D-Wave Quantum Inc. Reports Earnings, USC Partnership Renewal

Insider Brief

• D-Wave Quantum Inc. announced an earnings increase in its financial results for the first fiscal quarter.
• Revenue for the quarter reached $2.5 million, an increase of 56%.
• Critical Quote:  “D-Wave’s first quarter revenue and bookings reflect growing customer demand for quantum and hybrid quantum solutions that can drive measurable impact today…” Dr. Alan Baratz, CEO of D-Wave

D-Wave Quantum Inc. (NYSE: QBTS), a pioneer in commercial quantum computing systems, software and services, announced an earnings increase in its financial results for the first fiscal quarter. The company also announced the renewal of its multiyear partnership with the University of Southern California (USC), marking continued collaboration in the field of quantum computing.

Earnings Report

D-Wave’s financial performance for the first quarter of fiscal 2024 highlights growth and increasing demand for its quantum solutions. Revenue for the quarter reached $2.5 million, an increase of 56% compared to the $1.6 million reported in the same quarter of the previous year. This growth reflects the company’s eighth consecutive quarter of year-over-year growth in quarterly bookings, which totaled $4.5 million, up by 54% from $2.9 million in Q1 FY23.

Dr. Alan Baratz, CEO of D-Wave, commented, “D-Wave’s first quarter revenue and bookings reflect growing customer demand for quantum and hybrid quantum solutions that can drive measurable impact today. Coupled with the significant technical milestones we’ve achieved with the Advantage2 prototype, we believe our progress leading the commercialization of quantum through our products, customer application development, and accelerating adoption is evident.”

Business and Technical Highlights

• Fast-Anneal Feature: D-Wave introduced a new fast-anneal feature that significantly speeds up quantum computations and reduces the impact of external disturbances like thermal fluctuations and noise. This innovation has been acknowledged by IDC, a leading industry analyst firm, as a major step forward in quantum computing.
• Advantage2 System: The company has yielded over 4800 qubit processors for the forthcoming Advantage2 system. This follows the earlier launch of the 1,200+ qubit Advantage2 prototype, which is now accessible via the Leap quantum cloud service. These processors are currently undergoing calibration, marking an important milestone in the product delivery roadmap.
• USC Partnership Renewal: D-Wave announced a renewed partnership with USC’s Viterbi School of Engineering, continuing to house a state-of-the-art Advantage quantum computer. This partnership supports ongoing exploration and adoption of annealing quantum computing solutions across various sectors.
• Customer Projects: D-Wave has been working with customers on diverse quantum-powered optimization applications, including optimizing solar panel usage in buildings, scheduling for commercial vehicle production, tanker unloading at refineries, and enhancing cybersecurity.
• Qubits Conference: The company will host its ninth annual Qubits quantum computing conference on June 17-18 in Boston, Massachusetts. The event, themed “Success, Powered by Quantum,” will feature demonstrations of how partners and customers are using D-Wave’s technology to solve complex real-world problems.

Financial Highlights

• Revenue: First quarter revenue increased by 56% to $2.5 million.
• Bookings: Quarterly bookings rose by 54% to $4.5 million.
• Customer Growth: The company served 128 customers over the past four quarters, up from 113 in the previous period, including 75 commercial customers and 25 Forbes Global 2000 customers.
• Commercial Revenue: Revenue from commercial customers increased by 51%, and commercial revenue as a percentage of total revenue rose from 63% to 69%.
• GAAP Gross Profit: Gross profit for the first quarter was $1.7 million, a 294% increase from the previous year, driven by revenue growth and operational efficiencies.
• GAAP Gross Margin: The gross margin improved to 67.3%, up from 26.6%.
• Non-GAAP Gross Profit: Non-GAAP gross profit was $1.9 million, up by 122%.
• Operating Expenses: GAAP operating expenses decreased by 24% to $19.2 million, while non-GAAP adjusted operating expenses decreased by 17% to $14.8 million.
• Net Loss: The net loss for the quarter was $17.3 million, a significant reduction from the $24.4 million loss in Q1 FY23.
• Adjusted EBITDA Loss: Adjusted EBITDA loss improved to $12.9 million, a 24% reduction.

Balance Sheet and Liquidity

According to the statement, as of March 31, 2024, D-Wave’s cash balance stood at $27.3 million, a substantial increase from $9.0 million in the previous year. By May 10, 2024, the cash balance had risen to $33 million. The company’s $175 million shelf registration statement and an Equity Line of Credit (ELOC) with Lincoln Park Capital Fund went effective in April, providing an available capacity of $82.1 million under the ELOC through October 2025, subject to certain conditions.

USC Partnership Details

The renewed partnership with USC’s Viterbi School of Engineering will continue to host a D-Wave Advantage quantum computer. The collaboration supports USC’s research in annealing quantum computing solutions and provides organizations with real-time access to quantum computing resources via D-Wave’s Leap quantum cloud service.

USC Dean Yannis C. Yortsos was enthusiastic about the continued partnership.

“Together with D-Wave, we are putting quantum computing power into the hands of our researchers who want to harness this transformative technology to solve the world’s toughest challenges,” Yortsos said.

Since 2011, USC’s Quantum Computing Center has housed several generations of D-Wave’s quantum systems. The center has facilitated numerous research and benchmarking studies, contributing to significant findings in quantum annealing and machine learning applications.

You can read the entire financial statement here.