IonQ, Inc. Price & Performance (IONQ)

Which is available on the Investor Relations section of our website at investors.inq.com IonQ. Please note that on today's call, management will refer to adjusted EBITDA. Which is a non GAAP financial measure.

While the company believes this non GAAP financial measure provides useful information for investors, The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance You are directed to our press release for a reconciliation of adjusted EBITDA to its closest comparable GAAP measure. During the call, we will discuss our business outlook and make forward looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to a number of risks, uncertainties, including those mentioned in our 10 ks that we have filed with the SEC today. We undertake no obligation to revise any statements to reflect changes that occur after this call, except as required by law. Now, I will turn it over to Peter Chapman, Executive Chair of IonQ. Peter?

Thank you, Jordan, and thank you to everyone listening. If you take away one thing from this call, let it be this, 2024 was INQ's best year ever. But we believe 2025 is slated to be the year INQ drives inflection, in the quantum market. In 2024, we grew our full year bookings by 47% to $95,600,000 and nearly doubled our revenue achieving $43,100,000 for the year and $11,700,000 for the fourth quarter. Both exceeding the high end of our guidance range. To continue our rapid growth rate, last quarter we announced our acquisition of substantially all the assets of quantum networking leader, Cubitec Inc. Which we have since closed. Our interest in quantum networking is multifaceted It enables INQ to scale its quantum computers enabling distributed quantum computing in much the same way classical CPUs and GPUs, are networked together today. Our unique architecture allows us to interface with existing telecommunication networks and real world environments. The second facet is to build the next generation of the Internet. Which is secure from the potential threat of classical and quantum computers. Today, I am thrilled to announce that INQ has signed a definitive agreement to acquire a controlling stake [indiscernible] a large global player in quantum networking.

Once the deal closes, INQ will consolidate IDQuantique's global book of business more than 100 team members can gain control of almost 300 quantum networking patents and patent applications.

Aggregate, INQ will shortly control nearly 900 patents and patent applications across quantum key distribution, Quantum Sensing, quantum networking and quantum computing. With IDQUANTIQ, INQ furthers its leadership in quantum networking. Our goal is to build a suite of products that enable secure quantum communication in all forms.

From satellites to ground stations, across existing telecommunication, fiber infrastructure to drones on a battlefield. Those following IMQ closely will note that we are building out the key component technologies for the telecom and defense sectors.

With the pending addition of ID. Quantiq and the completed addition of Cubatec, we will partner with their existing blue chip customers which include SK Telecom, and the Electric Power Board of Chattanooga. These customer relationships allow us to test new hardware and applications in real world environments. Switching gears to computing, we delivered our first Forte enterprise system to Quantum Basel in Switch as well as our first system to the Air Force Research Lab, INQ continues to make progress on developing our next generation Mariam based system called Tempo, with the first unit already sold and slated for delivery to Basel. During our Q3 earnings call, we spoke about our partnership with AstraZeneca on drug discovery use cases. Tonight, I can share that our working chemistry modeling in collaboration with other partners has advanced significantly We plan to showcase some of the progress before the next earnings call. With ANSYS, we are also continuing our collaboration with ANSYS and are making great progress computer aided engineering, a $10,000,000,000 industry. This quarter, we also announced a new partnership with General Dynamics Information Technology a division of General Dynamics. To create quantum solutions that enhance fraud and anomaly detect by identifying irregularities in large datasets with greater speed and accuracy.

Not only do these collaborations reflect how Quantum is bringing value to businesses today, They are also emblematic of the breadth of impact that quantum computing will have as INQ and our partners continue to develop more applications using Forte Enterprise in future systems. We continue to make progress against our technical roadmap in performance goals we are reconfirming our confidence in achieving AQ64 by the end of this year which will be demonstrated on our next generation barium based system. Historically, AQ has been the best tool to measure performance across quantum systems. However, since its introduction, quantum applications and compiler that benchmarks defined only four years ago can no longer reflect our true pace of innovation and future system capabilities. By the end of this year, we will demonstrate our AQ64 system capable of circa 3,000 high quality gate operations As we gear up for the era of commercial advantage, we will deprecate AQ as a measure of technical progress in in favor of a new set of benchmarks. These new metrics will be closely aligned with our customers' application success and will be accompanied by an updated computing and networking roadmap. Match it.

Before we turn it over to Thomas for our financials, I want to take a moment to discuss an exciting announcement we made today regarding the future of our leadership team. While I continue my leadership as Executive Chair, This evolution will allow me to spend more time focused on our strategic customer relationships and the development of Quantum AI. Niccolo is originally a physicist. And has twice been a public company CEO and a key member of our team since we went public. He has made important contributions to our strategic direction and growth initiatives As a Director, we are confident that Nicolas' track record of expertise insights and leadership, will further enable IonQ to accelerate our growth. Today, we are also welcome a new direct to INQ Gabriel Toledano, Gabriel is a former Chief People Officer of Tesla. She has held senior roles at Electronic Arts, Siebel Systems, Microsoft and Oracle. She brings a wealth of experience as an executive on everything from organizational growth to executive compensation. Both of these leadership announcements optimally position I and Q for continued success in the quantum era. And quantum AI, and Quantum Commercial Advantage. With that, I'll hand this over to Nick for a brief introduction.

Thank you, Peter, for the kind words.

I'm excited to join the team full time for what I view as a once in a generation opportunity to continue scaling the world's first publicly traded pure play quantum company. As many people know, I've been a quantum computing enthusiast for twenty five years. Ever since I was both an undergrad and grad physics student, at Cambridge University, Early in my career, I worked on novel next generation solar cells and I've long believed in the importance of quantum computing to truly realize the advantage in things like renewable energy. I've been a longtime supporter of INQ's work both in my role as a Director of the last five years and as an original sponsor of INQ's pioneering IPO. We have plenty of groundbreaking work ahead and I'm absolutely thrilled to have the opportunity to lead IonQ during this pivotal moment for both quantum computing and quantum networking. I've long believed that the mid-2020s will be when quantum computing begins to impact virtually every aspect of applied science.

From chemistry to materials, national security, logistics, and financial services. Quantum networking is expected to be an equally large and impactful market opportunity And INQ is well positioned here to be the global leader. I'm honored by Peter and the Board's confidence in me. And look forward to working with our industry leading team to build upon our momentum in 2025 and beyond. Thomas, I'll turn it over to you now to walk through our financials and some more depth. You, Nicolas.

Thank you to everyone joining us today. Let's walk through this quarter's financial results in more detail. As Pierre mentioned, had an excellent fourth quarter recognizing $11,700,000 in revenue.

For the full year, we ended up with $43,100,000 in revenue, above the high end of our updated guidance range up 95% year over year. We had $22,900,000 in bookings in the fourth quarter and ended the year with $95,600,000 in total bookings. Which was also above the high end our updated guidance range for 2024, and up over 46% year over year. Moving down the income spectrum. For the fourth quarter twenty twenty four, our total operating costs and expenses were $89,200,000 up 47% from $60,600,000 in the prior year period. For the full year 2024, number was $275,500,000 up 53% from $179,800,000 2023. To break this down further, our research and development costs for the fourth quarter were $40,100,000 up 27% from $31,600,000 in the prior year period For the full year 2024, that number was $136,800,000 48% from $92,300,000 in 2023.

Recall that we are investing heavily in R and D and are investing in the production of our various product lines, to meet projected customer demand. Our sales and marketing costs in the fourth quarter were $8,900,000 up 28% from $7,000,000 the prior year period. For the full year 2024, that number was $28,400,000 up 55% from $18,300,000 in the full year 2023.

This increase was due to us growing our go to market function as we continue the investment in our commercialization efforts. And we expect that trend to continue, as we further expand sales initiatives.

Our general and administrative costs in the fourth quarter were $29,700,000 up 94% from $15,300,000 in the prior year period For the full year 2024, that number was $71,100,000 up 40% from $50,700,000 the full year 2023.

Stock based compensation was $106,900,000 for the full year 2024 up from $69,700,000 in the full year 2023.

All of this was compared to $41,900,000 in the prior year period, and a net loss of $331,600,000.0 for the full year 2024 versus $1,578,000,000 dollars in 2023.

It is important to note that these results include a non cash loss of $128,500,000 for the fourth quarter related to the change in fair value of our warrant liabilities, and $117,100,000 in non cash loss for the full year 2024. We saw an adjusted EBITDA loss for the four compared to a $20,000,000 loss in the prior year period. And a loss of $107,200,000 for the full year 2024 versus $77,700,000 for 2023. Note that we projected an adjusted EBITDA loss for the full year 2024 of $110,500,000 once again beating our expected plan.

Turning now to our balance sheet.

Cash, cash equivalents and investments as of December 31, 2024, we $363,800,000.0 I'm excited to share that INQED is launching a $500,000,000 at the market facility to equip FineQ with an even larger war chest. We plan to use the proceeds to accelerate our networking in promising application areas. As the initial amount we raised when we were on public was largely largely sufficient, for the computing business we believe that this new amount for Cloud Capital will provide us with a critical mass of capital for advancing the quantum networking communications business. Our capital needs are finite. And this is a unique moment for long term investors to build a position at scale as we gear up for the era of Quantum Advantage. We are generating a strong foundation for what we expect will be another incredible year for IonQ. We aim to continue our growth once again in 2025. We are projecting revenue of between $75,000,000 $95,000,000 for the full year and $7,000,000 to $8,000,000 in Q1. Our guidance includes all organic momentum and inorganic activity. Because of the early stage of the company's sales organization, and the time it takes to turn a sale into revenue, we created the bookings metric [indiscernible] to allow investors to gauge our progress.

With revenue expected to be in the 9 figures next year 2026, we are sunsetting bookings guidance. We will of course continue to update the market on significant commercial milestones. Additionally, we anticipate an adjusted EBITDA loss of $120,000,000 for the full year 2025 at the midpoint of our revenue guidance. And with that, I would like to turn the call back over to Peter for some closing remarks.

Thank you, Thomas. Historically, Q1 is a bit of a slow time for IAQ. But this year, we've had a strong start.

We closed our Cubitec acquisition and announced the pending acquisition of a majority stake in ID. Quantique today. Looking forward, there are some important events for investors to watch out for. First, look out for Quantum Day at NVIDIA's GCC Conference.

DARPA will announce Phase one awards for its quantum benchmarking initiatives potentially worth $300,000,000 Investors should be following the legislative updates from the state of Maryland on a potential $1,000,000,000 initiative to make Maryland the capital of Quantum. Congressional budget approval for fiscal year twenty twenty five And lastly, the DOE Quantum Leadership Act a $2,500,000,000 bill advancing through the Senate that seems to have bipartisan support. Along with UNESCO, we believe that 2025 will in fact be the year of quantum. One in which you see both public and private institutions realize the that computing and networking game will be forever changed by INQ Systems. With commercial advantage right around the corner, the inflection point that everyone has been waiting for is not far behind it. And with that, operator, I would like to open the line for questions.

Thank you. We'll now be conducting a question and answer session.

One moment please for our first question. Thank you.

Our first question comes from the line of David Williams with Bench company.

Please proceed with your questions.

Hey, good afternoon and thanks for taking my question.

And first, congratulations, Nikhil, for the CEO role.

And Peter, we certainly enjoyed our time with you. So with that, I guess, are there any strategic changes we should be thinking about as we as we move forward in terms of just how you anticipate the business maybe running or changing here at Niccolo? I'm going to jump in here first.

Just to let you know, I'm not actually going anywhere. So, you'll probably even see me on future earnings calls and all the rest. So this change from my perspective is one where this is a big job.

And there's just too much to do. Especially for this company. If you look at all the things we have on an applications, we're building a new business in networking and quantum computing itself is is really hard enough. So I think what we're doing here is Nicola is coming on board to be able to offload some of the work in part because the the primary reason I came to INQ was to work on Quantum AI. And so I'm also hoping this will free up some time for me to work on that as well.

More than I've been able to do so far. So it is a change, but it's not I'm not going anywhere. So just as an FYI.

But I'll leave it to Nicole. Yes. So let me just add to that. Hi, nice to meet you. And thank you for the support over the years. Look, this is a bandwidth expansion for Peter. Peter and I have worked closely together since actually before the IPO. And I proudly have been, I think, one of his most contributory and active Board member in the last few years. And so the opportunity to work with Peter full time is obviously one that the Board thought made a lot of sense. There's a lot of continuity and there's obviously an opportunity for the two of us to tackle two businesses, which are growing at inflection points that are truly historic. So to answer your question in a nutshell, no, there's no there's no changes in strategic direction because Peter and I have been working together closely to set the strategic direction in the last five years and we'll continue to do that.

Fantastic, great.

I hope to give up some parts of my job that I don't like. Nicolas is going to go do the TV interviews tomorrow.

There we go.

All right. Well understood. Thank you. Then maybe just secondly, you've made a nice acquisition last quarter, you closed Cubatetic and you've announced the ID Quantique this quarter. Kind of curious how we should be thinking about going forward, just kind of consolidation that we should anticipate and then maybe what are these patents I mean, 900 patents is significant. How do you think this helps you longer term? And just anything around the strategy from a consolidation M and A perspective? Thank you. [indiscernible] We obviously care about the patent portfolio. Have been focused on it since the IPO. I think when I first met Peter, we had a low double digit number of of patents. And so it's an investment that we make organically and we make it inorganically as well. We obviously view the quantum space as we head into the era of commercial advantage to be one that is becoming a bigger a bigger company's game, if you will. And so that is both a defensive mode and potentially an offensive one to a greater or lesser extent here in both computing and networking. As you've heard in prior calls, there are obviously significant synergies between the networking and the computing business, particularly around our advances and our patents around photonic So whilst we have done networking to some extent organically and internally we're of course accelerating this with Cubatek and ID Quantique We're going to aim to, of course, get the best out of both worlds here.

As we integrate these acquisitions. IDQ is bringing us not just patents capabilities, but it's bringing us of course new geographies. And so we will be using these as bases to expand both businesses. Both in Europe and Asia and The Middle East where we've already got [indiscernible] So lots of work to do, but we're excited about both the patent position the team and quality and we'll continue of course doing our best to attract world class talent to both sides of the computing and networking has the house.

Great. Thanks again and best of luck. Our next question is from the line of Richard Shannon with Craig Hallum.

Please proceed with your questions.

Hi, everyone. This is Tyler on for Richard. And thank you for taking my questions and congrats, Niccolo, and Peter. I'm happy you're sticking around at least. How should we think about the timing and market size of the networking market and when could we start seeing top line impacts from these acquisitions?

So I think that we are Sorry about that. I just raised my microphone. Thanks for that question. We are already seeing the impact of our acquisition In fact, the first acquisition we made in 2023 is already deeply ingrained in our technology and it's a core part of how we design our systems today. We are also seeing the effect of our partnership and acquisition of Cubitec where we're already going together to service our clients and we expect to see the same from IDQ soon, although I should say that we're not a majority of their equity now. And I was just going to add that that the outside date for IDQUANTIC is in September. And so, in terms of its impact this year, it won't be as great as it will be next year. [indiscernible] can throw in here as a new guy on the team here is that I've watched INQ organically grow in the networking because customers both strategic partners and governments are of course demanding it. Right? So we've been added organically. We've been increasing our investment inorganically. And I think I'm delighted to be joining a firm that has already the leading position from almost every metric, including of course the patent perspective.

I could hope for. And I'll just add a little bit more to in the sense that for quantum computing, no matter what the [indiscernible] methodology that is used to be able to get to scale, you have to network them together. And so where most companies are today is they're still focused on chip But the next horizon beyond that is to be able to network together systems QPU to QPU. And here we are building a strong patent portfolio a moat, if you will, controlling that market. And so as well as opening up the TAM for our new market, which is now the quantum Internet. So it's quite synergistic with with quantum computing. Okay. And then specifics on the technologies that were acquired You said you only took some of the company Did you you interested in the [indiscernible] there's some timing instrumentation in there. Is there anything on frequency conversion? What drew you to IDQuantique? Yes. It's all of the above. Some of it is obviously opening up a new market for us.

And the others the underlying technology, there's bits and pieces that we have interesting interested in our own systems as well.

Things like single photon detectors and all sorts those kinds of things There's quite a bit of overlap between the two technologies in terms of their markets. So it was those as well, but it's honestly, it was also we're excited both Cubitec and IDQANTI have been going after a different market, which is quantum networking in building a secure quantum [indiscernible] and we're just as excited about that market as well. And we pick up for the first time here some new areas since third area of of Quantum which is quantum sensing. So we'll pick up some technology in that area as well. And if quantum sensing is going to take off, it's going to need quantum networking. So, we're kind of covering the bases, if you will.

Because to be clear that we've purchased the super majority, so we will be consolidating that when it closes Exactly.

Okay. I'll step out of the line for now, but you. I appreciate it. Our pleasure. The next question is from the line of Alex Platt with D. A. Davidson. Please proceed with your questions.

Yes. Thanks for taking my question and congratulations on Nicola on the new role and Peter on the transition. I actually wanted to ask about something you sort of announced last week, which is the sort of completion of this next step with XHV technology. In a blog post, you mentioned you're able to materially reduce Energy consumption and computational energy costs with this innovation. So I guess could you maybe give us a better idea for where energy consumption was at prior to this sort of just as like a baseline and then where we could think of it now? Also maybe how this compares to other systems on the market? Thanks. Thanks, Alex. This is Dean Casman.

Running kind of engineering and technology here. So the XHV post kind of highlighted the fact is as we drive our technology roadmap, as we are investing in basically non cryogenically enhanced vacuum systems we have an ability to one, reduce the overall footprint. The size, weight, power.

Right now, the ability to drive that overall piece down drives down energy consumption of the systems. Right now trapped ions in their current state, even in our current systems, have one of the overall lowest cost per use from a scaling perspective in terms of the amount of computational output you get versus the number of amount of energy that you put in. So as we think about scaling Cubic count, trapped ions and our system scale linearly, Other systems and other modalities and GPUs, for example, scale exponentially.

The overall quantum computing offers a huge advantage from an energy scaling perspective. XHV just adds to that. And so the overall effort we have in the roadmap and the technology is simplification of the engineering design, better scaling. And I'll just add a little bit to on top of this, which is today, everyone, there's a great deal of focus on different QBI modalities and and their pros and cons. But it will get to a point where it's about cost per cubic. And ultimately, if one vendor such as INQ can produce a room temperature cubit that will have significant cost advantages compared to others that have to get down to near zero degrees.

And not just in quantum computing, but also in quantum networking as well. Because the last thing you want to do is to put cryogenic systems all over the globe That would be prohibitively expensive to do. So it's all about our long term plans to win here. So it's about reducing our cost per cubic into the future.

Great. Thanks guys.

Thank you. Next question is from the line of Shadi Meghali with Craig Hallum. Please proceed with your question.

This is Shadi on for Quinn Bolton at Needham. On the solid year. And Nicola, congrats on being appointed to CEO. The acquisition of IDQ. How does the acquisitions fit into INQ's portfolio, especially with your guys' previous acquisition of Cubitec? Then can you talk about the similarities and differences in technology between IDQ and It's a great question. So So there's a couple of things here. There is some overlap between them. And then there's pieces that each company has that the other doesn't. So we think there's areas for collaboration between the [indiscernible] and areas where we can reduce our expenses by reducing the engineering investments going forward. But as we did mention We are at the moment have a majority stake in [indiscernible] So we do have to be careful of minority shareholder interests going forward. But it is obviously brings the two companies much closer together. And really, honestly, I think creates a powerhouse in quantum networking of kind of taking the two companies that had the largest revenues that we knew of and bringing them together with INQ.

I can speak a little bit from a hardware perspective. This is Dean again.

And so, both Cubitec as well as IDQantiq kept deployed quantum networks. Cubitec has a network that's deployed in Chattanooga. As part of EPB there in the city that's a user network where you can plug different quantum computing device IDQ has deployed quantum safe networks around the world. They have implementations in Singapore, There's other networks in South Korea and they also have kind of projects in Europe. And so they both are in kind of the overall just quantum network deployment slightly different hardware technologies. Slightly different protocols and software stacks. Cubitec does not have quantum random number generation. IDQ does. IDQ also has been able to manufacture and engineer component technology in their single nanowire proton detectors and are actually have made that as part of their business in fact. Those photon detection systems are used in many different products. We use them here in Internally, for other work that we're doing on the quantum computing. And so from an overall technology stack, there are some things that are very similar. But there's also things that are quite different and that we'll be looking at as we as we move forward.

And I'll add to that is obviously Cuba Tech had a great U. S. Customer base. IDQ is bringing us Europe, bringing us obviously significant partnership. With SK Telecom. We also announced today. And we think that the forward looking nature of markets like Korea the next generation secure internet is going to be obviously fortuitous and lead to much prosperity for our networking business in that market.

Cubitec brought us about 118 patents granted and pending and IDQ has brought us nearly So it's quite a powerhouse of networking moat as Peter mentioned. [indiscernible] Got it. That makes sense. And then my follow-up is on the revenue guidance for 2025.

It's implying very strong year over year growth. Can you guys give some of the puts and takes for the revenue guidance, especially with Q1 guidance in mind? Seems like this will be more back half weighted. So Maybe how much of this will be hardware sales versus QCA or development, Thanks.

So it is correct that it will be back half. Traditionally, Q1 has been a little weaker than quarters for us. But we have a very strong pipeline and we now have several product areas that we expect to be able to benefit from. And we really look forward to being able to go to market now with a much fuller set of solutions than when we are only selling compute.

Got it. Thanks for all the color and congrats on the solid year.

Thank you. Thank you.

The next question is from the line of Richard Shannon with Craig Hallum.

Please proceed with your question.

Hi, guys. Thanks for letting me ask another question.

So you mentioned South Korea or just Korea in general. Do you plan on expanding that product into the EU in The U. S?

QRNG products, I think it's a little early to to do kind of where do we want to take which products. We're still we need to complete the acquisition as well. But what I would say is and Nicholo kind of kind of signposted to this, which is in the current marketplace, having multiple geographic locations allows us to go into markets, especially if the world is becoming more nationalistic. And we think that the ID. Quantiq will enable that because it is a European Swiss and South Korean company. They have number of employees in both locations. And they have strong relationship with companies in South Korea as well. So So I think in that sense, it's kind of derisking a little bit of the current potential things which are going on kind of globally? And make sure that we're not just a U. S. Company now, but now a European and and South Korean company as well. And so we think those things and right now we need to do it also depending on what happens with tariffs, well now you could decide to do manufacturing in different locations. And deal with those things in that way as well.

So it just kind of helps in a global footprint. We'll also be picking up salespeople obviously. Who have been quite successful And then the next thing is what kind of co selling can we do? How can we take advantage of each other's unique advantages. But that's still work ahead of us.

All right. That sounds great.

And could you guys give us any guidance on what you expect gross margins and OpEx to look like throughout the year?

So we are not ready to give guidance on that. What we have seen in the past is that we've been lucky enough to benefit from some large government contracts These tend to have slightly lower gross margin because you're not mass producing a product. So what it does is it pays for R and D that goes into actually generating our next generation of products So we expect that as the market moves further and further into enterprise commercialization that the gross margins will start trending up up in the positive direction.

Quite Quite a lot. So we saw the in the past when we were selling just compute and we whenever we've had a majority of enterprise customers the gross margin has been around 75%, 77%. And we expect it to go back there. But in the meantime, we also know that we are saving a lot on R and D by taking up projects with customers who are looking into the same areas that we are looking into and that we think are crucial for the development of quantum computing and quantum networking over the longer term.

As an example that we have a contract [indiscernible] to build an optical switch. And so the margin on that one might not be as good, but we're working with them to build that and they're helping pay for the development cost. Which we would have otherwise paid for directly out of our pocket. So we don't use the same lens, if you will, that we would in terms of a product that we're kind of shipping in volume.

Hopefully that helps. That does.

Do you guys have any insight as to any any expected milestones or just cadence of revenue recognition for those contracts?

Which country are we talking about, the AFRL contract?

I mean, we could go on a overall basis if you don't want to break anything out.

So overall, our contracts tend to come in different flavors. We will do projects that are application minded, they tend to be on a six to eighteen month platform. And if There are contracts that we have with entities such as AFRL, these have been on a eighteen months, but sometimes up to forty eight months, which was large fifty four point five So it all depends on which project that we're looking at. If we sell a system, the lead time on delivering a system is around twelve to eighteen months, and we expect that to go closer to twelve.

And even shorter as we get more volume up.

Awesome.

Thank you. Our next question is from David Williams with Benchmark Company.

Hey, thanks for taking the follow-up here. I just to ask a little bit, I think this first quarter we haven't heard, you mentioned kind of the pipeline strength of hardware sales, but I imagine that's still fairly healthy. Just any color on what you're seeing and terms of the hardware sales and any activity around that I think would be helpful.

Yes, this is Peter. I can help with that. So it's a particularly busy time right now.

And when we say hardware sales here, I'm going to I'm going to assume you mean compute. IonQ quantum computers. And I will just mention too, it seems to me that from what I can see on the networking side versus the compute side, The networking side is not doesn't seem to be quite as lumpy. It seems to be a lot more sales in smaller dollar amounts, which is nice. Because it kind of offsets the lumpiness of of the quantum compute side. Which is that will be nice just going forward. I'll be looking forward to not having to say and our sales are lumpy. So on the compute side, things are a really interesting time There's a bunch of RFPs we're competing in and [indiscernible] And we'll know in the next couple of months, I guess, probably within six to nine months, whether or not those systems will be awarded to us. And so so, I don't think the world has kind of quite picked up, but there's internationally, there's quite a bit right now, which is going on in the quantum compute side. And up for grabs. And then I mentioned also at the close of the kind of the remarks some of the things that are going on in terms of the quantum compute marketplace, that I think is fairly large events The DARPA The DARPA benchmarking initiative is a huge reward per company.

And so those things have the potential to have an outsized impact.

Okay. Great. Great color there. And then maybe just one last one, if I may, on the $500,000,000 that you announced today, that targeted for anything in particular or is it more just about having the drop powder as you move forward here and not have constraints around your OpEx trends?

It's really two it's twofold.

One is to to we see an entirely new TAM, which is is in quantum networking And so it's supporting that. We have said that, that will be the first business that becomes cash flow positive for us. And I can see that happening not too far off in the future. The other aspect, which is just as exciting is our applications business. The work we're doing with ANSYS and AstraZeneca and some other things we haven't announced yet, are compelling businesses unto themselves and that have the potential to generate billions of dollars But we just didn't have the resources to do quantum computing, quantum networking, you know, chemistry applications optimization, there's just if you go on [indiscernible] each one of these things unfortunately needs its own investment to be successful. And so while we had sufficient funds to do the quantum computing side, We didn't have the the funds to to be a leading player in some of these application areas or again in the networking space. So that's where this money is going to get used. [indiscernible] I will say, we thought about doing going out and and doing venture for some of these and doing some of as one way, but that means you're giving up these pieces of the action.

In exchange for that and we're pretty excited about what what the future holds. For some of these some of these other markets that we're going into.

Thank you.

At this time, I'll turn the floor back to Peter Chapman for closing remarks.

Great.

Well, I just want to say thank you as I always do at this time to the company and to our investors and everyone that supports us This work wouldn't happen without the hard work of all of our employees. And also the management team And so just thank you. Thanks for a great 2024. And we look forward to a fantastic 2025.

And thanks everyone for joining us today.

Thank you. This does conclude today's conference.

You may disconnect your lines at this time. We thank you for your participation.