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DQ

D-Wave Quantum Inc. (QBTS)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue beat with momentum across mix: Q3 revenue $3.74M (+100% YoY; +20.8% QoQ) vs S&P Global consensus $3.03M; Non‑GAAP adjusted EPS of -$0.05 beat (-$0.07 YoY), and GAAP gross margin expanded to 71.4% (+1,560 bps YoY; +760 bps QoQ). Revenue and EPS beats were driven by higher‑margin systems activity (Advantage2 upgrade) and stronger QCAS/services contribution, partially offset by higher OpEx . Q3 revenue $3.739M vs est. $3.028M*; Primary EPS -$0.05 vs est. -$0.066* (Values retrieved from S&P Global).
  • Bookings and pipeline inflected: Q3 bookings $2.4M (+80% QoQ; +3% YoY), and post‑quarter bookings exceed $12M, anchored by a €10M, five‑year, 50%‑capacity Advantage2 contract in Italy (Q‑Alliance), recognized ratably starting when operational (expected next year) .
  • Liquidity catalyst: Record cash of $836.2M (up from $819.3M in Q2 and $29.3M in Q3’24), aided by warrant exercises; additional $21.3M raised post‑quarter through Nov 4. Balance sheet strength supports accelerated R&D (gate‑model program) and go‑to‑market investments .
  • Stock drivers: Visible deal momentum (systems and QCAS), Davidson Advantage2 now operational for U.S. defense use cases, and management’s assertive positioning on annealing advantage; counterbalanced by higher OpEx (+40% YoY) and GAAP losses driven by non‑cash warrant remeasurement .

What Went Well and What Went Wrong

  • What Went Well

    • Strong top‑line and margin expansion: Revenue $3.74M (+100% YoY/+20.8% QoQ) and GAAP gross margin 71.4% (+1,560 bps YoY/+760 bps QoQ), aided by the Advantage2 upgrade at Jülich and mix .
    • Commercial traction and pipeline: Q3 bookings $2.4M (+80% QoQ) with post‑quarter bookings >$12M including the €10M Q‑Alliance capacity deal; Davidson Advantage2 system now operational for mission‑critical U.S. defense use cases .
    • Management confidence and positioning: “D-Wave offers the only quantum computers that have demonstrated advantage on a useful real-world problem. We can support customer applications in production today.” . “Only D‑Wave is the real deal.” .

  • What Went Wrong

    • Elevated operating expense base: GAAP OpEx $30.4M (+40% YoY) on personnel, fabrication, and SBC; Adjusted EBITDA loss widened to $20.6M (vs $13.8M) .
    • GAAP losses dominated by non‑cash items: Net loss -$140.0M (vs -$22.7M), driven primarily by $121.9M of non‑cash warrant liability remeasurement and realized losses from warrant exercises .
    • Bookings trend over 9 months mixed: YTD bookings $5.3M (-7% YoY), despite Q3 sequential improvement; highlights larger, more complex enterprise cycles .

Financial Results

MetricQ3 2024Q2 2025Q3 2025 ActualQ3 2025 Consensus
Revenue ($M)$1.870 $3.100 $3.739 $3.028*
GAAP Gross Margin %55.8% 63.8% 71.4% N/A
GAAP EPS ($)-$0.11 -$0.55*-$0.41 N/A
Primary/Adjusted EPS ($)-$0.12 (Adj) N/A-$0.05 (Adj) -$0.066*
  • Notes: EPS consensus/actuals shown for S&P Global “Primary EPS”; “Adjusted EPS” refers to company’s adjusted net loss per share . Values with asterisks (*) retrieved from S&P Global.

Revenue mix (Q3 2025)

ComponentAmount ($M)Notes
Systems$1.8Advantage/Advantage2 upgrade revenue
QCAS (cloud)$1.4Recurring access via Leap
Professional Services$0.5POCs and application build-outs

Key profitability metrics

MetricQ3 2024Q3 2025
GAAP Gross Profit ($M)$1.0 $2.7
Non-GAAP Gross Profit ($M)$1.3 $2.9
Non-GAAP Gross Margin %67.2% 77.7%
Adjusted EBITDA Loss ($M)$13.836 $20.615

KPIs and balance sheet

KPIQ3 2024Q2 2025Q3 2025
Bookings ($M)$2.3 $1.3 $2.4
Revenue‑generating customersN/AN/A“100+” last four quarters
Cash balance ($M)$29.3 $819.3 $836.2

Non‑GAAP adjustments reference

  • Adjusted Net Loss excludes non‑cash, non‑operating warrant remeasurement; Non‑GAAP gross metrics exclude SBC and D&A; Adjusted EBITDA also excludes interest and other non‑operating items .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating Expenses2H 2025Indicated ~+15% sequential increase (Q2 call)Reiterated on Q3 call Maintained
Revenue (color)Q4 2025NoneBookings >$12M to‑date post‑Q3; additional €10M capacity contract signed for Advantage2 New color
Revenue recognition (Italy capacity deal)Start upon system operationalN/ARecognized ratably over 5 years when operational, expected next year (post‑Q3 timing) New disclosure

No formal quantitative revenue/EPS/margin outlook was issued.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/Optimization use casesQ1: Production wins (Ford Otosan), hybrid solvers to 2M variables; error mitigation improving effective coherence; Advantage2 GA timeline BASF POC: scheduling latency -14%, setup -9%, unloading -18%; North Wales Police: >90% on-time responses, ~50% faster response, 4 months→4 minutes coordination Expanding enterprise proofs; stronger performance data
Gate‑model roadmapQ1: Cryogenic control leadership, separate gate and annealing paths Fluxonium qubit and superconducting control chips fabricated; bonding underway; first cryogenic‑control demonstration in coming year; large‑scale, error‑corrected gate system still 5–10 years out Clear medium‑term R&D milestones; long runway to scale
Government/DefenseQ1: Davidson install nearing completion; U.S. government had gate bias, limited system sale interest Davidson Advantage2 now operational; next step: secure for classified apps—potentially first certified for classified workloads Tangible U.S. defense progress
Systems sales modelQ1: Jülich system sale drove record revenue/margins €10M/5‑year 50% capacity Italy deal with purchase option; multiple advanced discussions; model can seed new PoPs Model broadening globally
QCAS capacity/economicsQ1: QCAS margins 70–80%; growing pipeline Four production systems support >$100M annual QCAS capacity; enterprise “bundled” multi‑POC/production dialogue emerging Operating leverage emerging

Management Commentary

  • “D‑Wave offers the only quantum computers that have demonstrated advantage on a useful real‑world problem. We can support customer applications in production today.” — Alan Baratz, CEO .
  • “We recently completed the fabrication of fluxonium qubit chips and superconducting control chips…we believe this work will enable the first‑ever scalable gate model system with cryogenic control.” — Alan Baratz .
  • “After the close of the quarter, we signed a €10 million agreement…[recognized] ratably over five years, commencing when the system becomes operational, which we expect to be sometime next year.” — John Markovich, CFO .
  • “The next step [with Davidson] is to secure the system so that we can run classified versions of applications…what we believe would be the very first quantum computer certified for classified government applications.” — Alan Baratz .
  • “With more than $800 million in cash on our balance sheet, we remain well‑positioned to expand our business both organically and through M&A.” — Alan Baratz .

Q&A Highlights

  • U.S. government engagement: Strategy focuses on solving mission‑critical problems (logistics, maintenance) with annealing systems rather than R&D funding; growing recognition of value; Davidson system on path to classified certification .
  • Gate‑model plans and timing: Fluxonium + cryogenic control approach; first demonstration (cryogenic control of gate qubits) expected over the coming year; scaled error‑corrected gate model still 5–10 years away .
  • Italy Q‑Alliance structure: €10M for 50% capacity with option to purchase full system at a premium; revenue recognized ratably over five years once operational .
  • Commercial momentum and deal structuring: Larger enterprises, complex structures; exploring “enterprise‑license‑like” bundles for multiple POCs plus production apps to accelerate PS/QCAS revenue .
  • OpEx trajectory: Reiterated ~15% sequential increase in 2H spend (R&D‑weighted) to support tech and GTM acceleration; no additional 1H 2026 guidance provided .

Estimates Context

  • Q3 2025 vs S&P Global consensus: Revenue $3.739M vs $3.028M* (+23.5% surprise); Primary EPS -$0.05 vs -$0.066* (beat by ~$0.02). Outperformance driven by systems upgrade revenue (Advantage2), solid QCAS/pro services, and margin expansion, partly offset by higher OpEx . Values with asterisks retrieved from S&P Global.
MetricQ3 2025 ActualQ3 2025 ConsensusSurprise
Revenue ($M)$3.739 $3.028*+23.5%
Primary EPS ($)-$0.05 -$0.066*+$0.016

Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Near‑term: Clear beat on revenue and adjusted EPS vs consensus; bookings acceleration post‑quarter and Italy capacity deal create positive setup into Q4 and 2026 system deployment milestones .
  • Mix and margin: Systems upgrades plus improving QCAS scale supported 71.4% GAAP GM and 77.7% non‑GAAP GM; watch for sustainability as mix normalizes and R&D/SM spend steps up .
  • Liquidity optionality: Record $836.2M cash (plus post‑quarter warrant proceeds) funds accelerated gate‑model R&D and broader GTM, reducing financing overhangs near‑term .
  • Defense catalyst: Davidson Advantage2 is operational; potential classified certification could open higher‑value U.S. government workloads in 2026+ .
  • Structural growth vector: Innovative capacity‑lease → purchase options (Italy) can seed global points of presence and new QCAS/system pipelines; management highlighted similar advanced discussions .
  • Risk balance: Elevated OpEx and wider adjusted EBITDA loss reflect investment cycle; GAAP P&L volatile given warrant remeasurement; investors should anchor on non‑GAAP operations and bookings convertibility .
  • What to monitor next: Q4 bookings conversion to revenue cadence, additional system capacity deals, QCAS utilization vs >$100M annual capacity, and gate‑model cryogenic control demonstration timing .

Additional Data References

  • Q3 headline results and narrative: press release and 8‑K exhibits .
  • Earnings call transcript (prepared remarks and Q&A): .
  • Prior quarters (trend context): Q1 record revenue/system sale and margins ; Q2 comparison values referenced in Q3 materials .

Values with asterisks (*) retrieved from S&P Global.