Today's News

Completed transaction with DPCM Capital, Inc. and began trading as a public company listed on the NYSE on August 8, 2022

Continued expansion of commercial footprint with over 55 commercial customers, representing a year-over-year increase of 44%, during the Second Quarter

Burnaby, BC, August 23, 2022--(T-Net)--D-Wave Quantum Inc., (NYSE: QBTS) 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 of its wholly-owned operating subsidiary, D-Wave Systems Inc., and a business update for its second quarter ended June 30, 2022.

Alan Baratz, Chief Executive Officer, D-Wave Systems Inc.

"We reported our first quarterly results as a public company. Since the beginning of the year, we have achieved a number of important milestones. In addition to successfully transitioning to a publicly listed company, in the face of a very challenging and volatile market, we continue to expand our customer base with over 95 total customers as of the end of the second quarter, over 55 of which were commercial organizations; launched an updated quantum-hybrid solver; expanded our Leap quantum cloud physical footprint into the United States and Europe; and provided our customers with access to a prototype of our Advantage2™ system, showcasing the power of our upcoming 6th generation quantum computer," said Alan Baratz, CEO of D-Wave.

"Our commercial momentum is propelled by the new use cases that we are developing with our customers, and we look forward to continuing to unlock the power of quantum-hybrid value for a growing number of use-cases in the coming months and years."

Recent Commercial / Business Highlights

• Announced a multi-year strategic alliance with Mastercard to develop quantum applications in areas such as consumer loyalty and rewards, cross border settlement, and fraud management
  
  
• Announced a number of new customers, including Forbes Global 2000 customers, to address quantum use cases across manufacturing, logistics, financial services, autonomous driving, and life sciences
  
  
• Continued expansion of commercial customer base, with 44% year-over-year increase in commercial customers, during the first half of 2022
  
  
• 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 began trading on the NYSE under the ticker symbol QBTS on August 8, 2022

Recent Technical Highlights

• Announced availability of the Advantage2™ experimental prototype, which is expected to become our sixth-generation quantum system. The prototype is designed to illustrate the power of the upcoming system, ultimately expected to feature 7,000+ qubits with a new design that enables 20-way connectivity and increased coherence
  
  
• Launched the CQM hybrid solver, allowing businesses to solve constrained quadratic optimization problems with continuous variables, expanding the types of use-cases that are able to benefit from quantum-hybrid solutions
  
  
• Expanded the Leap™ quantum cloud service footprint, with quantum computing systems now physically located in Canada, the United States, and Europe

Financial Results for the Second Quarter ended June 30, 2022

• Revenue for the second quarter of fiscal 2022 was $1,371,000, an increase of $234,000, or 21%, from $1,137,000 in the second quarter of fiscal 2021
  
  
• Gross profit for the second quarter of fiscal 2022 was $785,000, an increase of $96,000, or 14%, from $689,000 in the second quarter of fiscal 2021
  
  
• Operating expenses for the second quarter of fiscal 2022 were $12,770,000, an increase of $2,745,000, or 27%, from $10,025,000 in the second quarter of fiscal 2021
  
  
• Adjusted operating expenses1 for the second quarter of fiscal 2022 were $11,660,000, an increase of $2,167,000, or 23%, from $9,493,000 in the second quarter of fiscal 2021
  
  
• Net loss for the second quarter of fiscal 2022 was $13,198,000, or $0.12 per share, compared with $4,668,000, or $0.04 per share, in the second quarter of fiscal 2021
  
  
• Adjusted EBITDA (2) for the second quarter of fiscal 2022 was negative $10,835,000, a $2,031,000 or 23% increase, from negative $8,804,000 in the second quarter of fiscal 2021

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.

1. Adjusted operating expenses is a non-GAAP financial measure. For a description of adjusted operating expenses and a reconciliation to operating expenses, the closest comparable GAAP financial measure, refer to "Non-GAAP Financial Measures" below and the reconciliation table at the end of this release.
   
   
2. Adjusted EBITDA is a non-GAAP financial measure. For a description of Adjusted EBITDA and a reconciliation to net loss, the closest comparable GAAP financial measure, refer to "Non-GAAP Financial Measures" below and the reconciliation table at the end of this release.

Financial Results for the First Half of Fiscal Year 2022

• Revenue for the six months ended June 30, 2022 was $3,083,000, an increase of $537,000, or 21%, from $2,546,000 in the six months ended June 30, 2021
  
  
• During the first half of fiscal 2022, D-Wave had 56 commercial customers, an increase of 17, or 44%, from 39 commercial customers in the first half of fiscal 2021.
  
  
• During the first half of fiscal 2022, D-Wave had 97 total customers, an increase of 29, or 43%, from 68 total customers in the first half of fiscal 2021.
  
  
• Gross profit for the six months ended June 30, 2022 was $1,914,000, an increase of $114,000, or 6%, from $1,800,000 for the six months ended June 30, 2021
  
  
• Operating expenses for the first half of fiscal 2022 were $24,544,000, an increase of $4,443,000, or 22%, from $20,101,000 in the first half of fiscal 2021
  
  
• Adjusted operating expenses for the first half of fiscal 2022 were $22,319,000, an increase of $3,283,000, or 17%, from $19,036,000 in the first half of fiscal 2021
  
  
• Net loss for the six months ended June 30, 2022 was $24,815,000, or $0.22 per share, compared with $13,496,000, or $0.12 per share, in the six months ended June 30, 2021
  
  
• Adjusted EBITDA for the first half of fiscal 2022 was negative $20,325,000, an increase of $3,101,000, or 18%, from negative $17,224,000 for the first half of fiscal 2021

Committed Equity Facility

On June 16, 2022, D-Wave entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC. 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.

The Company issued 127,180 shares of common stock to Lincoln Park as consideration for Lincoln Park's commitment to purchase shares of Company common stock under the agreement. Further details have been provided in the Company's Form S-4 Registration Statement (as amended, the "Registration Statement") previously filed with the Securities and Exchange Commission.

Fiscal Year 2022 Outlook

Based on information available as of August 16, 2022, D-Wave is providing the following guidance for full year fiscal 2022:

• Revenue is expected to be in the range of $7.0 million to $9.0 million
• Adjusted EBITDA is expected to be less than negative $49 million1

1. 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.

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.