D-Wave's loss widens in first earnings report after IPO

D.       Wave, a leader in the development and delivery of quantum computing systems, software and services, is the world's first commercial provider of quantum computers and the only company to build both annealing quantum computers and gate-model quantum computers.On August 16, the combined parent company officially announced the results of its wholly owned operating subsidiary, D-Wave Systems Inc. Systems) financial results for the second quarter ended June 30, 2022, and its business update.

 

Alan Baratz

 

"We are pleased to report our first quarter results since becoming a public company. Since the beginning of 2022, we have achieved a number of important milestones. In addition to our successful transition to a public company, we have expanded our customer base: totaling over 95 customers at the end of the second quarter, of which over 55 are commercial organizations; launched an updated quantum hybrid solver; expanded the scope of our Leap™ Quantum Cloud service to Europe and the U.S.; and provided customers with access to our Advantage2™ system prototype, demonstrating the upcoming launch of our sixth generation quantum computer," said Alan Baratz, CEO of D-Wave, "The new use cases we are developing with our customers are driving additional commercial development and look forward to continuing to unlock the value of quantum hybrid computing for an increasing number of use cases in the months/years ahead."

 

01Second Quarter Financial Results

 

Revenues of $1,371,000 for the second quarter of fiscal 2022, an increase of $234,000, or 21%, from $1,137,000 for the second quarter of fiscal 2021.

 

Gross profit of $785,000 for the second quarter of fiscal year 2022, an increase of $96,000, or 14%, from $689,000 for the second quarter of fiscal year 2021.

 

Operating expenses of $12.77 million for the second quarter of fiscal year 2022, an increase of $2.745 million, or 27%, from $10.025 million for the second quarter of fiscal year 2021.

 

Adjusted operating expenses of $11.66 million for the second quarter of fiscal year 2022, an increase of $2.167 million, or 23%, from $9.493 million for the second quarter of fiscal year 2021.

 

A net loss of $13.198 million, or $0.12 per share, for the second quarter of fiscal 2022, compared to a net loss of $4.668 million, or $0.04 per share, for the second quarter of fiscal 2021.

 

Adjusted EBITDA 2 for the second quarter of fiscal 2022 was -$10.835 million, an increase of $2.031 million, or 23%, compared to -$8.804 million in the second quarter of fiscal 2021.

 

Note: D-Wave stated that adjusted operating expenses and adjusted EBITDA (non-GAAP financial measures) are provided because it believes these measures improve investors' ability to assess underlying performance. Non-GAAP measures do not have any standardized meaning under GAAP and therefore may not be comparable to similar measures used by other companies.

 

02First Half Financial Results

 

Revenue for the six months ended June 30, 2022 was $3,083,000, an increase of $537,000 or 21% from $2,546,000 for the six months ended June 30, 2021.

 

56 commercial customers for D-Wave in the first half of fiscal year 2022, an increase of 17 or 44% from 39 commercial customers in the first half of fiscal year 2021.

 

97 customers for D-Wave in the first half of fiscal year 2022, an increase of 29, or 43%, from 68 customers in the first half of fiscal year 2021.

 

Gross profit of $1.914 million for the six months ended June 30, 2022, an increase of $114,000 or 6% from $1.8 million for the six months ended June 30, 2021.

 

Operating expenses of $24,544,000 for the first half of fiscal 2022, an increase of $4,443,000 or 22% from $20,001,000 for the first half of fiscal 2021.

 

Adjusted operating expenses of $22,319,000 for the first half of fiscal 2022, an increase of $3,283,000, or 17%, from $19,036,000 for the first half of fiscal 2021.

 

A net loss of $24.815 million, or $0.22 per share, for the six months ended June 30, 2022, compared to a net loss of $13.496 million, or $0.12 per share, for the six months ended June 30, 2021.

 

Adjusted EBITDA for the first half of fiscal 2022 was -$20.325 million, an increase of $3.101 million, or 18%, compared to -$17.224 million for the first half of fiscal 2021.

 

03Commercial/business highlights

 

Announced a multi-year strategic alliance with MasterCard to develop quantum applications in areas such as consumer loyalty and rewards, cross-border settlements and fraud management.

 

Announced multiple new customers, including Forbes Global 2000 corporate customers, to address quantum use cases in manufacturing, logistics, financial services, autonomous driving and life sciences.

 

Continued expansion of its commercial customer base in the first half of 2022, with 44% year-over-year growth in commercial customers.

 

Announced a new Board of Directors, led by Chairman Steven West and including CEO Alan Baratz, Roger Biscay, Amy Cappellanti-Wolf, Emil Michael, Michael Rogers and Eduard van Gelderen.

 

Completed a transaction with DPCM Capital and traded on the New York Stock Exchange on August 8 under the symbol QBTS.

 

04Technology Highlights

 

Launched the Advantage2™ experimental prototype, which is expected to be the sixth generation of D-Wave's quantum system. The prototype is designed to demonstrate the power of the upcoming system, which is ultimately expected to feature more than 7,000 quantum bits, with a new design that enables 20-way connectivity and improved coherence.

 

The introduction of a constrained quadratic model (CQM) hybrid solver, enabling companies to solve constrained quadratic optimization problems with continuous variables, expanding the types of use cases that can benefit from quantum hybrid solutions.

 

Expanded the scope of the Leap™ Quantum Cloud service, with quantum computing systems now located in Canada, the United States and Europe.

 

05Equity Financing

 

On June 16, 2022, D-Wave entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC (Lincoln Park). Under the agreement, the Company has the right, but not the obligation, to issue and sell up to $150 million of common stock to Lincoln Park over a three-year period, subject to certain restrictions and conditions. The Company issued 127,180 shares of its common stock to Lincoln Park in consideration for Lincoln Park's commitment to purchase the Company's common stock under the agreement.

 

06Fiscal Year 2022 Outlook

 

Based on information available as of August 16, 2022, D-Wave provides the following projections for the full year of fiscal year 2022.

 

Revenues expected to be in the range of $7 million to $9 million.

 

Adjusted EBITDA is expected to be less than negative $49 million.

 

Reference link：

https://ir.dwavesys.com/news/news-details/2022/D-Wave-Reports-Second-Quarter-and-First-Half-2022-Results-and-Provides-Business-Update/default.aspx