D-Wave's Q2 Results Highlight Robust Growth, Promising Quantum Computing Trajectory

Zinger Key Points
  • The company witnesses a robust business performance, securing multiple new deals across varied application domains.
  • D-Wave has revises its FY23 guidance, expecting an annual revenue between $11 million to $13 million.

Benchmark analyst David Williams reiterated D-Wave Quantum Inc QBTS with a Buy and $4 price target.

D-Wave's second-quarter results primarily aligned with the preliminary financials released on July 20. 

The standout feature was the significant boost in liquidity, with cash reserves soaring to more than $50 million from a mere $7.5 million at the end of the second quarter. This was achieved by utilizing $35.1 million under the ELOC program and securing another $15 million tranche under its $50 million term loan post the quarter's close.

Second-quarter revenue stood at $1.71 million, with a quarter-over-quarter decline attributed to the lumpiness of revenue recognition. The company's preference for bundled contracts has led to this revenue volatility.

However, with a 146% YoY increase in quarterly bookings and a rise in average deal size, the future revenue growth trajectory looks promising.

D-Wave's annealing architecture is primed for generative AI applications, likely driving growth in upcoming quarters.

See Also: Hedge Funds Target Tech In Q2, Increasing Positions In Meta Platforms, Microsoft, Nvidia, Apple

The company witnessed a robust business performance, securing multiple new deals across varied application domains.

The company's customer base has grown, with the number of revenue-producing customers increasing to 115 from 109 quarter-over-quarter.

Commercial customers, making up 59% of the total, have risen to 47 from 44. The shift to packaged deal pricing has led to a 308% YoY surge in deal size for commercial customers and a 44% YoY revenue growth. The trend indicates growing customer confidence in D-Wave's value proposition.

Customer engagement has been robust, with new contracts signed with entities like Interpublic Group, VINCI Energies and Unisys Corporation. 

In collaboration with Davidson Technologies, D-Wave developed two advanced national defense applications that outperformed alternative computing solutions.

D-Wave has revised its FY23 guidance, expecting an annual revenue between $11 million to $13 million (vs. the prior $12 million-$13 million).

The company's $4 price target is based on a 7x EV/Sales multiple on 2026E revenue projections, positioning D-Wave as a frontrunner in the quantum computing domain, especially in catering to AI-related demand.

QBTS Price Action: D-Wave Quantum shares traded lower by 6.29% at $1.49 on the last check Tuesday.

Read Next: PayPal Has a New CEO, But Old Challenges Remain - Analysts Discuss Future Path

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: Shutterstock

 

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: NewsPenny StocksPrice TargetReiterationAnalyst RatingsTechAIAI GeneratedAI-Generatedartificial intellegenceBriefsQuantum Computing
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!