IONQ 10-K & 10-Q changes, risk factors and insider trading

Summary of Risk Factors

We have experienced in the past, and could also suffer futurein 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 computing systemstechnologies 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.technologies.

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 solutionsolutions doesdo 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,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.

Our business depends on our customers’ abilitiesability 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.

Contracts with domesticU.S. federal and state and international government and state agencies are subject to a number of challenges and risks.

As a result of our limited operating history, our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties, including our ability to plan for and model future growth. Our ability to generate revenues will largely be dependent on our ability to develop and produce quantum computers with increasing numbers of algorithmic qubits and to connect those quantum computers via quantum networks. As a result, our scalable business model has not been formed and it is possible that neither our December 2020 forward-looking technical roadmap nor our latest technical roadmap will not be realized as quickly as expected, or even at all. The development of our scalable business model will likely require the incurrence of a substantially higher level ofmore costs than incurred to date, while our revenues will not substantially increase until more powerful, scalable computers are produced, which requires a number of technological advancements that may not occur on the currently anticipated timetable or at all.date. As a result, our historical results should not be considered indicative of our future performance. Further, in future periods, our growth could slow or decline for a number of reasons, including but not limited to slowing demand for our service offerings, increased competition, changes to technology, inability to scale up our technology, a decrease in the growth of the overall market,market or our failure, for any reason, to continue to take advantage of growth opportunities.

We have also encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries. If our assumptions regarding these risks and uncertainties and our future growth are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations,expectations and our business could suffer. Our success as a business ultimately relies upon fundamental research and development breakthroughs in the coming years and decade. There is no certainty these research and development milestones will be achieved as quickly as expected, or even at all.

We have historically experienced net losses from operations. For the year ended December 31, 2024,2025, we incurred a loss from operations of $232.5$633.7 million. As of December 31, 2024,2025, we had an accumulated deficit of $683.7$1,194.1 million. We believe that we will continue to incur losses each year until at leastin the timenear we begin significant productionfuture, and delivery of our quantum computers. Even with significant production, such productionwe may never become profitable.

We expect to continue to incur operating losses for the near future as we, among other things, continue to incur significant expenses in connection with the design, development and construction of our quantum computers,computers and other products, and as we expand our research and development activities, invest in manufacturing capabilities, build up inventories of components for our quantum computers,products, increase our sales and marketing activities, develop our distribution infrastructure, invest in expanding our quantum platform and developing a worldwide quantum ecosystem and increase our general and administrative functions to support our growing operations and costs of being a public company.operations. We may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses. IfFurther, we arehave unablerecently acquired companies, or entered into agreements to acquire companies, that have operating losses, which could result in additional losses, and our expected integration related expenses for those acquired companies could increase our losses. An inability to achieve and/or sustain profitability, or if we are unable to achieve the growth that we expect from these investments, it could have a material adverse effect on our business, financial condition or results of operations. Our business model is unproven and may never allow us to cover our costs.

In order toTo grow our business, we will need to continually evolve and scale our business and operations to meet customer and market demand. Quantum computing technology has never been sold at large-scale commercial levels. Evolving and scaling our business and operations places increased demands on our management as well as our financial and operational resources to:

accelerate and/or refocus research and development activities;

expand manufacturing, supply chain and distribution capacity, including foundry capacity;

CommercialLarge-scale commercial production of quantum computers orand networksother quantum products may never occur. We have no experience in producing large quantities of certain of our products and are currently constructing advanced generations of our products. As noted above, there are significant technological and logistical challenges associated with developing, producing, marketing, selling and distributing products in the advanced technology industry, including our products, and we may not be able to resolve all of the difficulties that may arise in a timely or cost-effective manner, or at all. 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.

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. Both of these factors would adversely impact scalability and costs of the ion trap system.

If large-scale commercial production of our quantum computers and networksother quantum products commences, our productsthey may contain defects in design and manufacturemanufacturing that may cause them not to not perform as expected or that mayto require repair, recalls and design changes. Our quantum computers areand inherentlyother complexquantum andproducts 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. There can be no assurance that we will be able to detect and fix any defects in our quantum computers orand networksother priorquantum toproducts before the sale to potential customers. If our products fail to perform as expected, customers may delay deliveries, terminate further orders or initiate product recalls, each of which could adversely affect our sales and brand and could adversely affect our business, prospects and results of operations.

If we fail to manage growth effectively, we may not be able to meet the benchmarks in our latest technical roadmap, and our business, results of operations and financial condition could be harmed. We anticipate that a period of significant expansion will be required to address potential growth. This expansion will place a significant strain on our management, operational and financial resources. We have recently acquired companies, or entered into agreements to acquire companies, that could place additional strain on our management, operational and financial resources. Expansion will require significant cash investments and management resources and there is no guarantee that they will generate additional sales of our products or services, or that we will be able to avoid cost overruns or be able to hire additional personnel to support them. 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 may be unable to acquire the necessary capabilities and personnel required to manage growth or to identify, manage and exploit potential strategic relationships and market opportunities.

Market opportunity estimates andestimates, growth forecasts, and data analytics, including those we have generated, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of companies covered by our market opportunity estimates will purchase our products at all or generate any particular level of revenue for us. In addition, alternatives to quantum computingsolutions may present themselves, which could substantially reduce the market for our quantum computingproducts and services. Any expansion in our market depends on a number of factors, including the cost, performance, and perceived value associated with quantum computing solutions.

The methodologymethodology, assumptions, and assumptionsdata analytics used to estimate industry size market opportunities and analyze the quantum industry may differ materially from the methodologiesmethodologies, assumptions, and assumptionsanalyses previously used to estimate the total addressable market. To estimate the size of our market opportunities and our growth rates, as well as to forecast the size of the quantum industry and analyze the quantum industry more broadly, we have relied on market reports by leading research and consulting firms. These estimates of the total addressable marketmarket, growth forecasts, and growthindustry 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. This could adversely affect the timing of any quantum advantage being achieved, if at all.

Even if the marketmarkets in which we compete achievesachieve the forecasted growth, our business could fail to grow at similar rates, if at all.

Our success will depend upon our ability to expand, scale our operations,operations and increase our sales capability. Even if the marketmarkets in which we compete meetsmeet the size estimates and growth forecasted, our business could fail to grow at similar rates, if at all.

Our growth is dependent upon our ability to successfully scale up manufacturing of our products in sufficient quantity and quality, in a timely or cost-effective manner. Our growth is also dependent upon our ability to successfully market and sell quantum computing and networking technology.technologies. We do not have experience with the mass distribution and sale of quantum computing and networking technology.technologies. Our growth and long-term success will depend upon the development of our sales and delivery capabilities.

Unforeseen issues associated with scaling upup, constructing and constructingselling quantum computing and networking technologytechnologies at commercially viable levels, and selling our technology,levels could negatively impact our business, financial condition and results of operations.

Moreover, because of our unique technology,technologies, our customers will require particular support and service functions, some of which are not currently available. If we experience delays in adding such support capacity or servicing our customers efficiently, or experience unforeseen issues with the reliability of our technology,technologies, it could overburden our servicing and support capabilities. Similarly, increasing the number of our customers, products or services, for example by entering into government contracts and expanding to new geographies, has required and may continue to require us to rapidly increase the availability of these services. Failure to adequately support and service our customers may inhibit our growth and ability to expand computing targets globally. There can be no assurance that our projections on which such targets are based will prove accurate or that the pace of growth or coverage of our customer infrastructure network will meet customer expectations. Failure to grow at rates similar to that of the quantum computing and networking industry may adversely affect our operating results and ability to effectively compete within the industry.

customer acceptance of our quantum computingproducts and networking systems;

breakthroughs in classical computing or other computing technologies that could eliminate the advantages of quantum computingsystems and networking systemsby rendering them less practical to customers;

Our business and our future plans for expansion are capital-intensive and the specific timing of cash inflows and outflows may fluctuate substantially from period to period. Our operating plan may change because of factors currently unknown, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations. Such financings may result in dilution to our stockholders, issuance of securities with priority as to liquidation and dividend and other rights more favorable than common stock, imposition of debt covenants and repayment obligations or other restrictions that may adversely affect our business. 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. Weakness and volatility in capital markets and the economy, in general or as a result of bank failures or macroeconomic conditions such as high inflation and interest rates, could limit our access to capital markets and increase our costs of borrowing. There can be no assurance that financing will be available to us on favorable terms, or at all. The inability to obtain financing when needed maycould make it more difficult for us to operate our business or implement our growth plans.

We have incurred losses during our history, do not expect to become profitable in the near future and may never achieve profitability. To the extent that we continue to generate losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire, if at all. As of December 31, 2024,2025, we had U.S. federalfederal, state, and stateforeign net operating loss carryforwards of approximately $224.2$653.8 millionmillion, $454.7 million, and $148.1$140.6 million, respectively. Additionally, we continue to generate business tax credits, including the U.S. federal research and development credit, which generally may be carried forward for 20 years from the year of generation to offset a portion of our future tax liability, if any.

There is a risk that our ability to use net operating loss and tax credit carryforwards may be limited due to local tax law restrictions, changes in tax regulations, or insufficient future taxable income in the relevant jurisdictions. Our U.S. federal and state net operating loss carryforwards and other tax attributes are subject to review and possible adjustment by the Internal Revenue Service, and state tax authorities. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amendedamended, (which we refer to as the “Code”),Code, our U.S. federal net operating loss carryforwards and other tax attributes may become subject to an annual limitation in the event of certain cumulative changes in the ownership of our stock. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Our ability to utilizeuse our net operating loss carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes, such as issuances of our stock as consideration to acquire other companies. Additionally, the utilization of pre-acquisition net operating loss carryforwards and other tax attributes of subsidiaries we acquired may be limited under Sections 382 and 383 of the Internal Revenue if the acquired subsidiary underwent an ownership change, including changes in connection with ourthe Businessapplicable Combinationacquisition withtransaction, dMYwhether or othernot transactions.we have undergone an ownership change. Similar rules may apply under state tax laws. We have not yet determined thewhether amountany of the cumulativetransactions changethat we have entered into since our establishment has resulted in ouran “ownership resultingchange” fromunder ourSection Business382 Combinationof withthe dMYCode, orand othertherefore transactions,whether orwe have experienced any resulting limitations on our ability to utilize our net operating loss carryforwards and other tax attributes. If we earn taxable income, such limitations could result in increased future income tax liability and our future cash flows could be adversely affected. We have recorded a full valuation allowance related to our net operating loss carryforwards and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.

Producing quantum computers is a difficult undertaking. There are significant research, development,development and manufacturing challenges that we must overcome to build our quantum computers. We are still in the development stage and face significant challenges in developing quantum computers with sufficient performance and scale to meet the requirements of commercial use-casesuse cases and in producing quantum computers in commercial volumes. Some of the development challenges that could prevent the introduction of our quantum computers include, but are not limited to, failure to find scalable ways to flexibly manipulate qubits, failure to increase their number, failure to transition quantum systems to leverage low-cost, commodity optical technology,technology and failure to realize multicore and multiple QPU quantum computer technology.

the photonic interconnect technology used to connect ion traps could prove more challenging and take longer to perfect than currently expected.expected, Thiswhich would limit our ability to scale to a sufficiently large number of qubits in a single system or network systems together;

In addition, we will need to develop the manufacturing process necessary to make these quantum computers in high volume. We have not yet validated a manufacturing process noror acquired the tools, processes,processes or support functions necessary to produce high volumes of our quantum computers that meet all commercial requirements. If we are not able to overcome these manufacturing hurdles in building our quantum computers, our business is likely tocould fail.

We have experienced in the past, and could also suffer futurein the future, disruptions, outages, defects and other performance and quality problems with our quantumsystems, computing systems,including our privateinformation cloud, or other informationtechnology systems, our research and development activities, our facilities, our other fixed assets,assets or with the public cloud, internet,internet and other infrastructure on which they rely.

Our business depends on our quantum computing systems to be available. We have experienced, and may in the future further experience, disruptions, outages, defects and other performance and quality problems with our systems. We have also experienced, and may in the future further experience, disruptions, outages, defects and other performance and quality problems with the public cloud, internet, private data center providers, facilities in which we build and deploy our systems and technology,technology and other infrastructure like utility power, water supply, air conditioning, air compression,compression and other inputs on which our systems and their supporting services rely. For example, in February 2025, an overheating incident in one of our manufacturing rooms affected laboratory cleanliness and system components, necessitating cleaning and repair, as well as movement of components and systems, causing some disruptions and delays in availability of our systems. These problems can be caused by a variety of factors, including software or firmware updates, vulnerabilities and defects in proprietary software and open-source software, hardware components, human error or misconduct, capacity constraints, design limitations, denial of service attacks or other security-related incidents, foreign objects or debris, weather, construction, supply chain events,events or accidents and other force majeure. We do not have a contractual right with our public cloud providers that compensates us for any losses due to availability interruptions in the public cloud.

Any disruptions, outages, defects and other performance and quality problems with our quantumfixed computing systemsassets or with the public cloud, internet,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,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.

Even if we are successful in developing quantum computing systemstechnologies and executing our strategy, competitors in the industry may achieve technological breakthroughs that render our quantum computing systems obsolete or inferior to other products.

Our continued growth and success depend on our ability to innovate and develop quantum computing and networking technologytechnologies in a timely manner and effectively market these products. Without timely innovation and development, our quantum computing solutions could be rendered obsolete or less competitive by changing customer preferences or because of the introduction of a competitor’s newer technologies. We believe that many competing technologies will require a technological breakthrough in one or more problems related to science, fundamental physics or manufacturing. While it is uncertain whether such technological breakthroughs will occur in the next several years, that does not preclude the possibility that such technological breakthroughs could eventually occur. Any technological breakthroughs that render our technology obsolete or inferior to other products could have a material effect on our business, financial condition or results of operations.

We may be negatively impacted by any early obsolescence of our quantum computing technology.technologies.

We depreciate the cost of our quantum computing systems over their expected useful lives. 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. 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 computingtechnologies requires unique tools, software, hardware,hardware and development environments. 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. Further up the stack, we rely on third parties to create and advance software, standards, specifications, applications, hardware and services that enable these systems to integrate into various environments and be utilizedused towards various customer use cases. Full utilizationuse 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. Our efforts to ensure wide compatibility with other quantum technologies and supporting infrastructure, now existing or developed in the future, could be less successful than expected.

If our customers are unable to achieve compatibility between other software and hardware and our hardware, it could impact our relationships with such customers or with customers, generally, if the incompatibility is more widespread. 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.

We may be unable to reduce theour cost per qubit sufficiently, which may prevent us from pricing our quantum systems competitively.

Our projectionsprojections, as well as our ability to meet the benchmarks in our latest technical roadmap, are dependent on theour cost per qubit decreasing over the next several years as our quantum computers advance. These cost projections are based on economies of scale due to demand for our computer systems, technological innovation and negotiations with third-party parts suppliers. If these cost savings do not materialize, theour cost per qubit may be higher than projected, making our quantum computing solutionsolutions less competitive than those produced by our competitors, which could have a material adverse effect on our business, financial condition or results of operations.

This Annual Report contains statements that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amendedamended, (or the “Securities Act”),Act, and Section 21E of the Securities Exchange Act of 1934, as amendedamended, (or the “Exchange Act”),Act, that involve substantial risks and uncertainties. All statements contained in this Annual Report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believes,” “expects,” “intends,” “estimates,” “projects,” “anticipates,” “will,” “plan,” “may,” “should,” “could,” or similar language are intended to identify forward-looking statements.

It is routine for our internal projections and expectations to change throughout the year, and any forward-looking statements based upon these projections or expectations may change prior to the end of the next quarter or year. Readers of this Annual Report are cautioned not to place undue reliance on any such forward-looking statements. 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 CommissionCommission, (or the “SEC”).SEC. All forward-looking statements included herein are made only as of the date hereof. Unless otherwise required by law, we do not undertake, and specifically disclaim, any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise after the date of such statement.

You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related notes included elsewhere in this Annual Report. 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 BusinessDe-SPAC Combination. References to “dMY” refer to the predecessor company prior to the consummation of the Business Combination.Transaction.

We are developing quantum computers and networks designed to solve some of the world’s most complex problems,problems and transform business, society and the planet for the better. We believe that our proprietary technology, our architecture,architecture and the technology exclusively available to us through license agreements will offer us advantages both in terms of research and development,development asand well asin the commercial value of our intended product offerings.

Today, we sell specialized quantum computing and networking hardwarehardware, together with relatedcomplementary 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. We currently make access to our quantum computers available viathrough three major cloud platforms, Amazon Web Services’Services’, (“AWS”)or AmazonAWS’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-servicequantum-computing-as-a-service, (“QCaaS”).or QCaaS.

We supplement our offerings with professional services focused on assisting our customers in applying quantum computing and networkingour quantum networking, quantum sensing and quantum security solutions to their businesses. We also expect to sell full quantum computing systems to customers, either over the cloud or foron localpremises. access.Additionally, Wethrough alsoa network of satellites, we offer quantum networkingdata-as-a-service products whichto customers, including synthetic-aperture radar imaging, and through combining our satellite platform with our quantum sensing products, we intend to offer customersadvanced securequantum communicationpositioning, networksnavigation and enabletiming networkedservices quantumin computing.the future.

We are still in the early stages of commercial growth. Since our inception, we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend heavily on the successful development and further commercialization of our quantum computing systems. Our net losses attributable to IonQ, Inc. were $331.6$510.4 million, $157.8$331.6 million and $48.5$157.8 million, for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $683.7$1,194.1 million. We expect to continue to incur significant losses for the foreseeable future as we prioritize reaching the technical milestones necessary to achieve an increasingly higher number of algorithmicphysical and logical qubits and higher levels of fidelityqubit performance than presently exists—prerequisites for quantum computing to reach broad quantum advantage.

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. These inflationary effects may be exacerbated by new tariffs and evolving trade policy. 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.

We derive revenue from contracts associated with the design, development, construction and sale of specialized quantum computingecosystem hardware together with related maintenance and support, from contracts providing access to QCaaS,our andQCaaS services, from consulting services related to co-developing algorithms onand other services related to the Company's quantum computing systems.In arrangements with the cloud service providers, the cloud service provider is considered the customerproducts, and wefrom doproviding notsatellite haveimagery anyand contractualdata relationshipsfrom withour theconstellation cloudof servicesatellites providers’through endour users.online platform.

Certain of our contracts contain multiple performance obligations, most commonly in contracts for the sale of specialized quantum computing hardwareproducts together with related maintenancemaintenance, consulting and other support. SuchCertain 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. When there are multiple performance obligations in a contract, we allocate the transaction price to each performance obligation based on its standalone selling price when available. We determine standalone selling price based on the observable price of a product or service when we sell the products or services separately in similar circumstances and to similar customers. Certain products and services have limited or no history of being sold on a standalone basis, requiring us to estimate the standalone selling price. ToWe date, we have estimatedestimate 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. 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 have not had a material impact on revenue recognized in recent periods.

Performance obligations are satisfied over time if the customer receives the benefits as we perform the work, if the customer controls the asset as it is being produced (continuous transfer of control), or if the product being produced for the customer has no alternative use and we have a contractual right to payment for performance to date. 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. 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 materialsmaterials, and the effect of any delays in performance. 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.

Cost of revenue primarily consists of expenses related to constructionthe delivery of specializedthe our quantum computinghardware hardwareproducts and delivery of our services, including personnel-related expenses, hardware costs, allocated overhead costs for customer facing functions, and costs associated with maintaining ourthe 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 QCaaSCompany resides.delivers its services. 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.amortization.

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. UnlikeResearch aand standarddevelopment computer,is designattributable 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. 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.

Depreciation and amortization expense results from depreciation and amortization of our property and equipment, including our quantum computing systems,systems and satellites, and intangible assets that are recognized over their estimated lives.

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 assumedand asSeries partA ofand theSeries BusinessB Combination.prefunded and private warrants.

Interest income, net primarily consists of income earned on our money market funds and other available-for-sale investments.

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.

Revenue increased by $21.0$86.9 million, or 95%,202%, to $130.0 million for the year ended December 31, 2025, from $43.1 million for the year ended December 31, 2024, from $22.0 million for the year ended December 31, 2023 .2024. The increase was primarily driven by progress on our arrangements to build specialized quantum computing hardware, as well as newincreased revenue contractsas undera whichresult weof provided servicesacquisitions during the year ended December 31, 2024.2025.

Cost of revenue increased by $12.5$56.9 million, or 154%,276%, to $77.5 million for the year ended December 31, 2025, from $20.6 million for the year ended December 31, 2024, from $8.1 million for the year ended December 31, 2023.2024. The increase was driven primarily by an increase in hardwarelabor costs usedto inservice the construction of specialized quantum computing hardware,contracts, as well as an increase in labormaterials costs related to servicequantum contracts,products, for the year ended December 31, 2024.2025.

Research and development expense increased by $44.5$168.9 million, or 48%,123%, to $305.7 million for the year ended December 31, 2025, from $136.8 million for the year ended December 31, 2024, from $92.3 million for the year ended December 31, 2023.2024. The increase was primarily driven by an increase of $33.7$146.4 million in payroll-related expenses, including an increase in stock-based compensation of $18.1$111.1 million, as a result of increased headcount and new equity grants, including the replacement awards issued in connection with acquisitions, and a $5.0$11.2 million increase in materials, suppliessupplies, and equipment costs. The remaining increase is due to an increase in costs to support research and development initiatives, including a $1.9$7.4 million increase in professional service fees and a $2.3 million increase in allocated overhead costs.

Sales and marketing expense increased by $10.1$25.1 million, or 55%,88%, to $53.4 million for the year ended December 31, 2025, from $28.4 million for the year ended December 31, 2024, from $18.3 million for the year ended December 31, 2023.2024. The increase was primarily driven by an increase of $10.0$19.4 million of payroll-related expenses, including an increase in stock-based compensation of $7.0$10.1 million, as a result of increased headcount and new equity grants.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.

General and administrative expenses increased by $20.3$174.0 million, or 40%,245%, to $245.1 million for the year ended December 31, 2025, from $71.1 million for the year ended December 31, 2024, from $50.7 million for the year ended December 31, 2023.2024. The increase was primarily driven by an increase of $21.4$92.0 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$66.8 million, offsetas bya decreasesresult of $0.6increased headcount and new equity grants, as well as an increase of $74.9 million in professional service fees and allocated overhead costscosts, andincluding $0.5$43.5 million in directoracquisition transaction and officer liability insuranceintegration costs.

Depreciation and amortization expenses increased by $8.3$63.4 million, or 80%,340%, to $82.0 million for the year ended December 31, 2025, from $18.7 million for the year ended December 31, 2024, from $10.4 million for the year ended December 31, 2023.2024. The increase was primarily driven by an increase of $3.1$45.6 million in amortization expense associated with acquired intangible assets, and $2.8an increase of $10.2 million in depreciation expense associated with capitalized quantum computing system costssystems and other property and equipment, respectively, and an increase of $2.4 million due to amortization of capitalized internal-use software.satellites.

Interest income, net decreasedincreased by $1.1$37.7 million, or 6%,207%, to $56.0 million for the year ended December 31, 2025, from $18.2 million for the year ended December 31, 2024, from $19.3 million for the year ended December 31, 2023.2024. The decreaseincrease was primarily driven by aan decreaseincrease in the available-for-sale investments balance, offset by higher interest rates.balance.

As of December 31, 2024,2025, we had cash, cash equivalentsequivalents, and available-for-saleshort-term securitiesand long-term investments of $363.8$3,336.8 million. Excluded from our available liquidity is $2.4$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, 2024,2025, will be sufficient to meet our working capital and capital expenditure needs for the next 12 months. We believe we will meet longer term expected future cash requirements and obligations through a combination of cash flows from operating activities and available funds from our cash, cash equivalentsequivalents, 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. We have incurred significant losses since our inception and as of December 31, 2024,2025, we had an accumulated deficit of $683.7$1,194.1 million. During the year ended December 31, 2024,2025, we incurred net losses attributable to IonQ, Inc. of $331.6$510.4 million. We expect to incur significant losses and higher operating expenses for the foreseeable future.

We expect our principal sources of liquidity will continue to be our cash, cash equivalentsequivalents, and short-term and long-term 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. 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, 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 expendituresexpenditures, potential acquisitions, and potentialstrategic acquisitions.investments. We require a significant amount of cash for expenditures as we invest in ongoing research and development and commercialization of our products. Until such time as we can generate significant revenue from commercializing our quantum computingproducts and networking technology,services, if ever, we expect to finance our liquidity needs through our cash, cash equivalentsequivalents, 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. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. 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. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our quantum computing and networking technology on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our quantum computing and networking development efforts. 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, 2024,2025, primarily relate to operating lease commitments. As of December 31, 2024,2025, we have total operating lease obligations of $21.9$35.5 million, with $3.7$9.6 million payable within 12 months. Other than operating lease commitments, cash requirements for fiscal year 20252026 are expected to consist primarily of operating expenses and continued investment in our quantum computers.products, as well as the acquisition of SkyWater. 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.

Net cash used in operating activities during the year ended December 31, 2024,2025, was $105.7$283.2 million, resulting primarily from a net loss of $331.6$512.1 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, 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 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 and increased compensation costs.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, and additions of $18.0 million to property and equipment primarily related to leasehold improvements,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.

We derive revenue from contracts associated with the design, development, construction and sale of specialized quantum computingecosystem hardware together with related maintenance and support, from contracts providing access to QCaaS,our andQCaaS services, from consulting services related to co-developing algorithms onand other services related to the Company's quantum computingproducts, systems.and from providing satellite imagery and data from our constellation of satellites through our online platform.

For arrangements with multiple performance obligations, judgment is applied to determine the relative standalone selling price of each performance obligation as this is used to allocate the transaction price to each performance obligation within the contract. We determine standalone selling price based on the observable price of a product or service when we sell the products or services separately in similar circumstances and to similar customers. Certain products and services have limited or no history of being sold on a standalone basis, requiring us to estimate the standalone selling price. ToWe date, we have estimatedestimate 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. 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.

For certain contracts, 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. 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 materialsmaterials, and the effect of any delays in performance. Changes in these estimates can have a significant impact on revenue recognition, which could result in material changes to reported revenue.

ThereOther than as set forth below, there have been no material changes to the risk factors previously disclosed in Item 1A “Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider those risk factors, which could materially and adversely affect our business, financial condition and results of operations. Those risks and uncertainties are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business, financial condition and results of operations.

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 and networks. Our losses from operations were $271.5$608.8 million and $75.7$236.3 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $388.7$2,256.5 million. We expect to continue to incur significant losses for the foreseeable future as we prioritize reaching the technical milestones necessary to achieve an increasingly higher number of stable qubits and higher levels of fidelity than presently exists—prerequisites for quantum computing to reach broad quantum advantage.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Revenue increased by $57.1$59.4 million, or 755%,287%, to $64.7$80.1 million for the three months ended MarchJune 31,30, 2026, from $7.6$20.7 million for the three months ended MarchJune 31,30, 2025. 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.

Cost of revenue increased by $44.9$51.8 million, or 1,041%,622%, to $49.3$60.1 million for the three months ended MarchJune 31,30, 2026, from $4.3$8.3 million for the three months ended MarchJune 31,30, 2025. The increase was driven primarily by an increase in labor costs to service contracts for the three months ended MarchJune 31,30, 2026, as well as an increase in materials costs related to quantum products.

Research and development expense increased by $85.8$57.3 million, or 215%,55%, to $125.7$160.6 million for the three months ended MarchJune 31,30, 2026, from $40.0$103.4 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by an increase of $53.1$62.9 million in payroll-related expenses, including an increase in stock-based compensation of $35.3$43.6 million, as a result of increased headcount and new equity grants, andoffset $24.8by a decrease of $54.6 million in one-time stock-based compensation costs incurred in the three months ended June 30, 2025. The remaining increase is primarily due to an increase of $40.3 million in materials, supplies and equipment costs and an increase in costs to support research and development initiatives, including an increase of $8.1 million in professional services and other allocated support costs.

Sales and marketing expense increased by $20.8$22.0 million, or 242%,202%, to $29.4$32.9 million for the three months ended MarchJune 31,30, 2026, from $8.6$10.9 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by an increase of $16.3$18.0 million of payroll-related expenses, including an increase in stock-based compensation of $10.3$10.6 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.

General and administrative expenses increased by $64.8$69.5 million, or 272%,144%, to $88.6$117.6 million for the three months ended MarchJune 31,30, 2026, from $23.8$48.1 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by an increase of $45.2$44.5 million of payroll-related expenses, including an increase in stock-based compensation of $33.9$32.3 million, as a result of increased headcount and new equity grants,grants. The remaining increase is primarily due to an increase of $18.9$12.2 million in professional service fees and allocated overhead costs, including an increase of $11.9 million in acquisition transaction and integration costs.

Depreciation and amortization expenses increased by $36.6$35.5 million, or 557%,334%, to $43.1$46.1 million for the three months ended MarchJune 31,30, 2026, from $6.6$10.6 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by an increase of $29.4$26.8 million in amortization expense associated with acquired intangible assets, and an increase of $5.9$6.1 million in depreciation expense associated with capitalized satellites and leasehold improvements.satellites.

The change in the fair value of the warrant liabilities was primarily due to the mark-to-market gainloss recognized on the Series A and Series B warrants, driven by changes in our stock price.

Interest income, net increased by $23.3$24.8 million, or 477%,348%, to $28.2$32.0 million for the three months ended MarchJune 31,30, 2026, from $4.9$7.1 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by an increase in the available-for-sale investments balance.

Other income (expense), net increased by $16.2$79.5 million to $16.1$79.7 million for the three months ended MarchJune 31,30, 2026, from less than $0.1$0.2 million for the three months ended MarchJune 31,30, 2025. The increase was primarily driven by changes in fair value of strategic investments.

Income tax benefit (expense) increaseddecreased by $6.4$9.2 millionmillion, or 60%, to a benefit of $6.4$6.1 million for the three months ended MarchJune 31,30, 2026, from ana expensebenefit of less than $0.1$15.3 million for the three months ended MarchJune 31,30, 2025. The increasedecrease was primarily driven by a one-time partial release of U.S. federal and state valuation allowances in the three months ended June 30, 2025. The decrease was partially offset by a tax benefit recognized on foreign operating losses.losses incurred in the three months ended June 30, 2026.

As of MarchJune 31,30, 2026, we had cash, cash equivalents and available-for-sale securities of $3,091.9$2,959.3 million. Excluded from our available liquidity is $7.8$7.6 million of restricted cash, which is primarily recorded in other noncurrent assets in our condensed consolidated balance sheets. We believe that our cash, cash equivalents and investments as of MarchJune 31,30, 2026, will be sufficient to meet our working capital and capital expenditure needs for the next 12 months. We believe we will meet longer term expected future cash requirements and obligations through a combination of available funds from our cash, cash equivalents and investment balances and cash flows from operating activities. However, this determination is based upon internal projections and is subject to changes in market and business conditions. We have incurred significant losses since our inception and as of MarchJune 31,30, 2026, we had an accumulated deficit of $388.7$2,256.5 million. During the threesix months ended MarchJune 31,30, 2026, we incurred a loss from operations of 271.5.$608.8 million. We expect to incur significant losses and higher operating expenses for the foreseeable future.

Our material contractual commitments as of MarchJune 31,30, 2026, primarily relate to operating lease commitments and certain supplier purchase commitments. As of MarchJune 31,30, 2026, we have total operating lease obligations of $35.8$71.1 million, with $10.0$12.9 million payable within 12 months, and a remaining short-term supplier purchase commitment related to quantum chip development of approximately $40.9 million. Other than these commitments, cash requirements for the next 12 months are expected to consist primarily of operating expenses and continued investment in our quantum products, as well as the acquisition of SkyWater. The SkyWateracquisition Acquisition is expected to requirerequired approximately $1.0$1,056.4 billionmillion in cash, including approximately$741.3 $0.8 billionmillion related to purchasepurchased consideration and approximately $0.2$315.1 billionmillion related to debt repayment and other transaction costs.

Net cash used in operating activities during the threesix months ended MarchJune 31,30, 2026, was $151.0$254.8 million, resulting primarily from a net incomeloss of $804.6$1,064.0 million, adjusted for non-cash activity, primarily related to the gainloss recorded as a result of mark-to-market activity for our warrants, stock-based compensation, depreciation and amortization, the gain recorded as a result of the change in fair value of our strategic investments, 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 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.

Net cash used in operating activities during the threesix months ended MarchJune 31,30, 2025, was $33.0$85.6 million, resulting primarily from a net loss of $32.3$209.8 million, adjusted for non-cash activity, primarily related to stock-based compensation, depreciation and amortization, deferred income taxes, the gainloss recorded as a result of mark-to-market activity for our public warrants, depreciation and amortization, and other working capital activities.

Net cash usedprovided inby investing activities during the threesix months ended MarchJune 31,30, 2026, was $391.9$442.1 million, primarily resulting from maturities and sales of available-for-sale securities, offset by purchases of available-for-sale securities and strategic investments, and cash paid for acquired businesses, net of cash acquired, and additions of property and equipment, offset by cash received from maturities of available-for-sale securities.acquired.

Net cash used in investing activities during the threesix months ended MarchJune 31,30, 2025, was $230.2$201.0 million, primarily resulting from purchases of available-for-sale securities and additions of property and equipment primarily related to the development of our quantum computing systems and other supporting equipment,securities, offset by cash received from maturities of available-for-sale securities.securities and from businesses acquired.

Net cash provided by financing activities during the threesix months ended MarchJune 31,30, 2026, was $6.9$18.9 million, primarily resulting from proceeds from stock options and warrants exercised and warrantstax exercised.withholding receipts related to equity awards.

Net cash provided by financing activities during the threesix months ended MarchJune 31,30, 2025, was $368.7$372.9 million, primarily resulting from proceeds from the 2025 ATM Offering ProgramProgram, stock options exercised, and warrants exercised.