D-Wave Quantum Inc. (QBTS) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights several positive aspects: ongoing product development, a strong pipeline, and strategic government opportunities. The Q&A section reveals some uncertainties, such as unclear timelines and retention rates, but these are outweighed by the positive sentiment around new contracts, system scalability, and the company's market positioning. The absence of negative financial indicators and the potential for significant government contracts suggest a positive outlook for stock price movement.
Key Financial Performance
Revenue for fiscal 2025 $24.6 million, an increase of $15.8 million or 179% from fiscal 2024 revenue of $8.8 million. The increase was driven by $16.2 million in systems sales revenue, $5.5 million in QCaaS subscription revenue, and $2.7 million in professional services revenue.
Fiscal 2025 bookings $18.7 million, a decrease of 22% or $5.2 million from fiscal 2024 bookings of $23.9 million. The decrease was due to the absence of an 8-figure booking that occurred in fiscal 2024.
GAAP gross profit for fiscal 2025 $20.3 million, an increase of $14.7 million or 265% from fiscal 2024 GAAP gross profit of $5.6 million. The increase was primarily due to a higher-margin quantum computer system sale during the year.
Non-GAAP gross profit for fiscal 2025 $21.1 million, an increase of $14.7 million or 229% from the prior year non-GAAP gross profit of $6.4 million. The increase was due to higher-margin quantum computer system sales.
GAAP gross margin for fiscal 2025 82.6%, an increase of 19.6% from fiscal 2024 GAAP gross margin of 63%. The increase was primarily due to a higher-margin quantum computer system sale during the year.
Non-GAAP gross margin for fiscal 2025 86%, an increase of 13.2% from the prior year non-GAAP gross margin of 72.8%. The increase was due to higher-margin quantum computer system sales.
Net loss for fiscal 2025 $355 million or $1.11 per share, compared with the fiscal 2024 loss of $143.9 million or $0.75 per share. The increase in net loss was primarily driven by $250.5 million in noncash nonoperating charges related to the remeasurement of the company's warrant liability and realized losses from warrant exercises.
Adjusted net loss for fiscal 2025 $84.5 million or $0.26 per share, an increase of $8.9 million or 11.8% compared to the fiscal 2024 adjusted net loss of $75.6 million or $0.39 per share. The reduction in net loss per share was due to a higher number of issued and outstanding common shares in 2025.
Adjusted EBITDA loss for fiscal 2025 $71.8 million, an increase of $15.8 million or 28% from the fiscal 2024 adjusted EBITDA loss of $56 million. The increased loss was due to higher operating expenses, partially offset by higher gross profit.
Revenue in the fourth quarter of fiscal 2025 $2.8 million, an increase of approximately $0.5 million or 19% from the fourth quarter of fiscal 2024 revenue of $2.3 million. The increase was driven by $1 million in QCaaS subscription revenue, $1 million in professional services revenue, and approximately $700,000 in systems sales revenue.
Bookings for the fourth quarter of fiscal 2025 $13.4 million, a decrease of $4.9 million or 27% compared to the year-earlier quarter of $18.3 million. The decrease was due to the absence of an 8-figure system sale that occurred in the prior year.
GAAP gross profit for the fourth quarter of fiscal 2025 $1.8 million, an increase of approximately $300,000 or 21% from the fiscal 2024 fourth quarter gross profit of $1.5 million. The increase was due to revenue growth.
Non-GAAP gross profit for the fourth quarter of fiscal 2025 $2 million, an increase of approximately $300,000 or 17% from the prior year fourth quarter non-GAAP gross profit of $1.7 million. The increase was due to revenue growth.
GAAP gross margin for the fourth quarter of fiscal 2025 64.8%, an increase of 1% from the fiscal 2024 fourth quarter GAAP gross margin of 63.8%. The increase was due to revenue growth.
Non-GAAP gross margin for the fourth quarter of fiscal 2025 71.8%, a decrease of 1.2% from the fiscal 2024 fourth quarter non-GAAP gross margin of 73%. The decrease was due to changes in revenue mix.
Net loss for the fourth quarter of fiscal 2025 $42.3 million or $0.12 per share, a decrease of $43.8 million or $0.25 per share from the fiscal 2024 fourth quarter net loss of $86.1 million or $0.37 per share. The decrease was primarily due to a reduction in noncash nonoperating charges related to the remeasurement of the company's warrant liability.
Adjusted net loss for the fourth quarter of fiscal 2025 $31.8 million or $0.09 per share, an increase of $14 million or $0.01 per share from the fiscal 2024 fourth quarter adjusted net loss of $17.8 million or $0.08 per share. The increase was due to higher operating expenses.
Adjusted EBITDA loss for the fourth quarter of fiscal 2025 $25 million, an increase of $9.7 million or 63% from the prior year fourth quarter adjusted EBITDA loss of $15.3 million. The increase was due to higher operating expenses, partially offset by higher gross profit.
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Operating Highlights
Advantage quantum computer system sale: First commercial annealing quantum computer sold to Julich Supercomputing Centre for integration into a national supercomputing facility.
Advantage2 system: Launched general availability in May 2025, achieving quantum supremacy on a real-world problem.
Dual platform approach: Combines annealing quantum computing and Quantum Circuits' dual-rail qubit technology for optimization and error-corrected gate-model systems.
Advantage3 system: In development to extend performance gains in annealing quantum computing.
Commercial traction: Record revenue of $24.6 million in fiscal 2025, up 179% year-over-year. Bookings in January 2026 exceeded all of fiscal 2025.
Enterprise QCaaS agreement: Signed a 2-year $10 million deal with a Fortune 100 company, one of the largest in the quantum computing industry.
System sales: $20 million system sale to Florida Atlantic University and ongoing discussions in South Korea and other regions.
Acquisition of Quantum Circuits: Secures D-Wave's position as the only dual platform quantum computing company, enhancing capabilities in error-corrected gate-model systems.
U.S. Government Solutions business unit: Launched to address government interest in quantum technologies, with demonstrated applications in missile defense simulation.
R&D expansion: New headquarters in Boca Raton, Florida, with additional R&D hubs in Burnaby, British Columbia, and New Haven, Connecticut.
Dual platform strategy: Focus on both annealing and gate-model quantum computing to address the full quantum computing market.
Commercial separation: Positioned as a frontrunner in the quantum computing industry with real-world quantum supremacy and commercial adoption.
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Risk or Challenges
Market Conditions: The quantum computing industry is consolidating, and only a few companies are expected to survive. This creates competitive pressure for D-Wave to maintain its leadership position.
Competitive Pressures: D-Wave faces competition from companies like Google, Quantinuum, IBM, and others. While D-Wave claims technical and commercial advantages, competitors are also advancing their technologies.
Regulatory Hurdles: The company has not explicitly mentioned regulatory challenges, but its expansion into government contracts and international markets may expose it to regulatory scrutiny.
Supply Chain Disruptions: No explicit mention of supply chain disruptions, but the complexity of quantum computing systems and reliance on specialized components could pose risks.
Economic Uncertainties: D-Wave's profitability depends on continued investment in R&D and commercial adoption. Economic downturns or reduced funding could impact its operations.
Strategic Execution Risks: The company is investing heavily in dual-platform technology and expanding its R&D footprint. Delays or failures in these initiatives could hinder its competitive edge and financial performance.
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Guidance & Outlook
Revenue Growth: D-Wave expects incrementally higher revenue growth in the second half of 2026 compared to the first half, driven by system sales and service agreements.
System Sales Revenue Recognition: Revenue from system sales will be recognized on a percentage of completion basis, with site preparation, installation, and calibration potentially spanning multiple months or quarters.
Enterprise QCaaS Agreement: The $10 million enterprise Quantum Compute as a Service (QCaaS) agreement will be recognized ratably over a 2-year period starting in Q1 2026.
European System Sale: The EUR 10 million system sale in Italy will be recognized over 5 years, starting in the second half of 2026 after system installation.
R&D Investments: D-Wave plans to aggressively invest in annealing and gate-model technology development, including expanding the New Haven gate-model team by 50% and establishing a new R&D facility in Boca Raton, Florida.
Government Business Unit: Significant investments will be made in the newly formed U.S. Government Solutions business unit to capitalize on government opportunities.
Gate-Model Systems: D-Wave expects to generate initial Quantum Compute as a Service revenue from gate-model systems in 2026 and build a sales pipeline for delivery starting in 2027.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What are the advantages of the gate-model with built-in error correction?
A:The gate-model with built-in error correction offers a timing advantage due to reduced complexity in building a fully error-corrected system. The dual rail technology provides high gate fidelities comparable to the best in the industry while maintaining a 1,000x speed advantage of superconducting. This allows error correction with fewer physical qubits per logical qubit and reduces complexity further with on-chip cryogenic control, enabling control of hundreds of thousands of qubits with fewer I/O lines. This combination positions the company to deploy scaled error-corrected superconducting gate-model systems ahead of competitors.
Q:How much OpEx is expected to incur in 2026 with the QCI acquisition?
A:The 15% sequential growth in OpEx includes the incremental costs associated with the QCI acquisition, such as R&D team expansion, fabrication expenses, and some capital expenditure.
Q:What is the ideal net retention rate for QCaaS, and how could Stride hybrid solvers impact upsell conversations?
A:The company has not published retention rates. However, the composition of QCaaS has shifted, with larger transactions providing more visibility on growth. The Stride hybrid solvers and new ML integration capabilities are expected to enhance upsell conversations, transitioning QCaaS into larger enterprise license deals, as evidenced by a $10 million Fortune 100 company deal.
Q:What is the revenue contribution and engagement level from Quantum Circuits?
A:Quantum Circuits is expected to contribute revenue through professional services, QCaaS, and government-related business. The company has seen interest in dual rail systems, including the operational 8-qubit system and the upcoming 17-qubit system, with current annealing customers expressing interest.
Q:How is the company mitigating risks related to competitors acquiring foundries?
A:The dual rail technology is not fabricated at SkyWater, and for annealing technology, SkyWater only fabricates the wiring, not the active components. The company fabricates active components in-house and is exploring other sources of fab support to mitigate risks.
Q:What metrics are customers focused on when evaluating Quantum as a Solution?
A:Customers focus on metrics like speed, convenience, and ROI. The annealing quantum systems are the only ones delivering commercial value today, with customers seeing strong ROI and bottom-line improvements. This has led to interest in enterprise licenses and additional applications.
Q:Are there opportunities to combine annealing and gate-model technologies?
A:Some annealing customers have expressed interest in gate-model technology for specific use cases. While there is early evidence of integrating digital controls into annealing systems, it is too soon to consider hybrid solutions as a viable commercial opportunity.
Q:How much capacity does the company have for enterprise QCaaS deals?
A:The company has sufficient capacity in its Leap quantum cloud service to support tens of enterprise deals. Each quantum computer can support $25-$30 million of revenue per year, and the company has four systems available. Additional systems can be deployed within 3-4 months at a capital cost of about $2 million.
Q:What progress has been made on the Advantage3 system?
A:The Advantage3 system includes analog digital capability and multichip scaling to 100,000 qubits. The company has received its first chips with analog digital controls and is close to having chips demonstrating multichip interconnect, showing good progress.
Q:What is the pipeline strength and timeline for converting it into revenue?
A:The pipeline is strong for both system sales and QCaaS deals, with larger companies and deals progressing faster. Revenue recognition depends on the company's policies and deal-specific timelines, but the go-to-market environment is robust.
Q:What is the magnitude of the opportunity with increased Pentagon budgets for quantum technologies?
A:The company is focused on solving computational problems for the government rather than pursuing R&D grants. The Davidson Anduril deal has generated significant interest, and the company is building a government business unit to capitalize on these opportunities.
Q:What is the capacity and scalability of future systems like Advantage3?
A:The company has sufficient capacity in its current cloud service and is investing in capabilities to install multiple systems in parallel to meet growing demand. The Advantage3 system will be upgraded across all cloud systems as quickly as possible.
Q:What is the expected mix of QCaaS and hardware sales going forward?
A:The mix will depend on the composition and magnitude of bookings, which are expected to be lumpy. OpEx is projected to grow 15% sequentially quarter-to-quarter, and revenue recognition will vary based on deal-specific elements.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the timeline for revenue recognition from the pipeline, the exact metrics for QCaaS retention rates, and the potential for hybrid solutions combining annealing and gate-model technologies. Additionally, they did not provide clarity on the exact magnitude of the opportunity with increased Pentagon budgets or the specific capabilities of the Advantage3 system relative to Advantage2.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Anduril
Atlantic University
Circuits acquisition
Compute Service
Florida Atlantic
Fortune enterprise
Google Quantinuum
Government Solutions
Julich
Officer Dr
Others
Quantum Circuits
Quantum Compute
RD
University enterprise
Wave Google
Wave advantage
Wave chip
Wave world
agreement
analyst
architecture
capital
computing industry
detection
erasure
fidelity ion
ion trap
missile
phase
platform
promise
rail technology
speed
trap atom
QBTS Transcript
D-Wave Quantum Inc. (QBTS) Q1 2026 Earnings Call Transcript
Positive5-12
The earnings call showed a strong financial performance with a 25% increase in revenue and improved gross margins. Operating expenses decreased, and there was a notable improvement in adjusted EBITDA loss. Bookings rose by 20%, indicating strong customer acquisition and retention. The lack of strategic initiatives or risks discussed may limit the upside, but overall, the financial metrics suggest a positive sentiment, likely leading to a 2% to 8% stock price increase.
D-Wave Quantum Inc. (QBTS) Q4 2025 Earnings Call Transcript
Positive2-26
The earnings call highlights several positive aspects: ongoing product development, a strong pipeline, and strategic government opportunities. The Q&A section reveals some uncertainties, such as unclear timelines and retention rates, but these are outweighed by the positive sentiment around new contracts, system scalability, and the company's market positioning. The absence of negative financial indicators and the potential for significant government contracts suggest a positive outlook for stock price movement.
D-Wave Quantum Inc. (QBTS) Q3 2025 Earnings Call Transcript
Positive11-6
The earnings call indicates strong revenue growth, improved gross margins, and strategic initiatives in quantum AI and government engagements. Despite a significant net loss, the adjusted figures show improvement. The Q&A highlights potential in national security and defense, and successful trials in optimization problems. The focus on high-margin revenue streams and strategic partnerships, along with optimistic future plans, suggest a positive sentiment. However, the lack of clarity on certain deals and the increase in operating expenses temper the outlook. Overall, the stock is likely to see a positive movement.
D-Wave Quantum Inc. (QBTS) Q2 2025 Earnings Call Transcript
Positive8-7
The earnings call reveals strong financial performance, including record revenue and a robust cash position, which supports future profitability. Product development is promising, with the Advantage2 system demonstrating quantum supremacy. While M&A strategies and quantum AI milestones lack specificity, the company's strategic priorities and advancements in cryogenic technology are positive. The Q&A section highlights a focus on growth through acquisitions and R&D, with a high customer retention rate. Overall, the sentiment is positive, with potential for stock price appreciation over the next two weeks.
QBTS Slides
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