Overview

• Quantum computing systems provider's Q1 revenue fell 81% yr/yr, missing analyst expectations

• Company posted a Q1 net loss of $18.4 mln as operating expenses rose sharply

• Q1 bookings surged nearly 2,000% yr/yr, driven by major system and service contracts

Outlook

• Company expects to accelerate delivery of large-scale, error-corrected gate model quantum systems

• D-Wave targets dual-rail system with ~175 physical qubits by end of 2028

• Company expects to recognize 54% of $42.4 mln Q1 RPO as revenue in next 12 months

Result Drivers

• ONE-TIME SYSTEM SALE IMPACT - Co said Q1 revenue and gross profit fell due to the absence of a large annealing quantum computer system sale recognized in the prior-year quarter

• SURGE IN BOOKINGS - Q1 bookings rose nearly 2,000% yr/yr, driven by a $20 mln system sale to Florida Atlantic University and a $10 mln enterprise service agreement

• HIGHER OPERATING EXPENSES - Q1 operating expenses increased due to Quantum Circuits acquisition costs, higher personnel expenses, and increased investment in product development and go-to-market initiatives

Company press release: ID:nBw93rV8Ka

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Revenue	Miss	$2.86 mln	$4.14 mln (14 Analysts)
Q1 Net Income		-$18.36 mln
Q1 Gross Profit		$1.82 mln
Q1 Income From Operations		-$54.73 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 14 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the it services & consulting peer group is "buy"

• Wall Street's median 12-month price target for D-Wave Quantum Inc is $36.00, about 49.8% above its May 11 closing price of $24.03

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.