[QBTS] Summary of D-WAVE 2023 1Q Earnings Call Transcript

QBTSparticipants

Kevin Hunt - Investor Relations
Alan Baratz - Chief Executive Officer
John Markovich - Chief Financial Officer

Business Highlights

1. Strong Demand and Bookings:

D-Wave Quantum Inc. reported strong demand trends and bookings, with an increase in the average deal size due to customers recognizing the benefits of working with D-Wave's professional services organization. The company's sales cycle is starting to shorten, and there is a greater awareness of D-Wave's approach to quantum computing.

2. Coherent Quantum Annealing:

D-Wave achieved a significant scientific milestone on coherent quantum annealing, which led to publishing the results in nature, one of the most preeminent peer-reviewed scientific journals. The company is also developing Advantage 2, its next-generation annealing quantum system, which is expected to feature 7,000 plus qubits 20-way connectivity and higher coherence.

Financial Status:

1. Revenue Growth:

The company's commercial customer portfolio remains robust, and it has seen a steady increase in the growth of revenue-producing commercial customers. The first quarter bookings of $2.9 million were up by 297%, compared to the first quarter of 2022. The company's revenue in the first quarter of fiscal 2023 was $1.6 million, a decrease of $129,000 or 7.5% for the first quarter of 2022. The company's guidance for the full fiscal year of 2023 is revenues, which is expected to be in the range of $12 million to $13 million, representing year-over-year growth of 67% to 80%.

2. Quantum Computer Technology:

D-Wave Quantum Inc. is the only company in the world offering quantum annealing technology, which is a valuable technology for solving complex optimization problems. D-Wave's quantum solutions are used in logistics, financial services, drug discovery, materials sciences, scheduling, fault detection, mobility, and supply chain management. The company serves financial services, manufacturing/logistics, mobility, and life sciences/pharmaceuticals industries.

Overall, D-Wave Quantum Inc. reported positive momentum and traction with the commercial adoption of their quantum annealing technology during the 2023 1Q earnings call. The company's quantum computers are commercial today, which sets them apart from others in the industry that require heavy R&D investment for years to come. The company's gross margin is expected to expand with the general trend being towards a higher component of QCaaS. The company believes that D-Wave has the opportunity to be the first independent publicly held quantum computing company to achieve sustained profitability and to achieve this milestone with substantially less funding than required by any other independent publicly held quantum computing company.

Question and Answer

D-Wave Quantum Inc. held its 2023 1Q Earnings Call Transcript, where the company's CEO, Alan Baratz, and CFO, John Markovich, discussed the company's performance and future growth prospects. The company reported strong demand trends and bookings, with an increase in the average deal size due to customers recognizing the benefits of working with D-Wave's professional services organization. The company's sales cycle is starting to shorten, and there is a greater awareness of D-Wave's approach to quantum computing. The company's revenue recognition on professional services agreements tends to be more lumpy, but customers have been interested in combined agreements, which is a good direction for the company to be moving in. The company's renewals on its QCaaS business have historically been consistently in excess of 90%. The company's gross margin is expected to expand with the general trend being towards a higher component of QCaaS. The company closed the first tranche of the $50 million loan commitment, which gives the company a cash runway of approximately $24 million. The company is still early with respect to building out the channel, and the majority of its businessD-Wave Quantum Inc. reported positive momentum and traction with the commercial adoption of their quantum annealing technology during the 2023 1Q earnings call. The company's quantum computers are commercial today, which sets them apart from others in the industry that require heavy R&D investment for years to come. D-Wave's focus is on working with customers to move them to production and then upselling those customers. The sales team is very focused on helping to drive that upsell. The company has a heavy emphasis on helping customers evaluate their applications, develop proofs-of-concept, and start moving that into production. D-Wave's quantum solutions are used in logistics, financial services, drug discovery, materials sciences, scheduling, fault detection, mobility, and supply chain management. The company serves financial services, manufacturing/logistics, mobility, and life sciences/pharmaceuticals industries. D-Wave Quantum Inc. was founded in 1999 and is headquartered in Burnaby, Canada.