D-Wave Quantum Stock Falls as Q3 Margins and Bookings Slide

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•  10 Nov 2026
 

$QBTS D-Wave Quantum shares fell about 9% after third-quarter earnings showed 21% revenue growth, gross margin compression, and a 19% decline in bookings. The selloff snapped a two-day rally. The stock entered the session down about 56% year to date amid a prolonged slump in quantum computing shares. The broader market also weakened.

Third-quarter revenue rose to $4.5 million, slightly ahead of the roughly $4.4 million consensus, for the period ended September 30, 2026. The net loss reached $48.2 million, or 13 cents per share, versus an expected loss of 10 cents. Wall Street coverage remains broad and the consensus largely positive. The results show that commercialization remains slow and uneven, with the shift from research to commercial use weighing on margins.

Professional services drove the shift in revenue mix, rising $1.5 million year over year as systems sales fell by the same amount. Quantum computing as a service revenue increased $0.8 million. Professional services include identifying and implementing quantum applications for businesses and supporting customers in the D-Wave Quantum launch program. D-Wave Quantum said those services carry lower margins.

GAAP gross profit fell 11% to $2.4 million, with gross margin down 18.5 percentage points to 52.9%. Adjusted gross profit was nearly flat at $2.9 million, while adjusted gross margin fell 14.1 percentage points to 63.6%. D-Wave Quantum attributed the compression to a higher mix of professional services revenue and a $0.2 million increase in stock-based compensation expense.

Operating loss nearly doubled to $53.5 million from $27.7 million a year earlier. Operating expenses rose 84% to $55.9 million, driven primarily by a $12.3 million increase in personnel costs. The adjusted loss before interest, taxes, depreciation, and amortization widened 83% to $37.7 million as D-Wave Quantum stepped up product development and marketing investment. Net loss narrowed sharply year over year, mainly because noncash charges tied to revaluing the liability for warrants redeemed in November 2025 fell by $121.9 million.

Quarterly bookings fell 19% year over year to $1.9 million. Bookings measure customer orders expected to convert into future revenue, and management said the timing of large deals can drive significant quarterly swings. Rival IonQ has discontinued the metric, while D-Wave Quantum still reports it as an indicator of demand.

Nine-month bookings rose 611% to $37.4 million, with $33.4 million concentrated in the first quarter. Major deals included a $20 million system sale to Florida Atlantic University and a two-year, $10 million agreement with an unnamed Fortune 100 company. Management expects to recognize a significant share of the university system sale on fourth-quarter delivery, with the balance recognized during installation, likely early next year. Maintenance and quantum computing as a service are expected to generate recurring revenue for years.

Remaining performance obligations reached $38.3 million at the end of September, up 1,221% from $2.9 million a year earlier. D-Wave Quantum expects to recognize about 59% of the backlog within 12 months and about 71% within 24 months, reflecting the lag between bookings and revenue recognition. The company recognized revenue from more than 100 customers in the quarter, 48% of them commercial companies.

Cash and marketable securities fell 40% year over year to $503.4 million, mainly reflecting about $253 million in cash used to acquire Quantum Circuits in January. D-Wave Quantum also signed a binding agreement with the US Department of Commerce for access to up to $100 million in CHIPS Act funding. Payments are tied to milestones and made in installments.

D-Wave Quantum delivered an Advantage2 quantum system to Italy in October with funding from Swiss Quantum Technology SA. The system has more than 4,400 qubits and will be installed at Villa Saporiti in Como. It will give European researchers and companies direct access to quantum annealing, which is designed to find optimal solutions to complex mathematical problems.

NTT Docomo, the largest mobile operator in Japan, deployed a second production application using D-Wave Quantum hybrid technology. The application improved network tracking area lists, reducing daily peaks in registration signaling by 65.3% and fragmentation signaling by 7%. A representative problem involving 333 base stations took about five minutes to solve, and the results are already used in network planning and daily operations. CEO Alan Baratz has long pointed to optimization as a particular strength of quantum annealing.

D-Wave Quantum is accelerating development of gate-based quantum computing alongside annealing. IBM management sees gate-based computing as the main path to commercialization. D-Wave Quantum briefly explored gate-based models after its founding in 1999 and stepped up efforts to revive the architecture after acquiring Quantum Circuits in January. The two programs divide resources, and Jefferies analysts endorsed the dual approach when they initiated coverage last year.

D-Wave Quantum became the first company to sell a quantum system to a major corporation with its 2011 sale to Lockheed Martin. That early lead has faded as rivals such as IonQ set more aggressive revenue targets for the coming years. Commercial progress remains uneven across the industry, and D-Wave Quantum continues to rely on manufacturing partnerships. Those include an extended agreement with SkyWater, a chip foundry now owned by IonQ.

The earnings test is whether D-Wave Quantum converts its backlog into higher-margin revenue and reduces its dependence on a single large system sale. Quarterly bookings remain volatile, and operating losses are widening as D-Wave Quantum funds two technology programs. With the stock already down more than half for the year, Tuesday’s selloff showed investor patience wearing thin.

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