D-Wave (QBTS) Q1 FY26 earnings call: guidance and Q&A

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

What are the target 2-qubit gate fidelities for the 10 logical qubits by 2030 and 100 logical qubits by 2032?

Alan stated they are already at 99.9% fidelity on a small system and believe dual rail qubits will significantly improve this, potentially 5x better than Google's Willow work, leading to very high qubit and 2-qubit gate fidelities.

“So first of all, we're already at 99.9% fidelity, but that's on a very small system admittedly. One of the things that we believe the dual rail qubits are going to do is put us on a much steeper path to improving fidelities.”

asked by John McPeake · answered by Alan Baratz

As the optimization market grows, does D-Wave expect more entrants into annealing, either from gate-based players or new companies?

Alan confirmed increasing interest in annealing, with some early activities from others building small annealing systems and gate model companies exploring annealing protocols. However, he believes D-Wave's advantage in native annealing systems is not threatened.

“So yes, there is increasing interest in the annealing approach to quantum computing. There are some early activities underway with respect to building annealing quantum computers, and there is some work going on with respect to trying to perform annealing within gate model systems.”

asked by Antoine Legault · answered by Alan Baratz

How does D-Wave see the split of on-premise system sales between research/academic and commercial customers, especially with potential for commercial interest in AI/blockchain?

Alan expects 2-3 system sales this year to be mostly research/academic, with potentially one commercial sale in emerging areas like blockchain or AI where research is still needed. He sees blockchain and AI as potentially transformative for future commercial system sales.

“I think that we're likely to see one in the commercial arena and the other is more in the research and academic arena. So I think we're still in an environment where the system sales are more oriented toward deeper research investigations...”

asked by Joe McCormick · answered by Alan Baratz

What are commercial customers saying about engaging with the QCI gate model roadmap (2028, 2030, 2032 levels), and is QCI attracting new customers?

Alan stated a handful of customers are interested in the gate model system, some for acquisition and some for cloud access. Interest exists even for current 8-qubit and upcoming 17-qubit systems, with preliminary sales possible this year, more likely in 2027.

“We're interested in getting our hands on these things now. So I think we may start to see some preliminary sales this year, but more likely into 2027.”

asked by Craig Ellis · answered by Alan Baratz

How does NVIDIA's "Icing" announcement relate to D-Wave, especially given D-Wave's dual rail technology and reduced need for error correction?

Alan clarified that NVIDIA's "Icing" term is unrelated to annealing's Ising model. He acknowledged the importance of GPUs for the classical component of error correction in gate model systems. He noted that dual rail processors have more sophisticated and efficient error correction, making NVIDIA's work relevant but requiring modification for D-Wave's specific technology.

“However, the announcement from NVIDIA with use of the term icing has absolutely nothing to do with the icing amamiltonian or the icing programming model for annealing-based quantum computers. I'm not entirely sure why they picked that name.”

asked by Troy Jensen · answered by Alan Baratz

What makes the blockchain application amenable to D-Wave's system? Can it address all proof-of-work/proof-of-stake protocols, or a subset?

Alan explained it's a new, quantum-safe proof-of-work protocol. The quantum computer's advantage comes from its efficiency in generating samples from a distribution, which is core to this new protocol. He stated it's a hypothesis that it will be more energy-efficient, and benchmarking is underway to validate this.

“What makes the quantum computer able to win the majority of the blocks right now is that at its core, the proof of work is drawing samples from a distribution. And the quantum computer is very, very fast and very, very energy efficient at generating samples from a distribution...”

asked by Tyler Perry Anderson · answered by Alan Baratz