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| Statement |
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| And so by improving the coherence and improving the connectivity, we're able to solve those larger and larger problems |
| So we're pleased to share our second quarter results with you, which reflect our ongoing progress in commercializing our quantum technology, as well as the continued momentum that we are seeing in the quantum industry |
| I’m also really pleased with how we’ve done at getting out the message that quantum computing is real today, and that you can see real business benefits from it today |
| The second quarter bookings represents our fifth consecutive quarter of year-over-year growth in bookings |
| And finally, we are very pleased to report that subsequent to the second quarter, we substantially improved the company's cash position, which currently exceeds $50 million |
| Our growth in bookings and the expansion of our average deal sizes demonstrate increasing demand for our near-term quantum technologies and showcase D-Wave’s continued commercial momentum |
| And so I just feel really good with the progress that we’ve made |
| So there certainly are benefits to room temperature superconducting |
| And we are starting to have success in getting governments around the world |
| The only other thing I would say is that, there’d also be a benefit in terms of the cost of the systems because the largest single component – the largest cost component of our quantum computer is the refrigerator, believe it or not |
| Evidence of this can be seen in the growth in our customer bookings and increase deal sizes |
| We're excited by the progress of our work together to bring quantum to bear for national interests |
| In the second quarter, we closed 2.5 million in bookings, represent a 146% increase over last year's second quarter bookings with a year-over-year increase in our average deal size, up 136% across all customers, and up 163% for our commercial customers |
| And so, we expect that over the course of the next year or two, we’ll start to see that money flowing and D-Wave will be best able to benefit from that aspect of government funding because we really are the only ones that can help with near-term solutions |
| Advantage2 is expected to ultimately feature over 7,000 qubits, 20 way connectivity, and significantly higher coherence |
| But we’re making good progress on that |
| Good to see the QCaaS revenue increase |
| So the fact that Advantage 2 has not only more qubits and more connectivity, both of which allow us to embed larger problems and significantly higher coherence, which means we’re able to get to the solutions faster than in Advantage is what represents opportunity for addressing more applications than we are able to address today |
| I'm grateful to our employees, customers, partners, and investors for their ongoing support and trust in the business we're building at D-Wave |
| As we have previously stated, we believe that D-Wave has the opportunity to be the first independent publicly held quantum computing company to achieve sustained profitability and to achieve this milestone with substantially less funding than required by any other independently publicly held quantum computing company |
| So we’d also be able to produce these systems at lower costs, although, they’re pretty cost effective today |
| Most recently, we introduced algorithmic updates to our hybrid solvers to drive increased performance for key customers |
| It's a remarkable achievement to take a company public, especially when we did at a time of significant macroeconomic and stock market headwinds |
| Revenue in the second quarter of fiscal 2023 totaled $1.7 million, an increase of $336,000 or 25% and the second quarter of 2022 revenue $1.4 million and up 8% sequentially over the immediately preceding first quarter revenue |
| How things kind of played out in the quantum computing market versus how you imagine them one year ago? What has changed, if anything? And what are some of the things that you’ve learned over the last year? Alan Baratz So, first of all, I am really encouraged and excited by the progress that we are making commercially with respect to the fact that if I look back a year ago, our customers were mostly buying small amounts of time on our quantum system to kind of play around with it |
| In addition to commercial momentum, we're also seeing governments around the world taking a more inclusive approach to their quantum strategies by supporting both near-term quantum technologies, such as annealing quantum computing and quantum hybrid, in addition to longer term approaches like gate-model |
| We remain at the early stages of quantum's commercialization and global impact, but as a category leader with two decades of experience in harnessing the power of this technology to solve highly complex problems, we believe we're out in front in driving this transformation |
| And we’ve just made enormous progress with that |
| But what we’ve been focused on is helping governments around the world, understand that quantum is real today and can be a benefit to their operations today |
| We have now successfully fabricated a 1,200-qubit prototype processor in our new high coherence fabrication stack |
| Statement |
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| With respect to gross margins, our GAAP gross margin for the second quarter was 41.3%, a decrease of 13.5% from the 54.8% GAAP gross margin in the second quarter of 2022 with a decrease due primarily to higher non-cash stock-based compensation expense and cost of sales in the second quarter of this year |
| They were not successful with that |
| Our GAAP gross profit for the second quarter was $705,000, a decrease of $46,000 or 6% from the second quarter of 2022 |
| Our adjusted EBITDA for the second quarter was a negative $14.9 million compared with $11.3 million or a negative $11.3 million in the 2022 second quarter and $16.9 million in the immediately preceding first quarter |
| The non-GAAP gross margin for the first six months ended June 30 was 56.1%, a decrease of 6.4% from 62.5% in the six months ended June 30, 2022 |
| With respect to margins, the GAAP gross margin for the six months ended June 30 was 34.2%, a decrease of 25.7% from the 59.9% GAAP gross margin in the first six months of 2022 with a decrease due primarily to higher non-cash stock-based compensation expense in the cost of sales in the first half of 2023 |
| Non-GAAP gross profit for the six months ended June 30 was $1.8 million, a decrease of $83,000 or 4% from the year earlier six months non-GAAP gross profit of $1.9 million |
| The adjusted EBITDA for the first half of 2023 was negative $31.8 million, compared with a negative $21.1 million in the first half of 2022 with the increased due primarily to higher public company and headcount related expenses |
| There are many, many hard problems that we had to solve along the way |
| GAAP gross profit was $751,000 with the decrease due primarily to higher non-cash stock-based compensation expense in the second quarter of this year |
| And it's great to see the deal size is going up on a year-on-year basis, but if we look at the bookings here it was down a little bit sequentially to 92.5 here, which I guess isn't a big deal |
| And then secondarily, actually we had been seeing cycle times coming down on getting deals closed |
| With respect to the GAAP gross profit for the six months ended June 30, it totaled $1.1 million, a decrease of $722,000 or 39% from $1.8 million in the six months end of June 30, 2022, with the decrease due primarily to higher non-cash stock-based compensation expense in the first half of 2023 cost of sales |
| We expect fiscal 2023 revenue to be in the range of $11 million to $13 million, and we expect fiscal 2023 adjusted EBITDA to be less than a negative $58 million |
| The net loss for the second quarter is $25.9 million or $0.20 per share compared with a net loss of $13.3 million or $0.11 per share in the second quarter of 2022 |
| So we are going to continue to see lumpiness for a while until the bookings end up being large enough that those small perturbations in win-loss of just a couple of deals aren't really causing a significant impact on the total bookings number |
| However, it's very, very fledgling at this point in time |
| Net loss for the six months ended June 30 was $50.5 million or $0.40 per share, compared with a net loss of $25.3 million or $0.20 per share in the six months ended June 30, 2022 |
| And John, I wanted to ask on your – in your preliminary results, it looks like you reduced your losses on the EBITDA, adjusted EBITDA for the year |
| So it sounds like you're suggesting that bookings should start to improve in the second half then, is that what you're saying? John Markovich Look, what I'm saying is that bookings are going to continue to be lumpy until they become large enough that small perturbations won't matter |
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