D-Wave Quantum Inc. — Blitz Index 36 (D)
A quantum annealing pioneer with a $38.3M backlog and 56% QCaaS growth — held back by lumpy system sales, a 285% stock-comp ratio, and a lawsuit challenging its bookings.
Last re-scored: November 13, 2026.
Confidence: Medium · Category: frontier
Score breakdown
| Section | Score | Detail |
|---|---|---|
| A · Speed | 12 / 25 | Fiscal 2025 +179% was one $13.7M system sale, and 9M 2026 revenue is −52.1% — growth rides on single system sales, with Q4 FAU $20M the swing variable |
| B · Moat | 25 / 60 | Leap cloud plus direct sales plus partner channels, with a 52.9% Q3 gross margin — but no network effect and a moat that converts to only 41.7 |
| C · Creative destruction | 8 / 15 | Annealing displacing classical optimisation, with two production proofs (DOCOMO, SkyWater) — but the displacement is still at pilot scale |
| D · BlitzFailing | −9 | Stock comp at 285% of revenue with shares +19.4% YoY (D1 −3), a non-cash warrant swing behind the 'improved' loss (D2 −3), and a Rosen class action (D4 −3) |
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Radar axes (0–100): Moat 41.7 · Speed 48 · Creative 53.3.
Watch item
Gates: G1 ✓ (borderline — repeat purchases via QCaaS at $2.2M, +56% YoY, and a backlog of $38.3M, but 80% of nine-month bookings sit in two contracts and Q3 bookings fell 19%) · G2 ✓ (low confidence — the narrow annealing market reaches $1.2B by 2035 against a $132M bar, about 9x, though the 2025 TAM is nearly the size of the company's own revenue). 29 points below the 65-point threshold — the backlog is real but concentrated, growth rides on single system sales, and dilution funds the build. Watch the Q4 FAU $20M delivery, Q4 bookings, and whether the Rosen class action is certified.
Strengths
- QCaaS $2.2M (+56% YoY) + professional services $2.0M (+318%) — the recurring revenue engine is growing
- NTT DOCOMO's second production app + SkyWater fab optimisation — two production proofs that annealing displaces classical optimisation
- RPO $38.3M (+1,221% YoY), 59% converting within 12 months — near-term revenue visibility
- Cash and securities $503.4M + access to up to $100M in CHIPS funding — years of runway (about 3.5 years at the 9M operating cash outflow)
- Advantage2 (4,400+ qubits) generally available + a dual platform with gate-model (QCI acquisition) — annealing leader plus a second axis
Concerns
- Trailing-twelve-month revenue down (9M −52.1%) — fiscal 2025's +179% was one system sale's illusion
- Backlog concentration: 80% of nine-month bookings in two contracts, Q3 bookings −19%, RPO down two quarters in a row
- Operating loss of $53.5M in Q3 (about 2x the prior year) and adjusted EBITDA loss of $37.7M (+83%) — costs rising faster than revenue
- Dilution machine: stock comp at 285% of revenue, shares +19.4% YoY, QCI at $300M in stock plus a Commerce Department equity stake
- Rosen securities class action (lead-plaintiff deadline December 15, 2026) — the allegation targets the bookings themselves, unproven but aimed at Gate 1's evidence
Research notes
Thesis: quantum annealing, sold by the system
D-Wave Quantum enters the BlitzLab record with a first scoring of 36 out of 100, grade D, built from Speed 12 out of 25, Moat 25 out of 60, Creative Destruction 8 out of 15, and deductions of 9. The total sits 29 points below the 65-point line, and the shape of the score is the story: on the radar conversion used by the model, Creative Destruction converts to 53.3, Speed to 48.0, and Moat to only 41.7. This is a quantum annealing company — trailing-twelve-month revenue of $13.2 million — whose Advantage2 system (4,400+ qubits) is generally available, whose QCaaS subscription revenue grew 56% year on year to $2.2 million in the third quarter of 2026, and whose backlog stands at $38.3 million. Both gates pass, but both pass on the borderline: the first on a backlog concentrated in two contracts, the second on a narrow annealing market whose 2025 size is nearly the company's own revenue. The fourth quarter of 2026 has not been reported at T, and its reporting date is unconfirmed — it is not a company-confirmed date and must not be presented as one — and no outcome is anticipated here. That is the balance of the record at T: a technology with production proofs, a business that rides on single system sales, dilution that funds the build, and a lawsuit that challenges the bookings themselves.
The gates: both pass — growth proven, market ample on the stated definition
Gate 1, two pieces of product-market-fit evidence for a growth company, passes on a borderline basis. Repeat purchases are real: QCaaS subscription revenue of $2.2 million in the third quarter, up 56% year on year, with more than 100 customers, and NTT DOCOMO has put two production applications into daily use. The backlog is the second prong: remaining performance obligations of $38.3 million, up 1,221% year on year, with 59% expected to convert within twelve months. This is not the 'product revenue $0' pattern of ACHR and ARCT — fiscal 2025 included about $16 million of system sales. But the borderline is explicit: 80% of nine-month bookings sit in two contracts (FAU $20 million and a Fortune 100 $10 million), third-quarter bookings fell 19% year on year, and the backlog has shrunk for two consecutive quarters. Gate 2, a ten-year market ceiling at least ten times current revenue, also passes, but with low confidence. Revenue is GAAP revenue. The bar is about $132 million, ten times trailing-twelve-month revenue of $13.2 million. The addressable market is quantum annealing narrowly defined: about $1.2 billion by 2035, or about nine times the bar. The verdict is low-confidence because the 2025 narrow TAM of $27.5 million is nearly the company's own fiscal 2025 revenue of $24.6 million, estimates range widely ($1.2B to $4.0B), and commercialisation timing is unproven. The deductions are the other half of the gate story: 9 points — debt at minus 3, revenue quality at minus 3, and regulatory cost at minus 3 — so the company is not flagged. If the Q4 FAU delivery is recognised and bookings recover, the gates firm up; if the delivery slips or the Rosen suit is certified, Gate 1 is re-examined.
More Frontier companies
Other Frontier names on the Blitz Index, highest score first: Rocket Lab (64/B), Tesla (62/B), Illumina (61/B).
Next earnings
Not announced.
Coverage
D-Wave Quantum Inc. · Q3 2026 reported Nov 10, 2026 · Score 36 · Grade D
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BlitzLab scores businesses against a scholar’s standard — not investment advice. No price targets, no buy/sell recommendations. Figures are from SEC filings (XBRL) as labeled in the source scorecard.