QBTS earnings call transcript, November 10, 2026

Good morning, everyone, and welcome to D-Wave's third quarter fiscal year 2026 earnings conference call. Today's conference call is being recorded. At this time, I would like to turn the call over to Kevin Hunt, Senior Director of Investor Relations. Please go ahead.

Thank you, and good morning.

Thank you, Kevin.

Good morning, and thank you all for joining us. I'm pleased to share with you today our third quarter 2026 business results. highlights. Our third quarter revenue was $4.5 million, up 21% year-over-year. Bookings for the first nine months of 2026 were $37.4 million, a 611% year-over-year increase. That triple-digit year-over-year bookings growth and a robust pipeline reinforce our confidence in the opportunity ahead. We are expanding our commercial reach, delivering measurable customer value, and advancing both our annealing and the gate model roadmaps. As a reminder, D-Wave is the only dual-platform quantum computing company, and that gives us a distinctive position in this market. Our annealing quantum computers are available today with customers using hybrid quantum applications in their operations. At the same time, we are developing fault-tolerant gate model systems designed to address a different set of computational challenges. We are building our business around both opportunities. Let me start with our commercial progress. During the quarter, NTT Docomo, Japan's largest mobile operator, deployed its second production application powered by D-Wave. hybrid quantum technology. In addition, we continue to make progress with other large enterprise customers that are pursuing production applications, including UnitedHealth Group's Optum and AT&T. We are also continuing to pursue system sales. In October, we delivered Italy's first annealing quantum computer, a D-Wave Advantage 2 system.

for installation at Villa Zappariti in Como. Funded by Swiss Quantum Technology, the system will support Italy's efforts to accelerate application development, build quantum workforce skills, and advance commercial adoption. System placements can create a focal point for a broader quantum ecosystem. Local access brings researchers, universities, and business in the future. Services together around the technology, creating opportunities to develop applications, and build demand. System sales also allow us to serve organizations with different access requirements and strategic priorities. Moving on to partners. Partners are beginning to play a stronger role in advancing our go-to-market efforts for both system sales and Quantum Compute as a Service. As well as helping us move more customer applications into production deployments. Recent relationships are expanding our ability to deliver on that. CGI, one of the world's largest independent IT and business consulting services firms, plans to integrate DEWA's quantum computing platforms into its advanced technology services portfolio. Following a year of collaboration, a service. We expect this partnership will help clients develop and deploy quantum and hybrid quantum applications in industries including logistics, transportation, and retail. At our sold-out QBTS Asia user conference in Seoul two weeks ago, we announced an MOU with LG CNS, a leading AI transformation company and a technology arm of LG Group.

The collaboration… This collaboration will focus on enterprise optimization within LG Group and among LG CNS's customers in South Korea and beyond. LG CNS brings mathematical optimization capabilities, industry knowledge, and systems integration experience that complement our annealing quantum computing technology. These relationships address a practical requirement for accelerating quantum computing adoption. Enterprises need help identifying the right problems, developing applications, and integrating them into existing operations. Working with partners that already understand those customers and their systems can help us expand our reach and support deployment. As we expand our commercial reach through these partnerships, we are also strengthening the magnification manufacturing relationships that support our technology roadmap. We recently extended our long-standing relationship with SkyWater through a multi-year agreement for semiconductor process development and manufacturing. That relationship also provides an opportunity to apply our technology within semiconductor manufacturing. A proof-of-technology project using D-Wave's annealing quantum computing technology to optimize maintenance schedules at SkyWater's FAB, reduced lot delays by up to 30%, improving factory throughput. That project will now advance to a proof-of-concept incorporating resource availability, technician constraints, and additional FAB-specific operational constraints. SkyWater has been a key partner of D-Wave for more than 10 years, and we view them...

as a key partner going forward. That said, prudent supply chain management requires diversification of suppliers, so we will continue to qualify additional manufacturing sources. Now let me turn to our products and technology. Last week, we announced performance gains to our Strive Hybrid Solver, available through the LEAP cloud service. For example, on assembly line balancing benchmark problems, the enhanced solver found better solutions in 15 seconds than the previous version found in 120 seconds. For businesses making time-sensitive decisions, both solution quality and speed matter. A better production schedule or resource allocation is most useful. when it is available in time to act. These enhancements are designed to help our customers obtain better answers within the time their businesses require. We are also expanding the capabilities of our annealing quantum computers. Earlier this year, we published a preprint demonstrating analog digital quantum computation on our annealing quantum computers. extending the range of quantum dynamics, we can investigate. Since annealing dynamics are inherently analog, like the dynamics of quantum materials, we can avoid much of the overhead that gate model systems require to simulate quantum materials. And unlike in lab experiments, we can investigate the behavior of every individual spin and program material properties with that. Without synthesizing new samples. In October, we published a preprint describing experiments realizing topological insulators in one, two, and three dimensions using more than 700 qubits. We believe these include the first programmable quantum dynamics experiments in three dimensions. This work advances our ability to investigate the behavior of quantum materials

and broadens the scientific opportunity for our annealing systems. On our annealing hardware roadmap, we are advancing two technologies central to scaling. That includes superconducting interconnect that enables multi-chip systems and scalable IO control circuitry that supports significantly larger processors. We have already shown experimentally that we can achieve strong coupling between prototype annealing fabrics that are interconnected across two chips. Building on this foundational work, we have completed design of a dual-chip annealing processor and are releasing it for fabrication this week. In addition, we are on track to complete fabrication of our first scalable IO development wafers in November. We believe these are important engineering steps toward the larger systems on our roadmap, including 20,000 qubit and ultimately 100,000 qubit annealing systems. Turning to gate model development, our strategy starts with the requirements for useful computation. Logical qubits that can execute sufficiently long calculations reliably with practical hardware requirements and execution times. Our differentiated dual-rail architecture features built-in error detection, which is designed to reduce the hardware overhead required for quantum error correction. Combined with the speed of superconducting operations, this underpins our approach to building scalable, fault-tolerant systems.

To prepare customers and researchers to use our forthcoming gate model systems, we launched a simulator data program in early October. Participants include both commercial and research organizations, including BBVA, First QFM, Florida Atlantic University, and the ULIC Supercomputing Center. Built around our dual-rail superconducting technology, the simulator will enable users to experiment with error-aware programming and develop quantum applications in advance of hardware availability. As we have previously published on our gate model roadmap, we are on track to complete a 17-qubit gate model system, and we are already discussing 17-qubit system orders. For delivery in 2027. Our longer-term roadmap targets 100 logical qubits capable of reliably executing more than 1 million operations by 2032. Now, let me make some clarifying comments on logical qubits. As there seem to be different definitions of logical qubits floating around, some of them a bit misleading. First, at D-Wave, we are focused on solving real-world customer problems, so our roadmap is focused on metrics that define a useful system. It is generally accepted that you need a system with at least 100 fault-tolerant logical qubits to solve a useful real-world problem with fault tolerance defined as the ability to perform at least 1 million gate operations successfully. Second, as of today, we are not aware of any quantum computing company that has produced even one logical qubit that meets that fault-tolerant standard.

Our gate model roadmap lays out a timeline to achieve the first fully error-corrected fault-tolerant logical qubit by 2028, and then 100 by 2032. Third, many of the our peers are using alternative definitions for logical qubits. Some only error-detected, or partially error-corrected, or at error rates below the generally accepted fault-tolerant threshold. So the point is, when assessing vendors' roadmaps, it is important to clarify and fully understand the terms and definitions that underlies those roadmaps. D-Wave is move-tolerant. We're moving forward with an approach to error correction that is designed to be efficient, scalable, and faster. And that's why we believe we'll be the first to deliver a scalable, fault-tolerant gate model system. Now let me turn to government, an area with some significant announcements over the past few months. We executed a definitive agreement with the U.S. Department of Commerce, following... our previously announced letter of intent, providing access to up to $100 million of U.S. CHIPS and Science Act funding. The funding is intended to support development of our next generation annealing and gate model quantum computers. These include the 100,000-cubit annealing quantum computing, targeting greater performance across optimization, material simulation, blockchain... and artificial intelligence, as well as the 10,000-cubit gate model system designed to enable 100 logical qubits capable of reliably executing more than 1 million operations. We believe this agreement also reflects U.S. government validation of both our annealing and gate model roadmaps. We are also seeing recognition extend to third...

...party industry analyst firms. If you recall, last quarter, IDC named D-Wave as one of only two companies in the leaders category in their 2026 quantum computing vendor assessment. Recently, Gartner recognized D-Wave as a market shaper in its emerging market quantum quadrant for quantum computing established vendors as of November. 2026. And we were one of only six vendors placed in the upper right quadrant. Before I turn the call over to Greg, I want to recognize several additions to our board of directors. Bernard Gavgani, former group CIO of BMP Parabot, joined our board and cybersecurity committee, bringing deep enterprise technology experience. Kevin Crystal.

joined the board and audit committee, adding extensive expertise in public company finance, corporate growth strategy, and risk management. So in summary, we are focused on expanding customer adoption, converting our pipeline into bookings and revenue, and delivering on our product roadmap. Our commercial results and technical progress reinforce our confidence in the opportunity. ahead. With that, I will hand the call over to Greg to provide a review of our third quarter results. Greg? Thank you, Alan. And thank you to everyone for taking the time to participate in our third quarter earnings call. Revenue in the third quarter of 2026 totaled $4.5 million, an increase of approximately 21% year over year. In the third quarter, D-Wave recognized revenue for more than $100 million.

Typically several months after delivery. In the case of FAU, that will likely occur in early 2027. There are also small recurring revenue streams related to maintenance and QCADS access that span several years. With that, operator, please open the call for questions. Thank you. To ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please link yourself to one question. For follow-up questions, please go back into the queue. Please stand by while we're part of the Q&A roster. One moment for our first question.

Our first question will come from the line of John McPeak from Rosenblatt. Your line is open.

Thank you. And our next question will come from the line of Kingsley Crane from Canaccord Genuity. Your line is open.

Our next question will come from the line of Kevin Garrigan from Jeffries. Your line is open. Yeah.

Next question will come from the line of Harsh Kumar from BMO. Your line is open.

Our next question will come from the line of Gary Mobley from StoneX. Your line is open.

Our next question on the cuff line. Troy Jensen from Cantor Fitzgerald. Your line is open.

Hey, congrats on all the great updates here. Alan, for you, I'd just be curious about QBITS Asia. It feels like in North America here, there's kind of a push for sovereign supply chains. It feels like other countries might do that. But just your thoughts on, do you think that's going to be the case? Coming back from Asia here. Sorry, Troy. I'm not sure I fully understand the question. You broke up a little bit when you were talking about supply chain. It's a sovereign supply chain. It seems like our administration is really pushing for, you know, everything built in the U.S. You know, and I'm just curious if you're seeing that more globally, especially coming out of this QBITS Asia conference here. So we are seeing it. I mean, the EU, for example, has taken a very sort of strong position that EU quantum funding can go to only EU companies that's starting to spill over into some of the countries. In Asia, we're not seeing that strong position, but instead what we're seeing is, well, you know, can you at least incorporate some of our companies into your supply chain for some of the components, at least for systems that you deliver here? And we're looking at that. You know, we don't, we do not. Currently source all our components from the U.S. And, you know, I think while, you know, there may be a push from every country to be able to do that, I'm not convinced we'll ever get there. I mean, there are just, you know, certain components that where companies in other countries are best at delivering them and other components where local companies may be best at delivering them. So I think.

For the foreseeable future, the supply chain is going to, by necessity, be more global. And then we just need to manage that. I think we can certainly manage it in the U.S. We are. I think we can manage it in Asia. We are. I think U.S. I'm sorry, Europe is a little bit more challenging. But, you know, at least as long as country money doesn't fall into the same track as the EU. We shouldn't have a problem, although as I said a minute ago, it's starting to move in that direction. And so at that point, we start looking at, well, can we get more independent or commercial funds for the systems in Europe? For example, Swiss quantum technology is funding the system in Italy, and they're not really a government entity.

Thank you. One moment. For our next question, next question will come from the line of Krish Sankar from TDKalib. Your line is open.

Thank you. And our next question will come from

RPO balance has grown significantly due to system sales opportunities as well as the Fortune 100 enterprise deal. So we have good line of sight when we can deliver... deliver those services, whatever they may be. And so we expect 59% to be delivered 12 months after September 30th, 2026, and up 71% over the 24 months following that September 30th, 2026 date. Thank you. And as a reminder, to ask any additional questions, please press star one one. That's star one one.

Hey, this is Shadi Nawali on for Quinn.

Thanks for letting me ask a question. I believe you guys mentioned that you're already in discussions around 17-qubit system sales. Are those engagements with existing and new customers, or are you starting to see growing interest from new customers?

Discussions with both, existing and new. Got it. And then for my follow-up, you guys highlighted a Fortune 100 customer in professional services. I know you can't say who this customer is, but just any color on how long you've been engaged with them, and then maybe what sector applications they're targeting. Thank you. Well, we did talk about this, actually, in Q1. This was our first two-year, $10 million deal to pursue multiple. Applications. The first of those is already in production. There are several others that we have been working on with them that are making good progress as well that we believe in the not-too-distant future will move into production. So, you know, a lot of the professional services work over the quarter has been in support of that engagement.

Thank you. I will now hand the call back to Dr. Alan Barrett's foreclosure remarks. Okay. So, thanks again to all of you for joining us today and for your continued support of D-Wave. We're advancing a clear strategy. Expand the commercial use of our annealing technology and execute on our path to fault-tolerant, gait model, quantum reputing. Our focus is on... delivering measurable customer value and building a successful and growing business around it. And we look forward to continuing to update you on our progress.

Thank you all.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.