QBTS

D-Wave Quantum Inc. (QBTS) - Q1 2026 10-Q Summary

Business Context and Reporting Period

This Quarterly Report on Form 10-Q covers the three-month period ended March 31, 2026. D-Wave Quantum Inc. is the world's first commercial supplier of quantum computers, offering dual-platform products spanning annealing and gate-model technologies. The company operates four facilities in North America and provides access via its Leap quantum cloud service. A significant corporate event during this period was the acquisition of Quantum Circuits, Inc. on January 20, 2026, to enhance gate-model capabilities.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased 81% to $2.9 million, primarily due to a $12.6 million drop in system sales. Q1 2025 included a large system sale that was not repeated in Q1 2026. QCaaS and professional services revenue saw slight increases.
• Expense Surge: Operating expenses increased 125% to $56.5 million.
  • R&D: Increased 151% to $25.8 million, driven by personnel costs, stock-based compensation, and fabrication costs.
  • G&A: Increased 155% to $20.3 million, largely due to $6.7 million in transaction expenses related to the Quantum Circuits acquisition.
  • Sales & Marketing: Increased 51% to $10.5 million.
• Acquisition Impact: The company acquired Quantum Circuits for $538.5 million ($250.8 million cash + equity). This resulted in $342.6 million of goodwill and $217.2 million of intangible assets on the balance sheet.
• Tax Benefit: A significant $28.5 million income tax benefit was recorded, reducing the net loss. This was driven by deferred tax liabilities assumed in the acquisition, which allowed the release of valuation allowances on existing deferred tax assets.
• Cash Flow: Net cash used in investing activities was $252.1 million, primarily due to the cash portion of the Quantum Circuits acquisition. Operating cash burn increased to $45.0 million.

Guidance, Outlook, and Risks

• Strategic Outlook: Management intends to accelerate the time to a scaled, error-corrected gate-model quantum computer and aims to make an initial dual-rail system generally available in 2026. The company plans to transition its corporate headquarters to Boca Raton, Florida, before the end of 2026.
• Liquidity: As of March 31, 2026, the company held $338.2 million in cash and $250.2 million in marketable securities. The company expects to continue incurring significant losses as it invests in R&D and go-to-market initiatives.
• Risks: Key risks include the uncertainty of realizing value from quantum computing, the integration of the Quantum Circuits acquisition, and the need for continued capital investment. The company has no material pending litigation.
• Unusual Items: The $28.5 million tax benefit and the $1.9 million gain on investment in marketable securities were non-recurring or unusual items impacting the net loss.

Investor Verification Checklist

• Revenue Sustainability: Verify the pipeline for future system sales, as the absence of a large system sale caused an 81% revenue drop.
• Acquisition Integration: Monitor the integration progress of Quantum Circuits and the realization of synergies to justify the $538.5 million purchase price.
• Burn Rate: Assess the runway provided by the $588.4 million in liquid assets against the current operating cash burn of ~$45 million per quarter.
• Tax Benefit Recurrence: Confirm that the $28.5 million tax benefit was a one-time event related to the acquisition and not indicative of future profitability.
• Customer Concentration: Note that in Q1 2026, one customer (Customer A) represented 29% of total revenue.