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D-Wave Quantum (QBTS)
NYSE:QBTS
US Market

D-Wave Quantum (QBTS) AI Stock Analysis

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QB

D-Wave Quantum

(NYSE:QBTS)

39Underperform
D-Wave Quantum's overall score is influenced significantly by its poor financial performance, which highlights substantial net losses and negative equity. While the company shows promise through technological advancements and strategic partnerships, as reflected in its earnings call and corporate events, these are overshadowed by financial instability and weak valuation metrics. The stock's mixed technical indicators provide limited support.
Positive Factors
Financial Stability
D-Wave’s recapitalized balance sheet with $307M in cash has eliminated near-term liquidity concerns, providing sufficient capital to bridge to profitability.
Technology Development
The peer-reviewed publication of the company’s quantum supremacy demonstration is a significant achievement and was the highlight since the company’s last earnings release.
Negative Factors
Financial Performance
D-Wave reported revenue and adjusted EBITDA that came in below our estimates.

D-Wave Quantum (QBTS) vs. S&P 500 (SPY)

D-Wave Quantum Business Overview & Revenue Model

Company DescriptionDPCM Capital Inc is a blank check company.
How the Company Makes MoneyD-Wave Quantum makes money primarily through the sale and leasing of its quantum computing systems, as well as through subscription-based access to its cloud-based quantum computing platform, known as Leap. The company also generates revenue by providing professional services, such as consulting and custom application development, to help clients integrate quantum solutions into their operations. Additionally, D-Wave forms strategic partnerships with academic institutions, research organizations, and industry leaders to expand its market reach and enhance its technological offerings. These partnerships often involve collaborative research projects and co-development agreements, which can contribute to the company's earnings.

D-Wave Quantum Financial Statement Overview

Summary
D-Wave Quantum is experiencing significant financial challenges, characterized by weak profitability and a strained balance sheet. While the company shows some revenue growth, these gains are offset by substantial net losses and high leverage. The negative stockholders' equity and cash flow deficits highlight the need for strategic financial restructuring and improvement in operational efficiencies to ensure long-term viability.
Income Statement
32
Negative
D-Wave Quantum has shown some revenue growth, with a 7.61% increase from 2023 to TTM 2024. However, the company is struggling with negative profitability, evident from consistent negative net profit margins and EBIT margins. The gross profit margin for TTM stands at 64.27%, indicating efficient management of production costs, but the high operating losses overshadow this strength.
Balance Sheet
20
Very Negative
The company’s balance sheet is concerning, with negative stockholders' equity of -$16.92 million in TTM 2024, signaling financial instability. The debt-to-equity ratio cannot be calculated due to negative equity, but the high total debt suggests potential solvency issues. The equity ratio is also negative, reflecting a weak financial position and heavy reliance on debt financing.
Cash Flow
25
Negative
D-Wave Quantum's cash flow situation is challenging, as evidenced by negative free cash flow and operating cash flow. The free cash flow growth is stagnant, with minimal improvement, and the operating cash flow to net income ratio remains negative, indicating a lack of cash generation relative to net losses.
Breakdown
TTMDec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
9.42M8.76M7.17M6.28M5.16M
Gross Profit
6.06M4.62M4.25M4.53M4.25M
EBIT
-73.53M-80.55M-59.46M-31.78M-19.44M
EBITDA
-69.08M-80.83M-49.03M-34.36M-14.06M
Net Income Common Stockholders
-73.82M-82.72M-38.97M-34.07M-18.25M
Balance SheetCash, Cash Equivalents and Short-Term Investments
27.30M41.31M7.07M9.48M21.34M
Total Assets
48.60M59.36M26.95M32.61M47.46M
Total Debt
71.84M72.65M18.99M21.17M4.66M
Net Debt
44.53M31.34M11.93M11.69M-16.68M
Total Liabilities
85.56M83.84M33.12M29.59M14.73M
Stockholders Equity
-36.96M-24.48M-6.17M3.02M32.73M
Cash FlowFree Cash Flow
-61.28M-61.28M-45.72M-36.80M-30.08M
Operating Cash Flow
-59.40M-60.65M-45.23M-34.80M-29.29M
Investing Cash Flow
-2.63M-630.00K-498.00K-2.00M-789.00K
Financing Cash Flow
38.12M95.64M43.27M24.91M43.14M

D-Wave Quantum Technical Analysis

Technical Analysis Sentiment
Positive
Last Price6.91
Price Trends
50DMA
6.26
Positive
100DMA
4.83
Positive
200DMA
2.94
Positive
Market Momentum
MACD
0.26
Negative
RSI
72.67
Negative
STOCH
87.29
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QBTS, the sentiment is Positive. The current price of 6.91 is above the 20-day moving average (MA) of 6.11, above the 50-day MA of 6.26, and above the 200-day MA of 2.94, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 72.67 is Negative, neither overbought nor oversold. The STOCH value of 87.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for QBTS.

D-Wave Quantum Risk Analysis

D-Wave Quantum disclosed 66 risk factors in its most recent earnings report. D-Wave Quantum reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

D-Wave Quantum Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$2.82T39.39119.18%0.03%114.20%146.26%
IBIBM
67
Neutral
$231.47B38.8424.14%2.67%1.45%-20.56%
58
Neutral
$21.67B10.04-18.58%2.39%5.01%-23.17%
48
Neutral
$2.56B-170.20%-10.15%-67.68%
QSQSI
44
Neutral
$219.77M-41.48%182.62%-3.67%
43
Neutral
$4.17B-76.34%95.41%-97.85%
39
Underperform
$1.67B436.39%14.27%35.36%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
QBTS
D-Wave Quantum
10.15
8.07
387.98%
IBM
International Business Machines
248.35
63.50
34.35%
NVDA
Nvidia
121.67
33.86
38.56%
QSI
Quantum-Si
1.36
-0.37
-21.39%
IONQ
IonQ
25.00
15.69
168.53%
RGTI
Rigetti Computing
11.22
9.26
472.45%

D-Wave Quantum Earnings Call Summary

Earnings Call Date: Mar 13, 2025 | % Change Since: 18.73% | Next Earnings Date: May 14, 2025
Earnings Call Sentiment Neutral
D-Wave's earnings call highlighted significant achievements in quantum supremacy and a strong financial position, yet also reflected challenges such as flat revenue growth and increased net losses. The record bookings and first Advantage system sale underscore business momentum, while the financial losses indicate a need for careful management moving forward.
Highlights
Record Quarterly Bookings
D-Wave recorded $18.3 million in bookings for Q4 2024, a 502% increase over the fourth quarter of 2023.
Quantum Supremacy Achievement
D-Wave demonstrated quantum supremacy on a real-world problem using its 1,200 qubit Advantage 2 prototype, a significant milestone published in the journal Science.
Cash Position and Profitability Outlook
The company has over $300 million in cash, expected to be sufficient to reach sustained profitability, potentially making D-Wave the first pure-play quantum company to do so.
First Advantage System Sale
D-Wave completed the first sale of an Advantage system to the Jülich supercomputing center, marking a significant business achievement.
Non-GAAP Gross Margin Improvement
D-Wave's non-GAAP gross margin for fiscal 2024 was 72.8%, a 3% increase from fiscal 2023's 69.8%.
Lowlights
Revenue Stagnation
Fiscal 2024 revenue was $8.8 million, flat compared to fiscal 2023.
Increased Net Loss
Net loss for fiscal 2024 was $143.9 million, significantly higher than the $82.7 million loss in fiscal 2023, primarily due to a $68.3 million non-cash warrant liability re-measurement charge.
Decreased Fourth Quarter Revenue
Q4 2024 revenue was $2.3 million, a 21% decrease from Q4 2023's $2.9 million.
Adjusted EBITDA Loss Increase
Adjusted EBITDA loss for Q4 2024 was $15.3 million, a 41% increase from Q4 2023's $10.9 million.
Company Guidance
D-Wave's earnings call for the fourth quarter of fiscal year 2024 highlighted several key metrics and achievements. The company reported record quarterly bookings of $18.3 million, driven by the first sale of an Advantage system to the Jülich supercomputing center. This transaction contributed to a 502% year-over-year increase in fourth-quarter bookings compared to 2023. D-Wave also disclosed a strong cash position, with over $300 million on hand, bolstered by $175 million in gross proceeds from two ATM programs completed in 2024. The company's revenue for fiscal 2024 was $8.8 million, consistent with fiscal 2023, while bookings for the year reached $23.9 million, marking a 128% increase from the previous year. D-Wave's GAAP gross profit grew by 20% to $5.6 million, with a GAAP gross margin increase to 63%. The net loss for fiscal 2024 was $143.9 million, influenced largely by a $68.3 million non-cash charge related to warrant liability re-measurement. The adjusted EBITDA loss for 2024 was $56 million, up 3% from the prior year. Looking ahead, D-Wave expects first-quarter revenue for fiscal 2025 to exceed $10 million, anticipating further momentum from their quantum computing advancements and strategic sales.

D-Wave Quantum Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
D-Wave Quantum Completes $150M Equity Offering Successfully
Positive
Jan 23, 2025

On January 23, 2025, D-Wave Quantum Inc. announced the successful completion of its $150 million ‘at-the-market’ equity offering program, with sales completed at an average price per share of $6.10, which was a 3.7% premium over the Volume Weighted Average Price of the stock. The company now holds a cash balance of approximately $320 million, which will be used for working capital and capital expenditures to support ongoing technical development and business operations. This financial move is seen as providing the necessary capital to execute its operating plan towards sustained profitability and positive cash flow, thereby solidifying its position in the quantum computing industry.

Product-Related AnnouncementsBusiness Operations and Strategy
D-Wave Quantum Launches Leap Quantum LaunchPad Program
Positive
Jan 22, 2025

On January 22, 2025, D-Wave Quantum Inc. announced the launch of the Leap Quantum LaunchPad program, intended to accelerate the deployment of quantum computing applications. This initiative provides free trial access to D-Wave’s quantum technology and expertise, aiming to help customers utilize annealing quantum computing for complex business and scientific problems. The program is designed to facilitate the exploration and implementation of quantum applications, offering participants access to D-Wave’s annealing quantum computers and technical support for a three-month trial. The company also expanded access to its Quantum Programming Core and Quick Start Training programs, enhancing participants’ hands-on experience with quantum technology. This launch signifies D-Wave’s commitment to advancing quantum computing adoption and development, potentially impacting stakeholders by enabling the rapid deployment of transformative applications.

Product-Related AnnouncementsBusiness Operations and StrategyFinancial Disclosures
D-Wave Quantum Highlights Achievements at Needham Conference
Positive
Jan 15, 2025

On January 15, 2025, D-Wave Quantum Inc. released an investor presentation from the 27th Annual Needham Growth Conference, highlighting financial achievements and product updates for the 2024 fiscal year. The company showcased its advancements in quantum annealing and supremacy, emphasizing its strong system reliability and diverse customer base. D-Wave’s solutions have significantly optimized business operations across various sectors, demonstrating reduced scheduling times and improved network performance, underscoring its role in the commercialization of quantum technology.

Business Operations and Strategy
D-Wave Quantum Partners with Carahsoft for U.S. Expansion
Positive
Jan 15, 2025

On January 15, 2025, D-Wave Quantum Inc. announced a partnership with Carahsoft Technology Corp. to expand the distribution of quantum computing solutions to the Public Sector in the United States. This collaboration aims to accelerate government adoption of quantum technology by leveraging Carahsoft’s reseller network and contract vehicles, thereby increasing visibility and accessibility of D-Wave’s solutions to address complex optimization challenges and national priorities like defense and infrastructure optimization.

Product-Related AnnouncementsBusiness Operations and Strategy
D-Wave Quantum Asserts Leadership in Quantum Computing
Positive
Jan 10, 2025

D-Wave Quantum Inc.’s CEO, Dr. Alan Baratz, addressed comments made by NVIDIA’s CEO on CNBC, asserting the immediate commercial availability and real-world problem-solving capabilities of D-Wave’s annealing quantum computing solutions. Baratz emphasized that D-Wave’s technology is already being utilized by over 100 organizations to tackle complex optimization problems, positioning the company as a leader in the quantum computing industry by demonstrating significant computational advancements over traditional supercomputers.

Business Operations and StrategyRegulatory Filings and Compliance
D-Wave Quantum Completes Second SOC 2 Type 2 Audit
Positive
Dec 18, 2024

D-Wave Quantum Inc. announced the successful completion of its second SOC 2 Type 2 audit, underscoring its commitment to customer data security and protection. This achievement supports the company’s efforts to facilitate customers’ production deployments of quantum applications, evidenced by the introduction of service-level agreements for its Leap quantum cloud service. The audit, conducted by compliance assessor A-LIGN, affirms D-Wave’s leadership in using best practices for data protection, thereby enhancing its reputation as a trusted vendor in the quantum computing industry.

Product-Related AnnouncementsBusiness Operations and Strategy
D-Wave Quantum CEO Highlights Quantum Computing Advances
Positive
Dec 16, 2024

D-Wave Quantum Inc. announced that its CEO, Dr. Alan Baratz, discussed the company’s progress and the advantages of quantum computing on Yahoo! Finance’s ‘Catalysts’ show. He emphasized D-Wave’s unique annealing quantum computing approach, which is effectively solving optimization problems across industries and driving commercial adoption. The technology is expected to have a significant impact on modern enterprises, offering solutions to complex problems in various sectors.

Private Placements and FinancingBusiness Operations and Strategy
D-Wave Quantum Secures $175M to Boost Growth
Positive
Dec 12, 2024

D-Wave Quantum Inc. announced the successful completion of $175 million in gross proceeds from its ‘at-the-market’ equity offering programs. This funding strengthens the company’s financial position, allowing it to enhance its technical development efforts and execute its product and go-to-market strategies, thus positioning D-Wave for future growth and impact in the commercial adoption of quantum computing.

Business Operations and Strategy
D-Wave Quantum Showcases Annealing Quantum Computing Leadership
Positive
Dec 6, 2024

D-Wave Quantum Inc.’s CEO, Dr. Alan Baratz, highlighted the transformative role of annealing quantum computing on Fox Business, emphasizing its unique capabilities in solving optimization problems that are crucial for modern businesses. This technology, already in use by major companies like Mastercard and Siemens, positions D-Wave as a leader in commercially viable quantum computing, offering practical solutions across diverse industries.

Executive/Board Changes
D-Wave Quantum Appoints Sharon Holt to Board
Neutral
Nov 25, 2024

D-Wave Quantum Inc. has appointed Sharon Holt as a Class I director to its Board of Directors, effective November 22, 2024. Holt, an experienced leader in the tech industry with a background in sales, licensing, and marketing, will also join the Board’s Audit Committee. Her extensive experience, including roles at Infinera and Immersion Corporation, positions her well to contribute to D-Wave Quantum’s strategic direction.

Product-Related Announcements
D-Wave Quantum Unveils Advanced 4,400+ Qubit Processor
Positive
Nov 6, 2024

D-Wave Quantum Inc. has unveiled its cutting-edge 4,400+ qubit Advantage2 processor, marking a pivotal advancement in quantum computing. This new processor offers remarkable performance enhancements over its predecessor, with doubled coherence time, a 40% boost in energy scale, and increased qubit connectivity, enabling it to tackle complex computational challenges in fields like AI and materials science. These improvements promise faster, more precise solutions, underscoring D-Wave’s commitment to revolutionizing the quantum computing landscape.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.