Q1 Revenue up 56% Year over Year
Q1 Bookings up 54% Year over Year
Gross Profit up 294% Year over Year
D-Wave Quantum Inc., (NYSE: QBTS) (“D-Wave” or the “Company”) a
leader in commercial quantum computing systems, software, and
services, today announced financial results for its first fiscal
quarter ended March 31, 2024.
“D-Wave’s first quarter revenue and bookings reflect growing
customer demand for quantum and hybrid quantum solutions that can
drive measurable impact today,” said Dr. Alan Baratz, CEO of
D-Wave. “Coupled with the significant technical milestones we’ve
achieved with the Advantage2TM prototype, we believe our progress
leading the commercialization of quantum through our products,
customer application development and accelerating adoption is
evident.”
Recent Business and Technical Highlights
- Introduced the powerful, new fast-anneal feature, which helps
users perform quantum computations at unprecedented speeds, greatly
reducing the impact of external disturbances such as thermal
fluctuations and noise that often hinder quantum calculations.
Leading industry analyst firm IDC noted that “D-Wave’s launch of
the fast-anneal feature should be considered just as significant as
recent logical qubit and error mitigation announcements from
gate-based quantum hardware developers.”1
- Recently yielded 4800+ qubit processors for the forthcoming
Advantage2 system, which comes on the heels of launching the 1,200+
qubit Advantage2 prototype and making it accessible in the LeapTM
quantum cloud service earlier this year. Currently under
calibration, the yielding of these 4800+ processors marks an
important milestone in our Advantage2 product delivery
roadmap.
- Announced a renewed multiyear partnership with the University
of Southern California ("USC"); the USC Viterbi School of
Engineering will continue to house a D-Wave state-of-the-art
Advantage™ quantum computer, facilitating ongoing exploration and
adoption of annealing quantum computing solutions for businesses,
researchers, and government.
- Worked with customers on a variety of quantum-powered
optimization applications including optimizing usage of solar
panels in buildings; body shop scheduling for commercial vehicle
production; optimizing schedules for crude oil tanker unloading at
refineries; and cybersecurity.
- Announced our tenth Qubits quantum computing conference, which
takes place June 17th and 18th in Boston, Massachusetts. Themed
“Success, Powered by Quantum,” the conference will demonstrate how
partners and customers such as Davidson Technologies, Los Alamos
National Lab, Mastercard, Momentum Worldwide (part of Interpublic
Group), Pattison Food Group, QuantumBasel, SavantX, Unisys and
Zapata AI are using D-Wave’s innovative annealing quantum computing
technology to solve complex real-world problems.
- First quarter 2024 Bookings (as defined below) totaled $4.5
million, an increase of $1.6 million, or 54%, from Q1 FY23
bookings, representing the Company’s eighth consecutive quarter of
year-over-year growth in quarterly bookings.
___________________
1
IDC Link: D-Wave: Improving the Quantum
Experience with the Introduction of Fast Anneal, doc #lcUS52073224,
April 2024
First Quarter Fiscal 2024 Financial Highlights
- Revenue: Revenue for the first quarter of fiscal 2024
was $2.5 million, an increase of $0.9 million, or 56%, from the
fiscal 2023 first quarter revenue of $1.6 million.
- Bookings1: Bookings for the first quarter of fiscal 2024
were $4.5 million, an increase of $1.6 million, or 54%, from the
fiscal 2023 first quarter Bookings of $2.9 million. This represents
D-Wave’s eighth consecutive quarter of year-over-year growth in
quarterly bookings.
- Customers: In comparing the most recent four quarters
with the immediately preceding four quarters, D-Wave had:
- A total of 128 customers compared with a total of 113
customers;
- 75 commercial customers compared with 69 commercial customers;
and
- 25 Forbes Global 2000 customers compared with 22 Forbes Global
2000 customers constituting 33% of the total number of commercial
customers.
- Commercial Traction: In comparing the most recent four
quarters with the immediately preceding four quarters:
- Revenue from commercial customers increased by $2.2 million, or
51%;
- Commercial revenue as a percentage of total revenue increased
from 63% to 69%; and
- Revenue from Forbes Global 2000 customers increased by $0.9
million, or 50%, and comprised 27% of total revenue.
- GAAP Gross Profit: GAAP gross profit for the first
quarter of fiscal 2024 was $1.7 million, an increase of $1.3
million, or 294%, from the fiscal 2023 first quarter gross profit
of $0.4 million, with the increase due primarily to the growth in
revenue and increased operating efficiencies.
- GAAP Gross Margin: GAAP gross margin for the first
quarter of fiscal 2024 was 67.3%, an increase of 40.7% from the
fiscal 2023 first quarter GAAP gross margin of 26.6% with the
increase due primarily to the growth in revenue and increased
operating efficiencies.
- Non-GAAP Gross Profit2: Non-GAAP gross profit for the
first quarter of fiscal 2024 was $1.9 million, an increase of $1.0
million, or 122%, from the fiscal 2023 first quarter non-GAAP gross
profit of $0.9 million. The difference between GAAP and non-GAAP
gross profit is limited to non-cash stock-based compensation and
depreciation expenses that are excluded from the non-GAAP gross
profit.
- Non-GAAP Gross Margin2: Non-GAAP gross margin for the
first quarter of fiscal 2024 was 76.6%, an increase of 22.8% from
the fiscal 2023 first quarter non-GAAP gross margin of 53.8%. The
difference between GAAP and non-GAAP gross margin is limited to
non-cash stock-based compensation and depreciation expenses that
are excluded from the non-GAAP gross margin.
- GAAP Operating Expenses: GAAP operating expenses for the
first quarter of fiscal 2024 were $19.2 million, a decrease of $5.9
million, or 24%, from the fiscal 2023 first quarter GAAP operating
expenses of $25.1 million with the decrease driven primarily by a
decrease of $3.0 million in non-cash stock-based compensation
expense, $2.2 million in professional services and $0.5 million in
marketing costs.
- Non-GAAP Adjusted Operating Expenses2: Non-GAAP adjusted
operating expenses for the first quarter of fiscal 2024 were $14.8
million, a decrease of $3.0 million, or 17% from the fiscal 2023
first quarter non-GAAP adjusted operating expenses of $17.8 million
with the decrease driven primarily by a decrease of $2.2 million in
professional services and $0.5 million in marketing costs.
- Net Loss: Net loss for the first quarter of fiscal 2024
was $17.3 million, or $0.11 per share, a decrease of $7.1 million,
or $0.09 per share, from the fiscal 2023 first quarter net loss of
$24.4 million, or $0.20 per share.
- Adjusted EBITDA Loss2: Adjusted EBITDA Loss for the
first quarter of fiscal 2024 was $12.9 million, a decrease of $4.0
million, or 24%, from the fiscal 2023 first quarter Adjusted EBITDA
Loss of $16.9 million with the improvement due primarily to higher
gross profit and lower operating expenses.
Balance Sheet and Liquidity
As of March 31, 2024, D-Wave’s consolidated cash balance totaled
$27.3 million, an increase of $18.3 million, or 204%, from the
fiscal 2023 first quarter consolidated cash balance of $9.0
million. As of May 10, 2024, D-Wave's consolidated cash balance was
$33 million.
On April 12, 2024, D-Wave’s $175 million shelf registration
statement on Form S-3 went effective. On the same date, the
Company’s Equity Line of Credit ("ELOC") registration statement on
Form S-3 with Lincoln Park Capital Fund, LLC also went effective.
As of the effective date, the Company had $82.1 million in
available capacity under the ELOC with the investment commitment
running through October 2025. D-Wave’s ability to raise additional
funds under the ELOC is subject to a number of conditions including
having a sufficient number of registered shares and having D-Wave's
stock price above $1.00 per share.
Fiscal Year 2024 Outlook
We are reiterating the full year 2024 financial guidance set
forth in our March 28, 2024, fiscal 2023 fourth quarter and full
year earnings press release. Our guidance is subject to various
cautionary factors described below. Based on the information
available on May 10, 2024, guidance for the full year 2024 is as
follows:
Adjusted EBITDA
- We expect fiscal 2024 Adjusted EBITDA Loss3 to be less than the
fiscal 2023 Adjusted EBITDA Loss of $54.3 million.
___________________
1
“Bookings” is an operating metric that is
defined as customer orders received that are expected to generate
net revenues in the future. We present the operational metric of
Bookings because it reflects customers' demand for our products and
services and to assist readers in analyzing our potential
performance in future periods.
2
"Non-GAAP Gross Profit", "Non-GAAP Gross
Margin", "Non-GAAP Adjusted Operating Expenses", and "Adjusted
EBITDA Loss", are non-GAAP financial measures or metrics. Please
see the discussion in the section “Non-GAAP Financial Measures” and
the reconciliations included at the end of this press release.
3
We are not able to reconcile guidance for
Adjusted EBITDA Loss to its most directly comparable GAAP measure,
Net Loss, and cannot provide an estimated range of net loss for
such period without unreasonable efforts because certain items that
impact Net Loss, including foreign exchange and the fair value of
warrant liabilities, are not within our control or cannot be
reasonably predicted.
Earnings Conference Call
In conjunction with this announcement, D-Wave will host a
conference call on Monday, May 13, 2024, at 8:00 a.m. (Eastern
Time), to discuss the Company’s financial results and business
outlook. The live dial-in number is 1-800-267-6316 (domestic) or
1-203-518-9783 (international). The conference ID is “D-Wave.”
Participating in the call on behalf of the Company will be Chief
Executive Officer, Dr. Alan Baratz, and Chief Financial Officer,
John Markovich.
About D-Wave Quantum Inc.
D-Wave is a leader in the development and delivery of quantum
computing systems, software, and services, and is the world’s first
commercial supplier of quantum computers. Our mission is to unlock
the power of quantum computing today to benefit business and
society. We do this by delivering customer value with practical
quantum applications for problems as diverse as logistics,
artificial intelligence, materials sciences, drug discovery,
scheduling, cybersecurity, fault detection, and financial modeling.
D-Wave’s technology has been used by some of the world’s most
advanced organizations, including Mastercard, Deloitte, Davidson
Technologies, ArcelorMittal, Siemens Healthineers, Unisys, NEC
Corporation, Pattison Food Group Ltd., DENSO, Lockheed Martin,
Forschungszentrum Jülich, University of Southern California, and
Los Alamos National Laboratory.
Non-GAAP Financial Measures
To supplement the financial information presented in accordance
with GAAP, we use non-GAAP measures of certain components of
financial performance. Each of non-GAAP gross profit, non-GAAP
gross margin, Adjusted EBITDA Loss and non-GAAP adjusted operating
expenses is a financial measure that is not required by or
presented in accordance with GAAP. Management believes that each
measure provides investors an additional meaningful method to
evaluate certain aspects of such results period over period. The
Company defines each of its non-GAAP financial measures as
follows:
- Non-GAAP gross profit is defined as GAAP Gross Profit less
non-cash stock-based compensation expense and depreciation and
amortization. We use non-GAAP gross profit to measure, understand
and evaluate our core operating performance and trends and to
develop short-term and long-term operating plans.
- Non-GAAP gross margin is defined as GAAP Gross Margin less
non-cash stock-based compensation expense and depreciation and
amortization. We use non-GAAP gross margin to measure, understand
and evaluate our core business performance.
- Adjusted EBITDA Loss is defined as net loss before interest
expense, income tax expense (benefit), depreciation and
amortization expense, stock-based compensation, remeasurements of
liability-classified warrants, and other non-recurring
non-operating income and expenses. We use Adjusted EBITDA to
measure the operating performance of our business, excluding
specifically identified items that we do not believe directly
reflect our core operations and may not be indicative of our
recurring operations.
- Non-GAAP Adjusted operating expenses is defined as operating
expenses before depreciation and amortization expense,
non-recurring one-time expense and non-cash stock-based
compensation expense. We use non-GAAP adjusted operating expenses
to measure our operating expenses, excluding items we do not
believe directly reflect our core operations.
The presentation of non-GAAP financial measures is not meant to
be considered in isolation or as a substitute for the financial
results prepared in accordance with GAAP, and our presentation of
non-GAAP measures may be different from non-GAAP measures used by
other companies. For a reconciliation of non-GAAP gross profit,
non-GAAP gross margin, Adjusted EBITDA Loss and non-GAAP adjusted
operating expenses to its most directly comparable GAAP measure,
please refer to the reconciliations below.
Forward-Looking Statements
Certain statements in this press release are forward-looking, as
defined in the Private Securities Litigation Reform Act of 1995.
These statements involve risks, uncertainties, and other factors
that may cause actual results to differ materially from the
information expressed or implied by these forward-looking
statements and may not be indicative of future results.
Forward-looking statements in this press release include, but are
not limited to, statements regarding the potential impact of
quantum and quantum hybrid systems; the development and progress of
our forthcoming Advantage2 system; the timing and content of the
Qubits quantum computing conference; our ability to raise
additional funds under the ELOC; the Company's reiterated 2024
financial guidance, as set out in our March 28, 2024 fiscal 2023
fourth quarter and full year earnings press release; the Company's
expectations relating to 2024 Adjusted EBITDA Loss; and details of
the Company's conference call in conjunction with this
announcement. These forward-looking statements are subject to a
number of risks and uncertainties, including, among others, various
factors beyond management’s control, including general economic
conditions and other risks; our ability to expand our customer base
and the customer adoption of our solutions; risks within D-Wave’s
industry, including anticipated trends, growth rates, and
challenges for companies engaged in the business of quantum
computing and the markets in which they operate; the outcome of any
legal proceedings that may be instituted against us; risks related
to the performance of our business and the timing of expected
business or financial milestones; unanticipated technological or
project development challenges, including with respect to the cost
and/or timing thereof; the performance of our products; the effects
of competition on our business; the risk that we may not be able to
raise additional funds under the ELOC; the risk that we will need
to raise additional capital to execute our business plan, which may
not be available on acceptable terms or at all; the risk that we
may never achieve or sustain profitability; the risk that we are
unable to secure or protect our intellectual property; volatility
in the price of our securities; the risk that our securities will
not maintain the listing on the NYSE; the risk that our restatement
of certain previously issued audited and unaudited financial
statements or material weaknesses in internal controls could
negatively affect investor confidence and raise reputational
issues; and the numerous other factors set forth in D-Wave’s Annual
Report on Form 10-K for its fiscal year ended December 31, 2023 and
other filings with the Securities and Exchange Commission. Undue
reliance should not be placed on the forward-looking statements in
this press release in making an investment decision, which are
based on information available to us on the date hereof. We
undertake no duty to update this information unless required by
law.
D-Wave Quantum Inc.
Condensed Consolidated Balance
Sheets
March 31,
December 31,
(In thousands, except share and per share
data)
2024
2023
(Unaudited)
Assets
Current assets:
Cash
$
27,304
$
41,307
Trade accounts receivable, net
1,735
1,652
Inventories
2,079
2,078
Prepaid expenses and other current
assets
2,569
2,009
Total current assets
33,687
47,046
Property and equipment, net
2,909
2,551
Operating lease right-of-use assets
7,879
8,223
Intangible assets, net
302
179
Other non-current assets
3,828
1,357
Total assets
$
48,605
$
59,356
Liabilities and stockholders'
deficit
Current liabilities:
Trade accounts payable
$
1,037
$
1,465
Accrued expenses and other current
liabilities
6,007
5,343
Current portion of operating lease
liabilities
1,448
1,374
Loans payable, net, current
369
399
Deferred revenue, current
1,999
2,669
Total current liabilities
10,860
11,250
Warrant liabilities
4,282
1,630
Operating lease liabilities, net of
current portion
6,978
7,028
Loans payable, net, non-current (including
$31,100 and $31,400 as of March 31, 2024 and December 31, 2023,
respectively, at fair value)
63,043
63,850
Deferred revenue, non-current
399
79
Total liabilities
$
85,562
$
83,837
Commitments and contingencies
Stockholders' deficit:
Common stock, par value $0.0001 per share;
675,000,000 shares authorized at both March 31, 2024 and December
31, 2023; 161,675,010 shares and 161,113,744 shares issued and
outstanding as of March 31, 2024 and December 31, 2023,
respectively.
16
16
Additional paid-in capital
473,870
469,081
Accumulated deficit
(500,373
)
(483,061
)
Accumulated other comprehensive loss
(10,470
)
(10,517
)
Total stockholders' deficit
(36,957
)
(24,481
)
Total liabilities and stockholders’
deficit
$
48,605
$
59,356
D-Wave Quantum Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Unaudited)
Three Months Ended March
31,
(In thousands, except share and per share
data)
2024
2023
Revenue
$
2,465
$
1,583
Cost of revenue
806
1,162
Total gross profit
1,659
421
Operating expenses:
Research and development
8,525
10,915
General and administrative
7,566
11,296
Sales and marketing
3,084
2,900
Total operating expenses
19,175
25,111
Loss from operations
(17,516
)
(24,690
)
Other income, net:
Interest expense
(1,140
)
(212
)
Change in fair value of Term Loan
1,199
—
Gain on investment in marketable equity
securities
1,660
—
Change in fair value of warrant
liabilities
(2,652
)
638
Other income (expense), net
1,137
(142
)
Total other income, net
204
284
Net loss
$
(17,312
)
$
(24,406
)
Net loss per share, basic and diluted
$
(0.11
)
$
(0.20
)
Weighted-average shares used in computing
net loss per share, basic and diluted
161,308,490
123,144,097
Comprehensive loss:
Net loss
$
(17,312
)
$
(24,406
)
Foreign currency translation adjustment,
net of tax
47
(19
)
Net comprehensive loss
$
(17,265
)
$
(24,425
)
D-Wave Quantum Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Three Months Ended March
31,
(in thousands)
2024
2023
Cash flows from operating
activities:
Net loss
$
(17,312
)
$
(24,406
)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation and amortization
229
339
Stock-based compensation
3,509
6,755
Amortization of operating right-of-use
assets
199
206
Non-cash interest expense
1,093
195
Change in fair value of Warrant
liabilities
2,652
(638
)
Change in fair value of Term Loan
(1,199
)
—
Gain on marketable securities
(1,660
)
—
Unrealized foreign exchange loss
(gain)
(994
)
84
Change in operating assets and
liabilities:
Trade accounts receivable
(42
)
215
Inventories
(19
)
(59
)
Prepaid expenses and other current
assets
(559
)
767
Trade accounts payable
(538
)
1,858
Accrued expenses and other current
liabilities
2,597
1,214
Deferred revenue
(350
)
46
Operating lease liability
343
(150
)
Other non-current assets
(68
)
—
Net cash used in operating
activities
(12,119
)
(13,574
)
Cash flows from investing
activities:
Purchase of property and equipment
(305
)
(64
)
Purchase of convertible note (Note 4)
(1,000
)
—
Sales of marketable equity securities
(Note 4)
254
—
Expenditures for internal-use software
(67
)
—
Purchase of software
(87
)
(12
)
Net cash used in investing
activities
(1,205
)
(76
)
Cash flows from financing
activities:
Proceeds from Lincoln Park Purchase
Agreement
—
15,683
Proceeds from issuance of common stock
upon exercise of stock options
8
546
Payment of tax withheld for common stock
issued under stock-based compensation plans
(734
)
—
Short swing profit settlement
—
244
Debt payments
—
(881
)
Net cash provided by (used in)
financing activities
(726
)
15,592
Effect of exchange rate changes on cash
and cash equivalents
47
(19
)
Net increase (decrease) in cash and cash
equivalents
(14,003
)
1,923
Cash and cash equivalents at beginning of
period
41,307
7,065
Cash and cash equivalents at end of
period
$
27,304
$
8,988
D-Wave Quantum Inc.
Reconciliation of Gross Profit
to Non-GAAP Gross Profit
For the Three Months Ended
March 31, 2024 and 2023
Three Months Ended March
31,
(in thousands of U.S. dollars)
2024
2023
Gross Profit
$
1,659
$
421
Gross Margin
67.3
%
26.6
%
Excluding:
Depreciation and Amortization (1)
54
54
Stock-based compensation (2)
175
377
Non-GAAP Gross Profit
$
1,888
$
852
Non-GAAP Gross Margin
76.6
%
53.8
%
(1)
Depreciation and Amortization reflects the
Depreciation and Amortization recorded in Cost of Revenue only,
which differs from the total Depreciation and Amortization set
forth in the Condensed Consolidated Statement of Cash Flows that
also includes Depreciation and Amortization recorded in Operating
Expenses.
(2)
Stock based compensation reflects the
stock based compensation recorded in Cost of Revenue only, which
differs from the total stock based compensation set forth in the
Condensed Consolidated Statement of Cash flows that also includes
stock based compensation recorded in Operating Expenses.
D-Wave Quantum Inc.
Reconciliation of Operating
Expenses to Non-GAAP Operating Expenses
For the Three Months Ended
March 31, 2024 and 2023
Three Months Ended March
31,
(in thousands of U.S. dollars)
2024
2023
Operating expenses
$
19,175
$
25,111
Excluding:
Depreciation and Amortization (1)
175
285
Stock-based compensation (2)
3,334
6,378
Non-recurring one time expenses (3)
882
680
Non-GAAP Adjusted Operating Expenses
$
14,784
$
17,768
(1)
Depreciation and Amortization reflects the
Depreciation and Amortization recorded in the Operating Expenses
only, which differs from the total Depreciation and Amortization
set forth in the Condensed Consolidated Statement of Cash Flows
that also includes Depreciation and Amortization recorded in Cost
of Revenue.
(2)
Stock based compensation reflects the
stock based compensation recorded in Operating Expenses only, which
differs from the total stock based compensation set forth in the
Condensed Consolidated Statement of Cash flows that also includes
stock based compensation recorded in Cost of Revenue.
(3)
Non-recurring professional fees and legal,
consulting, and accounting fees related to capital markets
activities.
D-Wave Quantum Inc.
Reconciliation of Net Loss to
Adjusted EBITDA
For the Three Months Ended
March 31, 2024 and 2023
Three Months Ended March
31,
(in thousands of U.S. dollars)
2024
2023
Net loss
$
(17,312
)
$
(24,406
)
Excluding:
Depreciation and Amortization
229
339
Stock-based compensation
3,509
6,755
Interest (income) expense (1)
1,140
212
Change in fair value of warrant
liabilities
2,652
(638
)
Change in fair value of Term Loan
(1,199
)
—
Gain on investment in marketable equity
securities
(1,660
)
—
Other (income) expense, net (2)
(1,137
)
142
Non-recurring one time expenses (3)
882
680
Adjusted EBITDA
$
(12,896
)
$
(16,916
)
(1)
Interest expense primarily reflects the
accrued interest associated with the below market interest rate
government loans as if they were interest-bearing at market rates
of interest, the paid-in-kind interest associated with the term
loan agreement with PSPIB Unitas Investments II Inc. entered into
on April 13, 2023, interest and adjustments to accrued interest on
the SIF Loan, and the interest and amortization of the final fee
associated with the Venture Loan with PSPIB Unitas Investments II
Inc. that was entered into on March 3, 2022 and repaid on August 5,
2022.
(2)
Other income (expense), net consists
primarily of foreign exchange gains and losses.
(3)
Non-recurring professional fees and legal,
consulting, and accounting fees related to capital markets
activities.
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version on businesswire.com: https://www.businesswire.com/news/home/20240513418917/en/
Investor Contact: Kevin Hunt ir@dwavesys.com
Media Contact: Alex Daigle media@dwavesys.com
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