XX.X% But strong. today, and remains only right right? significant. now, strong gotten in announcement not remains So seen -- progress barium, to

other images believe, well. is in of XX as thing some a you've The seen, system loaded I ions

So these milestones are all along to the getting tempo. to way small or

of just we're for so way. first delivering the Yes. kind systems the yes, the But And progress Tempo. we're showing along track manufactured is answer for in the on

Quinn Bolton

those then And sense error I but in no us typical frequently some techniques circuit, to use commonly probably of what on you Clifford announcement guess you on to are you similar there's give of gates, can a error use on gates? from take Perfect. XX% other in techniques percent and used quantum the how Clifford week. And can or this correction the typical gate of Gates, improve the circuits? gates correction gates or can circuit perform XX% the

Peter Chapman

Great question.

other are of many comprised highly the large lot so gates of as they're There's And here, sub-blocks of a class gates. to use a circuits, of that so variational Clifford are we and companies use gates of the applicable Clifford circuits lot well chemistry a applications. different

really allow results. the able to to overall of techniques reduction key us these the pieces target those and be reduce circuits so be overall of noise improve to noise And the to kind able

there's overall a noise stone, away, class years we on, that right? reaches before are this the any of believe, helps fault those still, that is stepping beauty which called will full reduction to is have so address noise gates our tolerance, of And T gates another we philosophy and but industry the as

air just lot a There's tolerance. besides code other to correcting for of blocks building required full

And so value to the of, the both deliver to of Peter systems accelerate in be supercharge the to said, software, as to able kind hardware innovations capabilities we as move forward, able kind are these be sooner. and that

Operator

The next Kevin of we have Garrigan question comes Capital. from WestPark

Kevin Garrigan

all on can echo there? the the me little all can contract of my on To kind on quantum computing if color congrats kind provide a process? different of more the the give many start, they in just progress Were wondering you and were how congrats Let else I'm ARLIS you results. architectures, anything bidding

Peter Chapman

know But sure -- other what obviously, were. strangely, I the they to was there not But know to their RFP. be against system exactly we and it. is nothing companies was -- mean what in of we companies it bid don't the I'm don't won about everyone is I belief open I it send -- that exactly the competed different that number But us didn't for a it modalities responses of And honest, proposed. else. know an they my

Kevin Garrigan

then, of enterprise enterprise one if increase customers the of color in Got opens to us an and adopt it. on another up Have side Got just it. see wondering commercial kind and looking Okay. you can mentioned I'm Avenue. to commercial you give had started And things. ARLIS you computing? Peter, government some

Peter Chapman

different guess of computers. But I networking of One communication the kind systems. networking as doing an customers things. couple them is in. one a development. or little for both doing so. One see in require is quantum We is interest It's things of a both required computing are applications. confusing one and of application there's is purpose and the much other very with quantum interested X because and Yes, quantum different

So that part confusing. be can it of

enterprise When are when Forte we customers for compute, instance, networking. were sales, not interested largely about talking those in

ARLIS is building but for networking. interest the So case their where we're is now systems, a primary

next interest and mentioned, call. earnings coming applications in I And so the of the the as also talk space as see up first increased in about we the And we'll well. compute those

Operator

you, sir. Thank

Morgan Stanley. question comes from have Next Moore we Joe of

Joseph Moore

common competitive along Yes, you you the many winning kind you there's now why so if the it's getting gotten are you of thread opportunities? mean, federal I you've Force, that's other the keep same process. bidding opportunities? Great. selected about between Air a a lines, ARLIS. criteria Can Navy said ahead What of Quantum And opportunities you those talk think

Peter Chapman

complex a of a that question. number I there's That's do things. think

the general, We best have, I in and fact Kind the the here. in early that product the think, industry. the trapping good are a is ion error of winner rates

certainly that to the compared some there. out other of helps modalities So

the ion traps, within sales even plan. I largely a winning then sales a good think we've But good and because we're force got

winning the we're -- can from the IonQ so from And I is see see sales I on all what can that published data is front. as

to And we a of products so sales and that Rima it's and team her have. got the that be mixture

terms are looking I liking ability customers So optically the technical system systems competitive think was the the process across in we're doing. that I what that in bit. The ARLIS distance. capability know customer connect the to included little a the criteria for success in can speak of involve the

investment in systems also photonic to delivering to cap. networking achieved capabilities experimental proven results our date, customers. and a Our and our for feather that track record providing looking and we've in a things They're the we're and in

have We that track record.

what at for are scored high programmatic So that shooting many kind in customer they we requirements of of and scored day, for. of in end the when the terms technical basically the of were us the were looking they

And building to record so the technology that as company both the side. been side on the to in as it speak we've on investing goes well track and

Operator

Peter to I this Please for At turn Instructions] to no go conference now stage, there further ahead. call the be remarks. [Operator closing Chapman seems questions back will

Peter Chapman

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

future. that entire continues the forward for diligent team we fuel a that the quarter meaningful that continued to IonQ commercially. And for to contributed thank such everything to want to look in work their I us, and both Finally, technically

you again, next call. forward earnings thanks the we look joining, to to everyone, talking for So at and

Operator

Thank for Thank that then conference. concludes Ladies and you, sir. us. today's gentlemen, joining you

may You disconnect now your lines.

IonQ (IONQ) 7 Aug 242024 Q2 Earnings call transcript