D-Wave Quantum (QBTS) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for fiscal 2025 totaled $24.6 million, an increase of $15.8 million, or 179% from fiscal 2024 revenue of $8.8 million [25] - GAAP gross profit for fiscal 2025 was $20.3 million, an increase of $14.7 million, or 265% from fiscal 2024 GAAP gross profit of $5.6 million [28] - Net loss for fiscal 2025 was $355 million, or $1.11 per share, compared with the fiscal 2024 loss of $143.9 million, or $0.75 per share [29] Business Line Data and Key Metrics Changes - Fiscal 2025 revenue included $16.2 million in systems sales revenue, $5.5 million in QCaaS subscription revenue, and $2.7 million in professional services revenue [25] - Fiscal 2025 bookings were $18.7 million, a decrease of 22% from fiscal 2024 bookings of $23.9 million [26] - The average revenue per commercial customer increased by 20% over fiscal 2024, and total revenue recognized from Forbes Global 2000 customers increased by 70% year-over-year [27] Market Data and Key Metrics Changes - D-Wave recognized revenue from over 135 individual customers, encompassing over 70 commercial customers, including over 2 dozen Forbes Global 2000 enterprises [27] - The sales opportunity pipeline entering 2026 was up nearly 1,500% compared to the beginning of 2025 [37] Company Strategy and Development Direction - D-Wave's acquisition of Quantum Circuits fundamentally changes the competitive landscape, positioning the company as the world's leading quantum computing company [9] - The dual-platform approach allows D-Wave to address the full quantum computing market, focusing on both annealing and gate model quantum computing solutions [10] - The company aims to be the first independent, publicly held quantum computing company to achieve sustained profitability with less funding than competitors [41] Management's Comments on Operating Environment and Future Outlook - Management emphasized that 2025 marked a transition from research to real-world impact in quantum computing, with D-Wave leading this change [5] - The company is experiencing extraordinary momentum entering 2026, with significant bookings already exceeding the entirety of fiscal 2025 [8] - Management noted that the U.S. government is increasingly interested in D-Wave's technologies, leading to the establishment of a dedicated U.S. Government Solutions Business Unit [18] Other Important Information - D-Wave's headquarters will relocate from Palo Alto, California, to Boca Raton, Florida, where a major U.S.-based R&D center will be opened [21] - The company raised over $800 million in gross proceeds during fiscal 2025, significantly increasing its cash and marketable securities balance to $884.5 million [36] 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 [45][46] Question: How much OpEx would you expect to incur in 2026 with the QCI acquisition? - Management stated that the 15% sequential growth in OpEx includes costs associated with the QCI acquisition [49] Question: What is the ideal net retention rate for QCaaS? - Management indicated that retention rates have not been published, but larger transactions are being seen, providing more visibility on growth [52] 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 QCAST [56] Question: Have you started conversations on potential longer-term roadmap opportunities with gate model computing? - Management confirmed that several annealing customers have expressed interest in exploring gate model technology for additional use cases [69]