D-Wave Quantum Inc. filed its annual report for the fiscal year ended December 31, 2024, reporting a market value of its common stock held by non-affiliates of $136.7 million as of June 30, 2024. The company’s financial statements reflect the correction of an error in previously issued financial statements. The report does not include any restatements that required a recovery analysis of incentive-based compensation received by executive officers. As of March 12, 2025, there were 287.8 million shares of common stock outstanding, with an additional 3.6 million exchangeable shares convertible into common stock. The company is a non-accelerated filer and an emerging growth company, and it has elected not to use the extended transition period for complying with new or revised financial accounting standards.
Financial Performance Overview
D-Wave Quantum Inc., a leading provider of quantum computing services and systems, has released its financial results for the year ended December 31, 2024. The company’s revenue remained consistent with the prior year, with an increase in Quantum Computing as a Service (QCaaS) revenue offset by a decrease in professional services revenue. However, the company’s cost of revenue decreased, leading to an increase in gross profit.
On the expense side, research and development (R&D) and general and administrative (G&A) costs decreased, while sales and marketing expenses increased as the company invested in growing its customer base and brand awareness. The company also experienced significant changes in other income and expenses, including increased interest costs, gains on investments, and changes in the fair value of its warrant liabilities.
Overall, the company reported a net loss of $143.9 million for the year, a significant increase from the prior year’s net loss of $82.7 million. However, the company has taken steps to improve its liquidity and financial position, including raising additional equity capital and repaying a significant portion of its outstanding debt.
Revenue and Profit Trends
D-Wave’s revenue for the year ended December 31, 2024 remained consistent with the prior year at $8.8 million. This was due to an increase in QCaaS revenue, which grew by $1.9 million, offset by a decrease of $1.9 million in professional services revenue.
The increase in QCaaS revenue was primarily driven by an increase in the average revenue per QCaaS customer, as the company continued to expand its customer base and the adoption of its cloud-based quantum computing services. The decrease in professional services revenue was a result of the timing of closing new professional services engagements.
Despite the consistent revenue, the company’s cost of revenue decreased by $0.9 million, or 21%, to $3.3 million. This was primarily driven by a decrease in non-cash stock-based compensation and personnel costs. As a result, the company’s gross profit increased by $0.9 million, or 20%, to $5.6 million.
Strengths and Weaknesses
One of the company’s key strengths is its continued investment in research and development to enhance the performance of its quantum computing systems and expand the functionality of its QCaaS platform. The company’s R&D expenses decreased by $2.6 million, or 7%, to $35.3 million, primarily due to a decrease in stock-based compensation expenses.
Another strength is the company’s focus on reducing its general and administrative expenses, which decreased by $4.6 million, or 12%, to $32.4 million. This was driven by decreases in professional fees, stock-based compensation, and insurance costs, partially offset by an increase in personnel expenses and credit loss expenses.
However, the company’s sales and marketing expenses increased by $4.8 million, or 47%, to $15.1 million, as the company invested in growing its customer base and brand awareness. This reflects the company’s strategy to drive additional revenue and expand its global reach.
One of the company’s weaknesses is its significant net loss, which increased by $61.2 million, or 74%, to $143.9 million. This was primarily due to the increase in other expenses, including a $68.5 million increase in the fair value of the company’s warrant liabilities and a $3.9 million increase in interest expense related to the company’s debt obligations.
Outlook and Future Prospects
Despite the company’s significant net loss, management has assessed the company’s liquidity and determined that it has sufficient capital resources to meet its obligations for at least the next 12 months. This is due to the company’s successful fundraising activities, including the issuance of $214.2 million in common shares during the year ended December 31, 2024 and an additional $146.2 million in January 2025.
The company has also taken steps to improve its financial position by repaying a significant portion of its outstanding debt, including the $30.0 million Term Loan and $4.3 million in accrued interest. This has reduced the company’s interest expense and improved its overall financial flexibility.
Looking ahead, the company expects its QCaaS revenue to continue to increase as more customers adopt its cloud-based quantum computing services. However, the company’s quantum computing system revenue may have an outsized impact on its overall revenue and product mix, as this revenue is expected to be irregular and intermittent.
The company also expects its research and development expenses to continue to trend upward as it invests in enhancing its quantum computing capabilities and expanding the functionality of its QCaaS platform. Similarly, the company expects its sales and marketing expenses to increase as it continues to drive customer acquisition and brand awareness.
Overall, the company’s financial performance in 2024 was mixed, with improvements in gross profit and reductions in certain operating expenses offset by a significant increase in net loss. However, the company’s successful fundraising activities and debt repayment have strengthened its financial position and liquidity, positioning it to continue investing in its core business and pursuing growth opportunities in the rapidly evolving quantum computing market.
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