D-Wave Quantum (QBTS)2024-11-14 21:29Revenue and Cost of Revenue - Revenue decreased by $0.7 million (27%) to $1.9 million for Q3 2024 compared to $2.6 million in Q3 2023, driven by a $1.1 million decrease in professional service revenue partially offset by a $0.5 million increase in QCaaS revenue[91] - Revenue increased by $0.7 million (11%) to $6.5 million for the nine months ended September 30, 2024, driven by a $1.7 million increase in QCaaS revenue[100] - Cost of revenue decreased by $0.2 million (20%) to $0.8 million for Q3 2024 compared to $1.0 million in Q3 2023, primarily due to a decrease in non-cash stock-based compensation[92] - Cost of revenue decreased by $0.8 million (24%) to $2.4 million for the nine months ended September 30, 2024, primarily due to reductions in non-cash stock-based compensation and personnel costs[101] Net Loss and Accumulated Deficit - Net loss increased by $6.6 million (41%) to $22.7 million for Q3 2024 compared to $16.1 million in Q3 2023[90] - The company had an accumulated deficit of $540.9 million as of September 30, 2024, with net cash outflows from operating activities of $44.7 million for the nine months ended September 30, 2024[111] Research and Development Expenses - Research and development expenses decreased by $0.8 million (8%) to $8.7 million for Q3 2024 compared to $9.5 million in Q3 2023, driven by decreases in stock-based compensation and fabrication costs[93] - Research and development expenses decreased by $4.4 million (15%) to $25.5 million for the nine months ended September 30, 2024, driven by lower stock-based compensation and personnel costs[102] General and Administrative Expenses - General and administrative expenses increased by $1.3 million (16%) to $9.3 million for Q3 2024 compared to $8.0 million in Q3 2023, primarily due to increases in professional services and credit losses[94] - General and administrative expenses decreased by $4.6 million (16%) to $24.3 million for the nine months ended September 30, 2024, primarily due to reductions in professional fees and stock-based compensation[103] Sales and Marketing Expenses - Sales and marketing expenses increased by $1.3 million (52%) to $3.8 million for Q3 2024 compared to $2.5 million in Q3 2023, driven by increases in personnel costs and stock-based compensation[95] - Sales and marketing expenses increased by $3.4 million (43%) to $11.2 million for the nine months ended September 30, 2024, driven by higher personnel costs and stock-based compensation[104] Interest Expense and Term Loan - Interest expense increased by $0.1 million (14%) to $1.2 million for Q3 2024 compared to $1.0 million in Q3 2023, primarily due to the Term Loan[96] - Interest expense increased by $1.7 million (91%) to $3.5 million for the nine months ended September 30, 2024, primarily due to the Term Loan[105] - The fair value of the Term Loan increased by $1.6 million for Q3 2024 compared to a decrease of $1.7 million in Q3 2023[97] - The fair value of the Term Loan increased by $0.6 million for the nine months ended September 30, 2024, compared to a decrease of $1.4 million in the same period in 2023[106] - Term Loan debt issuance costs decreased by $0.7 million for Q3 2024 compared to Q3 2023, as there were no advances on the Term Loan during Q3 2024[98] Other Income and Expenses - Gain on investment in marketable equity securities increased by $1.5 million for the nine months ended September 30, 2024, due to an acquisition of an investee[108] - Other income (expense), net increased by $1.8 million (5365%) to $1.8 million for the nine months ended September 30, 2024, driven by foreign exchange gains and higher interest income[110] Cash Flow and Liquidity - Net cash used in operating activities for the nine months ended September 30, 2024 was $44.7 million, a decrease of $1.3 million from $45.9 million in 2023[115] - Net cash used in investing activities for the nine months ended September 30, 2024 was $2.2 million, an increase of $2.0 million from $0.2 million in 2023[116] - Net cash provided by financing activities for the nine months ended September 30, 2024 was $34.9 million, a decrease of $57.5 million from $92.4 million in 2023[118] - Proceeds from the issuance of common stock pursuant to the ATM Agreement were $20.7 million for the nine months ended September 30, 2024[118] - The company's liquidity condition raises substantial doubt about its ability to continue as a going concern for one year from the issuance of the financial statements[113] - The decrease in noncash items was primarily due to a $5.6 million decrease in stock-based compensation and a $3.1 million decrease in non-cash interest expense[115] - The increase in cash used in investing activities was primarily due to a $1.0 million purchase of convertible notes and a $1.0 million increase in property and equipment purchases[116] - The decrease in cash provided by financing activities was primarily due to a $29.2 million decrease in proceeds from the issuance of common stock and a $29.0 million decrease in debt financing proceeds[118] - The company may need to obtain additional capital through debt or equity issuance if sufficient capital is not obtained from existing agreements[113] - The company's operating cash flows are significantly affected by research and development, sales and marketing, and general and administrative activities[115] QCaaS Revenue Expectations - The company expects QCaaS revenue as a percentage of total revenue to increase due to more QCaaS agreements driven by professional services engagements and direct Leap cloud service access[84]