D-Wave Quantum Analysts Highlight Strong Results, First System Sale, Growing Backlog

D-Wave Quantum Inc. (NYSE: QBTS) has reported a series of impressive financial and operational milestones, capturing the attention of analysts and investors alike. The company's fiscal year 2024 bookings exceeded $23 million, marking a 120% increase from the previous year. This surge in bookings, coupled with the sale of its first on-premise Advantage quantum computing system, has positioned D-Wave as a leader in the rapidly evolving quantum computing market.



The Advantage system, featuring over 5,000 qubits and 15-way connectivity, offers customers full access to system parameters, allowing for deeper integration than cloud services typically provide. This on-premise offering complements D-Wave's existing Leap quantum cloud service, catering to a broader range of customer needs. The sale to the Jülich Supercomputing Centre (JSC) in Germany, the first high-performance computing (HPC) center to own a D-Wave Advantage system, underscores the company's technological advancements and market leadership.

Analysts have taken note of D-Wave's strong performance. Suji Desilva of Roth Capital Markets maintained a Buy rating while raising the price target from $7 to $10. Desilva highlighted the company's growing backlog and the inclusion of the first quantum annealing computer sale in the quarter. "We are encouraged by the growing backlog and opportunity to diversify into hardware sales beyond core QCaaS quantum cloud services," Desilva noted.

David Williams of Benchmark reiterated a Buy rating and a price target of $8, emphasizing D-Wave's momentum in hardware sales and the launch of the next-generation Advantage 2 system. "The company enjoyed momentum in hardware sales, with the first on-site Advantage system sale," Williams stated. "The launch of the next-generation Advantage 2 system, anticipated for later this year, is expected to serve as a catalyst for additional sales opportunities."

Quinn Bolton of Needham also reiterated a Buy rating and a price target of $8.50, highlighting D-Wave's achievement of quantum supremacy on a real-world magnetic materials simulation problem. "D-Wave Quantum achieved quantum supremacy on a real-world magnetic materials simulation problem, meaningfully strengthened its balance sheet," Bolton said. The company's sale of an Advantage system to the Jülich Supercomputing Centre, while booked in the fourth quarter, is expected to generate most of its revenue in the first quarter of 2025.

The growing backlog of $8.1 million at the end of Q2 2024 provides significant visibility into D-Wave's future revenue streams. This backlog represents orders that have been signed but not yet recognized as revenue, indicating a strong pipeline of future earnings. John Markovich, CFO of D-Wave, stated, "This backlog growth, particularly in our Quantum Computing as a Service (QCaaS) contracts, provides greater visibility into future revenue and gross margins." This financial stability allows D-Wave to continue innovating and maintaining its leadership position in the quantum computing market.

D-Wave's strategic partnerships and expanding customer base, including major government and Forbes Global 2000 clients, underscore its leadership in the quantum computing market. The company's near completion of a 4800+ qubit Advantage2 processor and its ongoing efforts to deliver scalable, production-grade quantum solutions are directly supported by this financial stability. The partnership with the Jülich Supercomputing Centre is expected to facilitate breakthroughs in AI and quantum optimization applications, further validating D-Wave's technological advancements and market leadership.

In summary, D-Wave's recent financial performance, strategic advantages from its first on-premise Advantage system sale, and growing backlog position the company as a leader in the quantum computing market. With a strong financial foundation and a commitment to innovation, D-Wave is well-positioned to continue driving the commercialization of quantum computing and delivering measurable outcomes for its customers.