D-Wave Quantum Inc. Q4 FY2025 earnings call

Fiscal 2025 was an inflection point for D-Wave, with record revenue, demonstrating quantum computing's transition to real-world impact. Closed first advantage quantum computer system sale to ULIC Supercomputing Center. Demonstrated quantum supremacy on a useful real-world problem. Launched general availability of Advantage 2 system. 2026 had strong momentum with January bookings exceeding fiscal 2025 entirety, closed $20 million system sale with Florida Atlantic University, signed $10 million enterprise QCAS agreement. Acquired Quantum Circuits, which gives dual platform approach. Annealing quantum computing is a strategic focus with production workloads. Gate model with Quantum Circuits' dual-rail CUBA technology has advantages in fidelity and speed. Developed Advantage 3 system. Expanded management team with new hires. Headquarters relocating to Boca Raton, Florida with new R&D center.

Fiscal 2025 revenue totaled $24.6 million, up 179% year-over-year. Systems sales revenue was $16.2 million, QCAS subscription revenue was $5.5 million, and professional services revenue was $2.7 million. Fiscal 2025 bookings were $18.7 million, a decrease of 22% from fiscal 2024. Fourth quarter 2025 revenue was $2.8 million, up 19% from the prior year. Fourth quarter 2025 bookings were $13.4 million, a decrease of 27% from the prior year but up 471% sequentially. Non-GAAP gross profit for fiscal 2025 was $21.1 million, up 229% from prior year. Non-GAAP gross margin for fiscal 2025 was 86%, up from 72.8% prior year. Net loss for fiscal 2025 was $355 million, adjusted net loss was $84.5 million. Adjusted EBITDA loss for fiscal 2025 was $71.8 million, up from $56 million prior year.

Management will not provide formal financial guidance for 2026. Bookings for 2026 started strong with year-to-date exceeding any prior year's annual bookings. Sales opportunity pipeline entering 2026 was up nearly 1500%. System sales process is complex with lengthy sales cycles. Revenue recognition on system sales is percentage of completion. Anticipate incrementally higher revenue growth in second half of 2026. Intend to invest aggressively in annealing and gate model technology development, including expanding R&D teams. Expect quarterly operating expenses to increase by approximately 15% sequentially over fiscal 2026.

The INQ acquisition of Skywater could pose risks as D-Wave is skeptical and concerned about potential changes affecting fabrication support. System sales process is complex with lengthy sales cycles which could impact revenue recognition and timing. Dependence on successful execution of technology development and commercialization efforts for annealing and gate model systems to maintain competitive position.

Q: Harsh Kumar asked about gate model advantage with built-in error correction and timing advantage.

A: Alan responded that dual rail technology and cryogenic control technology reduce complexity, allowing faster development of error-corrected superconducting gate model systems.

Q: Quinn Bolton asked about QCI integration and OPEX.

A: John said 15% OPEX increase includes QCI expansion.

Q: Kinsley Crane asked about QCAS net retention rate and Stride Hybrid Solver.

A: John and Alan discussed QCAS deal size growth and complementary nature of system sales and QCAS.

Q: Joe McCormick asked about Quantum Circuits' engagement and backlog.

A: John said Quantum Circuits has government-related book of business and interest in dual rail systems.

Q: Krish Sankar asked about risk mitigation and foundry.

A: Alan said D-Wave is working on other FAB support sources.

Q: Kevin Garrigan asked about QCAST customer conversations and metrics.

A: Alan said annealing systems deliver ROI and customers see strong benefits.

Q: Ruben Roy asked about annealing customers and gate model roadmap.

A: Alan said annealing customers are engaging on gate model discussions.

Q: Troy Jensen asked about QCAS capacity and system ramp.

A: Alan said there's plenty of capacity and ability to ramp systems.

Q: Craig Ellis asked about R&D and pipeline.

A: Alan said investments are playing out as planned and pipeline is robust.

Q: John McTeek asked about Advantage 3 circuit tests.

A: Alan said Advantage 3 has analog-digital and multi-chip capabilities with progress.

Q: David Williams asked about pipeline strength and lifecycle.

A: Alan said pipeline is strong with robust go-to-market.

Q: Antoine Legault asked about Pentagon budget and government opportunity.

A: Alan said focused on helping government solve problems and has interest.

Q: Richard Shannon asked about new system capacity.

A: Tyler said there's capacity and plans to do more in parallel.

Q: David Liu asked about QCAS and hardware sales mix.

A: John said OpEx growth is 15% sequentially and mix is lumpy