COLLEGE PARK, Md. & VISTA, Calif. - IonQ (NYSE: IONQ), a leader in quantum computing, announced today its definitive agreement to acquire the operating assets of Qubitekk, a quantum networking company. The acquisition, expected to close within six months pending certain conditions, will integrate Qubitekk's team and technology into IonQ's operations, aiming to enhance the company's stature in the quantum networking market.
Quantum (NASDAQ:QMCO) networks are poised to become crucial, offering ultra-secure communications and other benefits across various sectors, including defense, finance, and energy. Qubitekk's experience, demonstrated by the deployment of the nation's first commercial quantum network, the EPB Quantum Network in Chattanooga, Tennessee, will complement IonQ's strategy to scale its quantum computers through photonic interconnects.
The transaction is set to expand IonQ's quantum networking capabilities and customer base, with potential contributions to near-term bookings and revenue opportunities. Peter Chapman, President and CEO of IonQ, expressed confidence that the acquisition will consolidate IonQ's expansion and leadership in both quantum networking and computing. He also anticipates the quantum networking division to potentially be the first to achieve positive cash flow.
Qubitekk's team, including Co-Founder and CEO Stan Ellis and other executives, will join IonQ, bringing with them a portfolio of 118 U.S. and international patents in quantum networking hardware and security.
The acquisition follows IonQ's recent announcements, including a $54.5 million contract with the United States Air Force Research Lab and advances in remote ion-ion entanglement, as well as a quantum networking contract with the Applied Research Laboratory for Intelligence and Security.
IonQ and Qubitekk's leaders have expressed mutual enthusiasm for the merger, envisioning a strengthened position in the pursuit of a quantum-enabled internet.
Legal counsel for the acquisition is provided by Wilson Sonsini Goodrich & Rosati. The information is based on a press release statement.
In other recent news, IonQ has made significant strides in the quantum computing sector. The company reported a successful demonstration of remote ion-ion entanglement between two qubits in separate ion traps, a crucial step toward achieving a scalable quantum system. The company's research and development team accomplished this feat by entangling two trapped ion qubits using entangled photons and routing them to a single detection hub, establishing a quantum communication link.
Additionally, IonQ has expanded its partnership with the University of Maryland to bolster quantum computing research and development at the National Quantum Lab at Maryland. This collaboration aims to provide advanced quantum computing resources to the UMD community and its partners, further establishing Maryland as a key player in the quantum computing industry.
Despite a net loss in Q2 2024, IonQ exceeded revenue expectations, reporting $11.4 million and booking $9 million in sales contracts. The company also raised its full-year revenue forecast, suggesting a positive outlook for the remainder of the fiscal year. Furthermore, IonQ secured a $40 million contract from ARLIS, anticipating an additional $12 million in bookings before the end of 2024.
In terms of technical advancements, IonQ revealed a prototype Barium system that achieved 99.9% fidelity in two-qubit gates, marking a significant milestone in quantum computing performance. Despite reducing its price target for IonQ to $13 from $18, Needham maintains a Buy rating on the company. These recent developments underscore IonQ's ongoing commitment to innovation and growth in the quantum computing sector.
InvestingPro Insights
IonQ's acquisition of Qubitekk's operating assets aligns with the company's strong growth trajectory, as evidenced by recent InvestingPro data. The company's revenue growth of 90.62% over the last twelve months and an impressive 106.36% growth in the most recent quarter underscore its rapid expansion in the quantum computing sector.
This growth strategy is further supported by InvestingPro Tips, which indicate that analysts anticipate continued sales growth for IonQ in the current year. The acquisition of Qubitekk's quantum networking capabilities could potentially accelerate this trend, especially given IonQ's expectation that the new quantum networking division might be the first to achieve positive cash flow.
However, investors should note that IonQ is currently trading at a high revenue valuation multiple, according to another InvestingPro Tip. This suggests that the market has high expectations for the company's future performance, which the Qubitekk acquisition aims to fulfill.
It's worth mentioning that IonQ holds more cash than debt on its balance sheet, providing financial flexibility for strategic moves like this acquisition. This solid financial position could be crucial as the company works to integrate Qubitekk's assets and capitalize on new market opportunities in quantum networking.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for IonQ, providing a deeper understanding of the company's financial health and market position.
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