We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
QBTS Stock Down on Q3 Earnings Miss, Revenues Surpass Estimates
Read MoreHide Full Article
Key Takeaways
D-Wave reported Q3 revenues of $4.51 million, up 21% year over year and 14.2% above estimates.
D-Wave's nine-month bookings surged 611% to $37.4 million, despite a 19% quarterly decline.
D-Wave's gross margin contracted 1,850 bps to 52.9%, while adjusted EBITDA loss widened 83%.
D-Wave Quantum Inc. (QBTS - Free Report) or “D-Wave”, reported a third-quarter 2026 loss of 11 cents per share, narrower than the year-ago loss of 41 cents. The improvement primarily reflected lower non-cash charges related to warrant liability remeasurement. The Zacks Consensus Estimate is pegged at a 10-cent loss per share.
Revenues rose 21% year over year to $4.51 million, driven by stronger professional services and quantum computing as a service (QCaaS) revenue. The figure topped the consensus mark by 14.2%.
Following the announcement, QBTS shares dipped nearly 2% in the pre-market session today.
QBTS Revenue Growth Driven by Services and QCaaS
Professional services revenues increased $1.5 million year over year, while QCaaS revenues grew $0.8 million. These gains were partially offset by a $1.5 million decline in system sales revenues, reflecting a shift in the company's revenue composition.
D-Wave Quantum Inc. Price, Consensus and EPS Surprise
D-Wave recognized revenues from more than 100 customers during the quarter, with commercial enterprises accounting for 48% of the customer base. The diversified customer mix highlights the company's presence across commercial, government and research applications.
D-Wave Bookings and Backlog Signal Future Demand
Third-quarter bookings totaled $1.9 million, declining 19%, or approximately $0.4 million, year over year. Management noted that quarterly bookings can fluctuate significantly depending on the timing of larger customer transactions.
However, bookings for the first nine months of 2026 reached $37.4 million, increasing 611%, or $32.1 million, from the prior-year period. Approximately 59% of the company's remaining performance obligations are expected to convert into revenues within 12 months, while 71% are expected to be recognized within 24 months.
QBTS Gross Margins Contract on Unfavorable Revenue Mix
On a GAAP basis, gross profit declined 11% year over year to $2.4 million in the third quarter of 2026. Gross margin contracted 1,850 basis points (bps) to 52.9%, primarily due to a higher proportion of lower-margin professional services revenues and a $0.2 million increase in non-cash stock-based compensation.
Adjusted gross profit remained essentially flat year over year at $2.9 million. However, adjusted gross margin contracted 1,410 bps to 63.6%, reflecting an unfavorable revenue mix.
GAAP operating expenses increased 84% year over year to $55.9 million, driven primarily by higher personnel costs, stock-based compensation, depreciation and amortization, professional services and marketing expenses.
Adjusted operating expenses rose 72% to $40.5 million. Consequently, adjusted EBITDA loss widened 83% year over year to $37.7 million from $20.6 million, reflecting increased investments in product development and go-to-market initiatives.
D-Wave ended September 2026 with $503.4 million in cash and marketable investment securities. The company used $109.0 million in operating activities during the first nine months compared with $53.6 million in the corresponding prior-year period.
During the quarter, D-Wave executed a definitive agreement with the U.S. Department of Commerce providing access to up to $100 million in CHIPS and Science Act funding, subject to specified milestones and conditions. The funding is intended to support next-generation annealing and gate-model quantum computing development.
D-Wave Advances Technology and Commercial Partnerships
The company delivered a 4,400-plus-qubit Advantage2 quantum computer to Italy for installation in Como. It also launched a gate-model quantum computing simulator beta program, enabling participants to develop applications using error-aware programming capabilities.
On the commercial front, NTT DOCOMO deployed its second production application powered by D-Wave's hybrid quantum technology, reducing daily peak location registration signals by 65.3% and paging signals by 7.0%.
D-Wave also extended its partnership with SkyWater through a multi-year semiconductor development and manufacturing agreement. A related maintenance-scheduling project demonstrated reductions in lot delays of up to 30%.
Additionally, the company formed a strategic partnership with CGI to support quantum application development across industries and signed a memorandum of understanding with LG CNS to advance enterprise optimization applications in South Korea and beyond.
Our Take
D-Wave delivered mixed third-quarter 2026 results, with a wider-than-expected loss while revenues surpassed expectations. The company's year-over-year revenue growth, supported by stronger professional services and QCaaS revenues, was encouraging. However, contracting gross margins and a widening adjusted EBITDA loss remain concerning. This indicates an unfavorable revenue mix and elevated operating expenses.
On a positive note, robust year-to-date bookings and a substantial increase in remaining performance obligations indicate healthy demand for the company's quantum computing solutions. Moreover, its strong liquidity position and access to potential government funding should support continued investments in product development and commercialization initiatives.
QBTS’ Zacks Rank and Key Picks
D-Wave currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Computer and Technology sector are MKS Inc. (MKSI - Free Report) , Arista Networks, Inc. (ANET - Free Report) and Docebo, Inc. (DCBO - Free Report) .
MKS, sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter 2026 EPS of $4.18, which beat the Zacks Consensus Estimate by 14.84%. Revenues of $1.41 billion surpassed the Zacks Consensus Estimate by 4.12%. You can see the complete list of today’s Zacks #1 Rank stocks here.
MKSI has an estimated long-term earnings growth rate of 36.3% compared with the industry’s 24% growth. The company surpassed earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 10.12%.
Arista Networks, currently sporting a Zacks Rank #1, reported third-quarter 2026 earnings of $1.2 per share, which topped the Zacks Consensus Estimate by 11.11%. Revenues of $3.66 million outperformed the consensus mark by 10.41%.
ANET has an estimated long-term earnings growth rate of 22.7% compared with the industry’s 21.2% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 10.6%.
Docebo, carrying a Zacks Rank #2 (Buy), reported third-quarter 2026 earnings of 55 cents per share, which topped the Zacks Consensus Estimate by 3.77%. Revenues of $70.3 million outperformed the consensus mark by 1.10%.
DCBO has an earnings yield of 6% compared with the industry’s 3.8% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 25.6%.
View the Zacks #1 Rank List
Image: Bigstock
QBTS Stock Down on Q3 Earnings Miss, Revenues Surpass Estimates
Key Takeaways
D-Wave Quantum Inc. (QBTS - Free Report) or “D-Wave”, reported a third-quarter 2026 loss of 11 cents per share, narrower than the year-ago loss of 41 cents. The improvement primarily reflected lower non-cash charges related to warrant liability remeasurement. The Zacks Consensus Estimate is pegged at a 10-cent loss per share.
Revenues rose 21% year over year to $4.51 million, driven by stronger professional services and quantum computing as a service (QCaaS) revenue. The figure topped the consensus mark by 14.2%.
Following the announcement, QBTS shares dipped nearly 2% in the pre-market session today.
QBTS Revenue Growth Driven by Services and QCaaS
Professional services revenues increased $1.5 million year over year, while QCaaS revenues grew $0.8 million. These gains were partially offset by a $1.5 million decline in system sales revenues, reflecting a shift in the company's revenue composition.
D-Wave Quantum Inc. Price, Consensus and EPS Surprise
D-Wave Quantum Inc. price-consensus-eps-surprise-chart | D-Wave Quantum Inc. Quote
D-Wave recognized revenues from more than 100 customers during the quarter, with commercial enterprises accounting for 48% of the customer base. The diversified customer mix highlights the company's presence across commercial, government and research applications.
D-Wave Bookings and Backlog Signal Future Demand
Third-quarter bookings totaled $1.9 million, declining 19%, or approximately $0.4 million, year over year. Management noted that quarterly bookings can fluctuate significantly depending on the timing of larger customer transactions.
However, bookings for the first nine months of 2026 reached $37.4 million, increasing 611%, or $32.1 million, from the prior-year period. Approximately 59% of the company's remaining performance obligations are expected to convert into revenues within 12 months, while 71% are expected to be recognized within 24 months.
QBTS Gross Margins Contract on Unfavorable Revenue Mix
On a GAAP basis, gross profit declined 11% year over year to $2.4 million in the third quarter of 2026. Gross margin contracted 1,850 basis points (bps) to 52.9%, primarily due to a higher proportion of lower-margin professional services revenues and a $0.2 million increase in non-cash stock-based compensation.
Adjusted gross profit remained essentially flat year over year at $2.9 million. However, adjusted gross margin contracted 1,410 bps to 63.6%, reflecting an unfavorable revenue mix.
GAAP operating expenses increased 84% year over year to $55.9 million, driven primarily by higher personnel costs, stock-based compensation, depreciation and amortization, professional services and marketing expenses.
Adjusted operating expenses rose 72% to $40.5 million. Consequently, adjusted EBITDA loss widened 83% year over year to $37.7 million from $20.6 million, reflecting increased investments in product development and go-to-market initiatives.
QBTS Liquidity Supports Quantum Computing Investments
D-Wave ended September 2026 with $503.4 million in cash and marketable investment securities. The company used $109.0 million in operating activities during the first nine months compared with $53.6 million in the corresponding prior-year period.
During the quarter, D-Wave executed a definitive agreement with the U.S. Department of Commerce providing access to up to $100 million in CHIPS and Science Act funding, subject to specified milestones and conditions. The funding is intended to support next-generation annealing and gate-model quantum computing development.
D-Wave Advances Technology and Commercial Partnerships
The company delivered a 4,400-plus-qubit Advantage2 quantum computer to Italy for installation in Como. It also launched a gate-model quantum computing simulator beta program, enabling participants to develop applications using error-aware programming capabilities.
On the commercial front, NTT DOCOMO deployed its second production application powered by D-Wave's hybrid quantum technology, reducing daily peak location registration signals by 65.3% and paging signals by 7.0%.
D-Wave also extended its partnership with SkyWater through a multi-year semiconductor development and manufacturing agreement. A related maintenance-scheduling project demonstrated reductions in lot delays of up to 30%.
Additionally, the company formed a strategic partnership with CGI to support quantum application development across industries and signed a memorandum of understanding with LG CNS to advance enterprise optimization applications in South Korea and beyond.
Our Take
D-Wave delivered mixed third-quarter 2026 results, with a wider-than-expected loss while revenues surpassed expectations. The company's year-over-year revenue growth, supported by stronger professional services and QCaaS revenues, was encouraging. However, contracting gross margins and a widening adjusted EBITDA loss remain concerning. This indicates an unfavorable revenue mix and elevated operating expenses.
On a positive note, robust year-to-date bookings and a substantial increase in remaining performance obligations indicate healthy demand for the company's quantum computing solutions. Moreover, its strong liquidity position and access to potential government funding should support continued investments in product development and commercialization initiatives.
QBTS’ Zacks Rank and Key Picks
D-Wave currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Computer and Technology sector are MKS Inc. (MKSI - Free Report) , Arista Networks, Inc. (ANET - Free Report) and Docebo, Inc. (DCBO - Free Report) .
MKS, sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter 2026 EPS of $4.18, which beat the Zacks Consensus Estimate by 14.84%. Revenues of $1.41 billion surpassed the Zacks Consensus Estimate by 4.12%. You can see the complete list of today’s Zacks #1 Rank stocks here.
MKSI has an estimated long-term earnings growth rate of 36.3% compared with the industry’s 24% growth. The company surpassed earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 10.12%.
Arista Networks, currently sporting a Zacks Rank #1, reported third-quarter 2026 earnings of $1.2 per share, which topped the Zacks Consensus Estimate by 11.11%. Revenues of $3.66 million outperformed the consensus mark by 10.41%.
ANET has an estimated long-term earnings growth rate of 22.7% compared with the industry’s 21.2% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 10.6%.
Docebo, carrying a Zacks Rank #2 (Buy), reported third-quarter 2026 earnings of 55 cents per share, which topped the Zacks Consensus Estimate by 3.77%. Revenues of $70.3 million outperformed the consensus mark by 1.10%.
DCBO has an earnings yield of 6% compared with the industry’s 3.8% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 25.6%.