D-Wave Quantum Inc. (NYSE:QBTS) Q2 2023 Earnings Call Transcript

Richard Shannon: Hi, Alan and John. Thanks for taking my questions as well. Maybe we’ll touch on bookings here. Alan, you talked about increased activity going on here. And it’s great to see the deal size is going up on a year-on-year basis, but if we look at the bookings here it was down a little bit sequentially to 92.5 here, which I guess isn’t a big deal. I’d certainly love to see that grow here. So you talk about a lot of activity. Is there a sense of sales cycles lengthening that drives this or some other lumpiness and would you expect bookings to start improving on a quarter-on-quarter basis and third quarter in the second half?

John Markovich: Yes, so first of all, I think it’s more about lumpiness in the following sense because of the fact that we’re still early on in building the business, just a kind of one or two deal change in win versus loss really makes an impact. So we are going to continue to see lumpiness for a while until the bookings end up being large enough that those small perturbations in win-loss of just a couple of deals aren’t really causing a significant impact on the total bookings number. And then secondarily, actually we had been seeing cycle times coming down on getting deals closed. A year ago, we were looking at north of a year, sales cycle whereas more recently we’ve been looking at in a range of five to seven months. And so, again, small perturbations in that can make a difference right now given where we are.

And so, okay, in the last quarter, maybe we were looking at the higher end of that rather than the lower end of that, where we were in the previous quarter. But I think the main point is that small perturbations make a difference right now, our expectation is that, as we get a little bit further down the path and the bookings become larger, that those small perturbations won’t make much of a difference.

Richard Shannon: Okay. So it sounds like you’re suggesting that bookings should start to improve in the second half then, is that what you’re saying?

John Markovich: Look, what I’m saying is that bookings are going to continue to be lumpy until they become large enough that small perturbations won’t matter. And our focus is on continuing to grow the site –and continue to grow bookings and revenue.

Richard Shannon: Okay. Fair enough. Let’s follow up on topic of your Advantage2 here. And you had an interesting comment in your press release in the last question from Suji was hitting on part of this, but in your press release you talked about a new 1,200-qubit processor supporting that Advantage – future Advantage2 system here. How big of an improvement is this 1,200-qubit processor from prior generations? And how does this help you scale up into larger systems over time?

Alan Baratz: Yes, so the 1,200-qubit processor is just a step on the path to the Advantage2 delivery. So the way we develop the quantum computers is we start by fabricating smaller versions to prove out the design and the fab stack and our ability to calibrate the new architecture and then we start scaling it. And so in the case of Advantage2, our product plan and roadmap involved several processors of increasing size, starting with roughly a 300-qubit processor, which I think we pointed out was available in the new higher coherent stack. I don’t know, three or four months ago, a 1,200-qubit version which we’ve now yielded and is being calibrated. The next one in the stack is a 5,000-qubit version, and then on the 7,000-qubit version.