D-Wave Reports Fiscal 2024 Third Quarter Financial Results

D-Wave Systems, a leader in quantum computing software and services, has reported its financial results for the third quarter of fiscal year 2024.

The company continues to innovate and expand its offerings, including its recent launch of a hybrid solver service that combines classical and quantum computing capabilities.

Third Quarter Fiscal 2024 Financial Highlights

•   Revenue: Revenue for the third quarter of fiscal 2024 was $1.9 million, a decrease of $0.7 million, or 27%, from the fiscal 2023 third-quarter revenue of $2.6 million.

◦   QCaaS revenue for the third quarter of fiscal 2024 was $1.6 million, an increase of $0.5 million, or 41%, from the fiscal 2023 third quarter QCaaS revenue of $1.1 million, with the rise principally due to a higher average revenue per customer for D-Wave’s QCaaS subscription services.

◦   Due to the timing of closing new professional services engagements, professional services revenue for the third quarter of fiscal 2024 was $0.3 million, a decrease of $1.0 million, or 80%, from the fiscal 2023 third quarter professional services revenue of $1.3 million. 

•   Bookings1: Bookings for the third quarter of fiscal 2024 were $2.3 million, a decrease of $0.6 million, or 22% from the fiscal 2023 third quarter Bookings of $2.9 million.
•   Customers: In comparing the most recent four quarters with the immediately preceding four quarters, D-Wave had:

◦   A total of 132 customers compared with a total of 125 customers;

◦   76 commercial customers compared with 75 commercial customers; and

◦   There are 27 Forbes Global 2000 customers, compared to 26 Forbes Global 2000 customers, constituting 36% of the total commercial customers.

•   Revenue by sector: In comparing the most recent four quarters with the immediately preceding four quarters:

◦   Revenue from government customers increased by $0.8 million, or 66%.

◦   Revenue from research customers increased by $0.6 million, or 47%.

◦   Revenue from commercial customers decreased by $0.2 million or 4%.

◦   Commercial revenue as a percentage of total revenue decreased from 70.1% to 59.2%, primarily due to the company’s increased focus on government and research customers.

•   GAAP Gross Profit: GAAP gross profit for the third quarter of fiscal 2024 was $1.0 million, a decrease of $0.5 million, or 32%, from the fiscal 2023 third-quarter gross profit of $1.5 million. The decrease was due primarily to lower professional services revenue that was partly offset by higher QCaaS revenue.
•   GAAP Gross Margin: GAAP gross margin for the third quarter of fiscal 2024 was 55.8%, a decrease of 3.9% from the fiscal 2023 third quarter GAAP gross margin of 59.7%.
•   Non-GAAP Gross Profit2: Non-GAAP gross profit for the third quarter of fiscal 2024 was $1.3 million, a decrease of $0.6 million, or 35%, from the fiscal 2023 third quarter Non-GAAP gross profit of $1.9 million. The difference between GAAP and Non-GAAP gross profit is limited to non-cash stock-based compensation and depreciation and amortization expenses that are excluded from the Non-GAAP gross profit.
•   Non-GAAP Gross Margin2: Non-GAAP gross margin for the third quarter of fiscal 2024 was 67.2%, a decrease of 8.4% from the fiscal 2023 third quarter Non-GAAP gross margin of 75.6%. The difference between GAAP and Non-GAAP gross margin is limited to non-cash stock-based compensation and depreciation and amortization expenses that are excluded from the Non-GAAP gross margin.
•   GAAP Operating Expenses: GAAP operating expenses for the third quarter of fiscal 2024 were $21.7 million, an increase of $1.8 million, or 9%, from the fiscal 2023 third quarter GAAP operating expenses of $19.9 million with the increase driven primarily by $1.3 million in third party professional fees and the balance by incremental investments in go-to-market personnel and related expenses. 
•   Non-GAAP Adjusted Operating Expenses2: Non-GAAP Adjusted Operating Expenses for the third quarter of fiscal 2024 were $15.1 million, an increase of $1.6 million, or 12% from the fiscal 2023 third quarter Non-GAAP adjusted operating expenses of $13.5 million, with the difference between GAAP and non-GAAP operating expenses being primarily non-cash stock-based compensation expense, non-recurring one-time expenses, and depreciation and amortization.
•   Net Loss: Net loss for the third quarter of fiscal 2024 was $22.7 million, an increase of $6.6 million, or 41% from the fiscal 2023 third quarter net loss of $16.1 million. Net loss per share for the third quarter of fiscal 2024 was $0.11 per share, a decrease of 0.01 from the fiscal 2023 third quarter net loss of $0.12 per share.
•   Adjusted EBITDA Loss2: Adjusted EBITDA loss for the third quarter of fiscal 2024 was $13.8 million, an increase of $2.2 million, or 19%, from the fiscal 2023 third quarter Adjusted EBITDA loss of $11.6 million with the increase due primarily to lower revenue and higher operating expenses that were principally related to the Company’s increased investment in its go-to-market organization.

Financial Results for the Nine Months of Fiscal Year 2024

•   Revenue: Revenue for the nine months ended September 30, 2024, was $6.5 million, an increase of $0.6 million, or 11%, from revenue of $5.9 million for the nine months ended September 30, 2023.

◦   QCaaS revenue for the nine months ended September 30, 2024 was $5.1 million, an increase of $1.8 million, or 52%, from QCaaS revenue of $3.3 million for the nine months ended September 30, 2023, with the increase principally due to a higher average revenue per customer for D-Wave’s QCaaS subscription services.

◦   As a result of the timing closing new professional services engagements, professional services revenue for the nine months ended September 30, 2024 was $1.3 million, a decrease of $0.9 million, or 42% from professional services revenue of $2.2 million for the nine months ended September 30, 2023.

•   Bookings1: Bookings for the nine months ended September 30, 2024, were $5.6 million, a decrease of $1.8 million, or 24%, from Bookings of $7.4 million for the nine months ended September 30, 2023.