QBTS - Earnings call transcript Q3 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the D-Wave Q2 2024 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, November 14, 2024. I would now like to turn the conference over to Kevin Hunt, Investor Relations. Please go ahead.

Kevin Hunt

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 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

by morning, clear, wins this most largest believe Kevin, that is the quantum our world to significant have at again, adoption. all wireless rate, carrier processor, update pleased a into is thank to step towards calibration Advantage to to the is up be move be you computer you at start some the and momentum great X,XXX, And application provides our driving that time X,XXX commercial of energy technology. over exciting and solution, computer, impressive advancements. way on We it critical that I'd slated X,XXXqubit represents generation with solutions quantum million X that sixth is solutions update quantum NTT and faster adoption here and a we product our system, coherence Thanks, increase completed able qubit continues a Docomo, it announced in and in Moreover, grow, from double time in the quantum quantum recently showing annealing qubit in we the quality a me bigger with us commercial today's D-Wave. connectivity qubit an is gains technology let Japan's accelerant like evident advantage more good business is to are processor highlighting Advantage and to technology quantum X,XXX where computing XX% production. XX XX a powerful the to like scale of levels for we enable release subscribers than is computer. existing largest of you it be the I'm including X, for The quantum larger increasing to XX and with It's to Advantage interest which seeing performance to time joining problems. Interest annealing everyone. for rapid It's to higher today. increased industry in which the

use potential be Analyst to recently versatility long at help these industry note performance limited technologies quantum versatility of piece, to gate-based improvements, end a the Advantage annealing solve I'm we With on for Consequently, annealing the want computing to fact, And to West, sought-after of intelligence science. production it quantum to number quantum to of used speed in multiple to IDC, that will standards from D-Wave's once increasingly actually a run quantum that to to optimization, the piece, that problems, one users computing applied gain she optimization be use in killer setting be quoting problems, of computer published able very few across material will substantial organizations computing The performance. annealing the systems performance. a such quantum add Advantage customers' calling AI quantum optimization the said, only adoption thought expand of positive systems. for Quantum Heather. I X problems, optimization. that the premier cases of which may quantum quote by Heather can be a range quantum. quantum Heather to computational called That's remarkable from quantum large market the believe only value. is, industries. to body our especially able report and that as is the D-Wave, is case be up demonstrate evidence X are areas in this global taking firm, a systems use This larger deliver a case killer there's will In on business what new also and the date, computing complex

over As majority have patent the quantum XXX gate we U.S. both with model portfolio. extensive also a includes This patents granted covering valuable technologies. annealing an reminder, and and

to need fundamental the on-chip example, For fundamental around data numbers and of lines. controlling processors on quantum we pipelining quantum complex processor I/O own and addressing chip. readout for support for related processors and IP This control without overcomes large a quantum that costly large challenge the

We future. are scaled be annealing computers gate using in it today, will and model our this technology systems quantum required in of the

more make continue exploring inference. directly architectures energy-efficient generative model use to progress AI that from QPU distributions facilitate unit quantum on to We faster training quantum samples processing rapid and and

QPU. transformer moving of the designs diffusion toward completed architectures of and are the benchmarking have the We role and initial

machine are a investigating restricted supporting QPU. machine the AI samples architectures, several use for also from Boltzmann We customers learning generative directly that canonical approach

only service agreements, to availability, move side we cloud software quantum believe the transitioning applications performance, of as SLAs. into It's the of into are underpinning quantum levels ability business, formal that customers support move reflects computing who customers deployments. for production company its and level is We commercial-grade service reliability introduced LEAP production. applications SLAs, On LEAP's high D-Wave significant the a providing

service having meaning even monitoring the over years, in is the advance, high consistently times our the X of run shows demand. Since the fact, In during service, million service queue XX.X% X advantage has highly exceeded data lengthy have LEAP customers to LEAP past the systems our that that work availability reliable periods nearly across or hardware. work jobs launch schedule X endure around unavailable of without production

to of be things for other services. Quantum All cloud seem norm those the

improved constraints. hybrid million the Beyond quantum nonlinear of supporting problems SLAs, to X of and optimization variables we also solver capable of the performance up our introduction with new

example, These For business an related vehicle driving important customer in problem real can on advancements to problem of solved capacitated time. be are solutions. now the the routing, X/X technology

tasks also across in Docomo a units. we required after And network drug first of plans and discovering the running optimization process company of Japan NTT Japan. methods. show promise. applications quantum Japan. quantum classical of are discovery quarter, in will seeking the past to optimization quarter, including compounds Docomo major XX compared like seconds being also NTT Japan and congestion. quantum announced across other a manufacturing NTT is pilot a computing additional we delivered portfolio for reduction hybrid optimization applications, other This customers the required resources in of completion pilot leverages in-production XX both and solver quantum optimization small application are deploy the on deployments. I'd application, We The in of truck has is the a operations completed that production into Tobacco, to scheduling, geographic with The annealing great commercial agricultural regions used of in many This major only X computing with we've solution collaboration believe new our variety opportunities D-Wave annealing held the first-in-class and D-Wave the pilots, world process. was rates worked that solutions hours and concept production building be we successful now a XX% Docomo where AI AI-related others. and to on quantum financial proof compute to with optimization, for technology. exploring customers And pharmaceutical company in other This in delivery annealing a computing the to highlight move with create a business seen as we that quantum a across lines, new Upon

products deemed accelerate that I'm U.S. on Tradewinds D-Wave's platform, offerings D-Wave government has computing designed to been the AI/ML, Defense's side On business, now of capabilities. of adoption buying the marketplace other is like means and which the The the are alongside procurement available quantum technologies. analytics on and the that of designation data to emerging say awardable services delighted and Department annealing

quantum remarkable AI as In stories we And discussions partnership We Quantum technology continued take consultant U.S. develop of around the showcase September, in increased a deploy Exchange use in quantum where showcases first-ever national utilizing quantum civilian Qubit role saw announced computing of problems other research. enterprise registration agencies and again Middle Department of you March optimization variety we optimization we to interest open. and reach, where transportation Scottsdale, Quantum increased Qubit technology the for a East, by play and to user public sector D-Wave emergency has end the to in and partner. near-term also in as of at We from services a once optimization, of asking understanding September, and next version also our joined jointly relating highlighted interest conference customer annealing half-day of activity We applications, abroad. success STACK, all and will the a This we as U.S. pivotal a government's Quantum. security in quantum designed attend sector today. problems. annual corporate as latest quantum now is leading the can will alongside better customers invite event, way, our a AI announced help near-term address applications solving public well cases showcased that will partnership this we by and RFI with application Broadening how spanning Chicago the identification a D-Wave hybrid where response, UAE, place Defense in the our announced quantum U.S.-based innovations Arizona,

CQE's commercial cases. of the share mission only use As company, practical we developing quantum optimization

aren't D-Wave human for our September, where we term. capital she Sophie building D-Wave. Officer, go-to-market building growth cutting-edge supporting long to innovation strategy, the essential as Human Chief joined at Ames announced lead We're that We Resources just company a our will In technology objectives. has

of tech XX also growth private John leading of experience years at at and services And Board and start-ups companies. we technologies. security. Ghai, CEO and in variety wealth of and CEO mindset experience leaders firms. an Directors. experience across with X Deepwatch, services software, veterans DiLullo, at international appointment to technology of and Sophie enterprises a aggressive technology public large brings all brings both Rohit of October, new And of commercializing technology RSA, are from brings the These announced over our XX over of years experience industry a

cash. months and call our off $XX XXXX $XX hand comment will end that, secured with the I nearly John a we on will of close term to review with a million loan the first million Subsequent have and paid Finally, With to financials. third of in we results. quarter, PSP, quick our of John? X I provide the quarter over our to completely

John Markovich

call. $X.X non-GAAP gross these increase to increase press 'XX the the gross $X.X are margins the third with revenue underlying per part, approximately ability financial metrics today's include of you, third most of release customer of Thank I third decrease customer, third for average a tables principally due the nonrecurring measures fiscal XX% and quarter quarter of QCaaS third in loss for $XXX,XXX the believe revenue totaled adjusted to QCaaS time months profit, million, or fiscal was to Alan, revenue of third the million, expenses. In Revenue 'XX noncash investors' include quarter be the revenue $XXX,XXX the revenue per and as improve million, as in you services. our operating non-GAAP average my quarter EBITDA at metrics non-GAAP $X.X everyone an X non-GAAP an the that results, from XX% and financial defined the of or XXXX review D-Wave's million. earnings performance. $X.X thank metrics in as will adjusting from a to QCaaS today's higher providing for bottom metrics of These participate that we evaluate taking non-GAAP bookings quarter well quarter the of with fiscal for and subscription

$X.X quarter timing a the services million professional XX% revenue or of services decrease third result of third $X million. a new As fiscal 'XX $XXX,XXX, quarter the the for from closing professional agreements, of services professional revenue was of

Although strong, X declined bookings year-over-year service bookings the years. the second quarter professional services revenue last the basis, professional third third representing were quarter quarter over a on highest the quite quarterly

for improve respect that fourth Bookings have quarter in of our million. of we revenue third quarter $X.X quarter last over fourth million, or of the go-to-market progress expect to over the we quarter the XX% expect compared the the decrease the Again, bookings organization third call, third when With months. quarter bookings XXXX quarter the bookings. a up-leveling to the revenue. $X.X We of improve to totaled several to earnings over made highlighted significant third our we $XXX,XXX last

we period, focused States, including Germany, the quota-carrying the United filled and on several positions positions this U.K., across positions the logistics During X manufacturing, and verticals. services have XX and Switzerland

We customers, expect customers the most quarter. to commercial total our we the the customers, compared XXXX With government the commercial, with by of a customers, to to with XXX customer preceding a customers. continue the Forbes compared base commercial customers comparing up-leveling immediately recent next broaden across In to prior including substantially quarters X XX of and period. the and part Global complete organization with with respect of the middle XX diversify customers of had quarters. commercial XX XX in X XXX total D-Wave compared customers research

Our constitute of the customers customers. of our Forbes commercial XXXX total XX% number Global

XXXX professional revenue XX%, X% decrease a include due declining XXXX total increased the the on third respect for XX% QCaaS third $XXX,XXX Kash increased respect primarily with million, from between compared decrease percentage of profit the $X.X of the an third GAAP quarter was $XXX,XXX GAAP commercial third quarter amortization XX.X%, compensation quarters was services X.X% million margins, GAAP fiscal between XX.X%. with non-GAAP quarter Revenue loss million for to lower $XX.X primarily higher third and was third profit XXXX revenue the $X.X X the quarter that million $XX.X performance quarters With Energies, depreciation numbers gross the quarter, companies, decreased third expenses. months preceding as margin to quarter. gross $X.X government X was internationally from its profit of from Ford higher non-GAAP for Revenue $XXX,XXX In offset XX% loss XXXX million $X.XX Holding. is the organization. was comparing to compensation related $XXX,XXX loss expenses and the million company's increase lower to and revenue that September a decrease adjusted and that compared slightly with increase investment principally primarily ended of fiscal increase DENSO, to of the months difference fiscal difference ended The to gross the of XXXX from an $X.X customers of go-to-market quarter. The a revenue of The X.X% $X.X million, per the amortization limited customers was QCaaS $X.XX third XX%. XX% the for due including Our D-Wave's from by profit net quarter gross address the million. X revenue the in quarter gross per the GAAP is XXXX to by the September most in XX% third the or EBITDA will by respect million, share margin quarter revenue million due to for the With Again, million, the Otosan, third or due a revenue with $XXX,XXX million, the $XXX,XXX company's XX, a quarters, to of XX% EBITDA focus for of based gross partially an $X.X from of numerous non-GAAP margin gross non-GAAP fiscal The Bridgestone The months X principally or XX.X%, to the immediately loss $XX.X X operating million, the fiscal in the increased third of and XX%. fiscal million of commercial of excluded adjusted the the profit. by was revenue stock-based ended customers from gross stock-based depreciation XX.X%. for for XX% ended Forbes in customers. I or higher Vinci or Mastercard, XXXX, XXXX, research and profit non-GAAP $X.X the months and or September 'XX. limited now for with revenue. XXXX margin expenses totaled $X.X it decrease of non-GAAP recent September increased NEC, were quarter noncash for the non-GAAP Net share With customer. gross per a or gross or from or the and for research operating $XX.X XX, the revenue of for are first X from third from customers quarter government XXXX. was increase profit, or to and X gross the GAAP a with Global decrease XX, of was the margin QCaS the fiscal $X average increase Revenue gross $X.X

for X $XX.X $X.XX XXXX. GAAP revenue or ended gross first increase X was the efficiencies. for period. a with costs the first $X.XX from the X X for gross was the As months or and the the million the loss XXXX, of increase from XX.X%, compared ended EBITDA professional $X.X $X.X for ended to in professional due the loss stock-based XX% a or Bookings ended the and decrease the months for X.X% prior million timing million, gross XX, due of X with was $XXX,XXX entirely closing September September $XX.X from were decrease the months per $X.X million million, for result primarily was administrative engagements, XX XXXX. $X.X an adjusted first about professional of for and X increase services primarily XX, XX% a for of from from September or non-GAAP the share ended Non-GAAP months of of the increase to in bookings for XXXX, services months $X.X XX.X% net the million general months of for GAAP operating terminating margin the September for months share fiscal decrease million, primarily stock-based the XX.X%, $X.X services from to ended cost the $XX.X a compensation X X first months respect XX.X% gross new million in decrease of increased X with $XXX,XXX was XX% million XX.X% revenue GAAP XX, in months decrease for and of X% net operations. or With September XX, of the expenses. million ended margin and September months gross profit ended revenue XXXX in months X first due with X a XXXX, XXXX. X The profit or profit of totaled The from was months, loss margin non-GAAP its million, the due million months increase $X.X an sales. X gross X September the X EBITDA profit $X.X and higher September months, GAAP XX% margin for the lower of revenue with million profit in the increase operating the the gross increase of for to an the compensation XX, or decrease an of of lower million first gross $X.X non-GAAP customer $XX.X growth gross $X.X the $X.X to expenses XX, months X-month one the million loss Adjusted per an

and I address Now balance sheet liquidity. the will

statement filed we carved an highlighted XX, on subsequent million. consolidated $XXX program. capital-raising Alan Form year, of and million With of to our of we totaled to September of previously, the of PSP balance million XX in S-X term May, shelf At-The-Market respect the that secured As out And on registration cash capacity, $XX.X this the that effective remaining end off we went balance million loan. the $XX quarter, D-Wave's as $XXX April paid for

of the of program. Park with or available of With of As issuance Lincoln under Capital, had end had of September, capacity. as still remaining $XX.X the capacity issuance line equity of the end million million ATM credit almost in quarter, the our respect we $XX.X $XX we million to

to EBITDA company as publicly this we to $XX.X to less be profitability reiterating than guidance substantially conclude, than other to computing by independent quantum we first will we have that funding previously With are companies. XXXX held adjusted that, loss achieve million. believe less quantum sustained required held fiscal has D-Wave We our stated, opportunity milestone computing achieve of independent publicly and the To now proceed questions. with the

Operator

comes [Operator Bolton Instructions] question Your Needham. first from Quinn with

Quinn Bolton

be It with continued of they'll this to Is the and contract start give between, a quarter, they're the production of about what's all Last about DOCOMO I customers. the a talk move range about And thinking with I progress that thinking when the in could range? to now application cell million you guess or somewhere on applications like the us Can that sort you should I start did in some different into into the million you've to Congratulations production? to looks that across generate sense win past, the sites revenue about that. timing of think right production year. be want for QCaaS in $X.X we $X Japan. say, talked move pilot. NTT looking

Alan Baratz

Yes.

revenue high So, of production, or of you're or recurring production, Quinn, to particular, we, fact, on QCaaS the the applications significantly concept revenue. of the they QCaaS have hundreds thousands proof that applications per that company. as year tend And more move as first in generate indicated generate into from they revenue, for into order more of all, of correct transition trials in

completed move three the Japan respect work of to across timing that's NTT country, place entire or and expectations on are not the changed throughout the yet they've revenue in putting disclosed and for trial plans model relative made the to to magnitude as DOCOMO, into the rollout. applications and So, the production. have there's but for the nothing the they With our line that in time plans public regions this now move

Quinn Bolton

And which to increasing revenue sort have break was I to out U.S. think time up. I qualitatively see, it's of on first you know about opportunities the for government guys spoken guys front. then interesting the starting government, you

So maybe just see initiative. you're pretty business? It might a of what on thoughts expand you of there. looks like how And you perhaps some looks on And Fund business. seeing the then when be on side National reauthorization what the have any momentum we your if government would we get to that funding that affect increased think levels, could at significant the

Alan Baratz

Yes.

Quantum me Initiative the take let So first. National

As actually it about NQI recall, maybe at Trump. it was ago supposed under has not been you a the renewed not, renewed. X-year the year may to And passed be and but mark, originally was

hopeful government variety Initiative programs And easy you will office, to sell have work processes reauthorized. being a deemed open without National complex the are respect government through from in awardable. be just process Defense long DoD the deemed DoD. that quantum as was go Congress agencies done that awardable is language then, those U.S., will to that a from a We but are actually part, with being near-term that push near-term the agencies platform in becoming quantum us able as government that that buy progress the to the Quantum not for quantum Tradewinds to industry. to began they year to not kind the Trump applications. quantum actually he'll the different respect And Tradewinds and a an even he with reauthorized, on the additional benefit not passed world, We, to the fact, government, funding the up the just quantum in in quantum can out back are, is once of we incorporate will of help Act -- in on about players applications. in early for our that buy near-term will needing around interest, is completing believe U.S. get that of more the governments to Authorization very once be but with significant to been being in deal. But awardable into on program traditionally With around us It's all focus ago got focus seeing result National in easier And calling interested areas. it required trying those to the that make you deals application if into applications, on fact, as not

one options partners, And that. so comment, it's of and And and even deliver to that's think was this outreach plans just in that for much we variety continuing process are the or table a quick put future. important of that including us. for world some but couple put of One alone. we the different seeing U.S. months to might large governments the on increasing potentially advance then those we RFI the outside in also having ago. And not different either actually, with and of we in And D-Wave in particular, for D-Wave for interest course, a strategies interest just a seat first not is able U.S. out very applications opportunities at near-term initiatives relative how materialize of see So, one government undertaking significant Quantum a be of more to the to expecting the just and a around from only We're see in of DoD understanding U.S. better formulating government, many put the kind of the on not number

Operator

comes Your from Williams with question David next Benchmark.

David Williams

color Alan, there. all thanks for the

potentially. questions I things that I know we my the in they real answered did the coming China that can to about misleading on of about of being actually a is bit out double-edged Quantum most Obviously, broken adversary saw what things, do of the you think from a guess headline I but there. it one in the response shows But there. also research that terms of But I was want an sword accomplished. like ask of that came it's encryption sounds there.

kind So, can that what talk means through that just view overall you of you that development? in that, terms how of and

Alan Baratz

Yes.

of not first sure we've of U.S. number honestly, And government. work. from all, and/or elements really there it's the a that around had expressed inquiries hasn't sword this with of today been much that piece actually discussions I'm various So, in of a the negativism double-edged sense

all, interesting that it say I was very first what of So, will is work.

large interesting to So, factor numbers being to able developed computer. approach our quantum an they on annealing

enough cryptographic large current However, systems. still break to not

the for state-of-the-art grow XX, which demonstrated a numbers. XX previously to RSA to technology developed, X,XXX-bit bits, had we with they So, whopping it the what XX is And up able today bits. from is were they

good interesting what X,XXX growth XX done but on solid is work. XX to nowhere it's an bits. okay, near had still from So bits previously, been bits It's improvement research

from, the That you're coming it's be the in given in I had of trivial the taking system but are here, been So, that the get might Chinese where Canadian university only researchers the not we a individuals possible not had our because have while that's process Europe the countries are to or fact that can that today system. countries, the the the to the we that sell rather to in been today. we allow tried other fact note self-service to tighten not China. Western for research. service do That researchers generally work good research Quantum was that self-sign-up sign-up. cryptography said, or key been to quantum that, will to I do access on at because maybe China, there. breaking sensitivities systems XX by But the by we're not to at systems was having sell to access we and restrict work research, to good say U.S. U.S. lead technology, of can of companies would it access able much of steps other don't Quantum having still in point we've interesting for our and the done but our The done do RSA We our like on worry a number And sell it said, past, that because government done kind public where use spoof system government factor about than to Cloud anything in been quantum is computer, we or annealing in that VPNs in access.

David Williams

Okay. spoken could just very significant Quinn's to I And Fantastic. maybe real for helpful. terms decent-sized before year like that you the about you in mean that opportunity annealing the magnitude fairly felt for language up and think that to you question could for given comfortable some you've for follow wanted it Certainly, next the NQIA. to I course, you And get included or here you. be potential you feel guess, there And once that's do where Just on of a could of get wins do all? we think about potential or there of some increase, what revenue specific how I still there? authorization contracts

Alan Baratz

Yes.

in a was. generated National application signed the that ago. Quantum is is bills discussed. by separate in X already National Act are there One Biden quantum, and Initiative was last a pool near-term back December started David, got all, from of year, ` interest office open language of what done the in mechanism here. was a the will Act last that's that, that he the has DoD with already annealing U.S. Defense that's really Trump not that up funding And and that Technologies. so and given research and we're reauthorized general the the the R&D The I've reauthorization time. bill annealing hopeful where of last different was end needed in that's office, funding different And for for quantum that Quantum will And by Authorization year, near-term that it get act, And year almost as government. of That that's at first premier So, Congress. while

Operator

comes question Shannon Richard Your next Craig-Hallum. with from

Richard Shannon

going here follow how you today. into the as go Maybe just had you company help the here inform with please? you've and improve with cycles customers, to talk if go the talk market about I'm NTT production even without up to here a that topic frame, see going at of obviously, maybe, and to on them DOCOMO, the least But can love forward sales experience us can give high-profile you a international and that to A, other about can working them. time

Alan Baratz

Yes.

the investigation, trial. us. and then the a moved way, by that they began provided required they then amounts it did sense very very some So, some help the situation accessing some time they self-sign-up they of application. in through They along interesting was small from purchased to We little They NTT the into DOCOMO benchmarking. -- system actually complete some basically of development the early help did

compute us that's So excellent sense, materialize. experience. is had Service. at those decided view to we X, all think Not why customers great we're I the production. scenario put and a was And in from are now. months of themselves. didn't where X, services they professional we level to ability ideal have it process talk our X as seeing move a services with the frames we a from knowledge perspective to all this that about and time into And DOCOMO, some it got results, the But technical into as to They effort drive still to quantum how they much NTT effort. professional start actually of And maybe where respect for on-ramp can to I the have

Richard Shannon

of Okay. and Great. follow of Alan, maybe here. questions here perspective just That's couple helpful before there. spending government the on up a topic

or to be that sense type that something versus of from earlier be revenues States. might give be? Maybe research would to you outcomes more more of was responses the your funding And a outside us degree of what this production One level where worthy. countries United is expect

Alan Baratz

Yes.

of the see So, Europe. outside likely governments sooner to my primarily U.S. about refers comments to more from

research, the where And larger we numbers to to related activity right are smaller So that's now. it's seeing most numbers applications. near-term related

we've and be overcome So, hard And where a the quite area work to about is it it. numbers of talk work still that yet activity prime is time. isn't kind most overcome as still the question I become short to able to larger Europe for to as hard and there's of will I to That misunderstanding near-term of ready government to we're had need easier answer in research. think think but a deployments and a to some that quantum view we seeing start result, the is your clearer applications,

Operator

next with comes Riley Craig Securities. B. question Ellis Your from

Craig Ellis

and expanding Alan with John, that's progress congratulations Alan, happening on first wanted on the I there. counts. customer start and to Advantage point the II all

doing like customer commercialize benefits X's what's and inbound monitoring? that would impact from You would versus commentary. favorable all revenues current and that system? things interest that the booking for engage really The question those consultancy we and we're systems noted expect fulsome to to is, that that when Advantage with many want And system

Alan Baratz

Yes.

take X. result or X,XXX said So, the you X the that the increased We had ultimately scale time when about primarily, Advantage we energy tried X,XXX system first on that system, archive to that we And we work increased the increased weren't coherence was on get the paper that and the of get X,XXXqubit we qubit that the just to on we the that all, I earlier on to to a to got system. connectivity. needed of actually had and quantum II X system point talked Advantage of the able X,XXXqubit system, was result qubit the at months the but back what because need also put on that, in but so version we supremacy Advantage related done Advantage Advantage

think that I at our X,XXX made Advantage qubits, that in arguably, even at time system And is comment qubit that X,XXX system. I more powerful point a so, than

version connectivity, preserving got same means able a as even on, in processor now a Xx X increased what calibrate that's more increased system, to is what of coherence, increased So, large the powerful. benefits, showing but that Supremacy results that been to we've as X,XXXqubit we do we're the energy which scale,

the solving because get that's that Now materials From area benefits, going to we're reason perspective, significant to is be optimization the to this the said supremacy material of the to X,XXX an the class that about optimization why the of the qubit of this been fact provides talk And is from it's to now, commercial a the basis because we X,XXX supremacy able system enabled frankly, excitement. X to for the the is has by in get really lot of we've of size I combination needed excitement and right processor generated that while the all to that able and the that work in version to X,XXX, simulation work, Advantage research. arena. also problems customers

the it. characteristics where It's qubit just that. We we'll But able benefit service. yet the that that in we're now X,XXX now seeing the from cloud not it. benchmarked calibrated mind, it. start in We LEAP. the yet point not to it So at performance keep as We know is benchmarked some in has be version. strong same We system smaller

the deliver arena. So able now optimization that expect being to to value we'll see in

Craig Ellis

would the Or LEAP? into in go it LEAP does it quarter go X, or And coming into Alan? when

Alan Baratz

will it when rather We actually haven't into said later. go LEAP, but than sooner

Craig Ellis

Okay.

question. Second

and bookings expand that's XXXX? impact as customer taken does initial where and can of way And about made? adds with geos any which, productivity where you in that ads quite place? as the up the you On leveling, out momentum seeing further were on you're the geos that the noted, some the future go-to-market you And on the will favorable quarter how think be over counts, look color

Alan Baratz

Yes.

all, it's of first So, days. early

it but commented, John a quarter. As ads, was XX over

to need team middle to to by people completed be QX. expect to still that these and we become to come to go-to-market productive, out speed So, do of have building finish up we more the

and the curve. but has of are grown the we're going the the learning people now So, at substantially, new through point many team where go-to-market

the actually minutes in haven't is relative I nearer-term of And not people true we're in Europe in than U.S. A interest few as well. the would we starting are government, a lot commented to the and seeing commercially, next as quarter in in QX. Europe. we opportunity people starting near-term actually North becoming productive. just commercially or also ago be seeing we that's more And putting that because we Europe, America, seen So, in are but hope we those yet of benefit would And also that

fully kind to that's we results start and we're we why get hope out there productive, building of seeing move But to early people need well. So QX. as would we as days, into these the

Operator

Capital. Suji with from Your ROTH next Desilva question comes

Sujeeva De Silva

the bundling Congrats works? how on hyperscalers elaborate you on you customer? QPU of Or happening? samples. that is AMD. progress perhaps are seeing NVIDIA talked seeing that instances AI, you cross-selling assist a kind of Are Alan, GenAI by happening And AI any in the here. lot with about you putting Can the benefits, are

Alan Baratz

Yes.

X being on is are known today. that heavier as today. but are going computationally approach based where related to an approach model approach, even training models is there areas we on So, what's actually trained Boltzmann machines. restricted this And there's training than work One is excellent an GenAI an to load the way model have generates

And so, extensively. it hasn't typically as been used

optimization our their machines. engines native restricted native in sense, systems, much Boltzmann However, are, some like

technology and to by by means, so, ideal don't discrete, not inserting costs natively discrete around for quantum need annealing at smaller of going architectures the model diffusion lower it to transformer using important And bolt we're process, means it And hybrid. exactly variables. got we and the fit can natively customers models. been that better of we've are looking And a back us a are associated Then how smaller what to there number energy there's our sampling of do machines and training the computational today modern that because space. because in is us model continuous on in is training to what by computer. called for kind training the published transformer discrete can into stages NVIDIA Without middle diffusion a in model or using the paper we improve they from are that's of essentially the training, latent done models work actually getting We the more doing restricted with architectural some But early that. approaches that. cost

much at that's one we train. not hand, think other working in to, and the we using process, in energy on processor so, part point the on the arena, training that's be and get we're And a able reduction We yet better required quantum that to to that models. But models. customers. built of with believe a training, be by where the cost, also generate able the we're diffusion in time, But and to going hand, very model actually costly that we'll transformer

are working to We does how inserted the when into now that the QPU, benchmark quantum process in model processor the training.

Sujeeva De Silva

with AI Okay. theirs to and customers And effort? that hyperscalers Are instances, how together? putting using then customer-driven? the your Or use seeing of NVIDIA service for AMD out is terms any customers in in forth. figuring so Is bundling you there

Alan Baratz

the yet. as that, that we definitively all of view diffusion demonstrate My have to of interested machines the become the Currently, transformers answer whether it's not value is question will will are to of bolt driven training. because end they'll change. infrastructure to by to, or providers hyperscalers And the restricted processor, start driven quantum do that the Well, to with customer or versus is be able model that it's the competitive. kind the to

Operator

Your with Piper comes Aguanno Robert next question Sandler. from

Robert Aguanno

there. some by you the bit on previously gate solution? and thought solutions a annealing have This potentially opportunities for wanted annealing of on that potentially on Do touch could I particularly is Harsh. TAM around opportunities the the Robert some you made see as model little comments addressed to been of

Alan Baratz

first Sorry, repeat context. could question? you missed I the part the of the

Robert Aguanno

Yes.

there. Just on the opportunity TAM total

Alan Baratz

Okay.

in it One in times same killer of that fact, problem including businesses different equations if And but significant including technology area not in the a that number out problem fact, a point and said to many, she to of covers hard for machine optimization optimization. the most, chemistry, thing need the Heather that app kind for learning, number for crypto, TAM covers And her algebra different is, Quantum. tried a problems. solve could think problems the optimization I of types are quote important factorization we've West when optimization, of be look, quantum quantum for said linear areas. for So, areas, couple of differentiated

solving very is to Annealing well Now problems. optimization suited

that minute Moreover, in able to I theory speed There this deliver struggle this a a comment more I going growing up of of of years native systems ago, math that's optimization why a gate recent on to be are engine. There's to a is think made evidence are there And some body couple there's on sense, benchmarking it's done. and case. the optimization behind problems. papers been a topic. ago kind of published model number

up IMQ's On system results the to you If did XXX XX system accuracy on where up and could IBM's a there. fractions whereas taking XX,XXXx to look IonQ to variables was to XX% some gate with at XX% system, XX% problems. D-Wave in you problem about can able second, anywhere IBM and problems, at annealing D-Wave to of comparing XXX solve variables go the go from to accuracy solve the to QEDC, and optimization they with time. the more those to the benchmarking gate

we that, of fact, a really think So, the will TAM quantum is optimization in the that portion portion annealing of TAM computing. that require

Robert Aguanno

helpful. Very

quick We've it near-term, end-of-year And more has follow-up going be happening. on could or a dynamics potentially quarter Just XXXX. budget impact the that tightening government be so next on wondering the on. I just near-term the that of some going heard any if just into of kind some was

Alan Baratz

Yes.

now of beneficiaries ask funding. have of up you But should model a for and of that gate no. lot IonQ who government us, other until been Rigetti So, question U.S. and providers the

is than funding. impact government been tightening from model. their of hasn't it us In U.S. impact comes the until that any them fact, recently, suspect far most if that I more will will of our because budget, there revenue that

move commercial. government. to has starting model Our now We're into been

keep very an us. be on So, that's eye no, for of careful not something and we it's issue need But currently, to forward. going an

Operator

at time. no remarks. I closing this Baratz call will Dr. to further are turn for questions the There now over

Alan Baratz

the Okay. time for to join you all Again, us today. thank taking

deployment. with stated well and developing computing adoption important applications positioned for beginning quantum service, production serves advancements, very highly annealing our cloud is quantum. remarkable in and reliable we that solutions, D-Wave an the at work quantum given increasing, technical the AI quantum quantum of I on with continued and catalyst customers rapidly performing progress as call, of interest As technology believe commercial is for

transformative you call. in to continue And Thank talking next in of industry lead the this looking ushering We we're next wave our forward computing. during all. you to to again

Operator

ask gentlemen, disconnect this concludes today. and conference for thank your and lines. you call your participating We that for Ladies please you

D-Wave Quantum (QBTS) 14 Nov 242024 Q3 Earnings call transcript