D-Wave Quantum’s Backlog Balloons While the Income Statement Stays Stubbornly Flat

The gap between what a quantum computing company promises and what it actually bills has rarely been on starker display than in D-Wave Quantum’s latest earnings report. The numbers tell two stories that barely seem to belong to the same business: one of a bookings pipeline growing at a triple-digit clip, the other of a revenue line stuck in neutral while costs accelerate.

A Quarter of Contradictions

For the second quarter of fiscal 2026, D-Wave generated $3.08 million in revenue — essentially flat against the $3.1 million posted a year earlier and well short of the $4.03 million consensus estimate. The net loss narrowed dramatically, from $167.33 million to $48.03 million, yet earnings per share still came in roughly 44.4 percent below what analysts had penciled in. Investors responded by knocking the stock down 8.81 percent on Thursday, with shares closing at €16.87.

That headline reaction, however, masks a far more dynamic picture underneath. First-half bookings reached $35.5 million, up from $2.9 million in the same period last year — a surge of more than 1,120 percent. The second quarter alone saw bookings climb 59 percent to $2.1 million, though that figure includes a $20 million system sale whose revenue won’t hit the income statement until future quarters. The company’s remaining performance obligations stood at $40.7 million as of June 30, a 668 percent jump from $5.3 million a year earlier, with the bulk of that backlog expected to convert to recognized revenue within twelve months.

The Cost of Building Tomorrow’s Technology

That chasm between contracted and recognized business is a familiar pattern for companies at the earliest stages of commercialization — but it carries a price tag. Adjusted EBITDA losses widened by 85 percent as D-Wave poured resources into product development and its sales organization. Higher personnel expenses shaved 8.4 percentage points off the gross margin, which slipped from 63.8 percent to 55.4 percent year over year. Operating expenditures ballooned 93 percent to $55 million in the quarter.

The integration of Quantum Circuits, acquired earlier this year, accounts for most of the decline in cash and marketable securities, which now stand at $546.2 million. That war chest provides runway, but the burn rate raises the stakes on the company’s ability to convert its pipeline before investors lose patience.

Partnerships Lend Credibility to the Thesis

The bull case rests on more than just backlog math. AT&T agreed on July 27 to expand its use of D-Wave’s technology for network optimization problems, and early tests showed processing times collapsing from roughly an hour to under 15 seconds — a 240-fold acceleration. The stock spiked as much as 18 to 19 percent on the news before the entire quantum computing sector got caught in a sell-off days later, dragging D-Wave down about 9.6 percent.

Should investors sell immediately? Or is it worth buying D-Wave Quantum?

More recently, Nasdaq Verafin signed on for a pilot project testing D-Wave’s annealing-based approach to financial crime detection. Unisys has also emerged as a customer, and the commercial sector now represents 62.4 percent of revenue. In July, research firm IDC placed D-Wave in the Leaders category of its quantum computing vendor assessment, one of only two companies to earn that distinction. The stock also completed its move from the New York Stock Exchange to the Nasdaq on July 24, with trading beginning under the ticker QBTS on July 27.

What Analysts Are Saying

Wall Street’s response to the quarter reflects the tension between the bookings momentum and the earnings miss. Canaccord’s Kingsley Crane trimmed his price target from $41 to $35 but maintained a Buy rating. Rosenblatt Securities, citing the growing backlog, had issued a $30 target with a Buy recommendation in late July. The consensus price target sits at $32.12, implying roughly 87 percent upside from current levels — though the wide dispersion of estimates suggests even bullish analysts are hedging their bets.

The stock currently trades about 58.25 percent below its twelve-month high while remaining well above its recent annual low, a reflection of the volatility that has defined this growth story. Annualized volatility stands at 104.18 percent, and the shares sit roughly 10.12 percent below their 50-day moving average. A test of the 52-week low of $11.12 remains possible if revenue conversion continues to lag.

The Road Ahead

CEO Alan Baratz sold 52,320 shares in mid-July, a transaction the company described as a tax-related mandatory sale to cover expiring RSU obligations. He retains approximately 3.2 million shares. Management has also announced plans to relocate headquarters to Boca Raton and is awaiting a decision on a $100 million CHIPS Act funding application.

The next major test comes November 5, when D-Wave reports third-quarter results. Analysts expect revenue to jump to $14.1 million, a 277 percent increase that would demonstrate the backlog is finally translating into recognized sales. Until then, the stock appears likely to trade sideways with elevated volatility, caught between a bookings story that keeps getting better and an income statement that hasn’t caught up yet.