D-Wave Quantum Q1 Earnings Call Highlights

Key Points

• Bookings surged to $33.4 million in Q1, up 1,994% year over year, driven by a $20 million Florida Atlantic University system sale and what D-Wave called the industry’s first $10 million enterprise quantum computing-as-a-service agreement.
• Revenue fell sharply to $2.9 million because the prior-year quarter included a large one-time system sale, but D-Wave said commercial demand is strengthening and backlog rose to $42.4 million, up 563% from a year earlier.
• The company’s loss widened as operating expenses jumped to $56.5 million, though D-Wave ended the quarter with $588.4 million in cash and investments and said its liquidity supports a “fully funded plan to profitability.”

D-Wave Quantum NYSE: QBTS reported a sharp increase in first-quarter bookings and said demand for its quantum computing systems has strengthened, even as revenue declined from a year earlier when results included a major system sale.

On the company’s first-quarter 2026 earnings call, Chief Executive Officer Dr. Alan Baratz said D-Wave is seeing “measurable business outcomes” from what he described as accelerating commercial momentum. Chief Financial Officer John Markovich said first-quarter revenue was $2.9 million, down 81% from $15 million in the prior-year period, which included $12.6 million in revenue from the first sale of a D-Wave annealing quantum computer system.

Bookings, however, rose sharply. Markovich said first-quarter bookings totaled $33.4 million, up 1,994% from $1.6 million in the first quarter of 2025 and up 149% from $13.4 million in the fourth quarter of 2025. The total included a previously announced $20 million system sale to Florida Atlantic University and what Baratz called the industry’s first $10 million enterprise license quantum computing-as-a-service agreement.

Bookings and Backlog Rise

Markovich said D-Wave recognized revenue from more than 100 individual customers in the quarter, with more than 50% of them commercial enterprises. Commercial revenue accounted for more than 73% of quarterly revenue. By product category, revenue included $1.8 million in quantum computing-as-a-service subscription revenue, up nearly 15% year over year, and $1 million in professional services revenue, up more than 26%.

Remaining performance obligations, or backlog, also increased. Markovich said RPO totaled $42.4 million as of March 31, up 563% from $6.4 million a year earlier and up 216% from $13.4 million at the end of the fourth quarter of 2025. About 54% of the balance is expected to be recognized as revenue over the next 12 months, and 71% over the next two years.

Markovich said the backlog is “roughly 50/50 between commercial and research,” with $20 million tied to the Florida Atlantic University system sale and a significant portion related to the enterprise SaaS agreement.

D-Wave did not provide formal financial guidance, but Markovich said second-quarter 2026 revenue is likely to be “up modestly” from the first quarter, with a substantial portion of full-year revenue expected in the second half.

Loss Widens as Expenses Increase

GAAP gross profit was $1.8 million, down 87% from $13.9 million in the prior-year quarter, reflecting the comparison with the year-earlier system sale. GAAP gross margin was 63.6%, compared with 92.5% a year earlier.

GAAP operating expenses rose to $56.5 million from $25.2 million. Markovich attributed the increase primarily to $9.1 million of non-recurring costs related to the acquisition of Quantum Circuits, higher salaries and personnel costs, and $7.4 million in non-cash expenses, including stock-based compensation and depreciation and amortization.

Net loss was $18.4 million, or $0.05 per share, compared with a net loss of $5.4 million, or $0.02 per share, in the first quarter of 2025. Adjusted EBITDA loss was $32.8 million, compared with a loss of $6.1 million a year earlier.

D-Wave ended the quarter with $588.4 million in cash and marketable investment securities, up 93% from $304.3 million a year earlier. Markovich said the company invested $250 million in cash in connection with the Quantum Circuits acquisition and believes remaining liquidity is sufficient to support “a fully funded plan to profitability.”

Company Raises System Sales Expectations

Baratz said D-Wave now expects two or three system deals per year, compared with an earlier expectation of one system sale annually. He said the company expects to deliver at least two systems in 2026.

During the question-and-answer portion of the call, Baratz said the company is “well down the path of negotiating system deals with multiple customers,” though those discussions have not been announced. Asked about likely buyers this year, he said he expects one possible commercial system sale, with other sales more likely in research and academic settings.

Baratz said current system purchases remain more oriented toward “deeper research investigations,” where customers need more control over operating parameters than is available through cloud-based access. He added that blockchain and artificial intelligence could become areas where commercial demand for systems expands if current work proves successful.

Gate Model Roadmap Highlighted After Quantum Circuits Acquisition

Baratz used much of the call to emphasize D-Wave’s position in both annealing quantum computing and gate model quantum computing following its January acquisition of Quantum Circuits. He said D-Wave is now “the only dual platform quantum computing company,” developing both annealing and gate model systems.

The company outlined a gate model roadmap based on Quantum Circuits’ dual-rail qubit technology. Baratz said D-Wave is targeting about 175 physical qubits by the end of 2028, 10 logical qubits by 2030 and 100 logical qubits by the end of 2032. He said the company has demonstrated greater than 99.9% fidelities on a small system and believes dual-rail technology can improve error correction efficiency.

Baratz said the dual-rail approach includes built-in erasure detection that can identify roughly 90% of errors as they occur, with an observed erasure rate of 0.5%. He also said the technology could reduce the number of physical qubits needed for a logical qubit by up to an order of magnitude.

Asked about customer interest in gate model systems, Baratz said a handful of customers have expressed interest, including some in acquiring a system and others in accessing it through the cloud. He said D-Wave is working to integrate the tools into its Leap cloud service and Ocean software development kit, and to harden systems for premise-based installations.

Applications in Blockchain, AI and Research

Baratz highlighted several application areas for D-Wave’s annealing systems, including optimization, blockchain and artificial intelligence. He cited Boston Consulting Group estimates that optimization represents a $100 billion to $220 billion opportunity within the broader quantum computing market.

In blockchain, Baratz discussed D-Wave’s collaboration with PostQuant Labs on a quantum-classical blockchain test net. He said more than 18,500 people have signed up to participate and that the test net includes more than 1,600 nodes, one of which is D-Wave’s Advantage2 annealing quantum computer. Baratz said the Advantage2 system is currently outperforming classical nodes and winning the majority of blocks, though he emphasized that claims about energy efficiency remain a hypothesis pending benchmarking.

In artificial intelligence, Baratz pointed to work with Japan-based pharmaceutical company Shionogi. He said the project applies D-Wave’s annealing systems as part of a large language model training process for drug discovery, with a second phase producing a 10-fold increase in desirable molecules compared with a classical machine learning algorithm. Shionogi is now moving into the next phase, he said.

Baratz closed the call by saying the quantum computing industry is moving “from promise to proof and from experiments to evidence.” He said D-Wave believes its annealing systems are delivering commercial value now, while its gate model technology provides a path to future growth.

About D-Wave Quantum NYSE: QBTS

D-Wave Quantum Inc NYSE: QBTS develops and provides quantum computing systems, software and services focused on quantum annealing technology. Headquartered in Burnaby, British Columbia, D-Wave designs specialized processors that leverage quantum mechanics to solve complex optimization and sampling problems. Since its founding in 1999 by physicists including Geordie Rose, the company has pursued the development of commercially viable quantum hardware and accompanying software tools.

The company's product portfolio centers on its quantum annealers, which are complemented by hybrid solvers that integrate classical and quantum computing resources.

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