D-Wave Quantum Inc.

Good day, everyone, and welcome to the D-Wave First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask questions by pressing the star and 1 on your telephone keypad. You may withdraw yourself by pressing the star 2. Please note this call may be recorded and it will be sending by should you need any assistance. It is now my pleasure to turn the conference over to Kevin Hunt, Investor Relations. Please go ahead.

Thank you and good morning. With me today are Dr. Alan Barrett, our Chief Executive Officer, and John Markovich, our Chief Financial Officer. Before we begin, I would like to remind everyone that this call may contain forward-looking statements and should be considered in conjunction with cautionary statements contained in the earnings release and the company's most recent periodic SEC report. During today's call, management will provide certain information that will constitute non-GAAP financial and operational measures under ICT rules, such as non-GAAP gross profit, non-GAAP operating expenses, adjusted EBITDA, and bookings. Reconciliations to GAAP financial measures and certain additional information are also included in today's earnings release, which is available at the Investor Relations section of our company website at www.dua.com.

Thank you, Kevin. Good morning, everyone, and thank you all for joining us today. It feels like we were just together discussing our remarkable FY23 results, and now we're back again to share Q1 highlights. We provided a thorough business update back in March, and today's presentation will build upon many of the same themes we touched upon during our FY23 call. The bottom line is that our progress continues. First, we're hitting all our major product milestones and delivering on our track record of innovation and execution, especially with our Advantage 2 system. This is all about getting even greater quantum processing power into the hands of customers as soon as possible. Second, we're furthering the science of quantum computing. Our recent research demonstrating what we believe is an example of quantum supremacy, meaning our system's ability to solve important real-world problems that cannot be solved classically, is now going through the peer review process with an esteemed scientific publication. Third, our commercial traction is growing. We have new customers spanning government, healthcare, research institutions, and consulting firms signing on to explore and adopt quantum-powered optimization solutions. And finally, While others remain firmly entrenched in R&D, we're building an infrastructure that supports production-grade commercial quantum and hybrid quantum application deployments. All of our key financial and business metrics, including revenue, bookings, total customers, commercial customers, profit, and liquidity, they are all moving up as we enter in the next era of computing. Now let me walk you through a few key highlights of our progress. Last month, we introduced the powerful new FAST Anneal feature. This important technology helps users perform quantum computations at unprecedented speeds, greatly reducing the impact of external disturbances such as thermal fluctuations and noise that often hinder quantum calculations. FAST Anneal was key to our recent quantum supremacy research as well as our work published in Nature in 2023 showing a scaling advantage of annealing quantum computing over several classical heuristics. Now we are bringing that same level of speed and extended control that led our supremacy result to academic researchers and commercial customers. It's thrilling to bring that level of performance to customers. They will now be able to reproduce landmark results in quantum simulation using full-scale, coherent, annealing quantum computing to build world-class applications, as well as expand benchmarking studies and connect increased coherence to better performance. Initial customer response has been fantastic, with customers submitting more than 530,000 problems using Fastenil since it launched in mid-April. Leading industry analyst firm IDC noted that D-Way's launch of the Fastenil feature should be considered just as significant as recent logical qubit and error mitigation announcements from gate-based quantum hardware developers. It's a remarkable feature, and we're very proud to get it into the hands of customers. Let me also take a minute to remind everyone about our work on quantum supremacy. As I stated in our Q4 call, we believe D-Wave is the first in the world to demonstrate quantum supremacy on real-world problems. This groundbreaking research was achieved using our latest generation Advantage 2 quantum computer. showing that our quantum processors can solve problems that cannot be solved classically. And it bears repeating, as there continues to be misinformation in the market, we believe we've achieved a demonstration of quantum supremacy, not quantum advantage or quantum utility as commonly understood in the community. Our result goes beyond classical computation. We believe it is a demonstration of a quantum computer performing calculations of practical interest that a classical computer cannot achieve. Unlike other attempts to show quantum supremacy, mostly around random number generation with no practical application, our research is based on interesting and important quantum simulation problems. It was made public two months ago, and we are not aware of any challenges to our results. We encourage you to check out the preprint paper on the archive. The article is currently going through peer review by a highly respected journal. During our Q4 2023 earnings call, I share details about progress with our Advantage 2 prototype, including the launch of the 1,200-plus qubit version and its availability to customers in our Leak Quantum Cloud service. Growing customer demand for D-Way's latest annealing quantum computing technology is clear from the usage of the two next-generation Advantage 2 experimental prototypes, which together have solved nearly 8 million customer problems since they were made available in 2022 and 2024. Today, I'm thrilled to share with you that another key milestone towards the delivery of our full Advantage 2 system has been achieved. That is, we have very recently yielded 4,800-plus, 4,800-plus qubit processors for Advantage 2. Currently under calibration, the yielding of these 4,800-plus processors marks an important milestone in our Advantage 2 product delivery roadmap. Our goal for the full Advantage 2 system is 7,000 plus qubits, and the yielding of the 4,800 plus qubits chips is a significant step towards that achievement. Turning now to commercial traction. Customer demand remained strong, and growth rates accelerated in the first quarter. As expected, our first quarter 2024 bookings were up significantly. Q1 2024 bookings totaled 4.5 million. a 54% year-over-year increase over Q1 FY23 bookings, and a 43% increase sequentially over 4Q23, representing our eighth consecutive quarter of year-over-year growth in quarterly bookings. Our growth rate for total revenue accelerated to 56% year-over-year, while on a trailing four-quarter comparison basis, revenue from commercial customers increased by 51%, the total number of our commercial customers increased, and the total number of Forbes Global 2000 customers increased. We continue to help customers drive new use cases for quantum that solve real business problems today. We are working with an increasing number of customers on quantum-powered optimization solutions. We're seeing growing interest in applications related to scheduling labor, production, transportation, and inventory resources across verticals such as manufacturing, logistics, retail, services, and government, which are regularly impacted by variable demand and supply conditions. New customer use cases in development for Q1 2024 include optimizing solar panel usage in buildings, body shop scheduling for commercial vehicle production, and optimizing schedules for crude oil tanker unloading at refineries, just to name a few. The applicability of our hybrid quantum technologies across a multitude of optimization problems remains high, with customers seeing measurable performance improvements. Following the release of our supremacy results, we are also seeing growing interest in using the unique capabilities of annealing quantum computing by government and university research labs worldwide to power their pure and applied research activities to solve problems not previously addressed due to the limitations of classical computing. On the partner front, we're thrilled to announce that we've renewed our multi-year partnership with the University of Southern California. USC's prestigious Viterbi School of Engineering will continue to house a D-Wave state-of-the-art advantage quantum computer, facilitating ongoing exploration and adoption of annealing quantum computing solutions for businesses, researchers, and government. USC currently houses the only D-Wave system physically located in the United States. The university is an important strategic partner to us, and we're excited that our critical work together continues. We've seen further progress in terms of educating governments around the world about the value of the quantum computing, and particularly annealing quantum computing, the value that can bring to businesses and society today. In the United States, the passage of the FY24 National Defense Authorization Act last December created a pilot program for quantum computing near-term applications. Congress has introduced the National Defense Quantum Acceleration Act, which would further accelerate the Department of Defense's adoption of quantum computing technology, including annealing quantum computing and quantum hybrid technologies. It creates an office with programmatic authorities to drive adoption of quantum, compute and others, to build near-term applications and further educate about the different types of quantum technologies. This legislation... combined with the earlier passage of the FY24 NDAA, continues to show the push from Congress that the administration needs to start using quantum computing technology today, not just research it. The Pentagon and others can now begin using quantum technologies to help solve national security challenges and problems facing our military in areas such as logistics, transportation, and emergency response. In addition, earlier this month, D-Wave joined others in the quantum industry to showcase quantum technology's potential impact to policymakers in the U.S. Senate. We also responded to media requests for perspectives on how our annealing quantum computing technology could potentially help address some of the transportation infrastructure challenges faced by the city of Baltimore as it works to address the impact from the recent bridge collapse. Beyond the United States, We're also now working on exciting application development for other 5i countries. We hope to provide additional details on a future earnings call. On our last call, I spoke about the launch of our new go-to-market growth strategy to increase sales and expedite customer applications moving into production. The company-wide initiative is now in full swing as we apply an enterprise-wide focus on delivering customer value, especially in near-term applications. in key vertical markets like supply chain, logistics, manufacturing, and government. In support of our aggressive go-to-market efforts, we also recently announced our 10th Qubits Quantum Computing Conference, which will take place on June 17th and 18th in Boston. Seeing success powered by quantum, the conference will demonstrate how D-Wave, our partners, and our customers, such as Davidson Technologies, Los Alamos National Lab, MasterCard, and Momentum Worldwide, a part of Interpublic Groups, Patterson Food Group, Quantum Dazzle, Svoboda X-Units, and Zapata AI are using D-Wave's innovation and Neolink quantum computing technology to solve real-world problems. We hope to see you all in Boston on June 17th and 18th. It's clear that D-Wave's momentum has remained strong since we spoke just two months ago. We continue to propel the business forward in critical product performance milestones, working with our customers to build proofs of concept and applications that address real-world challenges now, and educating governments around the world about the critical role annealing quantum computing can play today. And we're doing all of this while running an efficient, cost-conscious business, never losing sight of our goal to be the first profitable, pure-play quantum computing company in the world. With that, I'll hand the call over to John to provide a review of our first quarter 2024 results. John?