The following is a summary of the D-Wave Quantum (QBTS) Q3 2024 Earnings Call Transcript:

Financial Performance:

• D-Wave reported Q3 2024 revenue of $1.9 million, down by 27% from Q3 2023.

• Non-GAAP gross margin for Q3 was 67.2%, a decrease from the prior year's 76.6%.

• The company experienced a net loss of $22.7 million in Q3, compared with a net loss of $16.1 million in Q3 2023.

• Adjusted EBITDA loss increased by 19% YoY, amounting to $13.8 million.

• For the first nine months of 2024, revenue increased 11% to $6.5 million.

Business Progress:

• Enhanced the 4,400 qubit Advantage 2 processor, aiming for commercial release, showcasing double coherence time and increased qubit connectivity.

• Launched SLAs for Leap quantum cloud service, showing over 99.9% availability, and introduced a powerful non-linear hybrid quantum solver.

• Announced a major quantum optimization pilot with NTT DOCOMO and an AI collaboration with Japan Tobacco in drug discovery.

• Joined as a corporate partner in the Chicago Quantum Exchange and filled key positions in the go-to-market team.

Opportunities:

• The expansion of the Advantage 2 processor is expected to solve more complex computational problems, potentially boosting customer base and revenue.

• Government and commercial interest in quantum applications, particularly optimization and AI, is growing, with specific interest shown by the U.S. Department of Defense and agencies abroad.

• Partnerships and increased presence in emerging markets like the Middle East hint at broader adoption and new market avenues.

Risks:

• The company is observing a significant increase in adjusted EBITDA losses due to higher operating expenses and lower revenue segments.

• Market competition and advancements in quantum computing technology by other firms pose a risk to maintaining a technological edge and market share.

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