What Are QBTS Stock Investors Overlooking?
D-Wave Quantum (QBTS) reported revenue of $3.1 million for the second quarter of 2026, a figure essentially flat compared to a year earlier. This stagnation stands out given the $5.4 billion valuation investors have placed on the business, a price that appears to anticipate rapid growth. Underneath the top line, cloud subscriptions and professional services actually expanded at double-digit rates during the period. So why did D-Wave’s revenue stand still?
D-Wave Booked Very Little From Selling Computers
The company generated little of its second-quarter revenue from actual quantum computer sales. Systems and other revenue totaled about $300,000 for the period, even though management prices a single annealing system between $20 million and $40 million.
The rest of the business actually grew. Subscriptions to D-Wave’s quantum cloud service increased 50% from a year earlier, and professional services climbed by more than 18%. Because total revenue remained flat overall, falling systems revenue appears to have offset those gains.
Selling physical hardware simply takes time. During the second-quarter 2026 earnings call, management explained that system timing typically depends on site selection. Once a location is finalized, each machine must still be built, installed, and calibrated.
Looking over the latest twelve months, D-Wave’s revenue performed worse than flat. Revenue fell 44%, mostly because first-quarter revenue dropped 81% from a year earlier. That is a stark contrast to its three-year average of 37.7% growth a year.
D-Wave’s Adjusted EBITDA Loss Has Widened
D-Wave’s costs increased during the quarter without a corresponding bump in revenue. D-Wave’s adjusted EBITDA loss widened 85% from a year earlier, an expansion management attributed mostly to product development and sales staff expenses. Gross margin also dropped to 55.4% from 63.8% a year earlier, with management again pointing to personnel costs.
The stock has already taken a heavy hit. D-Wave shares lost 59% over the past twelve months, while the S&P 500 returned 17.0%. Despite that drop, the shares still trade at 434.9 times sales, compared to 3.1 for the S&P 500. This valuation likely assumes future revenue will eclipse today’s baseline many times over.
D-Wave Expects A Bigger Fourth Quarter
The company does have orders in hand that have not yet converted into revenue. D-Wave’s backlog reached $40.7 million on June 30, 2026, up 668% from a year earlier. Management expects about 57% of that backlog to become revenue within twelve months.
Management also expects to ship two annealing systems in 2026, with both probably shipping in the fourth quarter. The company guided for third-quarter revenue to be modestly higher than the second quarter, though D-Wave has not yet reported that quarter. Ultimately, management expects the fourth quarter to supply most of the year’s total revenue.
Fortunately, D-Wave can afford to wait for those sales to close. The business held $546.2 million in cash and marketable securities at the end of June, and its debt equals 0.9% of its market value.
Shareholders certainly have reason to track D-Wave’s revenue closely, but the underlying worry appears to be an issue of timing rather than demand. Any delayed delivery would push revenue out further, and management has already noted that D-Wave will book some revenue from the 2026 systems in 2027. If fourth-quarter revenue comes in larger than the first three quarters combined, as management guided, it would show D-Wave’s backlog turning into sales.
How To Act On QBTS?
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