D-Wave Quantum’s Contradictory Gate Model Timelines, Sales Pipeline Spark Uncertainty

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $3.1M, essentially flat with Q2 2025
• EPS: $0.13 net loss per share, compared to $0.55 net loss per share in Q2 2025
• Gross Margin: 55.4% GAAP, a decrease of 8.4% from 63.8% in Q2 2025

Guidance:

• Expect Q3 revenue to be up modestly from Q2.
• Expect Q4 revenue to be up significantly over Q3 and comprise the majority of the year's total.
• Expect to ship two annealing quantum computer systems in Q4 2026, with revenue carryover into 2027.
• Expect adjusted EBITDA loss to increase due to investments in product development and go-to-market initiatives.

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Business Commentary:

Commercial Customer Growth and Production Applications:

• D-Wave reported that 62.4% of its Q2 revenue was derived from commercial enterprises, compared to 45.1% in the previous year.
• 37% of first half 2026 QCaaS revenue was from production applications, up from 9.8% in the first half of 2025.
• This growth is driven by expanding customer interest in quantum computing solutions and successful deployment of quantum applications in production environments.

Government Funding and Strategic Importance:

• D-Wave received approximately $1.57 million from the U.S. National Science Foundation and continued funding for the SQ Fab project.
• This recognition highlights the strategic importance of D-Wave's quantum computing technology in strengthening domestic quantum leadership and validates its technical expertise.

Advancements in Gate Model Architecture:

• The Nature paper demonstrated a 99.9% fidelity in two-qubit operations with fast gate times of about 500 nanoseconds.
• This advancement in D-Wave's dual-rail architecture provides a significant technical validation for its efficient error correction and fault-tolerant quantum computing roadmap.

Customer Engagement and Pipeline Expansion:

• D-Wave's sales pipeline increased by over 120%, and bookings for the first half of 2026 totaled $35.5 million.
• The expansion is supported by strong customer engagements, with notable agreements and expansions with companies like AT&T and Optum, indicating a growing interest in quantum computing solutions.

Financial Performance and Investment:

• Revenue for Q2 was $3.1 million, flat year-on-year, with an adjusted EBITDA loss increase to $37.1 million.
• The financial results reflect increased investments in product development and go-to-market initiatives, primarily in personnel costs, to support D-Wave's accelerated growth strategy.

Sentiment Analysis:

Overall Tone: Positive

• CEO stated 'the quantum computing market is reaching an important inflection point' and highlighted 'expanding commercial momentum' with six production applications. Noted 'peer-reviewed research has validated a critical component of our dual-rail gate model architecture' and that 'leading commercial and government organizations are expanding their engagements with D-Wave.'

Q&A:

• Question from Troy Johnson (Cantor Fitzgerald): Can you comment on the pipeline for QCaaS annealing customers?
  Response: Pipeline is expanding rapidly with larger deals, including AT&T and Optum, and a strong pipeline for both QCaaS and systems.

• Question from John McPeake (Rosenblatt Securities): How does the $10M two-year deal recognition align with the $1.9M QCaaS revenue in Q2?
  Response: Revenue recognition on the deal started in Q1; it represents a prototype for moving from initial application to production and exploring multiple applications.

• Question from Steven (TD Cowen): Can you provide color on AT&T's application volume and future gate program interest?
  Response: Clarified that annealing systems deliver commercial production value; operations over network concept doesn't apply; gate systems are still R&D.

• Question from Shaadi Migwali (Needham): Is Optum's move to production typical or an outlier?
  Response: Depends on customer data readiness; some customers may move directly to production, others may need a proof of concept.

• Question from Kingsley Crane (Canaccord): What are the implications of the Nature paper and the error reduction roadmap?
  Response: Nature paper validates dual-rail architecture's speed and fidelity; simulations support achieving 2,000-fold error reduction, enabling 1 million reliable operations by 2032.

• Question from Mark Lipacis (Evercore): How should we think about revenues from gate model milestones?
  Response: Government funding is already occurring; initial system sales likely to universities/research institutions; significant QCaaS revenue expected around 2032 with commercial applications.

• Question from Suji Desilva (Roth Capital): How have QCaaS discussions with commercial customers evolved?
  Response: Discussions are transitioning from central research teams to line-of-business units, with 25-30% now involving line of business directly.

• Question from Kevin Garrigan (Jefferies): How do you view working with modalities beyond superconducting?
  Response: Dual-rail approach combines superconducting speed with high fidelity, making additional modalities unnecessary; company invests in both annealing and superconducting architectures.

• Question from Gary Mobley (Benchmark): What's the gating factor for delivering 2-3 annealing systems per year and the potential revenue from deployed capacity?
  Response: Gating factors are site selection, build, install, and calibration timing; system pricing is $20M-$40M; revenue recognition occurs over approximately two quarters.

• Question from Harsh Kumar (BMO): How is the integration with Quantum Circuits progressing, and is the gate pipeline distinct from annealing?
  Response: Integration has gone extremely well; on track to deliver 17-qubit system by year-end. Pipeline is mixed with some annealing customers interested in gate and new customers approaching for gate.