IonQ Inc

Previous wording

We are still in the early stages of commercial growth. Since our inception we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend heavily on the successful development and further commercialization of our quantum computing systems. Our net losses were $39.6 million and $27.3 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, we had an accumulated deficit of $391.7 million. We expect to continue to incur significant losses for the foreseeable future as we prioritize reaching the technical milestones necessary to achieve an increasingly higher number of stable qubits and higher levels of fidelity than presently exists—prerequisites for quantum computing to reach broad quantum advantage.

Current wording

We are still in the early stages of commercial growth. Since our inception we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend heavily on the successful development and further commercialization of our quantum computing systems. Our net losses were $77.2 million and $71.1 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $429.2 million. We expect to continue to incur significant losses for the foreseeable future as we prioritize reaching the technical milestones necessary to achieve an increasingly higher number of stable qubits and higher levels of fidelity than presently exists—prerequisites for quantum computing to reach broad quantum advantage.

Previous wording

The recent trends towards rising inflation may materially adversely affect our business and corresponding financial position and cash flows. Inflationary factors, interest rates and overhead costs may adversely affect our operating results. High interest and inflation rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain high or continue to rise) on our operating costs, including our labor, due to supply chain constraints, consequences associated with bank failures, geopolitical tensions in and around Ukraine, Israel and other areas of the world, and employee availability and wage increases, which may result in additional stress on our working capital resources.

Current wording

While inflation has recently been moderated following the Federal Reserve's interest rate increases over the past two years, the Federal Reserve has been cautious to cut interest rates and economic uncertainty remains. Inflationary factors, interest rates and overhead costs may adversely affect our operating results. High interest and inflation rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain high or continue to rise) on our operating costs, including our labor, due to supply chain constraints, consequences associated with bank failures, geopolitical tensions in and around Ukraine, Israel and other areas of the world, and employee availability and wage increases, which may result in additional stress on our working capital resources.

Previous wording

Other income (expense), net consists of gains and losses that arise from fluctuations in foreign currency exchange rates, realized losses on our available-for-sale investments, and certain other nonoperating expenses.

Current wording

Other income (expense), net consists of gains and losses that arise from fluctuations in foreign currency exchange rates and certain other nonoperating expenses.

Previous wording

Revenue increased by $3.3 million, or 77%, to $7.6 million for the three months ended March 31, 2024, from $4.3 million for the three months ended March 31, 2023. The increase was primarily driven by progress on our arrangements to build specialized quantum computing hardware, as well as new revenue contracts under which we provided services during the three months ended March 31, 2024.

Current wording

Revenue increased by $5.9 million, or 106%, to $11.4 million for the three months ended June 30, 2024, from $5.5 million for the three months ended June 30, 2023. The increase was primarily driven by progress on our arrangements to build specialized quantum computing hardware, as well as new revenue contracts under which we provided services during the three months ended June 30, 2024.

Previous wording

Cost of revenue increased by $2.4 million, or 230%, to $3.4 million for the three months ended March 31, 2024, from $1.0 million for the three months ended March 31, 2023. The increase was driven primarily by the increase in labor costs to service contracts, as well as the increase in materials costs for arrangements to build specialized quantum computing hardware, for the three months ended March 31, 2024.

Current wording

Cost of revenue increased by $3.7 million, or 196%, to $5.6 million for the three months ended June 30, 2024, from $1.9 million for the three months ended June 30, 2023. The increase was driven primarily by an increase in labor costs to service contracts, as well as an increase in materials costs for arrangements to build specialized quantum computing hardware, for the three months ended June 30, 2024.

Previous wording

Research and development expense increased by $16.1 million, or 99%, to $32.4 million for the three months ended March 31, 2024, from $16.2 million for the three months ended March 31, 2023. The increase was primarily driven by an increase of $11.4 million in payroll-related expenses, including an increase in stock-based compensation of $7.1 million, as a result of increased headcount and new equity grants, and a $3.0 million increase in materials, supplies and equipment costs.

Current wording

Research and development expense increased by $11.3 million, or 57%, to $31.2 million for the three months ended June 30, 2024, from $19.9 million for the three months ended June 30, 2023. The increase was primarily driven by an increase of $8.3 million in payroll-related expenses, including an increase in stock-based compensation of $5.2 million, as a result of increased headcount and new equity grants, and a $1.3 million increase in materials, supplies and equipment costs. The remaining increase is due to an increase in costs to support research and development initiatives, including a $0.5 million increase in professional service fees and a $0.5 million increase in allocated facility and other costs.

Previous wording

General and administrative expenses increased by $3.4 million, or 33%, to $14.0 million for the three months ended March 31, 2024, from $10.6 million for the three months ended March 31, 2023. The increase was primarily driven by an increase of $3.7 million in payroll-related expenses, including an increase in stock-based compensation of $2.0 million, as a result of increased headcount and new equity grants, offset by a decrease of $0.3 million in professional services fees.

Current wording

Sales and marketing expense increased by $2.6 million, or 72%, to $6.1 million for the three months ended June 30, 2024, from $3.6 million for the three months ended June 30, 2023. The increase was primarily driven by an increase of $2.9 million of payroll-related expenses, including an increase in stock-based compensation of $1.7 million, as a result of increased headcount and new equity grants, offset by a decrease of $0.3 million in professional service fees.

Previous wording

Depreciation and amortization expenses increased by $2.2 million, or 121%, to $4.0 million for the three months ended March 31, 2024, from $1.8 million for the three months ended March 31, 2023. The increase was primarily driven by an increase of $1.0 million and $0.5 million in depreciation expense associated with capitalized quantum computing system costs and other property and equipment, respectively, and an increase of $0.6 million due to amortization of capitalized internal-use software.

Current wording

Depreciation and amortization expenses increased by $2.0 million, or 85%, to $4.3 million for the three months ended June 30, 2024, from $2.3 million for the three months ended June 30, 2023. The increase was primarily driven by an increase of $0.6 million and $0.7 million in depreciation expense associated with capitalized quantum computing system costs and other property and equipment, respectively, and an increase of $0.7 million due to amortization of capitalized internal-use software.

Previous wording

The change in fair value of warrant liabilities increased by $12.2 million, or 339%, to a gain of $8.6 million for the three months ended March 31, 2024, from a loss of $3.6 million for the three months ended March 31, 2023. The decrease was due to mark-to-market adjustments based on changes in the trading price for our public warrants.

Current wording

The change in fair value of warrant liabilities increased by $22.2 million, or 143%, to a gain of $6.6 million for the three months ended June 30, 2024, from a loss of $15.5 million for the three months ended June 30, 2023. The increase was due to mark-to-market adjustments based on changes in the trading price for our public warrants.

Previous wording

Sales and marketing expense increased by $4.0 million, or 151%, to $6.7 million for the three months ended March 31, 2024, from $2.7 million for the three months ended March 31, 2023. The increase was primarily driven by an increase of $3.3 million of payroll-related expenses, including an increase in stock-based compensation of $2.0 million, as a result of increased headcount and new equity grants, and increased costs to promote our services and other marketing initiatives of approximately $0.7 million.

Current wording

Sales and marketing expense increased by $6.6 million, or 106%, to $12.8 million for the six months ended June 30, 2024, from $6.2 million for the six months ended June 30, 2023. The increase was primarily driven by an increase of $6.2 million of payroll-related expenses, including an increase in stock-based compensation of $3.7 million, as a result of increased headcount and new equity grants, and increased costs to promote our services and other marketing initiatives of approximately $0.4 million.

Previous wording

Interest income, net increased by $0.6 million, or 13%, to $4.8 million for the three months ended March 31, 2024, from $4.2 million for the three months ended March 31, 2023. The increase was primarily driven by interest income earned on our cash equivalents and available-for-sale investments due to higher interest rates.

Current wording

Interest income, net increased by $0.5 million, or 5%, to $9.6 million for the six months ended June 30, 2024, from $9.1 million for the six months ended June 30, 2023. The increase was primarily driven by interest income earned on our cash equivalents and available-for-sale investments due to higher interest rates.

Previous wording

As of March 31, 2024, we had cash, cash equivalents and available-for-sale securities of $434.4 million. Excluded from our available liquidity is $2.4 million of restricted cash, which is primarily recorded in other noncurrent assets in our condensed consolidated balance sheets. We believe that our cash, cash equivalents and investments as of March 31, 2024, will be sufficient to meet our working capital and capital expenditure needs for the next 12 months. We believe we will meet longer term expected future cash requirements and obligations through a combination of cash flows from operating activities and available funds from our cash, cash equivalents and investment balances. However, this determination is based upon internal projections and is subject to changes in market and business conditions. We have incurred significant losses since our inception and as of March 31, 2024, we had an accumulated deficit of $391.7 million. During the three months ended March 31, 2024, we incurred net losses of $39.6 million. We expect to incur significant losses and higher operating expenses for the foreseeable future.

Current wording

As of June 30, 2024, we had cash, cash equivalents and available-for-sale securities of $402.0 million. Excluded from our available liquidity is $2.4 million of restricted cash, which is primarily recorded in other noncurrent assets in our condensed consolidated balance sheets. We believe that our cash, cash equivalents and investments as of June 30, 2024, will be sufficient to meet our working capital and capital expenditure needs for the next 12 months. We believe we will meet longer term expected future cash requirements and obligations through a combination of cash flows from operating activities and available funds from our cash, cash equivalents and investment balances. However, this determination is based upon internal projections and is subject to changes in market and business conditions. We have incurred significant losses since our inception and as of June 30, 2024, we had an accumulated deficit of $429.2 million. During the six months ended June 30, 2024, we incurred net losses of $77.2 million. We expect to incur significant losses and higher operating expenses for the foreseeable future.

Previous wording

Our material cash requirements as of March 31, 2024, include operating lease commitments. As of March 31, 2024, we have total operating lease obligations of $23.9 million, with $2.8 million payable within 12 months.

Current wording

Our material cash requirements as of June 30, 2024, include operating lease commitments. As of June 30, 2024, we have total operating lease obligations of $23.5 million, with $3.2 million payable within 12 months.

Previous wording

Our cash flows from operating activities are significantly affected by the growth of our business, primarily related to research and development, sales and marketing, and general and administrative activities. Our operating cash flows are also affected by our working capital needs to support growth in personnel-related expenditures and fluctuations in accounts payable and other current assets and liabilities.

Current wording

Our cash flows from operating activities are significantly affected by the growth of our business, primarily related to research and development, sales and marketing, and general and administrative activities. Our operating cash flows are also affected by our working capital needs to support growth in personnel-related expenditures and fluctuations in current assets and liabilities.

Previous wording

Net cash used in operating activities during the three months ended March 31, 2024, was $20.5 million, resulting primarily from a net loss of $39.6 million, adjusted for non-cash activity, primarily related to the gain recorded as a result of mark-to-market activity for our public warrants, stock-based compensation and other working capital activities. The increase in net cash used in operations from the prior year period was primarily related to increased research and development activities, increased compensation costs as a result of hiring personnel and increased costs incurred as a public company.

Current wording

Net cash used in operating activities during the six months ended June 30, 2024, was $47.0 million, resulting primarily from a net loss of $77.2 million, adjusted for non-cash activity, primarily related to the gain recorded as a result of mark-to-market activity for our public warrants, stock-based compensation and other working capital activities. The increase in net cash used in operations from the prior year period was primarily related to increased research and development activities and increased compensation costs as a result of hiring personnel.

Previous wording

Net cash used in operating activities during the three months ended March 31, 2023, was $13.8 million, resulting primarily from a net loss of $27.3 million, adjusted for non-cash activity, primarily related to the loss recorded as a result of mark-to-market activity for our public warrants, stock-based compensation and other working capital activities.

Current wording

Net cash used in operating activities during the six months ended June 30, 2023, was $29.9 million, resulting primarily from a net loss of $71.1 million, adjusted for non-cash activity, primarily related to the loss recorded as a result of mark-to-market activity for our public warrants, stock-based compensation and other working capital activities.

Previous wording

Net cash provided by investing activities during the three months ended March 31, 2024, was $43.5 million, primarily resulting from cash received from maturities of available-for-sale securities of $115.0 million, offset by purchases of available-for-sale securities of $66.6 million, additions of $3.1 million to property and equipment primarily related to leasehold improvements and the development of our quantum computing systems, and additions of $1.4 million related to capitalized software development costs.

Current wording

Net cash provided by investing activities during the six months ended June 30, 2024, was $51.8 million, primarily resulting from cash received from maturities of available-for-sale securities of $211.6 million, offset by purchases of available-for-sale securities of $146.1 million, additions of $10.6 million to property and equipment primarily related to leasehold improvements and the development of our quantum computing systems, and additions of $2.1 million related to capitalized software development costs.

Previous wording

Net cash provided by investing activities during the three months ended March 31, 2023, was $21.3 million, primarily resulting from cash received from maturities of available-for-sale investments of $88.1 million, offset by purchases of available-for-sale securities of $64.4 million and additions of $1.2 million to property and equipment primarily related to the development of our quantum computing systems.

Current wording

Net cash used in investing activities during the six months ended June 30, 2023, was $0.9 million, primarily resulting from purchases of available-for-sale securities of $185.4 million, additions of $2.4 million to property and equipment primarily related to the development of our quantum computing systems and additions of $2.0 million related to capitalized software development costs, offset by cash received from maturities of available-for-sale investments of $189.4 million.

Previous wording

Net cash provided by financing activities during the three months ended March 31, 2023, was less than $0.1 million, primarily resulting from proceeds from stock options exercised.

Current wording

Net cash provided by financing activities during the six months ended June 30, 2024, was $1.3 million, primarily resulting from proceeds from stock options exercised.

Previous wording

Net cash provided by financing activities during the three months ended March 31, 2024, was $1.4 million, primarily resulting from tax withholding receipts related to restricted stock units and proceeds from stock options exercised.

Current wording

Net cash provided by financing activities during the six months ended June 30, 2023, was $0.5 million, primarily resulting from proceeds from stock options exercised.