The News: On May 8, quantum computing company IonQ announced its earnings for the first quarter (Q1) of 2024. It declared recognized revenue of $7.6 million, slightly above its guidance range, and is increasing its full-year bookings guidance. See the press release on the IonQ website for more details.
By the Numbers: All currency figures are in millions.
| Q1 2024 | Q4 2023 | Q1 2023 | |
| Revenue | $Â 7.582 | $Â 6.106 | $Â 4.285 |
| Operating Expenses | $ 60.458 | $ 60.554 | $ 32.308 |
| Net Loss | $ 39.592 | $ 41.904 | $ 27.338 |
| Total Current Assets | $543.862 | $553.580 | $402.342 |
Quantum in Context: IonQ Announces Q1 2024 Earnings
Analyst Take: IonQ maintains a healthy total assets number compared with D-Wave and Rigetti Computing, the other two public pure-play quantum computing companies. The nearly $40 million net loss and low quarterly bookings require continued inspection.
Net Losses Continue But with a Healthy Bank Account
IonQ’s reported numbers for Q1 2024 were fairly flat compared with those for the final quarter of 2023. Operating expenses in both quarters were about $60 million, and net losses were approximately $40 million. Revenue increased modestly year-over-year. Though it was a 77% increase, it was only $3.3 million, dwarfed by the operating expenses and net loss figures.
Nevertheless, IonQ has over half a billion dollars in total assets, so it can afford to operate for some time while increasing revenue and controlling operating expenses. Many small companies in the quantum computing industry do not have that luxury.
Bullish on NISQ
During the earnings call, IonQ CEO Peter Chapman stated he is bullish that NISQ quantum computers will demonstrate commercial value before vendors implement error correction at scale, creating a market for IonQ’s near-term devices. Most quantum computing vendors make similar claims, given the long-term development roadmaps and the need for continued investments in the technology. I believe we will not see this fault tolerance and Practical Quantum Advantage until 2030, at the earliest.
To remain competitive, IonQ must match the recent low-error results of Microsoft and Quantinuum. IonQ has invested in technology to connect its ion trap quantum processing units, allowing it to eventually build modular systems that can scale to the tens and hundreds of thousands of qubits we will need for breakthrough computations. I hope we see the results of IonQ’s investment this year.
Watch the Bookings
IonQ announced Q1 bookings of $300,000, while raising its bookings expectation range to be between $75 million and $95 million. CEO Chapman attributed his optimism to President Biden signing the US budget bill in March, paving the way for new government contracts in 2024. Aside from the large and somewhat imprecise guidance range, those numbers must be made in the 9 months not covered in the earnings call. Investors and analysts will carefully examine progress made on this metric in the next two quarters.
Key Takeaway
At a macro level, IonQ’s 1Q2024 numbers did not vary much from Q4 2023. Bookings will be the key metric to watch through the fall, with subsequent significant double-digit increases in revenue.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold an equity position in any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other Insights from The Futurum Group:
Quantum in Context: D-Wave Q4 2023 Earnings and Other Numbers
Quantum in Context: Rigetti Q4 2023 Earnings and Other Numbers
Quantum in Context: A Qubit Primer
Author Information
Dr. Bob Sutor has been a technical leader and executive in the IT industry for over 40 years. Bob’s industry role is to advance quantum and AI technologies by building strong business, partner, technical, and educational ecosystems. The singular goal is to evolve quantum and AI to help solve some of the critical computational problems facing society today. Bob is widely quoted in the press, delivers conference keynotes, and works with industry analysts and investors to accelerate understanding and adoption of quantum technologies. Bob is the Vice President and Practice Lead for Emerging Technologies at The Futurum Group. He helps clients understand sophisticated technologies in order to make the best use of them for success in their organizations and industries. He is also an Adjunct Professor in the Department of Computer Science and Engineering at the University at Buffalo, New York, USA. More than two decades of Bob’s career were spent in IBM Research in New York. During his time there, he worked on or led efforts in symbolic mathematical computation, optimization, AI, blockchain, and quantum computing. He was also an executive on the software side of the IBM business in areas including middleware, software on Linux, mobile, open source, and emerging industry standards. He was the Vice President of Corporate Development and, later, Chief Quantum Advocate, at Infleqtion, a quantum computing and quantum sensing company based in Boulder, Colorado USA. Bob is a theoretical mathematician by training, has a Ph.D. from Princeton University, and an undergraduate degree from Harvard College.
He’s the author of a book about quantum computing called Dancing with Qubits, which was published in 2019, with the Second Edition released in March 2024. He is also the author of the 2021 book Dancing with Python, an introduction to Python coding for classical and quantum computing. Areas in which he’s worked: quantum computing, AI, blockchain, mathematics and mathematical software, Linux, open source, standards management, product management and marketing, computer algebra, and web standards.
