Le Lézard
Classified in: Science and technology, Business
Subjects: EARNINGS, Conference Call, Webcast

D-Wave Reports First Quarter 2024 Results


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 first fiscal quarter ended March 31, 2024.

"D-Wave's first quarter revenue and bookings reflect growing customer demand for quantum and hybrid quantum solutions that can drive measurable impact today," said Dr. Alan Baratz, CEO of D-Wave. "Coupled with the significant technical milestones we've achieved with the Advantage2TM prototype, we believe our progress leading the commercialization of quantum through our products, customer application development and accelerating adoption is evident."

Recent Business and Technical Highlights

___________________

1

 

IDC Link: D-Wave: Improving the Quantum Experience with the Introduction of Fast Anneal, doc #lcUS52073224, April 2024

First Quarter Fiscal 2024 Financial Highlights

Balance Sheet and Liquidity

As of March 31, 2024, D-Wave's consolidated cash balance totaled $27.3 million, an increase of $18.3 million, or 204%, from the fiscal 2023 first quarter consolidated cash balance of $9.0 million. As of May 10, 2024, D-Wave's consolidated cash balance was $33 million.

On April 12, 2024, D-Wave's $175 million shelf registration statement on Form S-3 went effective. On the same date, the Company's Equity Line of Credit ("ELOC") registration statement on Form S-3 with Lincoln Park Capital Fund, LLC also went effective. As of the effective date, the Company had $82.1 million in available 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 having D-Wave's stock price above $1.00 per share.

Fiscal Year 2024 Outlook

We are reiterating the full year 2024 financial guidance set forth in our March 28, 2024, fiscal 2023 fourth quarter and full year earnings press release. Our guidance is subject to various cautionary factors described below. Based on the information available on May 10, 2024, guidance for the full year 2024 is as follows:

Adjusted EBITDA

___________________

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 Monday, May 13, 2024, at 8:00 a.m. (Eastern Time), to discuss the Company's financial results and business outlook. The live dial-in number is 1-800-267-6316 (domestic) or 1-203-518-9783 (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:

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. Forward-looking statements in this press release include, but are not limited to, statements regarding the potential impact of quantum and quantum hybrid systems; the development and progress of our forthcoming Advantage2 system; the timing and content of the Qubits quantum computing conference; our ability to raise additional funds under the ELOC; the Company's reiterated 2024 financial guidance, as set out in our March 28, 2024 fiscal 2023 fourth quarter and full year earnings press release; the Company's expectations relating to 2024 Adjusted EBITDA Loss; and details of the Company's conference call in conjunction with this announcement. 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; risks within D-Wave's industry, including anticipated trends, growth rates, and challenges for companies engaged in the business of quantum computing and 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 our products; the effects of competition on our business; the risk that we may not be able to raise additional funds under the ELOC; 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; the risk that our securities will not maintain the listing on the NYSE; the risk that our restatement of certain previously issued audited and unaudited financial statements or material weaknesses in internal controls could negatively affect investor confidence and raise reputational issues; and the numerous other factors set forth in D-Wave's Annual Report on Form 10-K for its fiscal year ended December 31, 2023 and other filings with the Securities and Exchange Commission. 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

 

 

 

 

 

March 31,

 

December 31,

(In thousands, except share and per share data)

2024

 

2023

 

(Unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash

$

27,304

 

 

$

41,307

 

Trade accounts receivable, net

 

1,735

 

 

 

1,652

 

Inventories

 

2,079

 

 

 

2,078

 

Prepaid expenses and other current assets

 

2,569

 

 

 

2,009

 

Total current assets

 

33,687

 

 

 

47,046

 

Property and equipment, net

 

2,909

 

 

 

2,551

 

Operating lease right-of-use assets

 

7,879

 

 

 

8,223

 

Intangible assets, net

 

302

 

 

 

179

 

Other non-current assets

 

3,828

 

 

 

1,357

 

Total assets

$

48,605

 

 

$

59,356

 

 

 

 

 

Liabilities and stockholders' deficit

 

 

 

Current liabilities:

 

 

 

Trade accounts payable

$

1,037

 

 

$

1,465

 

Accrued expenses and other current liabilities

 

6,007

 

 

 

5,343

 

Current portion of operating lease liabilities

 

1,448

 

 

 

1,374

 

Loans payable, net, current

 

369

 

 

 

399

 

Deferred revenue, current

 

1,999

 

 

 

2,669

 

Total current liabilities

 

10,860

 

 

 

11,250

 

Warrant liabilities

 

4,282

 

 

 

1,630

 

Operating lease liabilities, net of current portion

 

6,978

 

 

 

7,028

 

Loans payable, net, non-current (including $31,100 and $31,400 as of March 31, 2024 and December 31, 2023, respectively, at fair value)

 

63,043

 

 

 

63,850

 

Deferred revenue, non-current

 

399

 

 

 

79

 

Total liabilities

$

85,562

 

 

$

83,837

 

 

 

 

 

Commitments and contingencies

 

 

 

Stockholders' deficit:

 

 

 

Common stock, par value $0.0001 per share; 675,000,000 shares authorized at both March 31, 2024 and December 31, 2023; 161,675,010 shares and 161,113,744 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.

 

16

 

 

 

16

 

Additional paid-in capital

 

473,870

 

 

 

469,081

 

Accumulated deficit

 

(500,373

)

 

 

(483,061

)

Accumulated other comprehensive loss

 

(10,470

)

 

 

(10,517

)

Total stockholders' deficit

 

(36,957

)

 

 

(24,481

)

Total liabilities and stockholders' deficit

$

48,605

 

 

$

59,356

 

D-Wave Quantum Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

 

 

 

 

 

Three Months Ended March 31,

(In thousands, except share and per share data)

2024

 

2023

Revenue

$

2,465

 

 

$

1,583

 

Cost of revenue

 

806

 

 

 

1,162

 

Total gross profit

 

1,659

 

 

 

421

 

Operating expenses:

 

 

 

Research and development

 

8,525

 

 

 

10,915

 

General and administrative

 

7,566

 

 

 

11,296

 

Sales and marketing

 

3,084

 

 

 

2,900

 

Total operating expenses

 

19,175

 

 

 

25,111

 

Loss from operations

 

(17,516

)

 

 

(24,690

)

Other income, net:

 

 

 

Interest expense

 

(1,140

)

 

 

(212

)

Change in fair value of Term Loan

 

1,199

 

 

 

?

 

Gain on investment in marketable equity securities

 

1,660

 

 

 

?

 

Change in fair value of warrant liabilities

 

(2,652

)

 

 

638

 

Other income (expense), net

 

1,137

 

 

 

(142

)

Total other income, net

 

204

 

 

 

284

 

Net loss

$

(17,312

)

 

$

(24,406

)

Net loss per share, basic and diluted

$

(0.11

)

 

$

(0.20

)

Weighted-average shares used in computing net loss per share, basic and diluted

 

161,308,490

 

 

 

123,144,097

 

 

 

 

 

Comprehensive loss:

 

 

 

Net loss

$

(17,312

)

 

$

(24,406

)

Foreign currency translation adjustment, net of tax

 

47

 

 

 

(19

)

Net comprehensive loss

$

(17,265

)

 

$

(24,425

)

D-Wave Quantum Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

Three Months Ended March 31,

(in thousands)

2024

 

2023

Cash flows from operating activities:

 

 

 

Net loss

$

(17,312

)

 

$

(24,406

)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

Depreciation and amortization

 

229

 

 

 

339

 

Stock-based compensation

 

3,509

 

 

 

6,755

 

Amortization of operating right-of-use assets

 

199

 

 

 

206

 

Non-cash interest expense

 

1,093

 

 

 

195

 

Change in fair value of Warrant liabilities

 

2,652

 

 

 

(638

)

Change in fair value of Term Loan

 

(1,199

)

 

 

?

 

Gain on marketable securities

 

(1,660

)

 

 

?

 

Unrealized foreign exchange loss (gain)

 

(994

)

 

 

84

 

Change in operating assets and liabilities:

 

 

 

Trade accounts receivable

 

(42

)

 

 

215

 

Inventories

 

(19

)

 

 

(59

)

Prepaid expenses and other current assets

 

(559

)

 

 

767

 

Trade accounts payable

 

(538

)

 

 

1,858

 

Accrued expenses and other current liabilities

 

2,597

 

 

 

1,214

 

Deferred revenue

 

(350

)

 

 

46

 

Operating lease liability

 

343

 

 

 

(150

)

Other non-current assets

 

(68

)

 

 

?

 

Net cash used in operating activities

 

(12,119

)

 

 

(13,574

)

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(305

)

 

 

(64

)

Purchase of convertible note (Note 4)

 

(1,000

)

 

 

?

 

Sales of marketable equity securities (Note 4)

 

254

 

 

 

?

 

Expenditures for internal-use software

 

(67

)

 

 

?

 

Purchase of software

 

(87

)

 

 

(12

)

Net cash used in investing activities

 

(1,205

)

 

 

(76

)

Cash flows from financing activities:

 

 

 

Proceeds from Lincoln Park Purchase Agreement

 

?

 

 

 

15,683

 

Proceeds from issuance of common stock upon exercise of stock options

 

8

 

 

 

546

 

Payment of tax withheld for common stock issued under stock-based compensation plans

 

(734

)

 

 

?

 

Short swing profit settlement

 

?

 

 

 

244

 

Debt payments

 

?

 

 

 

(881

)

Net cash provided by (used in) financing activities

 

(726

)

 

 

15,592

 

Effect of exchange rate changes on cash and cash equivalents

 

47

 

 

 

(19

)

Net increase (decrease) in cash and cash equivalents

 

(14,003

)

 

 

1,923

 

Cash and cash equivalents at beginning of period

 

41,307

 

 

 

7,065

 

Cash and cash equivalents at end of period

$

27,304

 

 

$

8,988

 

D-Wave Quantum Inc.

Reconciliation of Gross Profit to Non-GAAP Gross Profit

For the Three Months Ended March 31, 2024 and 2023

 

 

 

Three Months Ended March 31,

(in thousands of U.S. dollars)

 

2024

 

2023

Gross Profit

 

$

1,659

 

 

$

421

 

Gross Margin

 

 

67.3

%

 

 

26.6

%

Excluding:

 

 

 

 

Depreciation and Amortization (1)

 

 

54

 

 

 

54

 

Stock-based compensation (2)

 

 

175

 

 

 

377

 

Non-GAAP Gross Profit

 

$

1,888

 

 

$

852

 

Non-GAAP Gross Margin

 

 

76.6

%

 

 

53.8

%

(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 March 31, 2024 and 2023

 

 

 

 

 

Three Months Ended March 31,

(in thousands of U.S. dollars)

 

2024

 

2023

Operating expenses

 

$

19,175

 

$

25,111

Excluding:

 

 

 

 

Depreciation and Amortization (1)

 

 

175

 

 

285

Stock-based compensation (2)

 

 

3,334

 

 

6,378

Non-recurring one time expenses (3)

 

 

882

 

 

680

Non-GAAP Adjusted Operating Expenses

 

$

14,784

 

$

17,768

(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 legal, consulting, and accounting fees related to capital markets activities.

D-Wave Quantum Inc.

Reconciliation of Net Loss to Adjusted EBITDA

For the Three Months Ended March 31, 2024 and 2023

 

 

 

 

 

Three Months Ended March 31,

(in thousands of U.S. dollars)

 

2024

 

2023

Net loss

 

$

(17,312

)

 

$

(24,406

)

Excluding:

 

 

 

 

Depreciation and Amortization

 

 

229

 

 

 

339

 

Stock-based compensation

 

 

3,509

 

 

 

6,755

 

Interest (income) expense (1)

 

 

1,140

 

 

 

212

 

Change in fair value of warrant liabilities

 

 

2,652

 

 

 

(638

)

Change in fair value of Term Loan

 

 

(1,199

)

 

 

?

 

Gain on investment in marketable equity securities

 

 

(1,660

)

 

 

?

 

Other (income) expense, net (2)

 

 

(1,137

)

 

 

142

 

Non-recurring one time expenses (3)

 

 

882

 

 

 

680

 

Adjusted EBITDA

 

$

(12,896

)

 

$

(16,916

)

(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 legal, consulting, and accounting fees related to capital markets activities.

 


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