D-Wave Quantum (QBTS) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q3 2024 totaled $1.9 million, a decrease of approximately$ 700,000 or 27% from Q3 2023 revenue of $2.6 million [24] - GAAP gross profit for Q3 was$ 1 million, a decrease of $500,000 or 32% from Q3 2023 gross profit of$ 1.5 million [30] - Net loss for Q3 was $22.7 million or$ 0.11 per share compared to a net loss of $16.1 million or$ 0.12 per share in Q3 2023 [33] - Adjusted EBITDA loss for Q3 was $13.8 million, an increase of$ 2.2 million or 19% compared to the adjusted EBITDA loss of $11.6 million in Q3 2023 [34] Business Line Data and Key Metrics Changes - QCaaS revenue for Q3 was$ 1.6 million, an increase of $500,000 or 41% from Q3 2023 QCaaS revenue of$ 1.1 million [24] - Professional services revenue for Q3 was $300,000, a decrease of$ 1 million or 80% from Q3 2023 professional services revenue of $1.3 million [25] - Bookings for Q3 totaled$ 2.3 million, a decrease of $600,000 or 22% compared to Q3 2023 bookings of$ 2.9 million [26] Market Data and Key Metrics Changes - Revenue from government customers increased by $800,000 or 66% compared to the previous four quarters [29] - Revenue from research customers increased by$ 600,000 or 47% compared to the previous four quarters [29] - Revenue from commercial customers decreased slightly by $200,000 or 4% compared to the previous four quarters [29] Company Strategy and Development Direction - The company is focused on expanding its go-to-market organization, having filled 11 positions across various regions [27] - D-Wave aims to be the first independent publicly held quantum computing company to achieve sustained profitability with less funding than competitors [41] - The company is exploring generative AI architectures that utilize quantum processing units for model training and inference [11] Management's Comments on Operating Environment and Future Outlook - Management noted increasing interest in quantum technology and believes that annealing quantum computing is critical for commercial adoption [7] - The company is optimistic about the potential for government funding through the re-authorization of the National Quantum Initiative [50] - Management highlighted the significant progress with NTT DOCOMO and the potential for increased QCaaS revenue as applications move into production [46] Other Important Information - D-Wave has been deemed awardable on the U.S. Department of Defense's Tradewinds buying platform, facilitating easier procurement of their products [17] - The company has nearly$ 30 million in cash and has paid off a $50 million secured term loan [22][41] - D-Wave's Leap quantum cloud service has consistently exceeded 99.9% availability over the past two years [12] Q&A Session Summary Question: Timing for NTT DOCOMO moving to production - Management confirmed that NTT DOCOMO is planning to move applications into production but has not disclosed a timeline [46] Question: Insights on government business momentum - Management noted significant interest from U.S. government agencies and highlighted the importance of being deemed awardable on the Tradewinds platform [51] Question: Impact of recent research on encryption from China - Management clarified that while the research is interesting, it does not pose a current threat to existing cryptographic systems [58] Question: Potential for government budget tightening - Management indicated that any potential budget tightening would likely impact gate model providers more than D-Wave, which has focused on commercial revenue [94]