QBTS Stock Slides 7% After Q1 Revenue Misses Estimates

Earnings season is an important time for many stocks, but especially for firms in emerging industries like quantum computing. Where major player IonQ Inc. NYSE: IONQ The results reported for the first quarter of 2026 at the beginning of May, investors noted promising revenue growth, an increase in full-year guidance relative to previous projections, and a strong showing in both relationships and system sales. Still, an important piece of the puzzle—profit—remains missing.

Now, some of the biggest names in the pure-play quantum sphere are sharing their results, including firms like D-Wave Quantum Inc. NYSE: QBTS and Rigetti Computing NASDAQ: RGTI. ID-Wave, known for its large holdings and recent acquisition of Quantum Circuits Inc., stands out for its dual focus on different quantum computing technologies.

Like IonQ, the company noted several compelling developments in its Q1 2026 earnings, particularly in bookings, sales pipelines, and technological advancements.

However, top-line and downline performance may have contributed to the post-earnings sell-off that sent the stock price down 7% on May 12, reversing a recent small rally that began in April.

D-Wave's Revenue Highlights: Bookings, Recurring Revenue, Sales Pipeline, and More

Many highlights come from a closer look at D-Wave's first quarter of the new year. Notably, bookings for the quarter reached $33.4 million, a Q1 record and a whopping 2,000% year-over-year (YOY) increase. This figure is impressive on its own, but the real strength here is D-Wave's massive growth in its quantum-computing-as-a-service (QCaaS) business, which rose 15% YOY to $1.8 million in revenue. QCaaS positions D-Wave to build recurring revenue from its distribution, which can be critical to its efforts to achieve sustainable profitability. A $10-million QCaaS enterprise deal from Q1 was a major driving factor here.

The company's sales pipeline is bright as well, with growth of more than 100% sequentially through Q1 2026. ID-Wave sees system sales—the largest share of revenue so far—including two or three per year going forward, with at least two expected in 2026. These big-ticket sales don't necessarily mean lower revenue, but they do mean stronger revenue. this point.

Technological advances are also important for any quantum computing company, and D-Wave highlighted some important ones in the first three months of the year. The company's outstanding achievement is the road map to 100 logical qubits, a major technological breakthrough, which it believes can be achieved by 2032.

Ultimately, investors were waiting for signs of whether D-Wave was able to maintain its historically strong financial position. With more than $588 million in cash and equivalents at the end of the quarter, the company's reserves remain healthy.

Reason for Share Price Reduction

It's hard for D-Wave to avoid negative headlines for its high and low performance in the quarter, despite all the above achievements. Notably, revenue of $2.9 million fell more than 80% YOY and came in nearly $1.3 million below analyst forecasts. While loss per share exceeded forecasts by 3 cents, it did increase by 3 cents compared to the prior year quarter.

A closer look may offer long-term D-Wave investors some comfort. Part of the reason for the seemingly large decline is that last year's Q1 saw sales of a computer system that incorporates quantum annealing at about $13 million. A single transaction can have a significant impact on revenue performance, especially if overall revenue is very low.

Still, that D-Wave is more vulnerable to these key changes based on the timing of each system's sales is an indication of how reliant the company has been on these types of one-off deals. Investors will certainly be happy to see the company move forward on a predictable, consistent revenue path.

Investors in the quantum computing space will need to assess whether D-Wave is still a worthy contender based on its performance relative to its peers (first, Rigetti announced that day that Q1 2026 revenue nearly tripled YOY to $4.4 million).

The path to profitability may be somewhat clear based on QCaaS performance, but mounting losses and a large gap between expected revenue and actual performance indicate that there may still be significant ground to cover.

D-Wave shares remain a Moderate Buy, with 14 of 17 analysts on the stock.

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