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

So it’s not that these are all individual products, these are all development processors that are on the path to the ultimate production quantum computer. We could choose to make any one of these available in our quantum cloud service to give our customers the ability to see early versions of the product and experiment with them or actually run applications on them. We have not yet decided whether or not we’ll make the 1,200-qubit version available within Leap, we may. We almost assuredly will make the 5,000-qubit version available and then ultimately the 7,000-qubit version. The reason why we’ll most assuredly make the 5,000-qubit version available is because 5,000-qubits with 20 way connectivity and significantly higher coherence will be Advantage system with the same 5,000 qubits, but less connectivity and lower coherence.

Richard Shannon: Okay. Great viewpoint there. Thanks for the detail. That’s all for me. Thank you.

Operator: And our next question come from Robert Aguanno from Piper Sandler. Please go ahead, Robert.

Robert Aguanno: Hi guys. Robert Aguanno on for Harsh Kumar. Thanks for all the colors so far, and thanks for taking the question. Just longer term thinking, can you guys talk more about the competitive landscape here, and as more companies try and get into the annealing space. I was curious about kind of the moat you guys have established and maybe how has that changed since you guys have been public?

Alan Baratz: So first of all, there’s no other commercial annealing quantum computer in the market today. The only other experimental prototype system that we are aware of and that recently became available is a system that I think has like I don’t know four or five qubits. I don’t remember the exact number. That was a experimental research system that was developed by NEC and one of the universities in Japan experimenting with a different technology for the qubits than the flux qubits that we use. And so, it’s interesting to see that there’s some work now beginning in annealing beyond what D-Wave has done. However, it’s very, very fledgling at this point in time. And my view on this has always been that it took us 15 years to get to the point where we had our 5,000-qubit commercial annealing quantum computer.

We’re not standing still. There are many, many hard problems that we had to solve along the way. Much of that is trade secret, and so anybody else that wants to enter the space is going to have a long complex road ahead of them. I think I might’ve mentioned in the past, the U.S. government actually had a program to build an annealing quantum computer four or five years ago. They were not successful with that. We’re the only ones that have been able to pull it off up until now. And we’ve got 220, 225 U.S. granted patents, 400 patents worldwide in this space. So we’ve got a massive patent mode. So I think it’s going to be a long time, if ever before anybody is able to compete with us in annealing quantum computing.

Robert Aguanno: Fair enough. Thanks for the color there. More on the guide for the back half here. The guidance implies a pretty steep ramp. So I was wondering kind of what are the puts and takes there and how should we be thinking about maybe the split between Q3 and Q4? Is there a significant ramp that we should expect in either quarter? Any color there would be great.

Alan Baratz: John, do you want to take that one?

John Markovich: Sure. We haven’t provided any guidance Robert with respect to per quarter performance. But based upon the guidance on the year obviously you can back into what our expectations are with respect to revenue in the second half.

Robert Aguanno: Thanks guys.

Operator: And our next question come from Kevin Garrigan from WestPark Capital. Please go ahead, Kevin.