What happened
Shares of IonQ (IONQ -0.67%) surged 58.4% in November, according to data from S&P Global Market Intelligence. This compares with the S&P 500 index's 0.8% decline last month. The primary catalyst for the quantum computing company's stock was management raising its full-year contract bookings guidance again.
Quantum computing, according to a definition by tech giant IBM, is "a rapidly emerging technology that harnesses the laws of quantum mechanics to solve problems too complex for classical computers."
This month, IonQ stock has pulled back 12% through Dec. 8. Since the company went public on Oct. 1 via a special purpose acquisition company (SPAC), its stock has risen 102% as of Dec. 8. The S&P 500 has returned 9.4% over this period.
Image source: Getty Images.
So what
On Nov. 16, IonQ stock soared 33.1% following the company's release of its third-quarter results on the prior day. It continued sharply upward on Nov. 17, bringing its two-day gain to a whopping 56.4%.
At this early point in IonQ's transitioning into a commercialization-stage company, investors aren't that concerned with the usual headline numbers in quarterly reports -- that is, revenue and earnings. What excited investors in IonQ's third-quarter update was the fact that year-to-date contract bookings came in at $15.1 million. This result slightly exceeded management's most recent guidance for the full year.
Management raised its full-year bookings estimate to $15.8 million. While this increase is relatively small, it marks the second time the company has upped this guidance. In September, management hiked its full-year bookings projection from $5 million to $15 million. At that time, the company said it expects these bookings to generate recognized revenue over the next 36 months.
In the third quarter, revenue was $223,000, compared to none in the year-ago period. That result brought year-to-date revenue to $451,000. Net loss was $14.8 million, or $0.12 per share, compared to a net loss of $3.6 million, or $0.03 per share, in the third quarter of last year.
IonQ ended the quarter with cash and cash equivalents of $587 million. In the first nine months of 2021, the company used cash of $21.9 million running its operations and $6.9 million making investments in growth.
Now what
Management guided for fourth-quarter revenue between $1 million and $1.2 million, which would bring full-year revenue up to about $1.5 million to $1.7 million.
It makes sense that investors are optimistic about IonQ's growth prospects, given the more than tripling in 2021 bookings guidance in a span of just two months. That said, the company is still very early in its journey as both a publicly traded and revenue-generating entity. So all but the most risk-tolerant investors should probably watch how things unfold over the next few quarters before making investing decisions about IonQ stock.