D-Wave Says ‘Momentum is Undeniable’ As It Releases Q4, Full-Year Financial Results

Insider Brief

• D-Wave showed continued revenue growth and improving profitability metrics in Q4, building on trends from earlier quarters.
• Revenue for Q4 2023 was $2.9 million, up 21% from $2.4 million in the same quarter last year.
• D-Wave raised $98.1 million in equity and debt financing in 2023; however, the company will have to keep a tight eye on expenses, figures show.

Vancouver-based quantum computing company D-Wave Systems Inc. reported its fourth quarter and full year 2023 financial results.

According to a company statement, the quantum computing pioneer showed continued revenue growth and improving profitability metrics in Q4, building on trends from earlier quarters. The figures do show that expenses remained high, however, as D-Wave is investing in research and product development.

“Our momentum is undeniable,” Dr. Alan Baratz, CEO of D-Wave, said in the statement. “From our commercial traction to substantive product advancements, from our ground-breaking scientific milestones to new strategic partnerships — we believe all these achievements are propelling us forward to solidify D-Wave’s position as the commercial quantum category builder and leader.”

On the cash front, D-Wave ended the year with $41.3 million in cash, up from just $7.1 million at the end of 2022. This built its runway as D-Wave raised $98.1 million in equity and debt financing over the course of 2023. However, even with a bolstered runway, the company will have to keep a tight eye on expenses. On a non-GAAP basis, which excludes stock compensation and depreciation, Q4 operating expenses were $13.2 million, which is down 17% from Q4 2022 and down just 2% from Q3 2023.

Revenue for Q4 2023 was $2.9 million, up 21% from $2.4 million in the same quarter last year. It was also a 13% sequential increase from Q3 2023 revenue of $2.6 million, marking D-Wave’s third straight quarter of quarter-over-quarter revenue growth.

Bookings, which represent future revenue contracted in the current period, grew at a fast clip at $3.1 million for Q4 2023 – up 34% year-over-year and 8% from Q3. According to the statement, this extended D-Wave’s streak to seven consecutive quarters of year-over-year bookings growth.

While revenue trended higher, expenses remained a focus area for D-Wave as it aimed to move towards profitability. GAAP operating expenses declined 17% year-over-year and 7% sequentially to $18.5 million in Q4 2023, the third straight quarter of sequential decreases.

As revenue grew and expenses softened, D-Wave’s net loss improved to $16.0 million in Q4 2023, down 12% from $18.2 million in Q4 2022 and 1% lower than Q3 2023. D-Wave marked its second straight quarter of quarter-over-quarter net loss improvement, according to the statement.

For the full year 2023, D-Wave reported revenue of $8.8 million, a 22% increase over 2022 revenue of $7.2 million. The company ended 2023 with 133 total customers, up from 120 in 2022. This included 78 commercial customers (up from 74) and 27 Forbes Global 2000 customers (up from 24).

Recent Business and Technical Highlights

The company also offered the following business and technical highlights for annual and Q4 2023 results. D-Wave:

• Bolstered the executive leadership team and Board of Directors to drive rapid growth and deliver strategic execution with the addition of Lorenzo Martinelli, Chief Revenue Officer, the promotion of Dr. Trevor Lanting to Chief Development Officer, and the addition of Secretary Kirstjen Nielsen, former Secretary of Homeland Security, to the Board of Directors.
• Entered into a multi-year strategic collaboration with Zapata AI to advance quantum-enabled machine learning, initially focused on building quantum generative AI models that accelerate the discovery of new materials and molecules.
• Progressed applications into production, with two customer applications deployed (employee scheduling and driver delivery scheduling) and additional customer applications nearing production deployment for promotional tour routing and customer reward program optimization.
• Launched the 1,200+ qubit Advantage2 prototype and made it accessible in the Leap quantum cloud service, making the Company’s most performant system available to customers. Built with a new lower-noise fabrication stack, the Advantage2 prototype has 2x the qubit coherence for faster time-to-solution and 40% energy scale improvement to deliver higher-quality solutions.
• Worked with customers on a variety of quantum-hybrid applications including cargo loading optimization, job shop scheduling, building electrical grid optimization, customer rewards optimization with Satispay, HVAC system design with VINCI Energies and QuantumBasel, and aircraft network optimization with SavantX.
• Signed a number of new and renewed customer engagements, including agreements with Bridgestone Corp., Ford Otosan, Julich Supercomputing Centre, Quantum Algorithms Institute, Qunova Computing, SavantX and UKRI National Quantum Computing Centre.
• Launched a new go-to-market growth initiative designed to increase sales and help move customer applications into production, initially focused on key verticals including logistics, manufacturing and government.
• Announced partnerships with NEC Australia and Deloitte Canada to expedite the exploration and adoption of quantum computing solutions among governments and businesses.