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QBTS Q3 Earnings Call Highlights System Sales and Quantum Roadmap
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Key Takeaways
D-Wave's pipeline rose more than 75% sequentially, while nine-month bookings climbed 611% to $37.4 million.
QBTS expects to recognize substantial revenue from its $20 million Florida Atlantic system sale in Q4.
D-Wave advanced multichip annealing and a 17-qubit gate-model system while pursuing 2027 orders.
D-Wave Quantum Inc. (QBTS - Free Report) used its third-quarter 2026 earnings call to emphasize a growing system-sales pipeline and plans to convert contracted business into revenues. Management also outlined technical milestones across its annealing and gate-model platforms.
The discussion balanced expanding commercial opportunities against uneven bookings, lower margins and higher development spending. Executives stressed that large system deliveries will influence reported results.
D-Wave's Pipeline Expands as Bookings Fluctuate
Acting chief financial officer Greg Golkov said the sales pipeline increased more than 75% from the second quarter's end and more than tripled since year-end 2025, driven by system demand.
Third-quarter bookings declined 19% year over year to $1.9 million, reflecting transaction timing. Nine-month bookings, however, rose 611% to $37.4 million.
Remaining performance obligations reached $38.3 million, up 1,221% year over year. Golkov said 59% was expected to convert into revenues within 12 months of Sept. 30, 2026.
QBTS Eyes a Fourth-Quarter System Delivery
Golkov said a $20 million system sale to Florida Atlantic University was included in year-to-date bookings. Management expects to recognize a substantial portion of the revenue upon delivery in the fourth quarter.
He explained that additional system revenues are typically recognized during installation, followed by smaller recurring maintenance and cloud-access streams.
Asked by a StoneX analyst about 2027, chief executive officer Alan Baratz anticipated growth across systems, quantum computing as a service, professional services and partner-driven sales. He declined numerical guidance but indicated systems could represent a larger revenue share.
D-Wave Advances Two Quantum Technology Paths
Baratz said the company is moving toward multichip annealing processors, with a dual-chip design entering fabrication. Scalable input-output control circuitry remains another development priority.
The gate-model program advanced through a simulator beta launch. Baratz said D-Wave remains on track to complete a 17-qubit system and is discussing orders for delivery in 2027.
During a Rosenblatt Securities exchange, Baratz described a goal of controlling 100 logical qubits using approximately 200 to 300 input-output lines. Upcoming chip tests will help determine whether this objective is achievable.
QBTS Builds Adoption Through Customers and Partners
Baratz highlighted NTT DOCOMO's second production application, which reduced peak location-registration signals by 65.3%. Responding to a Craig-Hallum analyst, he clarified that DOCOMO developed both applications independently and runs them relatively infrequently.
Management discussed partnerships with CGI and LG CNS to help enterprises deploy optimization applications. Baratz expects partners to become more commercially active in 2027.
A SkyWater manufacturing project reduced lot delays by up to 30% in a technology demonstration. The companies are advancing that effort into a more detailed proof of concept.
D-Wave Faces Margin Pressure and Rising Costs
Revenues increased 21% to $4.51 million, exceeding the Zacks Consensus Estimate of $3.95 million. The company incurred a loss of 11 cents per share compared with the Zacks Consensus Estimate of a 10-cent loss.
D-Wave Quantum Inc. Price, Consensus and EPS Surprise
Golkov attributed the lower GAAP gross margin of 52.9% to a heavier mix of lower-margin professional services. Adjusted operating expenses climbed 72% year over year to $40.5 million.
Adjusted EBITDA loss reached $37.7 million amid accelerated development and commercialization investments. Cash and marketable securities totaled $503.4 million at quarter-end.
QBTS Discusses Government Support and Supply Capacity
Baratz highlighted an agreement providing access to up to $100 million in U.S. CHIPS Act funding, contingent on milestones. Golkov confirmed that no funds had been received by quarter-end.
Asked about supply bottlenecks by a Jefferies analyst, Baratz identified dilution refrigerators as a long-lead-time component. D-Wave is qualifying another supplier and purchasing certain components ahead of anticipated demand.
Baratz also told analysts that European restrictions on quantum funding create additional complexity, while the company continues managing a global supply chain.
D-Wave Keeps Execution at the Center
Management remains focused on converting its expanding pipeline into system deliveries, recurring services and production applications. Quarterly booking fluctuations remain an important consideration.
Baratz also emphasized parallel execution of annealing and gate-model milestones. Upcoming fabrication tests and planned system deliveries remain central to the company's development roadmap.
These ratings reflect an unfavorable Style Score profile, with weak value, growth and combined characteristics and a relatively neutral momentum signal. The overall combination offers limited support for near-term outperformance. However, the Zacks Rank can change as analysts revise earnings estimates following the latest results.
View the Zacks #1 Rank List
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QBTS Q3 Earnings Call Highlights System Sales and Quantum Roadmap
Key Takeaways
D-Wave Quantum Inc. (QBTS - Free Report) used its third-quarter 2026 earnings call to emphasize a growing system-sales pipeline and plans to convert contracted business into revenues. Management also outlined technical milestones across its annealing and gate-model platforms.
The discussion balanced expanding commercial opportunities against uneven bookings, lower margins and higher development spending. Executives stressed that large system deliveries will influence reported results.
D-Wave's Pipeline Expands as Bookings Fluctuate
Acting chief financial officer Greg Golkov said the sales pipeline increased more than 75% from the second quarter's end and more than tripled since year-end 2025, driven by system demand.
Third-quarter bookings declined 19% year over year to $1.9 million, reflecting transaction timing. Nine-month bookings, however, rose 611% to $37.4 million.
Remaining performance obligations reached $38.3 million, up 1,221% year over year. Golkov said 59% was expected to convert into revenues within 12 months of Sept. 30, 2026.
QBTS Eyes a Fourth-Quarter System Delivery
Golkov said a $20 million system sale to Florida Atlantic University was included in year-to-date bookings. Management expects to recognize a substantial portion of the revenue upon delivery in the fourth quarter.
He explained that additional system revenues are typically recognized during installation, followed by smaller recurring maintenance and cloud-access streams.
Asked by a StoneX analyst about 2027, chief executive officer Alan Baratz anticipated growth across systems, quantum computing as a service, professional services and partner-driven sales. He declined numerical guidance but indicated systems could represent a larger revenue share.
D-Wave Advances Two Quantum Technology Paths
Baratz said the company is moving toward multichip annealing processors, with a dual-chip design entering fabrication. Scalable input-output control circuitry remains another development priority.
The gate-model program advanced through a simulator beta launch. Baratz said D-Wave remains on track to complete a 17-qubit system and is discussing orders for delivery in 2027.
During a Rosenblatt Securities exchange, Baratz described a goal of controlling 100 logical qubits using approximately 200 to 300 input-output lines. Upcoming chip tests will help determine whether this objective is achievable.
QBTS Builds Adoption Through Customers and Partners
Baratz highlighted NTT DOCOMO's second production application, which reduced peak location-registration signals by 65.3%. Responding to a Craig-Hallum analyst, he clarified that DOCOMO developed both applications independently and runs them relatively infrequently.
Management discussed partnerships with CGI and LG CNS to help enterprises deploy optimization applications. Baratz expects partners to become more commercially active in 2027.
A SkyWater manufacturing project reduced lot delays by up to 30% in a technology demonstration. The companies are advancing that effort into a more detailed proof of concept.
D-Wave Faces Margin Pressure and Rising Costs
Revenues increased 21% to $4.51 million, exceeding the Zacks Consensus Estimate of $3.95 million. The company incurred a loss of 11 cents per share compared with the Zacks Consensus Estimate of a 10-cent loss.
D-Wave Quantum Inc. Price, Consensus and EPS Surprise
D-Wave Quantum Inc. price-consensus-eps-surprise-chart | D-Wave Quantum Inc. Quote
Golkov attributed the lower GAAP gross margin of 52.9% to a heavier mix of lower-margin professional services. Adjusted operating expenses climbed 72% year over year to $40.5 million.
Adjusted EBITDA loss reached $37.7 million amid accelerated development and commercialization investments. Cash and marketable securities totaled $503.4 million at quarter-end.
QBTS Discusses Government Support and Supply Capacity
Baratz highlighted an agreement providing access to up to $100 million in U.S. CHIPS Act funding, contingent on milestones. Golkov confirmed that no funds had been received by quarter-end.
Asked about supply bottlenecks by a Jefferies analyst, Baratz identified dilution refrigerators as a long-lead-time component. D-Wave is qualifying another supplier and purchasing certain components ahead of anticipated demand.
Baratz also told analysts that European restrictions on quantum funding create additional complexity, while the company continues managing a global supply chain.
D-Wave Keeps Execution at the Center
Management remains focused on converting its expanding pipeline into system deliveries, recurring services and production applications. Quarterly booking fluctuations remain an important consideration.
Baratz also emphasized parallel execution of annealing and gate-model milestones. Upcoming fabrication tests and planned system deliveries remain central to the company's development roadmap.
QBTS Zacks Rank and Style Scores Signal Caution
QBTS carries a Zacks Rank #3 (Hold), indicating a neutral near-term ranking. The stock’s Value, Growth and VGM Scores are all F, while its Momentum Score is C. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
These ratings reflect an unfavorable Style Score profile, with weak value, growth and combined characteristics and a relatively neutral momentum signal. The overall combination offers limited support for near-term outperformance. However, the Zacks Rank can change as analysts revise earnings estimates following the latest results.