Q3 Revenue up 30% Year-Over-Year
Number of commercial customers increased by 34%
to 63 during the first nine months of fiscal 2022
D-Wave Quantum Inc., (NYSE: QBTS) (“D-Wave” or the “Company”) a
leader in quantum computing systems, software, and service, and the
only provider building both annealing and gate-model quantum
computers, today announced financial results for its third quarter
ended September 30, 2022.
“Our third quarter results reflect continued progress in our
mission to help customers realize real value by using quantum
computing for practical business applications, today. The era of
commercialized quantum computing is here, and that is evident in
the momentum we’re seeing in terms of our expanded customer
footprint, accelerated application development, and revenue growth.
With a 34% increase in the number of commercial customers
year-to-date and a 30% increase in year-over-year quarterly
revenue, it’s clear that customers are seeing the impact of our
quantum-hybrid solutions in unlocking competitive advantage and
fueling growth,” said Alan Baratz, CEO of D-Wave. “In addition, we
remain laser focused on relentless product development and
delivery. We’re advancing quantum innovation through continued
progress on our gate model development efforts, launching solutions
that solve important client needs like support for weighted
constraints, and furthering the science as shown by our coherent
annealing research results, which bring us one step closer to
demonstrating practical quantum advantage.”
Recent Commercial / Business Highlights
- Signed a number of new and expanded customer engagements with
Forbes Global 2000 companies, as well as industry leaders such as
ArcelorMittal, BASF, and Deloitte
- Continued expansion of our commercial customer base with 63
commercial customers in the first nine months of the year, a 34%
year-over-year increase
- Worked with customers on a variety of new and expanded quantum
hybrid applications; including 3D bin packing, customer offer
allocation, employee scheduling, feature selection for machine
learning, job shop scheduling, and manufacturing optimization
- Created a new, streamlined pricing structure for our QCaaS
offering, shifting from a consumption, time-based approach to a
seat-based and application-based collection of offerings designed
to better meet the needs of customers and deliver business
value
- Launched D-Wave in AWS Marketplace, introducing access to the
Leap quantum cloud service and three professional service quantum
computing offerings to AWS customers
Recent Technical Highlights
- Continued progress on our gate model development work, reaching
several milestones this quarter, including the fabrication of our
first gate model qubits in the multilayer stack, the start of
benchmarking for one- and two-qubit gates with these devices, and
demonstration of a scalable approach to readout for our gate model
architecture
- Published research results in Nature Physics that demonstrated
large-scale coherence in annealing quantum computers, representing
an important step toward practical quantum advantage and providing
definitive evidence that D-Wave’s systems perform coherent quantum
annealing, which cannot be classically simulated
- Launched an update to the CQM hybrid solver, enabling
businesses to run quadratic optimization problems with weighted
constraints and benefit from presolve techniques that streamline
and simplify problem formulation
Financial Results for the Third Quarter ended September 30,
2022
- Revenue for the third quarter of fiscal 2022 was $1.7 million,
an increase of $388,000, or 30%, from $1.3 million in the third
quarter of fiscal 2021 and an increase of $324,000, or 24%, from
the immediately prior fiscal 2022 second quarter revenue of $1.4
million
- Gross profit for the third quarter of fiscal 2022 was $1.1
million, an increase of $86,000, or 9%, from $1.0 million in the
third quarter of fiscal 2021 and an increase of $301,000, or 38%,
from the immediately prior fiscal 2022 second quarter gross profit
of $785,000
- Gross margin for the third quarter was 64.1%, a decrease of
12.4% from 76.5% in the third quarter of fiscal 2021 and an
increase of 6.8% from the immediately prior fiscal 2022 second
quarter gross margin of 57.3%
- Operating expenses for the third quarter of fiscal 2022 were
$16.4 million, an increase of $5.6 million, or 52%, from $10.8
million in the third quarter of fiscal 2021
- Adjusted operating expenses1 for the third quarter of fiscal
2022 were $13.6 million, an increase of $3.4 million or 33%, from
$10.2 million in the third quarter of fiscal 2021
- Net loss for the third quarter of fiscal 2022 was $13.1
million, or $0.11 per share, compared with $4.2 million, or $0.03
per share, in the third quarter of fiscal 2021
- Adjusted EBITDA2 for the third quarter of fiscal 2022 was
negative $12.4 million, a $3.3 million or 36% increase, from
negative $9.2 million in the third quarter of fiscal 2021
We are providing adjusted operating expenses and Adjusted EBITDA
as we believe these metrics improve investors’ ability to evaluate
our underlying performance. Non-GAAP measures do not have any
standardized meaning under GAAP, and therefore may not be
comparable to similar measures employed by other companies.
- Adjusted operating expenses is a non-GAAP financial measure.
For a description of adjusted operating expenses and a
reconciliation to operating expenses, the closest comparable GAAP
financial measure, refer to “Non-GAAP Financial Measures” below and
the reconciliation table at the end of this release.
- Adjusted EBITDA is a non-GAAP financial measure. For a
description of Adjusted EBITDA and a reconciliation to net loss,
the closest comparable GAAP financial measure, refer to “Non-GAAP
Financial Measures” below and the reconciliation table at the end
of this release
Financial Results for the Nine Months of Fiscal Year
2022
- Revenue for the nine months ended September 30, 2022, was $4.8
million, an increase of $925,000, or 24%, from $3.9 million in the
nine months ended September 30, 2021
- During the nine months ended September 30, 2022, D-Wave had 63
commercial customers, an increase of 16, or 34%, from 47 commercial
customers in the nine months ended September 30, 2021
- During the nine months ended September 30, 2022, D-Wave had 105
total customers, an increase of 24, or 30%, from 81 total customers
in the nine months ended September 30, 2021
- Gross profit for the nine months ended September 30, 2022, was
$3 million, a small increase from $2,980,000 in the nine months
ended September 30, 2021
- Operating expenses for the nine months ended September 30, 2022
were $40.9 million, an increase of $9.8 million, or 32%, from $31.1
million in the nine months ended September 30, 2021
- Adjusted operating expenses for the nine months ended September
30, 2022 were $35.8 million, an increase of $6.4 million, or 22%,
from $29.4 million in the nine months ended September 30, 2021
- Net loss for the nine months ended September 30, 2022, was $
37.9 million, or $0.31 per share, compared with $17.7 million, or
$0.14 per share, in the nine months ended September 30, 2021
- Adjusted EBITDA for the nine months ended September 30, 2022
was negative $32.7 million, an increase of $6.3 million, or 24%,
from negative $26.4 million for the nine months ended September 30,
2021
Committed Equity Facility
As previously disclosed, on June 16, 2022, D-Wave entered into a
common stock purchase agreement with Lincoln Park Capital Fund, LLC
(“Lincoln Park”). Under the agreement, 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. Further details have been provided in the Company’s related
Form S-1 Registration Statement and in the Company’s Form 10-Q for
the quarter ended September 30, 2022, each filed with the
Securities and Exchange Commission.
Fiscal Year 2022 Outlook
Based on information available as of November 10, 2022, D-Wave
is maintaining its fiscal 2022 Revenue and Adjusted EBITDA guidance
as follows:
- Revenue is expected to be in the range of $7.0 million to $9.0
million
- Adjusted EBITDA is expected to be less than negative $49
million1
- We are not able to reconcile guidance for Adjusted EBITDA 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 stock-based compensation, are not
within our control or cannot be reasonably predicted.
Third Quarter 2022 Conference Call
In conjunction with this announcement, D-Wave will host a
conference call on Thursday, November 10, 2022, at 8:00 a.m.
(Eastern Time), to discuss such financial results and its business
outlook. The live dial-in number is 1-877-300-8521 (domestic) or
1-412-317-6026 (international), conference ID code 10171956. A live
webcast and subsequent replay of the call will also be available on
the “Investors” page of the Company’s website at:
http://ir.dwavesys.com/.
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—and the only company
building both annealing quantum computers and gate-model 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 is being used by some of
the world’s most advanced organizations, including NEC Corporation,
Volkswagen, 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 Adjusted EBITDA and adjusted
operating expenses is a financial measure that is not required by
or presented in accordance with GAAP. Management believes that this
measure provides investors an additional meaningful method to
evaluate certain aspects of such results period over period.
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 nonrecurring nonoperating
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.
Adjusted operating expenses is defined as operating expenses before
depreciation and amortization expense and stock-based compensation
expense. We use 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 each of Adjusted EBITDA and adjusted operating
expenses to its most directly comparable GAAP measure, please refer
to the reconciliations below.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, which statements are based on beliefs and assumptions and on
information currently available. In some cases, you can identify
forward-looking statements by the following words: “may,” “will,”
“could,” “would,” “should,” “expect,” “intend,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “project,”
“potential,” “continue,” “ongoing,” or the negative of these terms
or other comparable terminology, although not all forward-looking
statements contain these words. These statements involve risks,
uncertainties, and other factors that may cause actual results,
levels of activity, performance, or achievements to be materially
different from the information expressed or implied by these
forward-looking statements. We caution you that these statements
are based on a combination of facts and factors currently known by
us and our projections of the future, which are subject to a number
of risks. Forward-looking statements in this press release include,
but are not limited to, statements regarding the company’s future
growth and innovations; the increased adoption of quantum computing
solutions and expansion of related market opportunities and use
cases and our customer base; and our expectations relating to
revenue and Adjusted EBITDA for fiscal 2022. We cannot assure you
that the forward-looking statements in this press release will
prove to be accurate. 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, and the
uncertainties and factors set forth in the sections entitled “Risk
Factors” and “Cautionary Note Regarding Forward-Looking Statements”
in the registration statement on Form S-1 (SEC File No.
333-267124), initially filed by the Company with the SEC on August
29, 2022 and which was declared effective by the SEC on October 26,
2022, as well as factors associated with companies, such as D-Wave,
that are engaged in the business of quantum computing, including
anticipated trends, growth rates, and challenges in those
businesses and in 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 the
our products; 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; and the risk
that our securities will not maintain the listing on the NYSE.
Furthermore, if the forward-looking statements contained in this
press release prove to be inaccurate, the inaccuracy may be
material. In addition, you are cautioned that past performance may
not be indicative of future results. In light of the significant
uncertainties in these forward-looking statements, you should not
place undue reliance on these statements in making an investment
decision or regard these statements as a representation or warranty
by any person we will achieve our objectives and plans in any
specified time frame, or at all. The forward-looking statements in
this press release represent our views as of the date of this press
release. We anticipate that subsequent events and developments will
cause our views to change. However, while we may elect to update
these forward-looking statements at some point in the future, we
have no current intention of doing so except to the extent required
by applicable law. You should, therefore, not rely on these
forward-looking statements as representing our views as of any date
subsequent to the date of this press release.
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)
2022
2021
Assets
Current assets:
Cash
$
13,764
$
9,483
Trade accounts
receivable, net
740
421
Receivable
research incentives
1,052
4,774
Inventories
2,533
2,114
Prepaid expenses
and other current assets
8,190
1,116
Deferred offering
costs
—
1,250
Total current assets
$
26,279
$
19,158
Property and equipment, net
2,537
3,249
Operating lease right-of-use assets
8,066
8,578
Intangible assets, net
262
272
Other noncurrent assets
1,345
1,353
Total assets
$
38,489
$
32,610
Liabilities and stockholders' (deficit)
equity
Current liabilities:
Trade accounts
payable
3,158
2,109
Accrued expenses
and other current liabilities
5,318
3,614
Current portion
of operating lease liabilities
1,461
1,687
Loans payable,
current
2,232
220
Deferred revenue,
current
1,989
2,665
Promissory note -
related party
420
—
Total current liabilities
14,578
10,295
Warrant liabilities
5,498
—
Operating lease liabilities, net of
current portion
6,211
6,990
Loans payable, noncurrent
12,912
12,233
Deferred revenue, noncurrent
—
54
Other noncurrent liabilities
—
18
Total liabilities
$
39,199
$
29,590
Commitments and contingencies
Stockholders' (deficit) equity:
Non-redeemable convertible preferred
stock*, no par value; nil shares and 122,564,333 shares
authorized as of September 30, 2022 and December 31, 2021,
respectively; nil shares and 122,564,333 shares issued and
outstanding as of September 30, 2022 and December 31, 2021,
respectively.
—
189,881
Common stock*, par value $0.0001 per
share; 675,000,000 shares and unlimited shares authorized at
September 30, 2022 and December 31, 2021, respectively; 110,377,357
shares and 2,817,498 shares issued and outstanding as of September
30, 2022 and December 31, 2021, respectively.
11
—
Additional paid-in capital
372,840
148,850
Accumulated deficit
(363,136)
(325,268)
Accumulated other comprehensive loss
(10,425)
(10,443)
Total
stockholders' (deficit) equity
$
(710)
$
3,020
Total liabilities and stockholders’
equity
$
38,489
$
32,610
* Shares of legacy non-redeemable
convertible preferred stock and legacy common stock have been
retroactively restated to give effect to the Business
Combination.
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, except share and per share
data)
2022
2021
2022
2021
Revenue
$
1,695
$
1,307
$
4,778
$
3,853
Cost of revenue
609
307
1,778
873
Total gross
profit
1,086
1,000
3,000
2,980
Operating expenses:
Research and development
7,334
6,313
20,933
19,268
General and
administrative
6,921
2,801
14,527
7,831
Sales and marketing
2,099
1,679
5,438
3,975
Total operating expenses
16,354
10,793
40,898
31,074
Loss from
operations
(15,268)
(9,793)
(37,898)
(28,094)
Other income (expense), net:
Interest expense
(1,336)
(205)
(3,874)
(590)
Government assistance
—
4,560
—
9,146
Gain on investment in
marketable securities
—
1,164
—
1,164
Change in fair value of
warrant liabilities
2,603
—
2,603
—
Other income, net
948
65
1,301
669
Total other income, net
2,215
5,584
30
10,389
Net loss
$
(13,053)
$
(4,209)
$
(37,868)
$
(17,705)
Net loss per share, basic and diluted
$
(0.11)
$
(0.03)
$
(0.31)
$
(0.14)
Weighted-average shares * used in
computing net loss per share, basic and diluted
116,256,805
125,362,390
122,337,727
125,331,065
Comprehensive loss:
Net loss
$
(13,053)
$
(4,209)
$
(37,868)
$
(17,705)
Foreign currency translation adjustment,
net of tax
56
29
18
40
Net
comprehensive loss
$
(12,997)
$
(4,180)
$
(37,850)
$
(17,665)
* Weighted-average shares have been
retroactively restated to give effect to the Business
Combination
D-Wave Quantum Inc.
Condensed consolidated
statements of cash flows
(Unaudited)
Nine months ended September
30,
(in thousands)
2022
2021
Cash flows from operating
activities:
Net loss
$
(37,868)
$
(17,705)
Adjustments to reconcile net loss to cash
used in by operating activities:
Depreciation and amortization
1,038
1,135
Allowance for doubtful accounts
1
—
Stock-based compensation
3,695
555
Amortization of operating right of
use assets
590
764
Provision for excess and obsolete
inventory
265
215
Non-cash interest expense on
government payable
1,902
601
Venture loan interest and final
payment fee
1,808
—
Grant income
—
(9,135)
Change in fair value of public
warrant liability
(1,483)
—
Change in fair value of private
warrant liability
(1,120)
—
Non-cash lease expense
—
(756)
(Gain) loss on marketable
securities
—
(1,164)
Unrealized foreign exchange loss
(gain)
(1,226)
15
Change in operating assets and
liabilities:
Trade accounts
receivable
(320)
(334)
Research
incentives receivable
579
(10,374)
Inventories
(684)
(29)
Deferred offering
costs
1,250
—
Prepaid expenses
and other current assets
(7,074)
(929)
Trade accounts
payable
1,049
(1,081)
Right-of-use
assets
(97)
—
Accrued expenses
and other current liabilities
1,704
(313)
Deferred revenue,
current
(730)
(148)
Loan program
payable
—
11,068
Current portion
of long-term debt
2,893
—
Operating lease
liability
(442)
—
Net cash used in
operating activities
$
(34,270)
$
(27,615)
Cash flows from investing
activities:
Purchase of property and
equipment
(249)
(1,493)
Purchase of software
(67)
(214)
Net cash used in
investing activities
$
(316)
$
(1,707)
Cash flows from financing
activities:
Proceeds from issuance of common
stock from the PIPE investment
40,000
—
Business Combination, 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
—
Proceeds from government
assistance
3,124
16,346
Proceeds from issuance of common
stock upon exercise of stock options
72
66
Proceeds from debt financing
19,870
—
Payment for directors and officers
insurance
(864)
—
Debt payments
(20,000)
(23)
Venture loan interest and final
payment fee
(1,808)
—
Government loan payment
(398)
(399)
Net cash provided
by financing activities
$
38,898
$
15,990
Effect of exchange rate changes on cash
and cash equivalents
(31)
42
Net (decrease)
increase in cash and cash equivalents
4,281
(13,290)
Cash and cash equivalents at beginning of
period
$
9,483
$
21,335
Cash and cash equivalents at end of
period
$
13,764
$
8,045
Supplemental disclosure of noncash
investing and financial activities:
Initial warrant liabilities recognized in
connection with closing of Business Combination
$
8,101
$
—
Non-cash Business Combination
financing
$
(11,400)
$
—
Issuance of shares for payment of ELOC
commitment fee
$
3,271
$
—
Conversion of convertible preferred stock
to common stock
$
189,871
$
—
D-Wave Quantum Inc.Reconciliation of Operating Expenses to
Non-GAAP Operating ExpensesFor the Three and Nine Months Ended
September 30, 2022 and 2021(In thousands) For the
three months ended September 30, For the nine months
ended September 30,
2022
2021
2022
2021
Operating expenses
$
16,354
$
10,793
$
40,898
$
31,074
Excluding: Depreciation and
Amortization (1)
(298)
(392)
(923)
(1,127)
Stock based compensation
(2,027)
(225)
(3,695)
(555)
Non-recurring one time expenses (2)
(456)
-
(456)
-
Non-GAAP Operating Expenses
$
13,573
$
10,176
$
35,824
$
29,392
(1) Depreciation and
Amortization reflects the Depreciation and Amortization
incorporated 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) Non-recurring one time expenses related to legal,
consulting, and accounting fees associated with the August 5, 2022
Business Combination.
D-Wave Quantum Inc.Reconciliation of
Net Loss to Adjusted EBITDAFor the Three and Nine Months Ended
September 30, 2022 and 2021(In thousands) For the
three months ended September 30, For the nine months
ended September 30,
2022
2021
2022
2021
Net loss
$
(13,053)
$
(4,209)
$
(37,868)
$
(17,705)
Excluding:
Depreciation and Amortization
338
393
1,038
1,135
Stock based compensation
2,027
225
3,695
555
Interest expense (1)
1,336
205
3,874
590
Government assistance (2)
-
(4,560)
-
(9,146)
Gain on investment in marketable securities
-
(1,164)
-
(1,164)
Other Income (expense), net (3)
(948)
(65)
(1,301)
(669)
Change in fair value of warrant liabilities
(2,603)
-
(2,603)
-
Non-recurring one time expenses (4)
456
-
456
-
Adjusted EBITDA
$
(12,447)
$
(9,175)
$
(32,709)
$
(26,404)
(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, 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) Government Assistance reflects the imputed benefit
arising from the difference between the market rate of interest and
the rate of interest charged on the government loans.
(3) Other Income (expense), net consists primarily of foreign
exchange gains and losses, and it is included in the above table to
facilitate the reconciliation of Adjusted EBITDA to Net loss.
(4) Non-recurring one time expenses related to legal,
consulting, and accounting fees associated with the August 5, 2022
Business Combination.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221110005454/en/
Investor Contact: Kevin Hunt ir@dwavesys.com
Media Contact: Jill Wroblewski AxiCom
media@dwavesys.com
D Wave Quantum (NYSE:QBTS)
Historical Stock Chart
From Mar 2024 to Apr 2024
D Wave Quantum (NYSE:QBTS)
Historical Stock Chart
From Apr 2023 to Apr 2024