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What changed in IonQ, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of IonQ, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+523 added−528 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in IonQ, Inc.'s 2025 10-K

523 paragraphs added · 528 removed · 399 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

94 edited+29 added−40 removed76 unchanged
Biggest changeIt includes software toolsets for converting quantum programs from users into a set of instructions the computer hardware can execute to yield the desired computational results. To support system access from the cloud, we offer cloud management tools and application programming interfaces (“APIs”) that permit programming jobs to run remotely.
Biggest changeOur systems employ a set of lasers, electrodes and antennae to deliver signals precisely tailored to achieve this manipulation. An operating system manages the quantum computer, maintaining the system in operation. It includes software toolsets for converting quantum programs from users into a set of instructions the computer hardware can execute to yield the desired computational results.
Market Opportunity: A Future Driven by Quantum Computing The potential uses for quantum applications are widespread and address a number of problems that would be impossible to solve using classical computing technology.
Market Opportunity: A Future Driven by Quantum The potential uses for quantum applications are widespread and address a number of problems that would be impossible to solve using classical computing technology.
Unlike quantum computer systems that are limited to a single class of problems due to their architecture, we believe that any computational problem with arbitrary internal algorithmic structure could be optimized to run on our system, although this has not been demonstrated at scale. 10 Quantum Error Correction A key milestone in building larger quantum computers is achieving fault-tolerant quantum error-correction.
Unlike quantum computer systems that are limited to a single class of problems due to their architecture, we believe that any computational problem with arbitrary internal algorithmic structure could be optimized to run on our system, although this has not been demonstrated at scale. Quantum Error Correction A key milestone in building larger quantum computers is achieving fault-tolerant quantum error-correction.
The point at which a quantum computer is able to perform a particular computation that exceeds its classical counterpart in speed or reduces its cost to solution is known as the point of “quantum advantage.” 6 Given the substantial research and development required to build a modern quantum computer that is both functional and practical, industry experts describe the remaining challenges in quantum computing to achieve quantum advantage as being solved in three phases.
The point at which a quantum computer is able to perform a particular computation that exceeds its classical counterpart in speed or reduces its cost to solution is known as the point of “quantum advantage.” Given the substantial research and development required to build a modern quantum computer that is both functional and practical, industry experts describe the remaining challenges in quantum computing to achieve quantum advantage as being solved in three phases.
The development of large-scale quantum computing and networking systems is still in early stages, and several potential engineering architectures for how to build a quantum computer or network have emerged. We are developing quantum computers based on individual atoms as the core qubit technology, which we believe has key advantages in scaling.
The development of large-scale quantum computing systems is still in early stages, and several potential engineering architectures for how to build a quantum computer or network have emerged. We are developing quantum computers based on individual atoms as the core qubit technology, which we believe has key advantages in scaling.
Similarly, there are probability distributions that can only be efficiently distinguished from each other using a quantum computer. In these examples, models utilizing quantum circuits can be used to capture complex internal structures in the data set much more effectively than classical models. In other words, quantum computers can “learn” things that are beyond the capabilities of classical computers.
Similarly, there are probability distributions that can only be efficiently distinguished from each other using a quantum computer. In these examples, models using quantum circuits can be used to capture complex internal structures in the data set much more effectively than classical models. In other words, quantum computers can “learn” things that are beyond the capabilities of classical computers.
We believe this protocol can be combined with all-optical switching technology to enable multi-QPU quantum computers at large scale. We at IonQ have assembled a team with deep expertise in photonics and are designing Photonic Interconnects that will enable our systems to compute with entangled qubits spanning multiple QPUs.
We believe this protocol can be combined with all-optical switching technology to enable multi-QPU quantum computers at large scale. We have assembled a team with deep expertise in photonics and are designing photonic interconnects that will enable our systems to compute with entangled qubits spanning multiple QPUs.
Compared to the trapped ion approach, the qubits generated via superconducting suffer from short coherence times, high error rates, limited connectivity, and higher estimated error-correction overhead, ranging from 1,000:1 to 100,000:1 to realize the error-corrected qubits from physical qubits. There are companies pursuing photonic qubits, such as PsiQuantum and Xanadu, among others.
Compared to the trapped ion approach, the qubits generated via superconducting suffer from short coherence times, high error rates, limited connectivity, and higher estimated error-correction overhead, ranging from 1,000:1 to 100,000:1 to realize the error-corrected qubits from physical qubits. 14 There are companies pursuing photonic qubits, such as PsiQuantum and Xanadu, among others.
Classical computers cannot solve these problems because the calculations would take far 4 too long (i.e., millions to trillions of years) or because the problems involve quantum systems that are far too complex to be represented on a classical computer, even if their remarkable pace of development were to continue indefinitely.
Classical computers cannot solve these problems because the calculations would take far too long (i.e., millions to trillions of years) or because the problems involve quantum systems that are far too complex to be represented on a classical computer, even if their remarkable pace of development were to continue indefinitely.
Maintaining identical, replicable, and cost-effective qubits is critical to our potential competitive advantage, and we have developed a process to produce, confine and manipulate atomic ion qubits. 9 To create trapped atomic ion qubits using our approach, a solid source containing the element of interest is either evaporated or laser-ablated to create a vapor of atoms.
Maintaining identical, replicable and cost-effective qubits is critical to our potential competitive advantage, and we have developed a process to produce, confine and manipulate atomic ion qubits. To create trapped atomic ion qubits using our approach, a solid source containing the element of interest is either evaporated or laser-ablated to create a vapor of atoms.
A 2019 publicly available report by a leading third-party consulting firm describes these phases—and the associated technical barriers—as paraphrased below: • Noisy and intermediate-scale quantum (NISQ) computers : The earliest stage of development will see component demonstrations and intermediate-scale system development with limited commercial application.
A 2019 publicly available report by a leading third-party consulting firm describes these phases—and the associated technical barriers—as paraphrased below: • Noisy and intermediate-scale quantum, or NISQ, computers : The earliest stage of development will see component demonstrations and intermediate-scale system development with limited commercial application.
Our engineering effort is focused on reducing the size, weight, cost, and power consumption of the QPUs that will be the center of each generation of the modular quantum computer, while increasing the number of QPUs 11 manufactured each year. We intend to focus on achieving these engineering efforts over the next several years.
Our engineering effort is focused on reducing the size, weight, cost and power consumption of the QPUs that will be the center of each generation of the modular quantum computer, while increasing the number of QPUs manufactured each year. We intend to focus on achieving these engineering efforts over the next several years.
Quantum computing uses information in a fundamentally different way than classical computing. Quantum computers are based on quantum bits (qubits), a fundamental unit that can exist in both states 0 and 1 simultaneously (superposition). As a result, we believe that quantum computers can address a set of problems classical computing may never solve.
Quantum computing uses information in a fundamentally different way than classical computing. Quantum computers are based on quantum bits, or qubits, a fundamental unit that can exist in both states 0 and 1 simultaneously (superposition). As a result, we believe that quantum computers can address a set of problems classical computing may never solve.
A cornerstone of the global agriculture industry, the Haber-Bosch process consumes about one percent of the world’s energy and produces about one percent of the world’s carbon dioxide. Agronomists have attempted to model the core molecule in nature’s nitrogen fixation process, but the molecule is too large for today’s classical supercomputers to 5 simulate.
A cornerstone of the global agriculture industry, the Haber-Bosch process consumes about one percent of the world’s energy and produces about one percent of the world’s carbon dioxide. Agronomists have attempted to model the core molecule in nature’s nitrogen fixation process, but the molecule is too large for today’s classical supercomputers to simulate.
To obtain 99.9% accuracy, a classical computer requires around one million simulations. Quantum algorithms, however, can achieve the same accuracy using only one thousand simulations, thereby significantly reducing the time it takes to perform Monte Carlo simulations. This is especially important when running these simulations is expensive.
To obtain 99.9% accuracy, a classical computer requires around one million simulations. Quantum algorithms, however, can 6 achieve the same accuracy using only one thousand simulations, thereby significantly reducing the time it takes to perform Monte Carlo simulations. This is especially important when running these simulations is expensive.
The trapping is done in an UHV chamber to keep the ions well-isolated from the environment. Isolating and loading a specific isotope of a specific atomic species ensures each qubit in the system is identical. Two internal electronic states of the atom are selected to serve as the qubit for each ion.
The trapping is done in a UHV chamber to keep the ions well isolated from the environment. Isolating and loading a specific isotope of a specific atomic species ensures each qubit in the system is identical. Two internal electronic states of the atom are selected to serve as the qubit for each ion.
We intend to build upon our technological lead by leveraging our world-class team of leaders and engineers who are pioneers in quantum computing and networking, with proven track records in innovation and technical leadership.
We intend to build upon our technological lead by leveraging our world-class team of leaders and engineers who are pioneers in quantum computing, with proven track records in innovation and technical leadership.
We have developed new approaches, such as environmental conditioning, that we believe will substantially reduce the time and cost to prepare the UHV environment to operate the quantum computer. • Executing high fidelity gates with all-to-all connectivity : While trapped ion qubits feature the highest fidelity entangling gates, it is nevertheless a major technical challenge to design a control scheme that enables all qubits in a system to form gates with each other under full software control.
We have developed new approaches, such as environmental conditioning, that we believe will substantially reduce the time and cost to prepare the UHV environment to operate the quantum computer. • Executing high fidelity gates with all-to-all connectivity : While trapped ion qubits feature the highest fidelity entangling gates, it is nevertheless a major technical challenge to design a control scheme that enables all qubits in a system to efficiently form gates with each other under full real-time software control.
The key economic driver permitting the expansion of digital computer applications to new segments of the market was this very phenomenon of capability doubling in each generation with costs rising only modestly.
The key economic driver permitting the expansion of digital computer applications to new segments of the 11 market was this very phenomenon of capability doubling in each generation with costs rising only modestly.
Our Business Model Quantum Computing and the Compute Access Model As quantum hardware matures, we expect the quantum computing industry to increasingly focus on practical applications for real-world problems, known as quantum algorithms.
Our Business Model Quantum Hardware and Compute Access Model As quantum hardware matures, we expect the quantum industry to increasingly focus on practical applications for real-world problems, known as quantum algorithms.
If this barrier can be overcome, we believe that quantum computing will offer practical solutions to meaningful problems superior to those provided by classical computers. • Fault-tolerant quantum computing (FTQC) : This last stage will see large modular quantum computers with enough power to tackle a wide array of commercial applications relevant to many sectors of the economy.
If this barrier can be overcome, we believe that quantum computing will offer practical solutions to meaningful problems superior to those provided by classical computers. 7 • Fault-tolerant quantum computing, or FTQC : This last stage will see large modular quantum computers with enough power to tackle a wide array of commercial applications relevant to many sectors of the economy.
For example, in a superconducting qubit, the qubit tends to lose its coherence within approximately 10 to 50 microseconds. Even neutral atoms are perturbed to some extent when they are trapped in space. In contrast, trapped ion qubits are confined via electric fields in an ultra-high vacuum environment, and their internal qubits are hence perfectly isolated.
For example, in a superconducting qubit, the qubit tends to lose its coherence within approximately 10 to 50 microseconds. Even neutral atoms are perturbed to some extent when they are trapped in space. In contrast, trapped ion qubits are confined by electric fields in an ultra-high vacuum environment and their internal qubits are hence perfectly isolated.
We expect the technical complexity of the solutions required for quantum algorithms to address how each application area will impact the timing of that market’s inflection point and transition from the development phase to the application phase. We expect computational chemistry and optimization to be among the first solutions to transition into broadly available applications.
We expect the technical complexity of the solutions required for quantum algorithms to address how each application area will impact the timing of that market’s inflection point and transition from the development phase to the application phase. We expect computational chemistry and life sciences optimization to be among the first solutions to transition into broadly available applications.
Intellectual Property We rely on a combination of the intellectual property protections afforded by patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as license agreements and other contractual protections, to establish, maintain and enforce rights in our proprietary technologies.
We rely on a combination of the intellectual property protections afforded by patent, copyright, trade secret and trademark laws in the United States and other jurisdictions, as well as license agreements and other contractual protections, to establish, maintain and enforce rights protecting our business and proprietary technologies.
We are targeting a Modular Architecture, Designed to Scale, resulting in Smaller Systems and Cheaper Compute Power for Each Generation The scaling of classical computer technology, which unlocked continuously growing markets over many decades, was driven by exponential growth in computational power coupled with exponential reduction in the cost of computational power for each generation (Moore’s law).
We are targeting a Modular Architecture, Designed to Scale, resulting in Cheaper Compute Power for Each Generation The scaling of classical computer technology, which unlocked continuously growing markets over many decades, was driven by exponential growth in computational power coupled with exponential reduction in the cost of computational power for each generation (Moore’s law).
For customers who have worked alongside us in the development phase to curate deep in-house technical expertise in quantum computing capabilities at the time quantum advantage is achieved for the customer’s application, our preferred compute agreements, cloud offerings, and dedicated hardware sales are expected to offer sufficient quantum computational capacity. • Packaged solution offerings .
For customers who have worked alongside us in the development phase to curate deep in-house technical expertise in quantum capabilities at the time quantum advantage is achieved for the customer’s application, our preferred agreements, cloud offerings, and dedicated hardware sales are expected to offer sufficient quantum capacity. • Packaged solution offerings .
Moreover, to be practical, a quantum computer or network must be economical in cost and scalable in compute power (i.e., the number of qubits and the number of gate operations) to handle real world problems.
Moreover, to be practical, a quantum computer must be economical in cost and scalable in compute power (i.e., the number of qubits and the number of gate operations) to handle real world problems.
We also expect to manufacture and sell complete quantum systems and networks for dedicated use by a single customer, to be hosted on premises by the customer or remotely by us. • Cloud access to quantum computing .
We also manufacture and sell complete quantum systems for dedicated use by a single customer, to be hosted on premises by the customer or remotely by us. • Cloud access to quantum computing .
Our Customer Journey In each new market that stands to benefit from quantum computing, we intend to guide our customers and partners through two stages: the development phase and the application phase.
Our Quantum Platform Customer Journey In each new market that stands to benefit from quantum, we intend to guide our customers and partners through two stages: the development phase and the application phase.
In a 2024 update of the previously referenced publicly available report, the third-party consulting firm detailed $50 billion in total government and private investment in quantum technology and estimated up to $2 trillion in economic value from quantum computing in the next ten years.
In a 2025 update of the previously referenced publicly available report, the third-party consulting firm detailed over $50 billion in total government and private investment in quantum technology and estimated up to $2 trillion in economic value from quantum computing in the next ten years.
We make available on our website, free of charge, our Annual Reports, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
We make available on our website, free of charge, our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
To execute computational tasks, a quantum computer must be able to (i) initialize and store quantum information in qubits, (ii) operate quantum gates to modify information stored in qubits and (iii) output measurable results. Each of these steps must be accomplished with sufficiently low error rates to produce reliable results.
To execute computational tasks, a quantum computer must be able to initialize and store quantum information in qubits, operate quantum gates to modify information stored in qubits and output measurable results. Each of these steps must be accomplished with sufficiently low error rates to produce reliable results.
Building a Quantum Computer or a Quantum Network Requirements for Building Useful Quantum Computers and Networks Quantum computers and networks are difficult to build and operate because the physical system of qubits must be nearly perfectly isolated from its environment to faithfully store quantum information.
Building a Quantum Computer Requirements for Building Useful Quantum Computers Quantum computers are difficult to build and operate because the physical system of qubits must be nearly perfectly isolated from its environment to faithfully store quantum information.
Development Phase: This first stage focuses on quantum algorithm development and we expect it to involve deep partnerships between us and our customers to lay the groundwork for applying quantum solutions to the customer’s industry. We also anticipate uneven revenue for this period given that the quantum computing market is still nascent.
Development Phase: This first stage focuses on quantum use case development and we expect it to involve deep partnerships between us and our customers to lay the groundwork for applying quantum solutions to the customer’s industry. We also anticipate uneven revenue for this period given that the quantum market is still nascent.
When appropriate, we may develop full-stack quantum solutions that can be provided directly to customers, regardless of their in-house quantum expertise. • Accelerated high-impact applications development . We intend to provide opportunities for accelerated applications development to customers seeking compressed development timelines to solve some of their biggest problems and drive efficiencies.
When appropriate, we may develop fully enabled quantum solutions that can be provided directly to customers, regardless of their in-house quantum expertise. • Accelerated high-impact applications development . We intend to provide opportunities for accelerated applications development to customers seeking compressed development timelines to solve some of their biggest problems and drive efficiencies.
The two atomic states have enough frequency separation that the qubit is easy to measure through fluorescence detection when an appropriate laser beam is applied. To build quantum computers, many atomic ions are held in a single trap, and the repulsion from their charges naturally forces them into a stable linear crystal (or chain) of qubits.
The two atomic states have enough frequency separation that the qubit is easy to measure through fluorescence detection when an appropriate laser beam is applied. To build quantum computers, many atomic ions are held in a single trap and the repulsion from their charges naturally forces them into stable arrays of qubits.
Our business model is premised on the belief that businesses with access to quantum computers and networks will likely have a competitive advantage in the future. We provide quantum computing and networking services, complemented by access to quantum experts and algorithm development capabilities, designed to solve some of the most challenging issues facing corporations, governments and other large-scale entities today.
Our business model is premised on the belief that businesses with access to quantum technologies will likely have a competitive advantage in the future. We sell quantum hardware, and provide quantum computing services, complemented by access to quantum experts and algorithm development capabilities, designed to solve some of the most challenging issues facing corporations, governments and other large-scale entities today.
We expect our preferred offerings to give the customer’s application engineers direct access to our cutting-edge quantum systems, as well as technical support to pursue their solution development. • Dedicated hardware . We sell certain specialized quantum computing and networking hardware to select customers.
We expect our preferred offerings to give the customer’s application engineers direct access to our cutting-edge quantum systems, as well as technical support to pursue their solution development. • Dedicated hardware . We sell certain specialized quantum hardware to customers.
Information contained on or accessible through our website is not a part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive textual reference only. Available Information Our website address is www.ionq.com .
Information contained on or accessible through our website is not a part of or otherwise incorporated by reference into this Annual Report, and the inclusion of our website address in this Annual Report is an inactive textual reference only. Available Information Our website address is www.ionq.com .
We believe the scaling of quantum computing may follow a similar trajectory: as the #AQ available in each generation scales, the per-AQ cost is also reduced and enables true scaling of quantum computers.
We believe the scaling of quantum computing may follow a similar trajectory: as the compute performance available in each generation scales, the per- qubit cost is also reduced and enables true scaling of quantum computers.
We currently make access to our quantum computers available via three major cloud platforms, Amazon Web Services’ (“AWS”) Amazon Braket, Microsoft’s Azure Quantum and Google’s Cloud Marketplace, and also to select customers via our own cloud service. This cloud-based approach enables the broad availability of quantum-computing-as-a-service (“QCaaS”).
We currently make access to our quantum computers available through three major cloud platforms, Amazon Web Services’, or AWS’s, Braket, Microsoft’s Azure Quantum and Google’s Cloud Marketplace, and also to select customers via our own cloud service. This cloud-based approach enables the broad availability of quantum-computing-as-a-service, or QCaaS.
As with any completely new technology, the use cases imagined by us today are only a subset of the opportunities that will emerge if future generations of more powerful quantum computers are successfully developed, as users understand the power of quantum algorithms.
As with any completely new technology, the use cases we imagine today are only a subset of the opportunities that will emerge if future generations of more powerful quantum computers are successfully developed, as users understand the power of quantum algorithms.
Our systems have benefited from years of architectural focus on scalability that addresses both #AQ and per-AQ cost and, as such, we believe that if we are able to successfully solve remaining scalability challenges, these systems may become increasingly powerful and accessible in tandem. At the heart of our approach is the modular architecture that may enable such growth.
Our systems have benefited from years of architectural focus on scalability that addresses per-qubit cost and, as such, we believe that if we are able to successfully solve remaining scalability challenges, these systems may become increasingly powerful and accessible in tandem. At the heart of our approach is the scalable unit cell architecture that may enable such growth.
At scale, we believe these architectural features will confer benefits in the speed and efficiency of running algorithms. At a higher level, our scaling architecture will exploit optical interconnects among multiple QPUs in a way that allows full connectivity between any pair of qubits across the entire system.
At scale, we believe these architectural features will confer benefits in the speed and efficiency of running algorithms while being highly input/output resource efficient. At a higher level, our scaling architecture will exploit optical interconnects among multiple QPUs in a way that allows full connectivity between any pair of qubits across the entire system.
Additional markets taking advantage of quantum material science research and optimization speed-ups may come online next if broad-scale quantum advantage becomes accessible. If our quantum computers achieve full-scale fault tolerance, a diverse array of industries, ranging from quantum machine learning to deeper optimization, may be able to be transitioned to the application phase.
Additional markets taking advantage of quantum research and optimization speed-ups may come online next if broad-scale quantum advantage becomes accessible. If our quantum computers achieve full-scale fault tolerance, a diverse array of industries, ranging from quantum-enabled AI and machine learning to complex optimizations, may be able to be transitioned to the application phase.
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 algorithmic qubits and higher levels of fidelity than presently exists—prerequisites for quantum computing to reach broad quantum advantage.
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 physical and logical qubits and higher levels of qubit performance than presently exists—prerequisites for quantum computing to reach broad quantum advantage.
None of our employees are subject to a collective bargaining agreement or are represented by a labor union at this time. 15 Corporate Information IonQ, formerly known as dMY Technology Group, Inc. III (“dMY”) was incorporated in the state of Delaware in September 2020, and formed as a special purpose acquisition company. Our wholly owned subsidiary, IonQ Quantum, Inc.
None of our employees are subject to a collective bargaining agreement or are represented by a labor union at this time. 15 Corporate Information IonQ, Inc., formerly known as dMY Technology Group, Inc. III, which we refer to as dMY, was incorporated in the state of Delaware in September 2020, and formed as a special purpose acquisition company.
In this stage, we expect revenue to be unevenly distributed, with individual customers potentially contributing to peaks in bookings. • During the application stage, once an algorithm is fully developed for a market, we anticipate that customers would be charged to run the algorithm on our hardware.
In this stage, we expect revenue to be unevenly distributed, with individual customers potentially contributing to peaks in revenue recognition. • During the application stage, once a solution or algorithm is fully developed for a market, we anticipate that customers would be charged to run the algorithm on our hardware or to purchase a commoditized solution.
Given the mission critical nature of the use cases we anticipate quantum computing will attract, we believe a usage-based revenue model will result in a steady stream of revenue while providing the incremental ability to grow with customers as their algorithm complexity and inputs scale.
Given the mission critical nature of the use cases we anticipate quantum will attract, we believe this will result in a steady stream of revenue while providing the incremental ability to grow with customers as their use case complexity and inputs scale.
Approximately 31% of our full-time employees are based in the greater Washington, D.C. metropolitan area and approximately 35% of our full-time employees are based in the greater Seattle, WA metropolitan area. We also engage a small number of consultants and contractors to supplement our permanent workforce.
Approximately 14% of our full-time employees are based in the greater Washington, D.C. metropolitan area and approximately 18% of our full-time employees are based in the greater Seattle metropolitan area. We also engage a number of consultants and contractors to supplement our permanent workforce.
Notably, our architectural approach to scaling quantum computers across several QPUs has also contributed to IonQ's work in quantum networking. Gate Configuration Our qubits are manipulated (for initialization, detection, and forming quantum logic gates) by shining specific laser beams onto the trapped ions.
Notably, our architectural approach to scaling quantum computers across several QPUs has also contributed to our quantum networking. Gate Configuration Our qubits are manipulated (for initialization, detection and forming quantum logic gates) by directing specific laser beams or EQC fields onto the trapped ions.
Classical computer simulation : Classical computers in a data center can be used to simulate quantum computers. Although useful for small-scale quantum experiments, quantum simulation on classical computers is still bound by the same limitations of classical computing and would require an impractical number of data centers to tackle meaningful quantum problems.
Although useful for small-scale quantum experiments, quantum simulation on classical computers is still bound by the same limitations of classical computing and would require an impractical number of data centers to tackle meaningful quantum problems.
We expect our future systems to be modular networks of many QPUs working together as a large quantum computer, similar to how classical data centers are designed, constructed and operated today.
We expect our future systems to be built of QPUs designed from many identical unit cells, and of many QPUs working together as a large quantum computer, similar to how classical data centers are designed, constructed and operated today.
IonQ has announced co-development agreements with Ansys for computer aided design (CAD) and engineering and with the US Defense Advanced Research Projects Agency (DARPA) to help establish the next generation of benchmarking for quantum computers. • Preferred compute agreements with clients .
IonQ has announced co-development agreements with Ansys for computer aided design and engineering, the Centre for Commercialization of Regenerative Medicine, for 12 advanced therapeutics optimization, and with the US Defense Advanced Research Projects Agency to help establish the next generation of benchmarking for quantum computers. • Preferred compute agreements with clients .
The nuclear spin of the dopant atoms, or the nearby atoms to defects, are often used to store qubits. • Superconducting circuits : This approach uses circuits fabricated using superconducting material that features quantum phenomena at cryogenic temperatures. Two states of the circuit, either charge states or states of circulating current, are used as the qubit.
The nuclear spin of the dopant atoms, or the nearby atoms to defects, are often used to store qubits. • Superconducting circuits : This approach uses circuits fabricated using superconducting material that features quantum phenomena at cryogenic temperatures.
We expect our standard offerings will include additional bundled value-add services in exchange for an annual commitment, such as reserved system time, consultations with solution scientists, and other application and integration support.
Such access is currently limited to a select group of end-users. We expect our standard offerings will include additional bundled value-add services in exchange for an annual commitment, such as reserved system time, consultations with solution scientists, and other application and integration support.
Through innovation in gate-implementation protocols, we believe that we have developed laser delivery and control systems that will allow us to implement fully programmable, fully connected gate schemes in our system. • Slow gate speeds : Compared to their solid-state counterparts, trapped ions are widely believed to have slow gate speeds.
We believe that we have developed control schemes that will allow us to implement fully programmable, fully connected gate schemes in our system in a way that scales efficiently. • Slow gate speeds : Compared to their solid-state counterparts, trapped ions are widely believed to have slow gate speeds.
This is because the qubits themselves are not in thermal contact with the environment, as they are electromagnetically confined in free space inside a vacuum chamber. Although modest cryogenics ( 8 themselves do not degrade at room temperature.
This is because the qubits themselves are not in thermal contact with the environment, as they are electromagnetically confined in free space inside a vacuum chamber.
Our Strategy Our mission is to be the leading quantum computing company enabling the new era of quantum computing. We intend to fulfill our mission by: • Leveraging Our Technology . We believe that our technology offers substantial technological advantages compared to other competing quantum computing and networking systems.
Our Strategy As the world’s only quantum platform company, and the leading quantum computing company, we aim to advance the new quantum era. We intend to fulfill our mission by: • Leveraging Our Technology . We believe that our technology offers substantial technological advantages compared to other competing quantum computing systems.
Scientific Approaches to Quantum Computing There are a variety of different approaches to (or architectures for) building a quantum computer, each of which involves tradeoffs in meeting the three functional and practical requirements outlined above.
Scientific Approaches to Quantum Computing There are a variety of different approaches to (or architectures for) building a quantum computer, each of which involves tradeoffs in meeting the three functional and practical requirements outlined above. Roughly, approaches to performing a quantum computation fall into one of three categories: natural quantum bits, solid state or classical computer simulation.
We believe that, with engineering advancements and firsts yet to be achieved, our quantum computers will become increasingly compact and transportable, opening up future applications of quantum computing at the edge. Our Forward-Looking Roadmap In December 2020, we publicly released a forward-looking technical roadmap for the next eight years.
We believe that, with engineering advancements and firsts yet to be achieved, our quantum computers will become increasingly compact and transportable, opening up future applications of quantum computing at the edge.
We expect our involvement in these two stages, to the extent they will take place, to be as follows: • During the development stage, our experts will assist customers in developing an algorithm to solve their business challenges.
We expect our target markets to experience two stages of quantum algorithm deployment: the development stage and the application stage. We expect our involvement in these two stages, to the extent they take place, to be as follows: • During the development stage, our experts will assist customers in experimenting with or developing a quantum solution to their business challenges.
Roughly, approaches to performing a quantum computation fall into one of three categories: natural quantum bits, solid state or classical computer simulation. 7 Natural quantum bits : In natural qubit-based quantum computers, a system is built around naturally occurring substrates exhibiting quantum properties. • Atoms : In atomic-based quantum computers, the qubits are represented by internal states of individual atoms trapped and isolated in a vacuum.
Natural quantum bits : In natural qubit-based quantum computers, a system is built around naturally occurring substrates exhibiting quantum properties. • Atoms : In atomic-based quantum computers, the qubits are represented by internal states of individual atoms trapped and isolated in a vacuum.
Our net losses were $331.6 million, $157.8 million and $48.5 million, for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, we had an accumulated deficit of $683.7 million.
Our net losses attributable to IonQ, Inc. were $510.4 million, $331.6 million and $157.8 million, for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, we had an accumulated deficit of $1,194.1 million.
We supplement our offerings with professional services focused on assisting our customers in applying quantum computing and networking to their businesses. We also expect to sell full quantum computing systems to customers, either over the cloud or for local access. We also offer quantum networking products which offer customers secure communication networks and enable networked quantum computing.
We supplement our offerings with professional services focused on assisting our customers in applying quantum computing and our quantum networking, quantum sensing and quantum security solutions to their businesses. We also sell full quantum computing systems to customers, either over the cloud or on premises.
Commensurate with the closing of the Business Combination, dMY changed its name to IonQ, Inc. and Legacy IonQ changed its name to IonQ Quantum, Inc. Our principal executive offices are located at 4505 Campus Drive, College Park, MD 20740, and our telephone number is (301) 298-7997. Our corporate website address is www.ionq.com .
Our principal executive offices are located at 4505 Campus Drive, College Park, MD 20740, and our telephone number is (301) 298-7997. Our corporate website address is www.ionq.com .
We manufacture, own and operate quantum computers and networks, with compute units being offered to potential customers through system hardware sales and on a QCaaS basis and network units being offered through hardware sales. We manufacture specialized quantum computers for specific use cases for customers including government agencies.
We manufacture, own and operate quantum systems, with compute units being sold to customers through system hardware sales and on a QCaaS basis, and with an expanding platform of networking, sensing, security and infrastructure units being offered through hardware sales and as service offerings. We also manufacture specialized quantum computers for specific use cases for customers including government agencies.
We believe that our proprietary technology, our architecture, and the technology exclusively available to us through license agreements will offer us advantages both in terms of research and development, as well as the commercial value of our intended product offerings. Today, we sell specialized quantum computing and networking hardware together with related maintenance and support.
We believe that our proprietary technology, our architecture and the technology exclusively available to us through license agreements will offer us advantages both in research and development and in the commercial value of our product offerings.
Customers may be expected to pay for quantum compute usage, in addition to an incremental amount for the consulting and development services provided in the creation of algorithms. We may choose to sell this computing time to customers in a variety of ways.
Customers may be expected to pay for quantum hardware or access to IonQ-owned quantum computers, in addition to an incremental amount for the consulting and development services provided in the creation and customization of the hardware or other solutions. We may choose to sell these hardware and services to customers in a variety of ways.
By contrast, solid-state qubits, such as superconducting qubits or solid- state silicon spins, require exotic materials and fabrication processes that demand atomic perfection in the structures of the qubits and their surroundings; fabrication with this level of precision is an unsolved challenge.
By contrast, solid-state qubits, such as superconducting qubits or solid-state silicon spins, require exotic materials and fabrication processes that demand atomic perfection in the structures of the qubits and their surroundings; fabrication with this level of precision is an unsolved challenge. 9 Significant Barriers to Entry Alongside the benefits of the trapped ion approach, there are several challenges inherent in it that serve as barriers to entry, strengthening the advantages of our systems.
Because the ion qubits feature very low idle and native error rates and are highly connected, to achieve the first useful quantum applications we expect the error-correction overhead to be significantly lower than other approaches, for which we estimate the overhead to be on the order of at least 1,000:1.
Because the ion qubits feature very low idle and native error rates and are highly connected, to achieve the first useful quantum applications we expect the error-correction overhead to be significantly lower than other approaches. We believe our architectural decisions will make our systems uniquely capable of achieving scale.
We also sell access to several quantum computers of various qubit capacities and are in the process of researching and developing technologies for quantum computers with increasing computational capabilities.
Today, we sell specialized quantum computing hardware, together with complementary products and services, such as quantum networking, quantum sensing and quantum security products and associated maintenance and support. We also sell access to several quantum computers of various qubit capacities and are in the process of researching and developing technologies for quantum computers with increasing computational capabilities.
Our current and future cloud partnerships with AWS’s Amazon Braket, Microsoft’s Azure Quantum, Google’s Cloud Marketplace and other cloud providers are designed and will continue to be designed to make access to quantum computing hardware available to a broader community of quantum programmers. 12 Application Phase : This second phase is expected to commence if we are successful in demonstrating the commercial viability of quantum advantage in the industry and can therefore commence with developing commercial applications and applying that advantage broadly throughout the market with new customers. • Delivery of a full-scale quantum compute platform .
Application Phase : This second phase is expected to commence if we are successful in demonstrating the commercial viability of quantum advantage in the industry and can therefore commence with developing commercial applications and applying that advantage broadly throughout the market with new customers. • Delivery of a full-scale quantum compute platform .
To date, we have developed and assembled ten generations of quantum computer prototypes and systems, have constructed quantum operating systems and software tools, and have worked with leading cloud vendors, quantum programming languages and quantum software development kits (“SDKs”). • Selling Direct Access to Quantum Computers .
To date, we have developed and assembled many generations of quantum computer prototypes and systems, have constructed quantum operating systems and software tools and have worked with leading cloud vendors, quantum programming languages and quantum software development kits, or SDKs. • Accelerating Our Roadmap by Acquiring the Best Minds and Technologies .
Our quantum gates are fully programmable in software; there is no “hard-wiring” of qubit connections in the quantum computing hardware. The structure of a quantum circuit or algorithm can therefore be optimized in software, and the appropriate laser beams can then be generated, switched, or modulated to execute any pattern of gate interactions.
The structure of a quantum circuit or algorithm can therefore be optimized in software, and the appropriate control fields can then be generated, switched, or modulated to execute any pattern of gate interactions. Our programmable gate configurations make our systems adaptable.
However, meeting future milestones included in our roadmap is not guaranteed and is dependent on various technological advancements, which could take longer than expected to realize or turn out to be impossible to achieve.
We have published a roadmap for scaling to larger quantum computing systems, with concrete technological innovations designed to significantly improve the performance of the systems. Meeting the milestones included in our roadmap is not guaranteed and is dependent on various technological advancements, which could take longer than expected to realize or turn out to be impossible to achieve.
We believe this can open up the possibility of scaling quantum computers indefinitely, similar to how high-performance computers and data centers have been scaled. Our quantum architecture is modular, meaning that if development of this architecture is successful, the number of qubits in a QPU, or the number of QPUs in a system, could be scaled.
Our quantum architecture is modular, meaning that if development of this architecture is successful, the number of qubits in a QPU, or the number of QPUs in a system, could be scaled.
We sell specialized quantum computing and networking hardware to select customers, complemented by access to quantum experts and algorithm development capabilities. We sell direct access to the quantum computers we manufacture, with units offered on a whole system or usage basis.
We sell specialized quantum computing, quantum networking and quantum sensing hardware to select customers, complemented by access to quantum experts and algorithm development capabilities. We sell computers, partial computers and direct access to IonQ-owned computers.
In the trapped ion approach, however, qubits are connected by electrostatic repulsion rather than through physical wires. As a result, qubits in our existing systems can directly interact with any other qubit in the system.
As a result, qubits in our existing systems can directly interact with any other qubit in the system.
We believe that we have resolved this issue from an engineering standpoint and that our future roadmap will further improve manufacturability. • Ultra-high vacuum (UHV) technology : The conventional method to achieve UHV conditions for ion trapping experiments involves using vacuum chamber designs with carefully chosen materials, assembly procedures with cumbersome electrical connections, and a conditioning procedure to prepare and bake the chamber at elevated temperatures for extended periods of time.
We believe that EQC, which integrates critical components into our ion trap chips in a way that we believe is not only highly manufacturable and scalable, but also increases the ultimate computing performance, is a solution to this challenge. • Ultra-high vacuum, or UHV, technology : The conventional method to achieve UHV conditions for ion trapping experiments involves using vacuum chamber designs with carefully chosen materials, assembly procedures with cumbersome electrical connections, and a conditioning procedure to prepare and bake the chamber at elevated temperatures for extended periods of time.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThis would limit our ability to scale to a sufficiently large number of qubits in a single system or network systems together; • it could take longer to incorporate modular architectures for additional cross-processor computational strength than currently expected, limiting our ability to realize the benefits of multicore technology; and 22 • the scaling of fidelity with qubit number could prove poorer than expected, limiting our ability to successfully run larger circuits or achieve commercial advantage.
Biggest changeAdditional development challenges we face include: • gate fidelity, error correction and miniaturization may not commercialize from the lab and scale as hoped or at all; • it could prove more challenging and take materially longer than expected to operate gates within a single ion trap with higher throughput while maintaining gate fidelity; • the gate speed in our technology could prove more difficult to improve than expected; • the ion transport technology used to shuttle and reconfigure the qubits within a trap or QPU could prove more challenging to develop, operate and scale than anticipated, resulting in reduced gate performance or throughput; • the photonic interconnect technology used to connect ion traps could prove more challenging and take longer to perfect than currently expected, which would limit our ability to scale to a sufficiently large number of qubits in a single system or network systems together; • the integration of quantum memories into our photonic interconnects could prove more challenging, costly or time-consuming than expected, resulting in a reduced interconnect system performance; • it could take longer to incorporate modular architectures for additional cross-processor computational strength than currently expected, limiting our ability to realize the benefits of multicore technology; and • the scaling of fidelity with qubit number could prove poorer than expected, limiting our ability to successfully run larger circuits or achieve commercial advantage. 22 In addition, we will need to develop the manufacturing process necessary to make these quantum computers in high volume.
Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. Summary Risk Factors Our business is subject to a number of risks of which you should be aware before making a decision to invest in our securities.
Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. Summary of Risk Factors Our business is subject to a number of risks of which you should be aware before making a decision to invest in our securities.
Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs. Employee salaries and benefits expenses have increased as a result of economic growth, increased demand for business services, increased competition for trained and talented employees, among other wage-inflationary pressures and we cannot assure that they will not continue to rise.
Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs. Employee salaries and benefits expenses have increased as a result of economic growth, increased demand for business services and increased competition for trained and talented employees, among other wage-inflationary pressures and we cannot assure that they will not continue to rise.
Because the decision to issue securities in the future offering will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future issuances of debt or equity securities.
Because the decision to issue securities in any future offering will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future issuances of debt or equity securities.
These risks include, among other things: • lack of familiarity and burdens of complying with foreign laws, legal standards, privacy and cybersecurity standards, regulatory requirements, tariffs and other barriers, and the risk of penalties to our customers and individual members of management or employees if our practices are deemed to not be in compliance; • practical difficulties of enforcing intellectual property rights in countries with varying laws and standards and reduced or varied protection for intellectual property rights in some countries; • an evolving legal framework and additional legal or regulatory requirements for privacy and cybersecurity, which may necessitate the establishment of systems to maintain data in local markets, requiring us to invest in additional data centers and network infrastructure, and the implementation of additional employee privacy documentation (including locally compliant privacy notices and policies), all of which may involve substantial expense and may cause us to need to divert resources from other aspects of our business, all of which may adversely affect our business; • unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions; • difficulties in managing systems integrators and partners; • increased or unexpected supply chain challenges or delays; • differing technology standards; • different pricing environments, longer sales cycles, longer accounts receivable payment cycles and difficulties in collecting accounts receivable; • increased financial accounting and reporting burdens and complexities; • difficulties in managing and staffing international operations including the proper classification of independent contractors and other contingent workers, differing employer/employee relationships and local employment laws; • increased costs involved with recruiting and retaining an expanded employee population, including highly skilled workers and leaders in the quantum computing industry, outside the United States through cash and equity-based incentive programs, and legal costs and regulatory restrictions in issuing our shares to employees outside the United States; • global political and regulatory changes that may lead to restrictions on immigration and travel for our employees; • fluctuations in exchange rates that may decrease the value of our foreign-based revenue or increase the cost of our foreign operations; • global public health threats or geopolitical events such as tensions in and around Ukraine, Israel and other areas of the world; • degradation in U.S. relationships with targeted countries that could result in those countries disfavoring doing business with U.S. companies; • potentially adverse tax consequences, including the complexities of foreign value added tax (or other tax) systems, restrictions on the repatriation of earnings, and transfer pricing requirements; and • permanent establishment risks and complexities in connection with international payroll, tax and social security requirements for international employees.
These risks include, among other things: • lack of familiarity and burdens of complying with foreign laws, legal standards, privacy and cybersecurity standards, regulatory requirements, tariffs and other barriers, and the risk of penalties to our customers and individual members of management or employees if our practices are deemed to not be in compliance; • practical difficulties of enforcing intellectual property rights in countries with varying laws and standards and reduced or varied protection for intellectual property rights in some countries; • an evolving legal framework and additional legal or regulatory requirements for privacy and cybersecurity, which may necessitate the establishment of systems to maintain data in local markets, requiring us to invest in additional data centers and network infrastructure, and the implementation of additional employee privacy documentation (including locally compliant privacy notices and policies), all of which may involve substantial expense and may cause us to need to divert resources from other aspects of our business, all of which may adversely affect our business; • unexpected changes in regulatory requirements, taxes, foreign investment rules, trade laws, tariffs, export quotas, custom duties or other trade restrictions; • difficulties in managing systems integrators and partners; • increased or unexpected supply chain challenges or delays; • differing technology standards; • different pricing environments, longer sales cycles, longer accounts receivable payment cycles and difficulties in collecting accounts receivable; • increased financial accounting and reporting burdens and complexities; • difficulties in managing and staffing international operations including the proper classification of independent contractors and other contingent workers, differing employer/employee relationships and local employment laws; • increased costs involved with recruiting and retaining an expanded employee population, including highly skilled workers and leaders in the quantum computing industry, outside the United States through cash and equity-based incentive programs, and legal costs and regulatory restrictions in issuing our shares to employees outside the United States; • global political and regulatory changes that may lead to restrictions on immigration and travel for our employees; • fluctuations in exchange rates that may decrease the value of our foreign-based revenue or increase the cost of our foreign operations; • global public health threats or geopolitical events such as tensions in and around Ukraine, Israel and other areas of the world; • degradation in U.S. relationships with targeted countries that could result in those countries disfavoring doing business with U.S. companies; • potentially adverse tax consequences, including the complexities of foreign value added tax (or other tax) systems, restrictions on the repatriation of earnings, and transfer pricing requirements; and • permanent establishment risks and complexities in connection with international payroll, tax and social security requirements for international employees.
We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards or other costs (including indemnification of third parties or costly licensing arrangements (if licenses 43 are available at all)) and limit our ability to use certain key technologies in the future or require development of non-infringing products, services, or technologies, which could result in a significant expenditure and otherwise harm our business.
We may face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions and significant damage awards or other costs (including indemnification of third parties or costly licensing arrangements (if licenses are available at all)) and limit our ability to use certain key technologies in the future or require development of non-infringing products, services, or technologies, which could result in a significant expenditure and otherwise harm our business.
Our current competitors include (among others): • large, well-established tech companies that generally compete in all of our markets, including Amazon, Google, IBM, Intel, and Microsoft; • countries such as China, Russia, Australia, Canada, the United Kingdom, and certain countries in the European Union; • less-established public and private companies with competing technology, including companies located outside the United States; and • new or emerging entrants seeking to develop competing technologies.
Our current competitors include (among others): • large, well-established technology companies that generally compete in all of our markets, including Amazon, Google, IBM, Intel and Microsoft; • countries such as China, Russia, Australia, Canada, the United Kingdom and certain countries in the European Union; • less-established public and private companies with competing technology, including companies located outside the United States; and • new or emerging entrants seeking to develop competing technologies.
Generally, we understand the use of AI for employee productivity also presents emerging ethical and social issues and may draw public scrutiny or controversy, and may also create or assist in producing output that appear correct but are factually inaccurate, incomplete, misleading, biased, or otherwise flawed, or produce other discriminatory or unexpected results, errors, or inadequacies, any of which may not be easily detectable.
Generally, we understand the use of AI for employee productivity also presents emerging ethical, privacy, and social issues and may draw public scrutiny or controversy, and may also create or assist in producing output that appear correct but are factually inaccurate, incomplete, misleading, biased, or otherwise flawed, or produce other discriminatory or unexpected results, errors or inadequacies, any of which may not be easily detectable.
The inability to obtain financing when needed may make it more difficult for us to operate our business or implement our growth plans. Our ability to use net operating loss carryforwards and other tax attributes may be limited. We have incurred losses during our history, do not expect to become profitable in the near future and may never achieve profitability.
The inability to obtain financing when needed could make it more difficult for us to operate our business or implement our growth plans. Our ability to use net operating loss carryforwards and other tax attributes may be limited. We have incurred losses during our history, do not expect to become profitable in the near future and may never achieve profitability.
Additionally, operating in international markets also requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required in establishing operations in other countries will produce desired levels of revenue or profitability. 35 Compliance with laws and regulations applicable to our global operations also substantially increases our cost of doing business in foreign jurisdictions.
Additionally, operating in international markets also requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required in establishing operations in other countries will produce desired levels of revenue or profitability. Compliance with laws and regulations applicable to our global operations also substantially increases our cost of doing business in foreign jurisdictions.
We cannot provide any assurance that all of our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. Detecting, investigating, and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources, and attention from senior management.
We cannot provide any assurance that all of our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. 42 Detecting, investigating, and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources and attention from senior management.
We believe that the pace of innovation will continue to accelerate as technology changes and different approaches to quantum computing mature on a broad range of factors, including system architecture, error correction, performance and scale, integration with classical computing resources, ease of programming, user experience, markets addressed, types of data processed, and data governance and regulatory compliance.
We believe that the pace of innovation will continue to accelerate as technology changes and different approaches to quantum technologies mature on a broad range of factors, including system architecture, error correction, performance and scale, integration with classical computing resources, ease of programming, user experience, markets addressed, types of data processed and data governance and regulatory compliance.
If any of these events occur, it could have a material adverse effect on our business, financial condition or results of operations. An element of our business is currently dependent upon our relationship with our cloud providers. There are no assurances that we will be able to commercialize quantum computers from our relationships with cloud providers.
If any of these events occur, it could have a material adverse effect on our business, financial condition or results of operations. 24 An element of our business is currently dependent upon our relationship with our cloud providers. There are no assurances that we will be able to commercialize quantum computers from our relationships with cloud providers.
These estimates of the total addressable market and growth forecasts are subject to significant uncertainty, are based on assumptions and estimates that may not prove to be accurate and are based on data published by third parties that we have not independently verified. Advances in classical computing may prove more robust for longer than currently anticipated.
These estimates of the total addressable market, growth forecasts, and industry forecasts are subject to significant uncertainty, are based on assumptions and estimates that may not prove to be accurate and are based on data published by third parties that we have not independently verified. Advances in classical computing may prove more robust for longer than currently anticipated.
If a third party is able to obtain an injunction preventing us from accessing such third-party intellectual property rights, or if we cannot license or develop alternative technology for any infringing aspect of our business, we may be forced to limit or stop sales of our products, services or technologies or cease business activities related to such intellectual property.
If a third party is able to obtain an injunction preventing us from accessing such third-party intellectual property rights, or if we cannot license 44 or develop alternative technology for any infringing aspect of our business, we may be forced to limit or stop sales of our products, services or technologies or cease business activities related to such intellectual property.
In addition, the mere announcement of an incompatibility problem relating to our products with higher level software tools could cause us to suffer reputational harm and/or lead to a loss of customers. Any adverse impacts from the incompatibility of our quantum computing solutions could adversely affect our business, operating results and financial condition.
In addition, the mere announcement of an incompatibility problem relating to our products with higher level software tools could cause us to suffer reputational harm and/or lead to a loss of customers. Any adverse impacts from the incompatibility of our quantum solutions could adversely affect our business, operating results and financial condition.
Any future hedging activities may not offset the full, or in some cases any, adverse financial impact resulting from unfavorable movement in foreign currency exchange rates, which could adversely affect our financial condition and results of operations. 36 Our international operations may subject us to greater than anticipated tax liabilities.
Any future hedging activities may not offset the full, or in some cases any, adverse financial impact resulting from unfavorable movement in foreign currency exchange rates, which could adversely affect our financial condition and results of operations. Our international operations may subject us to greater than anticipated tax liabilities.
In addition, we will also need to ensure our compliance with regulatory requirements in various jurisdictions applicable to the sale, installation and servicing of our products. To manage the growth of our operations and personnel, we must establish appropriate and scalable operational and financial systems, procedures and controls and establish and maintain a qualified finance, administrative and operations staff.
In addition, we will also need to ensure our compliance with regulatory requirements in various jurisdictions applicable to the sale, installation and servicing of our products. To manage the growth of our operations and personnel, we must establish appropriate and scalable operational and financial systems, procedures and controls and establish and maintain a qualified finance, legal, administrative and operations staff.
We could become subject to investigations by the NYSE, the SEC or other regulatory authorities, which could require additional financial and management resources. We will continue to incur significant increased expenses and administrative burdens as a public company, which could negatively impact our business, financial condition and results of operations.
We could become subject to investigations by the NYSE, the SEC or other regulatory authorities, which could require additional financial and management resources. 47 We will continue to incur significant increased expenses and administrative burdens as a public company, which could negatively impact our business, financial condition and results of operations.
We may not be able to cost-effectively manage production at a scale or quality consistent with customer demand in a timely or economical manner. 19 Our ability to scale is dependent also upon components we must source from the optical, mechanical, electronics and semiconductor industries.
We may not be able to cost-effectively manage production at a scale or quality consistent with customer demand in a timely or economical manner. Our ability to scale is dependent also upon components we must source from the optical, mechanical, electronics and semiconductor industries.
As a result, we may be unable to implement adequate preventative and responsive measures to stop or mitigate security incidents before or while they are occurring. Finally, 31 incidents that may appear to be minor when assessed individually, may become material, at a later date, when considered in the aggregate.
As a result, we may be unable to implement adequate preventative and responsive measures to stop or mitigate security incidents before or while they are occurring. Finally, incidents that may appear to be minor when assessed individually, may become material, at a later date, when considered in the aggregate.
We intend to make investments to support our current business and may require additional funds to 46 respond to business challenges, including the need to develop or enhance our technology, improve our operating infrastructure or acquire complementary businesses and technologies. Additional financing may not be available on favorable terms, if at all.
We intend to make investments to support our current business and may require additional funds to respond to business challenges, including the need to develop or enhance our technology, improve our operating infrastructure or acquire complementary businesses and technologies. Additional financing may not be available on favorable terms, if at all.
Additionally, under these current and future laws and regulations, exports of our products, technology, and services as well as the underlying technology may require export authorizations, including by license, a license 33 exception, or other appropriate government authorizations, and the filing of a classification request or self-classification report to use a license exception, as applicable.
Additionally, under these current and future laws and regulations, exports of our products, technology, and services as well as the underlying technology may require export authorizations, including by license, a license exception, or other appropriate government authorizations, and the filing of a classification request or self-classification report to use a license exception, as applicable.
We are subject to requirements relating to environmental and safety regulations and environmental remediation matters, which could adversely affect our business, results of operation and reputation. We are subject to numerous federal, state and local environmental laws and regulations governing, among other things, solid and hazardous waste storage, treatment and disposal, and remediation of releases of hazardous materials.
We are subject to requirements relating to environmental and safety regulations and environmental remediation matters, which could adversely affect our business, results of operation and reputation. We are subject to numerous federal, state, local and foreign environmental laws and regulations governing, among other things, solid and hazardous waste storage, treatment and disposal, and remediation of releases of hazardous materials.
Our data storage and processing activities, including the establishment and operation of future quantum data centers, may subject us to numerous privacy, data protection and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements and other obligations relating to privacy, data 39 localization and security.
Our data storage and processing activities, including the establishment and operation of future quantum data centers, may subject us to numerous privacy, data protection and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements and other obligations relating to privacy, data localization and security.
Even if our patent applications succeed and we are issued patents in accordance with them, it is still uncertain whether these patents – including any of the issued patents exclusively licensed to us – will be contested, circumvented, invalidated, found to be unenforceable or limited in scope in the future.
Even if our patent applications succeed and we are issued patents in accordance with them, it is still uncertain whether these patents – including any issued patents exclusively licensed to us – will be contested, circumvented, invalidated, found to be unenforceable or limited in scope in the future.
However, product cycles or quantum computing systems may change periodically due to changes in innovation in the industry, and we may decide to update our products or production processes more quickly than expected, resulting in obsolescence of all or part of our quantum computing systems prior to the end of the previously expected useful life.
However, product cycles or quantum systems may change periodically due to changes in innovation in the industry, and we may decide to update our products or production processes more quickly than expected, resulting in obsolescence of all or part of our quantum systems prior to the end of the previously expected useful life.
Our international sales and operations subject us to additional risks and costs exposure to foreign currency exchange rate fluctuations, that can adversely affect our business, financial condition, revenues, results of operations or cash flows. We are continuing to expand our international operations as part of our growth strategy.
Our international sales and operations subject us to additional risks and costs, including exposure to foreign currency exchange rate fluctuations, that can adversely affect our business, financial condition, revenues, results of operations or cash flows. We are continuing to expand our international operations as part of our growth strategy.
Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future. 37 In addition, the laws and regulations our business is subject to are complex and change frequently.
Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future. In addition, the laws and regulations our business is subject to are complex and change frequently.
Department of Justice, could result in a material diversion of our management’s time and could have a material adverse effect on our business and results of operations. Our ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all.
Department of Justice, could result in a material diversion of our management’s time and could have a material adverse effect on our business and results of operations. 46 Our ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all.
Our quantum computing and networking technologies could fail to attain sufficient market acceptance, if at all, for many reasons, including: • pricing and the perceived value of our systems relative to its cost; • delays in releasing quantum computers with sufficient performance and scale to the market; • failure to produce products of consistent quality that offer functionality comparable or superior to existing or new products; • ability to produce products fit for their intended purpose; • failures to accurately predict market or customer demands; • defects, errors or failures in the design or performance of our quantum computing systems; • negative publicity about the performance or effectiveness of our systems; • strategic reaction of companies that market competitive products; and • the introduction or anticipated introduction of competing technology.
Our quantum technologies could fail to attain sufficient market acceptance, if at all, for many reasons, including: • pricing and the perceived value of our systems relative to its cost; • delays in releasing quantum computers with sufficient performance and scale to the market; • failure to produce products of consistent quality that offer functionality comparable or superior to existing or new products; • ability to produce products fit for their intended purpose; • failures to accurately predict market or customer demands; • defects, errors or failures in the design or performance of our quantum systems; • negative publicity about the performance or effectiveness of our systems; • strategic reaction of companies that market competitive products; and • the introduction or anticipated introduction of competing technology.
Although various mechanisms may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA’s and UK’s respective standard contractual clauses, the EU-U.S. Data Privacy Framework, the United Kingdom extension to the EU-U.S. Data Privacy Framework, and the Swiss-U.S.
Although various mechanisms may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA’s and UK’s respective standard contractual clauses, the EU-U.S. Data Privacy Framework, the UK extension to the EU-U.S. Data Privacy Framework, and the Swiss-U.S.
Our quarterly operating results may fluctuate significantly because of several factors, including: • labor availability and costs for hourly and management personnel; • profitability of our products, especially in new markets; • changes in interest rates; • impairment of long-lived assets; • macroeconomic conditions, both nationally and locally; • size and scope of our revenue arrangements with our customers; • negative publicity relating to our products; • changes in customer preferences and competitive conditions; • the loss of strategic relationships or existing contracts with any customer; • lengthy customer sales cycle, leading to difficulty in forecasting the timing of purchasing decisions; • expansion to new markets; and • fluctuations in commodity prices.
Our quarterly operating results may fluctuate significantly because of several factors, including: • labor availability and costs for hourly and management personnel; • profitability of our products, especially in new markets; • changes in interest rates; • impairment of long-lived assets; • macroeconomic conditions, both nationally and locally; • size and scope of our revenue arrangements with our customers; • negative publicity relating to our products; • changes in customer preferences and competitive conditions; • the loss of strategic relationships or existing contracts with any customer; • lengthy customer sales cycle, leading to difficulty in forecasting the timing of purchasing decisions; • expansion to new markets or the acquisition of new businesses; and • fluctuations in commodity prices.
If we are unable to obtain or use components for inclusion in our products, if component prices increase significantly or if we are unable to export or sell our products to any of our customers, our business, liquidity, financial condition and/or results of operations would be materially and adversely affected.
If 33 we are unable to obtain or use components for inclusion in our products, if component prices increase significantly or if we are unable to export or sell our products to any of our customers, our business, liquidity, financial condition and/or results of operations would be materially and adversely affected.
Significant reduction in U.S. government spending could have long-term consequences for our size and structure. In addition, changes in government priorities and requirements could impact the funding, or the timing of funding, of our programs, which could negatively impact our results of operations and financial condition.
A significant reduction in U.S. government spending could have long-term consequences for our size and structure. In addition, changes in government priorities and requirements could impact the funding, or the timing of funding, of our programs, which could negatively impact our results of operations and financial condition.
If we cannot successfully overcome those barriers, our business will be negatively impacted and could fail. • We have experienced in the past, and could also suffer future disruptions, outages, defects and other performance and quality problems with our quantum computing systems, our private cloud, or other information systems, our research and development activities, our facilities, our other fixed assets, or with the public cloud, internet, and other infrastructure on which they rely. • Even if we are successful in developing quantum computing systems and executing our strategy, competitors in the industry may achieve technological breakthroughs that render our quantum computing systems obsolete or inferior to other products. • We may be negatively impacted by any early obsolescence of our quantum computing technology. • If our computers fail to achieve a broad quantum advantage, our business, financial condition and future prospects may be harmed. • The quantum computing and networking industry is competitive on a global scale and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers. • The quantum computing and networking industry is in its early stages and volatile, and if it does not develop, if it develops slower than we expect, if it develops in a manner that does not require use of our quantum computing solutions, if it encounters negative publicity or if our solution does not drive commercial engagement, the growth of our business will be harmed. • We may not be able to accurately estimate the future supply and demand for our quantum computers, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue.
If we cannot successfully overcome those barriers, our business will be negatively impacted and could fail. • We have experienced in the past, and could also suffer in the future, disruptions, outages, defects and other performance and quality problems with our quantum computing systems, our private cloud, or other information systems, our research and development activities, our facilities, our other fixed assets, or with the public cloud, internet, and other infrastructure on which they rely. • Even if we are successful in developing quantum technologies and executing our strategy, competitors in the industry may achieve technological breakthroughs that render our quantum computing systems obsolete or inferior to other products. • We may be negatively impacted by any early obsolescence of our quantum technologies. • If our computers fail to achieve a broad quantum advantage, our business, financial condition and future prospects may be harmed. • The quantum computing and networking industry is competitive on a global scale and we may not be successful in competing in this industry or establishing and maintaining confidence in our long-term business prospects among current and future partners and customers. • The quantum computing and networking industry is in its early stages and volatile, and if it does not develop, if it develops slower than we expect, if it develops in a manner that does not require use of our quantum computing solutions, if it encounters negative publicity or if our solutions do not drive commercial engagement, the growth of our business will be harmed. • We may not be able to accurately estimate the future supply and demand for our quantum solutions, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue.
We currently offer our QCaaS on public clouds provided by AWS’s Amazon Braket, Microsoft’s Azure Quantum, and the Google Cloud Marketplace. The companies that own these public clouds have internal quantum computing efforts that are competitive to our technology.
We currently offer our QCaaS on public clouds provided by AWS’s Braket, Microsoft’s Azure Quantum, and the Google Cloud Marketplace. The companies that own these public clouds have internal quantum computing efforts that are competitive to our technology.
As part of our business strategy, we have entered into and may enter into additional contracts with state and federal government entities, which subjects our business to statutes and regulations applicable to companies doing business with the government, including the Federal Acquisition Regulation.
As part of our business strategy, we have entered into and may enter into additional contracts with state, federal and foreign government entities, which subjects our business to statutes and regulations applicable to companies doing business with the government, including the Federal Acquisition Regulation.
There is also a possibility of future tariffs, trade protection measures or other restrictions imposed on our products or on our customers by the United States, China or other countries that could have a material adverse effect on our business.
There is also a possibility of future tariffs, trade protection measures or other restrictions imposed on our products or on our customers by the United States or other countries that could have a material adverse effect on our business.
Negative perceptions of our business may result in additional regulation, enforcement actions by the government and increased litigation, or harm to our ability to attract or retain customers or strategic partners, any of which may affect our business.
Negative perceptions of our business may result in additional regulation, enforcement actions by the government and increased litigation, or harm to our ability to attract or retain customers or strategic partners, any of which may negatively affect our business.
While the public 48 warrants are redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
While the public warrants are redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Evolving and scaling our business and operations places increased demands on our management as well as our financial and operational resources to: • effectively manage organizational change; • design scalable processes; • accelerate and/or refocus research and development activities; • expand manufacturing, supply chain and distribution capacity; • increase sales and marketing efforts; • broaden customer-support and services capabilities; • maintain or increase operational efficiencies; • scale support operations in a cost-effective manner; • implement appropriate operational and financial systems; and • maintain effective financial disclosure controls and procedures.
Evolving and scaling our business and operations places increased demands on our management as well as our financial and operational resources to: • effectively manage organizational change; • design scalable processes; • accelerate and refocus research and development activities; • expand manufacturing, supply chain and distribution capacity, including foundry capacity; • increase sales and marketing efforts; • broaden customer-support and services capabilities; • maintain or increase operational efficiencies; • scale support operations in a cost-effective manner; • implement appropriate operational and financial systems; and • maintain effective financial disclosure controls and procedures.
Although we have implemented policies and procedures designed to ensure compliance with these laws and policies, there can be no assurance that all of our employees, contractors, partners and agents will comply with these laws and policies.
Although we have implemented policies and 37 procedures designed to ensure compliance with these laws and policies, there can be no assurance that all of our employees, contractors, partners and agents will comply with these laws and policies.
Data Privacy Framework, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
Data Privacy Framework, these 41 mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
A catastrophic event that results in the destruction or disruption 32 of any of our critical business or IT systems, or the infrastructure or systems they rely on could harm our ability to conduct normal business operations.
A catastrophic event that results in the destruction or disruption of any of our critical business or IT systems, or the infrastructure or systems they rely on could harm our ability to conduct normal business operations.
In addition, we may seek additional capital due to favorable market conditions or 21 strategic considerations even if we believe that we have sufficient funds for current or future operating plans.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe that we have sufficient funds for current or future operating plans.
We have focused our efforts on creating quantum computing hardware, the system control platform for such hardware and a suite of low-level software programs that optimize execution of quantum algorithms on our hardware.
We have focused our efforts on creating quantum hardware, the system control platform for such hardware and a suite of low-level software programs that optimize execution of quantum algorithms on our hardware.
Government actions and regulations, such as tariffs and trade protection measures, especially in China and the United States, may adversely impact our business, including our ability to obtain products from our suppliers.
Government actions and regulations, such as tariffs and trade protection measures, especially in the United States, may adversely impact our business, including our ability to obtain products from our suppliers.
The U.S. government also continues to increase end-use restrictions on the provision of products, technology and services to China and other countries including end-uses related to advanced computing.
The U.S. government also continues to increase end-use restrictions on the provision of products, technology and services to other countries including end-uses related to advanced computing.
A disruption in our relationship with any of our customers could adversely affect our business. Our inability to meet our customers’ requirements or to qualify our products with them could 28 adversely impact our revenue.
A disruption in our relationship with any of our customers could adversely affect our business. Our inability to meet our customers’ requirements or to qualify our products with them could adversely impact our revenue.
Moreover, we may need to alter the way in which we deliver our products due to changes in engineering and production expertise and efficiency. If our quantum computing systems are not compatible with some or all industry-standard software and hardware in the future, our business could be harmed. Programming for quantum computing requires unique tools, software, hardware, and development environments.
Moreover, we may need to alter the way in which we deliver our products due to changes in engineering and production expertise and efficiency. If our quantum systems are not compatible with some or all industry-standard software and hardware in the future, our business could be harmed. Programming for quantum technologies requires unique tools, software, hardware and development environments.
Moreover, a product liability claim could generate substantial negative publicity about our quantum computers and business and inhibit or prevent commercialization of other future quantum computers, which would have material adverse effects on our brand, business, prospects and operating results. Any insurance coverage might not be sufficient to cover all potential product liability claims.
Moreover, a product liability claim could generate substantial negative publicity about our quantum solutions and business and inhibit or prevent commercialization of other future quantum solutions, which would have material adverse effects on our brand, business, prospects and operating results. Any insurance coverage might not be sufficient to cover all potential product liability claims.
It further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolutions of any complaint asserting a cause of action arising under the Securities Act.
The Charter further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolutions of any complaint asserting a cause of action arising under the Securities Act.
Currently, there is very little historical basis for making judgments on the demand for our quantum computers or our ability to design, develop, manufacture, and deliver quantum computers, or our profitability, if any, in the future. If we overestimate our requirements, our suppliers may have excess inventory, which indirectly would increase our costs.
Currently, there is very little historical basis for making judgments on the demand for, or our ability to design, develop, manufacture and deliver, quantum solutions, or our profitability, if any, in the future. If we overestimate our requirements, our suppliers may have excess inventory, which indirectly would increase our costs.
Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various evolving laws, regulations, guidance, industry standards, and other obligations. Additionally, several states and localities have enacted measures related to the use of artificial intelligence and machine learning in products and services.
Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various evolving laws, regulations, guidance, industry standards, and other obligations. Additionally, several states and localities have enacted measures related to the use of AI and machine learning in products and services.
We may not be able to accurately estimate the future supply and demand for our quantum computers, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays.
We may not be able to accurately estimate the future supply and demand for our quantum solutions, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays.
For example, certain laws 40 addressing privacy, data protection and security, such as the EU GDPR, Switzerland Federal Act on Data Protection (FADP), UK GDPR and CCPA, require our customers to impose specific contractual restrictions on their service providers. Additionally, some of our customers may require us to host personal data locally.
For example, certain laws addressing privacy, data protection and security, such as the EU GDPR, Switzerland Federal Act on Data Protection, UK GDPR and CCPA, require our customers to impose specific contractual restrictions on their service providers. Additionally, some of our customers may require us to host personal data locally.
As a result, stockholders will bear the risk of future issuances of debt or equity securities reducing the value of their common stock and diluting their interest. There can be no assurance that we will be able to comply with the continued listing standards of the New York Stock Exchange (“NYSE”).
As a result, stockholders will bear the risk of future issuances of debt or equity securities reducing the value of their common stock and diluting their interest. There can be no assurance that we will be able to comply with the continued listing standards of the New York Stock Exchange, or NYSE.
Full utilization of our quantum computing solutions may depend on these third-party software, standards, specifications, applications, hardware and services, which may not be compatible with our quantum computing solutions and their development, or may not be available to us or our customers on commercially reasonable terms, or at all, which could harm our business.
Full use of our quantum solutions may depend on these third-party software, standards, specifications, applications, hardware and services, which may not be compatible with our quantum computing solutions and their development, or may not be available to us or our customers on commercially reasonable terms, or at all, which could harm our business.
In addition, if we fail to comply with government contracting laws, regulations and contract requirements, our contracts may be subject to termination, and we may be subject to financial and/or other liability under our contracts, the Federal Civil False Claims Act (including treble damages and other penalties), or criminal law.
In addition, if we fail to comply with government contracting laws, regulations and contract requirements, our contracts may be subject to termination, and we may be subject to financial and/or other liability under our contracts, the Federal Civil False Claims Act (including treble damages and other penalties) and state analogues or criminal law.
Shortages or supply interruptions in any of these components will adversely impact our ability to deliver revenues. The stability of ion traps may prove poorer than hoped, or more difficult to manufacture. It may also prove more difficult or even impossible to reliably entangle/connect ion traps together.
Shortages or supply interruptions in any of these components will adversely impact our ability to deliver revenues. 19 The stability of ion traps may prove poorer than hoped, or more difficult to manufacture. It may also prove more difficult or even impossible to reliably entangle or otherwise connect ion traps together.
Our business depends on our customers’ abilities to implement useful quantum algorithms and sufficient quantum resources for their business. If they are unable to do so, including due to their algorithmic challenge or other technical or personnel dilemmas, our growth may be negatively impacted.
Our business depends on our customers’ ability to implement useful quantum algorithms and sufficient quantum resources for their business. If they are unable to do so, including due to their algorithmic challenge or other technical or personnel dilemmas, our growth may be negatively impacted.
However, there are a variety of risks and costs associated with our international sales and operations, which include making investments prior to the sales or use of quantum computers, the cost of conducting our business internationally and hiring and training international employees and the costs associated with complying with local law.
However, there are a variety of risks and costs associated with our international sales and operations, which include making investments prior to the sales or use of quantum solutions, the cost of conducting our business internationally and hiring and training international employees and the costs associated with complying with local law.
In addition, alternatives to quantum computing may present themselves, which could substantially reduce the market for quantum computing services. Any expansion in our market depends on a number of factors, including the cost, performance, and perceived value associated with quantum computing solutions.
In addition, alternatives to quantum solutions may present themselves, which could substantially reduce the market for our quantum products and services. Any expansion in our market depends on a number of factors, including the cost, performance, and perceived value associated with quantum solutions.
The effective operation of our supply chain, including the acquisition of critical components and materials, the development of our quantum computing and networking technologies, the commercialization of our quantum computing and networking technologies and the effective operation of our managerial and operating systems all depend upon our ability to attract, train and retain qualified personnel in the aforementioned specialties.
The effective operation of our supply chain, including the acquisition of critical components and materials, the development and commercialization of our quantum technologies and the effective operation of our managerial and operating systems all depend upon our ability to attract, train and retain qualified personnel in the aforementioned specialties.
Furthermore, we cannot predict the rate at which our quantum computers will be accepted in international markets by potential customers. Our sales, support and engineering organization outside the United States is substantially smaller than our U.S. sales organization.
Furthermore, we cannot predict the rate at which our quantum solutions will be accepted in international markets by potential customers. Our sales, support and engineering organization outside the United States is substantially smaller than our U.S. sales organization.
We have limited experience in marketing, selling and supporting our platform outside of the United States. Our limited experience in operating our business internationally increases the risk that any potential future expansion efforts that we may undertake will not be successful.
We have limited experience in marketing, selling and supporting our solutions outside of the United States. Our limited experience in operating our business internationally increases the risk that any potential future expansion efforts that we may undertake will not be successful.
If we are unable to enhance our quantum computing system to keep pace with these rapidly evolving customer requirements, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, with better functionality, more conveniently, or more securely than our platform, our business, financial condition and results of operations could be adversely affected.
If we are unable to enhance our quantum technologies to keep 27 pace with these rapidly evolving customer requirements, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, with better functionality, more conveniently or more securely than our platform, our business, financial condition and results of operations could be adversely affected.
Whether actual operating and financial results and business developments will be consistent with our expectations and assumptions as reflected in our forecasts depends on a number of factors, many of which are outside our control, including, but not limited to: • success and timing of development activity; • customer acceptance of our quantum computing and networking systems; • breakthroughs in classical computing or other computing technologies that could eliminate the advantages of quantum computing and networking systems rendering them less practical to customers; • competition, including from established and future competitors; • whether we can obtain sufficient capital to sustain and grow our business; • our ability to manage our growth; • our ability to expand our sales into international markets; • our ability to retain existing key management, integrate recent hires and attract, retain and motivate qualified personnel; and • the overall strength and stability of domestic and international economies.
Whether actual operating and financial results and business developments will be consistent with our expectations and assumptions as reflected in our forecasts depends on a number of factors, many of which are outside our control, including, but not limited to: • success and timing of development activity; • customer acceptance of our quantum products and systems; • breakthroughs in classical technologies that could eliminate the advantages of quantum systems by rendering them less practical to customers; • competition, including from established and future competitors; • whether we can obtain sufficient capital to sustain and grow our business; • our ability to manage our growth; • our ability to expand our sales into international markets; • our ability to retain existing key management, integrate recent hires and attract, retain and motivate qualified personnel; and • the overall strength and stability of domestic and international economies.
The development and optimization of these algorithms is reliant on employing sufficient talent familiar with quantum computing and quantum networking, unique skills that require special training and education. If the market fails to train a sufficient number of engineers, researchers and other key quantum personnel, our customers may not find sufficient talent to partner with us to solve these problems.
The development and optimization of these algorithms is reliant on employing sufficient talent familiar with quantum technologies, unique skills that require special training and education. If the market fails to train a sufficient number of engineers, researchers and other key quantum personnel, our customers may not find sufficient talent to partner with us to solve these problems.
The U.S. government continues to add additional entities, in China and elsewhere, to restricted party lists impacting the ability of U.S. companies to provide products and technology, and, in certain cases, services, to these entities and, in some cases, to receive products, technology or services from these entities.
The U.S. government continues to add additional entities to restricted party lists impacting the ability of U.S. companies to provide products and technology, and, in certain cases, services, to these entities and, in some cases, to receive products, technology or services from these entities.
If our clients and partners do not perceive the benefits of our solution, or if our solution does not drive customer engagement, then our market may not develop at all, or it may develop slower than we expect. If any of these events occur, it could have a material adverse effect on our business, financial condition or results of operations.
If our clients and partners do not perceive the benefits of our solutions, or if our solutions do not drive customer engagement, then our market may not develop at all, or it may develop slower than we expect. If any of these events occur, it could have a material adverse effect on our business, financial condition or results of operations.
Additionally, we also target customers in Asia and may be subject to new and emerging data protection and privacy regimes in Asia, including China’s PIPL, Japan’s Act on the Protection of Personal Information, and Singapore’s Personal Data Protection Act.
Additionally, we also target customers in Asia and may be subject to existing and emerging data protection and privacy regimes in Asia, including China’s PIPL, Japan’s Act on the Protection of Personal Information, and Singapore’s Personal Data Protection Act.
If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our transferring or other processing of personal data necessary to operate our business.
Particularly given our significant and growing presence in the UK and the EEA, if there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our transferring or other processing of personal data necessary to operate our business.
Any disruptions, outages, defects and other performance and quality problems with our quantum computing systems or with the public cloud, internet, and other information systems and infrastructure on which they rely, could result in reduced use of our systems, increased expenses, delayed delivery under our contractual commitments, required provision of service credits, and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition and results of operations.
Any disruptions, outages, defects and other performance and quality problems with our fixed assets or with the public cloud, internet and other information systems and infrastructure on which they rely, could result in reduced use of our systems, increased expenses, delayed delivery under our contractual commitments, required provision of service credits and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition and results of operations.
From time to time we have been required to provide, and we anticipate being required to provide more consistently in the future, forecasts of our demand to our current and future suppliers prior to the scheduled delivery of products to potential customers.
From time to time we have been required to provide, and we anticipate being required to provide more consistently in the future, forecasts of our demand to our current and future suppliers before the scheduled delivery of products to potential customers.
Additionally, Sensitive Data could be leaked, disclosed or revealed as a result of or in connection with our employees', contractors', consultants', affiliates', or vendors' use of generative artificial intelligence (“AI”) technologies.
Additionally, Sensitive Data could be leaked, disclosed or revealed as a result of or in connection with our employees’, contractors’, consultants’, affiliates’ or vendors' use of generative artificial intelligence, or AI, technologies.
We cannot predict what actions may ultimately be taken with respect to trade relations between the United States and China or other countries, what products may be subject to such actions or what actions may be taken by the other countries in retaliation.
We cannot predict what actions may ultimately be taken with respect to trade relations between the United States or other countries, what products may be subject to such actions or what actions may be taken by the other countries in retaliation.
The success of these contracts and partnerships is dependent on our customer’s ability to identify, implement, and realize useful and scalable algorithms for their portfolio at a speed commensurate with the pace of hardware, software, and technological development. These arrangements are also dependent on the availability of time and resources to develop and optimize these algorithms.
The success of these contracts and partnerships is dependent on the customer’s ability to identify, implement and realize useful and scalable algorithms for its portfolio at a speed commensurate with the pace of hardware, software and technological development. These arrangements are also dependent on the availability of time and resources to develop and optimize these algorithms.
Our quantum computers are inherently complex and incorporate technology and components that have not been used for other applications and that may contain defects and errors, particularly when first introduced. We have a limited frame of reference from which to evaluate the long-term performance of our products.
Our quantum computers and other quantum products incorporate technology and components that have not been used for other applications and that may contain defects and errors, particularly when first introduced. We have a limited frame of reference from which to evaluate the long-term performance of our products.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditional information about cybersecurity risks we face is discussed in Item 1A of Part I, “Risk Factors,” under the heading “If our information technology systems, data, or physical facilities, or those of third parties upon which we rely, are or were compromised, we could experience adverse business consequences resulting from such compromise,” which should be read in conjunction with the information contained within Item 1C, Cybersecurity.
Biggest changeAdditional information about cybersecurity risks we face is discussed in Item 1A of Part I, “Risk Factors,” under the heading “If our information technology systems, data, or physical facilities, or those of third parties upon which we rely, are or were compromised, we could experience adverse business consequences resulting from such compromise,” and additional information about risks related to our ability to successfully integrate acquired businesses, including implementing our cybersecurity risk management processes, is discussed under the headings “ Acquisitions and other strategic investments involve a number of inherent risks, any of which could result in the benefits anticipated not being realized,” and “We have experienced in the past, and could also suffer in the future, disruptions, outages, defects and other performance and quality problems with our systems, including our information technology systems, our research and development activities, our facilities, our other fixed assets or with the public cloud, internet and other infrastructure on which they rely,” in Item 1A of Part I, “Risk Factors,” each of which should be read in conjunction with the information contained within this Item 1C, Cybersecurity.
Our Audit Committee is responsible for the oversight of cybersecurity risks, including our assessment of potential vulnerabilities and threats, evaluation of incidents, and monitoring of the implementation of key actions and/or projects to further enhance our ability to detect and manage ongoing security threats.
Our Audit Committee is responsible for the oversight of cybersecurity risks, including our assessment of potential vulnerabilities and threats, evaluation of incidents and monitoring of the implementation of key actions and projects to further enhance our ability to detect and manage ongoing security threats.
Our security program is aligned to the National Institute of Standards and Technology Cybersecurity Framework Special Publication (NIST) 800-53 standard, and we have obtained a SOC 2 Type 2 Certification.
Our security program is aligned to the National Institute of Standards and Technology Cybersecurity Framework Special Publication 800-53 standard, and we have obtained a SOC 2 Type 2 Certification.
We maintain an incident response plan which includes, among other areas, prioritization guidelines, data collection and evidence handling, communication channels and partners, and if required, law enforcement engagement. We maintain relationships with both local and national law enforcement agencies. We evaluate security incidents on a scale of severity to determine the appropriate incident handling protocols.
We maintain an incident response plan that includes, among other areas, prioritization guidelines, data collection and evidence handling, communication channels and partners and, if required, law enforcement engagement. We maintain relationships with both local and national law enforcement agencies. We evaluate security incidents on a scale of severity to determine the appropriate incident handling protocols.
Key members of management, including our security officer, provide updates to our Audit Committee on at least a semi annual basis. In addition to committee updates, our security officer also meets with the full Board of Directors at least annually to discuss the Company’s overall risk profile and associated ongoing mitigation efforts.
Key members of management, including our security officer, provide updates to our Audit Committee on at least a semi annual basis. In addition to committee updates, our security officer also meets with the full Board at least annually to discuss our overall risk profile and associated ongoing mitigation efforts.
The briefings provided to our Audit Committee and Board of Directors include updates on the Company’s key cyber risks and threats, the status of projects to strengthen our information security systems and incident readiness programs, assessments of the information security program and our key assets, as well as the emerging threat landscape.
The briefings provided to our Audit Committee and Board include updates on our key cyber risks and threats, the status of projects to strengthen our information security systems and incident readiness programs, assessments of the information security program and our key assets, as well as the emerging threat landscape.
The Company’s overall risks and assessments are monitored via a cross functional team composed of members of senior management, security, legal, and financial reporting. A partnership exists between these aforementioned individuals and departments so that identified issues are addressed in a timely manner and incidents are escalated to the appropriate parties as required.
Our overall risks and assessments are monitored by a cross functional team composed of members of senior management, security, legal and financial reporting. A partnership exists between these aforementioned individuals and departments so that identified issues are addressed in a timely manner and incidents are escalated to the appropriate parties as required.
Our security officer has over a decade of management and executive level information technology experience and reports to our SVP of Engineering and Technology.
Our Chief Information Security Officer has over a decade of management and executive level information technology experience and reports to our Chief Information Officer.
Cybersecurity Governance The Company’s Board of Directors oversees the overall risk management process, including cybersecurity risks, directly and through its committees.
Cybersecurity Governance The Board oversees our overall risk management process, including cybersecurity risks, directly and through its committees.
Our security officer is a member of the senior leadership team, collaborates closely with key members of management including our Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, SVP of Engineering and Technology, and SVP of Product to continuously monitor and evaluate our ongoing risk profile and mitigation strategies.
Our Chief Information Security Officer is a member of the senior leadership team, collaborates closely with key members of management including our President and Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, Chief Legal Officer and Chief Administrative Officer, Chief Business Officer, Chief Information Officer, EVP of Global Engineering and Chief Product Officer to continuously monitor and evaluate our ongoing risk profile and 51 mitigation strategies.
Our team includes personnel for supply chain security, governance risk and compliance and security engineering. We continue to leverage external industry partners in key areas including penetration testing, forensics, and for our security operations center. We use industry standard security tools across our program and reevaluate these annually as we digest the evolving threat landscape.
We also leverage external industry partners in key areas including penetration testing, forensics and for our security operations center. We use industry standard security tools across our program and reevaluate these annually as we digest the evolving threat landscape.
We conduct periodic and ad-hoc risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
We have implemented processes to identify, assess, detect, evaluate and mitigate ongoing security threats to our information technology systems and data as well as those of third parties upon which we rely. 50 We conduct periodic and ad-hoc risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
While we have experienced cybersecurity incidents in the past, to date, none have materially affected the Company or our financial position, results of operations, or cash flows.
While we have experienced cybersecurity incidents in the past, to date, none have materially affected or are reasonably likely to materially affect us or our business strategy, results of operations or financial condition.
Our security officer also provides ad hoc updates to management on cybersecurity-related news and events and discusses any updates to our cybersecurity risk management and strategy programs as a result of these matters. Where in the past we leveraged an outside fractional Chief Information Security Officer (“CISO”), during the year we transitioned to an in-house security leadership team.
Our Chief Information Security Officer also provides ad hoc updates to management on cybersecurity-related news and events and discusses any updates to our cybersecurity risk management and strategy programs as a result of these matters. Our team includes personnel for supply chain security, governance risk and compliance and security engineering.
These risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks. 50 As part of our risk management process, we conduct application security and vulnerability assessments, undergo third-party penetration testing of both our digital and physical assets, maintain ongoing risk assessments, and monitor various third-party risk feeds.
These risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks and the sufficiency of existing policies, procedures, systems and safeguards in place to manage such risks.
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We have implemented processes to identify, assess, detect, evaluate, and mitigate ongoing security threats to our information technology systems and data as well as those of third parties upon which we rely.
Added
As part of our risk management process, we conduct application security and vulnerability assessments, undergo third-party penetration testing of both our digital and physical assets, maintain ongoing risk assessments and monitor various third-party risk feeds.
Added
In addition, we regularly consider and enter into strategic transactions for the acquisition of, investment in or partnership with businesses, solutions or technologies, and therefore we conduct risk assessments with respect to such businesses, solutions or technologies and integrate them into our cybersecurity risk management program and implement the processes, assessments and plans described herein.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our principal facility is our corporate headquarters, located in College Park, Maryland, where we lease approximately 32,000 square feet of space from the University of Maryland under an agreement that expires in 2030. This facility is used for research and 51 development, servicing customers, and corporate functions.
Biggest changeItem 2. Properties. We lease facilities related to the operations of our business, including manufacturing, research and development, servicing customers and corporate functions. Our corporate headquarters is located in College Park, Maryland, where we lease approximately 32,000 square feet of space from the University of Maryland under an agreement that expires in 2030.
Most of the facility is used for servicing customers and general office space. We believe that our facilities are sufficient to meet our current needs and we will be able to obtain additional space as needed under commercially reasonable terms. 52
We believe that our facilities are sufficient to meet our current needs and we will be able to obtain additional space as needed under commercially reasonable terms. 52
We also lease approximately 101,000 square feet of space in Bothell, Washington under an agreement that expires in 2030. Most of the facility is used for manufacturing, research and development, servicing customers, and general office space. We also lease approximately 13,000 square feet of space in Arlesheim, Switzerland under an agreement that expires in 2029.
We also lease approximately 101,000 square feet of space in Bothell, Washington under an agreement that expires in 2030, and approximately 30,000 square feet of space in Oxford, United Kingdom, under an agreement that expires in 2034.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. In May 2022, a securities class action complaint captioned Leacock v.
Biggest changeThe results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Removed
IonQ, Inc. et al., Case No. 8:22-cv-01306, was filed by a stockholder of the Company in the United States District Court for the District of Maryland (the “Leacock Litigation”) against the Company and certain of the Company’s current officers. In June 2022, a securities class action complaint captioned Fisher v.
Removed
IonQ, Inc., Case No. 8:22-cv-01306-DLB (the “Fisher Litigation”) was filed by a stockholder against the Company and certain of the Company’s current officers (“IonQ Defendants”).
Removed
Both the Leacock Litigation and Fisher Litigation, which have been consolidated into a single action, allege violations of Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act and seek damages.
Removed
In September 2022, the Court appointed lead plaintiffs and counsel for lead plaintiffs, and ordered lead plaintiffs to file a consolidated amended complaint. The consolidated amended complaint was filed on November 22, 2022.
Removed
As part of the consolidated amended complaint, certain members of the Company’s board of directors as well as other dMY-related defendants (“Additional Defendants”) have been added as defendants to the case. On February 7, 2023, the IonQ Defendants and the Additional Defendants each filed a motion to dismiss the consolidated amended complaint.
Removed
On March 23, 2023, lead plaintiffs filed their omnibus opposition to the motions to dismiss. On April 26, 2023, the IonQ Defendants and the Additional Defendants each filed a reply in support of the motions to dismiss.
Removed
On September 28, 2023, the District Court of Maryland issued an order dismissing plaintiffs' claims against the IonQ Defendants and the Additional Defendants with prejudice and directed the clerk to close the case. On October 26, 2023, the plaintiffs filed a motion for post-judgment relief, seeking to amend their consolidated amended complaint.
Removed
The IonQ Defendants and Additional Defendants filed oppositions to plaintiffs’ motion on December 1, 2023, and plaintiffs filed their reply on January 8, 2024. On July 10, 2024, the plaintiffs' motion for post-judgment relief was denied and the District Court of Maryland directed the clerk to close the case.
Removed
On July 26, 2024, the plaintiffs filed a Notice of Appeal with the Fourth Circuit Court of Appeals seeking to review the trial court's decision. Plaintiffs filed their Opening Brief in the Fourth Circuit on September 9, 2024. A response brief by IonQ Defendants was filed on October 8, 2024 and plaintiffs’ reply brief was filed on October 29, 2024.
Removed
Oral argument in the Fourth Circuit occurred on January 31, 2025. Given the uncertainty of litigation and the legal standards that must be met for, among other things, success on the case merits, the Company cannot reasonably estimate the possible loss or range of loss, if any, that may result from the associated suit.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. Recent Sales of Unregistered Equity Securities None. 54 Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved]. 55
Biggest changeThe comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. 54 Recent Sales of Unregistered Equity Securities On December 8, 2025, we issued 356 shares of our common stock to former equityholders of Capella Space Corp. as a result of a post-closing working capital adjustment made pursuant to the terms of the Agreement and Plan of Merger, dated May 7, 2025, by and among the Company, Project Cornet Acquisition Sub, Inc., Capella Space Corp. and Shareholder Representative Services LLC, solely in its capacity as the representative of the former securityholders.
The graph assumes $100 was invested in each of the Company’s common stock, the S&P 500 Index and the Nasdaq Computer Index as of market close on October 1, 2021. Data for the S&P 500 Index and Nasdaq Computer Index assumes reinvestment of the full amount of all dividends. No dividends have been declared on our common stock.
The graph assumes $100 was invested in each of the Company’s common stock, the S&P 500 Index and the Nasdaq Computer Index as of market close on October 1, 2021. The data for the S&P 500 Index and Nasdaq Computer Index assume the reinvestment of the full amount of all dividends. No dividends have been declared on our common stock.
The following graph depicts the cumulative total shareholder return from October 1, 2021 (the first day on which the Company's common stock traded on the NYSE) through December 31, 2024 for the Company, the S&P 500 Index and the Nasdaq Computer Index.
The following graph depicts the cumulative total shareholder return from October 1, 2021 (the first day on which the Company’s common stock traded on the NYSE) through December 31, 2025 for the Company, the S&P 500 Index and the Nasdaq Computer Index.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock and public warrants are traded on the NYSE under the symbols “IONQ” and “IONQ WS,” respectively. Holders As of February 19, 2025, there were approximately 27 stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock and public warrants are traded on the NYSE under the symbols “IONQ” and “IONQ WS,” respectively. Holders As of February 18, 2026, there were approximately 461 stockholders of record.
Stock Performance Graph This performance graph shall not be deemed “soliciting material” or“filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section or incorporated by reference into any filing of IonQ, Inc. under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Stock Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that section or incorporated by reference into any filing of IonQ, Inc. under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Added
Securities Authorized for Issuance under Equity Compensation Plans Please see Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” under Part III of this Annual Report on Form 10-K, which is incorporated by reference to our 2026 Proxy Statement, for information on where to find information required by Item 201(d) of Regulation S-K.
Added
The issuance and sale of these shares was made in reliance on the private offering exemption of Section 4(a)(2) of the Securities Act and/or the private offering provision of Rule 506 of Regulation D promulgated under the Securities Act.
Added
On January 20, 2026, we issued 45,972 shares of our common stock to former equityholders of Oxford Ionics Limited as a result of a post-closing correction made pursuant to the terms of the Share Purchase Agreement, dated June 7, 2025, by and among the Company, Oxford Ionics Limited, the selling equityholders thereof and Oxford Science Enterprises plc, solely in its capacity as the representative of the selling equityholders.
Added
The issuance and sale of these shares was made in reliance on the private offering exemption of Section 4(a)(2) of the Securities Act and/or the private offering provision of Rule 506 of Regulation D and/or Regulation S promulgated under the Securities Act. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved]. 55

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIncome tax benefit (expense) Income tax expense consists of income taxes related to foreign jurisdictions in which we conduct business. 58 Results of Operations The following table sets forth our consolidated statements of operations for the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Revenue $ 43,073 $ 22,042 Costs and expenses: Cost of revenue (excluding depreciation and amortization) (1) 20,597 8,108 Research and development (1) 136,827 92,321 Sales and marketing (1) 28,395 18,270 General and administrative (1) 71,055 50,722 Depreciation and amortization 18,654 10,375 Total operating costs and expenses 275,528 179,796 Loss from operations (232,455 ) (157,754 ) Gain (loss) on change in fair value of warrant liabilities (117,107 ) (19,206 ) Interest income, net 18,249 19,322 Other income (expense), net (275 ) (85 ) Loss before income tax expense (331,588 ) (157,723 ) Income tax benefit (expense) (59 ) (48 ) Net loss $ (331,647 ) $ (157,771 ) (1) Cost of revenue, research and development, sales and marketing, and general and administrative expenses for the periods include stock-based compensation expense as follows: Year Ended December 31, 2024 2023 (in thousands) Cost of revenue $ 4,740 $ 2,819 Research and development 58,696 40,103 Sales and marketing 13,788 6,762 General and administrative 29,654 20,059 Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, $ % 2024 2023 Change Change (in thousands) Revenue $ 43,073 $ 22,042 $ 21,031 95 % Revenue increased by $21.0 million, or 95%, to $43.1 million for the year ended December 31, 2024, from $22.0 million for the year ended December 31, 2023 .
Biggest changeResults of Operations The following table sets forth our consolidated statements of operations for the periods indicated: Year Ended December 31, 2025 2024 (in thousands) Revenue $ 130,016 $ 43,073 Costs and expenses: Cost of revenue (excluding depreciation and amortization) (1) 77,488 20,597 Research and development (1) 305,705 136,827 Sales and marketing (1) 53,447 28,395 General and administrative (1) 245,087 71,055 Depreciation and amortization 82,004 18,654 Total operating costs and expenses 763,731 275,528 Loss from operations (633,715 ) (232,455 ) Gain (loss) on change in fair value of warrant liabilities 66,710 (117,107 ) Interest income, net 55,997 18,249 Offering costs associated with warrants (45,714 ) — Other income (expense), net 29 (275 ) Loss before income tax expense (556,693 ) (331,588 ) Income tax benefit (expense) 44,572 (59 ) Net loss $ (512,121 ) $ (331,647 ) Net loss attributable to noncontrolling interests (1,743 ) — Net loss attributable to IonQ, Inc. $ (510,378 ) $ (331,647 ) (1) Cost of revenue, research and development, sales and marketing, and general and administrative expenses for the periods include stock-based compensation expense as follows: Year Ended December 31, 2025 2024 (in thousands) Cost of revenue $ 21,806 $ 4,740 Research and development 169,828 58,696 Sales and marketing 23,899 13,788 General and administrative 96,499 29,654 Comparison of the Years Ended December 31, 2025 and 2024 Revenue Year Ended December 31, $ % 2025 2024 Change Change (in thousands) Revenue $ 130,016 $ 43,073 $ 86,943 202 % 59 Revenue increased by $86.9 million, or 202%, to $130.0 million for the year ended December 31, 2025, from $43.1 million for the year ended December 31, 2024.
Cash flows from investing activities Net cash provided by investing activities during the year ended December 31, 2024, was $82.7 million, primarily resulting from cash received from maturities of available-for-sale securities of $418.1 million, offset by purchases of available-for-sale securities of $296.3 million, additions of $18.0 million to property and equipment primarily related to leasehold improvements, the development of our quantum computing systems, and other supporting equipment, cash paid of $15.5 million for businesses acquired, and additions of $3.9 million related to capitalized software development costs.
Net cash provided by investing activities during the year ended December 31, 2024, was $82.7 million, primarily resulting from cash received from maturities of available-for-sale securities of $418.1 million, offset by purchases of available-for-sale securities of $296.3 million, and additions of $18.0 million to property and equipment primarily related to leasehold improvements and the development of our quantum computing systems, and other supporting equipment, cash paid of $15.5 million for businesses acquired, and additions of $3.9 million related to capitalized software development costs.
Impact of the Macroeconomic Climate on Our Business 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.
Impact of the Macroeconomic Climate on Our Business Inflationary factors, interest rates and overhead costs may adversely affect our operating results. High interest and inflation rates also present a 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.
Our critical accounting policies are described in greater detail in Note 2 to our audited consolidated financial statements included in this Annual Report. Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions.
Our critical accounting policies are described in greater detail in Note 2 to our audited consolidated financial statements included in this Annual Report. 63 Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders.
Interest income, net Interest income, net consists of income earned on our money market funds and other available-for-sale investments. Other income (expense), net Other income (expense), net consists of gains and losses that arise from fluctuations in foreign currency exchange rates and certain other nonoperating expenses.
Interest income, net Interest income, net primarily consists of income earned on our money market funds and other available-for-sale investments. Other income (expense), net Other income (expense), net consists of gains and losses that arise from fluctuations in foreign currency exchange rates and certain other nonoperating expenses.
Overview We are developing quantum computers and networks designed to solve some of the world’s most complex problems, and transform business, society and the planet for the better.
Overview We are developing quantum computers designed to solve some of the world’s most complex problems and transform business, society and the planet for the better.
Depreciation and amortization Depreciation and amortization expense results from depreciation and amortization of our property and equipment, including our quantum computing systems, and intangible assets that are recognized over their estimated lives.
Depreciation and amortization Depreciation and amortization expense results from depreciation and amortization of our property and equipment, including our quantum computing systems and satellites, and intangible assets that are recognized over their estimated lives.
As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Risks and uncertainties are identified under “Risk Factors” in Item 1A herein and in our other filings with the Securities and Exchange Commission (the “SEC”).
As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Risks and uncertainties are identified under “Risk Factors” in Item 1A herein and in our other filings with the Securities and Exchange Commission, or the SEC.
Certain products and services have limited or no history of being sold on a standalone basis, requiring us to estimate the standalone selling price. To date, we have estimated the standalone selling price based on other contracts for similar products and services adjusted for differing terms than the contract being evaluated, as well as internal pricing guidelines and market factors.
Certain products and services have limited or no history of being sold on a standalone basis, requiring us to estimate the standalone selling price. We estimate the standalone selling price based on other contracts for similar products and services adjusted for differing terms than the contract being evaluated, as well as internal pricing guidelines and market factors.
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 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 short-term and long-term investment balances. However, this determination is based upon internal projections and is subject to changes in market and business conditions.
The transaction price generally consists of a fixed fee for a minimum volume of usage to be made available over a defined period of access. Fixed fee arrangements may also include a variable component whereby customers pay an amount for usage over contractual minimums contained in the contracts.
The transaction price generally consists of a fixed fee for a minimum volume of usage or images to be made available over a defined period of access. Fixed fee arrangements may also include a variable component whereby customers pay an amount for usage over contractual minimums contained in the contracts.
Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled “Risk Factors.” Our material contractual commitments as of December 31, 2024, primarily relate to operating lease commitments.
Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled “Risk Factors.” Our material contractual commitments as of December 31, 2025, primarily relate to operating lease commitments.
To date, we have estimated the standalone selling price based on other contracts for similar products and services adjusted for differing terms than the contract being evaluated, as well as internal pricing guidelines and market factors. In addition, we take into consideration the estimated costs to be incurred to satisfy the performance obligation plus an appropriate profit margin.
We estimate the standalone selling price based on other contracts for similar products and services adjusted for differing terms than the contract being evaluated, as well as internal pricing guidelines and market factors. In addition, we take into consideration the estimated costs to be incurred to satisfy the performance obligation plus an appropriate profit margin.
A discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found under Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 28, 2024, which is available free of charge on the SEC's website at www.sec.gov and our investor relations website at investors.ionq.com.
A discussion of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found under Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 26, 2025, which is available free of charge on the SEC's website at www.sec.gov and our investor relations website at investors.ionq.com.
This section provides an analysis of our financial condition and results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023.
This section provides an analysis of our financial condition and results of operations for the year ended December 31, 2025, compared to the year ended December 31, 2024.
This Annual Report contains statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties.
This Annual Report contains statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act, that involve substantial risks and uncertainties.
Excluded from our available liquidity is $2.4 million of restricted cash, which is primarily recorded in other noncurrent assets in our consolidated balance sheets. We believe that our cash, cash equivalents and investments as of December 31, 2024, will be sufficient to meet our working capital and capital expenditure needs for the next 12 months.
Excluded from our available liquidity is $6.9 million of restricted cash, which is primarily recorded in other noncurrent assets in our consolidated balance sheets. We believe that our cash, cash equivalents and investments as of December 31, 2025, will be sufficient to meet our working capital and capital expenditure needs for the next 12 months.
Net cash provided by financing activities during the year ended December 31, 2023, was $1.8 million, primarily resulting from proceeds from stock options exercised. Critical Accounting Estimates This discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
Net cash provided by financing activities during the year ended December 31, 2024, was $41.7 million, primarily resulting from proceeds from warrants and stock options exercised. Critical Accounting Estimates This discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
We currently make access to our quantum computers available via three major cloud platforms, Amazon Web Services’ (“AWS”) Amazon Braket, Microsoft’s Azure Quantum and Google’s Cloud Marketplace, and also to select customers via our own cloud service. This cloud-based approach enables the broad availability of quantum-computing-as-a-service (“QCaaS”).
We currently make access to our quantum computers available through three major cloud platforms, Amazon Web Services’, or AWS’s, Braket, Microsoft’s Azure Quantum and Google’s Cloud Marketplace, and also to select customers via our own cloud service. This cloud-based approach enables the broad availability of quantum-computing-as-a-service, or QCaaS.
Certain of our contracts contain multiple performance obligations, most commonly in contracts for the sale of specialized quantum computing hardware together with related maintenance and support. Such contracts may also include access to our QCaaS. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied.
Certain of our contracts contain multiple performance obligations, most commonly in contracts for the sale of quantum products together with related maintenance, consulting and other support. Certain contracts may also include access to our QCaaS. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied.
Research and development expenses also include purchased hardware and software costs related to quantum computing systems constructed for research purposes that are not probable of providing a future economic benefit and have no alternate future use as well as costs associated with third-party research and development arrangements.
Research and development expenses also include purchased hardware and software costs for research purposes that are not probable of providing a future economic benefit and have no alternate future use as well as costs associated with third-party research and development arrangements.
Personnel-related expenses include salaries, benefits, and stock-based compensation. Cost of revenue excludes depreciation and amortization related to our quantum computing systems and related software. Research and development Research and development expenses consist of personnel-related expenses, including salaries, benefits and stock-based compensation, and allocated overhead costs for our research and development functions.
Personnel-related expenses include salaries, benefits, and stock-based compensation. Cost of revenue excludes depreciation and amortization. Research and development Research and development expenses consist of personnel-related expenses, including salaries, benefits and stock-based compensation, and allocated overhead costs for our research and development functions.
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 future on our operating costs, including 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.
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 future on our operating costs, including due to supply chain constraints, consequences associated with bank failures, trade wars and the effect of recently heightened, scheduled, and threatened tariffs by the U.S. or its trading partners, 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.
Until such time as we can generate significant revenue from commercializing our quantum computing and networking technology, if ever, we expect to finance our liquidity needs 61 through our cash, cash equivalents and investments, as well as equity or debt financings or other capital sources, including potential collaborations and other similar arrangements.
Until such time as we can generate significant revenue from commercializing our products and services, if ever, we expect to finance our liquidity needs through our cash, cash equivalents, and short-term and long-term investments, as well as equity or debt financings or other capital sources, including potential collaborations and other similar arrangements.
The remaining increase is due to an increase in costs to support research and development initiatives, including a $1.9 million increase in professional service fees and a $2.3 million increase in allocated overhead costs.
The remaining increase is due to an increase in costs to support research and development initiatives, including a $7.4 million increase in professional service fees and allocated overhead costs.
Unless the context otherwise requires, the terms “IonQ,” “Legacy IonQ” “we,” “us,” “our” and similar terms refer to IonQ Quantum, Inc. prior to the consummation of the Business Combination and IonQ, Inc. and its wholly owned subsidiaries after the consummation of the Business Combination. References to “dMY” refer to the predecessor company prior to the consummation of the Business Combination.
Unless the context otherwise requires, the terms “IonQ,” “we,” “us,” “our” and similar terms refer to IonQ Quantum, Inc. prior to the consummation of the Business Combination and IonQ, Inc. and its wholly owned subsidiaries after the consummation of the De-SPAC Transaction.
As of December 31, 2024, we have total operating lease obligations of $21.9 million, with $3.7 million payable within 12 months. Other than operating lease commitments, cash requirements for fiscal year 2025 are expected to consist primarily of operating expenses and continued investment in our quantum computers.
As of December 31, 2025, we have total operating lease obligations of $35.5 million, with $9.6 million payable within 12 months. Other than operating lease commitments, cash requirements for fiscal year 2026 are expected to consist primarily of operating expenses and continued investment in our quantum products, as well as the acquisition of SkyWater.
Nonoperating Costs and Expenses Gain (loss) on change in fair value of warrant liabilities The gain (loss) on change in fair value of warrant liabilities consists of mark-to-market fair value adjustments recorded associated with the public warrants assumed as part of the Business Combination.
Nonoperating Costs and Expenses Gain (loss) on change in fair value of warrant liabilities The gain (loss) on change in fair value of warrant liabilities consists of mark-to-market fair value adjustments recorded associated with the public warrants and Series A and Series B prefunded and private warrants.
We have incurred significant losses since our inception and as of December 31, 2024, we had an accumulated deficit of $683.7 million. During the year ended December 31, 2024, we incurred net losses of $331.6 million. We expect to incur significant losses and higher operating expenses for the foreseeable future.
We have incurred significant losses since our inception and as of December 31, 2025, we had an accumulated deficit of $1,194.1 million. During the year ended December 31, 2025, we incurred net losses attributable to IonQ, Inc. of $510.4 million. We expect to incur significant losses and higher operating expenses for the foreseeable future.
For performance obligations related to specialized quantum computing hardware and consulting services, revenue is recognized over time based on the efforts incurred to date relative to the total expected effort, primarily based on a cost-to-cost input measure. We apply judgment to determine a reasonable method to measure progress and to estimate total expected effort.
For performance obligations related to specialized quantum computing hardware and consulting services, as well as customer solutions for specialized satellite development capabilities, revenue is recognized over time based on the efforts incurred to date relative to the total expected effort, primarily based on a cost-to-cost input measure.
For performance obligations related to providing QCaaS access, fixed fees are recognized on a straight-line basis over the access period. Variable usage fees are recognized in the period they occur.
For performance obligations related to providing QCaaS access or satellite imagery and data, fixed fees are recognized on a straight-line basis over the access period.
The increase was primarily driven by an increase of $33.7 million in payroll-related expenses, including an increase in stock-based compensation of $18.1 million, as a result of increased headcount and new equity grants, and a $5.0 million increase in materials, supplies and equipment costs.
The increase was primarily driven by an increase of $146.4 million in payroll-related expenses, including an increase in stock-based compensation of $111.1 million, as a result of increased headcount and new equity grants, including the replacement awards issued in connection with acquisitions, and a $11.2 million increase in materials, supplies, and equipment costs.
The increase was driven primarily by an increase in hardware costs used in the construction of specialized quantum computing hardware, as well as an increase in labor costs to service contracts, for the year ended December 31, 2024.
The increase was driven primarily by an increase in labor costs to service contracts, as well as an increase in materials costs related to quantum products, for the year ended December 31, 2025.
Our net losses were $331.6 million, $157.8 million and $48.5 million, for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, we had an accumulated deficit of $683.7 million.
Our net losses attributable to IonQ, Inc. were $510.4 million, $331.6 million and $157.8 million, for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, we had an accumulated deficit of $1,194.1 million.
Sales and marketing Year Ended December 31, $ % 2024 2023 Change Change (in thousands) Sales and marketing $ 28,395 $ 18,270 $ 10,125 55 % Sales and marketing expense increased by $10.1 million, or 55%, to $28.4 million for the year ended December 31, 2024, from $18.3 million for the year ended December 31, 2023.
Sales and marketing Year Ended December 31, $ % 2025 2024 Change Change (in thousands) Sales and marketing $ 53,447 $ 28,395 $ 25,052 88 % Sales and marketing expense increased by $25.1 million, or 88%, to $53.4 million for the year ended December 31, 2025, from $28.4 million for the year ended December 31, 2024.
We supplement our offerings with professional services focused on assisting our customers in applying quantum computing and networking to their businesses. We also expect to sell full quantum computing systems to customers, either over the cloud or for local access. We also offer quantum networking products which offer customers secure communication networks and enable networked quantum computing.
We supplement our offerings with professional services focused on assisting our customers in applying quantum computing and our quantum networking, quantum sensing and quantum security solutions to their businesses. We also sell full quantum computing systems to customers, either over the cloud or on premises.
We believe that our proprietary technology, our architecture, and the technology exclusively available to us through license agreements will offer us advantages both in terms of research and development, as well as the commercial value of our intended product offerings. Today, we sell specialized quantum computing and networking hardware together with related maintenance and support.
We believe that our proprietary technology, our architecture and the technology exclusively available to us through license agreements will offer us advantages both in research and development and in the commercial value of our product offerings.
Net cash used in operating activities during the year ended December 31, 2023, was $78.8 million, resulting primarily from a net loss of $157.8 million, adjusted for non-cash activity, primarily related to stock-based compensation, the loss recorded as a result of mark-to-market activity for our public warrants, depreciation and amortization, and other working capital activities.
Net cash used in operating activities during the year ended December 31, 2025, was $283.2 million, resulting primarily from a net loss of $512.1 million, adjusted for non-cash activity, primarily related to stock-based compensation, depreciation and amortization, deferred income taxes, 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.
The increase in net cash used in operations from the prior year period was primarily related to increased compensation costs and costs for materials and supplies to support the production of quantum computing systems and satellites, customer contracts, and other research and development activities.
Cash flows The following table summarizes our cash flows for the period indicated: Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by (used in) operating activities $ (105,683 ) $ (78,811 ) $ (44,698 ) Net cash provided by (used in) investing activities 82,730 68,766 (309,056 ) Net cash provided by (used in) financing activities 41,687 1,761 1,096 Cash flows from operating activities 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.
The SkyWater Acquisition is expected to require approximately $1.0 billion in cash, including approximately $0.8 billion related to purchase consideration and approximately $0.2 billion related to debt repayment and other transaction costs. 62 Cash flows The following table summarizes our cash flows for the period indicated: Year Ended December 31, 2025 2024 2023 (in thousands) Net cash provided by (used in) operating activities $ (283,187 ) $ (105,683 ) $ (78,811 ) Net cash provided by (used in) investing activities (2,095,088 ) 82,730 68,766 Net cash provided by (used in) financing activities 3,358,602 41,687 1,761 Cash flows from operating activities 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.
General and administrative Year Ended December 31, $ % 2024 2023 Change Change (in thousands) General and administrative $ 71,055 $ 50,722 $ 20,333 40 % General and administrative expenses increased by $20.3 million, or 40%, to $71.1 million for the year ended December 31, 2024, from $50.7 million for the year ended December 31, 2023.
General and administrative Year Ended December 31, $ % 2025 2024 Change Change (in thousands) General and administrative $ 245,087 $ 71,055 $ 174,032 245 % General and administrative expenses increased by $174.0 million, or 245%, to $245.1 million for the year ended December 31, 2025, from $71.1 million for the year ended December 31, 2024.
We also sell access to several quantum computers of various qubit capacities and are in the process of researching and developing technologies for quantum computers with increasing computational capabilities.
Today, we sell specialized quantum computing hardware, together with complementary products and services, such as quantum networking, quantum sensing and quantum security products and associated maintenance and support. We also sell access to several quantum computers of various qubit capacities and are in the process of researching and developing technologies for quantum computers with increasing computational capabilities.
Revenue recognition We derive revenue from contracts associated with the design, development, construction and sale of specialized quantum computing hardware together with related maintenance and support, from contracts providing access to QCaaS, and from consulting services related to co-developing algorithms on quantum computing systems.
Revenue Recognition We derive revenue from the design, development, construction and sale of quantum ecosystem hardware together with related maintenance and support, from providing access to our QCaaS services, from consulting services related to co-developing algorithms and other services related to the Company's quantum products, and from providing satellite imagery and data from our constellation of satellites through our online platform.
Research and development Year Ended December 31, $ % 2024 2023 Change Change (in thousands) Research and development $ 136,827 $ 92,321 $ 44,506 48 % Research and development expense increased by $44.5 million, or 48%, to $136.8 million for the year ended December 31, 2024, from $92.3 million for the year ended December 31, 2023.
Research and development Year Ended December 31, $ % 2025 2024 Change Change (in thousands) Research and development $ 305,705 $ 136,827 $ 168,878 123 % Research and development expense increased by $168.9 million, or 123%, to $305.7 million for the year ended December 31, 2025, from $136.8 million for the year ended December 31, 2024.
Estimates related to standalone selling price have not had a material impact on revenue recognized in recent periods. We have determined that our QCaaS contracts represent a combined, stand-ready performance obligation to provide access to our quantum computing systems together with related maintenance and support.
We have determined that our QCaaS contracts represent a combined, stand-ready performance obligation to provide access to our quantum computing systems together with related maintenance and support. Additionally, we have determined that our contracts to provide satellite imagery and data also represent a stand-ready performance obligation.
The increase was primarily driven by an increase of $10.0 million of payroll-related expenses, including an increase in stock-based compensation of $7.0 million, as a result of increased headcount and new equity grants.
The increase was primarily driven by an increase of $19.4 million of payroll-related expenses, including an increase in stock-based compensation of $10.1 million, as a result of increased headcount and new equity grants, as well as increased costs to promote our products and services and other marketing initiatives, including a $2.9 million increase in professional service fees.
Changes in these estimates can have a significant impact on the assessment of capitalized costs and depreciation expense, which could result in material changes to reported property and equipment, net.
Changes in these estimates can have a significant impact on the determination of fair values of identifiable intangible assets acquired, which could result in material changes to reported intangible assets, goodwill, and amortization expense.
We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, and technologies, which may require us to seek additional equity or debt financing. Our primary uses of cash and investments are to fund our operations as we continue to grow our business and our investing activities, including capital expenditures and potential acquisitions.
Our future capital requirements will depend on many factors, including investments in growth and technology. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, and technologies, which may require us to seek additional equity or debt financing.
The increase was primarily driven by an increase of $21.4 million of payroll-related expenses, including a $10.0 million cash incentive award for the Company's chief executive officer and an increase in stock-based compensation of $9.6 million, offset by decreases of $0.6 million in professional service fees and allocated overhead costs and $0.5 million in director and officer liability insurance costs. 60 Depreciation and amortization Year Ended December 31, $ % 2024 2023 Change Change (in thousands) Depreciation and amortization $ 18,654 $ 10,375 $ 8,279 80 % Depreciation and amortization expenses increased by $8.3 million, or 80%, to $18.7 million for the year ended December 31, 2024, from $10.4 million for the year ended December 31, 2023.
The increase was primarily driven by an increase of $92.0 million of payroll-related expenses, including an increase in stock-based compensation of $66.8 million, as a result of increased headcount and new equity grants, as well as an increase of $74.9 million in professional service fees and allocated overhead costs, including $43.5 million in acquisition transaction and integration costs. 60 Depreciation and amortization Year Ended December 31, $ % 2025 2024 Change Change (in thousands) Depreciation and amortization $ 82,004 $ 18,654 $ 63,350 340 % Depreciation and amortization expenses increased by $63.4 million, or 340%, to $82.0 million for the year ended December 31, 2025, from $18.7 million for the year ended December 31, 2024.
Unlike a standard computer, design and development efforts continue throughout the useful life of our quantum computing systems to ensure proper calibration and optimal functionality.
Research and development is attributable to the advancing technology research, platform and infrastructure development, and the research and development of new product iterations, including quantum products and satellites. Design and development efforts continue throughout the useful life of our quantum computing systems and satellites to ensure proper calibration and optimal functionality.
Interest income, net Year Ended December 31, $ % 2024 2023 Change Change (in thousands) Interest income, net $ 18,249 $ 19,322 $ (1,073 ) (6 )% Interest income, net decreased by $1.1 million, or 6%, to $18.2 million for the year ended December 31, 2024, from $19.3 million for the year ended December 31, 2023.
Interest income, net Year Ended December 31, $ % 2025 2024 Change Change (in thousands) Interest income, net $ 55,997 $ 18,249 $ 37,748 207 % Interest income, net increased by $37.7 million, or 207%, to $56.0 million for the year ended December 31, 2025, from $18.2 million for the year ended December 31, 2024.
Factors considered in these estimates include our historical performance, the availability, productivity and cost of labor, the nature and complexity of work to be performed, the effect of change orders, availability and cost of materials and the effect of any delays in performance. 57 Operating Costs and Expenses Cost of revenue Cost of revenue primarily consists of expenses related to construction of specialized quantum computing hardware and delivery of our services, including personnel-related expenses, hardware costs, allocated overhead costs for customer facing functions, and costs associated with maintaining our in-service quantum computing systems to ensure proper calibration as well as costs incurred for maintaining the cloud on which the QCaaS resides.
Variable usage fees are recognized in the period they occur. 57 Operating Costs and Expenses Cost of revenue Cost of revenue primarily consists of expenses related to the delivery of the our quantum hardware products and delivery of our services, including personnel-related expenses, hardware costs, allocated overhead costs for customer facing functions, and costs associated with maintaining the Company's in-service quantum computing systems and satellites to ensure proper calibration as well as costs incurred for maintaining the cloud on which the Company delivers its services.
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 algorithmic qubits and higher levels of fidelity than presently exists—prerequisites for quantum computing to reach broad quantum advantage. 56 The Merger Agreement On March 7, 2021, Legacy IonQ, dMY and Ion Trap Acquisition Inc.
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 physical and logical qubits and higher levels of qubit performance than presently exists—prerequisites for quantum computing to reach broad quantum advantage. 56 From time to time, we have acquired or invested in complementary businesses, and intend to continue to consider making such acquisitions and investments.
Future Funding Requirements We expect our principal sources of liquidity will continue to be our cash, cash equivalents and investments and any additional capital we may obtain through additional equity or debt financings. Our future capital requirements will depend on many factors, including investments in growth and technology.
The transaction is expected to close within the next twelve months, subject to customary closing conditions, including approval by SkyWater’s shareholders and regulatory approval. Future Funding Requirements We expect our principal sources of liquidity will continue to be our cash, cash equivalents, and short-term and long-term investments and any additional capital we may obtain through additional equity or debt financings.
We require a significant amount of cash for expenditures as we invest in ongoing research and development and commercialization of our products.
Our primary uses of cash, cash equivalents, and short-term and long-term investments are to fund our operations as we continue to grow our business and our investing activities, including capital expenditures, potential acquisitions, and strategic investments. We require a significant amount of cash for expenditures as we invest in ongoing research and development and commercialization of our products.
The increase was primarily driven by an increase of $3.1 million and $2.8 million in depreciation expense associated with capitalized quantum computing system costs and other property and equipment, respectively, and an increase of $2.4 million due to amortization of capitalized internal-use software.
The increase was primarily driven by an increase of $45.6 million in amortization expense associated with acquired intangible assets, and an increase of $10.2 million in depreciation expense associated with capitalized quantum computing systems and satellites.
Net cash provided by investing activities during the year ended December 31, 2023, was $68.8 million, primarily resulting from maturities of available-for-sale securities of $386.8 million, offset by purchases of available-for-sale securities of $298.4 million, additions of $13.7 million to property and equipment primarily related to the development of our quantum computing systems, and additions of $4.6 million related to capitalized software development costs. 62 Cash flows from financing activities Net cash provided by financing activities during the year ended December 31, 2024, was $41.7 million, primarily resulting from proceeds from warrants and stock options exercised.
Cash flows from investing activities Net cash used in investing activities during the year ended December 31, 2025, was $2,095.1 million, primarily resulting from purchases of available-for-sale securities and privately-held securities of $2,757.8 million, and additions of $16.4 million to property and equipment, offset by cash received from maturities of available-for-sale securities of $682.8 million.
Key Components of Results of Operations Revenue We derive revenue from contracts associated with the design, development, construction and sale of specialized quantum computing hardware together with related maintenance and support, from contracts providing access to QCaaS, and from consulting services related to co-developing algorithms on quantum computing systems.In arrangements with the cloud service providers, the cloud service provider is considered the customer and we do not have any contractual relationships with the cloud service providers’ end users.
Key Components of Results of Operations Revenue We derive revenue from the design, development, construction and sale of quantum ecosystem hardware together with related maintenance and support, from providing access to our QCaaS services, from consulting services related to co-developing algorithms and other services related to the Company's quantum products, and from providing satellite imagery and data from our constellation of satellites through our online platform.
The decrease was primarily driven by a decrease in the available-for-sale investments balance, offset by higher interest rates. Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents and available-for-sale securities of $363.8 million.
The increase was primarily driven by a partial release of U.S. federal and state valuation allowances. Liquidity and Capital Resources As of December 31, 2025, we had cash, cash equivalents, and short-term and long-term investments of $3,336.8 million.
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 year ended December 31, 2024. 59 Cost of revenue Year Ended December 31, $ % 2024 2023 Change Change (in thousands) Cost of revenue (excluding depreciation and amortization) $ 20,597 $ 8,108 $ 12,489 154 % Cost of revenue increased by $12.5 million, or 154%, to $20.6 million for the year ended December 31, 2024, from $8.1 million for the year ended December 31, 2023.
The increase was primarily driven by progress on our arrangements to build specialized quantum computing hardware, as well as increased revenue as a result of acquisitions during the year ended December 31, 2025.
In addition, we take into consideration the estimated costs to be incurred to satisfy the performance obligation plus an appropriate profit margin. In limited situations, for certain contracts executed in prior years, when the standalone selling price was not known, due to it being either highly variable or uncertain, we allocated the transaction price using the residual approach.
In addition, we take into consideration the estimated costs to be incurred to satisfy the performance obligation plus an appropriate profit margin.
Gain (loss) on change in fair value of warrant liabilities Year Ended December 31, $ % 2024 2023 Change Change (in thousands) Gain (loss) on change in fair value of warrant liabilities $ (117,107 ) $ (19,206 ) $ (97,901 ) (510 )% The change in fair value of warrant liabilities decreased by $97.9 million, or 510%, to a loss of $117.1 million for the year ended December 31, 2024, from a loss of $19.2 million for the year ended December 31, 2023.
Gain (loss) on change in fair value of warrant liabilities Year Ended December 31, $ % 2025 2024 Change Change (in thousands) Gain (loss) on change in fair value of warrant liabilities $ 66,710 $ (117,107 ) $ 183,817 157 % The change in fair value of warrant liabilities was primarily due to the mark-to-market gains recognized on the Series A and Series B warrants issued in 2025.
Removed
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.
Added
Additionally, through a network of satellites, we offer data-as-a-service products to customers, including synthetic-aperture radar imaging, and through combining our satellite platform with our quantum sensing products, we intend to offer advanced quantum positioning, navigation and timing services in the future. We are still in the early stages of commercial growth. Since our inception, we have incurred significant operating losses.
Removed
(the “Merger Sub”) entered into an Agreement and Plan of Merger (the “Merger Agreement”).
Added
For more information on recent acquisitions and investments and their impact on our business, refer to Note 3, Business Combinations, Note 5, Fair Value Measurements, and Note 22, Subsequent Events, in the notes to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Removed
Pursuant to the Merger Agreement, at the closing, the Merger Sub was merged with and into Legacy IonQ, with Legacy IonQ continuing as the surviving corporation following the merger, being a wholly owned subsidiary of dMY and the separate corporate existence of the Merger Sub ceased (the “Business Combination”).
Added
These inflationary effects may be exacerbated by new tariffs and evolving trade policy.
Removed
Contemporaneously with the Business Combination, dMY changed its name to IonQ, Inc. and Legacy IonQ changed its name to IonQ Quantum, Inc. IonQ became the successor registrant with the SEC, meaning that Legacy IonQ’s financial statements for previous periods have been disclosed in the registrant’s periodic reports filed with the SEC.
Added
We apply judgment to determine a reasonable method to measure progress and to estimate total expected effort. Factors considered in these estimates include our historical performance, the availability, productivity and cost of labor, the nature and complexity of work to be performed, the effect of change orders, availability and cost of materials, and the effect of any delays in performance.
Removed
We have determined that contracts that contain consulting services related to co-developing quantum computing algorithms and the ability to use our quantum computing systems to run such algorithms represent a combined performance obligation that is satisfied over-time.
Added
For performance obligations related to certain quantum networking and sensing products and related services, revenue is recognized at the point in time when control passes to the customer, which is generally at the shipping point based on customary incoterms, or upon completion of the required services.
Removed
The decrease was due to mark-to-market adjustments based on changes in the trading price for our public warrants.
Added
Offering costs associated with warrants Offering costs associated with warrants consist of transaction costs that have been allocated to the Series A and Series B 58 prefunded and private warrants and were expensed upon completion of the equity offerings based on the relative fair value of the equity issued and the liability-classified warrants.
Removed
In limited situations, for certain contracts executed in prior years, when the standalone selling price was not known, due to it being either highly variable or uncertain, we allocated the transaction price using the residual approach. Estimates related to standalone selling price in recent contracts did not have a material impact on revenue recognized.
Added
Income tax benefit (expense) Income tax benefit (expense) consists of income tax benefits related to deferred taxes and income tax benefit (expense) related to foreign jurisdictions in which we conduct business.
Removed
Changes in these estimates can have a significant impact on revenue recognition, which could result in material changes to reported revenue. Quantum computing systems Quantum computing systems are included within property and equipment, net on the consolidated balance sheets.
Added
Cost of revenue Year Ended December 31, $ % 2025 2024 Change Change (in thousands) Cost of revenue (excluding depreciation and amortization) $ 77,488 $ 20,597 $ 56,891 276 % Cost of revenue increased by $56.9 million, or 276%, to $77.5 million for the year ended December 31, 2025, from $20.6 million for the year ended December 31, 2024.
Removed
Hardware and labor costs associated with the building of such quantum computing systems are capitalized in the period the costs are incurred.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur investments are held in corporate notes and bonds and U.S. government and agency securities. The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increased risk. To achieve this objective, we invest in highly liquid securities depending on our strategic cash needs.
Biggest changeOur cash and cash equivalents are held in cash and checking deposits, money market funds, and U.S government and agency securities. Our investments are held in corporate notes and bonds and U.S. government and agency securities. The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increased risk.
Due to the nature of these instruments, we believe that we do not have any material exposure to changes in the fair value due to changes in interest rates. Declines in interest rates, however, would reduce our future interest income.
To achieve this objective, we invest in highly liquid securities depending on our strategic cash needs. Due to the nature of these instruments, we believe that we do not have any material exposure to changes in 64 the fair value due to changes in interest rates. Declines in interest rates, however, would reduce our future interest income.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk We had cash, cash equivalents and available-for-sale securities of $363.8 million as of December 31, 2024. We hold our cash and cash equivalents for working capital purposes. Our cash and cash equivalents are held in cash and checking deposits, money market funds, and U.S government and agency securities.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk We had cash, cash equivalents, and short-term and long-term investments of $3,336.8 million as of December 31, 2025. We hold our cash and cash equivalents for working capital purposes.

Other IONQ 10-K year-over-year comparisons