Completed transaction with DPCM Capital,
Inc. and began trading as a public company listed on the NYSE on
August 8, 2022
Continued expansion of commercial footprint
with over 55 commercial customers, representing a year-over-year
increase of 44%, during the Second Quarter
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 of its wholly-owned
operating subsidiary, D-Wave Systems Inc. (“D-Wave Systems”), and a
business update for its second quarter ended June 30, 2022.
“We are pleased to report our first quarterly results as a
public company. Since the beginning of the year, we have achieved a
number of important milestones. In addition to successfully
transitioning to a publicly listed company, in the face of a very
challenging and volatile market, we continue to expand our customer
base with over 95 total customers as of the end of the second
quarter, over 55 of which were commercial organizations; launched
an updated quantum-hybrid solver; expanded our Leap™ quantum cloud
physical footprint into the United States and Europe; and provided
our customers with access to a prototype of our Advantage2™ system,
showcasing the power of our upcoming 6th generation quantum
computer,” said Alan Baratz, CEO of D-Wave. “Our commercial
momentum is propelled by the new use cases that we are developing
with our customers, and we look forward to continuing to unlock the
power of quantum-hybrid value for a growing number of use-cases in
the coming months and years.”
Recent Commercial / Business Highlights
- Announced a multi-year strategic alliance with Mastercard to
develop quantum applications in areas such as consumer loyalty and
rewards, cross border settlement, and fraud management
- Announced a number of new customers, including Forbes Global
2000 customers, to address quantum use cases across manufacturing,
logistics, financial services, autonomous driving, and life
sciences
- Continued expansion of commercial customer base, with 44%
year-over-year increase in commercial customers, during the first
half of 2022
- Announced a new board of directors, led by Chairman Steven
West, and including CEO Alan Baratz, Roger Biscay, Amy
Cappellanti-Wolf, Emil Michael, Michael Rogers and Eduard van
Gelderen
- Completed a transaction with DPCM Capital, and began trading on
the NYSE under the ticker symbol QBTS on August 8, 2022
Recent Technical Highlights
- Announced availability of the Advantage2™ experimental
prototype, which is expected to become our sixth-generation quantum
system. The prototype is designed to illustrate the power of the
upcoming system, ultimately expected to feature 7,000+ qubits with
a new design that enables 20-way connectivity and increased
coherence
- Launched the CQM hybrid solver, allowing businesses to solve
constrained quadratic optimization problems with continuous
variables, expanding the types of use-cases that are able to
benefit from quantum-hybrid solutions
- Expanded the Leap™ quantum cloud service footprint, with
quantum computing systems now physically located in Canada, the
United States, and Europe
Financial Results for the Second Quarter ended June 30,
2022
- Revenue for the second quarter of fiscal 2022 was $1,371,000,
an increase of $234,000, or 21%, from $1,137,000 in the second
quarter of fiscal 2021
- Gross profit for the second quarter of fiscal 2022 was
$785,000, an increase of $96,000, or 14%, from $689,000 in the
second quarter of fiscal 2021
- Operating expenses for the second quarter of fiscal 2022 were
$12,770,000, an increase of $2,745,000, or 27%, from $10,025,000 in
the second quarter of fiscal 2021
- Adjusted operating expenses1 for the second quarter of fiscal
2022 were $11,660,000, an increase of $2,167,000, or 23%, from
$9,493,000 in the second quarter of fiscal 2021
- Net loss for the second quarter of fiscal 2022 was $13,198,000,
or $0.12 per share, compared with $4,668,000, or $0.04 per share,
in the second quarter of fiscal 2021
- Adjusted EBITDA2 for the second quarter of fiscal 2022 was
negative $10,835,000, a $2,031,000 or 23% increase, from negative
$8,804,000 in the second 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.
1
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.
2
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 First Half of Fiscal Year
2022
- Revenue for the six months ended June 30, 2022 was $3,083,000,
an increase of $537,000, or 21%, from $2,546,000 in the six months
ended June 30, 2021
- During the first half of fiscal 2022, D-Wave had 56 commercial
customers, an increase of 17, or 44%, from 39 commercial customers
in the first half of fiscal 2021.
- During the first half of fiscal 2022, D-Wave had 97 total
customers, an increase of 29, or 43%, from 68 total customers in
the first half of fiscal 2021.
- Gross profit for the six months ended June 30, 2022 was
$1,914,000, an increase of $114,000, or 6%, from $1,800,000 for the
six months ended June 30, 2021
- Operating expenses for the first half of fiscal 2022 were
$24,544,000, an increase of $4,443,000, or 22%, from $20,101,000 in
the first half of fiscal 2021
- Adjusted operating expenses for the first half of fiscal 2022
were $22,319,000, an increase of $3,283,000, or 17%, from
$19,036,000 in the first half of fiscal 2021
- Net loss for the six months ended June 30, 2022 was
$24,815,000, or $0.22 per share, compared with $13,496,000, or
$0.12 per share, in the six months ended June 30, 2021
- Adjusted EBITDA for the first half of fiscal 2022 was negative
$20,325,000, an increase of $3,101,000, or 18%, from negative
$17,224,000 for the first half of fiscal 2021
Committed Equity Facility
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. The
Company issued 127,180 shares of common stock to Lincoln Park as
consideration for Lincoln Park’s commitment to purchase shares of
Company common stock under the agreement. Further details have been
provided in the Company’s Form S-4 Registration Statement (as
amended, the “Registration Statement”) previously filed with the
Securities and Exchange Commission.
Fiscal Year 2022 Outlook
Based on information available as of August 16, 2022, D-Wave is
providing the following guidance for full year fiscal 2022:
- 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
1.
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.
Second Quarter 2022 Conference Call
In conjunction with this announcement, D-Wave will host a
conference call on Tuesday, August 16, 2022, at 4:30 p.m. (Eastern
Time), to discuss such financial results and its business outlook.
The live dial-in number is 1-877-407-3982 (domestic) or
1-201-493-6780 (international), conference ID code 13732159. A live
webcast and subsequent replay of the call will also be available on
the “Investor Relations” 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; our Advantage2™ experimental
prototype; and our expectations relating to revenue and Adjusted
EBITDA for the second half of 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, 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 Systems Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
June 30,
December 31,
(In thousands of U.S. dollars, except
share and per share data)
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
10,466
$
9,483
Trade accounts receivable, net
918
421
Receivable research incentives
2,451
4,774
Inventories
2,148
2,114
Prepaid expenses and other current
assets
1,529
1,116
Deferred offering costs
5,671
1,250
Total current assets
$
23,183
$
19,158
Property and equipment, net
2,772
3,249
Operating lease right-of-use assets
8,118
8,578
Intangible assets, net
262
272
Other noncurrent assets
1,350
1,353
Total assets
$
35,685
$
32,610
Liabilities and stockholders'
equity
Current liabilities:
Trade accounts payable
2,483
2,109
Accrued expenses and other current
liabilities
8,295
3,614
Current portion of operating lease
liabilities
1,573
1,687
Loans payable, current
21,353
220
Deferred revenue, current
2,595
2,665
Total current liabilities
36,299
10,295
Operating lease liabilities, net of
current portion
6,556
6,990
Loans payable, noncurrent
12,903
12,233
Deferred revenue, noncurrent
20
54
Other noncurrent liabilities
—
18
Total liabilities
$
55,778
$
29,590
Commitments and contingencies
Stockholders' equity:
Non-redeemable convertible preferred
stock, no par value; unlimited number of shares authorized as of
June 30, 2022 and December 31, 2021; 137,765,828 shares issued and
outstanding as of June 30, 2022 and December 31, 2021,
respectively.
189,881
189,881
Common stock, no par value; unlimited
number of shares authorized as of June 30, 2022 and December 31,
2021; 3,341,327 and 3,166,949 shares issued and outstanding as of
June 30, 2022 and December 31, 2021, respectively.
2,811
2,610
Additional paid-in capital
147,779
146,240
Accumulated deficit
(350,083
)
(325,268
)
Accumulated other comprehensive loss
(10,481
)
(10,443
)
Total stockholders' equity
$
(20,093
)
$
3,020
Total liabilities and stockholders’
equity
$
35,685
$
32,610
D-Wave Systems Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Unaudited)
For the three months ended
June 30,
For the six months ended June
30,
(In thousands, except share and per share
data)
2022
2021
2022
2021
Revenue
$
1,371
$
1,137
$
3,083
$
2,546
Cost of revenue
586
448
1,169
746
Total gross profit
785
689
1,914
1,800
Operating expenses:
Research and development
7,072
6,291
13,599
12,775
General and administrative
3,959
2,508
7,606
5,030
Sales and marketing
1,739
1,226
3,339
2,296
Total operating expenses
12,770
10,025
24,544
20,101
Loss from operations
(11,985
)
(9,336
)
(22,630
)
(18,301
)
Other income (expense), net:
Interest expense
(1,746
)
(207
)
(2,538
)
(385
)
Government assistance
—
4,586
—
4,586
Other income (expense), net
533
289
353
604
Total other income (expense), net
(1,213
)
4,668
(2,185
)
4,805
Net loss
$
(13,198
)
$
(4,668
)
$
(24,815
)
$
(13,496
)
Net loss per share, basic and diluted
$
(0.12
)
$
(0.04
)
$
(0.22
)
$
(0.12
)
Weighted-average shares used in computing
net loss per share, basic and diluted
112,023,503
111,877,937
111,981,014
111,865,630
Comprehensive loss:
Net loss
$
(13,198
)
$
(4,668
)
$
(24,815
)
$
(13,496
)
Foreign currency translation adjustment,
net of tax
—
—
—
—
Net comprehensive loss
$
(13,198
)
$
(4,668
)
$
(24,815
)
$
(13,496
)
D-Wave Systems Inc.
Condensed consolidated
statements of cash flows
(Unaudited)
Six months ended June
30,
(in thousands)
2022
2021
Cash flows from operating
activities:
Net loss
$
(24,815
)
$
(13,496
)
Adjustments to reconcile net loss to cash
used in by operating activities:
Depreciation and amortization
705
747
Stock-based compensation
1,600
330
Amortization of operating right of use
assets
459
497
Provision for excess and obsolete
inventory
265
219
Non-cash interest expense
1,955
385
Non-cash final fee payment for Venture
Loan
583
—
Unrealized foreign exchange loss
(gain)
(349
)
44
Change in operating assets and
liabilities:
Trade accounts receivable
(505
)
(126
)
Research incentives receivable
(851
)
(5,339
)
Inventories
(301
)
39
Prepaid expenses and other current
assets
(4,449
)
(288
)
Trade accounts payable
107
(1,764
)
Accrued expenses and other current
liabilities
4,578
(733
)
Deferred revenue
(54
)
(324
)
Operating lease liabilities
(427
)
(459
)
Net cash used in operating activities
(21,499
)
(20,268
)
Cash flows from investing
activities:
Purchase of property and equipment
(175
)
(1,069
)
Purchase of software
(43
)
(196
)
Net cash used in investing activities
(218
)
(1,265
)
Cash flows from financing
activities:
Proceeds from government program
3,178
13,458
Proceeds from debt financing
19,870
—
Proceeds from issuance of common stock
upon exercise of stock options
141
67
Debt payments
(424
)
(398
)
Net cash provided by financing
activities
22,765
13,127
Effect of exchange rate changes on cash
and cash equivalents
(65
)
262
Net (decrease) increase in cash and cash
equivalents
983
(8,144
)
Cash and cash equivalents at beginning of
period
$
9,483
$
21,335
Cash and cash equivalents at end of
period
$
10,466
$
13,191
Supplemental disclosure of noncash
investing and financial activities:
Acquisition of property and equipment
included in accounts payable
$
3
$
21
Unpaid deferred costs
$
3,734
$
—
D-Wave Systems Inc. Reconciliation of Operating Expenses
to Non-GAAP Operating Expenses For the Three and Six Months
Ended June 30, 2022 and 2021 (In thousands)
Three Months Ended June 30, Six Months Ended June 30,
2022
2021
2022
2021
Operating expenses
$
12,770
$
10,025
$
24,544
$
20,101
Excluding: Depreciation and Amortization (1)
(294
)
(363
)
(625
)
(735
)
Stock based compensation
(816
)
(169
)
(1,600
)
(330
)
Non-GAAP Operating Expenses
$
11,660
$
9,493
$
22,319
$
19,036
(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.
D-Wave Systems Inc. Reconciliation of Net Loss to
Adjusted EBITDA For the Three and Six Months Ended June 30,
2022 and 2021 (In thousands) Three Months Ended June
30, Six Months Ended June 30,
2022
2021
2022
2021
Net loss
$
(13,198
)
$
(4,668
)
$
(24,815
)
$
(13,496
)
Excluding: Depreciation and Amortization
334
363
705
747
Stock based compensation
816
169
1,600
330
Interest expense
1,746
207
2,538
385
Government assistance (2)
-
(4,586
)
-
(4,586
)
Other Income (expense), net (3)
(533
)
(289
)
(353
)
(604
)
Adjusted EBITDA
$
(10,835
)
$
(8,804
)
$
(20,325
)
$
(17,224
)
(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 is included in
the above table to facilitate the reconciliation of Adjusted EBITDA
to Net loss.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220816005668/en/
Investor Contact: Kevin Hunt ir@dwavesys.com
Media Contact: Frank Lentini BCW media@dwavesys.com
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