Business Context and Reporting Period
Company: D-Wave Quantum Inc. (NYSE: QBTS)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: D-Wave is the world's first commercial supplier of quantum computers and the only dual-platform provider offering both annealing and gate-model quantum computing systems. The company generates revenue through Quantum Computing as a Service (QCaaS) via its Leap cloud platform, professional services, and direct sales of quantum systems. A key strategic milestone occurred on January 20, 2026 (subsequent to the reporting period), with the completion of the acquisition of Quantum Circuits, Inc., solidifying D-Wave's position in error-corrected gate-model technology.
Key Financial Metrics
| Metric (in thousands) | 2025 | 2024 |
|---|---|---|
| Revenue | $24,587 | $8,827 |
| Gross Profit | $20,306 | $5,563 |
| Gross Margin | 82.6% | 63.0% |
| Net Loss | $(355,062) | $(143,879) |
| Operating Loss | $(100,368) | $(77,223) |
| Cash and Cash Equivalents (Year End) | $635,347 | $177,980 |
| Net Cash Used in Operating Activities | $(71,982) | $(42,643) |
| Accumulated Deficit | $(982,002) | $(626,940) |
Note: The Net Loss for 2025 includes a non-cash charge of $270.5 million related to the change in fair value of warrant liabilities.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 179% to $24.6 million, driven primarily by $16.2 million in system sales (compared to zero in 2024) and an increase in professional services. QCaaS revenue decreased slightly by $1.2 million.
- Expense Increases: Operating expenses rose 46% to $120.7 million. Research and Development (R&D) increased 44% due to higher fabrication and personnel costs. Sales and Marketing expenses surged 91% to support global expansion.
- Liquidity Position: Cash and cash equivalents grew significantly from $178.0 million to $635.3 million. This increase was fueled by $779.1 million in net financing activities, including $536.7 million from at-the-market (ATM) equity offerings and $202.9 million from warrant exercises.
- Warrant Liability Resolution: The company redeemed all remaining public warrants in November 2025, eliminating the warrant liability balance that existed at the end of 2024 ($69.9 million).
Guidance, Outlook, and Risks
Outlook and Strategy:
- Dual-Platform Roadmap: Following the acquisition of Quantum Circuits, D-Wave aims to deliver the industry's first scaled, error-corrected gate-model quantum computer, with an initial dual-rail system targeted for general availability in 2026.
- Commercialization: The company continues to focus on moving customers from proof-of-concept to production applications via its Leap cloud service and professional services.
- Facilities: D-Wave plans to transition its corporate headquarters from Palo Alto, California, to Boca Raton, Florida, by the end of 2026.
Key Risks and Contingencies:
- Profitability: The company has a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future as it invests in R&D and commercialization.
- Integration Risk: Successful integration of Quantum Circuits is critical; failure to realize synergies or operational difficulties could materially harm financial results.
- Market Adoption: The quantum computing market is nascent and unproven; demand for QCaaS may not grow as expected, and classical computing advancements could delay the realization of "quantum advantage."
- Capital Requirements: The company may need additional capital sooner than planned to pursue growth strategies, with no assurance that financing will be available on acceptable terms.
Investor Verification Checklist
- Revenue Quality: Verify the sustainability of the 179% revenue growth, noting it was heavily driven by one-time system sales ($16.2M) rather than recurring QCaaS revenue, which declined.
- Non-Cash Charges: Confirm the impact of the $270.5 million warrant liability mark-to-market charge on the reported net loss to assess core operational performance.
- Cash Burn Rate: Monitor the $72.0 million cash burn from operations against the $635.3 million cash balance to determine runway without further dilution.
- Acquisition Integration: Track the progress of the Quantum Circuits integration and the timeline for the delivery of the error-corrected gate-model system promised for 2026.
- Customer Concentration: Review Note 3 of the financial statements, which indicates one customer ("Customer A") accounted for 67% of total revenue in 2025.