D-Wave Quantum (NYSE:QBTS) Q4 2025 Earnings call February 26, 2026 08:00 AM ET Company ParticipantsAlan Baratz - CEOAntoine Legault - Senior Equity Research AssociateCraig Ellis - Director of ResearchJohn Markovich - CFOJoseph McCormack - VP of Equity ResearchKevin Garrigan - Senior VP of Equity ResearchKevin Hunt - Senior Director of Investor RelationsKingsley Crane - Managing Director of Equity ResearchQuinn Bolton - Managing Director of Equity ResearchRuben Roy - Managing DirectorConference Call Particip ...

Financial Data and Key Metrics Changes - Revenue for fiscal 2025 totaled $24.6 million, an increase of 179% from fiscal 2024 revenue of $8.8 million [31] - GAAP gross profit for fiscal 2025 was $20.3 million, an increase of 265% from fiscal 2024 gross profit of $5.6 million [37] - Net loss for fiscal 2025 was $355 million, compared to a loss of $143.9 million in fiscal 2024, primarily due to non-cash charges related to warrant liability [40] - Adjusted EBITDA loss for fiscal 2025 was $71.8 million, an increase of 28% from the previous year [42] Business Line Data and Key Metrics Changes - Fiscal 2025 bookings were $18.7 million, a decrease of 22% from fiscal 2024 bookings of $23.9 million [34] - The average revenue per commercial customer increased by 20% over fiscal 2024, with total revenue from Forbes Global 2000 customers increasing by 70% year-over-year [36] - Fourth quarter revenue totaled $2.8 million, an increase of 19% from the fourth quarter of fiscal 2024 [43] Market Data and Key Metrics Changes - D-Wave recognized revenue from over 135 individual customers, including over 70 commercial customers, with significant contributions from Forbes Global 2000 enterprises [35] - The sales opportunity pipeline entering 2026 expanded by nearly 1,500% compared to the beginning of 2025 [54] Company Strategy and Development Direction - D-Wave's acquisition of Quantum Circuits is expected to fundamentally change the competitive landscape and secure its position as a leading quantum computing company [9] - The company aims to be a one-stop shop for solving complex problems through its dual-platform approach, combining annealing and gate model technologies [10] - D-Wave is focusing on both annealing and gate model technologies, with plans to expand its R&D capabilities and workforce significantly [61] Management's Comments on Operating Environment and Future Outlook - Management believes that D-Wave has transitioned from a participant to a front-runner in the quantum computing industry, with significant momentum entering 2026 [25] - The company is committed to solving real mission-critical problems for government and commercial customers, with a dedicated U.S. Government Solutions Business Unit launched to support this effort [18] - Management expects to achieve sustained profitability with less funding than required by other quantum computing companies [63] Other Important Information - D-Wave's headquarters will relocate to Boca Raton, Florida, where a major U.S.-based R&D center will be opened [23] - The company raised over $800 million in gross proceeds during fiscal 2025, significantly increasing its cash and marketable securities balance to $884.5 million [51][52] Q&A Session Summary Question: Can you help us think about the advantage with the built-in error correction? - Management confirmed that the dual-rail technology provides a timing advantage due to lower complexity in building fully error-corrected systems [68][70] Question: How much OpEx would you expect to incur in 2026 with the acquisition of QCI? - Management indicated that the 15% sequential growth in OpEx includes costs associated with the QCI acquisition [74] Question: What do you think an ideal net retention rate for QCaaS can be? - Management noted that while retention rates have not been published, larger transactions are being seen, indicating growth in the QCaaS segment [78][80] Question: Can you speak to the levels of engagement with Quantum Circuits? - Management expects revenue contributions from Quantum Circuits this year, particularly from professional services and QCaaS [85] Question: How are customer conversations evolving regarding QCaaS? - Management highlighted that initial applications are leading to strong ROI, encouraging customers to explore additional applications [95] Question: Have you started conversations on potential longer-term roadmap opportunities with gate model? - Management confirmed that several annealing customers are engaging in discussions about potential use cases for gate model technology [99]

Investor Update February 26, 2026 1 Copyright @ D-Wave Certain statements in this presentation are forward-looking, as defined in the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the following words: "believe," "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "trend," "believe," "estimate," "predict," "project," "potential," "seem," "seek," "future," "outlook," "forecast," "projection," "continue," "ongoin ...

Core Insights - Xanadu Quantum Technologies is set to become the only public pure play photonic quantum computing company following its merger with Crane Harbor Acquisition Corp. [1][8] - The company claims to have achieved quantum supremacy in 2022 with its 216-qubit system, Borealis, which solved a complex problem in 2 minutes compared to 7 million years for the fastest classical supercomputer [5][3] - Xanadu projects significant growth, aiming for up to 100,000 physical qubits and 1,000 logical qubits in its fault-tolerant computer by 2029 [6] Company Overview - Xanadu is recognized as the first pure play quantum computing company to achieve quantum supremacy [3] - The company has developed an open-source software platform called PennyLane, which is reportedly used by up to 47% of quantum programmers [7] - Xanadu's expected pro forma market capitalization upon merger completion is approximately $3.6 billion [8] Financial Projections - Estimates for Xanadu's 2024 revenue range from $6 million to $9 million, with expectations of operating at a net loss due to its early development stage [9] - The financial details of Xanadu remain unclear as it transitions from a private to a public company [8] Market Impact - The debut of Xanadu on Nasdaq is anticipated to attract attention from investors, potentially affecting the stock prices of existing quantum computing companies like IonQ, Rigetti Computing, and D-Wave Quantum [2][11] - Investors may shift their focus from these companies to Xanadu, which could lead to temporary dips in their stock prices [11][12]

Core Insights - D-Wave Quantum (NYSE: QBTS) has experienced a significant stock rally, driven by a successful PR strategy and a substantial improvement in its balance sheet [1][2] - Despite recent gains, the stock has only increased by 1.2% in the past month after a peak [1] - There are mixed sentiments among investors, with bulls optimistic about future growth and bears cautioning against a potential bubble [2] Group 1: PR Strategy and Stock Performance - D-Wave's PR strategy included participation in several high-profile investor conferences, leading to a stock increase of over 141% from its trough to peak in March [3][4] - The company claimed "Quantum Supremacy," which significantly boosted investor confidence, positioning D-Wave as a leader in the quantum computing industry [4][5] - The momentum continued with a sale of an Advantage quantum system to a research institution in May, further enhancing the company's market presence [7] Group 2: Financial Health - D-Wave's aggressive PR efforts were aimed at raising capital, resulting in a dramatic increase in cash reserves from $29 million in Q3 2024 to $819 million in Q2 2025 [8] - The upcoming Q3 2025 results are anticipated to be released on November 6, 2025, which may provide further insights into the company's financial trajectory [8]

Core Insights - BTQ Technologies is focused on postquantum cryptography and quantum computing, primarily developing near-term monetizable postquantum encryption products and services as global governments mandate these technologies [2][12] - The company has achieved a significant milestone by creating the first quantum safe Bitcoin, which is crucial for maintaining the value proposition of Bitcoin as its current encryption standard is set to be deprecated by 2030 [5][6] - There is an increasing recognition of the risk posed by quantum computers to existing encryption standards, with potential breaks in encryption for Bitcoin and other digital assets anticipated within a 1 to 3-year timeframe [7][8] Company Overview - BTQ Technologies has been operational for about 13 years, initially focusing on postquantum cryptography and expanding into quantum computing [1][2] - The company operates in two verticals within digital assets: centralized digital assets like stable coins and decentralized assets such as Bitcoin and Ethereum [9] - BTQ has developed a quantum secure stable coin network (QSSN) that has been mandated into law in Korea, indicating regulatory support for its technology [10][11] Market Context - Major tech companies and nation-states are racing towards quantum supremacy, which poses a threat to existing encryption standards globally [4] - The company believes that quantum technologies will be utilized at scale primarily in the digital asset ecosystem, including stable coin technologies [7][12] - BTQ Technologies is generating profits and scaling rapidly, with previous blockchain-related ventures generating over $1.5 billion in revenue [13][14]

Core Insights - D-Wave Quantum has entered a €10 million ($11.63 million) agreement with Swiss Quantum Technology (SQT) to deploy its Advantage2 quantum computer in Italy, supporting the country's digital transformation efforts [2][4]. Company Developments - The collaboration is part of a broader initiative called the "Q-Alliance," which includes D-Wave and IonQ, another American quantum computing firm [3]. - D-Wave's CEO, Alan Baratz, emphasized the significance of this deployment for Italy and the Q-Alliance, marking it as a pivotal moment for the region [7]. Market Performance - Following the announcement, D-Wave's stock rose approximately 1.29%, continuing a remarkable growth trajectory of over 4,235% in the past year, driven by increasing interest in quantum computing technology [4]. Technological Achievements - D-Wave recently claimed to have achieved "quantum supremacy," solving computations that would take classical computers about 1 million years to complete, showcasing the capabilities of its Advantage2 quantum computer [7][8]. - The Advantage2 is noted as the only quantum computer capable of solving significant real-world problems that classical computers cannot, specifically in simulating magnetic material properties [8]. Global Applications - D-Wave's technology is already in use globally, including applications in a Welsh police department for deployment analysis, in Ford Otosan's assembly processes in Turkey, and by a Japanese cellphone carrier to enhance network performance [9].

Core Insights - D-Wave Quantum (QBTS) is making significant advancements in quantum computing technology, particularly with the release of its Advantage2 system, which has demonstrated quantum supremacy in solving complex materials simulation problems [1][9] Technology Development - The Advantage2 system features longer coherence times, a higher energy scale, and improved qubit connections compared to its predecessor [1] - D-Wave is aiming to develop systems with 100,000 qubits, utilizing multichip designs and advanced cryogenic packaging to enhance quantum performance [2] - Collaboration with NASA's Jet Propulsion Laboratory is focused on creating superconducting interconnects to support both annealing and gate-model quantum systems [2] Quantum AI Initiatives - D-Wave has introduced a developer toolkit compatible with PyTorch for hybrid quantum-classical machine learning applications, with clients like Japan Tobacco and Triumph testing AI applications [3] - The company is exploring advanced AI models, including transformers and diffusion models, for future applications [3] Commercial Deployment - D-Wave is deploying Advantage2 systems on-premises at institutions such as Julich Supercomputing Center and Yonsei University [4] - The Leap Quantum LaunchPad program is assisting over 1,300 businesses, governments, and universities in testing quantum solutions for real-world challenges [4] Financial Position - D-Wave has $819 million in cash, which is being invested in R&D, wafer fabrication, superconducting control, and quantum AI, while also considering strategic acquisitions [5] - The company's roadmap emphasizes scaling both annealing and gate-model systems and developing practical hybrid quantum applications [5] Competitive Landscape - Other quantum computing companies, such as IonQ and Rigetti Computing, are also advancing their technologies and expanding their capabilities in quantum AI and hybrid systems [7][10]

Core Viewpoint - D-Wave Quantum Inc. has experienced significant stock price increases, with a nearly 26% rise over a five-day period in mid-July 2025, following a previous period of horizontal trading [1][2]. Group 1: Stock Performance - D-Wave's shares have tripled in value over the last six months, outperforming rivals like Quantum Computing Inc. and IonQ Inc., which only saw about 10% increases during the same timeframe [1]. - The company recorded a 12% increase in share price in a single day, indicating strong market interest [1]. Group 2: Technological Achievements - D-Wave achieved quantum supremacy earlier this year, a significant milestone that has contributed to investor optimism [2][3]. - Competitor Rigetti Computing also made headlines by halving its median two-qubit gate error rate, which led to a 40% increase in its shares [2]. Group 3: Financial Performance - D-Wave's revenue for the latest quarter was $15 million, exceeding analyst expectations, but the company remains dependent on large purchases from institutions and governments [4]. - The company reported its smallest quarterly losses since going public, supported by a strong balance sheet bolstered by a recent $400 million ATM offering, bringing reserves close to $1 billion [5]. Group 4: Market Sentiment - There is a prevailing sentiment among investors that quantum computing firms are nearing a technological breakthrough, with NVIDIA's CEO suggesting the field may be at an "inflection point" [7]. - The surge in D-Wave's stock was also fueled by increased options trading, with over 201,000 call options purchased in a single day, indicating bullish sentiment among investors [8]. Group 5: Analyst Ratings - Analysts are optimistic about D-Wave's potential, with eight Buy ratings and no Holds or Sells, although the stock is currently trading 24% above the consensus price target of $14.38 [9][10]. - The company has a high price/sales ratio of over 624 and a price/book ratio of 82.0, indicating that while there is potential for future growth, current valuations are elevated [11].

Core Insights - D-Wave Quantum (QBTS) stock has increased by 151.6% over the past three months, significantly outperforming broader markets and the S&P 500, driven by investor confidence in its unique approach and recent achievements [1][7] - The company is positioned as the only pure-play quantum company converting scientific milestones into commercial success, with expectations of reaching profitability faster than competitors [1][5] Financial Performance - D-Wave reported record revenues exceeding $15 million in Q1 2025, marking a 509% year-over-year increase, primarily from the sale of its Advantage system and growth in quantum computing-as-a-service (QCaaS) [4][6] - The net loss narrowed to $5.4 million, the lowest since going public, indicating improved cost management and operational efficiency [5] - As of March 31, 2025, D-Wave had $304 million in cash, which is expected to support its path to profitability without significant dilution [6] Product Developments - The official launch of the Advantage2 annealing quantum system represents a significant technical and commercial milestone, featuring over 4,400 qubits and enhanced performance metrics [7][8] - D-Wave achieved a breakthrough in quantum supremacy by solving a material science problem in minutes, a task that would take a classical supercomputer around 1 million years [9] Future Projections - The Zacks Consensus Estimate anticipates a 30% increase in Q2 earnings and a 15.7% rise in revenues compared to the previous year [10] - Year-over-year growth estimates for the current year project a 183.37% increase in revenues [11] Competitive Landscape - D-Wave faces competition from major players like IBM and Google, which are advancing in gate-based quantum computing, potentially impacting D-Wave's market position [13][14] - The absence of one-time hardware sales and extended enterprise sales cycles may lead to revenue softness in the near term [13]