Q3 QCaaS Revenue up 41% Year over Year Fiscal
YTD Revenue up 11% Year over Year Fiscal YTD GAAP Gross Profit up
54% 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 third fiscal
quarter ended September 30, 2024.
“Annealing quantum computing is continuing to drive the
commercial adoption of quantum technology,” said Dr. Alan Baratz,
CEO of D-Wave. “Organizations around the world – from Vinci
Energies in Europe to NTT DOCOMO in Japan – are recognizing the
value our technology can bring right now in fueling new
discoveries, facilitating operational excellence and driving
measurable outcomes."
Recent Business and Technical Highlights
- Announced that Japan’s largest mobile phone operator, NTT
DOCOMO, is planning production deployment of a hybrid-quantum
application, built with D-Wave technology, for optimizing mobile
network performance. Using D-Wave’s annealing quantum computing
solutions, DOCOMO found that it can reduce network signal
congestion across base stations, potentially leading to more
efficient signal transmission and equipment cost savings.
- Announced a new collaboration with Japan Tobacco Inc. (JT) to
build a proof-of-concept that leverages quantum computing
technology and artificial intelligence (AI) in the drug discovery
process. The goal of the project is to pioneer a new process for
discovering 'first-in-class' pharmaceutical small compounds.
- D-Wave has been deemed “awardable” on the US Department of
Defense’s Tradewinds buying platform, which is designed to
accelerate the procurement and adoption of emerging technologies.
The marketplace will now include D-Wave’s annealing quantum
computing technology alongside other offerings like Artificial
Intelligence (AI)/Machine Learning (ML), data, and analytics
capabilities.
- Announced the completed calibration of a 4,400 qubit Advantage2
processor, marking a significant development milestone on the path
to the commercial release of Advantage2. Compared to the previous
Advantage2 prototype with 1,200 qubits, this increased scale
features nearly 4x the number of qubits, allowing it to solve much
larger problems. Performance benchmarks are consistent with the
prototype released earlier this year, including doubled qubit
coherence for faster time-to-solution, a 40% increase in energy
scale for higher-quality solutions, and increased qubit
connectivity from 15-way to 20-way, enabling solutions to larger,
more complex problems.
- Introduced service-level agreements (SLAs) specifically
tailored for Leap™ quantum cloud service customers who are
transitioning applications into production. D-Wave is the only
quantum computing company providing formal SLAs, and, in doing so,
stands behind the high levels of availability, reliability and
performance of its Leap cloud service and its ability to support
requirements for commercial-grade quantum and hybrid-quantum
applications as customers move into production deployments.
- Continued to make rapid progress on exploring generative AI
architectures that directly use quantum processing unit (QPU)
samples from quantum distributions to facilitate faster and more
energy-efficient model training and inference. We have completed
the initial designs of transformer and diffusion architectures and
are moving toward benchmarking the role of the QPU. We are also
directly supporting several customers investigating restricted
Boltzmann machine architectures, a canonical machine learning
approach for generative AI, that use samples from the QPU.
- Released new benchmarking vignettes showcasing the performance
of the nonlinear hybrid quantum solver on two problems common to
customers – flow shop scheduling/production scheduling and
quadratic assignment/resource allocation. In addition, we improved
the performance of the nonlinear hybrid quantum solver, solving a
capacitated vehicle routing problem, for example, in one-fifth of
the time.
- Continued to see expanding interest from national security and
civilian agencies around near-term quantum applications,
highlighted by a US Department of Defense RFI asking for near-term
application identification, as well as increased discussions
relating to optimization of emergency response, transportation and
other public sector services in the US and abroad. This increased
activity showcases governments' interest in better understanding
how annealing quantum computing can play a pivotal role in solving
public sector problems today.
- Announced a strategic partnership with Staque, designed to
accelerate the commercial adoption of annealing quantum computing
across the Middle East. The partnership was revealed at the
first-ever Qubits UAE event in Dubai, a half-day version of
D-Wave’s annual Qubits user conference, which showcased “success
powered by quantum” through business optimization use cases,
progress in quantum-fueled AI technology, and demonstrations of
annealing quantum computing performance over classical
computing.
- Announced that D-Wave has joined the Chicago Quantum Exchange
(CQE) as a corporate partner, aiming to engage with the CQE
community on materials science research, quantum education, and the
development of practical optimization use cases, including for the
manufacturing and logistics industries.
- Continued ongoing progress executing the company’s aggressive
go-to-market (GTM) growth strategy, most notably launching the
quantum optimization market category with a robust collection of
website content and assets that showcase key use cases including
workforce scheduling, vehicle routing, production scheduling,
resource optimization, and cargo loading. In addition, recent work
on our systems in the area of materials simulation has opened up
new GTM efforts with research and government customers.
- Announced the expansion of the D-Wave executive leadership
bench with the addition of Sophie Ames as chief human resources
officer as well as the addition of two new board members, John
DiLullo and Rohit Ghai. The moves are designed to help facilitate
D-Wave’s next phase of growth as it continues to usher in the era
of commercial quantum computing.
Third Quarter Fiscal 2024 Financial Highlights
- Revenue: Revenue for the third quarter of fiscal 2024
was $1.9 million, a decrease of $0.7 million, or 27%, from the
fiscal 2023 third quarter revenue of $2.6 million.
- QCaaS revenue for the third quarter of fiscal 2024 was $1.6
million, an increase of $0.5 million, or 41%, from the fiscal 2023
third quarter QCaaS revenue of $1.1 million, with the increase
principally due to a higher average revenue per customer for
D-Wave’s QCaaS subscription services.
- As a result of the timing of closing new professional services
engagements, professional services revenue for the third quarter of
fiscal 2024 was $0.3 million, a decrease of $1.0 million, or 80%,
from the fiscal 2023 third quarter professional services revenue of
$1.3 million.
- Bookings1: Bookings for the third quarter of fiscal 2024
were $2.3 million, a decrease of $0.6 million, or 22% from the
fiscal 2023 third quarter Bookings of $2.9 million.
- Customers: In comparing the most recent four quarters
with the immediately preceding four quarters, D-Wave had:
- A total of 132 customers compared with a total of 125
customers;
- 76 commercial customers compared with 75 commercial customers;
and
- 27 Forbes Global 2000 customers compared with 26 Forbes Global
2000 customers constituting 36% of the total number of commercial
customers.
- Revenue by sector: In comparing the most recent four
quarters with the immediately preceding four quarters:
- Revenue from government customers increased by $0.8 million, or
66%.
- Revenue from research customers increased by $0.6 million, or
47%.
- Revenue from commercial customers decreased by $0.2 million or
4%.
- Commercial revenue as a percentage of total revenue decreased
from 70.1% to 59.2% primarily due to the company's increased focus
on government and research customers.
- GAAP Gross Profit: GAAP gross profit for the third
quarter of fiscal 2024 was $1.0 million, a decrease of $0.5
million, or 32%, from the fiscal 2023 third quarter gross profit of
$1.5 million, with the decrease due primarily to lower professional
services revenue that was partly offset by higher QCaaS
revenue.
- GAAP Gross Margin: GAAP gross margin for the third
quarter of fiscal 2024 was 55.8%, a decrease of 3.9% from the
fiscal 2023 third quarter GAAP gross margin of 59.7%.
- Non-GAAP Gross Profit2: Non-GAAP gross profit for the
third quarter of fiscal 2024 was $1.3 million, a decrease of $0.6
million, or 35%, from the fiscal 2023 third quarter Non-GAAP gross
profit of $1.9 million. The difference between GAAP and Non-GAAP
gross profit is limited to non-cash stock-based compensation and
depreciation and amortization expenses that are excluded from the
Non-GAAP gross profit.
- Non-GAAP Gross Margin2: Non-GAAP gross margin for the
third quarter of fiscal 2024 was 67.2%, a decrease of 8.4% from the
fiscal 2023 third quarter Non-GAAP gross margin of 75.6%. The
difference between GAAP and Non-GAAP gross margin is limited to
non-cash stock-based compensation and depreciation and amortization
expenses that are excluded from the Non-GAAP gross margin.
- GAAP Operating Expenses: GAAP operating expenses for the
third quarter of fiscal 2024 were $21.7 million, an increase of
$1.8 million, or 9%, from the fiscal 2023 third quarter GAAP
operating expenses of $19.9 million with the increase driven
primarily by $1.3 million in third party professional fees and the
balance by incremental investments in go-to-market personnel and
related expenses.
- Non-GAAP Adjusted Operating Expenses2: Non-GAAP Adjusted
Operating Expenses for the third quarter of fiscal 2024 were $15.1
million, an increase of $1.6 million, or 12% from the fiscal 2023
third quarter Non-GAAP adjusted operating expenses of $13.5
million, with the difference between GAAP and non-GAAP operating
expenses being primarily non-cash stock-based compensation expense,
non-recurring one-time expenses, and depreciation and
amortization.
- Net Loss: Net loss for the third quarter of fiscal 2024
was $22.7 million, an increase of $6.6 million, or 41% from the
fiscal 2023 third quarter net loss of $16.1 million. Net loss per
share for the third quarter of fiscal 2024 was $0.11 per share, a
decrease of 0.01 from the fiscal 2023 third quarter net loss of
$0.12 per share.
- Adjusted EBITDA Loss2: Adjusted EBITDA loss for the
third quarter of fiscal 2024 was $13.8 million, an increase of $2.2
million, or 19%, from the fiscal 2023 third quarter Adjusted EBITDA
loss of $11.6 million with the increase due primarily to lower
revenue and higher operating expenses that were principally related
to the Company’s increased investment in its go-to-market
organization.
Financial Results for the Nine Months of Fiscal Year
2024
- Revenue: Revenue for the nine months ended September 30,
2024, was $6.5 million, an increase of $0.6 million, or 11%, from
revenue of $5.9 million for the nine months ended September 30,
2023.
- QCaaS revenue for the nine months ended September 30, 2024 was
$5.1 million, an increase of $1.8 million, or 52%, from QCaaS
revenue of $3.3 million for the nine months ended September 30,
2023, with the increase principally due to a higher average revenue
per customer for D-Wave’s QCaaS subscription services.
- As a result of the timing closing new professional services
engagements, professional services revenue for the nine months
ended September 30, 2024 was $1.3 million, a decrease of $0.9
million, or 42% from professional services revenue of $2.2 million
for the nine months ended September 30, 2023.
- Bookings1: Bookings for the nine months ended September
30, 2024, were $5.6 million, a decrease of $1.8 million, or 24%,
from Bookings of $7.4 million for the nine months ended September
30, 2023.
- GAAP Gross Profit: GAAP gross profit for the nine months
ended September 30, 2024, was $4.1 million, an increase of $1.4
million, or 54%, from $2.7 million in GAAP gross profit for the
nine months ended September 30, 2023, with the increase due
primarily to the growth in revenue and lower stock-based
compensation expense in cost of sales.
- GAAP Gross Margin: GAAP gross margin for the nine months
ended September 30, 2024, was 62.7%, an increase of 17.3% from the
45.4% GAAP gross margin for the nine months ended September 30,
2023, with the increase due primarily to an increase in revenue and
a decrease in stock based compensation costs and increased
operating efficiencies.
- Non-GAAP Gross Profit2: Non-GAAP gross profit for the
nine months ended September 30, 2024, was $4.7 million, an increase
of $0.9 million, or 25%, from the Non-GAAP gross profit of $3.8
million for the nine months ended September 30, 2023. The
difference between GAAP and non-GAAP gross profit is limited to
non-cash stock-based compensation and depreciation and amortization
expenses that are excluded from the Non-GAAP gross profit.
- Non-GAAP Gross Margin2: Non-GAAP gross margin for the
nine months ended September 30, 2024, was 72.7%, an increase of
8.1% from the 64.6% Non-GAAP gross margin for the nine months ended
September 30, 2023. The difference between GAAP and non-GAAP gross
margin is limited to non-cash stock-based compensation and
depreciation and amortization expenses that are excluded from the
Non-GAAP gross margin.
- GAAP Operating Expenses: GAAP operating expenses for the
nine months ended September 30, 2024, were $61.1 million, a
decrease of $5.6 million or 8% from GAAP operating expenses of
$66.7 million for the nine months ended September 30, 2023, with
the year-over-year decrease primarily driven by decreases of $5.1
million in non-cash stock-based compensation expense and $2.6
million in third party professional services, partly offset by
increases in salaries and related personnel costs of $1.5 million,
marketing expense of $0.4 million and travel of $0.3 million that
stemmed from the Company’s increased investment in its go-to-market
organization.
- Non-GAAP Adjusted Operating Expenses2: Non-GAAP adjusted
operating expenses for the nine months ended September 30, 2024,
were $45.4 million, a decrease of $1.8 million or 4% from Non-GAAP
adjusted operating expenses of $47.2 million for the nine months
ended September 30, 2023, with the difference between GAAP and
non-GAAP operating expenses being primarily non-cash stock-based
compensation expense, non-recurring one-time expenses, and
depreciation and amortization.
- Net Loss: Net loss for the nine months ended September
30, 2024, was $57.8 million, or $0.32 per share, a decrease of $8.9
million, or $0.19 per share, compared with a net loss of $66.7
million or $0.51 per share for the nine months ended September 30,
2023.
- Adjusted EBITDA Loss2: Adjusted EBITDA loss for the nine
months ended September 30, 2024, was $40.6 million, a decrease of
$2.8 million or 6% from Adjusted EBITDA loss of $43.4 million for
the nine months ended September 30, 2023, with the decrease due
primarily to higher gross profit and lower general and
administrative operating expenses.
Balance Sheet and Liquidity
As of September 30, 2024, D-Wave’s consolidated cash balance
totaled $29.3 million and, subsequent to the end of the third
quarter, D-Wave paid off the remaining balance of the $50 million
four-year term loan agreement with PSPIB Unitas Investments II
Inc.
On April 12, 2024, the Company’s $175 million shelf registration
statement on Form S-3 went effective and, on May 24, 2024, the S-3
was partially used for a $100 million At-The-Market ("ATM")
program. As of September 30, 2024, D-Wave had $79.1 million of
issuance capacity under the ATM program.
D-Wave’s Equity Line of Credit ("ELOC") registration statement
on Form S-3 with Lincoln Park Capital Fund, LLC also went effective
on April 12, 2024. As of September 30, 2024, the Company had $49.9
million in available issuance 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 D-Wave's stock price being above $1.00 per
share.
Fiscal Year 2024 Outlook
We are reiterating the full year 2024 Adjusted EBITDA Loss
financial guidance set forth in our August 9, 2024, fiscal 2024
second quarter earnings press release. Our guidance is subject to
various cautionary factors described below. Based on the
information available on November 14, 2024, guidance for the full
year 2024 is as follows:
Adjusted EBITDA Loss
- We expect fiscal 2024 Adjusted EBITDA Loss2,3 to be less than
the fiscal 2023 Adjusted EBITDA loss of $54.3 million.
In addition, we are providing guidance with respect to the
fiscal 2024 fourth quarter as follows:
- We expect the fourth quarter Revenue to improve over the third
quarter Revenue.
- We expect the fourth quarter Bookings to improve over the third
quarter Bookings.
__________________
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 Thursday, November 14, 2024, at 8:00 a.m.
(Eastern Time), to discuss the Company’s financial results and
business outlook. The live dial-in number is: 1-800-717-1738
(domestic) or 1-646-307-1865 (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 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 and depreciation and
amortization expense. 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 loss 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 expenses 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. These
forward-looking statements are subject to a number of risks and
uncertainties, including, among others, various factors beyond
management’s control, including the risks set forth under the
heading “Risk Factors” discussed under the caption “Item 1A. Risk
Factors” in Part I of our most recent Annual Report on Form 10-K or
any updates discussed under the caption “Item 1A. Risk Factors” in
Part II of our Quarterly Reports on Form 10-Q and in our other
filings with the SEC. 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
September 30,
December 31,
(In thousands, except share and per share
data)
2024
2023
(Unaudited)
Assets
Current assets:
Cash
$
29,274
$
41,307
Trade accounts receivable, net of
allowance for doubtful accounts of $225 and zero
1,456
1,652
Inventories
1,903
2,078
Prepaid expenses and other current
assets
2,447
2,009
Total current assets
35,080
47,046
Property and equipment, net
3,414
2,551
Operating lease right-of-use assets
7,642
8,223
Intangible assets, net
436
179
Other non-current assets
2,989
1,357
Total assets
$
49,561
$
59,356
Liabilities and stockholders'
deficit
Current liabilities:
Trade accounts payable
$
696
$
1,465
Accrued expenses and other current
liabilities
6,573
5,343
Current portion of operating lease
liabilities
1,580
1,374
Loans payable, net, current (including
$13,700 and $— as of September 30, 2024 and December 31, 2023,
respectively, at fair value)
14,070
399
Deferred revenue, current
2,910
2,669
Total current liabilities
25,829
11,250
Warrant liabilities
1,611
1,630
Operating lease liabilities, net of
current portion
6,966
7,028
Loans payable, net, non-current (including
$— and $31,400 as of September 30, 2024 and December 31, 2023,
respectively, at fair value)
32,013
63,850
Deferred revenue, non-current
57
79
Total liabilities
$
66,476
$
83,837
Commitments and contingencies
Stockholders' deficit:
Common stock, par value $0.0001 per share;
675,000,000 shares authorized at both September 30, 2024 and
December 31, 2023; 207,963,593 shares and 161,113,744 shares issued
and outstanding as of September 30, 2024 and December 31, 2023,
respectively.
20
16
Additional paid-in capital
534,527
469,081
Accumulated deficit
(540,863
)
(483,061
)
Accumulated other comprehensive loss
(10,599
)
(10,517
)
Total stockholders' deficit
(16,915
)
(24,481
)
Total liabilities and stockholders’
deficit
$
49,561
$
59,356
D-Wave Quantum Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(In thousands, except share and per share
data)
2024
2023
2024
2023
Revenue
$
1,870
$
2,562
$
6,518
$
5,852
Cost of revenue
827
1,033
2,428
3,197
Total gross profit
1,043
1,529
4,090
2,655
Operating expenses:
Research and development
8,668
9,459
25,548
29,922
General and administrative
9,259
8,003
24,296
28,875
Sales and marketing
3,752
2,474
11,237
7,862
Total operating expenses
21,679
19,936
61,081
66,659
Loss from operations
(20,636
)
(18,407
)
(56,991
)
(64,004
)
Other income (expense), net:
Interest expense
(1,180
)
(1,035
)
(3,480
)
(1,822
)
Change in fair value of Term Loan
(1,559
)
1,701
(635
)
1,356
Term Loan debt issuance costs
—
(725
)
—
(2,118
)
Gain (loss) on investment in marketable
equity securities
(8
)
—
1,495
—
Change in fair value of warrant
liabilities
476
1,433
19
(79
)
Other income (expense), net
195
927
1,790
(34
)
Total other income (expense), net
(2,076
)
2,301
(811
)
(2,697
)
Net loss
$
(22,712
)
$
(16,106
)
$
(57,802
)
$
(66,701
)
Net loss per share, basic and diluted
$
(0.11
)
$
(0.12
)
$
(0.32
)
$
(0.51
)
Weighted-average shares used in computing
net loss per share, basic and diluted
201,585,533
133,222,318
178,406,948
131,373,959
Comprehensive loss:
Net loss
$
(22,712
)
$
(16,106
)
$
(57,802
)
$
(66,701
)
Foreign currency translation
adjustment
(151
)
15
(82
)
(70
)
Net comprehensive loss
$
(22,863
)
$
(16,091
)
$
(57,884
)
$
(66,771
)
D-Wave Quantum Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Nine Months Ended September
30,
(in thousands)
2024
2023
Cash flows from operating
activities:
Net loss
$
(57,802
)
$
(66,701
)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation and amortization
793
828
Stock-based compensation
11,784
17,362
Amortization of operating right-of-use
assets
565
573
Provision for excess and obsolete
inventory
89
35
Non-cash interest expense, net of cash
paid for PIK interest
(1,350
)
1,745
Change in fair value of Warrant
liabilities
(19
)
79
Change in fair value of Term Loan
635
(1,356
)
Debt issuance costs netted from Term Loan
proceeds
—
993
Gain on marketable securities
(1,495
)
—
Unrealized foreign exchange gain
(810
)
(40
)
Change in operating assets and
liabilities:
Trade accounts receivable
122
7
Inventories
(298
)
(235
)
Prepaid expenses and other current
assets
(437
)
2,035
Trade accounts payable
(822
)
(2,267
)
Accrued expenses and other current
liabilities
3,268
965
Deferred revenue
219
479
Operating lease liability
292
(412
)
Other non-current assets
606
—
Net cash used in operating
activities
(44,660
)
(45,910
)
Cash flows from investing
activities:
Purchase of property and equipment
(1,156
)
(141
)
Purchase of convertible note
(1,000
)
—
Sales of marketable equity securities
254
—
Expenditures for internal-use software
(276
)
(35
)
Net cash used in investing
activities
(2,178
)
(176
)
Cash flows from financing
activities:
Proceeds from the issuance of common stock
pursuant to the Lincoln Park Purchase Agreement
32,187
61,346
Proceeds from the issuance of common stock
in at-the-market offerings, net of issuance costs of 224
20,688
—
Proceeds from the issuance of common stock
upon exercise of stock options
84
1,890
Proceeds from common stock issued under
the Employee Stock Purchase Plan
171
273
Proceeds from Term Loan
—
29,007
Proceeds from government assistance
—
1,487
Payment on directors and officers
insurance financing arrangement
—
(1,449
)
Payment of tax withheld pursuant to
stock-based compensation settlements
(1,470
)
—
Short swing profit settlement
—
244
Debt payment for Term Loan
(16,403
)
—
Debt payment for TPC Loan
(370
)
(390
)
Net cash provided by financing
activities
34,887
92,408
Effect of exchange rate changes on cash
and cash equivalents
(82
)
(70
)
Net increase (decrease) in cash and cash
equivalents
(12,033
)
46,252
Cash and cash equivalents at beginning of
period
41,307
7,065
Cash and cash equivalents at end of
period
$
29,274
$
53,317
D-Wave Quantum Inc.
Reconciliation of Gross Profit
to Non-GAAP Gross Profit
For the Three Months Ended
September 30, 2024 and 2023
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands of U.S. dollars)
2024
2023
2024
2023
Gross Profit
$
1,043
$
1,529
$
4,090
$
2,655
Gross Margin
55.8
%
59.7
%
62.7
%
45.4
%
Excluding:
Depreciation and Amortization (1)
54
54
163
163
Stock-based compensation (2)
159
353
487
963
Non-GAAP Gross Profit
$
1,256
$
1,936
$
4,740
$
3,781
Non-GAAP Gross Margin
67.2
%
75.6
%
72.7
%
64.6
%
(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
September 30, 2024 and 2023
Three Months Ended September
30,
Nine Months Ended September
30, 2024
(in thousands of U.S. dollars)
2024
2023
2024
2023
Operating expenses
$
21,679
$
19,936
$
61,081
$
66,659
Excluding:
Depreciation and Amortization (1)
(229
)
(173
)
(630
)
(665
)
Stock-based compensation (2)
(3,896
)
(5,531
)
(11,297
)
(16,399
)
Non-recurring one time expenses (3)
(2,462
)
(714
)
(3,786
)
(2,396
)
Non-GAAP Adjusted Operating Expenses
$
15,092
$
13,518
$
45,368
$
47,199
(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
provisions for credit losses, as well as legal, consulting, and
accounting fees related to capital markets activities.
D-Wave Quantum Inc.
Reconciliation of Net Loss to
Adjusted EBITDA Loss
For the Three Months Ended
September 30, 2024 and 2023
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands of U.S. dollars)
2024
2023
2024
2023
Net loss
$
(22,712
)
$
(16,106
)
$
(57,802
)
$
(66,701
)
Excluding:
Depreciation and Amortization
283
227
793
828
Stock-based compensation
4,055
5,884
11,784
17,362
Interest (income) expense (1)
1,180
1,035
3,480
1,822
Change in fair value of warrant
liabilities
(476
)
(1,433
)
(19
)
79
Term Loan debt issuance costs
—
725
—
2,118
Change in fair value of Term Loan
1,559
(1,701
)
635
(1,356
)
Gain (loss) on investment in marketable
equity securities
8
—
(1,495
)
—
Other (income) expense, net (2)
(195
)
(927
)
(1,790
)
34
Non-recurring one time expenses (3)
2,462
714
3,786
2,396
Adjusted EBITDA Loss
$
(13,836
)
$
(11,582
)
$
(40,628
)
$
(43,418
)
(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
provisions for credit losses, as well as legal, consulting, and
accounting fees related to capital markets activities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241114411241/en/
Investor Contact: Kevin Hunt ir@dwavesys.com
Media Contact: Alex Daigle media@dwavesys.com
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