How IonQ's New $3.5 Billion Balance Sheet Changes the Investment Thesis

• IonQ holds $3.5 cardinal successful currency and short-term investments.

• The company's gross is increasing exponentially, acknowledgment to a bid of acquisitions.

• Meanwhile, its expenses are increasing -- contributing to mounting operating losses.

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In the satellite of quantum computing stocks, possibly nary different sanction commands much attraction than IonQ (NYSE: IONQ). On the surface, investing successful IonQ mightiness look compelling. The company's systems integrate with each large unreality hyperscaler -- Amazon, Microsoft, and Alphabet. Meanwhile, CEO Niccolo de Masi has done a phenomenal occupation connected the selling broadside of the location by getting investors some intrigued and excited astir the company's perchance revolutionary trapped ion technology.

With a currency heap of $3.5 billion, is IonQ poised to instrumentality implicit the quantum AI revolution? Below, I'll look astatine IonQ's fiscal illustration and measure what the underlying concern trajectory could look similar implicit the coming years.

The charts beneath exemplify IonQ's gross and nett income implicit the past 12 months. The dichotomy betwixt the company's income and profitability illustration could not beryllium much dramatic.

It appears that the income trajectory is firing connected each cylinders. However, if that were true, wherefore is IonQ hemorrhaging operating losses?

As is often the lawsuit with fiscal owed diligence, the devil is successful the details.

There's an important nuance to constituent retired arsenic it pertains to IonQ's revenue. Over the past year, the institution has completed a fig of acquisitions. Essentially, the gross fig pictured supra is simply a pro forma practice of the concern -- meaning it represents some integrated gross maturation successful operation with IonQ's recently acquired assets tucked into the wide operation.

This leads to my 2nd point. For the nine-month play ended Sept. 30, IonQ spent $210 cardinal connected probe and improvement (R&D) and $154 cardinal connected selling, general, and administrative (SG&A) expenses. This represents yearly maturation of 116% and 275%, respectively, crossed R&D and SG&A.

Given that the company's disbursal illustration is accelerating astatine a acold steeper gait than revenue, I deliberation it's tenable to accidental that IonQ's acquisitions haven't yet been accretive to the business. As a result, the institution is racking up tons of losses.

The billion-dollar question remains: If IonQ's gross maturation is augmented by acquisitions and the company's expenses are mounting, however does the equilibrium expanse diagnostic billions successful cash?