Why Quantum Computing Stock IonQ Dropped Today

Shares of quantum computing systems provider IonQ (NYSE: IONQ) tumbled 11% through 11 a.m. ET Thursday after the company reported a big earnings miss for Q4 last night.

Heading into the report, analysts forecast IonQ would lose $0.12 per share on $10.3 million in revenue. IonQ reported better revenue than that -- $11.7 million -- but its losses were a staggering $0.93 per share.

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IonQ's big Q4 loss

IonQ did its best to make bad results look good, emphasizing its $43.1 million in 2024 revenue (95% revenue growth), and noting Q4 revenue exceeded guidance (and was up 92% year over year).

IonQ also noted full-year bookings of twice its reported revenue at $95.6 million, implying strong sales growth will continue. Management forecast 2025 sales at between $75 million and $95 million, so $85 million at the midpoint, which is more than analysts anticipated. However, sequential sales growth looks to be negative, with IonQ warning that its Q1 2025 sales will be only $7 million or $8 million.

IonQ's big cash grab

And then, of course, there's the loss. IonQ's $0.93-per-share loss in Q4 and its full-year loss of $1.56 per share were both worse than investors had anticipated and are probably driving today's decline.

Not helping with that is the fact that IonQ announced plans to raise another $500 million to fund its continuing losses. Morgan Stanley and Needham & Co. will run the "at-the-market" stock offering, selling shares at whatever price the market will bear, until they've accumulated up to half a billion dollars in new cash.

IonQ didn't say specifically what it will use the new money for (but I think we can guess). Cash burn for the past year totaled nearly $124 million. So $500 million should keep the doors open and the lights on for another four years at IonQ's current burn rate. According to analyst forecasts, that should be long enough for IonQ to cross the finish line and turn profitable (at least on a non-GAAP basis) and free-cash-flow positive in 2029.

Fingers crossed.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.