D-Wave Delivers Growth Shock—Investors Eye Quantum Future

Key Points

• D-Wave Quantum posted mixed results for the second quarter, including wider-than-expected losses and significant revenue growth along with a top-line beat.
• Digging deeper, the firm's growing use cases and partnerships in the aerospace and defense and law enforcement industries suggest increasing marketability.
• With record levels of cash on hand, investors should watch for D-Wave to engage in M&A activity to boost its technology and development, particularly in the area of gate-model quantum.

With investors watching D-Wave Quantum Inc. NYSE: QBTS as a bellwether of the broader quantum computing space, the firm posted mixed results for the second quarter of 2025.

On a positive note, the company demonstrated its ability to grow revenue, which came in ahead of analyst predictions. At the same time, net losses were wider than expected, reiterating the challenges threatening D-Wave—and other quantum-focused firms—in the race toward sustained profitability.

While D-Wave shares dipped in pre-market trading following the announcement, they stabilized shortly thereafter. One reason for this may be that, despite a mixed bag of earnings results, D-Wave's report and conference call show that the company is positioned to deliver many use cases applicable to businesses across multiple industries.

Together with record levels of cash, a strong pipeline for sales of its Advantage2 quantum computer, and the prospect of M&A activity on the horizon, D-Wave still gives investors plenty to be excited about.

Revenue Beat and Earnings Miss, But Reasons for Optimism Nonetheless

Looking at the basics of D-Wave's earnings report, adjusted losses per share of 8 cents compared with 12 cents for the second quarter of 2024. These losses were wider than anticipated by 3 cents per share, but D-Wave attributed much of its net losses to "non-operating charges related to the remeasurement" of its warrant liability.

On the other hand, quarterly revenue growth of 42% year-over-year (YOY) brought D-Wave's total revenue up to $3.1 million for the quarter, topping analyst predictions. A good deal of the concern over D-Wave's viability has been surrounding its ability to boost revenue, and this quarter shows that it has done just that—and, moreover, this revenue is coming from a larger number of sources, as the company noted more than 100 revenue-generating customers over the prior four quarters.

Growing Use Cases and Partnership Opportunities

D-Wave already announced a number of significant partnerships developed or expanded in the second quarter, including in South Korea and elsewhere, and investors have speculated that hybrid quantum applications involving partners across sectors may be an important part of D-Wave's journey toward sustained profitability. Fortunately, the company gave several further indications that this may be a priority going forward.

In D-Wave's earnings call, executives discussed a major partnership with a Fortune 500 aerospace and defense company that led to a dozen different use cases involving D-Wave's annealing technology. D-Wave sees potential to extend these applications to market with other aerospace firms as well.

The firm also built a proof of technology for the deployment of patrol vehicles for North Wales police with notable success, potentially paving the way for other agreements with law enforcement agencies around the world. Investors will watch carefully in the coming months for signs of additional partnerships, whether confirmed or exploratory.

Large Cash Reserves Free Up Room for R&D Growth Via M&A

Following its most recent At-the-Market equity program, which generated $400 million in gross proceeds, D-Wave ended the second quarter with a record $819 million in cash reserves. In the earnings call, executives explained that these holdings should make possible acquisition activity, calling it a "strategic priority" for the firm. The company is likely to utilize M&A to accelerate its product development and general R&D activity, with a goal of being able to announce acquisition activity later this year.

This strategy could be essential to D-Wave's ability to continue to develop its annealing tech while also building on its promise to develop gate-model quantum technology, an alternative favored by some rivals in the quantum space. Also supporting this growth will be D-Wave's solid bookings trajectory—bookings nearly doubled YOY to $1.3 million—and the influx of cash the firm will receive as systems previously sold to earlier customers will be upgraded to Advantage2.

Further, the company said it has a strong pipeline for new sales of Advantage2 systems and anticipates around one additional sale per year in the near term. It's likely this figure will continue to ramp up over time as well.

D-Wave shares are still rated a unanimous Buy by all 11 analysts covering the company, with a price target of $17.55, indicating about 1.5% upside potential for now.