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01/11 04:08
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance, including record revenue and a robust cash position, which supports future profitability. Product development is promising, with the Advantage2 system demonstrating quantum supremacy. While M&A strategies and quantum AI milestones lack specificity, the company's strategic priorities and advancements in cryogenic technology are positive. The Q&A section highlights a focus on growth through acquisitions and R&D, with a high customer retention rate. Overall, the sentiment is positive, with potential for stock price appreciation over the next two weeks.
Revenue $3.1 million, an increase of about $900,000 or 42% from the second quarter of fiscal 2024 revenue of $2.2 million. The increase was due to $1 million in revenue associated with the Advantage2 quantum processing unit upgrade for the annealing system.
Bookings $1.3 million, an increase of approximately $600,000 or 92% from the second quarter of 2024 bookings of $700,000. The increase was attributed to an expanding sales pipeline and larger transaction sizes.
GAAP Gross Profit $2 million, an increase of approximately $600,000 or 42% from the second quarter of fiscal 2024 GAAP gross profit of approximately $1.4 million. The increase was due primarily to the growth in revenue.
Non-GAAP Gross Profit $2.2 million, an increase of approximately $600,000 or 39% from the second quarter of fiscal 2024 non-GAAP gross profit of approximately $1.6 million. The difference between GAAP and non-GAAP gross profit is due to noncash stock-based compensation and depreciation expenses.
GAAP Gross Margin 63.8%, a slight improvement from the second quarter of fiscal 2024 GAAP gross margin of 63.6%. The improvement was due to revenue growth.
Non-GAAP Gross Margin 71.8%, a slight decrease of 1.3% from the second quarter of fiscal 2024 non-GAAP gross margin of 73.1%. The decrease was attributed to changes in cost structure.
Net Loss $167.3 million or $0.55 per share, an increase of $149.5 million or $0.45 per share from the second quarter of fiscal 2024 net loss of $17.8 million or $0.10 a share. The increase was primarily due to $142 million in noncash nonoperating charges related to the remeasurement of the company's warrant liability and realized losses from warrant exercises.
Adjusted Net Loss $25.3 million or $0.08 per share, an increase of $5.3 million and a decrease of $0.04 per share from the fiscal 2024 second quarter adjusted net loss of $20 million or $0.12 per share. The increase was due to higher operating expenses.
Adjusted EBITDA Loss $20 million, an increase of $6.1 million or 44% from the second quarter of fiscal 2024 adjusted EBITDA loss of $13.9 million. The increase was due to higher operating expenses reflecting investments for future growth, partly offset by higher gross profit.
Cash Position $819.3 million as of June 30, representing over a 1,900% increase from the fiscal 2024 second quarter consolidated cash balance of $40.9 million and a nearly 170% increase from the immediately prior fiscal 2025 first quarter consolidated cash balance of $304.3 million. The increase was due to over $500 million raised in equity, including proceeds from ATM equity programs, warrant exercises, and an equity line of credit.
Advantage2 Quantum Computer: Launched in May 2025, it is the most advanced and energy-efficient annealing quantum computer, capable of solving complex problems beyond classical computers. It features double coherence time, a 40% increase in energy scale, and increased qubit connectivity from 15 to 20.
Quantum AI Toolkit: Introduced an open-source toolkit integrating D-Wave's quantum computers with PyTorch for machine learning applications. Demonstrated its use in generating simple images, advancing quantum AI capabilities.
South Korea Expansion: Established a strategic relationship with Yonsei University and Incheon Metropolitan City to promote quantum computing adoption and research. Plans include deploying an Advantage2 system at Yonsei University.
Customer Engagements: Signed new and renewing contracts with major organizations like E.ON, GE Vernova, Nikon, NTT Data, and the University of Oxford. Also engaged with a Fortune 500 aerospace company to develop quantum optimization use cases.
Cryogenic Packaging Initiative: Launched a strategic initiative to advance cryogenic packaging for scaling quantum processors, leveraging NASA JPL's expertise.
Quantum Hybrid Applications: Developed a proof of technology with North Wales Police to optimize patrol vehicle deployment, achieving 90% target response times in 10 seconds.
M&A and Investment Plans: With a record cash position of $819.3 million, the company plans to explore strategic acquisitions and accelerate R&D investments in quantum technology and AI.
Go-to-Market Strategy: Focused on increasing discussions for on-premises systems and expanding the Leap Quantum LaunchPad program, which has attracted over 1,300 applications since January 2025.
Revenue Growth Challenges: Deals are taking longer to close due to complex transaction structures and rigid procurement processes in larger organizations, which could delay revenue realization.
Profitability Concerns: The company reported a significant net loss of $167.3 million in Q2 2025, primarily due to noncash nonoperating charges related to warrant liabilities, which could impact financial stability.
Operational Cost Increases: Non-GAAP operating expenses are expected to increase by approximately 15% in the coming quarters due to investments in R&D, sales, marketing, and cybersecurity, potentially straining cash flow.
Market Misunderstanding: Continued misinformation about the differences between annealing and gate model quantum computing could confuse the market and hinder customer adoption.
Customer Acquisition Challenges: Despite growing interest, the company faces challenges in converting applications from the Leap Quantum LaunchPad program into revenue-generating customers.
Supply Chain and Manufacturing Risks: The company is heavily investing in advanced cryogenic packaging and superconducting processes, which could face delays or technical challenges, impacting product development timelines.
Competitive Pressures: The quantum computing market is highly competitive, and D-Wave's focus on both annealing and gate model systems may stretch resources and dilute focus.
Economic Uncertainties: Macroeconomic conditions could impact customer budgets and willingness to invest in quantum computing solutions, affecting sales and revenue.
Revenue Expectations: Revenue for the second quarter of fiscal 2025 totaled $3.1 million, an increase of about $900,000 or 42% from the second quarter of fiscal 2024. Revenue from the Advantage2 upgrade is expected to be substantially complete by the end of this year.
Capital Expenditures: D-Wave is accelerating key investment initiatives, including superconducting bump bond processes, upgrading superconducting printed circuit board advanced packaging manufacturing operations, and increasing wafer fabrication runs to support building Advantage3 prototypes and improving qubit coherence times.
Market Trends and Business Segment Performance: D-Wave is seeing growing interest in quantum optimization customer engagements across both commercial and government sectors, including U.S. Defense. The company is also expanding its professional services organization to support this demand.
Strategic Plans: D-Wave is investing in quantum AI research and development programs and expanding its geographical footprint for professional services. The company is also pursuing strategic acquisitions to propel its business further and faster.
The selected topic was not discussed during the call.
The earnings call indicates strong revenue growth, improved gross margins, and strategic initiatives in quantum AI and government engagements. Despite a significant net loss, the adjusted figures show improvement. The Q&A highlights potential in national security and defense, and successful trials in optimization problems. The focus on high-margin revenue streams and strategic partnerships, along with optimistic future plans, suggest a positive sentiment. However, the lack of clarity on certain deals and the increase in operating expenses temper the outlook. Overall, the stock is likely to see a positive movement.
The earnings call reveals strong financial performance, including record revenue and a robust cash position, which supports future profitability. Product development is promising, with the Advantage2 system demonstrating quantum supremacy. While M&A strategies and quantum AI milestones lack specificity, the company's strategic priorities and advancements in cryogenic technology are positive. The Q&A section highlights a focus on growth through acquisitions and R&D, with a high customer retention rate. Overall, the sentiment is positive, with potential for stock price appreciation over the next two weeks.
The earnings call reveals strong financial performance with a 509% revenue increase, significant gross margin improvements, and reduced net losses. Additionally, D-Wave's strategic initiatives, such as the Quantum Realized Framework and new partnerships, demonstrate potential for growth. However, some concerns arise from the Q&A session, particularly regarding undisclosed partnership details and lack of clarity on future revenue run rates. Despite these uncertainties, the overall sentiment remains positive due to record revenues, profitability outlook, and robust cash position, likely leading to a positive stock price movement.
The earnings call highlights strong financial performance with a 509% increase in revenue and a significant reduction in net loss. The company has a strong cash position and aims for profitability with less investment than competitors, indicating financial health. The Q&A section did not reveal major concerns and maintained positive sentiment, although some details were withheld. The company's technological advancements and strategic partnerships add to the positive outlook. Despite some uncertainties in customer adoption and error correction, the overall sentiment is positive, likely leading to a stock price increase in the short term.
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