D-Wave Quantum Inc. (QBTS) - Q3 2025 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. D-Wave Quantum Inc. is the world's first commercial supplier of quantum computers, offering both annealing and gate-model systems. The company operates three facilities in North America (Burnaby, Richmond, and Palo Alto) and provides access to its quantum computers via the Leap cloud service (QCaaS), professional services, and direct system sales. The company is classified as a non-accelerated filer, smaller reporting company, and emerging growth company.
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 |
|---|---|---|---|---|
| Revenue | $3.74 million | $1.87 million | $21.84 million | $6.52 million |
| Gross Profit | $2.67 million | $1.04 million | $18.52 million | $4.09 million |
| Gross Margin | 71.4% | 55.8% | 84.8% | 62.7% |
| Net Loss | $(139.99) million | $(22.71) million | $(312.74) million | $(57.80) million |
| Operating Loss | $(27.74) million | $(20.64) million | $(65.53) million | $(56.99) million |
| Cash & Equivalents | $836.23 million | $29.27 million | $836.23 million | $29.27 million |
| Total Debt (Loans Payable) | $32.20 million | $30.48 million | $32.20 million | $30.48 million |
| Warrant Liabilities | $140.97 million | $69.88 million | $140.97 million | $69.88 million |
Note: Net loss is significantly impacted by non-cash changes in the fair value of warrant liabilities ($121.9M loss in Q3 2025; $260.0M loss in 9M 2025).
Material Changes vs. Prior Period
- Revenue Growth: Revenue doubled in Q3 2025 compared to Q3 2024 (+100%) and increased 235% for the nine-month period. This was driven primarily by $15.5 million in system sales (including a $1.8 million system upgrade project in Q3) and growth in professional services.
- Liquidity Expansion: Cash and cash equivalents surged from $178 million at year-end 2024 to $836 million at September 30, 2025. This increase was fueled by $536.7 million in proceeds from at-the-market (ATM) offerings, $139.2 million from warrant exercises, and $37.8 million from the Lincoln Park Purchase Agreement.
- Debt Restructuring: The company fully repaid its $30 million Term Loan in October 2024. In August 2025, it entered a new $13.8 million Equipment Financing Agreement, drawing $0.5 million initially.
- Warrant Liability Volatility: The fair value of warrant liabilities increased by $121.9 million in Q3 2025 due to the appreciation of the company's stock price, creating a significant non-cash loss.
- Recovery of Zapata Note: The company recovered the full principal ($1.0 million) plus interest and legal fees of a previously written-off convertible note from Zapata Computing in June 2025, offsetting prior bad debt expenses.
Guidance, Outlook, and Risks
- Outlook: Management expects to continue incurring significant operating losses as it invests in R&D (fabrication, gate-model development) and go-to-market initiatives. Gross margins are expected to remain elevated in the near term due to system sales but may normalize as QCaaS becomes a larger revenue component.
- Warrant Redemption: Subsequent to the quarter end, the company issued a Notice of Redemption for all outstanding Public Warrants at $0.01 per warrant, effective November 19, 2025, following the satisfaction of the mandatory redemption price condition.
- Risks: Key risks include the company's history of losses, dependence on government grants (SIF Loan), the volatility of warrant liabilities affecting net income, and the need for continued capital raises to fund operations. The company has no sales in China, Russia, or Ukraine.
- Unusual Items: The $121.9 million loss in Q3 2025 related to warrant liability fair value changes is a non-cash item that distorts operating performance. Additionally, the $0.9 million gain on marketable securities in Q3 2025 resulted from an earnout provision on a former investee.
Investor Verification Checklist
- Warrant Redemption Impact: Verify the final number of warrants exercised prior to the November 19, 2025, redemption deadline and the resulting cash inflow and equity dilution.
- System Sales Sustainability: Assess the recurring nature of the $15.5 million in system sales recognized in the first nine months of 2025, as this revenue stream is described as irregular and intermittent.
- Cash Burn Rate: Monitor the net cash used in operating activities ($53.6 million for 9M 2025) against the current cash balance ($836 million) to determine runway without further equity dilution.
- SIF Loan Repayment Trigger: Track annual revenue against the $70 million threshold required to trigger repayments on the Canada Strategic Innovation Fund (SIF) Loan.
- ATM Capacity: Confirm the status of future equity raising capabilities, as the company has completed 100% of issuances under its previous four ATM agreements totaling $725 million.