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01/11 04:08
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call indicates strong revenue growth, improved gross margins, and strategic initiatives in quantum AI and government engagements. Despite a significant net loss, the adjusted figures show improvement. The Q&A highlights potential in national security and defense, and successful trials in optimization problems. The focus on high-margin revenue streams and strategic partnerships, along with optimistic future plans, suggest a positive sentiment. However, the lack of clarity on certain deals and the increase in operating expenses temper the outlook. Overall, the stock is likely to see a positive movement.
Revenue $3.7 million in Q3 2025, an increase of approximately $1.8 million or 100% from Q3 2024 ($1.9 million). The increase was driven by $1.8 million in systems revenue, $1.4 million in QCaaS revenue, and $500,000 in professional services revenue.
Bookings $2.4 million in Q3 2025, an increase of $100,000 or 3% compared to Q3 2024 ($2.3 million). The increase was attributed to higher customer engagement and deal sizes.
GAAP Gross Profit $2.7 million in Q3 2025, an increase of $1.7 million or 156% from Q3 2024 ($1 million). The growth was due to increased revenue and higher-margin systems upgrade revenue.
Non-GAAP Gross Profit $2.9 million in Q3 2025, an increase of $1.6 million or 131% from Q3 2024 ($1.3 million). The increase was driven by higher revenue and margin improvements.
GAAP Gross Margin 71.4% in Q3 2025, an increase of 15.6% from Q3 2024 (55.8%). The improvement was due to higher revenue and better margins from system upgrades.
Non-GAAP Gross Margin 77.7% in Q3 2025, an increase of 10.5% from Q3 2024 (67.2%). The improvement was attributed to higher-margin revenue streams.
Net Loss $140.8 million in Q3 2025, compared to $22.7 million in Q3 2024. The increase was primarily due to $121.9 million in noncash, nonoperating charges related to warrant liability remeasurement and realized losses from warrant exercises.
Adjusted Net Loss $18.1 million in Q3 2025, a decrease of $5.1 million from Q3 2024 ($23.2 million). The improvement was due to adjustments excluding noncash, nonoperating warrant-related charges.
Adjusted EBITDA Loss $20.6 million in Q3 2025, an increase of $6.8 million or 49% from Q3 2024 ($13.8 million). The increase was due to higher operating expenses, partially offset by higher gross profit.
Year-to-Date Revenue $21.8 million for the first 9 months of 2025, an increase of $15.3 million or 235% from the same period in 2024 ($6.5 million). The growth was driven by system sales, QCaaS, and professional services.
Year-to-Date GAAP Gross Profit $18.5 million for the first 9 months of 2025, an increase of $14.4 million or 353% from the same period in 2024 ($4.1 million). The increase was due to higher-margin system sales.
Year-to-Date Non-GAAP Gross Profit $19.2 million for the first 9 months of 2025, an increase of $14.5 million or 304% from the same period in 2024 ($4.7 million). The growth was driven by higher-margin revenue streams.
Year-to-Date GAAP Gross Margin 84.8% for the first 9 months of 2025, an increase of 22.1% from the same period in 2024 (62.7%). The improvement was due to higher-margin system sales.
Year-to-Date Non-GAAP Gross Margin 87.8% for the first 9 months of 2025, an increase of 15.1% from the same period in 2024 (72.7%). The improvement was attributed to higher-margin revenue streams.
Year-to-Date Net Loss $312.7 million for the first 9 months of 2025, compared to $57.8 million in the same period in 2024. The increase was primarily due to $260 million in noncash, nonoperating charges related to warrant liability remeasurement and realized losses from warrant exercises.
Year-to-Date Adjusted Net Loss $52.8 million for the first 9 months of 2025, a decrease of $5.1 million or 8.7% from the same period in 2024 ($57.8 million). The improvement was due to adjustments excluding noncash, nonoperating warrant-related charges.
Year-to-Date Adjusted EBITDA Loss $46.7 million for the first 9 months of 2025, an increase of $6.1 million or 15% from the same period in 2024 ($40.6 million). The increase was due to higher operating expenses, partially offset by higher gross profit.
Advantage2 System: D-Wave announced the Advantage2 system is operational at Davidson Technologies in Alabama, supporting U.S. government and aerospace customers. It is capable of solving mission-critical computational problems beyond classical computers.
Advantage3 Prototype: Fabrication of Advantage3 prototype chips is nearing completion, with testing expected soon. This system focuses on scaling to 100,000 qubits.
Gate Model Development: D-Wave is advancing its gate model program, including the fabrication of fluxonium qubits and superconducting control chips, aiming for scalable gate model systems with cryogenic control.
Q-Alliance Partnership: D-Wave partnered with the Italian government and Q-Alliance to establish a quantum hub in Italy, including a EUR 10 million contract for an Advantage2 system.
Global Presence: D-Wave expanded its global presence with events in Tokyo, Berlin, Taiwan, and Miami, and hosted its first Qubits Japan User Conference.
Customer Engagements: Signed new and renewing contracts with major organizations, including a U.S.-based airline, SkyWater, Japan Tobacco, Yapi Kredi, and Korea Quantum Computing.
Hybrid Quantum Applications: Demonstrated significant operational efficiencies in projects with BASF and North Wales Police, reducing production scheduling time and improving response times.
Superconducting Technology Focus: D-Wave emphasized its focus on superconducting technology for both annealing and gate model systems, citing advantages in speed and scalability.
Commercial Readiness: Positioned itself as the only quantum company with commercially ready systems solving real-world problems today, unlike competitors still in R&D mode.
Market Conditions: The company faces competitive pressures from other quantum computing companies, some of which are focused on gate model systems. D-Wave's emphasis on annealing systems may face challenges in market perception and adoption, especially as competitors tout their own technological advantages.
Regulatory Hurdles: The company is entering into agreements with international governments and organizations, such as the Italian government and Q-Alliance. These partnerships may expose the company to regulatory risks and compliance challenges in different jurisdictions.
Supply Chain Disruptions: D-Wave relies on superconducting technology, which leverages established supply chains. However, any disruptions in these supply chains could impact the scalability and cost-effectiveness of their quantum systems.
Economic Uncertainties: The company is heavily investing in R&D and expanding its operations globally. Economic downturns or reduced funding availability could impact its ability to sustain these investments and achieve profitability.
Strategic Execution Risks: D-Wave is pursuing a dual approach with both annealing and gate model quantum systems. Balancing these two strategies and ensuring successful execution could pose significant challenges. Additionally, the company’s focus on commercial applications over R&D may limit its appeal to certain market segments.
Deployment of Advantage2 System in Italy: D-Wave announced a EUR 10 million contract for a D-Wave Advantage2 annealing quantum computer in Lombardy, Italy, expected to be deployed in 2026. The agreement includes acquisition of 50% capacity of the system for 5 years, with an option to purchase the full system.
Advantage3 Prototype Development: Fabrication of Advantage3 prototype chips is nearing completion, with circuits expected for testing this quarter. The focus is on scaling to 100,000 qubits with increased connectivity and coherence.
Gate Model Development: D-Wave is advancing its gate model program, including the fabrication of fluxonium qubits and superconducting control chips. The company aims to demonstrate scalable control of gate model qubits, which could lead to the first scalable gate model system with cryogenic control.
Expansion of QCaaS Revenue Capacity: D-Wave has over $100 million in annual QCaaS revenue capacity, supported by four production systems. The company is at an early stage of developing this business, with significant operating leverage potential.
Pipeline and Future Opportunities: The company’s pipeline remains strong, with large opportunities for system sales and QCaaS deals. Recent bookings include a EUR 10 million European agreement and a high six-figure booking with a major U.S.-based international airline.
The selected topic was not discussed during the call.
The earnings call indicates strong revenue growth, improved gross margins, and strategic initiatives in quantum AI and government engagements. Despite a significant net loss, the adjusted figures show improvement. The Q&A highlights potential in national security and defense, and successful trials in optimization problems. The focus on high-margin revenue streams and strategic partnerships, along with optimistic future plans, suggest a positive sentiment. However, the lack of clarity on certain deals and the increase in operating expenses temper the outlook. Overall, the stock is likely to see a positive movement.
The earnings call reveals strong financial performance, including record revenue and a robust cash position, which supports future profitability. Product development is promising, with the Advantage2 system demonstrating quantum supremacy. While M&A strategies and quantum AI milestones lack specificity, the company's strategic priorities and advancements in cryogenic technology are positive. The Q&A section highlights a focus on growth through acquisitions and R&D, with a high customer retention rate. Overall, the sentiment is positive, with potential for stock price appreciation over the next two weeks.
The earnings call reveals strong financial performance with a 509% revenue increase, significant gross margin improvements, and reduced net losses. Additionally, D-Wave's strategic initiatives, such as the Quantum Realized Framework and new partnerships, demonstrate potential for growth. However, some concerns arise from the Q&A session, particularly regarding undisclosed partnership details and lack of clarity on future revenue run rates. Despite these uncertainties, the overall sentiment remains positive due to record revenues, profitability outlook, and robust cash position, likely leading to a positive stock price movement.
The earnings call highlights strong financial performance with a 509% increase in revenue and a significant reduction in net loss. The company has a strong cash position and aims for profitability with less investment than competitors, indicating financial health. The Q&A section did not reveal major concerns and maintained positive sentiment, although some details were withheld. The company's technological advancements and strategic partnerships add to the positive outlook. Despite some uncertainties in customer adoption and error correction, the overall sentiment is positive, likely leading to a stock price increase in the short term.
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