QBTS - Earnings call transcript Q2 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the D-Wave Second Quarter 2024 Earnings Call. [Operator Instructions] This call is being recorded on Thursday, August 8, 2024. I would now like to turn the conference over to Kevin Hunt from Investor Relations. Please go ahead.

Unknown Executive

Thank you, and good morning. Dr. are today me With Alan Baratz, Chief John our Officer; Chief Officer. Executive Financial and Markovich, our

Before would should begin, our periodic may conjunction we SEC I cautionary earnings contain this everyone with company's forward-looking call release that report. and statements most contained and statements be the in like considered in to recent remind

non-GAAP are GAAP is financial measures adjusted During to management will such constitute also Relations website expenses, operational and and included the financial now in SEC I loss today's certain today's Reconciliations provide section which call rules, additional hand release, will and www.dwavequantum.com. non-GAAP our call, the to company's measures non-GAAP as gross information at adjusted Alan. earnings EBITDA profit, gross Investor of non-GAAP operating certain in information margin, available will under bookings. that over

Alan Baratz

here thank morning, single across waking to and business the our market QX excited everyone, joining to fact up commercial Good positive I'm you computing continue is is and believe us quantum and D-Wave world today. for that is this research customers. now, government the quantum it's We that outcomes driving single-handedly, said share I've business. we our The handedly see with you annealing creating results commercial, to before, measurable for and computing. as the momentum for

it wrote used who and for in may dealer our be some illustrate I and is solving the recently West, me momentum "Because problem Let type and that of quantum problems, Heather solve. the from with argue optimization quote built that the Quantum's limited analyst can quote, a specifically to is quantum dealer D-Wave IDC

analyst, the most future. to and all users Hence, that IDC interested found are using Heather problems value that's technology provides all in are both prevalent Again, gain industries. problems into for an end optimization the point West. business quantum access today However, computing one from D-Wave quantum's in of

two, So of solutions of its the growing vehicle like business recognition resource quantum D-Wave and one, quantum scheduling, realization allocation; computing deliver rapidly and in to: these X applications and breakthroughs can material results optimize value a annealing workforce including and annealing routing there areas and is from streamline that research areas potential or unique science. And computing processes, growing today, now, in there's years important fuel but today. X not like

conferences technologies the For example, invited we're engage of to increase government future. of in annealing in being with better and technology scientific the personnel today also increasing and and government We're seeing its computing third-party computing quantum an quantum of to highlighting number understanding an a capabilities. meetings provide capabilities our papers in

private commercial-grade need hearing We that with the and accelerated Lastly, right vendor we the Customers quantum map for with solutions starting business adoption. more pain road solve problems from steep work that huge and services like quantum learning. AI, have today. indicated quantum public are AI to real, the has computing sectors tried to more we're they've customers quantum provide at abysmal that a now. that believe machine solutions, reliability other and advancements. product systems real-world, points service from able only and incorporate vendors but lead Last availability and block technical needed and key development the highlights, the D-Wave, scalable both extends D-Wave from commercial that production-grade walk and now to is and few a to week, cloud product Quantum to through I'd large-scale announced D-Wave's

in AI training broader accurate business industry integration optimization. and opening growing the Our direct ML response amount efforts of require customers new and and to of needed cases that effort set growing satisfy compute a efficient use costs the on AI including is will demand computing cases rapidly AI energy is This to crunch. workloads, pretraining of is ML a associated The more confronting focus as and use AI, and our the from escalating. business address helping model customers optimization,

optimization annealing importantly, Our faster, leverage energy-efficient PlanmAi transformative. achieve quantum more solutions computing's AI ML could to to be ability aim help to benefit our could massive, to problems for be opportunity The and and solutions. solve and cheaper customers customers better, more D-Wave the

expansion significant partnership the Zapata commercial of AI. part with map recently initiative, announced AI Quantum product we As to road a our

The our quantum, D-Wave's and joint and strategy. accelerate work overall AI model solutions. extended software and development of piece is quantum and D-Wave's pure universal more training, agreement development Our improved quantum will models important service of builds cloud AI development cloud generative AI and Together, leverages to delivery on focus platform. hybrid support expanded the AI collaboration quantum, to is It performant Pods rapid on integrated Leap classical LEAP in the the designed optimization. generative an generative solutions use AI real-time Quantum even of and and energy-efficient our synergistic quantum more for

and team will business, computer This system was mark the in the fourth Alabama using will is partnership from significance Davidson side system I just to that sensitive government. U.S. the housed collaborate toward security. important placing the technology. we an especially our advantage be of that agencies, this his will We're on a the headquarters quantum production computing applications secure in We're system Service. Huntsville, run to Defense at making This product. quantum our thrilled that event, of Dale LEAP facility among our reside we government the in as in actually in development especially placement, areas a accelerate quantum Cloud second eventually Moore and in of The U.S. X progress national we our delivering system Davidson are Cuban adoption could On X,XXX-plus Quantum with with computer noteworthy Alabama. also the shared path the Technologies' Davidson advantage talking the Missile about Space quantum at Symposium the down global new in

completion is use earlier which LEAP available are launch processor Qubit X,XXX-plus in Service. of customer our a We nearing Qubit year, XXXX-plus AdvantageX the Quantum this for the following calibrating AdvantageX of Cloud prototype now

also furthering highlight help protocols few on development perform and of I'll customers quantum are that our expanded QPUs. our new computations should We examples. richer a ongoing control

The first Fastenal. is

As have submitted thermal quantum has discussed hinder of reducing during problems such X.X we impact use speeds, April. our quantum QX thereby perform feature at Fastenal using call, calculations. that million in our Tell as Customer unprecedented disturbances the now as they been feature. can powerful external as fluctuations this new incredible earnings response introduced if computations

and By performance of extend iterative and are protocols across control exciting longer signature of inequality means development cyclic a coherent potentially multiple regime protocols, system from annealing able been QPUs. is we would This novel underway. could widely annealing the fabric that We result of inequality, work in provide of second in is Bell's Research violation that QPU the quantum is final benefits Truly same have to much The which happening violation. leveraging Bell coherent annealing. recognized sins. the behavior could the our here. The show a cyclic is cycles.

important enables arbitrary and opens are such state processing read both We bases quantum the same This digital us architectures. expectations Qubit AI analog applications and or annealing to as to Qubit new process. computing fabric for analyze distributions produce and midway up explore protocols metric and in potentially quantum opportunities able through the targeted generative in out

up solver Now X size growing problem real-world turning represents increase million We of to This quantum enables problems new D-Wave customers applications. tenfold to in a program over tackle nonlinear supporting new complexity, for software. launched hybrid and in solver which variables other solvers constraints, certain capacity June. to a

addressing flow offerings, These were of Qubit We shock of of expanding User we introduced also the introduced built The announced in part hybrid with vehicle growth and routing at solver applications our scheduling. new this commercial quantum optimization strategy earlier year. aggressive our new set Conference go-to-market hybrid supporting June. that demos is new this solver annual

to our gate IBM patent XXX world and more patents During annealing D-Wave largest model patent over is issued extensive only covering XX% quantum-computing Google. totaling both and in expand portfolio, the the continued also third portfolio portfolio as the quarter, technologies. patents of patent U.S. our ranked with behind than we

our of solve more energy and commercial see, helps even gears with in that are are product better, not of rather problems focused discuss that customers switch customer that a delivering ways XXX% on value. solutions momentum. sake, costly providing less and you complexity technology new speaking customers, So let's greater It's can development efficient. development, busy and as remarkably been faster, And but innovation we've for innovation's

marked constituting companies revenue. customer and up went X to with XXXX consecutive quarter Forbes bookings customers we commercial in the count XX% the most second growth of commercial bookings. comparing XXX customers preceding Our total year-over-year quarterly and quarter our of XXXX to quarters, ninth from XXX. recent customers, rose XX X quarters In total Global immediately of -- XX XX, from counted as XX% our

wide quantum We shop customers with are on of optimization and applications, wrap. including scheduling range vehicle working body a

of a examples. couple me highlight Let

production compared per a Ford Turkey have Ford solution Holding. using a able was current vehicle schedule that owned we generate process. we for to shop. in minutes to minutes with maximizes that in automotive by schedule under XX is body vehicles built Together, to sequencing working First, application based Catch X manufacturing are Quantum the Optimization X,XXX room their The Otosan, an equally Motor company and Company

network of emissions. a the Hermes logistics we've working projects All can service time, better understand Optimization Optimization our project set the Quantum strategy a are terms XX vehicle leading Quantum throughout is in explore very Quantum previously right and problems. routes of with Germany. sweet chain trucks route routing spot optimize Germany, logistics. provider from to up, you The a a with exciting Basel, these about and parcel focus Germany spanning Next ability to COX to us supply see, partner, shops on as this of manufacturing our aims in falls quantum's depots And verticalization talked and in to diverse to XX,XXX distance of application

their are Unisys by than quantum impact was community. interest The stories stage more. XXX fittingly included live and was successes XX of what with year's of the powered and Mastercard, countries This quantum building Quantum excitement energy June. organizations our participation Basel, see Los by ecosystem attendees and technology. our Just and participated D-Wave XXth theme we Cubic of from excited in attendees organizations as success the group turnout D-Wave virtually, inspired supporters. representing This industry's their in sharing for we National was using SaaS, Technologies, exciting in for real-world an or conference an quantum quantum are user incredible palpable Davidson Alamos computing computing, these More to annealing quantum, XXX Lab, D-Wave on and impressive Depatie, expressing

of reading race. smoking story Tortoise reimagined dramatic I my turtle winning Hare jacket as shared measured version and of the a as I the the think serving quantum equally D-Wave the done everyone was inspired by and unflappable the of

If haven't on check my Qubit's keynote YouTube. it, seen out you

we awareness all. our government the So clearly are witnessing similar sector. seeing and commercial solutions in sector. in in the We're But also that's traction not growing interest

saw and as This to can annealing and address government and applications support an a encompass technologies. public critical quarter, build sector number security government sector major public that showcase the to of D-Wave we companies Policymakers interest expand quantum programs national computing uptick applications continue organizations for to that well service as challenges. near-term quantum-classical in from quantum

technologies beginning like programs, exploring of intersection establishing tested Additionally, quantum Congress move policy, emerging with to AI which the computing. is other supports

adoption XX%. by the wanted We workers movement course sign another I XX% growth in call Enrollment technology. in through foundations technology. and interest seen period financials in with of XXXX. that John XXXX forces increased specifically will our months quantum there items to same train underscores for for are the enrollments double-digit Let core D-Wave in X compared this highlight growing in increasing first computing of me increased quantum quantum enrollment X the training the our to keep increasing a financial-related and the core but for you by of programming We've programming combined quantum our just plus to out. a walk pace to global believe rapidly minute,

First, D-Wave XXXX Index. has joined the Russell

As for you investment by know, all institutional indexes investment investors managers benchmarks and strategies. for Russell index and as used active are funds

the quarter quarter to global Our this to are increase cash, than in pleased company's is history. we And market. share we quantum review an clamoring the sector more John? With That and greatly and John second, products. bringing in Customers and position. call innovative innovations half these community customer a honor, It's in $XX of highest is among XXXX product adoption public group evident impressive a our hand we new second inclusion provide one solutions the operations. quarter-end been for the traction, will the that that, ended to our cash these results. solid government in of solutions and interest are put I'll their visibility commercial balances investor are use in with million with first to market of to to quarter over appetite

John Markovich

measures evaluate and as that well in million. ability non-GAAP non-GAAP X% D-Wave's would several adjusted believe participate time review These highlight respect second-quarter undergoing as and D-Wave on focus X as the you, and results, Thank EBITDA Alan, approximately bookings year-over-year new to of who leveling, with go-to-market which One, sales are up of logistics second in approximately and $X.X of from with quarter $XXX,XXX Officer to $X.X my quarterly of you everyone the our bookings in currently half XXXX X entire optimization, the metrics, represents noteworthy nonrecurring organization part, thank focused for bookings. gross expenses to organization an press a vertical these to had quarter today's AI, or aligning In non-GAAP including underlying fiscal financial improve Lorenzo involved consecutive the call. quarter noncash government developments our the second for increase XXXX margins, totaled investors' non-GAAP We $X.X adjusted earnings financial operating XXXX Revenue impact near-term gross for the expenses. million million. I sales providing to $X.X profits, including metrics, the are intimately fiscal bookings expanding of operating bottom organization with or quarter bookings expertise The specific metrics, taking metrics and performance. second focus increase be and chain totaled first of manufacturing, of losses. will defined There well quantum of non-GAAP second is million, second-quarter on I the today's sales and as from of operating quarter of non-GAAP of a leadership the of XX% at organizational infrastructure. for the on Martinelli, most Bookings $X.X the productivity. growth with capabilities an transformation that million size our second categories: has quarter revenue encompasses trend. $XXX,XXX ninth and in release tables under adjusting bookings months like been with research the market ago. has market was the the sales as the organizations, supply Lorenzo Chief some joined Revenue The our

transformation year. on planning this the are of completing end We this by

and with XX% $X.X of second of QCAS recognized the the be in XX to a quarter, relationship, the of in half of shifting from Second, our and changed increased to as follows: XX% backlog our sight end XX XX% the and whereas an the backlog of XXXX periods. $X.X backlog line expected thereafter. the of the X has higher-margin months incrementally the the Furthermore, and revenue of of the backlog XX% trended QCAS by of was quarter longer-term, our between the as backlog as December, -- XX% million to million larger, the thereafter, the of recognized to of XX, the composition revenue revenue greater Between June months to following towards million as percentage was $X of historical of revenue be following expected year end or the first increased bookings that contracts bookings recent end has year revenue future the in gross revenues fourth margins. the providing composition

disclosure comparing XXX, Our across recent XXX broaden customers Global with revenue will of and XXX total had our with for financial in customers. Global the to can of most compared of With that performance compared commercial close second remaining in obligations market preceding immediately including with footnote found customers government In forth commercial diversify customers X a XX quarter our customers. a the set number with research the three, base continue to backlog the be be we XX-Q XXXX SEC respect after with the X customers, customer the statements today. customers, commercial, filed XX commercial quarters, compared quarters total customers with XX and D-Wave the XXXX Form

non-GAAP XXXX XX.X% most revenue or quarter gross of With With operating noncash immediately depreciation gross the customers of of profit constituting of $X profit that increase and Group. XX.X% And to Several and increase constituting revenue expenses Global the non-GAAP XX% million, X quarter between profit as customers $XXX,XXX GAAP Forbes respect quarter difference improvement these increase increase Interpublic fiscal margin Cash operating relatively $XXX,XXX, XX% of from compensation margin customers traction was and gross number XX% Non-GAAP second respect revenue non-GAAP approximately revenue gross fiscal customers, million, increased GAAP the from quarter preceding excluded increased the of last of the by second Forbes the include gross at are remained again, Forbes or quarters. profit We versus for million, increased was from X the revenue in $XXX,XXX for Corporation limited second -- to gross with non-GAAP of gross the second in due profit an gross increased over Holdings, XXXX XXXX Forbes $X.X for due with profit. XXXX of and and of approximately and of with comparing total VINCI, Commercial the The customers, quarters, X total of percentage in Global the million. growth approximately efficiencies. gross consolidated the the commercial XX% XX.X%, customers improvement XX.X%. approximately these profit revenue. GAAP With is the primarily quarter quarter second Bridgestone Global $XXX,XXX an from MasterCard, the an XX.X%, with from or $X.X gross XXXX XXXX XX% Global was the second flat margin. approximately XX% of the and second revenue in of in gross quarters efficiencies. an of the primarily expenses non-GAAP that GAAP services quarter XXXX million, approximately of GAAP a XXXX respect XX% operating to margin $XXX,XXX were fiscal was from growth second expense, by of $XXX,XXX GAAP fiscal commercial the NEC, $X.X noncash or total gross improvement decrease primarily per recent to partially stock-based from million XX.X%. difference $X.X in GAAP XXXX, the increase the margin the quarter for commercial and With loss approximately expenses decrease The and quarter million decrease of operating nonrecurring offset the operating stock-based or partially second $XX.X company's $XXX,XXX million from decrease share. the adjusted of million, quarter quarter in second profit by increase expenses. of $XXX,XXX million $XX.X with million adjusted XXXX fiscal or net higher an or of professional a was non-GAAP the on XXXX, X% the expenses primarily loss compensation adjusted net second the million, the reflects activities expenses. a EBITDA and second of operating gross approximately with loss in services, the quarter the second $X.XX a expenses XXXX insurance, $X.XX expenses of the improvement was or $X approximately by or from the Non-GAAP of by of of in of million, driven fiscal quarter of second and a with $X.XX third-party management, Again, GAAP EBITDA in were $XXX,XXX marketing third-party an offset X% $XX.X continued share, second expense share expenses. operating driven improvement operating an fiscal gross $XXX,XXX loss X% expenses. non-GAAP a to decline focus Adjusted $XX.X in of $XX.X non-cash quarter quarter by lower depreciation in of $XX.X expenses compensation margin $X.X million is marketing of between of or and for for $X.X $XX.X quarter per adjusted million primarily with of XX.X%. expenses expenses, million, professional $XXX,XXX approximately fiscal combination decreases the operating for fabrication stock-based driven $XX.X in for operating related second by

or of of in increase in revenue million fiscal operating first for profit XX.X% of increased The margin profit due $X.X the X XXXX. With months XX.X% million June in half the Now decrease months fiscal gross operating address revenue of respect difference for non-GAAP XXXX, are the of loss $X.X gross XX.X% operating million first with million of for services. fiscal and primarily higher of X XXXX that compensation between share of services. noncash particularly the half was of the compensation margin profit to of million increase primarily GAAP months for the the million of performance first months June an increase $X.XX was operating limited of reduced XXXX. was expense months million, XX% first margin efficiencies. the revenue increase the or increase half in million, loss $X.X XXXX. from $X.X in XX, loss Net months 'XX of expenses, first-half an $X.X was third-party the or to XX% from totaled gross profit of driven the of fiscal gross million. $XX.X million non-GAAP for margin operating first the an XXXX million margins, million in XX.X%, $X.X a an EBITDA professional stock-based million the half XX% growth XX% fiscal XXXX, million fiscal and primarily XX% months gross of first gross expenses $X from operating half an were first increase GAAP of with compared to of revenue XXXX. third-party to XX%, for GAAP increase the a million half $X $X.X profit Non-GAAP in excluded $X.X from $X.X and XX, first from Adjusted Bookings share the is months growth of stock-based was and million, for the first half GAAP or GAAP of $X.X the non-GAAP $XX.X GAAP of XX, million and in June GAAP million, XXXX, of non-GAAP X or to million efficiencies. profit will of fiscal for June first to bookings fiscal gross operating XXXX X $XX.X by $XX.X respect non-GAAP XXXX D-Wave's margin. and first from from was in expense $XX.X X adjusted million, million, XXXX, ended were gross $X.X the fiscal increased year-over-year expenses XXXX the XXXX, due noncash the the or X per of or with ended first an primarily half $XX.X for of from the or with XX, million with half of with gross the the expenses, X With in the first increase per the XXXX, from XX% June gross the and XX.X% in ended of non-GAAP the the expenses profit fiscal decrease the million months fiscal first million X I X to The gross the XXXX year-earlier professional XXXX. The $X.XX EBITDA or an depreciation $X.X of ended from net expenses the XXXX. for in XXX% $X fiscal of XX, half ended was $X.X due respect half of $XX.X loss million, $X.X decrease a decrease for operating operating the adjusted adjusted improvement $XX.X in and

balance address sheet will liquidity. we Now and

XXXX, $X.X this the an D-Wave's the cash SX million. $XXX of D-Wave's increase SEC. consolidated with Lincoln balance On affected equity April was year, $XX.X shelf year-earlier registration of XX, Capital the quarter statement cash statement also million that $XX.X line credit same of SX or from of million As June by effective. deemed date, registration XX totaled second balance On Fund, of went million, company's Park XXX%

under available is $XXX XXXX. of used million was As per of of the a having D-Wave the the price $X effective of XX, to a including above investment company of program. of through SX registered additional date, million D-Wave's running issuance million shares equity registration and -- We share. ability the line line May conditions, to equity credit a statement being for under funds credit the under number stock issuance equity number as the had credit. in of subject capacity capacity $XX.X in October D-Wave raise line partially commitment available On the with June XX, had at-the-market XXXX, stock sufficient $XX.X

of As and a issuance total stock and D-Wave additional a in had capacity June $XX.X end Subsequent shelf $XX.X issuance loan today. of as to well basis the common totaling unallocated ATM second XX, the with D-Wave million an the a $XX quarter, balance XXXX, paying down under in the payments under of million with $XXX.X on million ATM leaving of began capacity million, combined as of as of million the had the under registration term capacity PSP loan statement. SX IB $XX.X about approximately ELOC investments units

release. Fourth full our XXXX XXXX press earnings forth are set and March guidance We fiscal the reiterating financial quarter XX, XXXX, year in full-year

than that is the $XX.X as fiscal to achieve -- loss D-Wave milestone subject the expect fiscal have the other factors Based information year be call the XXXX by stated, for held quantum we of follows: and opportunity less believe will on publicly conclude, To questions. XXXX the to to profitability we has for various this company. publicly adjusted Our held August described -- computing as previously EBITDA to funding that, million. below. sustained the on guidance with required loss less than cautionary to quantum be any adjusted EBITDA achieve open With computing company is we available XXXX, full XXXX the we guidance now independent independent first X, substantially

Operator

we you One the questions, gentlemen, question more Riley Your will B. first question... you. If for moment, and Securities. have from first Ellis please Thank please, Instructions] from Gap] Ladies rejoin [Audio begin session. Craig now [Operator the of line is the question-and-answer queue. your

Craig Ellis

And that the mind what timing that's milestones Zapata go or Russell the strengths well what the of path? agreement commercial as AI the partnership the made Nice with on as understand the road should been keep follow-up technical to the start just on to company? of are joining for broadening you you we in guys, congratulations And to better wanted point to the map see. commercial really that a progress the XXXX, of observe mean Alan, progress engagements some since and one I development as and and down

Alan Baratz

to but million at end over for question. earlier, properly, $XX it as number. need a Craig, was although the question, our $XX the it million. misstatement made have that I correct correct little million, answer before $XX second that Thanks, the is I may misstated cash of the think said I a the Actually, quarter I Sure. John balance I

are more that use optimization often good chain so The just I that. to in latter learning us AI with machine and the can, I Optimization predictive, the Quantum and example question, to b, at products optimize So we that future some more your Craig, and AI machine their demand. help could period to support our With of then customers for AI of capabilities. of how is initiatives; use so improve to to combine over demand like a, being supply is predict you respect wanted asking our learning correct

third, build actually rather develop that machine got that get some some and model classical a on today. has be more our and as companies our models learning. start machine So doing which a thinking GPUs, models quantum starting to requests, can we machine of because said, One what is X research all train computers to customers doing then, customer software work with And AI distributions; energy less consumption quantum we Zapata used areas. we X Optimization. bring of course, in based learning some based areas. areas really some could customers, to are training that AI each we've in some the leading been we've our talked I Triumph, doing And quantum are models in we models as training. together leverage to well as with have is work we've that be by learning other in two, successful Quantum these leveraging actually customers been which AI much in to of scientific as early better this on efficient exclusively integration of on about with accurate much that those the can is these that And for had to points And pretty than how decision help AI ourselves then compared we we AI distributions those demonstrate and of quick very used energy are our with fact help proof realize opportunities through Canada started

more that AI better enable service Quantum capability with classically a, can for cloud even as the Optimization if to as doing learning, what training integrating Leaf machine integrated learning And but just the with that service, not essentially, able is, also to only computations cloud constitute our capability. Optimization support be for of kind quantum start, b, then possible, AI the model machine to in our so roadmap So models. actually to the Quantum Quantum training finally, of customers lead leverage GPU computers model the enhancing soon then leveraging deliver

we out focused on our how are customers LEAP supporting essentially that's Cloud our through and service. capabilities rolling So

Craig Ellis

makes then, the cycle John, back and the it on get sense. lot there, on I you bookings wanted numbers provided. math a point Alan that make based sure Yes, just to and and I bookings to the

X the forward bookings, the like million to but a sounds low it in bookings. XX-month with difference. sustained We've So duration got increase visibility

visibility looks today So $X.XXX up versus billion beyond $X with we is it's the X.Xx about up months where that of forward million ago months that like that Is XX months. correct? about visibility versus ago. But are $X X million X math

John Markovich

of and The the million to compare of remaining that a end end fourth of quarter. the of obligations the I numbers $X as was Craig, I as of earlier, referenced $X.X, performance June

composition we'll this bookings. question? today. changed So as the detail answer that result significantly of QCAS that the bookings a And queue out Does out broken and your in sort later file longer-term $X.X increase, in million broken of of is a but this great the rather

Craig Ellis

Yes my is sounds but math like does, right. It it

Given hear, longer-term back has months me means in visibility appreciate a increase, in. -- sneak give occurred the the in business. that the beyond distribution, timing XX a of queue. one on didn't I that revenue... helpful John, the that big breakout hop with let to people change between lot more Actually,

Alan Baratz

apologize. run I late. starting We're Craig, to

going I we're think So to... have to

Sorry.

the go question, please. to next Let's

Operator

Your line next Quinn Needham. from is the question Bolton of from

Quinn Bolton

you you it really bookings And by end sales me impact. effects the force that if it's dissipate the the you continued more it near-term guys change the has like on also of mentioned to progress. just sales changes John, and congratulations sort of thought those offer It impacted would and had resulting the in my leadership the organization. wondering mentioned revenue. that see sounds some sort Let you Alan I'm of impact would actually the affecting of -- year. activity sort

couple next that first infer quarters bookings an of we fourth you should into of quarter So that and into now we you acceleration activity as that would get year the the realigned? the in expect force certainly sales have

Alan Baratz

bookings. specifically that to skills we're well your the guidance that as significantly the is we outline the John I arena up as obviously, areas fact verticals staffing go-to-market reasonable. So are in But think in bringing in not and ramping areas characterization giving the on the application

Quinn Bolton

any question, and explore I'll Perfect. you to but And quality computing. quantum allows analog technical it the a throw mentioned violation then and you digital bills

of, Alan, an a What for the double that analog you sort those us if does that of aren't use experts. that of customers? capability? needle... expand What's to importance it could, Or to quantum does sort you how versus allow of what's that, case down digital bring Just of especially application the

Alan Baratz

Yes.

of close we accurate, annealing I'm to to take Essentially, type we're close. not XXX% accurate. fabric. say and is first what our is pretty computation me So a it's what type but just let second computation, and analog, all digital say pretty It's about say, all, saying annealing [indiscernible] with combining when within

in benefits there And distributions well. mentioned, us of areas this helpful significance learning, think in but exploration of training. have of I can will of is to we I can briefly quantum machine richer allow it the past, talked in the like as some distributions that rich model annealing in that As kinds are, what's area These the will that functions. that? And I quantum some doing very significant about generate exclusively. sense, the be passing than what Now that significance generate with

energy-efficient functions. So about think hashing

Quinn Bolton

Perfect, thank you.

Operator

Richard line Craig-Hallum. Your next from Shannon from of the question is

Unknown Analyst

up changes question from changes is Alan talked I'm sales the and the how us Alan, analyst going helped? here. give here. accelerating here is in really my of the customers us I just an John, you made maybe of revenues some context to and think to affecting the bookings. time increasing context really terms here Maybe force bookings solution going detailed for sales John, They're you but guess your Alan to for comments on about being force sales progress How of in for question John... January, force? in is there. your you follow the to in time from that has back you to event on here. go-to-market more solution can time some to goal going a back give the changes Or Great, also of kind update

Alan Baratz

Yes... Yes.

able as focusing In of some conference, those believe the we time -- customer, analyst bring we get learn need and reuse. it the mean our customer we production ultimately benefits and this and and the whole some the at that better accelerates us think key more I but from next to move being I the production and the still case and believe into and goal, with of get key by customers that verticals some to one So can reuse. other it faster customer so notion on from we developing get to use does use allowing quickly. words, I next on, at him approach learnings time. to we cases, view a helps and said means reuse learning need And is take learn to to for our of

customers And in the coming place progress go-to-market use sense, with the in making we and all selling skills started that to we up does new end, organization it and January. it through in in put some the effective conference in those as we're those cases then, the be but focused, we staying were in areas analyst of by that So able areas. be supporting tool as vertical we to work introduced to And that's take time. course, strategy, toward needed some to, verticalization

to to, of organization, who the our important in best Martinelli, get the hire was early Lorenzo including background if focus a like, of Revenue now strong has all steps worked you go-to-market One that's how area to Chief most this determine and retool kind Officer, on and staffing. new implemented, starting significant has and to

We remainder go-to-market the will over the over year. course double staffing this of the of

Unknown Analyst

follow-up touching on question interesting feature. on that the follow-on is Okay. seems there. dynamics very My a fast annealing Alan,

a you from what seasoning with associated I'm your us guessing these real any advance understand perspective much and and technology expect from of hear on mentioned perspective what $X.X million a sales problems but got million sales and both you've growth could you there. you in the means Your how to I press obviously, not this, mentioned from quarter ago, maybe help here. impressive maybe this submitted up interesting problems all problems being release exactly be at some helps X.X conference there's technology probably call platform? just this that guess

Alan Baratz

Yes.

comments. X maybe So

coherent annealing much faster And the longer cloud We that required know in When X,XXX the on quantum system, we when it rate the the are with we system that can with the the do essentially, platform of anneal combined is result. cubic running process Quantum that's really system, achieve system the doing capability, fast X,XXX-Advantage to coherent. advantage cubic but coherence now because anneal anneal coherent tried the that work fast the that was combined service the used First, because is X,XXX longer the to faster we is tube a signs, to the means X available annealing. we optimality that our solutions times. advantage advantage with while supremacy get processor

the AdvantageX combination the with right, so coherent times, external to the of so living the can the anneal get of longer solutions kinds processor in outside to the we're anneal, environment, we of see the coherence And impact fast much and is that faster. starting not

get also government for and invaluable means market to do a the been able more up it that comfort gave there. the the that for finally faster one supporting governments to been the just our deliver optimization their can't in So to so we opening it even technology result, And and as commercial being more better which with able with classically. get to opportunities world on us be engaged solutions getting they directly, done the problems... us then hand, things has are supremacy excited around the secondarily commercial quantum message about maybe D-Wave, U.S. more starting and government, It's more other

Unknown Analyst

to that all Thanks. I'm going bit unpack questions later, from Great. you that's a guys. but little one the

Alan Baratz

Thanks...

Operator

the allow Williams to questions only follow-up of question from Benchmark. you queue for is next will question we David time, line then rejoin the your to Due from one -- ask

David Williams

and you that understand quarter? typically bookings to was expect generally us or Revenue guess turns much guided, captured business John. you this, of a maybe can where but expectation, wondering help if maybe bit how how about you is businesses below And to for below business talked believe, you then just I'm during revenue? little I a I convert maybe your

John Markovich

EBITDA any guidance David, I the we not clarity, provided an revenue year. think provided revenue which, on We you have for guidance, stated guidance.

bookings has the As has relationship changed the I in the mentioned revenue half first significantly rather earlier, the year, composition which and recognized. bookings when historical changed our is of between that of

end be the look subsequent would XX when our in months. of recognized the backlog revenue point, at the XX% we of at revenue of December, As that

As that end the next of of dropped over that had to of the couple of balance XX% is meaning years. June, XX%, out the number stretched

average So is higher-margin the revenue, significantly. lengthened has term bulk QCAS backlog so the rather contract And the of QCAS that contracts.

to going a bookings is be in relationship answer whatever time. Does given point that that is question? your So composition function any of the the at of

David Williams

It does...

Operator

Your Desilva next question Roth Capital. is of from Suji from the line

Sujeeva De Silva

are particularly, might in curious particular, here. in progress customer I'm the new AI And land of curious terms revenue accelerate healthier... help show future If of per play optimization, sales and those, on metric out to I'm how -- Alan, on customer will verticals Congrats infrastructure. this the research improve the and in a going efforts structure. the the there. or maybe expand at customers,

Alan Baratz

Yes.

In past, So commercial in talked actually, talked the Vinci. We've is PS well. working I X we Otosan. those. X we've We've talked about MasterCard. talked about I Hermes. all with flight currently Ford progressing about of the expand engagements about got quite and land customers. And or are

the application Lorenzo growing this is to through the the said, this with richer get about oriented are, professional application? after makes opposed and and more the in start production government. all just model. working expand. to always So especially team of I the logistics, base manufacturing, want the good logistics what's customer go as and again, And changes how And already so the actually start capabilities our we organization, do land toward delivering simply to, a in to valuable as that we is sense, AIML, with verticals okay, or component then customers we're feeling results. that is quite looking the making move next the Once some that customer good we've more into respect result, and we And engaged They're phenomenal. PS the services

Operator

is of the Sandler. line Kumar Piper question next Harsh from Your from

Harsh Kumar

the showing question of words, most were company. bookings I to in with Alan, up markets chime industries might answer or But nicely. your curious that what your last what up customers very asking. in companies I'm In I end incrementally are kind up interest noticed you? And other signing with the signing was Actually, that are

Alan Baratz

addition even really of we've question... effective, having year But to does we we areas for value has low-hanging we more We and And to areas knew even need the be just up a really are on deliver time. customers fastest. It technology, government and most talked up that continue up those that opportunities And more the opening interest us It's focus notable given government. our success a in where increasing the there customers those industries. those could of of is with represented in well. period be in this we move industries So... that thought other the over rapidly at about. signing the those that and the beginning verticals been signing faster there it from is Left. as The fruit,

to next, wanted back a -- Guys, ask would want hear cycle I be to we me? if guess, can if Suji David, around, or you you maybe second So question... if

David Williams

Yes.

Alan Baratz

Yes.

David Williams

Great.

on you just but customers the customers. think that? Alan, acquiring the wondering very as if And you curious, not kind you resonate to if of speak kind you're really could could key areas of -- maybe here, to your you've solid some technology Just speak view got most how innovation that front,

Alan Baratz

Yes.

But to solve governments research, really us a competitors, talking they the really can And the government end right? want going problems, allows their that If technologies. they our that solve leverage and use about the play anything problems. to do on That's we're site exciting us well. well us the but we really vertical and our able problems technology excitement to now about we've when solving of new they all for And precision. it's we playing how -- enhanced government able faster is to having what to and what care with their with about at do the a we're because got capabilities cases some being really is basically care is It's is them. greater as I talking be research areas, that well. in what's day, can't really about about with what the with generating So technologies care the really useful technologies with

Operator

Your next line the of follow-up is Greg question Ellis. from

Unknown Analyst

versus us you breakout in even help of if quarter can with professional services John, QCAS qualitatively? the the

John Markovich

Sure.

revenue, of So for about the revenue represented XX% QCAS whereas professional the represented total XX%... quarter, services

Unknown Analyst

Thank you.

Alan Baratz

Okay. We're pretty much at time now.

Quantum fronts, continued just me let on today, advancements. further by There's out is in computing liquidity product results annealing So benefits of strengthened this that technical saying Quantum Intelligence. rapidly awareness our its development revenue, hardware, and second business and deliver ability momentum software Artificial to close growing progress activities all our quarter and and and show by

thank and your is time world one momentum the for all is Our of companies leading in few the the Quantum transformation evident, we you today...

Operator

participation. your for Thank and this you concludes Ladies gentlemen, conference call. today's

now You disconnect. may

D-Wave Quantum (QBTS) 8 Aug 242024 Q2 Earnings call transcript