IonQ (IONQ) Q1 2026 Earnings Call Transcript

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DATE

Wednesday, May 6, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — Niccolo de Masi
• Chief Operating Officer and Chief Financial Officer — Inder Singh
• Investor Relations Director — Hanley Donofrio

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TAKEAWAYS

• GAAP Revenue -- $64.7 million reported, representing 755% year-over-year growth and delivering IonQ's fourth consecutive record-breaking quarter.
• Organic Revenue Growth Outlook -- Management expects 100% year over year organic growth for 2026, compared to 80% growth in 2025.
• Full-Year Revenue Guidance -- Raised to a range of $260 million to $270 million; the low end would double prior year revenue.
• Q2 Revenue Guidance -- Projected between $65 million and $68 million for the next quarter.
• Commercial Revenue Mix -- 60% of revenue came from commercial (non-U.S. government) customers; this reflects a stable mix as scale increases.
• International Revenue -- 35% of revenue originated outside the U.S., with sales spanning over 30 countries versus only a few in the prior year.
• Multiproduct Sales Contribution -- Over one-third of revenue came from customers purchasing more than one product, highlighting cross-product adoption.
• Remaining Performance Obligations (RPOs) -- Totaled $470 million as of March 31, 2026, up 554% year over year; for every $1 of revenue recognized, roughly $2.5 in new RPOs were added.
• GAAP R&D Spend -- $125.7 million, a 215% year-over-year increase in Q1 2026; management states IonQ's total R&D spend in 2025 exceeded the entire reported R&D of the broader quantum industry.
• Adjusted EBITDA -- Loss included $12 million related to SkyWater commercial agreement; excluding this, adjusted EBITDA would have been $85 million.
• GAAP Net Income -- $805.4 million reported, primarily due to a non-cash, approximately $1.1 billion mark-to-market gain on warrant valuation, which management noted does not reflect operating performance.
• Cash, Cash Equivalents, and Investments -- $3.1 billion as of March 31, 2026, providing what management described as sufficient resources for R&D acceleration, product development, and acquisitions.
• Pre-Sale of 256-Qubit System -- The first chip-based 256-qubit system was pre-sold in the quarter, with demonstration targeted by year-end and commissioning anticipated by end of 2027.
• SkyWater Acquisition Update -- The transaction is expected to close in 2026 subject to regulatory approval, with multiple 256-qubit chip tape-outs and functional samples already achieved.
• Technical Benchmarking -- IonQ claims up to "10 thousand times faster time to solution" for key algorithms, including a "1 thousand times faster" quantum Fourier transform, based on third-party validation.
• Fault Tolerance Roadmap -- Management outlined a path to a fully fault-tolerant system by 2030, targeting "logical error rates as low as one in 1 trillion" per the published "Walking Cat" paper.
• Federal and Defense Contracts -- Secured a $39 million contract under the Space Development Agency's HALO program and received a place on the Missile Defense Agency's SHIELD contract.
• Global Quantum Networking Expansion -- Deployed Poland's first national quantum communications network and delivered the first commercial quantum memory node for a U.S. regional quantum internet project.
• Q-Day Timeline -- Management expects to reach the logical qubit count necessary to challenge RSA 2048 encryption between 2028 and 2029, aligning with Chinese government goals and recent competitor updates.

SUMMARY

IonQ (NYSE:IONQ) delivered materially higher quarterly revenue growth driven by commercial and international sales, while raising its full-year outlook on strong market momentum. IonQ reported rapid expansion in multiproduct uptake as well as substantial increases in remaining performance obligations, providing multi-quarter forward visibility. Increased investment in R&D, supported by a robust cash position, is enabling accelerated product development, including the near-term rollout of the sixth- and long-term design of the seventh-generation quantum compute systems.

• Operating metrics revealed broad revenue diversification across geographies and products, with more than 35% of sales from customers deploying multiple solutions.
• Management highlighted the achievement of key technical and commercialization milestones, including functional 256-qubit prototype chips and the first engineering prototype for a full 256-qubit system.
• "we expect 100% year-on-year organic growth as well," COO and CFO Inder Singh said, underscoring the expectation for continued acceleration beyond 2025's pace.
• IonQ emphasized substantial order backlog growth, with RPOs increasing from $72 million to $470 million, bolstering claims of sustainable topline expansion.
• Strategic clarity emerged regarding the SkyWater acquisition, which is positioned to enhance merchant supply capabilities upon regulatory approval later in 2026.
• Deployments in quantum networking and federal contracts, along with named customer wins and technical benchmarking records, contributed to management's confidence in leadership across multiple quantum ecosystem verticals.
• Plans to reach technical parameters necessary for quantum decryption of RSA encryption—referred to as "Q-Day"—were identified as a near-term milestone, directly linked to both competitive positioning and national security partnerships.

INDUSTRY GLOSSARY

• Qubit: The quantum computing analogue to a classical bit, representing a quantum state capable of superposition and entanglement, central to quantum computational power.
• Quantum Fourier Transform: A quantum algorithm routine foundational for applications in cryptography, molecular modeling, and optimization problems.
• Logical Qubit: An error-corrected quantum bit constructed from multiple physical qubits to perform reliable computations at scale.
• RPO (Remaining Performance Obligations): A forward-looking metric representing total contracted, yet-to-be-recognized revenue for products or services not yet delivered.
• Tape-Out: The finalization and submission of a computer chip design for fabrication, a critical step in hardware development.
• Quantum Key Distribution (QKD): A method to securely distribute encryption keys using quantum mechanics, significant for secure communications networks.
• Tempo: IonQ's fifth-generation commercial quantum computing system, referenced as a key current revenue driver.
• HALO Program: A Space Development Agency initiative for secure, quantum-enabled space communications.
• SHIELD Contract: Missile Defense Agency's program for fast-tracking innovative defense capabilities, involving quantum sensing and communication.
• Q-Day: The anticipated point when quantum computing can break widely-used cryptographic algorithms, making classical security measures obsolete.

Full Conference Call Transcript

Hanley Donofrio: Good afternoon, everyone, and welcome to IonQ, Inc.'s first quarter 2026 earnings call. My name is Hanley Donofrio, and I am the Investor Relations Director here at IonQ, Inc. I am pleased to be joined on today's call by Niccolo de Masi, IonQ, Inc.'s Chairman and Chief Executive Officer, and Inder Singh, IonQ, Inc.'s Chief Operating Officer and Chief Financial Officer. By now, everyone should have access to the company's first quarter 2026 earnings release issued this afternoon, which is available on the SEC's website and on the Investor Relations section of our website at investors.ionq.com. Please note that on today's call, management will refer to non-GAAP financial measures.

While the company believes these non-GAAP financial measures provide useful information to 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 with GAAP. You are directed to our earnings release for a reconciliation of adjusted EBITDA and adjusted EPS to the closest comparable GAAP measures. During the call, we will discuss our business outlook and make forward-looking statements, including those regarding our guidance for 2026. These comments are based on our predictions and expectations as of today and are not guarantees of future performance. Actual events or results could differ materially due to a number of risks and uncertainties.

Therefore, you should not put undue reliance on those statements. We refer you to our recent SEC filings, including our annual report on Form 10-K for the year ended 12/31/2025, for a more detailed discussion of those risks and uncertainties. We undertake no obligation to revise any statements to reflect changes that occur after this call, except as required by law. I will now turn it over to Niccolo de Masi, Chairman and CEO of IonQ, Inc.

Niccolo de Masi: Thank you all for joining us today. 2026 is off to a strong start at IonQ, Inc., and our results this quarter serve as a powerful validation of what we built throughout our transformational 2025. Financially, we have delivered the biggest quarter in IonQ, Inc. history thus far—our fourth consecutive quarter of record-breaking results. $64.7 million of GAAP revenue in Q1 2026 is more than eight times what we delivered in the same period last year. Our strong momentum is a testament to the demand for our industry-leading quantum computers as well as the commercial impact of our entire quantum platform.

As I outlined on our fourth quarter call in February, a key objective for 2026 is to drive superior financial performance by leveraging our scaled quantum product families combined with increasing geographic breadth and depth. We are executing well and have today raised our full-year revenue expectations to $270 million at the high end. Our results were underpinned by accelerating global quantum computing system sales, increasing high-margin cloud utilization, and deepening application-layer partnerships with our enterprise customers. I am tremendously excited about IonQ, Inc.'s ecosystem progress, which was on full display at the New York Stock Exchange when we rang the bell with over 50 customers to celebrate World Quantum Day.

IonQ, Inc. is defining the quantum technology market and establishing the leading hardware and software quantum industrial ecosystem. Our organic performance is a direct reflection of this leadership as we architect and deliver the quantum platform for the next century of computation. We continue to widen our lead across commercial and technical frontiers. Our parallel gate architecture with electronic qubit control will allow us to solve problems at a scale and cost that we believe will be unmatchable. On April 14, we rolled out clear third-party validated benchmarks showcasing the incredible time-to-solution and cost-to-solution advantages that our quantum computers already possess. These metrics represent the speed and economics with which our systems deliver accurate solutions to the world's hardest problems.

As you can see on slide six of our investor presentation, we presently enjoy up to 10 thousand times faster time to solution on key quantum algorithms, including 1 thousand times faster for the quantum Fourier transform. The quantum Fourier transform, in fact, enables many critical use cases such as cryptography, molecular drug discovery, advanced material synthesis, and unlocking fusion energy, making this time-to-solution advantage valuable today and into the future. It is not a coincidence that several of the key utility-scale applications described by DARPA's quantum benchmarking initiative could take advantage of quantum Fourier transforms under the hood.

IonQ, Inc.'s time-to-solution advantage with quantum Fourier transform and other benchmark algorithms today underscores our fidelity and connectivity advantages that we expect to endure throughout the coming decades. I am proud to report that we have pre-sold our first chip-based 256-qubit system in the first quarter. We are moving with conviction to demonstrate this technology by year-end with customer systems expected to begin commissioning by the end of 2027. While much of the industry remains in the scientific research phase, IonQ, Inc. has been able to focus on delivering production-ready systems that are shaping the quantum market globally.

We remain the first and only quantum company in history to have demonstrated the critical technology components at the performance levels required for full fault tolerance. The next critical frontier in our industry is the efficient use of quantum error correction to convert high-quality physical qubits into even higher-quality logical qubits, unlocking new frontiers of scale and impact. This is the bridge to utility-scale fault-tolerant quantum computing. It should be no surprise that IonQ, Inc. is leading here as well.

Just last month, we published our complete architectural blueprint for our flexible modular framework that describes how our technology scales through to 2030 objectives of a fully fault-tolerant system with millions of physical qubits and logical error rates as low as one in 1 trillion. Our Walking Cat paper described IonQ, Inc.'s end-to-end architecture for full fault-tolerant quantum computing, spanning compiler design and error correction to hardware control systems and ion movement. This historic paper outlines in manufacturable detail how we will move from today's IonQ, Inc. commercial systems to deploying and commissioning IonQ, Inc.'s utility-scale quantum computers to customers.

The level of detail and completeness of our blueprint is a global first and historic milestone for the quantum industry as a whole. Along with the academic community, there has been strong and broad recognition that this is the industry's first clear, detailed, manufacturable path to scaled fault-tolerant systems. For those able to follow along in our investor presentation, please see page seven for details. IonQ, Inc.'s specificity sets a new standard and distinguishes IonQ, Inc. with its tangibility resting on capabilities our hardware has already demonstrated, including 99.99% two-qubit fidelity and reliable ion transport. This historic work demonstrates precisely why IonQ, Inc. is on track to be the first to unlock fully fault-tolerant quantum computers.

As we published clearly in June 2025, our level of transparency is only possible through our thirty years of innovation. Only IonQ, Inc. has the operational maturity and engineering predictability of generations of deployed systems, as we now accelerate into a new phase of manufacturing and scale. Moving on now to SkyWater and our merchant supplier activities. As most listeners know, in January 2026, we announced our intent to acquire SkyWater in order to accelerate the U.S. quantum industry and deepen our commitment as a merchant supplier. We expect the transaction to close in 2026 subject to customary regulatory approvals. Over the past quarter, our commercial collaboration with SkyWater has already yielded multiple test iterations for our 256-qubit chip.

As we shared in February, we hit the ground running with multiple initial tape-outs. Today, I am pleased to report that we have already received some of the first ion trap samples back from SkyWater and have demonstrated on these sample chips the critical performance we need for the complete 256-qubit chips. To design, fabricate, and test these chips with SkyWater within a single quarter has been a delight. Our commercial partnership with SkyWater is a demonstration of the kind of acceleration we hope our investment will bring for all customers of our quantum merchant supply function, and we expect these benefits to grow even further once the combination is complete.

We already act as a merchant supplier with our industry-leading atomic clocks, sensors, and networking products being sold to other quantum companies. When the SkyWater transaction closes, IonQ, Inc. will be the largest quantum merchant supplier in the world, with Thomas Sonderman continuing to lead SkyWater. We view this transaction as not only accelerating IonQ, Inc.'s commercialization of fault-tolerant quantum computers, but also using our balance sheet to secure the scalability of the entire U.S. and allied quantum market. As it is a frequent question from our community, I will now walk through our application and quantum algorithm momentum in a bit more granularity than in prior quarterly calls.

This work can be seen in our investor presentation on page eight. Applications and quantum algorithms are another cornerstone competitive advantage for IonQ, Inc. We know that for customers, value is measured not just on a machine's architecture, but by how that architecture ultimately delivers customer value and results. We are confident IonQ, Inc. already delivers a potent combination of orders-of-magnitude faster time to solution, the most accessible cost to solution, reliability, and quality that customers cannot find anywhere else. We have more than doubled our quantum algorithm and applications team size in the past few quarters in response to strong demand.

We continue to grow internationally, adding both application engineers and field engineers to support customer appetite for implementing IonQ, Inc.'s quantum solutions in their organizations. We are deliberately focused on early-advantage verticals: pharmaceuticals, financial services, energy, and logistics. Real-world examples from just the past few quarters include the following partnerships. In the financial sector, we ran the world's first large-scale portfolio optimization quantum algorithm using real S&P 500 data. This showcased, along with Kipu Quantum, our systematic improvement in portfolio quality and execution time in a production environment. Our trapped ion hardware has a long-term structural advantage for dense portfolio optimizations such as these because of its all-to-all connectivity and its industry-leading single-qubit and two-qubit gate fidelities.

With Synopsys, we demonstrated accelerated computer-aided engineering workloads through quantum-enhanced graph partitioning. We achieved double-digit percentage advantage in end-to-end time for large-scale structural models such as a Rolls-Royce jet engine and automotive models also. Crucially, this demonstration was integrated into their existing cloud workflow with zero new infrastructure required. Einride is using IonQ, Inc. to optimize shipment allocations and fleet orchestration for electric and autonomous freight, delivering measurable gains in real-world logistics efficiency. We have already demonstrated real-world commercial validation using anonymized logistics data and historical cancellation logs. By achieving an increase in shipments delivered, this work will underpin very significant revenue gains for our partner at fleet scale.

With QuantumBasel, we are advancing hybrid quantum-classical techniques to optimize large language models and reduce energy consumption. Our results show that an IonQ, Inc. quantum computer’s energy consumption scales approximately linearly with qubit numbers for shallow circuits. By comparison, classical simulation exhibits exponential scaling. We are on track to demonstrate significant energy savings with improved inference performance as we scale these capabilities. These four production-oriented applications are just some of the examples our customers are deploying to actively drive business advantage and growth. We are proud to announce in parallel that our work to positively and powerfully impact humanity itself has this quarter seen a step change.

We are now working with participants from the Wellcome Leap initiative out of the UK, which is a program designed to accelerate human health, to apply our quantum optimization to improve cancer research. Our work introduces new computational approaches for reconstructing difficult regions of DNA that are often missed or misread by existing methods. This could become a useful foundation for future studies of genetic changes that matter in human disease, including cancer. Last quarter, we also announced a commercial partnership with CCRM, which is one of the world's leading accelerators for advanced therapies. We are very excited about the work we are doing with them, which includes cell and gene therapies for cancer and immune system rebuilding.

This work is truly world-changing, offering a powerful new future for human health. We have also begun work on combining our quantum optimization technology with computational methods for gene therapies, including optimization of mRNA sequences that get delivered into cells. Long term, we anticipate personalized medicine acceleration. For those following along in our investor presentation, this can be seen on page eight. Let us now turn to the breadth of our unique and expanding quantum platform. Building on the momentum of our recent deployments of quantum communication networks in Switzerland, Romania, and Slovakia, IonQ, Inc. has now successfully deployed Poland's first national quantum communications network.

This is one of the largest terrestrial quantum key distribution networks in Europe, and it cements our position as the partner of choice for sovereign quantum security. We are similarly expanding our quantum platform leadership domestically by announcing a new statewide quantum networking initiative in the great state of Florida, and the first commercial sale of a quantum memory node into the Mid-Atlantic Regional Quantum Internet, hosted at the University of Maryland. These partnerships underscore that IonQ, Inc. is proudly playing a central role in the development of our secure national quantum infrastructure. On the technical front, we continue to innovate and lead the market as the only public company with a scaled quantum networking division.

Last year, in partnership with the Air Force Research Lab, we achieved the first qubit-to-telecom frequency conversion in a field-deployable system, enabling real-world quantum networks on existing telecom infrastructure. Last month, on World Quantum Day, we announced that, in conjunction with AFRL, we connected qubits from two separate systems. This is the first demonstration of connected commercial quantum computers, demonstrating the operationalization opportunity of quantum interconnects and paving the way for distributed quantum computing that will underpin the future of secure global communications. Our contract with DARPA's HARC program is another testament to our leadership in quantum memory, modular quantum computing, and scalable networking architectures using quantum interconnects.

IonQ, Inc. is playing a critical role in enabling a new class of networked quantum computers that can combine multiple qubit types into an interconnected high-performance architecture. To our knowledge, we are the only industry player to win a hardware award as part of HARC. This contract is another powerful example of how IonQ, Inc. is already serving as the leading merchant supplier to the entire quantum industry, with key IP including the world's most accurate commercial clocks that matter to any modality’s long-term scaling and manufacturability. Turning now to slide nine in the investor presentation. Momentum remains strong at IonQ, Inc. Federal.

We continue to advance through DARPA's quantum benchmarking initiative and are building out our capabilities to support next-generation GPS-alternative PNT and other mission-critical initiatives for our nation. We were awarded a $39 million contract to advance next-generation space communications under the Space Development Agency's HALO program. This paves the way for mission-ready quantum space systems for national security. Just this week, we expanded our space, mission, and sensing capabilities with a new product launch delivering persistent change monitoring intelligence from space. We were also awarded a spot on the Missile Defense Agency's SHIELD contract, which is focused on the rapid delivery of innovative capabilities to the warfighter with increased speed and agility.

Our technology platform represents a dual-use advantage for our nation and its allies, underpinning both economic growth and national security. We are proud to be the partner of choice for U.S. and allied governments in this geopolitical quantum space race. In order to do this work with U.S. government agencies, high technology readiness levels are an imperative. Our quantum sensors and clocks have reached TRLs for deployment on land, sea, air, and space. At this very moment, we have quantum sensors currently deployed on a Navy ship and in space on the X-37B space plane. Our quantum security products similarly have already reached deployment-ready TRLs across critical infrastructure, telecommunications, and national networks.

Providing mature, deployable quantum security solutions today is vital to ensuring continuity for communications as quantum computers become ubiquitous. Before I close, I would like to touch on Q-Day and talk through page 10 in our quarterly investor deck. Lately, Q-Day, the threshold where quantum systems render current RSA encryption obsolete, has dominated industry conversation. We have been transparent in our assessment of Q-Day's timeline since publishing our 10-year energy roadmap in June 2025. Based on our public roadmap, we expect to achieve the logical qubit count required to challenge RSA 2048 encryption in the 2028 to 2029 window.

China's stated goal in their government quantum efforts is 2029, and it is worth noting that our peers have now recognized this accelerated timeline, with Google very recently bringing forward its expectation for Q-Day from the mid-2030s to 2029. As we continue to accelerate the timeline toward Q-Day, we view it as a strategic responsibility to also provide the solution. We are not just identifying a future risk. We are delivering mature, field-deployable hardware and software cybersecurity solutions that allow global governments and enterprises to both enhance cybersecurity today and ensure our nation's protection in the age of quantum ubiquity. IonQ, Inc. is uniquely positioned to deliver post-quantum security solutions precisely because we are the ones defining the offensive frontier.

Our deep understanding of how advanced quantum systems challenge RSA and ECC encryption allows us to build superior defenses. This creates a powerful strategic flywheel. Our hardware leadership informs our security innovation, and our security expertise de-risks the quantum transition for our customers. As I said on our full-year call in February, 2025 was a strategic and financial inflection point for IonQ, Inc. Today, I am confident that 2026 is, in turn, the year we move from platform building blocks to platform execution at scale. We will continue to deliver superior financial performance, unlock exponential value through applications and system-level breakthroughs, and operate with both discipline and speed.

IonQ, Inc.'s mission is to pioneer and globally commercialize the world's quantum solutions, positively impacting every aspect of applied science while ensuring U.S. and allied leadership in this generational and geopolitically vital technology race. I want to thank my colleagues for their extraordinary efforts and the broader quantum industry for their partnership. With our strong capitalization, unmatched talent density, and clear roadmap, IonQ, Inc. is one platform, one team, primed and poised to win. I am now delighted to hand the call over to Inder Singh, our COO and CFO.

Inder Singh: Thank you, Niccolo. We are very proud to report our strongest quarter in the company's history, delivering $64.7 million in GAAP revenue, which is 755% year-on-year growth. This is now our third straight quarter of record-setting revenue growth. These results exceeded our revenue guidance by over 30% and our own expectations. Importantly, our results are underpinned by strong organic growth, which we expect will continue through the remainder of the year. In fact, as we indicated last quarter, we are expecting organic revenue growth to be 100% for the full year, even exceeding the 80% that we reported for 2025.

I will now cover our financials in more detail, which you can also see in our investor presentation on pages 12 through 18. Consistent with the additional color we started to provide you last quarter regarding the different areas of our revenue and the composition of our revenue, I am going to touch on four key aspects. One is commercial, two will be geography, third, we are introducing a metric around multiproduct sales, and of course I will again talk about remaining performance obligations, also known as RPOs. Number one, let me address our commercial revenue.

I am pleased to report that approximately 60% of our revenue came from commercial customers this quarter, similar to what we reported for the full year 2025. This demonstrates that we are firmly entering the commercialization of our quantum technologies. Commercial revenues consist of quantum platform contracts with non-U.S. government customers. We are happy to see this metric remain high as our revenues grow. We are happy that our commercial sales have now become a major part of the business and, importantly, a takeaway for us is that our quantum solutions have moved well away from the lab and squarely into real-world applications and deployments, as Niccolo described. Number two, our global revenue mix.

I am also pleased to report that we are seeing demand for our products come from around the world and from more countries than ever before. In Q1, approximately 35% of our revenue came from international markets. We have now sold solutions in over 30 countries, compared to a year ago when we had customers in just a few. As I said last quarter, we are working on pursuit and capture in a very methodical way and it is now starting to pay off, as we begin to see revenues come from many more parts of the world.

Number three, we are providing you with an additional metric, a new view into our revenues, which you should look at, and I would best describe it as multiproduct sales. Multiproduct sales means what percent of our revenue came from customers who have now bought more than one product from us—for example, computing, networking, sensing, security, etc. I am pleased to report that in Q1, over one-third of our revenue came from multiproduct sales. The reason this is important is consistent with the strategy that Niccolo laid out last year. We have become the go-to place for all things quantum.

Under the leadership of Scott Millard, who heads global sales for us, we have created a methodical approach to our go-to-market strategy. This includes cross-selling across our business, very disciplined pipeline development and conversion, a land-and-expand strategy, and, yes, an amazing group of sales leaders that we are deploying around the world. While we may or may not always share all metrics every single quarter, we want to provide you color that will help you look at our business. You should know that we are investing in growing our revenues across our entire suite of products. It was Niccolo's vision a year ago to develop this quantum platform company, and we are seeing that play through our financials now.

This multiproduct metric represents how that platform strategy has turned into financial outcomes. Number four, let me spend a moment on our remaining performance obligations, or RPOs, which is a widely accepted measure that companies use to gauge their visibility over several quarters. As of March 31, 2026, our remaining performance obligations stood at $470 million, compared to approximately $72 million a year ago. That represents growth of 554% year-over-year. From our lens, RPOs help us get context around the continuing growth of our company as well as provide visibility potentially beyond the next few quarters. As all of you know, RPOs turn into revenue as performance obligations are met, and RPOs get replenished with TCV from new sales.

In Q1, to give you some context, for every $1 of revenue we recognized, we added roughly $2.5 in RPOs. Some use this as a proxy for backlog. To summarize my revenue comments, Q1 2026 was another record-setting quarter with a revenue profile of 60% commercial, 35% international, 35% multiproduct, and RPOs grew 554% year-on-year. And yes, we expect 100% year-on-year organic growth as well. Let me turn to our investments and profitability metrics now. First, let me talk to you about R&D. As of last quarter, our biggest investment area continues to be R&D, and GAAP R&D in Q1 grew 215% year-over-year to $125.7 million.

For some context, last year our R&D exceeded the entire reported R&D in the quantum industry. Our strategy is to accelerate our innovation, deliver the most powerful quantum computing solutions to the market, connect all things quantum, and secure our customers in a post-quantum world, as Niccolo described. As a prime example of our innovation leadership and the compute power we intend to deliver and are delivering, today we are deploying our fifth-generation compute system called Tempo. We are now well on our way to the 256-qubit sixth-generation system, and we are starting to turn our focus also on the seventh-generation 10 thousand-qubit solution.

We will maintain this relentless focus on innovation, and our financial firepower allows us to do so. Turning now to adjusted EBITDA. We recorded a loss of [inaudible] for the first quarter. In this quarter, adjusted EBITDA included approximately $12 million of expenses related to our commercial agreement with SkyWater for the fabrication of our industry-leading ion trap. This commercial agreement remains in place until the approval and close of SkyWater. Excluding the SkyWater commercial agreement spend of $12 million, adjusted EBITDA would have been $85 million. Turning now to net income. In Q1, we reported a positive $805.4 million in GAAP net income, which was mainly due to an approximately $1.1 billion mark-to-market warrant valuation.

As in prior quarters, let me remind you again that this warrant mark-to-market is a non-cash item and depends on the stock price at any given time. Therefore, this net income, including the volatility, does not represent the operating performance of our business. Let me now turn to our financial position as a company. Cash, cash equivalents, and investments as of 03/31/2026 were $3.1 billion. This provides us with the visibility and financial firepower to accelerate our R&D roadmap, invest in new product development, scale our go-to-market engine, and also to acquire critical capabilities.

In addition to supporting our investment capabilities, our financial firepower provides comfort to our customers as well that we will be there for them not just today, but in the coming years. This helps us create stickier relationships with top-tier customers who want to align with our multiyear roadmap. With my COO hat on, let me highlight a few areas where we are driving towards excellence in our execution, as Niccolo shared last quarter. That is one of our prime objectives for 2026. Last quarter, I noted that near-term demand for some of our products in compute was outpacing our ability to meet that demand.

This quarter, I am happy to report we have addressed that and already strategically accelerated our ability to address the demand by growing our deployment teams, core deployed engineers, manufacturing capacity, and field operations. For one small example, we have more than doubled our manufacturing of the Tempo to meet the demand that we are seeing. Looking into the future for our 256-qubit system, last quarter I shared that we had completed tape-outs A, B, and C and had started working on tape-out D. This quarter, I am pleased to update you that tape-out D has been completed, the designs have been handed over to the foundry, and the chips are now progressing well through the fabrication process.

As part of this process, we received the first fully fabricated ion trap prototype, and I am happy to share that they are already beyond the critical quality metrics needed for 256-qubit devices. Not only that, but these metrics are also approaching what we will eventually need for our 10 thousand-qubit device and beyond. This is an important milestone. It means we are proving out the path to the full 256-qubit chips that are in fab at this time as well as the generations beyond. Building on our progress at the chip level, I am pleased to share that we are also now wrapping the first engineering prototype for the full 256-qubit computer.

This means we are now moving from component-level testing to system-level testing. These are very important strides towards delivering the full 256-qubit system to the market in the future. And we are not stopping there. As I mentioned, our team is already starting strides towards our seventh-generation 10 thousand+ high-qubit-count chip. The key to scaling into our 10 thousand+ high-qubit-count system is the integration of active CMOS design, where SkyWater really helps. By moving control functions directly onto the silicon with CMOS, we are taking advantage of the scaling techniques of the existing global semiconductor industry. In a nutshell, we are executing on our strategy. Let me now turn to financial guidance.

As you have heard today, we have built a strong foundation for what we expect will be another historic year for IonQ, Inc. in 2026. With that in mind, we are pleased to raise our revenue guidance for the full year 2026 to be between $260 million and $270 million. For context, even the lower end of that guidance doubles the company's year-over-year revenues. For the second quarter, we are projecting revenues of between $65 million and $68 million. We are also reaffirming our projections for full-year 2026 adjusted EBITDA to be in the range of negative $310 million to negative $330 million.

We look forward to the remainder of 2026 with confidence and believe that IonQ, Inc. is well positioned—with the talent density, the processes, the technology, and the innovation investment—to remain the trailblazing quantum leader that we are establishing and have established already. With that, operator, please open the call for Q&A.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing any keys. We would like to ask you to limit yourself to one question and one follow-up to ensure everyone has a chance to queue. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from John McPeak of Rosenblatt Securities. Please go ahead.

John McPeak: Thanks, guys. Nice work. So I think you have got three customers now for the 256. You just called out Cambridge. I think last call, you talked about QuantumBasel. And also there is Horizon Quantum out there. Could you talk a little bit about the likely delivery schedule and how we should think about the revenues coming in from these? Then I just have a quick follow-up.

Inder Singh: Yeah. Thanks, John, and thank you for the comments as well. Look, we are laser-focused on our fifth-generation machine because customers are laser-focused on it. The demand that we are seeing is actually for many more customers than I can share today. As I look at it, the demand for our fifth-generation machine is strong, and in fact customers will look at it and say, “Well, we might also want to look at your next and your next and your next.” That remains very, very strong. We will continue to announce new wins. First quarter is obviously just the beginning. As I look through the rest of the year, the demand is strong.

The need for us to have the manufacturing and deployment capabilities was necessary, as I mentioned last quarter, and we have made those investments by bringing on board and deploying folks that will be building these systems. You will see many more announcements coming in the future. I mentioned Scott and team are busy responding to some of the demand signals that we are seeing for Tempo and, importantly, early demand signals also for our 256. Remember, when customers buy something as unique as a computing platform, they are buying the platform, meaning a multiyear view, not having to shift direction 12 months from now.

So we are ensuring that we are in the right places with the right customers who not only have the desire and interest in our solutions but also the long-term conviction to remain with us over multiple years. Yes, QuantumBasel is an excellent example of that. There are many more we will be announcing. Our focus is to make sure that in 2026 we deliver on the guidance we provided you and hopefully exceed it. Tempo will be a big driver of that, as well as the rest of our platform. Also, February is just around the corner into 2027 and beyond. Hopefully, that addresses your question.

John McPeak: It does. Let me just have a quick follow-up. The roadmap has 12 logicals and a very respectable 10 to the negative seven two-qubit gate error rate. Will that be calibratable? In other words, could you have more logicals with slightly higher error rates? Is that in the cards? Because that is a very low error rate, but it is fewer logicals as a result.

Niccolo de Masi: Yeah. So as I said in my script, we are targeting 10 to the minus 12 error rates as our architecture matures, and so you are going to see even lower error rates in the coming generations of systems. The other thing that we are making progress on is reducing the ratio between physical and logical qubits still further. So I think there is probably some modest upside in the public roadmap that we published last June in terms of physical and logical qubit counts accelerating a bit further, at least on the logical front.

But as we have said consistently for the last year or two, if not five, frankly, the advantage of our architecture is we have the highest fidelity qubits naturally, and that makes everything easier. It makes the ratio of physical to logical start out lower even before you start trying to optimize it, and it means error rates are lower. You can see the advantages in having lower error rates on things like page six in the investor deck, where we are talking about time to solution and the high-fidelity two-qubit parallel gate architecture we have developed.

Time to solution is obviously a product of how many times you have to take what is called a shot in a certain algorithm and, of course, how accurate the shots are. Our shots are very accurate. We do not have to take very many of them. That is an advantage that we expect is going to endure throughout our entire architecture, and we are already demonstrating it in grand style now. With the Walking Cat architecture now all publicly available, you can see how we are going to hold that all the way through 2030.

Operator: Our next question comes from Craig Ellis of B. Riley Securities. Please go ahead.

Craig Ellis: Yes. Thanks for taking the question, and congratulations on the momentum to start the year, guys. I wanted to go back to the point that you made, Niccolo, on the April 14 photonic interconnect announcement. It is great to see something that I think some people are calling an Ethernet moment. But the question is, as you look at what that means and how customers are engaging, what are the revenue implications of that, either later this year or out on the roadmap, as we look at that advancement in technology?

Niccolo de Masi: Well, we are not going to give you precise guidance on the revenue impact in out quarters, but I will say that the beauty of our lead in quantum networking and photonic interconnects is threefold. First, we think we can push our systems a long way vis-à-vis getting, you know, 2 million physical qubits on a single chip. At some point, though, we may want even bigger systems. And so data center opportunities arise at some point in our architecture—whether it is 2 million per chip or 4 million per chip or even 10 million per chip—at some point, we may want 100 million qubits.

I am very bullish on humanity's ability to take advantage of more compute power and particularly more quantum computing power, and I think at some point in the future, generations of quantum computers themselves will help us figure out how to optimize and take advantage of even bigger quantum computers. Second, it builds us an expanded merchant supplier capability. Our quantum memory solutions and IP actually will allow multiple modalities to potentially connect together in a pretty seamless fashion and work together, and I think that is exciting vis-à-vis where the world will be in the coming years and decade.

And then, of course, third, we have talked a couple of times about the fact that we have multiple customers in the networked quantum computer category. The Air Force Research Lab is obviously the first of those, and that continues to be a large contract that we prove out every quarter of the year. My colleague Inder mentioned a few other customers both last quarter and this quarter taking networked quantum computers. So, in summary, there are really three great lever points for us, and we continue to invest in and, of course, protect our quantum networking and photonic interconnects because it is something that we have been working on, including from our founder Chris Monroe, early on.

And believe it or not, Chris Monroe continues to work on that. We are very excited that our lead there we believe to be as predictive as the computing one. The world is going to need protected communications between quantum computers, and this is precisely why we expanded the vision of the company 15 to 18 months ago from computing into networking.

Inder Singh: Yeah, and I will just add—I agree with everything Niccolo just said. In Q1, we saw growth in every product line year-on-year. If you look at our guidance for the year, without commenting on individual quarters, just look at the math: the company is doubling organically. Therefore, the rest of the product lines we have also need to have a doubling effect in total to get to the guidance we provided you. The interconnects, the ability to network computers together, the ability to deliver hybrid compute—those are the things that we are uniquely positioned to do. We can compute, and we can connect an ion trap type of quantum machine with someone else's.

So we are, in that way, very modality-agnostic and want the whole industry to grow. We want to become the networking and the compute leader in many ways in terms of our own innovation. We want the rest of the industry to succeed as well because that is how you make it a successful, durable industry. We have moved ourselves out of the lab into the commercial market. We want everyone else to do that as well. And that is how we grow. We are happy to see the results that we are delivering. We keep investing, and Niccolo is constantly getting calls for “Would you like some more investment?” and things like that.

There are always ideas in front of us. We are very happy with the portfolio we have. It was put together about a year ago by Niccolo and strategy: become the first quantum platform company, and you will establish basically a critical mass that allows the industry to scale, but also yourself to innovate and scale. So, strong first quarter across every product line and a strong year. I think you can do the math around the growth of the other products.

Craig Ellis: That is really helpful, guys. And, Inder, I will ask a follow-up question that relates to the COO hat that you also wear. It is directed at how go-to-market changes as you bring Scott Millard in from Dell. You talked about wanting to be a service provider and span a range of solutions. He would seem to have an ideal background for that, but how does go-to-market change as we think of the next few years and the company pursuing the roadmap that you laid out at Analyst Day? Thank you.

Inder Singh: Yeah, look, becoming a successful technology company is a team sport. You have to have the legal professionals to do the commercial negotiations, your ops and deployment teams deployed around the world working in partnership with Scott, my teams in the finance area helping Scott succeed, of course, and Scott himself developing a methodical pursuit-and-capture approach. These are not things companies do until they have critical mass. We think we are there. That is why we are now investing not just in R&D but also in go-to-market. Some of the leaders that have joined the company would amaze you in terms of their knowledge of the market and the mindset of the customer.

There is not a vertical that I think quantum will not touch eventually. It will touch everything. Some will be early adopters; some will lag. Areas like financial services, which need protection now—to the Q-Day comments that Niccolo made—and life sciences companies need faster innovation because they are committed to solving some of the most intractable problems that humanity faces. We are happy to be the one that brings all that together, whether it is connecting our machine to someone else's or ours to ours with interconnect, as you mentioned. I am happy to see the flywheel effect starting to take over, Craig. Happy to follow up with you offline as well.

Operator: Our next question comes from Troy Jensen of Cantor Fitzgerald. Please go ahead.

Troy Jensen: Hey, gentlemen. Congrats on the results and all the technical milestones. Maybe to start here with Niccolo: I agree 100% we are on the cusp of all your quantum advantage really helping to solve some commercial applications that we have not done previously. But I was just curious—how do you think about pricing the value that you are creating? Because if you are enabling, like, new drugs or new material science, I mean, there are huge market opportunities. So can you talk about how you price and think through the value you are delivering here?

Niccolo de Masi: Yeah. So, look, we obviously are innovating business models at the same time as we are building the quantum ecosystem here. Inder has eloquently talked in the last few quarters about the platform strategy translating into real momentum. And so, obviously, we are pricing things differently when there is a networked quantum computer and we are providing more value there than, obviously, just a single system that is not quantum-networked. There is going to be a fair amount of price exploration, frankly, on a global basis as our quantum platform continues to mature. What I am excited about this quarter in particular—and this year, really—is that the market continues to come towards us.

Inder mentioned the fact that at times there is greater short-term demand than supply. So we are very focused on improving manufacturing capacity at IonQ, Inc. in total, across the entire platform. We are working on both individual customer sales that can at times be multiproduct, but we are also working on some very large initiatives at the national scale. I think it is safe to say that there is a fair amount of bespoke, consultative selling that is going on, if you think about the breadth and depth of our product families as well as the geographies that we now have traction in.

Now, obviously, because of our cost advantages and because of the fact that we have always tried to forward invest in manufacturing capacities—we did that on both coasts in the U.S. years ago, for example—we believe we have the greatest power per unit dollar that is on offer in the marketplace, and that is, of course, our goal.

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