Core Viewpoint - D-Wave Quantum Inc. has experienced a significant stock price increase of 683% over the past year, leading to divided opinions among investors regarding its future potential and valuation [1][2]. Financial Performance - D-Wave reported first-quarter revenue of $15 million, marking a year-over-year increase of over 500%, primarily driven by the sale of a quantum computing system [5]. - The company achieved a GAAP gross profit of $13.9 million, a record for the company, with a gross margin of 92.5%, up from 67.3% in the same quarter of the previous year [7][8]. - Despite a net loss of $5.4 million for the first quarter, this represents an improvement of $11.9 million compared to the same quarter last year [7]. Market Position and Investor Sentiment - There is a split among investors, with bullish investors optimistic about D-Wave's technological advancements, while bearish investors express concerns about the company's ability to sustain profitability and market excitement [1][3]. - The company's customer base grew, but it still only had 133 customers at the end of the quarter, and bookings decreased by nearly two-thirds year-over-year to $1.6 million [11]. Analyst Ratings and Price Targets - Following the earnings report, analysts from Benchmark and Needham & Co. raised their price targets for D-Wave, with a consensus price target of $10.17, indicating a potential downside of 7.23% from the current price [12]. - D-Wave's stock price currently exceeds analyst predictions, suggesting limited short-term upside potential [12].

Company Overview - D-Wave Quantum Inc. currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [3][4] - The company has shown significant price increases, with shares up 40.2% over the past week and 52.71% over the past month [6] - Over the last quarter, shares have risen 68.29%, and over the past year, they have increased by 682.48% [7] Industry Comparison - The Zacks Internet - Software industry has only increased by 1.33% over the past week and 14.73% over the past month, indicating D-Wave's strong performance relative to its peers [6] - In comparison, the S&P 500 has moved -3.09% over the past quarter and 13.39% over the past year, further highlighting D-Wave's outperformance [7] Trading Volume - D-Wave's average 20-day trading volume is 43,378,424 shares, which is considered a bullish sign given the rising stock price [8] Earnings Outlook - Over the past two months, 2 earnings estimates for D-Wave have moved higher, while none have moved lower, resulting in an increase in the consensus estimate from -$0.25 to -$0.21 [10] - For the next fiscal year, 2 estimates have also moved upwards with no downward revisions [10] Conclusion - Considering the strong momentum indicators and positive earnings outlook, D-Wave Quantum Inc. is positioned as a promising investment opportunity [12]

Core Viewpoint - D-Wave Quantum Inc. is positioned for significant growth and potential profitability in the quantum computing sector, driven by impressive earnings results and technological advancements [1][2]. Financial Performance - D-Wave's first-quarter loss decreased to $5.4 million from $17.3 million year over year, indicating improved financial health [2] - Revenues for the first quarter reached $15 million, a 509% increase from $2.5 million a year earlier, surpassing analysts' expectations of $10.5 million [2] Technological Advancements - D-Wave set a new revenue record by selling a $12.2 million quantum computing system to Germany's Jülich Supercomputing Centre, demonstrating the practical superiority of quantum computing [3] - The Advantage2 system can solve complex problems in 20 minutes, a task that would take supercomputers nearly 1 million years, showcasing D-Wave's technological edge [4] Market Position and Growth Potential - D-Wave has a strong cash balance of $304.3 million and notable customers like NTT Docomo and Mastercard, positioning the company for future profitability and expansion [5] - The superconducting quantum chip market is expected to grow at a CAGR of 17.2% from 2025 to 2034, indicating a favorable market environment for D-Wave [7] Investment Outlook - D-Wave's reduced losses and record revenues suggest positive long-term prospects, making it an attractive investment opportunity [6] - The stock is currently trading above both the short-term 50-day moving average and long-term 200-day moving average, indicating a bullish trend [8]

Company Performance - D-Wave Quantum's stock surged by 40.2% for the week, reaching a peak increase of 47.8%, despite the S&P 500 and Nasdaq 100 experiencing declines of 0.5% and 0.2% respectively [1] - The company reported a record revenue of $15 million for Q1 2025, marking a 509% increase from $2.5 million in the same quarter of the previous year [2] - CEO Alan Baratz described the quarter as "arguably the most significant in D-Wave's history," emphasizing the achievement of "quantum supremacy" over classical computing for a real-world problem [3] Trade Environment - President Trump announced a trade deal outline with the U.K., which includes provisions for intellectual property protection that could benefit D-Wave [4] - Trump also expressed interest in reducing tariffs on China, which could lead to de-escalation of trade tensions and positively impact the economy [4] Industry Outlook - Despite the positive developments, the scope of D-Wave's demonstration of "quantum supremacy" is limited, indicating that significant economic benefits from quantum technology are still a long way off [6] - For investors with high risk tolerance, D-Wave is considered a strong option among quantum stocks, but diversification across multiple quantum companies is recommended due to uncertainty in long-term success [7]

Core Viewpoint - Needham analyst Quinn Bolton reiterated a Buy rating on D-Wave Quantum Inc. (QBTS) and raised the price forecast from $8.50 to $13, following a significant revenue increase reported by the company [1]. Financial Performance - D-Wave reported revenue of $15 million for the quarter ended March 31, representing a more than sixfold increase year-over-year [1]. - The gross margin for the Advantage system sales was 93.6%, significantly exceeding the Street estimate of 74.3%, indicating higher profitability from system sales compared to QCaaS revenue [3]. Key Developments - The sale of the Advantage quantum computing system to a major research institution was a primary driver of the revenue boost [1]. - D-Wave completed the installation of its Advantage2 system at Davidson in Alabama, showcasing its operational progress [4]. - The company is actively pursuing partnerships in the quantum blockchain space to enhance its go-to-market strategy, which could lead to substantial system sales opportunities [5]. Market Interest - There has been an increase in commercial interest following D-Wave's quantum supremacy demonstration last quarter, indicating growing market confidence in the company's technology [4]. - Ford Otosan is advancing its deployment into production, with plans for expansion across multiple factories, reflecting the practical application of D-Wave's technology [5]. Future Outlook - D-Wave's expanding technology portfolio and focus on practical, commercial use cases are expected to drive stronger customer adoption and revenue growth [6]. - Despite the positive developments, the company remains EBITDA-negative, suggesting that investors should anticipate ongoing dilutive financing rounds until it reaches EBITDA break-even [6].

Revenue and Income - Revenue for the three months ended March 31, 2025, increased by $12.5 million, or 509%, to $15.0 million compared to $2.5 million for the same period in 2024, primarily driven by system sales of $12.6 million[122]. - Other income increased by $1.0 million or 89%, reaching a net other income of $2.2 million for the three months ended March 31, 2025, compared to a net other expense of $1.1 million for the same period in 2024[131]. Net Loss and Expenses - Net loss for the three months ended March 31, 2025, was $5.4 million, a decrease of $11.9 million, or 69%, compared to a net loss of $17.3 million for the same period in 2024[121]. - Research and development expenses increased by $1.8 million, or 21%, to $10.3 million for the three months ended March 31, 2025, compared to $8.5 million for the same period in 2024[124]. - Sales and marketing expenses rose by $3.8 million, or 124%, to $6.9 million for the three months ended March 31, 2025, compared to $3.1 million for the same period in 2024[126]. - Total operating expenses increased by $6.0 million, or 31%, to $25.2 million for the three months ended March 31, 2025, compared to $19.2 million for the same period in 2024[121]. - Cost of revenue increased by $0.3 million, or 39%, to $1.1 million for the three months ended March 31, 2025, compared to $0.8 million for the same period in 2024, primarily due to system sales-related costs[123]. Cash Flow and Financing - Net cash used in operating activities was $19.3 million for the three months ended March 31, 2025, an increase of $7.2 million from $12.1 million for the same period in 2024[141]. - Net cash provided by financing activities was $145.6 million for the three months ended March 31, 2025, an increase of $146.3 million from $(0.7) million for the same period in 2024, primarily due to $146.1 million from the issuance of common stock under the $150M ATM[143]. - Net cash used in investing activities was $0.5 million for the three months ended March 31, 2025, a decrease of $0.7 million from $1.2 million for the same period in 2024[142]. - The Company entered into a new at-the-market sales agreement for up to $150.0 million on January 10, 2025, with net proceeds of $146.1 million received as of March 31, 2025[135]. Debt and Liabilities - The accumulated deficit as of March 31, 2025, was $632.4 million[107]. - Interest expense decreased by $0.9 million, or 80%, to $0.2 million for the three months ended March 31, 2025, compared to $1.1 million for the same period in 2024[127]. - The fair value of warrant liabilities decreased to $3.9 million for the three months ended March 31, 2025, compared to an increase of $2.7 million for the same period in 2024[130]. - The Company successfully repaid the entire Term Loan of $30.0 million and $4.3 million in accrued PIK interest on October 22, 2024[138]. - As of March 31, 2025, D-Wave had zero issuance capacity under both the $100M ATM and $75M ATM agreements[133][134]. Future Outlook - The company expects to continue incurring significant losses as it invests in research and development and various go-to-market initiatives[107]. - As of March 31, 2025, D-Wave had $37.8 million of issuance capacity under the Lincoln Park Purchase Agreement[132]. - The Company did not issue any Common Shares to Lincoln Park under the Purchase Agreement during the three months ended March 31, 2025[132]. Exchange Rate Impact - The effect of exchange rate changes on cash and cash equivalents was an increase of $0.5 million for the three months ended March 31, 2025[139].

Core Insights - D-Wave Quantum Inc (QBTS) and IONQ Inc (IONQ) reported smaller-than-expected losses and revenue beats for Q1, leading to significant stock price increases [1] - IONQ received a price-target increase from Morgan Stanley to $30, while Needham reduced its target to $50 [1] Company Performance - QBTS shares surged by 39.9% to $9.64, marking the highest level since late March and a year-over-year increase of 598% [2] - IONQ shares rose by 2.2% to $29.80, with a year-over-year gain of 239.3% [3] Technical Analysis - QBTS is bouncing off support from the 100-day moving average, aiming to end a three-day losing streak [2] - IONQ is approaching a long-term resistance level at $32, having reached its highest price since February [3] Options Activity - There is significant call option activity for both companies, with QBTS call volume at 16 times and IONQ at four times the intraday average [4] - The most popular call contract for QBTS is the May 10 call, while for IONQ it is the July 30 call [4]

Company Performance - D-Wave Quantum Inc. reported a quarterly loss of $0.02 per share, better than the Zacks Consensus Estimate of a loss of $0.05, and an improvement from a loss of $0.11 per share a year ago, representing an earnings surprise of 60% [1] - The company posted revenues of $15 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 38.05%, compared to revenues of $2.47 million in the same quarter last year [2] - Over the last four quarters, D-Wave Quantum has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Outlook - D-Wave Quantum shares have declined approximately 18% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.07 on revenues of $4.43 million, and for the current fiscal year, it is -$0.25 on revenues of $23.29 million [7] Industry Context - The Internet - Software industry, to which D-Wave Quantum belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]

Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $15 million for Q1 fiscal 2025, representing a 509% increase from $2.5 million in Q1 fiscal 2024 [21][24] - Non-GAAP gross profit reached a record $14 million, up 644% from $1.9 million in the same quarter last year [24] - The net loss for Q1 fiscal 2025 was $5.4 million, a significant reduction from a net loss of $17.3 million in Q1 fiscal 2024, marking the lowest quarterly loss since going public [24][26] - Adjusted EBITDA loss decreased by 53% to $6.1 million from $12.9 million year-over-year [24] Business Line Data and Key Metrics Changes - Bookings for Q1 were $1.6 million, down 64% from $4.5 million in Q1 fiscal 2024, with professional services bookings comprising over 50% of the total [22] - The company has 133 customers, including 69 commercial customers, with 36% being Forbes Global 2000 companies [23] Market Data and Key Metrics Changes - The company has seen a 153% increase in website traffic from October 2024 to March 2025, and media coverage increased by 803% from February to March 2025 [18] Company Strategy and Development Direction - The company aims to be the first independent publicly held quantum computing company to achieve sustained profitability with less funding than competitors [25] - The focus is on enhancing blockchain security and efficiency through quantum computing, with ongoing discussions for partnerships in this area [8][43] - The company is progressing on its product roadmap, targeting general availability of the Advantage 2 quantum computer by the end of the quarter [9][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's technology and commercial opportunities, highlighting the strong interest in quantum computing solutions [19][102] - The company is optimistic about the future, citing increased customer engagement and interest in quantum applications [19][102] Other Important Information - The Advantage 2 quantum computer has achieved significant technical milestones, including calibration of 4,400+ qubit processor chips and successful quantum error mitigation [9][10] - The company has completed the physical assembly of the Advantage 2 system at Davidson Technologies, with installation nearing completion [11] Q&A Session Summary Question: Clarification on Davidson Technology - Management clarified that the Davidson system is not part of previously mentioned system sales and is focused on developing applications for the US government [30][32] Question: Error Correction and Cryogenic Control - Management stated that the company is a leader in cryogenic control, operational today, while error correction for gate model systems is still under development [36][39] Question: Blockchain Application Partnerships - Management indicated that they are open to partnerships with organizations that specialize in blockchain, emphasizing the potential for enhancing security and efficiency [42][43] Question: System Sale Pricing and Pipeline Activity - Management noted that while the gross margin from the recent system sale is a good proxy, each deal will have unique elements [45][47] - The sales pipeline is healthy, with increased activity from larger organizations, although longer procurement processes are expected [50] Question: Revenue Per Customer Growth - Management observed that initial applications often lead to multiple opportunities, with larger companies engaging for proof of concept [60][62] Question: Future Profitability and Revenue Run Rate - Management did not provide specific revenue run rate estimates for achieving profitability but confirmed sufficient liquidity to reach that point [63]

D-Wave Quantum (QBTS) Q1 2025 Earnings Call May 08, 2025 08:00 AM ET Speaker0 Good morning, everyone, and welcome to D Wave's First Quarter of Fiscal Year twenty twenty five Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the floor over to Kevin Hunt of Investor Relations. Please go ahead. Speaker1 Thank you, and good morning. With me today are Doctor. Alan Barris, our Chief Executive Officer and John Hakavich, our Chief Financial Officer. Before we begin, I'd like t ...