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    QBTS
    Earnings call· Mar 2026(Q1 FY26)

    D-Wave Quantum Q1 FY26 earnings call QBTS

    May 12, 2026 Source

    Executive summary

    D-Wave Q1 FY26 — Record Bookings Driven by System Sales and Quantum Circuits Acquisition

    D-Wave Quantum reported a quarter of significant commercial momentum, marked by record bookings and a substantially expanded sales pipeline, driven by strategic system sales and the Quantum Circuits acquisition. While revenue and profitability metrics saw declines year-over-year due to a high comparable period, the company is actively defining the future of quantum computing with its dual-platform approach and differentiated gate model technology, aiming for long-term leadership and sustained profitability.

    Highlights

    5

    • Record Q1 bookings of $33.4 million, a nearly 2,000% increase YoY and 149% QoQ.

    • Sales opportunity pipeline more than doubled in dollar value and average deal size QoQ.

    • Remaining Performance Obligations (RPO) increased by $36 million or 563% YoY to $42.4 million.

    • Cash and marketable investment securities totaled $588.4 million, up 93% YoY.

    • QCaaS subscription revenue increased by nearly 15% YoY to $1.8 million.

    Concerns

    4

    • Revenue decreased by $12.1 million or 81% YoY to $2.9 million, primarily due to a large system sale in Q1 2025.

    • GAAP gross profit decreased by $12.1 million or 87% YoY to $1.8 million.

    • Net loss increased to $18.4 million ($0.05 per share) from $5.4 million ($0.02 per share) in Q1 2025.

    • Adjusted EBITDA loss increased to $32.8 million from $6.1 million in Q1 2025.

    Guidance & targets

    7
    CategoryTargetConfidence
    System sales
    2 or 3 system deals per year
    high materiality
    High
    System deliveries
    at least 2 systems
    high materiality
    High
    Revenue
    up modestly from the first quarter
    medium materiality
    Medium
    Revenue recognition
    substantial portion of the year's revenue recognized in the second half of the year
    medium materiality
    Medium
    Gate model logical qubits
    10 logical qubits
    high materiality
    High
    Gate model logical qubits
    100 logical qubits
    high materiality
    High
    Gate model physical qubits
    approximately 175 physical qubits
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    QCaaS Subscription
    Revenue from Quantum Computing as a Service subscriptions.
    		$1.8 millionnearly 15%——
    Professional Services
    Revenue from professional services.
    		$1.0 millionover 26%——
    Commercial Enterprises (Revenue)
    Commercial revenue as a percentage of total Q1 FY26 revenue. Over 50% of individual customers were commercial enterprises.
    		over 73%———
    Commercial Enterprises (Bookings)
    Bookings contribution from commercial customers.
    Percentage of Q1 bookings: over 31%
    		————
    Educational and Research Organizations (Bookings)
    Bookings contribution from educational and research customers.
    Largest booking: $20 million system sale to Florida Atlantic University
    		————

    Operational metrics

    17
    Revenue
    $2.9 milliondown 81% YoY
    Q1 FY26

    Decrease primarily due to a large system sale in the prior year's first quarter.

    GAAP gross profit
    $1.8 milliondown 87% YoY
    Q1 FY26

    Heavily influenced by the system sale in Q1 FY25.

    GAAP gross margin
    63.6%down 29% YoY
    Q1 FY26

    Heavily influenced by the system sale in Q1 FY25.

    GAAP operating expenses
    $56.5 millionup 125% YoY
    Q1 FY26

    Increase driven by investments to support accelerated product development, go-to-market initiatives, and Quantum Circuits acquisition.

    Non-GAAP adjusted operating expenses
    $34.8 millionup 73% YoY
    Q1 FY26

    Excludes noncash stock-based comp, D&A, and nonrecurring acquisition costs.

    Net loss
    $18.4 millionvs $5.4 million in Q1 FY25
    Q1 FY26

    Increase due to higher operating expenses and lower gross profit, partially offset by income tax benefit.

    EPS
    $0.05vs $0.02 per share in Q1 FY25
    Q1 FY26

    Diluted EPS.

    Adjusted EBITDA loss
    $32.8 millionup $26.7 million from Q1 FY25
    Q1 FY26

    Increase due to higher operating expenses and lower gross profit.

    Cash and investments balance
    $588.4 millionup $284.1 million or 93% YoY
    as of March 31

    Consolidated cash balance and marketable investment securities.

    Investment in Quantum Circuits acquisition
    $250 million
    Q1 FY26

    Cash invested in conjunction with the acquisition.

    Sales opportunity pipeline
    more than doubledQoQ
    Q1 FY26

    Compared to the end of Q4 FY25.

    Average potential deal size
    more than doubledQoQ
    Q1 FY26

    Compared to the end of Q4 FY25.

    Dual rail qubit error detection
    90%
    current

    Ability to identify errors as they occur.

    Observed erasure rate
    0.5%
    current

    Rate at which errors are erased.

    Qubit fidelity
    >99.9%
    current

    Demonstrated fidelity.

    Physical qubits needed for logical qubit
    up to an order of magnitudereduction
    current

    Reduction achieved with dual rail technology.

    Superconducting speed
    1,000x fastervs neutral atom quantum computer
    current

    Comparison based on Google and Presco research on Bitcoin protocol computation.

    Industry KPIs

    4
    MetricValueDetails
    Revenue growth$2.9 millionUSD
    Rpo current rpo$42.4 millionUSD
    Bookings billings$33.4 millionUSD
    Customer account countover 100customers

    Orderbook & backlog

    2
    Bookings$33.4 millionQ1 FY26

    up $31.8 million or 1,994% YoY; up $20 million or 149% QoQ

    Q1 FY25 bookings were $1.6 million; Q4 FY25 bookings were $13.4 million.

    Remaining Performance Obligations (RPO)$42.4 millionMarch 31

    up $36 million or 563% YoY; up $29 million or 216% QoQ

    Q1 FY25 RPO balance was $6.4 million; Q4 FY25 RPO balance was $13.4 million. Approximately 54% expected to be recognized as revenue in the next 12 months, and 71% in the next 2 years.

    Product announcements

    2
    ProductTypeDetails
    Dual Rail Gate Model Roadmaproadmap
    Multicolor Annealing Protocolslaunch

    Deals & partnerships

    5
    Quantum CircuitsAcquisition of gate model quantum computing company$250 million

    Acquisition completed in January 2026, bringing industry-first dual rail qubit technology.

    Florida Atlantic UniversitySystem sale of D-Wave annealing quantum computer$20 million

    Landmark system sale closed in January 2026.

    Undisclosed Enterprise CustomerEnterprise license for Quantum Computing as a Service$10 million

    Industry's first enterprise license for QCaaS, closed in January 2026.

    Postquant LabsCollaboration on quantum-classical blockchain testNet

    TestNet designed to support development of a global quantum blockchain standard. D-Wave's Advantage2 QPU is outperforming classical nodes.

    ShionogiCollaboration on AI for drug discovery

    Japanese pharmaceutical company using D-Wave's annealing quantum computers as part of LLM training, delivering a tenfold increase in desirable molecules.

    Risks & headwinds

    4
    Revenue Volatility from System SalesQ1 FY26

    Revenue decreased by $12.1 million or 81% YoY in Q1 FY26

    Mitigation: Expects a substantial portion of the year's revenue to be recognized in the second half of the year, indicating lumpiness is managed through timing.

    Increased Operating ExpensesQ1 FY26

    GAAP operating expenses increased $31.3 million or 125% YoY to $56.5 million

    Mitigation: Investments are to support accelerated product development and go-to-market initiatives, including the Quantum Circuits acquisition, aiming for long-term profitability.

    Quantum Hype vs. ExecutionOngoing

    Market generating significant excitement but also significant noise, with ambitious and overstated technology claims.

    Mitigation: Focus on distinguishing hype from execution, delivering proven commercial traction, and educating the market on near-term capabilities and modality strengths.

    Classical Overhead in Gate Model Error CorrectionCurrent

    Classical overhead associated with error correction eats up pretty much all of the benefit of solving optimization problems on a gate model system.

    Mitigation: D-Wave's dual rail qubits provide more sophisticated and efficient error correction, reducing the classical overhead compared to standard gate model systems.

    What to watch in Q2 FY26

    4

    System sales and deliveries

    FY26
    Current1 system sale (FAU) and 0 deliveries in Q1 FY26
    Target2-3 system deals per year, with at least 2 deliveries in 2026

    Why it matters

    Indicates commercial traction and ability to convert pipeline into revenue-generating assets.

    We're now expecting 2 or 3 system deals per year with expected delivery of at least 2 systems this year in 2026.

    Q&A highlights

    7

    What drives confidence in 2-3 system sales/year, and what's the expected mix between annealing and gate model systems?

    Alan Baratz expressed high confidence due to a significantly increased pipeline and ongoing negotiations. He expects 2-3 sales this year, with at least 2 deliveries, primarily annealing systems for research/academic use, but potentially one commercial sale in emerging AI/blockchain applications.

    “So as both John and I indicated, our pipeline has significantly increased over the course of the last year. And we are well down the path of negotiating system deals with multiple customers, none of which has been communicated to date.”

    asked by Quinn Bolton · answered by Alan Baratz

    2 min read6 chapters

    Detailed Narrative

    01

    Quantum Computing Landscape & D-Wave's Position

    Alan Baratz emphasized the shift from "hype to execution" in quantum computing, positioning D-Wave as a leader in the $800 billion market, with optimization alone representing a $100 billion to $220 billion opportunity as projected by Boston Consulting Group. He highlighted D-Wave's unique dual-platform approach (annealing and gate model) following the Quantum Circuits acquisition, enabling participation in the full addressable market.

    02

    Dual Rail Gate Model Technology

    The acquisition of Quantum Circuits introduced dual rail qubit technology, which D-Wave believes offers the "best of both worlds" by combining superconducting speed with the efficiency of ion traps/neutral atoms. This technology features built-in error detection (90% error identification, 0.5% erasure rate) and greater than 99.9% fidelity, reducing physical qubits needed for logical qubits by up to an order of magnitude. This is seen as a clear competitive advantage due to its scalability.

    03

    Gate Model Roadmap Acceleration

    D-Wave is targeting 10 logical qubits by 2030 and 100 logical qubits by the end of 2032, with 175 physical qubits planned by the end of 2028 to demonstrate quantum error correction and logical operations. This accelerated roadmap is based on demonstrated technology, known engineering pathways, and milestones that management believes are achievable with a high degree of confidence, distinguishing it from other industry roadmaps.

    04

    Annealing Quantum Computing Dominance & Applications

    D-Wave maintains its leadership in annealing quantum computing, with 6 generations of systems deployed in real customer problems across various sectors. Recent applications include a collaboration with Postquant Labs on a quantum-classical blockchain testNet, where D-Wave's Advantage2 QPU is currently outperforming classical nodes. Additionally, work with Shionogi, a pharmaceutical company, in drug discovery using AI delivered a tenfold increase in desirable molecules compared to classical methods.

    05

    Commercial Momentum & System Sales Outlook

    The company reported significant commercial momentum, including a $20 million system sale to Florida Atlantic University and a $10 million enterprise license quantum computing as a Service deal in Q1 FY26. Management now expects 2-3 system deals per year, with at least 2 deliveries in 2026, an increase from a prior expectation of 1 system per year, driven by a significantly increased sales pipeline.

    06

    Revenue Recognition & Sales Pipeline

    John Markovich clarified revenue recognition for system sales, noting that a significant portion is recognized upon physical delivery, with smaller portions over time⏳ during installation and calibration. The sales opportunity pipeline more than doubled in dollar value and average deal size QoQ, indicating strong future demand and potential for commercial system sales in emerging application areas like blockchain and AI.

    AI-generated summary of the company’s earnings call. Not investment advice.