Q2 2025 IonQ Inc Earnings Call
Good day and welcome to the ionq. Second quarter 2025 earnings call.
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I would like to turn the conference over to Henley Don Osio investor Relation Director. Please go ahead
Good afternoon, everyone, and welcome to IonQ's second-quarter 2025 earnings call.
My name is Hanley Danario, and I'm the Investor Relations Director here at IonQ. I'm pleased to be joined on today's call by Nico DeFey, IonQ's Chairman and Chief Executive Officer.
Thomas Kramer our Chief Financial Officer.
Jordan Shapiro, our President and General Manager of Quantum Networking.
Frank bis, president of capella and Dean kassman, our senior vice president of engineering and Technology.
By now, everyone should have access to the company's second quarter 2025 earnings press release issued this afternoon, which is available on the investor relations section of our website at investors.ionq.
Please note that on today's call management will refer to adjusted EBA, which is a non-gaap financial measure.
While the company believes this non-gaap financial measure provides useful information for investors. The presentation of this information is not intended to be considered in isolation, or is a substitute for the financial information presented in accordance with gaps.
Your directed to our press release for a Reconciliation of adjusted EPA to its closest comparable. Gaap measure.
During the call, we will discuss our business Outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today.
Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our 10 q that we have filed with the SEC today.
We undertake no obligation to revise, any statements to reflect changes that occur after this call. Except as required by law.
Now, I'll turn it over to Nico deasi, chairman and CEO of ionq.
Good afternoon, everyone and thank you for joining us.
I would like to begin today's call with an update from our board, which your earlier today. Announced my appointment as chairman Peter, Chapman, our previous chairman has now stepped down from his position at inq.
I want to thank Peter for his longtime service to Enqueue over the last six years and wish him the very best in his retirement from IonQ.
I'm honored to receive this further vote of confidence in me by the board, as in queue, continues to extend, its leadership in Quantum Computing and Quantum networking.
As I take on these additional responsibilities, I'm excited to continue executing on our strategic priorities and extending in Q's leadership position in the quantum era.
Enqueue is experiencing incredible momentum.
And I've never been more confident in our potential as we look ahead.
With that, let's get into our latest results.
We had an exciting quarter at inq.
Revenue beats the top end of guidance by 15%. And we completed the largest Capital raise from a single institution in the quantum industry.
Growing our net cash position by 1 billion dollars.
Investment from an affiliate of suss kohana in Greater detail.
The 1 billion dollar investment was closed at a premium to the prior market close.
It is an endorsement of all. We have achieved thus far on employees to deliver in the coming quarters and years.
Significantly expanded our global.
Countries. Building their Quantum, economies.
We signed an mou designed to advance Quantum Computing in Japan with aists GQ. The country's Premier R&D Center for Quantum and AI.
We were also recently named the primary Quantum partner by South Korea's, kissy Institute to build their National Quantum center of excellence.
In the US, we announced the 22 million deal to build the first commercial, Quantum, Computing and networking Hub in America with EPB a pioneering power and Telecommunications Company.
personally, our partnership with the US government continues with our selection by DARPA,
To help inform Quantum industry. Standards
Beyond building these ecosystem Partnerships, we are proving our value on critical commercial applications.
For example, we launched a world first collaboration with astrozen, AWS and Nvidia. The demonstrated, a 20x performance speed up for a key drug development workflow, showcasing practical Quantum advantage
Enqueue is also tackling critical. National energy issues in partnership with Oakridge National Laboratory and the US Department of energy.
We have developed a new hybrid Quantum classical Computing approach. That helps determine the optimal schedule for power generators to meet as electricity demand at minimal cost.
This accomplishment establishes a clear path for our systems to address. The Staggering 60% of energy currently lost due to grid inefficiencies,
As we continue shaping, the global Cano landscape my prepared remarks today will focus on 2 key areas.
First our tremendous strategic progress and second, the strides we're making.
To attract the world's top Quantum Talent.
I'm pleased to report that our strategy has progressed rapidly and gained considerable momentum this past quarter.
Fire acquisition of light sink and planned acquisition of Oxford onyxx.
We've created the most advanced accelerated and Powerful, Quantum Computing roadmap in the world.
As we outlined on our webinar on June 9th.
We believe the combination of enqueue hardware and software prowess Oxford's implementation of an ion trap on a chip provides the team IP technology. Momentum to achieve 800 large little cubits in 2027 and 80 in 2030.
We already have a manufacturing center in Seattle and with the anticipated addition of Oxford onyxx in the UK.
We have an additional site to expand both core Computing R&D and Manufacturing for emia.
We also announced the close of our acquisition of capella in July.
Representing a significant step forward in recognizing.
Our vision of a space-based Quantum key distribution Network.
Frank back is CEO of capella will speak to this in more detail shortly.
All of my colleagues, both veteran and new, are tremendously excited about the power of our talent density and combined capabilities.
there is room for upside in our road map as we continue to integrate and operationalize, our Technologies
But best of all is the truly fantastic combination of low, bill of material costs and near Limitless extensibility.
These attributes of I and q's Quantum, Computing approach are protected by over a thousand, patents and patents. Pending ensuring winning unit economics, at every stage of the quantum Revolution,
Our road map assumes oxygenics can reach 2 million cubits per chip.
However, our Ambitions are to continue, increasing ion density and driving down costs on Oxford's chips to someday, have 10 million ion traps on a single chip.
Then, using Q's modular scaling approach, we will break the single processor barrier.
By connecting two quantum processors via light-based photonic interconnect technology, we plan to scale to tens of millions of logical qubits and deliver immense computational power.
Iq's. Founders have been working on ION traps since the mid-1990s
We find that many announcements from competitors today.
Reflect the progress, our Founders had made by 2010 or even as far back as 2001.
our lead enabled us to put our machines on all major hyperscaler, public clouds in 2021
we are vertically integrated with Decades of engineering improvements under our belt and decades more to come
the beautiful thing about enqueue is quantum, computers.
Is that they have worked since before we went public and we've sold powerful systems for running real world applications that customers are taking advantage of today.
We expect our bill of materials cost to remain in the 8 figures even when we have 80,000 logical cubits and millions of physical cubits.
We think constantly about unit economics, as the history of computing shows that smaller energy, efficient easily operable low-cost computers always win.
It is, of course, also enormously helpful to have the most powerful and useful computers as well.
Ones that have the highest Fidelity and the lowest errors.
So the most impactful applications can run on them.
We also made very tangible progress on delivering our AQ 64 benchmark. The primary technical milestone we set for 2025, and all indications are that we'll be reached in the near term.
Meanwhile, our Quantum networking Vision has expanded considerably this past quarter with the Acquisitions of ID, quantique capella and light sink.
We believe our Quantum networking Solutions will be table Stakes. Not only in a world where RSA encryption can be cracked by quantum computers but also today to protect against the best resource classical cyber security foes
Capella extends, both our Quantum Computing and Quantum. Networking Vision into space.
And a critical race to secure our nation against Global. Bad actors.
Our networking products are production grade and are used by some of the world's household name Financial Services Telecom and government agencies.
Enqueue Quantum, networking offers. The ultimate in communication security, it's based on a simple law of physics and the attempt to eavesdrop on the quantum Channel. Disturbs the single guaranteeing immediate detection,
This isn't just a better file wall firewall. It's a better paradigm.
That provides your customers with absolute certainty that their Communications lines are secure something, no classical system can offer.
Moving on now to Talent.
I'll begin with a wonderful news that our co-founder Dr. Chris Monroe has assumed the role of Chief scientific adviser
He holds the current world record for remote, entanglement generation, and trapped ion technology on achievement. That opens the door to scalable Quantum Networks.
He'll be spending significant time with our other world record holder in this area, Dr. Mihir Bhaskar, former CEO and co-founder of Licensing.
Dr. Monroe, of course, also, previously held a world record for qubit Fidelity. A record currently held by Dr. Chris balance at Oxford Onix.
It's, of course, both exciting and delightful that I enqueue now has world record holders in all our key scaling vectors collaborating on a daily basis to accelerate our momentum towards full fault tolerance.
On the networking side, we're also very pleased that ID quantities. Founder Dr. Greger rubber d will remain in his role. Post closed to continue building on his 20 years of leadership in Quantum networking.
Based in our Geneva office, Dr. Webber D. is a giant of the QKD space and has been shipping ever so impressively, generations of his quantum networking equipment for over a decade now.
World renowned Quantum researcher and Industry. Figure Dr. Marco Pistoria joined us from JB Morgan. Chase where he previously ran all technology research at the biggest bank in the world.
Dr. Btoy is uniquely able to support our global efforts and financial services from both quantum computing and networking perspectives.
Dr. Rick Mueller has joined us to head up Quantum Computing systems development as many of, you know, Dr. Mueller was formerly the director of arpa our nation's intelligence, Advanced research, projects, activity organization, which is tasked with leading high-risk High payoff research for the intelligence community.
Dr. Mueller is also a distinguished researcher. Originally from Caltech with over 20 years of experience at Sandia National Labs.
Finally, I'm excited that Paul day here, has joined the company as Chief legal officer incorporate secretary for inq.
For over 26 years. Paul was the general counsel of EMC Corporation where he was instrumental in driving significant growth for the company during his tenure Revenue, Grew From 170 million to 25 billion dollars in 2016.
Employees grew from 750 to 68,000, and the company's market cap grew from $100 million to $55 billion.
As I've said before, I believe Talent is the proverbial. Warren Buffett. Weighing machine most relevant to any company's long-term prospects.
It's tremendously validating and an outstanding vote of confidence in Inus progress to have such towering world class Talent.
Depart from highly respected roles to become our colleagues at inq.
Quantum, Computing and networking offerings.
We expect to derive, our long-term success, for our ability to land, and expand with both our Computing and networking Solutions.
As a final comment with the strongest, balance sheet, thus, far in enqueue history, we have the ability to continue leading pioneering and growing. Our ecosystem in both Quantum Computing and Quantum networking worldwide. I now hand you over to Jordan Shapiro, president, and general manager of enqueue condo networking, who will touch on our networking highlights this quarter.
Thank you, Nico.
I'm excited to share that after, announcing the formation of our Quantum networking division, last quarter, we are already making significant progress in positioning ion Q as the leading provider of the Quantum Internet.
The takeaways for today are as follows.
Quantum networking provides the ultimate in cybersecurity today.
For customers intent, on long-term security for data transmission, protecting against sophisticated classical threats from Bad actors worldwide.
Quantum key distribution or qkd is the only provably secure protection against potential future, hacking attempts made by quantum computers?
2.
In Q's qkd products are the only ones in the world to have any form of formal security certification.
3 in queue is the only company offering commercial Quantum networks at scale today, that leverage quantum entanglement. Meaning they can be used to connect quantum computers and other Quantum devices.
4 in Q's quantum, computers are the only systems that are being developed with Quantum. Networking built in
As Nico mentioned, our qkd products are already being used in production by Leading governments financial institutions Telecom providers, energy, companies and Enterprises.
Customers buy qkd because it is the only technology that uses the principles of quantum physics to ensure that, no 1 can steal their data.
Software techniques like post-quantum cryptography and algorithms, while offering some protection, are not provably secure.
Over time, their security is decreasing and vulnerabilities are rising.
Our customers trust in queue, because our qkd products are already manufactured at scale.
Fit into a 1-unit. High rack, mountable server and are used every day to protect information across the globe.
Moreover, our Cutting Edge, clavis devices produced by ID quantique received the world's first ever security certification for qkd earlier this year. Via South Korea's national intelligence service.
Meanwhile, ionq is the only company building to Quantum Internet at commercial scale.
We are working with customers to bring all forms of quantum and edge devices onto our quantum networks, from security endpoints to quantum computers.
Enqueue customers will soon be able to Cluster quantum computers for extremely powerful processing?
send ultra-secure data from 1 quantum computer to another
and seamlessly transmit data from Quantum sensors to quantum computers.
A key milestone in this road map, is our ability to build Quantum networks over standard Telecom fiber, which requires technology to convert wavelengths from these Quantum devices to wavelengths compatible with classical Networks.
We are working on that technology with customers today and expect to be the first company in the world to achieve it.
Across all Dimensions, the infrastructure for the Quantum Internet is being built here at ionq.
Now, I'd like to hand the call over to Frank Bacchus, CEO of capella.
Thank you, Jordan.
As both Jordan and Nicolo have highlighted, we are witnessing a revolution.
In the global Computing and networking landscape driven by the maturation and deployment of quantum Technologies.
Today, I'd like to offer the perspective of the space sector on how quantum-enhanced space systems and sensors are poised to transform the future of computing and networking infrastructure, integrating advanced capabilities into everyday applications.
Newly a part of IonQ, Inc.,
Capella is focused on taking quantum technologies into orbit.
Sensors and 1 day quantum computers.
We believe that our Quantum enabled satellites will be highly differentiated in the market, Paving the way for a new generation of ultra secure.
Extremely powerful Computing and networking infrastructure with a global footprint.
Capella has already proven. We can put production grade satellites into orbit,
today we are producing streams of Earth, observation data with a constellation of satellites that operate day or night through clouds and in other challenging conditions, bringing critical information to Leading defense, governments and Enterprise customers.
Ionq will be expanding Capella's, proliferated low earth, orbit constellation to meet Global demand.
The integration of iron 2 Technologies means we will be able to collect and process data in never before. Seen ways and transmit. That data in a way that is provably secure.
Even from the threat of quantum computers.
We are committed to pioneering the New Frontier of quantum Technologies in space.
Providing our customers with an accelerated path to secure high performance and resilient solutions for the future.
Now, I'd like to hand the call over to Thomas Kramer enqueue CFO.
Thank you, Niccolo. Jordan and Frank. It has been truly an exciting quarter on the commercial front and our financials are no exception. Let's walk through this quarter. Financial results in more detail.
As Nico mentioned, we had a fantastic quarter recognizing revenue of 20.7 million beating the high end of our guidance by 15%.
In addition, we are making new Investments to accelerate our road map as well as entering new segments of the market. And we expect to continue to invest in the ecosystems that support our customers.
Accordingly, we saw an adjusted ibod dollars for the second quarter of 36.5 million compared to a 23.7 million loss in a prior year period.
To understand the key drivers behind that number. Let's turn to our expenses.
Total operating costs for the second. Quarter were 181.3 million up to 201% from 68.3 million in the prior year, period, but within our plan for the year,
To break this down further, our research and development costs. For the second quarter were 103.4 million up to 231% from 31.2 million in the prior period.
Recall, that we are investing, heavily in R&D and growing, our R&D headcount to support our road map and customer commitments.
Our sales and marketing costs in the second quarter were 10.9 million up to 77% from 6.1 million in the prior year period.
This increase was due to us growing, both our marketing and sales teams as we continue investing in our commercial efforts.
Our general and administrative costs. In the second quarter were 48.1 million up 269% from 31, from 13.1 million in the prior period.
These increases were primarily driven by an increase in Professional Services and payroll related expenses.
All of this resulted in a net loss of 177.5 million in the second quarter.
Compared to a 37.6 million net loss in the prior year period.
Accounting for warrants can be confusing. So we have always pointed out the impact they have on our results. This Q2 loss includes a non-cash loss of 39.6 million. For the second quarter related to the fair value of a warrant liabilities.
This is a pure accounting, artifact, that is not representative of the operating performance of our business.
These results also include growth in stock-based compensation, expense related to our headcount growth which was 99.2 Million for the second quarter compared to 21 million in the park.
Earlier period.
This elevated stock, based compensation expense was due primarily to incentives issue to newly Acquired and hired employees.
Turning now to our balance sheet.
As we announced previously in July, we raised $1 billion in an equity offering priced at the 25% premium above or closing price for the prior trading session.
This investment, to our knowledge, is the largest investment by a single investor into quantum computing and networking. We are honored to be the recipient.
The equity offering also included 7-year warrants at 99.88 per share, a strong indication of confidence in Iron Q's long-term prospects.
Our proformer cash balance as of July 9th, 2025 was 1.6 billion.
Making ionq the most, well, capitalized pure-play Quantum provider in the market today.
Continuing. Now to our financial Outlook, we are increasing our Revenue. Guidance for the full year, 2025 to be between 82 and 100 million and expect revenue for the third quarter to be between 25 and 29 million.
Last quarter, we projected an adjusted ibid doll, laws of 162 million for the full year 2025.
Pending the close of the Oxford Ionix acquisition, we anticipate that integration and our continued investments into accelerate. Our road map will result in an increase to our cost base for the year. We envision, this will widen our adjusted, EA loss up to 30%, or total of 211 million. Now, back to Uniqlo,
Our customer ecosystem now includes not only the winning, Quantum, Computing road map, but also the clear Global leader in Quantum networking.
We in fact expect our unit economics advantage, and the fully fault tolerant era to be 1 to 2 orders of magnitude lower than competitor efforts enqueue has commercialized considerably, faster than startups, who do not have our 30-year heritage.
We were first to operate on all 3 of the Google Amazon, and Microsoft public clouds 5 years ago.
Looking forward. We believe our unit economic advantages will underpin in Q's. Long-term market. Share leadership.
Enqueue also intends to accelerate this investment in our application roadmap which we outlined in our June 9th webinar.
Given our unparalleled unit economics at scale, we have a clear opportunity in the coming years to profitably, address long hypothesized, Quantum Classics such as the traveling salesperson problem, as well as Shores algorithm.
I'll now turn this over to the operator for Q&A.
Thank you. We will now begin the question and answer session.
To ask a question, you may press star, then 1 on your touchtone phone.
If you are using a speaker-phone, please pick up your handset before pressing the keys.
if at any time your question has been addressed and you would like to withdraw your question, please press star then 2
At this time, we will pause momentarily to assemble our roster.
The first question comes from Quinn Bolton with Needham & Co. Please go ahead.
Hey guys. Uh, congratulations on all the progress, again, this quarter. I guess I wanted to start, uh, with with the revenue that that came in better than expected. That's great to see. Um, 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. Um, how much revenue are you starting to generate from the non-quantifiable?
So uh thank you for uh 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 the pace of implementation.
And were those mostly on the quantum Computing side. Or uh could that include like the Air Force research lab on Quantum. Networking just just some sense on on the mix. Is it still predominantly Quantum computing.
It's an excellent question. But as we've said in previous quarters, many of these projects and particularly the AFL, 1 contains both sides of the coin. It's Quantum Computing and networking.
Program back in early April. And I guess, you know, as you guys have pivoted the roadmap now or accelerated the roadmap with Oxford Ionics, can you just sort of address, you know, how are you feeling about progressing from Stage A to Stage B and QBI?
Yeah, I know, I'm happy to take this it's Niccolo. Um, well, look, the Fantastic thing about the talent density and the technology that we've assembled at enqueue, is it oxyone itself was also, uh, put into the DARPA qbi initiative, uh, earlier this year. So, uh, enqueue is in, you know, a fantastic position overall, um, both ourselves and our announced acquisition, um, you know, obviously our considered, uh, fantastic businesses in their own right on a combined basis. Uh, we think it's, of course, you know, an even stronger offering. Um, so I think it's safe to say that, uh, we continue to, uh, progress, uh, as 2 2 shots on goal, if you will until the acquisition closes. Um, but once it closes, uh, you know, we'll be progressing as a single unified roadmap that we think is extremely powerful when you think about not, just how many logical cubits we're going to have um you know, pretty soon but also the unit economics involved.
Um, you know, we feel very good about our prospects uh both in Phase B and ultimately in Phase B.
Excellent. And maybe last Nico just any update on the timing of the close on Oxford ionics, could you just give us an update where you are on any regulatory approvals that you need? Um, do you still expect to close that transaction later in calendar, 25.
Yeah, we absolutely do, uh, still expect it to close later, um, you know, this is, of course, uh, subject to regulatory approval and, and, and the UK. Um, and, uh, that is proceeding constructively. Um, but we are not able to give a precise date, uh, you know, on this call. Although I think it's safe to say that, um, both Oxford and enqueue, uh, you know, of course, look forward to a closing as soon as possible.
Excellent, thank you.
The next question comes from Troy Jensen, from Canto for Gerald, please go ahead.
Hey gentlemen, congrats on on all the progress and and Milestones here.
Thank you.
Hey, it's a Nicholas maybe for you. First of all, 80,000 logical cubits by 2030, you know, at that level. Can you just talk about? You know, what type of encryption are you guys cracking or? You know how advanced is, is the
The quantum computer at that point.
Yeah, I mean, Troy I, I think we have the leading logical qubit road map Bar, None on a global basis. Um, and I, I say that not only because of the sheer number of logical cubits but also, uh, you know, the, the cost of of a machine of that size, uh, which is, which is very low compared to, um, competitors. You might run into, uh, Troy that probably will have machines that will cost 10 or 100 times more for a similar number of large scale cubits. Um, you know, we published an application road map on June 9th and our webinar and we showed you every year on our road map, what we can do from an application perspective,
So we're showing you what we can do, you know, even at, uh, uh, 1500 large little cubits, we're showing you what we can do, you know, at 10,000 large little cubits and we're showing you can do of course at at 80,000. Um what I think I would would highlight is these are just the known application areas that we've identified that we already are working on. Um, as you've seen throughout the compute space Troy you know, from CPUs to gpus to now our qpsk, kind of emerges, if you will, as an emerging phenomenon, as you start, solving problems with ever, ever more doubly exponentially, powerful machines, as I enqueue has. So, I think this, I think this tremendous upside in the app, uh, road map from Quantum AI.
36 qubit systems. Um, imagine where we're going to be, you know, in the next year, year and a half 2 years as we move to 256 cubits. And, and at some point soon, 10,000, uh, you know, physical cubits in combination with our friends at Oxford onx. Um, it unlocks, you know, a whole world, frankly of value, add for every industry category are already today. Um, you know, we think that you can start to do useful, uh, Shores algorithm work. Um, you know, probably in the 2027 time Horizon, if you look at our road map, um, you know, low low low thousands of logical cubits starts to become. Uh, you know, interesting for us on the encryption cracking front, the traveling Salesforce and problem, I believe is about 1,000 largely cubits as well. Um, and so a lot of work in logistics optimizations will get unlocked in the next 18 months or so. Um, and you know, obviously, I think it's the speed of 4 Troy. Our app team is growing as quickly as we can find the talent.
Um, we recognize that you know, it's a unique set of skills to be able to run Quantum applications on our machines and then translate those for each of the verticals that have slightly different problems that we've gone after. Um, but as I mentioned my prepared, remarks, it's a key investment area for us. So we recognize that the path for growth for us goes, right through our applications and all these different areas.
Great answers. Uh um thank you for that uh just like a follow-up and kind of a couple of couple things together here. Just can you talk about just the Acquisitions? You've done? I think it's like 6 now, you know, integrating all these businesses, you know, I've seen companies struggle doing 1 or 2 Acquisitions, you guys doing a lot at the same time here, you got a lot of money now in your balance sheet, you know, thoughts on kind of more consolidation or you just address that type of, that be great.
Yeah, I mean, look, we we have a couple of things. So, you know, I, I've made more than 50 Acquisitions in my career, as a public company leader uh across you know, over a dozen public companies. And so I like to think we get better at these things over time. Um, you know, you heard from Frank, uh, bakas who was actually on this call, uh, you know, Frank and I were very focused on cultural fit early on, um, we're all professional managers of our firm. Um, you know, we both want to make the industrial logic work. It's the same with oxeon and light sync, uh, and our friends at Cuba Tech and entangled networks. Uh, you know, from earlier this year and last year, uh, and what we're finding actually is um you know, 1 plus 1 doesn't just equal, 3 it equals, you know, 13 or 30. Um, and there is mutual curiosity, uh, at when we merge with, you know, new entities. Everyone is aligned, and of course, taking, uh, you know, stock and and a large IQ. And so, everyone's able to both work together to rally on our biggest Revenue opportunities. Um, but also
To continue growing, you know, their business and its own right? Um, so we're investing in the infrastructure. We need to make sure Integrations go well, uh, we've got experience on it, whether it's it through to, uh, you know, the actual technical road maps, and of course. Um, the soft side if you will, uh, of making sure that people have similar cultural definitions and understandings of success. Um, but honestly, um, you know, we, we, we don't lose any sleep about this, because there is so much to gain together. The teams are proactively, uh, excited and reaching out to 1, another, uh, and doing the integration honestly on their own in a lot of ways. Um, so yeah. I mean, look, we will continue to monitor the landscape. We now have, you know, 2, big growth factors for our business, right? Computing and networking networking, we're doing both on the ground, but also ground a space space of space and space to ground the most vulnerable pieces of our Communications infrastructure. And I think we're finding that, uh, new opportunities are unlocking themselves. Uh, frankly, every week, um,
You know, we have put together a unique asset and business here, right? No, 1 else in the world can do. Networking on the ground in space and Computing. Uh and right now you know, Sovereign nations in the friendly World, want more of everything that I enqueue has to offer. Um and so you know we are we're we're Supply limited, not demand limited uh if that makes sense.
Yeah, great. All right guys, keep up. The great work.
Thanks for it.
The next question.
Morgan Stanley. Please go ahead.
Great, thank you. Um, I wanted to ask about Chris Monroe, coming back. I am getting, you know, kind of questions about it. Seems like it's great news. He's obviously, um, you know, you characterize his capabilities but it caused some concern Nation when he left. And just maybe if you could address, you know, this is there anything to sort of read into the fact that he left and then came back now. Thank you.
Rick Mueller, remarkable story of Chris Monroe, Paul day here. Um, you know, we've also added a long list actually of vp's to the business in the last quarter, in, in areas from uh, you know, business development through to actually acquisition Integrations. And so, um, I think everyone is recognizing that, you know, A's want to work with A's and, and talent success helps attract. You know, yet more of it. Um, I I think Chris, you know, spending more time with us, um, is a tremendous, uh, vote of confidence. Not just in our Computing road map, but also our networking road map. I think it speaks very, highly of, of what he thinks about Chris balance and, uh, and we hear Bhaskar as well. Um, and I think you're seeing that, you know, you've got 4 World Records. If you will held, uh, by individuals who are all at ionq both on the Fidelity side, as well as the networking side. Um, and they want to continue pioneering the future together, right here at enqueue, right? So, um, we're excited to have everyone.
We welcome ever more uh, world class talent. I think we've attracted some um you know in the organization. Uh that haven't been announced today but continue to join us from nation's finest Laboratories and on a global basis. Um, we're always on the lookout for the very best most experienced everywhere from networking to Computing to Applications. Um, so I'd say, you know, look in summary, it's it is I think uh, Vindication of our strategy. Um, we're excited to have Chris here and we're excited to
Have everyone else that we've announced today all working together because we recognize that we're at the intersection of pioneering technology that has never done what we've done in the last decade or 2. And the next, you know, 5 years, 10 years, uh, has even more to be built together.
Very helpful context. Thank you.
The next question comes from Richard Shannon with Craig Haram. Please go ahead.
Hi everybody. This is Tyler Ryan. For Richard Shannon I was wondering can like think the ran at room temperature for compute or sensing purposes and if so what is the plan for those?
And I'll I'll let you go from there. I'll have a follow-up.
Thank you.
This is Dean. Uh so the overall technology that lightsync has in their Quantum memories does require uh cryogenic kind of uh mild cryogenic temperatures to be able to achieve and so they're similar to the cryogenic. Enhanced vacuum systems that uh are used in other trapped Ion systems and so it's not super exotic but it does require lower temperatures to be able to to realize that that Quantum memory.
Yeah, these things.
Always, you know, developing the next generation of all of our Hardware. So um, you know as as Dean put it mild mild cryogenic, we hope becomes milder and we hope the size also um of these of these repeaters shrinks and it should every generation also
Yeah, and then just for you and everybody else, I do understand that uh Diamond memories tend to be cryogenically cooled. I was just wondering if it wasn't cool. Would it be used for
Computer or sensing or if it always had to be.
Um,
Okay, and then when you're considering the combination of Oxford ionics and ion Q, what it what is the plan with these 2 different processors? Is this to
Are we keeping these separate? Or are we putting these together?
And then what are the goalposts for emergence?
And if you can comment on Iceberg Quantum and how that relates to QBI.
So Tyler on the the 2 different technology Stacks. We are absolutely uh integrating them together as we look at our integration plans moving forward, right? The being able to what Niccolo indicated is putting more cubits on a chip as well as. Uh, the technology for the quantum memory and doing Photon capture on those uh chips to be able to network them together. That is absolutely
Absolutely a couple technology on the Computing side, as we kind of scale out, uh, those different Pieces come in at different parts of our roadmap, as we move out to thousands and millions of cubits, but, uh, they're definitely intertwined as we move forward.
Okay, thank you. And I'll hop back in the queue for now.
Thank you. The next question. Comes from David Williams with Benchmark. Please go ahead.
Rats on all the, the really great progress.
And, uh, I guess maybe first, Niccolo, can you kind of run through just how much progress you've had? All the exciting things that are going on at IonQ. Is there a way you could kind of rank order what gets you most energized and maybe where you're most excited?
Um, you know, there's so much goodness going on in the last 6 months. Um, I I, I don't actually think of it that way. I think that we're in the business of quantum in every sense. Um, and Quantum for us is both on the compute side and the networking side. Um, and we care about having the leading technical roadmap 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,
Um, you know, provides the most that is very difficult um to to counteract this amount. Uh if you are a competitor of ours, um the fact that we can build, you know, 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. Um, you know, gives us a phenomenal range uh of solutions to sell to Nations and Fortune 100 companies. Um, if you look at the Acquisitions, we made in the talent we've attracted
Uh, 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 roadmap, the best unit economics. And to make sure we continue to win, uh, you know, market share. Um, and we'll continue to invest to achieve, you know, all 3 or 4 of those, uh, objectives. Um, I've been delighted with every acquisition that we've, you know, consummated. Since I, I, I assume assume this position and I've been really delighted with, um, you know, the the acceleration in Global Technical talent and talent in general, um, that we've been able to attract, uh, and we're just getting started here, right? I've, I've been in this role for 6 7 months, uh, you know, in a full-time basis and so, um, you know, I think it boasts very well for the future. We want to carry on doing what we've done in the last, uh, you know, 2 or 3 quarters. Uh, and the next 2 or 3 quarters and the next 20 or 30 quarters. Um, you know, the the reality is I think people um, tend to underestimate uh how much progress we are making uh, on a monthly quarterly and annual basis, they tend to under
Your estimate the progress that Quantum, uh, you know, computing at IonQ is making because of the double exponential nature, uh, of improvements in every generation. And they underestimate the need for quantum networking, um, because of, uh, the threats, if you will, from not just bad state actors in the classical sense, but because there are bad state actors that are working on, uh, you know, so-called Q-Day and cracking RSA 2048. Um, and so both sides of our business, uh, on the ground and up.
Space is poised, I think, to have inflection points, you know, in the coming quarters and years.
Maybe just, uh, for you Thomas. Um, given these Acquisitions, how should we think about that, the Opex Trends and, and maybe the break even point there is, is there a potential maybe to accelerate the the path to profitability maybe faster than we could thought? Previously just kind of given the different Revenue bases, uh, and and opportunities you have in front of you.
I think that our primary objective is to, uh, accelerate the road map and also to find and Delight customers.
Because this is a giant space and whoever gets there first, and we are the leading Contender. Uh, will reap huge Rewards. Well obviously, we'll take great care when we decide what to spend on. But right now, we've been able to contract our road map so much that this will save us a lot of money in the long term.
Thanks so much and best of luck on the on the quarter.
Yeah, look, I I'd add to that. I, I think Thomas is spot on, right? I mean, when you, when you look at
Competitor announcements that have come out subsequent to our June 9th webinar. Um, you know, you've seen you've seen big companies putting out announcements about being 5 years behind us.
Um and I think they're the closer competitors honestly uh in the quantum Computing space. It is a it is a commanding lead that we have been able to build in the last 6 or 7 months.
The next question is from the line of Kevin gangin with Rosen blood security. Please go ahead.
Yeah. Hi. Um, let me echo. My congrats on on all the progress. Hey uh going off of Troy's acquisition question, any of the areas of the business? You can point out where you might still be missing a piece of the puzzle.
Well, look.
Jokingly say that although I'm a physicist, um, you know, and I I never finished the PHD and so our superpower here is I'm not trying to defend my PhD dissertation. Uh, at any point of the week, I'm I'm happy to defend the PHD dissertations of our fantastic. You know, engineering leadership, and physicists that we've both hired and acquired. Right? And so, you know, we're we're in the early.
Ages and era if you will of the quantum Revolution, which is the biggest revolution in Computing and networking. I think, you know, since computer networking got going frankly, 80 years ago. Um and so as we become a bigger business um as Thomas Lighty pointed out, where we see opportunities to bring road maps, you know, in and move things from move things to the left effectively in our road maps. We'll always look at that. Um, we have a fully-fledged vision obviously, for the Quantum Internet that we talked about in the last couple of calls
And the quantum Internet, someday, will be not only quantum sensors that are capturing information, but quantum computers that are processing that information, performing calculations, and quantum networks that allow you to transmit that information and keep it safe throughout the whole system.
Um, and so that overall vision is a Northstar if you will for us. Uh, and we intend to be the leader in the Quantum Internet and all of its components as that plays out. Um, and as there was an acceleration and spend, not just from governments, but from, you know, Fortune 100 and Fortune thousand companies. Ultimately,
Okay. I I appreciate that color. Um and then as a follow-up, you know I'm still getting a lot of investor questions regarding the intersection of of quantum and AI. So wondering if you can give some details on the the collaboration with aist that is focusing on real world, Quantum AI applications and what some of those applications are
Let me talk more generally, um, than than just on a right. So, if you think about what we announced back in April, um, you know, a world Quantum day, we showed real world industrial, AI examples. Um, in categories, like, um, you know, reducing defects and steel, uh, and of course, training generative adversarial networks to learn faster, and we're continuing to see great progress there, right? I mean, you can, you can actually look at most of our, uh, application successes this year, through the lens of machine learning. Um, whether you want to call that AI or brand that AI, you know, depends both up to you and on the specific application. Um, but I would argue that when you have 20x speed ups and you know, computational drug design with Nvidia AWS astroica, um, you know, you're very much demonstrating machine learning and AI um, you know, through our Quantum systems, um, the the pieces of problems that we're able to, you know, take down
Today and deliver Quantum advantage on. Continue to expand, they are still pieces of problems in the workflows as opposed to, you know, a 1 Stop Shop for a workflow from Soup To Nuts from start to finish. Um, and so you can see that we're collaborating with hyperscalers, uh, and the world's biggest GPU makers, because we realize that together we can deliver the 1 shop, shop super nuts, solution for companies in many verticals, right? And I think you'll, you'll continue to see that frankly, so you'll see us partnering with industry expertise. You'll see us partnering. Um, you know, with GPU and Cloud leaders. Um and you're also going to see, you know, expand the lens of sub-sectors and we we're going to work in from Logistics to, uh, you know, a fair amount of, uh, of Pharma into areas like Financial Services. Um, you know, we hired Marco vistoria, who, were honored as, as working with this, not only because he, he's generated a lot of Ip himself, but also because of course,
He knows more about the financial services industry in Quantum Computing and Quantum networking. And then probably anybody on the planet, right? Um, and the great thing about financial services is is that ultimately, um, you know, you don't need a lot of infrastructure to address really valuable problems really quickly. Um, you know, I talked back to the IPO, uh, about financial services. And the fact that this whole chunks of it, that had been postulated for a decade or 2 to be perfect for quantum computers. We are now at the point where by our economy,
Got it, that makes sense. Okay, great. I appreciate it.
Thanks, Kevin. Thank you.
Thank you.
to ask a question, you may press star then 1 on your touchtone phone,
The next question is from the line of Richard. Shannon from Craig-Hallum, please go ahead.
Hi guys. Thank you for taking my follow-up. So, how many qpu deployments are there between ion q and Oxford ionics worldwide and considering your securing data in Flight. Is there any plans to secure a stationary data as well?
Yeah. So uh, I think the, the short answer is we, we have, uh, sold all the systems uh, that we've ever made at enqueue and we continue to do that. Um, you know, Oxford, uh, I think has has, has sold a system that has been publicly disclosed. I think it's safe to say that there is incredible demand for our 256. Qubit system. Um, that's around the corner and our 10,000 qubit systems on a combined basis. Um, the quantum networking question that you're asking about securing data on the ground. Absolutely. Right. Uh, I'll turn this over to my colleague Jordan, but we're also selling entangled, Quantum, networking Solutions.
And qk solutions, you know, every day. Uh, and we've announced a number of the larger ones. But, you know our, our businesses have already got Quantum networks deployed. Um, you know, in places like Tennessee and Korea and we continue to see, you know, incredible demand from household name financial services, and telecoms organizations, that recognize that, you know, it's like joking like to put it our, uh, our Quantum networking solution. Customers are the ones that are not in the news for data breaches, right? And so, I think as people recognize that increasingly, you know, you will, we will see the demand and Market penetration, uh, you know, Skyrocket, honestly. Um, and as soon as there is a whiff of a bad State actor, if you will making any progress whatsoever, uh, on RSA 248 cracking, I think you're going to see, you know, orders of magnitude step changes in networking demand.
That's right, and that's, that's data in transit, not data at rest, but that's where qkd offers a massively. Powerful Advantage for our customers, uh, in in defending. And it's a particularly weak point, uh, in their security architectures today and 1 that we can help them Shore up.
Awesome, thank you guys. And then with the combined companies between Oxford ionics and ionq it, is there a way to run all of these gates in parallel? And and how many of these could you could you effectively run the whole system in parallel using the electrical control?
And what is that effectively do?
To your gait speed.
And then also I just want to say I I'll get off after this but um congratulations on the road map with the logical qubit counts. That's definitely the most I've seen.
Awesome. Well, thank you for that. I'm turn this over to Dean. Um, but I I think the good news is the short answer.
Is going up.
And, and, and acquisition and merger, but Dean, over to you on the electrical control.
Yeah thanks Tyler. So overall the electronic gate control and the overall move from kind of the 1D architecture to the 2D. Uh and just the inherent way those electronic gates. Work allows for just a massive
I would say increase in parallelism that can occur as you execute 2 cubic Gates and so you can expect overall throughput to really go through a step change. As you go and introduce high density, kind of 2, qubit electronic gate control and this is coupled with what
You know, Niccolo is saying is that uh, there it's also just inherently faster from a gait speed perspective. And so when you're working with uh, the cubits in
Those.
Qubit based traps, they're just simply faster and so, uh, those 2 coupled together represent just a massive. I would say, overall throughput, uh, increase that really just drives. Also, the, the unit economics that Nicola was also mentioning before.
Got it. Thank you guys.
Thanks, Tyler. Thank you.
All right. Well, I'm going to wrap up by saying that we're pleased to have announced another quarter of progress here at inq.
Just a recap, a couple of our highlights.
On, I'm not working in Acquisitions of light sink and kompella. And announced the pending acquisition of oxy onyxx, which accelerates are expected to compute road map.
We will achieve 800 logical cubits in 2027.
80,000 logical cubits in 2030 and I expect hundreds of thousands. If not millions of logical cubits beyond that.
Secondly, we're attracting world-class Talent from all walks of expertise, which we believe is the greatest indicator of long-term success that we can provide.
Thirdly, we raise a billion dollars in additional Capital to enable enqueue to maintain its decisive lead, as a full stack. Quantum Computing and Quantum networking company.
Forth. We expanded our Global footprint with key government and Commercial Partnerships including mous with Japan's AISD, GQ out and South Korea's KY and a world first partnership with astroica AWS and Nvidia delivering a 20x drug development speed up.
We're investing to proliferate. Our satellite constellation with a road map to Quantum networking and Computing in space.
And last but not least, we beat the high-end of Revenue guidance for Q2 by 15%.
We believe the steps we have taken in 2025 today will ultimately set the stage for in Q's long-term leadership, in both Quantum, Computing and networking. Both of which, we believe to be crucially important to the future of our country's National Security and National Economic Security.
With our closed and proposed acquisition and well fortified balance sheet.
We believe we have a clear path to millions and eventually tens of millions of cubits leading to computing. Power previously unimaginable from a classical standpoint.
Join us now and be the first to gain commercial advantage in your industry by leveraging, the massive power of our Quantum networks and computers.
Thank you all for your time today and have a great week.
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