D-Wave Quantum Inc., (NYSE: QBTS) (“D-Wave” or the “Company”) a leader in quantum computing systems, software, and service, and the only provider building both annealing and gate-model quantum computers, today announced financial results for its third quarter ended September 30, 2022
BURNABY, British Columbia & PALO ALTO, Calif.--(BUSINESS WIRE)--Nov 10, 2022--
D-Wave Quantum Inc., (NYSE: QBTS) (“D-Wave” or the “Company”) a leader in quantum computing systems, software, and service, and the only provider building both annealing and gate-model quantum computers, today announced financial results for its third quarter ended September 30, 2022.
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“Our third quarter results reflect continued progress in our mission to help customers realize real value by using quantum computing for practical business applications, today. The era of commercialized quantum computing is here, and that is evident in the momentum we’re seeing in terms of our expanded customer footprint, accelerated application development, and revenue growth. With a 34% increase in the number of commercial customers year-to-date and a 30% increase in year-over-year quarterly revenue, it’s clear that customers are seeing the impact of our quantum-hybrid solutions in unlocking competitive advantage and fueling growth,” said Alan Baratz, CEO of D-Wave. “In addition, we remain laser focused on relentless product development and delivery. We’re advancing quantum innovation through continued progress on our gate model development efforts, launching solutions that solve important client needs like support for weighted constraints, and furthering the science as shown by our coherent annealing research results, which bring us one step closer to demonstrating practical quantum advantage.”
Recent Commercial / Business Highlights
Recent Technical Highlights
Financial Results for the Third Quarter ended September 30, 2022
We are providing adjusted operating expenses and Adjusted EBITDA as we believe these metrics improve investors’ ability to evaluate our underlying performance. Non-GAAP measures do not have any standardized meaning under GAAP, and therefore may not be comparable to similar measures employed by other companies.
Financial Results for the Nine Months of Fiscal Year 2022
Committed Equity Facility
As previously disclosed, 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 shares of its common stock to Lincoln Park, subject to certain limitations and satisfaction of certain conditions, over a 3-year period. Further details have been provided in the Company’s related Form S-1 Registration Statement and in the Company’s Form 10-Q for the quarter ended September 30, 2022, each filed with the Securities and Exchange Commission.
Based on information available as of November 10, 2022, D-Wave is maintaining its fiscal 2022 Revenue and Adjusted EBITDA guidance as follows:
We are not able to reconcile guidance for Adjusted EBITDA to its most directly comparable GAAP measure, net loss, and cannot provide an estimated range of net loss for such period without unreasonable efforts because certain items that impact net loss, including foreign exchange and stock-based compensation, are not within our control or cannot be reasonably predicted.
Third Quarter 2022 Conference Call
In conjunction with this announcement, D-Wave will host a conference call on Thursday, November 10, 2022, at 8:00 a.m. (Eastern Time), to discuss such financial results and its business outlook. The live dial-in number is 1-877-300-8521 (domestic) or 1-412-317-6026 (international), conference ID code 10171956. A live webcast and subsequent replay of the call will also be available on the “Investors” page of the Company’s website at: http://ir.dwavesys.com/.
About D-Wave Quantum Inc.
D-Wave is a leader in the development and delivery of quantum computing systems, software, and services, and is the world’s first commercial supplier of quantum computers—and the only company building both annealing quantum computers and gate-model quantum computers. Our mission is to unlock the power of quantum computing today to benefit business and society. We do this by delivering customer value with practical quantum applications for problems as diverse as logistics, artificial intelligence, materials sciences, drug discovery, scheduling, cybersecurity, fault detection, and financial modeling. D-Wave’s technology is being used by some of the world’s most advanced organizations, including NEC Corporation, Volkswagen, DENSO, Lockheed Martin, Forschungszentrum Jülich, University of Southern California, and Los Alamos National Laboratory.
Non-GAAP Financial Measures
To supplement the financial information presented in accordance with GAAP, we use non-GAAP measures of certain components of financial performance. Each of Adjusted EBITDA and adjusted operating expenses is a financial measure that is not required by or presented in accordance with GAAP. Management believes that this measure provides investors an additional meaningful method to evaluate certain aspects of such results period over period. Adjusted EBITDA is defined as net loss before interest expense, income tax expense (benefit), depreciation and amortization expense, stock-based compensation, remeasurements of liability-classified warrants, and other nonrecurring nonoperating income and expenses. We use Adjusted EBITDA to measure the operating performance of our business, excluding specifically identified items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations. Adjusted operating expenses is defined as operating expenses before depreciation and amortization expense and stock-based compensation expense. We use adjusted operating expenses to measure our operating expenses, excluding items we do not believe directly reflect our core operations. The presentation of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the financial results prepared in accordance with GAAP, and our presentation of non-GAAP measures may be different from non-GAAP measures used by other companies. For a reconciliation of each of Adjusted EBITDA and adjusted operating expenses to its most directly comparable GAAP measure, please refer to the reconciliations below.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. We caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, which are subject to a number of risks. Forward-looking statements in this press release include, but are not limited to, statements regarding the company’s future growth and innovations; the increased adoption of quantum computing solutions and expansion of related market opportunities and use cases and our customer base; and our expectations relating to revenue and Adjusted EBITDA for fiscal 2022. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward-looking statements are subject to a number of risks and uncertainties, including, among others, various factors beyond management’s control, including general economic conditions and other risks, our ability to expand our customer base and the customer adoption of our solutions, and the uncertainties and factors set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the registration statement on Form S-1 (SEC File No. 333-267124), initially filed by the Company with the SEC on August 29, 2022 and which was declared effective by the SEC on October 26, 2022, as well as factors associated with companies, such as D-Wave, that are engaged in the business of quantum computing, including anticipated trends, growth rates, and challenges in those businesses and in the markets in which they operate; the outcome of any legal proceedings that may be instituted against us; risks related to the performance of our business and the timing of expected business or financial milestones; unanticipated technological or project development challenges, including with respect to the cost and or timing thereof; the performance of the our products; the effects of competition on our business; the risk that we will need to raise additional capital to execute our business plan, which may not be available on acceptable terms or at all; the risk that we may never achieve or sustain profitability; the risk that we are unable to secure or protect our intellectual property; volatility in the price of our securities; and the risk that our securities will not maintain the listing on the NYSE. Furthermore, if the forward-looking statements contained in this press release prove to be inaccurate, the inaccuracy may be material. In addition, you are cautioned that past performance may not be indicative of future results. In light of the significant uncertainties in these forward-looking statements, you should not place undue reliance on these statements in making an investment decision or regard these statements as a representation or warranty by any person we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.
Condensed Consolidated Balance Sheets
(In thousands of U.S. dollars, except share and per share data)
Trade accounts receivable, net
Receivable research incentives
Prepaid expenses and other current assets
Property and equipment, net
Operating lease right-of-use assets
Liabilities and stockholders' (deficit) equity
Accrued expenses and other current liabilities
Current portion of operating lease liabilities
Deferred revenue, current
Promissory note - related party
Total current liabilities
Operating lease liabilities, net of current portion
Loans payable, noncurrent
Deferred revenue, noncurrent
Other noncurrent liabilities
Commitments and contingencies
Stockholders' (deficit) equity:
Non-redeemable convertible preferred stock*, no par value; nil shares and 122,564,333 shares authorized as of September 30, 2022 and December 31, 2021, respectively; nil shares and 122,564,333 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.
Common stock*, par value $0.0001 per share; 675,000,000 shares and unlimited shares authorized at September 30, 2022 and December 31, 2021, respectively; 110,377,357 shares and 2,817,498 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.
Additional paid-in capital
Accumulated other comprehensive loss
Total stockholders' (deficit) equity
Total liabilities and stockholders’ equity
* Shares of legacy non-redeemable convertible preferred stock and legacy common stock have been retroactively restated to give effect to the Business Combination.
Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three months ended September 30,
For the nine months ended September 30,
(In thousands, except share and per share data)
General and administrative
Other income (expense), net:
Gain on investment in marketable securities
Change in fair value of warrant liabilities
Net loss per share, basic and diluted
Weighted-average shares * used in computing net loss per share, basic and diluted
Foreign currency translation adjustment, net of tax
* Weighted-average shares have been retroactively restated to give effect to the Business Combination
Condensed consolidated statements of cash flows
Nine months ended September 30,
Cash flows from operating activities:
Adjustments to reconcile net loss to cash used in by operating activities:
Depreciation and amortization
Allowance for doubtful accounts
Amortization of operating right of use assets
Provision for excess and obsolete inventory
Non-cash interest expense on government payable
Venture loan interest and final payment fee
Change in fair value of public warrant liability
Change in fair value of private warrant liability
(Gain) loss on marketable securities
Unrealized foreign exchange loss (gain)
Change in operating assets and liabilities:
Trade accounts receivable
Research incentives receivable
Prepaid expenses and other current assets
Accrued expenses and other current liabilities
Deferred revenue, current
Current portion of long-term debt
Operating lease liability
Net cash used in operating activities
Cash flows from investing activities:
Purchase of property and equipment
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from issuance of common stock from the PIPE investment
Business Combination, net of redemption and transaction costs
Transaction costs paid directly by D-Wave Systems
Proceeds from exercise of public warrants
Proceeds from promissory note - related party
Proceeds from government assistance
Proceeds from issuance of common stock upon exercise of stock options
Proceeds from debt financing
Payment for directors and officers insurance
Venture loan interest and final payment fee
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Supplemental disclosure of noncash investing and financial activities:
Initial warrant liabilities recognized in connection with closing of Business Combination
Non-cash Business Combination financing
Issuance of shares for payment of ELOC commitment fee
Conversion of convertible preferred stock to common stock
—D-Wave Quantum Inc.
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
For the Three and Nine Months Ended September 30, 2022 and 2021
(In thousands) For the three months ended September 30, For the nine months ended September 30,
31,074Excluding: Depreciation and Amortization (1)
(1,127)Stock based compensation
(555)Non-recurring one time expenses (2)
- Non-GAAP Operating Expenses
29,392 (1) Depreciation and Amortization reflects the Depreciation and Amortization incorporated in the Operating Expenses only, which differs from the Total Depreciation and Amortization set forth in the Condensed consolidated statement of cash flows that also includes Depreciation and Amortization recorded in Cost of Revenue. (2) Non-recurring one time expenses related to legal, consulting, and accounting fees associated with the August 5, 2022 Business Combination. D-Wave Quantum Inc.
Reconciliation of Net Loss to Adjusted EBITDA
For the Three and Nine Months Ended September 30, 2022 and 2021
(In thousands) For the three months ended September 30, For the nine months ended September 30,
(17,705)Excluding: Depreciation and Amortization
1,135Stock based compensation
590Government assistance (2)
(9,146)Gain on investment in marketable securities
(1,164)Other Income (expense), net (3)
(669)Change in fair value of warrant liabilities
- Non-recurring one time expenses (4)
(26,404) (1) Interest expense primarily reflects the accrued interest associated with the below market interest rate government loans as if they were interest-bearing at market rates of interest, and the interest and amortization of the final fee associated with the Venture Loan with PSPIB Unitas Investments II Inc. that was entered into on March 3, 2022. (2) Government Assistance reflects the imputed benefit arising from the difference between the market rate of interest and the rate of interest charged on the government loans. (3) Other Income (expense), net consists primarily of foreign exchange gains and losses, and it is included in the above table to facilitate the reconciliation of Adjusted EBITDA to Net loss. (4) Non-recurring one time expenses related to legal, consulting, and accounting fees associated with the August 5, 2022 Business Combination.
CONTACT: Investor Contact:
ir@dwavesys.comMedia Contact:
KEYWORD: UNITED STATES NORTH AMERICA CANADA CALIFORNIA
INDUSTRY KEYWORD: SOFTWARE TECHNOLOGY OTHER TECHNOLOGY
SOURCE: D-Wave Quantum Inc.
Copyright Business Wire 2022.
PUB: 11/10/2022 07:00 AM/DISC: 11/10/2022 07:02 AM
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