Revenue of $2.6 Million, up 50% Sequentially
from Q2 Commercial Revenue up 62% Year-Over-Year Total Bookings of
$2.9 Million $53.3 Million Cash Balance – Highest in Company’s
History
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 fiscal third
quarter ended September 30, 2023.
“We believe that this is a pivotal moment in quantum computing,
as D-Wave leads the industry’s transformative shift from research
and developmental experimentation to true delivery of quantum’s
enterprise value and utility. Our annealing quantum computing
solutions are driving real business impact today, and we believe
that our third quarter results reflect a growing recognition that
D-Wave is leading the enterprise quantum wave,” said Dr. Alan
Baratz, CEO of D-Wave. “Once again, we experienced
quarter-over-quarter and year-over-year growth in the number of
customer bookings, commercial revenue, and the size of commercial
deals. We’re also seeing customers moving from development to
deployment of applications, as they are seeing first-hand the
business impact and near-term advantage that can be achieved using
D-Wave’s annealing quantum computing solutions. That growing
commercial success, coupled with our ongoing world-class product
development and scientific advancements, reflect, in our opinion,
impressive progress across all facets of our business.”
Recent Commercial / Business Highlights
- Signed a number of new and expanded existing customer
engagements in the third quarter, including agreements with
financial services giant BBVA, European quantum innovation hub
QuantumBasel, Japanese mobile phone company NTT Docomo,
e-infrastructure development leader Poznan Superconducting and
Networking Center, and European fintech unicorn Satispay.
- Worked with commercial customers on a variety of new quantum
and quantum-hybrid applications spanning customer rewards
optimization, radar scheduling for national security, HVAC system
design optimization, 6G satellite network optimization and much
more.
- Initiated exploration of our quantum technology’s integration
with new machine learning areas, including prompt optimization and
model training, to bring the power of quantum to artificial
intelligence/machine learning for our customers.
- Grew third quarter Bookings (as defined below) by 53% on a
year-over-year basis, representing the Company’s sixth consecutive
quarter of year-over-year growth in Bookings; YTD Bookings totaled
$8.4 million, an increase of $4.6 million, or 125% from the same
period of 2022.
- Grew third quarter Revenue by 51% on a year-over-year basis,
and 50% on a sequential quarter-to-quarter basis.
- The Average Deal Size per booking increased by 172% for
commercial customers and 178% for all customers when comparing the
most recent four quarters with the immediately preceding four
quarters.
- Substantially improved the Company’s liquidity position with a
quarter-end cash balance of $53.3 million, the highest quarter-end
cash balance in the Company’s history.
Recent Technical Highlights
- Announced notable progress in the development of high coherence
qubits, which are qubits capable of doing quantum computations for
a longer period of time without errors; D-Wave has designed,
manufactured, and operated fluxonium qubits that have demonstrated
quantum properties that are comparable to the best seen to date in
peer-reviewed scientific literature, which is expected to have
significant impact on our future quantum technologies.
- Successfully demonstrated quantum error mitigation, an
important technique for reducing errors in quantum computation, on
the upcoming Advantage2TM annealing quantum system prototype,
extending the coherent annealing range by nearly an order of
magnitude.
- Introduced new algorithmic updates to our Constrained Quadratic
Model hybrid solver that deliver increased performance for existing
binary problem classes, which can include offer allocation,
portfolio optimization, and satisfiability. These hybrid solver
enhancements are particularly impactful to our customers in the
financial services industry.
- Introduced new administration features that give customers the
ability to manage their own organization and associated projects,
an important feature given the rapid growth of our reseller and
partner programs.
- Released new “zero downtime deployment” features that allow us
to deploy new software enhancements within our LeapTM real-time
quantum cloud service without service interruption, streamlining
and expediting our ability to bring innovative new solutions to
customers faster while maintaining production-grade service and
stability.
- Entered the final stages of securing SOC 2 Type 2 compliance,
an important initiative that will help ensure the protection of
customer data as well as streamline and speed up procurement for
companies that require data compliance.
Third Quarter Fiscal 2023 Financial Highlights
- Revenue: Revenue for the third quarter of fiscal 2023
was $2.6 million, an increase of $0.9 million, or 51%, from fiscal
2022 third quarter Revenue of $1.7 million, and an increase of $0.9
million, or 50%, from the immediately preceding fiscal 2023 second
quarter Revenue of $1.7 million. Given the nature of our
professional services engagements, the timing of Revenue
recognition associated with our professional services contracts may
vary from period to period.
- Bookings1: Bookings for the third quarter of fiscal 2023
were $2.9 million, an increase of $1.0 million, or 53%, from fiscal
2022 third quarter Bookings of $1.9 million, and an increase of
$0.4 million, or 16%, from the immediately preceding fiscal 2023
second quarter Bookings of $2.5 million. This represents D-Wave’s
sixth consecutive quarter of year-over-year growth in
Bookings.
- Average Deal Size2: In comparing the most recent four
quarters with the immediately preceding four quarters, the Average
Deal Size per booking increased by 172% for commercial customers
and 178% for all customers.
- Commercial Traction: In comparing the last four fiscal
quarters with the immediately preceding four fiscal quarters:
- revenue derived from commercial customers increased by $2.2
million, or 62%;
- average revenue per commercial customer increased by 68%;
- commercial revenue as a percentage of total revenue increased
to 70% from 50%; and
- we had 73 commercial customers compared to 76 commercial
customers, including nearly two dozen Forbes Global 2000
companies.
- Customers: Over the last four quarters, we had a total
of 123 revenue producing customers compared with 121 revenue
producing customers in the immediately preceding four quarters,
with total customers including commercial, educational and
government accounts.
- GAAP Gross Profit: GAAP Gross Profit for the third
quarter of fiscal 2023 was $1.5 million, an increase of $0.5
million, or 47%, from the third quarter of fiscal 2022 GAAP Gross
Profit of $1.0 million, and an increase of $0.8 million, or 117%,
from the immediately preceding fiscal 2023 second quarter GAAP
Gross Profit of $0.7 million with the increase due primarily to the
growth in revenue.
- GAAP Gross Margin: GAAP Gross Margin for the third
quarter of fiscal 2023 was 59.7%, representing the second
consecutive quarter of sequential quarter-to-quarter improvement in
GAAP Gross Margins due primarily to the growth in revenue. The
59.7% GAAP Gross Margin for the third quarter of fiscal 2023 was
1.7% lower than the 61.4% GAAP Gross Margin for the third quarter
of fiscal 2022 with the decrease due entirely to higher non-cash
stock-based compensation expense in the third quarter of fiscal
2023 cost of sales.
- Non-GAAP Gross Profit3: Non-GAAP Gross Profit for the
third quarter of fiscal 2023 was $1.9 million, an increase of $0.8
million, or 72%, from the third quarter of fiscal 2022 Non-GAAP
Gross Profit of $1.1 million, and an increase of $0.9 million, or
95%, from the immediately preceding fiscal 2023 second quarter
Non-GAAP Gross Profit of $1.0 million with the increase due
primarily to higher revenue. 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 Margin3: Non-GAAP Gross Margin for the
third quarter of fiscal 2023 was 75.6%, an increase of 9.2% from
the third quarter of fiscal 2022 Non-GAAP Gross Margin of 66.4% and
an increase of 17.5% from the immediately preceding fiscal 2023
second quarter Non-GAAP Gross Margin of 58.1% with the increase due
primarily to higher Revenue. 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
third quarter of fiscal 2023 were $19.9 million compared with $16.2
million in the third quarter of fiscal 2022 with the increase due
primarily to higher non-cash stock-based compensation expense and
higher public company and headcount-related expenses. On a
sequential quarter-to-quarter basis, the $19.9 million in fiscal
2023 third quarter GAAP Operating Expenses represents the second
consecutive quarter of sequential quarter-to-quarter decreases in
GAAP Operating Expenses driven primarily by lower general and
administrative expenses.
- Non-GAAP Adjusted Operating Expense3: Non-GAAP Adjusted
Operating Expenses for the third quarter of fiscal 2023 were $13.5
million compared with $14.2 million in the year earlier fiscal 2022
third quarter. On a sequential quarter-to-quarter basis, the $13.5
million in fiscal 2023 third quarter Non-GAAP Adjusted Operating
Expenses represents the second consecutive quarter of sequential
quarter-to-quarter decreases in Non-GAAP Adjusted Operating
Expenses across all of the operating expense categories. The
difference between GAAP and Non-GAAP Adjusted Operating Expenses is
primarily non-cash stock-based compensation expense, non-recurring
one-time expenses, and amortization and depreciation expense.
- Net Loss: Net Loss for the third quarter of fiscal 2023
was $15.8 million, or $0.12 per share, compared with a Net Loss of
$13.3 million, or $0.11 per share, in the third quarter of fiscal
2022. On a sequential quarter-to-quarter basis, the $15.8 million
in fiscal 2023 third quarter Net Loss represents the second
consecutive quarter of sequential quarter-to-quarter improvement in
Net Loss that was driven by higher gross profit in combination with
lower operating expenses.
- Adjusted EBITDA Loss3: Adjusted EBITDA Loss for the
third quarter of fiscal 2023 was $11.6 million, a decrease of $1.4
million, or 11%, compared with the $13.0 million Adjusted EBITDA
Loss in the fiscal 2022 third quarter. On a sequential
quarter-to-quarter basis, the $11.6 million in fiscal 2023 third
quarter Adjusted EBITDA Loss represents the second consecutive
quarter of sequential quarter-to-quarter improvement in Adjusted
EBITDA Loss.
Financial Results for the Nine Months of Fiscal Year
2023
- Revenue: Revenue for the nine months ended September 30,
2023, was $5.9 million, an increase of $1.1 million, or 22%, from
Revenue of $4.8 million in the nine months ended September 30,
2022.
- Bookings1: Bookings for the nine months ended September
30, 2023, were $8.4 million, an increase of $4.6 million, or 125%,
from Bookings in the nine months ended September 30, 2022.
- GAAP Gross Profit: GAAP Gross Profit for the nine months
ended September 30, 2023, was $2.7 million, a decrease of $0.3
million, or 9%, from $2.9 million in GAAP Gross Profit for the nine
months ended September 30, 2022, with the decrease due primarily to
higher stock-based compensation expenses in fiscal 2023 cost of
sales.
- GAAP Gross Margin: GAAP Gross Margin for the nine months
ended September 30, 2023, was 45.4%, a decrease of 15.7% from the
61.1% GAAP Gross Margin for the nine months ended September 30,
2022, with the decrease due primarily to higher stock-based
compensation expenses in fiscal 2023 cost of sales.
- Non-GAAP Gross Profit3: Non-GAAP Gross Profit for the
nine months ended September 30, 2023, was $3.8 million, an increase
of $0.7 million, or 21%, from the Non-GAAP Gross Profit of $3.1
million in the nine months ended September 30, 2022. 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 Margin3: Non-GAAP Gross Margin for the
nine months ended September 30, 2023, was 64.6%, a decrease of 0.7%
from the 65.3% Non-GAAP Gross Margin in the nine months ended
September 30, 2022. 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
nine months ended September 30, 2023, were $66.7 million compared
with $41.3 million in the nine months ended September 30, 2022,
with the year-over-year increase including $13.1 million in
non-cash stock-based compensation expense and higher public company
and headcount-related expenses.
- Non-GAAP Adjusted Operating Expense3: Non-GAAP Adjusted
Operating Expenses for the nine months ended September 30, 2023,
were $47.2 million compared with $37.2 million in the nine months
ended September 30, 2022, with the difference between GAAP and
Non-GAAP Adjusted Operating Expenses being primarily non-cash
stock-based compensation expense, non-recurring one-time expenses,
and amortization and depreciation expense.
- Net Loss: Net Loss for the nine months ended September
30, 2023, was $66.3 million, or $0.50 per share, compared with a
Net Loss of $38.7 million, or $0.32 per share, in the nine months
ended September 30, 2022.
- Adjusted EBITDA Loss3: Adjusted EBITDA Loss for the nine
months ended September 30, 2023, was $43.4 million, compared with
$34.0 million in the nine months ended September 30, 2022, with the
increase due primarily to higher public company and
headcount-related expenses.
Balance Sheet and Liquidity
As of September 30, 2023, D-Wave’s consolidated cash balance
totaled $53.3 million, an increase of $45.8 million, or 610%, from
the $7.5 million consolidated cash balance at the end of the
immediately preceding fiscal 2023 second quarter ended June 30,
2023. The $53.3 million cash balance represents the Company’s
largest quarter-end cash balance in its history.
During the nine months ended September 30, 2023, D-Wave raised
over $94.0 million in debt and equity including $63.5 million in
equity, primarily from the Company’s common stock purchase
agreement (“Equity Line of Credit” or “ELOC”) with Lincoln Park
Capital Fund, LLC (“Lincoln Park”), and $30.5 million in debt,
primarily with PSPIB Unitas Investments II Inc., an affiliate of
PSP Investments.
As previously disclosed, on June 16, 2022, D-Wave entered into
the ELOC with Lincoln Park wherein the Company has the right, but
not the obligation, to issue and sell up to $150 million of shares
of its common stock to Lincoln Park, subject to certain limitations
and satisfaction of certain conditions, over a 3-year period. As of
September 30, 2023, D-Wave has $84.4 million in remaining capacity
under the ELOC with just over two years remaining under the Lincoln
Park ELOC commitment. D-Wave’s ability to raise 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.
As previously disclosed, on April 13, 2023, D-Wave entered into
a $50 million four-year term loan agreement (the “PSP Loan”) with
PSPIB Unitas Investments II Inc., an affiliate of PSP Investments.
The loan agreement is comprised of three individual tranches of $15
million, $15 million, and $20 million respectively and, to date,
D-Wave has drawn the first two tranches totaling $30 million.
However, the issuance of the third tranche is subject to certain
conditions and, there can be no assurance that the Company will be
able to meet the conditions necessary to draw on the third
tranche.
Fiscal Year 2023 Outlook
Based on the information available on November 8, 2023, guidance
for the full year 2023 is as follows and our guidance is subject to
various cautionary factors described below:
Revenue
- We expect fiscal 2023 revenue to be in a range of $10 million
to $11.5 million.
Adjusted EBITDA Loss
- We expect fiscal 2023 Adjusted EBITDA Loss[4] to be less than
$56 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“Average Deal Size” is an operating metric that is defined as
the average dollar amount per booking.
3“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.
4We 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.
Third Quarter 2023 Conference Call
In conjunction with this announcement, D-Wave will host a
conference call on Thursday, November 9, 2023, at 8:00 a.m.
(Eastern Time), to discuss the Company’s financial results and
business outlook. The live dial-in number is 1-800-908-9179
(domestic) or 1-312-281-1211 (international). Participating in the
call on behalf of the Company will be Chief Executive Officer 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 Volkswagen, 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 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. 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. We use non-GAAP gross
margin to measure understand and evaluate our core business
performance.
- Adjusted EBITDA 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 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 SOC 2 Type 2 compliance
helping to ensure protection of customer data and improving data
procurement, expected revenue recognition, and full-year 2023
guidance. These forward-looking statements are subject to a number
of risks and uncertainties, including, among others, various
factors beyond management’s control, including; our ability to
raise funds under the ELOC or meet the conditions necessary to draw
on the third tranche of the PSP Loan; our ability to regain
compliance with the NYSE’s listing standards and the risk that our
securities will not maintain the listing on the NYSE; general
economic conditions and other risks; our ability to maintain and
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; like our hybrid solvers
and software like “zero downtime deployment”; the effects of
competition on our business; 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; and the numerous other factors
set forth in D-Wave’s Annual Report on Form 10-K for its fiscal
year ended December 31, 2022 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
(Unaudited)
September 30,
December 31,
(In thousands of U.S. dollars, except
share and per share data)
2023
2022
Assets
Current assets:
Cash
$
53,317
$
7,065
Trade accounts receivable, net
763
757
Inventories
2,244
2,196
Prepaid expenses and other current
assets
1,870
3,907
Total current assets
58,194
13,925
Property and equipment, net
1,879
2,294
Operating lease right-of-use assets
8,560
9,133
Intangible assets, net
195
244
Other noncurrent assets
1,351
1,351
Total assets
$
70,179
$
26,947
Liabilities and stockholders'
(deficit) equity
Current liabilities:
Trade accounts payable
$
1,541
$
3,756
Accrued expenses and other current
liabilities
9,604
8,640
Loans payable, current
30,006
1,671
Deferred revenue, current
2,177
1,781
Total current liabilities
43,328
15,848
Warrant liabilities
1,971
1,892
Operating lease liabilities, net of
current portion
6,884
7,301
Loans payable, noncurrent
9,108
7,811
Deferred revenue, noncurrent
92
9
Total liabilities
61,383
32,861
Commitments and contingencies
Stockholders' (deficit) equity:
Common stock par value $0.0001 per share;
675,000,000 shares authorized at September 30, 2023 and December
31, 2022; 155,288,763 shares and 113,335,530 shares issued and
outstanding as of September 30, 2023 and December 31, 2022.
15
11
Additional paid-in capital
462,385
381,274
Accumulated deficit
(443,132
)
(376,797
)
Accumulated other comprehensive loss
(10,472
)
(10,402
)
Total stockholders' (deficit)
equity
8,796
(5,914
)
Total liabilities and stockholders’
equity
$
70,179
$
26,947
D-Wave Quantum Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Unaudited)
For the three months ended
September 30,
For the nine months ended
September 30,
(In thousands of U.S. dollars, except
share and per share data)
2023
2022
2023
2022
Revenue
$
2,562
$
1,695
$
5,852
$
4,778
Cost of revenue
1,033
654
3,197
1,858
Total gross profit
1,529
1,041
2,655
2,920
Operating expenses:
Research and development
9,459
7,507
29,922
21,799
General and administrative
8,003
5,925
28,875
13,566
Sales and marketing
2,474
2,773
7,862
5,982
Total operating expenses
19,936
16,205
66,659
41,347
Loss from operations
(18,407
)
(15,164
)
(64,004
)
(38,427
)
Other income (expense), net:
Interest expense
(1,247
)
(1,069
)
(2,482
)
(3,588
)
Change in fair value of warrant
liabilities
1,433
2,603
(79
)
2,603
Government assistance
1,051
-
1,051
-
Change in fair value of Term Loan
1,701
-
1,356
-
Term Loan debt issuance costs
(725
)
-
(2,118
)
-
Lincoln Park Purchase Agreement issuance
costs
—
(629
)
—
(629
)
Other income (expense), net
365
948
(59
)
1,301
Total other income (expense), net
2,578
1,853
(2,331
)
(313
)
Net loss
$
(15,829
)
$
(13,311
)
$
(66,335
)
$
(38,740
)
Net loss per share, basic and diluted
$
(0.12
)
$
(0.11
)
$
(0.50
)
$
(0.32
)
Weighted-average shares used in computing
net loss per share, basic and diluted
133,222,318
116,256,805
131,373,959
122,337,727
Comprehensive loss:
Net loss
$
(15,829
)
$
(13,311
)
$
(66,335
)
$
(38,740
)
Foreign currency translation adjustment,
net of tax
15
56
(70
)
18
Comprehensive loss
$
(15,814
)
$
(13,255
)
$
(66,405
)
$
(38,722
)
D-Wave Quantum Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Nine months ended September
30,
(in thousands of U.S. dollars)
2023
2022
Cash flows from operating
activities:
Net loss
$
(66,335
)
$
(38,740
)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation and amortization
828
1,038
Stock-based compensation
17,362
3,355
Amortization of operating right of use
assets
573
493
Government assistance
(1,051
)
-
Non-cash interest expense
2,405
1,616
Non-cash final fee payment for Venture
Loan
-
1,808
Non-cash Lincoln Park Purchase Agreement
issuance costs
-
629
Change in fair value of Warrant
liabilities
79
(2,603
)
Change in fair value of Term Loan
(1,356
)
-
Debt issuance costs netted from Term Loan
proceeds
993
-
Unrealized foreign exchange loss
(gain)
(15
)
(1,226
)
Other non-cash activities
35
266
Change in operating assets and
liabilities:
Trade accounts receivable
7
1
Research incentives receivable
-
1,448
Inventories
(235
)
(684
)
Deferred offering costs
-
1,250
Prepaid expenses and other current
assets
2,035
(3,815
)
Trade accounts payable
(2,267
)
614
Accrued expenses and other current
liabilities
965
1,704
Deferred revenue
479
(1,051
)
Operating lease liabilities, net of
current portion
(412
)
(442
)
Net cash used in operating
activities
(45,910
)
(34,339
)
Cash flows from investing
activities:
Purchase of property and equipment
(141
)
(249
)
Purchase of software
(35
)
(67
)
Net cash used in investing
activities
(176
)
(316
)
Cash flows from financing
activities:
Proceeds from issuance of common stock
from the PIPE investment
-
40,000
Merger, net of redemption and transaction
costs
-
4,100
Transaction costs paid directly by D-Wave
Systems
-
(6,528
)
Proceeds from exercise of public
warrants
-
910
Proceeds from promissory note - related
party
-
420
Payment on directors and officers
financing arrangement
(1,449
)
(864
)
Proceeds from Lincoln Park Purchase
Agreement
61,346
-
Proceeds from government assistance
1,487
3,124
Proceeds from issuance of common stock in
connection with ESPP
273
-
Proceeds from issuance of common stock
upon exercise of stock options
1,890
141
Proceeds from debt financing
29,007
19,870
Debt payments
(390
)
(20,000
)
Venture Loan interest and final payment
fee
-
(1,808
)
Government loan payment
-
(398
)
Short swing profit settlement
244
-
Net cash provided by financing
activities
92,408
38,967
Effect of exchange rate changes on cash
and cash equivalents
(70
)
(31
)
Net (decrease) increase in cash and cash
equivalents
46,252
4,281
Cash and cash equivalents at beginning of
period
7,065
9,483
Cash and cash equivalents at end of
period
$
53,317
$
13,764
D-Wave Quantum Inc.
Reconciliation of Gross Profit
to Non-GAAP Gross Profit
For the Three & Nine
Months Ended September 30, 2023 and 2022
For the three months ended
September 30,
For the nine months ended
September 30,
(in thousands of U.S. dollars)
2023
2022
2023
2022
Gross Profit
$
1,529
$
1,041
$
2,655
$
2,920
Gross Margin
59.7
%
61.4
%
45.4
%
61.1
%
Excluding:
Depreciation and Amortization (1)
54
40
163
121
Stock-based compensation (2)
353
45
963
80
Non-GAAP Gross Profit
$
1,936
$
1,126
$
3,781
$
3,121
Non-GAAP Gross Margin
75.6
%
66.4
%
64.6
%
65.3
%
(1)
Depreciation and Amortization reflects the
Depreciation and Amortization record 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 & Nine
Months Ended September 30, 2023 and 2022
For the three months ended
September 30,
For the nine months ended
September 30,
(in thousands of U.S. dollars)
2023
2022
2023
2022
Operating expenses
$
19,936
$
16,205
$
66,659
$
41,347
Excluding:
Depreciation and Amortization (1)
173
296
665
917
Stock-based compensation (2)
5,531
1,736
16,399
3,275
Non-recurring one time expenses (3)
714
-
2,396
-
Non-GAAP Operating Expenses
$
13,518
$
14,173
$
47,199
$
37,155
(1)
Depreciation and Amortization reflects the
Depreciation and Amortization record 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 expenses related to legal,
consulting, and accounting fees.
D-Wave Quantum Inc.
Reconciliation of Net Loss to
Adjusted EBITDA
For the Three & Nine
Months Ended September 30, 2023 and 2022
For the three months ended
September 30,
For the nine months ended
September 30,
(in thousands of U.S. dollars)
2023
2022
2023
2022
Net loss
$
(15,829
)
$
(13,311
)
$
(66,335
)
$
(38,740
)
Excluding:
Depreciation and Amortization
227
336
828
1,038
Stock-based compensation
5,884
1,781
17,362
3,355
Interest expense (1)
1,247
1,069
2,482
3,588
Change in fair value of warrant
liabilities
(1,433
)
(2,603
)
79
(2,603
)
Government assistance
(1,051
)
-
(1,051
)
-
Change in fair value of Term Loan
(1,701
)
-
(1,356
)
-
Term Loan debt issuance costs
725
-
2,118
-
Lincoln Park Purchase Agreement issuance
costs
—
629
—
629
Other (income) expense, net (2)
(365
)
(948
)
59
(1,301
)
Non-recurring one time expenses (3)
714
-
2,396
-
Adjusted EBITDA
$
(11,582
)
$
(13,047
)
$
(43,418
)
$
(34,034
)
(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 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.
(2)
Other Income (expense), net consists
primarily of foreign exchange gains and losses.
(3)
Non-recurring expenses related to legal,
consulting, and accounting fees.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109502105/en/
Investor Contact: Kevin Hunt ir@dwavesys.com
Media Contact: Alex Daigle media@dwavesys.com
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