Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
D-Wave Quantum's cash flow metrics continued to deteriorate in the third fiscal quarter of 2024, with revenue declining and operating cash outflows widening. The free cash flow margin weakened significantly compared to both the prior quarter and the same period a year ago.
- Cash conversion remained deeply negative as operating cash flow consumed far more than revenue generated, and capital expenditure, though lower than the prior quarter, added to the outflow. The result was a free cash flow margin that was substantially more negative than in either comparative period.
- Compared to the immediate prior quarter, revenue was lower and operating cash outflow was higher, leading to a more negative free cash flow and a weakened margin. Versus the same quarter one year earlier, revenue had also declined and the operating cash deficit had deepened, with free cash flow and its margin both worsening.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
-$61.0M
Trailing twelve-month free cash flow.
Quarter free cash flow
-$18.4M
Free cash flow in the selected fiscal quarter.
Operating cash flow
-$18.1M
Cash generated by operations before capital spending.
CapEx
$306000
Capital spending and related asset purchases.
FCF margin
-982.8%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2023-12-31 | $2.9M | -$14.7M | $442000 | -$15.2M | -522.4% |
| 2024-03-31 | $2.5M | -$12.1M | $305000 | -$12.4M | -504.0% |
| 2024-06-30 | $2.2M | -$14.5M | $545000 | -$15.0M | -687.7% |
| 2024-09-30 | $1.9M | -$18.1M | $306000 | -$18.4M | -982.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 80.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 16.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Accelerating operating cash burn
Operating cash outflow rose sequentially and year-over-year, despite lower revenue, indicating a faster rate of cash consumption in core operations. This was the primary factor behind the deeper free cash flow deficit.
If the trend persists, the company's liquidity position could come under additional pressure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion remained deeply negative as operating cash flow consumed far more than revenue generated, and capital expenditure, though lower than the prior quarter, added to the outflow. The result was a free cash flow margin that was substantially more negative than in either comparative period.
Compared to the immediate prior quarter, revenue was lower and operating cash outflow was higher, leading to a more negative free cash flow and a weakened margin. Versus the same quarter one year earlier, revenue had also declined and the operating cash deficit had deepened, with free cash flow and its margin both worsening.
Monitor whether operating cash outflows continue to widen in absolute terms, as this directly drives the free cash flow gap.