D-Wave Quantum Inc.
For the period ended Mar 31, 2026. Filed May 12, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 12, 2026
QBTS$10.68+18.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001907982-25-000251
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-12.
0001907982-26-000059
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 78 current paragraphs.
32 unchanged; 24 reworded; 22 added; 48 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
We have four operating facilities, which we lease, in North America. These facilities are located in Burnaby, British Columbia, Richmond, British Columbia, Palo Alto, California, and New Haven, Connecticut. In addition, we plan to transition our corporate headquarters before the end of 2026 from Palo Alto, California to Boca Raton, Florida, and open a key U.S. R&D facility in Boca Raton, Florida under a new lease agreement.
Current report
Acquisition of Quantum Circuits, Inc.
Current report
On January 20, 2026, we completed the acquisition (the "Acquisition") of all of the issued and outstanding equity of Quantum Circuits, Inc. (“Quantum Circuits”), pursuant to the Agreement and Plan of Merger, dated January 6, 2026, by and among the Company, Quantum Circuits, Quest Acquisition Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, Quest Acquisition Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company, and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as the representative, agent and attorney-in-fact of the Securityholders (as defined therein) (the "Acquisition Agreement"). The aggregate consideration (the "Acquisition Consideration") delivered at the closing of the Acquisition consisted of 10,430,444 Common Shares (the “Stock Consideration”) and $250,000,000 in cash, subject to a net debt adjustment and such other adjustments as set forth in the Acquisition Agreement. The issuance and sale of the Stock Consideration was made in reliance on the private offering exemption of Section 4(a)(2) of the Securities Act, Regulation D and/or Regulation S promulgated under the Securities Act. In accordance with the Acquisition Agreement, we assumed outstanding unvested options to purchase shares of Quantum Circuits common stock and adjusted such assumed options into options to purchase our Common Shares. Vested options and warrants to purchase Quantum Circuits common stock were cancelled in exchange for a pro rata portion of the Acquisition Consideration, subject to the adjustments described in the Acquisition Agreement.
Current report
Concurrently with the execution and delivery of the Acquisition Agreement, we entered into a lock-up agreement (each, a “Lock-Up Agreement”) with specified key employees of Quantum Circuits (each, a "Key Employee") with respect to a portion of the Common Shares received as Acquisition Consideration, pursuant to which, subject to certain exceptions, each Key Employee may not transfer 50% of the Common Shares received by such Key Employee as Acquisition Consideration for a period of five years, subject to the terms and conditions of the Lock-Up Agreement, including accelerated release in specified events.
Current report
In addition, we and the former securityholders of Quantum Circuits (the "Securityholders") entered into a Registration Rights Agreement under which the Securityholders have specified registration rights relating to the Stock Consideration. On January 20, 2026, we filed a Registration Statement on Form S-3ASR and a related prospectus supplement with the SEC, relating to the resale from time to time of up to 10,430,444 Common Shares by the Securityholders identified as selling stockholders in the prospectus supplement.
Current report
Cost of Revenue
Current report
Operating Expenses
Current report
Cost of Revenue
Current report
Operating Expenses
Current report
General and administrative expenses increased by $12.3 million, or 155%, to $20.3 million for the three months ended March 31, 2026 as compared to $8.0 million for the three months ended March 31, 2025. The increase was primarily driven by an increase in professional fees of $6.7 million (largely comprised of transaction expenses from the Acquisition), an increase in personnel expenses of $2.5 million and acquisition-related insurance expenses of $1.8 million.
Current report
Sales and marketing expenses increased by $3.6 million, or 51%, to $10.5 million for the three months ended March 31, 2026 as compared to $6.9 million for the three months ended March 31, 2025. The increase was primarily driven by increases in marketing expenses of $1.3 million, personnel costs of $1.0 million and stock-based compensation expense of $0.7 million.
Current report
Interest income
Current report
Interest income increased by $2.7 million, or 87%, to $5.8 million for the three months ended March 31, 2026 as compared to $3.1 million for the three months ended March 31, 2025. The increase was driven primarily by interest earned on higher cash and cash equivalent balances and the Company’s investment in short-term government debt.
Current report
Interest expense increased modestly to $0.3 million for the three months ended March 31, 2026 as compared to $0.2 million for the three months ended March 31, 2025.
Current report
Gain on investment in marketable securities, net was a gain of $1.9 million for the three months ended March 31, 2026 as compared to no gain or loss for the three months ended March 31, 2025. The gain in the current period was attributable to an observable price change resulting from a third-party transaction involving the Company’s investment in a privately-held company. Accordingly, the carrying value of the investment was adjusted based on the transaction price, resulting in a net gain. There was no similar activity for the three months ended March 31, 2025.
Current report
Income tax benefit, net
Current report
Income tax benefit, net was $28.5 million for the three months ended March 31, 2026 as compared to zero for the three months ended March 31, 2025. The increase was primarily driven by deferred tax liabilities assumed in connection with the Quantum Circuits acquisition. The deferred tax liabilities provided an additional source of taxable income required to utilize existing deferred tax assets, which resulted in the partial release of the valuation allowance against the deferred tax assets.
Current report
The Company has historically raised capital through equity issuances, including at-the-market (“ATM”) offerings, a purchase agreement with Lincoln Park, and warrant exercises.
Current report
As of December 31, 2025, the Company had completed all issuances under its prior equity programs, including the Lincoln Park purchase agreement and its ATM sales agreements. During the year ended December 31, 2025, the Company received significant net proceeds from these programs, as well as from warrant exercises, which strengthened its liquidity position.
Current report
The Company had no Public Warrants outstanding as of March 31, 2026 following the redemption of all remaining warrants in November 2025 pursuant to the Warrant Agreement.
Current report
In addition, the Company entered into the Equipment Financing Agreement in August 2025, which provides a conditional commitment of up to $13.8 million to finance certain capital equipment purchases. Refer to Note 9 - Loans payable, net to thecondensed consolidated financial statements for additional information.
Current report
Net cash used in investing activities during the three months ended March 31, 2026 was $252.1 million, an increase of $251.6 million from $0.5 million for the three months ended March 31, 2025. The increase primarily reflects cash consideration for the Acquisition of $250.8 million during the three months ended March 31, 2026, which did not occur during the three months ended March 31, 2025.
Removed paragraphs (48)
Previous report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, which includes permanent extensions of most expiring Tax Cuts and Jobs Act provisions and international tax changes. The Company has assessed the provisions of the OBBBA and determined that the tax changes will not have a material effect on its financial statements in the current year and are not expected to have a material effect on its financial statements for future periods.
Previous report
Revenue increased by $1.9 million, or 100%, to $3.7 million for the three months ended September 30, 2025 as compared to $1.9 million for the three months ended September 30, 2024. The increase was primarily driven by revenue from a system upgrade project of $1.8 million and an increase in professional service revenue of $0.2 million, partially offset by a decrease in QCaaS revenue of $0.2 million. Revenue from system upgrade projects is recognized over time using an input method, measuring progress based on costs incurred to date relative to total estimated costs.
Previous report
Cost of revenue increased by $0.2 million, or 29%, to $1.1 million for the three months ended September 30, 2025 as compared to $0.8 million for the three months ended September 30, 2024. The increase in cost of revenue was primarily due to an increase in infrastructure costs of $0.2 million, system upgrade related costs of $0.1 million and an increase in stock-based compensation expense of $0.1 million.
Previous report
Research and development expenses increased by $5.4 million, or 62%, to $14.1 million for the three months ended September 30, 2025 compared to $8.7 million for the three months ended September 30, 2024. The increase was primarily driven by increases in fabrication costs of $2.9 million, personnel expenses of $1.2 million, and stock-based compensation expense of $1.1 million, reflecting continued investment to advance our product roadmap.
Previous report
General and administrative expenses increased by $0.1 million, or 1%, to $9.4 million for the three months ended September 30, 2025 as compared to $9.3 million for the three months ended September 30, 2024. The increase was primarily driven by increases in personnel expenses of $1.1 million, stock-based compensation expense of $0.7 million and travel expenses of $0.3 million, partially offset by decreases in bad debt expenses of $1.0 million, primarily due to the write-off of the Zapata Note during the three months ended September 30, 2024, which was subsequently recovered in June 2025, and professional fees of $0.9 million. No similar expense occurred during the three months ended September 30, 2025 (see Note 4 - Balance sheet details to the accompanying condensed consolidated financial statements).
Previous report
Sales and marketing expenses increased by $3.2 million, or 85%, to $6.9 million for the three months ended September 30, 2025 as compared to $3.8 million for the three months ended September 30, 2024. The increase was primarily driven by increases in personnel costs of $1.8 million, stock-based compensation expense of $0.6 million and marketing expenses of $0.6 million that resulted from our ongoing expansion of our go-to-market capabilities.
Previous report
Interest expense decreased by $1.0 million, or 83%, to $0.2 million for the three months ended September 30, 2025 as compared to $1.2 million for the three months ended September 30, 2024. The decrease is primarily due to interest expenses related to the Term Loan and Security Agreement (the "Term Loan") with PSPIB Unitas Investments II Inc. ("PSPIB" or the "Lender"). The Company fully repaid and extinguished the Term Loan on October 22, 2024, including $30.0 million in principal and $4.3 million in accrued payable in kind ("PIK") interest. Refer to Note 6 - Loans payable, net to the accompanying condensed consolidated financial statements for further details.
Previous report
Change in fair value of Term Loan
Previous report
Change in fair value of Term Loan was zero for the three months ended September 30, 2025 as compared to an increase of $1.6 million for the three months ended September 30, 2024. On April 13, 2023, the Company entered into a Term Loan with PSPIB. The Company opted for the fair value option for accounting for the Term Loan (see Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesto the accompanying condensed consolidated financial statements). Changes in the fair value of the Term Loan, excluding changes due to the Company's own credit risk, were recorded as gains or losses in the Company’s condensed consolidated statements of operations and comprehensive loss in each reporting period. The fair value of the Term Loan varied primarily based on the market yield rate, market yield volatility and the probabilities of various settlement scenarios. The Company fully repaid and extinguished the Term Loan on October 22, 2024; as a result, no fair value change was recorded for the three months ended September 30, 2025.
Previous report
Gain on investment in marketable securities was $0.9 million for the three months ended September 30, 2025 as compared to a loss of $8.0 thousand for the three months ended September 30, 2024. The gain for the three months ended September 30, 2025 was attributable to the activation of an earnout provision, under which the Company received additional cash and stock consideration related to its interest in the acquired former investee (see Note 4 - Balance sheet details to the accompanying condensed consolidated financial statements). The loss for the three months ended September 30, 2024 resulted from the write-off of the conversion feature of the Zapata convertible notes (see Note 4 - Balance sheet details to the accompanying condensed consolidated financial statements). There was no similar activity for the three months ended September 30, 2025.
Previous report
Comparison of the Nine Months Ended September 30, 2025 and 2024
Previous report
Revenue
Previous report
Research and Development Expenses
Previous report
General and Administrative Expenses
Previous report
General and administrative expenses increased by $2.2 million, or 9%, to $26.5 million for the nine months ended September 30, 2025 as compared to $24.3 million for the nine months ended September 30, 2024. The increase was primarily driven by increases in personnel expenses of $2.4 million, stock-based compensation expense of $1.4 million, professional fees of $0.6 million and travel expenses of $0.5 million, partially offset by a decrease in bad debt expenses of $2.2 million, due primarily to recovery of the Zapata Note (see Note 4 - Balance sheet details to the accompanying condensed consolidated financial statements), facility costs of $0.4 million and insurance expenses of $0.3 million.
Previous report
Sales and Marketing Expenses
Previous report
Sales and marketing expenses increased by $9.3 million, or 82%, to $20.5 million for the nine months ended September 30, 2025 as compared to $11.2 million for the nine months ended September 30, 2024. The increase was primarily driven by increases in personnel costs of $5.3 million, marketing expenses of $1.8 million, stock-based compensation expense of $1.5 million and travel expenses of $0.3 million.
Previous report
Other Income (Expense), net
Previous report
Interest Expense
Previous report
Interest expense decreased by $2.8 million, or 82%, to $0.6 million for the nine months ended September 30, 2025 as compared to $3.5 million for the nine months ended September 30, 2024. The decrease is primarily due to interest expenses related tothe Term Loan with PSPIB. The Company fully repaid and extinguished the Term Loan on October 22, 2024, including $30.0 million in principal and $4.3 million in accrued PIK interest. Refer to Note 6 - Loans payable, net to the accompanying condensed consolidated financial statements for further details.
Previous report
Change in fair value of Term Loan
Previous report
Change in fair value of Term Loan was zero for the nine months ended September 30, 2025 as compared to $0.6 million for the nine months ended September 30, 2024. On April 13, 2023, the Company entered into a Term Loan with PSPIB. The Company opted for the fair value option for accounting for the Term Loan (see Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesto the accompanying condensed consolidated financial statements). Changes in the fair value of the Term Loan, excluding changes due to the Company's own credit risk, were recorded as gains or losses in the Company’s condensed consolidated statements of operations and comprehensive loss in each reporting period. The fair value of the Term Loan varied primarily based on the market yield rate, market yield volatility and the probabilities of various settlement scenarios. The Company fully repaid and extinguished the Term Loan on October 22, 2024; as a result, no fair value change was recorded for the nine months ended September 30, 2025.
Previous report
Gain on investment in marketable securities was $0.9 million for the nine months ended September 30, 2025 as compared to $1.5 million for the nine months ended September 30, 2024. The gain for the nine months ended September 30, 2025 was attributable to the activation of an earnout provision, under which the Company received additional cash and stock consideration related to its interest in the acquired former investee (see Note 4 - Balance sheet details to the accompanying condensed consolidated financial statements). On January 5, 2024, an investee of the Company was acquired for a combination of cash and stock in an observable orderly transaction. Consequently, the carrying value of the Company's investment was adjusted based on the consideration received, resulting in a net gain of $1.7 million, partially offset by a loss associated with the fair value of the conversion feature of the Zapata Note. There was no similar activity for the nine months ended September 30, 2025.
Previous report
The change in fair value of warrant liabilities was an increase of $260.0 million for the nine months ended September 30, 2025 as compared to a decrease of $19.0 thousand for the nine months ended September 30, 2024. The fair value of the warrant liabilities varies primarily with the trading price of the Public Warrants listed on the New York Stock Exchange (see Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesand Note 7 - Warrant Liabilities to the accompanying condensed consolidated financial statements). The trading price of the Public Warrants increased during the nine months ended September 30, 2025, generally in line with the appreciation of the Company’s common stock, resulting in a corresponding increase in the fair value of the warrant liabilities.
Previous report
Other income (expense), net
Previous report
Other income (expense), net increased by $10.8 million or 601%, to a net other income of $12.5 million for the nine months ended September 30, 2025 as compared to a net other income of $1.8 million for the nine months ended September 30, 2024. The increase was primarily driven by an increase in interest income of $14.8 million due primarily to interest earned on higher cash and cash equivalent balances, partially offset by the impact of net foreign exchange loss of $4.1 million driven by depreciation of the U.S. Dollar against certain foreign currencies.
Previous report
Lincoln Park Purchase Agreement
Previous report
In conjunction with the Merger with DPCM, the Company and D-Wave Systems entered into a purchase agreement with Lincoln Park Capital Fund, LLC ("Lincoln Park") on June 16, 2022 (the "Purchase Agreement") which provided D-Wave the sole right, but not the obligation, to direct Lincoln Park to buy specified dollar amounts up to$150 million of D-Wave's common stock, par value $0.0001 per share through November 1, 2025. The Purchase Agreement provided the Company with additional liquidity to fund the business, subject to the conditions set forth in the agreement, including volume limitations tied to periodic market prices, ownership limitations restricting Lincoln Park from owning more than 9.9% of the then total outstanding Common Shares and a floor price of $1.00 at or below which the Company could not sell to Lincoln Park any Common Shares. For shares sold by the Company to Lincoln Park, Lincoln Park may resell all, some, or none of those Common Shares at any time or from time to time in its sole discretion. In order for the Company to issue Common Shares under the Purchase Agreement, the Company's share price was required to be above the floor price of $1.00. During the nine months ended September 30, 2025, the Company issued 3,873,113 Common Shares to Lincoln Park under the Purchase Agreement, resulting in $37.8 million of net proceeds. As of September 30, 2025, D-Wave had completed 100% of the issuances available under the Purchase Agreement.
Previous report
At-the-Market Offerings
Previous report
On May 24, 2024, the Company entered into an at-the-market sales agreement (the "$100M ATM") with Needham & Company, LLC, B. Riley Securities, Inc., and Roth Capital Partners, LLC (the "$100M ATM Agents"). Under this agreement, the Company could sell shares of its common stock with an aggregate offering price of up to $100.0 million through or to the $100M ATM Agents. During the year ended December 31, 2024, the Company received $97.2 million in net proceeds through the issuance of 49,812,287 Common Shares. As of September 30, 2025, D-Wave had completed 100% of the issuances available under the $100M ATM.
Previous report
On December 9, 2024, the Company entered into its second at-the-market sales agreement (the "$75M ATM") with Needham & Company, LLC, Roth Capital Partners, LLC, B. Riley Securities, Inc., and Craig-Hallum Capital Group, LLC (the "$75M ATM Agents"). Under this agreement, the Company could sell shares of its common stock with an aggregate offering price of up to $75.0 million through or to the $75M ATM Agents. During the year ended December 31, 2024, the Company received $72.9 million in net proceeds through the issuance of 15,576,628 Common Shares. As of September 30, 2025, D-Wave had completed 100% of the issuances available under the $75M ATM.
Previous report
On January 10, 2025, the Company entered into its third at-the-market sales agreement (the "$150M ATM") with Needham & Company, LLC, Stifel, Nicolaus & Company, Incorporated, B. Riley Securities, Inc., Roth Capital Partners, LLC, The Benchmark Company, LLC, and Craig-Hallum Capital Group, LLC (the "$150M ATM Agents"). Under this agreement, the Company could sell shares of its common stock with an aggregate offering price of up to $150.0 million through or to the $150M ATM Agents. During the three months ended March 31, 2025, the Company received $146.1 million in net proceeds through the issuance of 24,604,021 Common Shares. As of September 30, 2025, D-Wave had completed 100% of the issuances available under the $150M ATM.
Previous report
On June 10, 2025, the Company entered into its fourth at-the-market sales agreement (the "$400M ATM") with Needham & Company, LLC, Evercore Group L.L.C., TD Securities (USA) LLC, Canaccord Genuity LLC, Mizuho Securities USA LLC, Piper Sandler & Co., Craig-Hallum Capital Group LLC and Rosenblatt Securities Inc. (collectively, the “$400M ATM Agents”). Under this agreement, the Company could sell shares of its common stock with an aggregate offering price of up to $400.0 million through or to the $400M ATM Agents. During the three months ended June 30, 2025, the Company received $390.6 million in net proceeds through the issuance of 26,344,831 Common Shares. As of September 30, 2025, D-Wave had completed 100% of the issuances available under the $400M ATM.
Previous report
Sales under these agreements are classified as "at-the-market" equity offerings under Rule 415(a)(4) of the Securities Act and may be conducted on the NYSE or other trading platforms. The $100M ATM Agents, $75M ATM Agents, $150M ATM Agents and $400M ATM Agents (collectively, the "Agents") used commercially reasonable efforts to sell shares based on the Company’s instructions. The compensation to the Agents was up to 3.0% of the gross sales price, along with expense reimbursements. The Company has also agreed to provide indemnification against certain liabilities under the Securities Act.
Previous report
The Company was not obligated to sell shares under any of these agreements. Each agreement could have been terminated by:(a) the election of the applicable Agents upon the occurrence of certain adverse events, (b) five business days’ advance notice from the Company to the applicable Agents or five days’ advance notice from any of the applicable Agents to the Company or (c) otherwise by mutual agreement of the parties pursuant to the terms of the applicable sales agreement.
Previous report
Warrant exercises
Previous report
During the nine months ended September 30, 2025, 12,146,144 Warrants were exercised by holders in accordance with the terms of the Warrant Agreement. As a result of these exercises, the Company issued 17,661,925 Common Shares, in exchange for cash proceeds of$139.2 million.
Previous report
Repayment of the Term Loan
Previous report
The Term Loan, outlined in Note 6 - Loans payable, net to the condensed consolidated financial statements, provided for$50.0 million in three tranches, subject to certain terms and conditions. The Company drew down two tranches totaling $30.0 million and, on October 22, 2024, the Company had prepaid the entire Term Loan, including $30.0 million in principal and $4.3 million in accrued PIK interest.
Previous report
Equipment Financing Agreement
Showing the first 40 of 48 passages. Open the source sections for the rest.
Reworded paragraphs (24)
Previous wording
The following discussion is intended to assist you in understanding our present business and the results of operations together with our present financial condition. This section should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes contained in Part I, Item I of this Quarterly Report on Form 10-Q (this "Report"), as well as our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission on March 14, 2025. In this section, unless otherwise specified, the terms “we”, “our”, “us”, D-Wave" or the "Company" refer to D-Wave Quantum Inc. and its subsidiaries following the closing of the merger between DPCM Capital, Inc. ("DPCM"), D-Wave Systems Inc., and certain other affiliated entities through a series of transactions (the "Merger") on August 5, 2022 (the "Closing") while "D-Wave Systems" refers to D-Wave Systems Inc. prior to the Closing. All other capitalized terms have the meanings ascribed thereto elsewhere in this Report. All dollar amounts are expressed in thousands of United States dollars (“$”), unless otherwise indicated.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes contained in Part I, Item I of this Report, as well as our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 26, 2026. The following discussion contains forward-looking statements based upon current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including risks described in this Report, and the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2025 and our other filings with the SEC. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. In this section, unless otherwise specified, the terms “we”, “our”, “us”, D-Wave" or the "Company" refer to D-Wave Quantum Inc. and its subsidiaries following the closing of the Merger (the "Closing") while "D-Wave Systems" refers to D-Wave Systems Inc. prior to the Closing. All other capitalized terms have the meanings ascribed thereto elsewhere in this Report. All dollar amounts are expressed in thousands of United States dollars (“$”), unless otherwise indicated.
Previous wording
We are focused on the development and delivery of quantum computing systems, software, and services. We were the world’s first commercial supplier of quantum computers, and it is the only company building both annealing and gate-model quantum computers. Our superconducting quantum computers provide sub-second response times and can be deployed on-premises or accessed through its Leap TM quantum cloud service, which offers 99.9% availability and uptime. Customers apply our technology to address use cases spanning optimization, artificial intelligence, research and more. Our current sixth-generation annealing quantum computing system is named Advantage2 TM.
Current wording
We are focused on the development and delivery of quantum computing systems, software, and services. We are the world’s first commercial supplier of quantum computers, and the first to offer dual-platform quantum computing products and services, spanning both annealing and gate-model quantum computing technologies. Our superconducting quantum computers provide sub-second response times and can be deployed on-premises or accessed through our Leap TM quantum cloud service (the "Leap service"), which offers 99.9% availability and uptime. Customers apply our technology to address use cases spanning optimization, artificial intelligence, research and more. Our current sixth-generation annealing quantum computing system is named Advantage2.
Previous wording
Our business model is focused on generating revenue from providing customers access to our quantum computing systems via the cloud in the form of quantum computing as a service ("QCaaS") products, from providing professional services wherein we assist our customers in identifying and implementing quantum computing applications, as well as selling our quantum computer systems to customers. We have three operating facilities, which we lease, in North America. These facilities are located in Burnaby, British Columbia, Richmond, British Columbia, and Palo Alto, California.
Current wording
Our business model is focused on generating revenue from providing customers access to our quantum computing systems via the cloud in the form of quantum computing as a service ("QCaaS") products, providing professional services wherein we assist our customers in identifying and implementing quantum computing applications, and selling our quantum computer systems to customers.
Previous wording
During the three months ended September 30, 2025 and 2024, we generated revenue totaling $3.7 million and $1.9 million, respectively. During the nine months ended September 30, 2025 and 2024, we generated revenue totaling $21.8 million and $6.5 million, respectively. We have incurred significant operating losses since inception. For the three months ended September 30, 2025 and 2024, our net losses were $140.0 million and $22.7 million, respectively. For the nine months ended September 30, 2025 and 2024, our net losses were $312.7 million and $57.8 million, respectively. We expect to continue to incur significant losses for the foreseeable future as we continue to invest in a number of research and development programs as well as a variety of go-to-market initiatives. As of September 30, 2025, we had an accumulated deficit of $939.7 million.
Current wording
During the three months ended March 31, 2026 and 2025, we generated revenue totaling $2.9 million and $15.0 million, respectively. We have incurred significant operating losses since inception. For the three months ended March 31, 2026 and 2025, our operating losses were $54.7 million and $11.3 million, respectively, and our net losses were $46.8 million and $5.4 million, respectively. We expect to continue to incur significant losses for the foreseeable future as we continue to invest in a number of research and development programs as well as a variety of go-to-market initiatives. As of March 31, 2026, we had an accumulated deficit of $1.0 billion.
Previous wording
Unfavorable conditions in the economy in the United States, Canada and abroad, including conditions resulting from changes in inflationary pressure, gross domestic product growth, financial and credit market fluctuations, banking collapses and related uncertainty, international trade relations, political turmoil, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe or elsewhere, including military actions affecting Russia, Ukraine, Israel or elsewhere, could cause a decrease in business investments in our products and negatively affect the growth of our business and our results of operations. However, to date, these unfavorable conditions have not affected our business.
Current wording
Unfavorable conditions in the economy in the United States, Canada and abroad, including conditions resulting from changes in inflationary pressure, gross domestic product growth, financial and credit market fluctuations, banking collapses and related uncertainty, international trade relations, political turmoil, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe or elsewhere, including military actions affecting the Middle East, Israel, Russia, Ukraine, Venezuela, or elsewhere, could cause a decrease in business investments in our products and negatively affect the growth of our business and our results of operations. However, to date, these unfavorable conditions have not affected our business.
Previous wording
We currently generate our revenue through subscription sales to access our QCaaS cloud platform, professional services related to the development and implementation of quantum computing applications and delivery of quantum computing application training. The Company also sells its superconducting annealing quantum computer systems to customers. QCaaS revenue is recognized on a ratable basis over the contract term, which generally ranges from one month to two years. Professional services revenue is recognized over time on a percentage of completion basis using the costs incurred input measure of progress.
Current wording
We currently generate our revenue through subscription sales to access our Leap service, professional services related to the development and implementation of quantum computing applications and delivery of quantum computing application training. The Company also sells its superconducting annealing quantum computer systems to customers. QCaaS revenue is recognized on a ratable basis over the contract term, which generally ranges from one month to two years. Professional services revenue is recognized over time on a percentage of completion basis using the costs incurred input measure of progress.
Previous wording
Revenue from quantum computing system sales is recognized at a point in time when control transfers to the customer, typically upon delivery or installation, based on the terms of the sales contract. Revenue from system upgrade projects is recognized over time using an input method, measuring progress based on costs incurred to date relative to total estimated costs. This approach is applied to upgrade projects that span multiple reporting periods and meet the criteria for over-time revenue recognition in accordance with ASC 606. Both revenue from quantum computing system sales and revenue from system upgrade projects are classified within system sales in our financial statements.
Current wording
Revenue from quantum computing system sales is recognized over time during the installation period using an input method, with progress measured based on costs incurred to date relative to total estimated costs, a percentage-of-completion approach, as the Company concludes that the criteria for over-time revenue recognition under ASC 606 are met. Revenue from system upgrade projects is also recognized over time using an input method, measuring progress based on costs incurred to date relative to total estimated costs. This approach is applied to system sales and upgrade projects that span multiple reporting periods and meet the criteria for over-time revenue recognition in accordance with ASC 606. Both revenue from quantum computing system sales and revenue from system upgrade projects are classified within system sales in our financial statements.
Previous wording
While we expect that QCaaS revenue would increase both in dollar terms and as a share of total revenue (excluding system sales), as of the end of the period covered by this Form 10-Q, professional services revenue has grown more rapidly—both in dollar terms and as a share of total revenue (excluding system sales). This increase reflects our continued efforts to promote our QCaaS cloud platform by supporting customers through the development and deployment of quantum applications. Customers often engage with our professional service team to gain the knowledge and support needed to effectively use our QCaaS cloud platform. We continue to view professional services as a strategic enabler for long-term QCaaS growth. Meanwhile, quantum computing system revenue may still impact our overall product mix in periods when recognized, although this revenue is expected to remain irregular and intermittent.
Current wording
While we expect QCaaS revenue to increase over time both in dollar terms and as a share of total revenue, excluding system sales, fluctuations in professional services revenue may affect our overall product mix in any given reporting period. This expected trend reflects our continued efforts to promote our Leap service by supporting customers through the development and deployment of quantum applications through our professional service organization. Customers often engage with our professional service team to gain the knowledge and support needed to effectively use our Leap service. We continue to view professional services as a strategic enabler for long-term QCaaS growth. Meanwhile, quantum computing system revenue may impact our overall product mix in periods when recognized, although this revenue is expected to remain irregular and intermittent.
Previous wording
Our cost of revenue consists of all direct and indirect expenses related to providing our QCaaS offering and delivering our professional services, such as personnel-related expenses, including stock-based compensation, costs associated with maintaining the cloud platform on which we provide the QCaaS product and depreciation and amortization related to our quantum computing systems and related software.
Current wording
Our cost of revenue consists of all direct and indirect expenses related to providing our QCaaS offering and delivering our professional services, such as personnel-related expenses, including stock-based compensation, costs associated with maintaining the Leap service on which we provide the QCaaS product and depreciation and amortization related to our quantum computing systems and related software.
Previous wording
Cost of revenue for quantum computing systems includes direct manufacturing costs, such as materials and labor for system production, as well as expenses related to installation, warranty, and support. Additionally, it includes shipping and handling costs associated with delivering the systems. These costs are also expensed as incurred.
Current wording
Cost of revenue for quantum computing systems includes direct manufacturing costs, such as materials and labor for system production, as well as expenses related to installation, maintenance, and support. Additionally, it includes shipping and handling costs associated with delivering the systems. These costs are also expensed as incurred.
Previous wording
We expect our total cost of revenue to trend upward in absolute dollars in future periods, corresponding to our anticipated growth in revenue and the higher costs that are necessary to support our customers, maintain the QCaaS cloud offering, operate our quantum computing systems, and deliver our professional services. In the near term, we expect our gross margin to be higher through the end of 2025, primarily due to system sales recognized since the first quarter of 2025, which carry higher margins. Over the longer term, as QCaaS becomes a larger component of our revenue mix, we expect gross margin to improve, reflecting the lower delivery costs of QCaaS relative to professional services.
Current wording
We expect our total cost of revenue to trend upward in absolute dollars in future periods, corresponding to our anticipated growth in revenue and the higher costs that are necessary to support our customers, maintain the Leap service, operate our quantum computing systems, and deliver our professional services. Over the long term, we expect QCaaS to become a larger component of our revenue mix and gross margin to improve, reflecting the lower delivery costs of QCaaS relative to professional services. In addition, our revenue mix may also shift toward quantum computing system sales in certain periods. As a result, gross margins may fluctuate depending on the relative contribution of QCaaS, system sales, and professional services in a given period.
Previous wording
Research and development expenses consist primarily of personnel-related expenses, including salaries, benefits and stock-based compensation for personnel, fabrication costs, lab supplies, and cloud computing resources and allocated facility costs for our research and development functions. Unlike a standard computer, design and development efforts continue throughout the useful life of our quantum computing systems to ensure proper calibration and optimal functionality. Research and development expenses also include purchased hardware components, fabrication and software costs related to quantum computing systems constructed for research purposes that do not have a high probability of providing near-term future economic benefits, and may have no alternate future use. We currently do not capitalize any research and development expenses.
Current wording
Research and development expenses consist primarily of personnel-related expenses, including salaries, benefits and stock-based compensation for personnel, fabrication costs, lab supplies, and cloud computing resources and allocated facility costs for our research and development functions. Research and development expenses also include purchased hardware components, fabrication and software costs related to quantum computing systems constructed for research purposes that do not have a high probability of providing near-term future economic benefits, and may have no alternate future use. We currently do not capitalize any research and development expenses.
Previous wording
We expect our research and development expenses will trend upward on an absolute dollar basis for the foreseeable future as we continue to invest in research and development efforts to enhance the performance of our annealing quantum computers, further develop our gate model quantum computer, advance our superconducting bump bond process, upgrade our printed circuit board packaging manufacturing, and to broaden the functionality, and improve the reliability, availability and scalability of our QCaaS cloud platform. If in the future we receive government grants and research incentives, which have historically offset a portion of research and development costs, these costs could decrease in absolute dollars. Also, non-cash share based compensation expenses may cause upward and downward fluctuations in these costs from time to time.
Current wording
We expect our research and development expenses will trend upward on an absolute dollar basis for the foreseeable future as we continue to invest in research and development efforts to enhance the performance of our annealing quantum computers, further develop our gate-model quantum computer, advance our superconducting bump bond process, upgrade our printed circuit board packaging manufacturing, and broaden the functionality and improve the reliability, availability and scalability of our Leap service. If in the future we receive government grants and research incentives, which have historically offset a portion of research and development costs, these costs could decrease in absolute dollars. Also, non-cash stock-based compensation expenses may cause upward and downward fluctuations in these costs from time to time.
Previous wording
We expect our general and administrative expenses to increase in absolute dollars for the foreseeable future as we continue to invest in more comprehensive compliance and governance functions, increased IT security and compliance, and expanded internal controls over financial reporting in accordance with the Sarbanes-Oxley Act of 2002. However, non-cash stock-based compensation expenses may cause upward and downward fluctuations in these costs from time to time.
Current wording
We expect our general and administrative expenses to increase in absolute dollars for the foreseeable future as we continue to invest in more comprehensive compliance and governance functions, increased IT security and compliance, and expanded internal controls over financial reporting in accordance with the Sarbanes-Oxley Act. However, non-cash stock-based compensation expenses may cause upward and downward fluctuations in these costs from time to time.
Previous wording
Revenue increased by $15.3 million, or 235%, to $21.8 million for the nine months ended September 30, 2025 as compared to $6.5 million for the nine months ended September 30, 2024. The increase was primarily driven by system sales of $15.5 million and an increase in professional service revenue of $0.7 million, partially offset by a decrease in QCaaS revenue of $0.9 million.
Current wording
Revenue decreased by $12.1 million, or 81%, to $2.9 million for the three months ended March 31, 2026 as compared to $15.0 million for the three months ended March 31, 2025. The decrease was primarily driven by a decrease in system sales of $12.6 million, partially offset by an increase in QCaaS revenue of $0.2 million and an increase in professional service revenue of $0.2 million. The decrease in system sales was primarily due to the timing of revenue recognition, as $12.6 million of system sales was recognized in the three months ended March 31, 2025, with no comparable system sales recognized in the current period.
Previous wording
Cost of revenue increased by $0.9 million, or 36%, to $3.3 million for the nine months ended September 30, 2025 as compared to $2.4 million for the nine months ended September 30, 2024. The increase in cost of revenue was primarily due to an increase in infrastructure costs of $0.5 million and system sales-related costs of $0.4 million.
Current wording
Cost of revenue decreased by $0.1 million, or 7%, to $1.0 million for the three months ended March 31, 2026 as compared to $1.1 million for the three months ended March 31, 2025. The decrease in cost of revenue was primarily due to a decrease in system sales-related costs.
Previous wording
Research and development expenses increased by $11.5 million, or 45%, to $37.1 million for the nine months ended September 30, 2025 compared to $25.5 million for the nine months ended September 30, 2024. The increase was primarily driven by an increase in fabrication costs of $4.9 million, personnel costs of $3.1 million and stock-based compensation expense of $2.5 million and professional fees of $0.4 million.
Current wording
Research and development expenses increased by $15.5 million, or 151%, to $25.8 million for the three months ended March 31, 2026 compared to $10.3 million for the three months ended March 31, 2025. The increase was primarily driven by increases in personnel costs of $5.8 million, stock-based compensation expense of $3.1 million and fabrication costs of $2.6 million.
Previous wording
Gain on investment in marketable securities
Current wording
Gain on investment in marketable securities, net
Previous wording
The change in fair value of warrant liabilities was an increase of $121.9 million for the three months ended September 30, 2025 as compared to a decrease of $0.5 million for the three months ended September 30, 2024. The fair value of the warrant liabilities varies primarily with the trading price of the Public Warrants listed on the New York Stock Exchange (see Note 2 - Basis of Presentation and Summary of Significant Accounting Policiesand Note 7 - Warrant Liabilities to the accompanying condensed consolidated financial statements). The trading price of the Public Warrants increased during the three months ended September 30, 2025, generally correlated with the appreciation of the Company’s common stock, resulting in a corresponding increase in the fair value of the warrant liabilities.
Current wording
The change in fair value of warrant liabilities was zero for the three months ended March 31, 2026 as compared to a decrease of $3.9 million for the three months ended March 31, 2025. The fair value of the warrant liabilities varied primarily with the trading price of the Public Warrants, which were listed on the New York Stock Exchange. The trading price of the Public Warrants decreased during the three months ended March 31, 2025, generally in line with the decline in the trading price of the Common Shares, resulting in a corresponding decrease in the fair value of the warrant liabilities. The Company had no Public Warrants outstanding following the redemption of all remaining warrants on November 19, 2025 pursuant to the Warrant Agreement.
Previous wording
Other income (expense), net increased by $8.8 million or 4,495%, to net other income of $9.0 million for the three months ended September 30, 2025 as compared to net other income of $0.2 million for the three months ended September 30, 2024. The increase was primarily driven by an increase in interest income of $7.9 million due primarily to interest earned on higher cash and cash equivalent balances and net foreign exchange gain of $0.8 million driven by appreciation of the U.S. Dollar against certain foreign currencies.
Current wording
Other income (expense), net increased by $1.5 million or 154%, to a net other expense of $0.5 million for the three months ended March 31, 2026 as compared to a net other income of $0.9 million for the three months ended March 31, 2025. The increase was primarily driven by the impact of net foreign exchange gain of $1.4 million driven by appreciation of the U.S. Dollar against certain foreign currencies.
Previous wording
For the nine months ended September 30, 2025, net cash used in operating activities was $53.6 million, an increase of $9.0 million from $44.7 million for the nine months ended September 30, 2024. The change is primarily due to an increase in net loss of $254.9 million and a decrease in cash absorbed by working capital of $23.8 million (primarily related to recognition of deferred revenue), offset by an increase in noncash items added back to net loss of $269.9 million. The increase in noncash items was primarily due to an increase in change in fair value of warrant liabilities of $260.0 million, an increase in stock-based compensation of $5.3 million, an increase in unrealized foreign exchange loss of $2.1 million and an increase in non-cash interest expense of $1.9 million. The decrease in cash absorbed by working capital was primarily driven by an increased change in deferred revenue of $15.6 million, an increased change in prepaid expenses and other current assets of $2.2 million, a decreased change in accrued expenses and other current liabilities of $2.7 million and an increased change in other non-current assets, net of $1.8 million.
Current wording
For the three months ended March 31, 2026, net cash used in operating activities was $45.0 million, an increase of $25.7 million from $19.3 million for the three months ended March 31, 2025. The change is primarily due to an increase in net loss of $12.9 million, offset by an increase in cash released from working capital of $8.3 million (primarily related to the recognition of deferred revenue) and a decrease in noncash items added back to net loss of $21.0 million (primarily related to higher deferred income tax, stock-based compensation and depreciation and amortization).
Previous wording
Net cash provided by financing activities during the nine months ended September 30, 2025 was $712.0 million, an increase of $677.2 million from $34.9 million for the nine months ended September 30, 2024. The increase is primarily due to an increase in proceeds from the issuance of common stock pursuant to at-the-market offerings of $516.1 million, an increase in proceeds from issuance of common stock upon exercise of Warrants of $139.2 million, the absence of $16.4 million in debt repayments related to the Term Loan, an increase in proceeds from the issuance of common stock upon exercise of stock options of $8.1 million, and an increase in proceeds from the issuance of common stock pursuant to the Purchase Agreement with Lincoln Park of $5.6 million, partially offset by an increase in payment of tax withheld pursuant to stock-based compensation settlements of $8.5 million.
Current wording
Net cash used by financing activities during the three months ended March 31, 2026 was $0.1 million, as compared to net cash provided by financing activities of $145.6 million for the three months ended March 31, 2025. The change is primarily due to a decrease in proceeds from the issuance of Common Shares pursuant to at-the-market offerings of $146.1 million.
Previous wording
Except as noted below, there have been no material changes to our critical accounting policies from those disclosed in the “Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” section of our Annual Report on Form 10-K for the year ended December 31, 2024.
Current wording
There have been no material changes to our critical accounting policies from those disclosed in our "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
A discussion of recent accounting pronouncements issued and adopted is included in Note 2- Basis of Presentation and Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements included elsewhere in this Report.
Current wording
A discussion of recent accounting pronouncements is included in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies to our unaudited consolidated financial statements included elsewhere in this Report.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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The following table sets forth our results of operations for the periods indicated (in thousands):
Previous report — wording carried elsewhere
Gain on investment in marketable securities
Previous report — wording carried elsewhere
Change in fair value of warrant liabilities