D-Wave Quantum’s Record Backlog Masks a Revenue Dip as Gate-Model Acquisition Reshapes the Pipeline

D-Wave Quantum is navigating a transitional quarter that puts the company’s long-term ambitions squarely against its near-term revenue reality. The numbers from the first quarter, released on May 12, show a stark divergence: bookings hit a record $33.4 million, yet reported revenue collapsed by 81% to just $2.9 million. Investors initially punished the stock, sending it down as much as 7.11% in after-hours trading as analysts focused on the top-line miss.

The revenue comparison was always going to be tough. The year-ago period included a $12.6 million system sale to a single customer, inflating the baseline to $15 million. Wall Street had expected $4.2 million this time around, but the absence of a similar large transaction left a gap. Excluding that one-off, the underlying business is actually gaining traction — and the real story lies in the order pipeline.

Bookings surged nearly 2,000% from $1.6 million a year earlier, driven by two landmark deals. Florida Atlantic University committed $20 million for a full system, and an unnamed Fortune 100 company signed a $10 million Quantum Computing-as-a-Service (QCaaS) agreement. These contracts helped push D-Wave’s total remaining performance obligations — or backlog — to $42.4 million, up 563% from $6.4 million at the same point last year. Management expects 71% of that backlog to convert into revenue over the next two years.

The transformation is not just commercial but technological. D-Wave’s acquisition of Quantum Circuits closed during the quarter, costing the company $252.1 million in cash outflows and adding $9.1 million in one-time acquisition expenses to operating costs. GAAP operating expenses jumped 125% to $56.5 million, partly because of an $8.6 million increase in personnel costs tied to the integration. Still, the company’s balance sheet remains well-capitalized: cash and investments stood at $588.4 million, up 93% from a year ago.

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The net loss came in at $18.4 million, or $0.05 per share, beating the consensus estimate of a $0.08 loss. A tax benefit related to the Quantum Circuits acquisition helped narrow the bottom-line damage, even as the lower gross margin and higher costs weighed on results.

On the technology front, D-Wave is now offering both quantum annealing and gate-model computing under one roof — a strategic shift that positions it as a dual-platform provider. The roadmap, detailed during the earnings call, targets around 175 physical qubits and a design for 1,000 physical qubits by the end of 2028. By 2030, the company aims for 1,000 physical qubits and 10 logical qubits, and by 2032 a system capable of supporting 100 logical qubits. This hinges on the Dual-Rail qubit architecture from Quantum Circuits, which promises easier error correction and faster scaling.

Commercial guidance remains measured. For the current quarter, D-Wave expects revenue to rise only modestly above the $2.9 million reported in Q1, with the bulk of full-year sales concentrated in the second half. Management reiterated its outlook for at least two system deliveries in the remainder of the fiscal year, maintaining a target range of two to three system sales annually.

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Analysts are watching the conversion rate closely. Mizuho reiterated its “Outperform” rating, noting that the pipeline has more than doubled. Jefferies’ Kevin Garrigan kept a “Buy” and a $45 price target, acknowledging the revenue miss but pointing to sustained demand momentum.

The stock has partially recovered from the initial selloff. On Wednesday, shares were trading at €19.43, up 2.26% on the day and still 56.13% higher on a one-month basis. The next major catalysts are the investor day scheduled for June 1, 2026, at the New York Stock Exchange, where management is expected to provide deeper detail on applications and gate-model integration, followed by the European user conference in London on June 18. For now, D-Wave’s narrative hinges on whether its record backlog can begin to show up on the income statement — and how quickly.

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