D-Wave Backlog Jumps 1,221% to $38.3M, But Quarterly Bookings Fall 19%

D-Wave Quantum closed the third quarter of 2026 with $38.3 million in remaining performance obligations, a 1,221% increase over the year-earlier level, according to its latest quarterly report released this week. The figure tracks contracted work not yet recognized as revenue. Of that total, 59% should convert into revenue within twelve months. That conversion rate gives investors a concrete yardstick for the quarters ahead.

The backlog number cuts both ways. Bookings over the first nine months of 2026 reached $37.4 million, up 611%. Yet orders taken in the most recent quarter fell 19% year on year to $1.9 million. A single large system sale has shaped the trajectory so far. The question is whether demand broadens or stays dependent on one-off transactions.

What is the technology deadline?

D-Wave intends to complete a 17-qubit gate-model system by the end of 2026. Customer deliveries are under discussion for 2027. The company puts pipeline growth since the close of the second quarter at more than 75%, evidence of rising interest in system purchases. Interest only becomes an investment case once it hardens into binding orders and then into recognized sales.

Management has guided toward higher revenue next year across systems as well as QCaaS, services and partner sales. It has not published a numerical forecast. Wedbush, for its part, models revenue of $81.5 million in 2027 and $153.1 million in 2028. That is a steep growth path. It depends on executing system deliveries on schedule.

The balance sheet offers room to maneuver. D-Wave ended the quarter with cash and securities of $503.4 million. The company also holds agreed access to as much as $100 million in CHIPS funding. Those disbursements are tied to conditions and milestones. The money would support development of the next generation of annealing and gate-model systems. If milestones slip, the associated payments slip with them.

Why are costs outrunning sales?

Third-quarter revenue rose 21% to $4.5 million. Operating expenses jumped 84% to $55.9 million. The adjusted EBITDA loss came in at $37.7 million. The net loss was $48.2 million, or $0.13 per share, according to the report. That is steeper than the $0.10 per-share loss analysts had expected, media reports said.

Rosenblatt analyst John McPeake pointed to the timing of system revenue recognition and slower QCaaS growth. He expects partial revenue from one machine in the closing quarter rather than the three previously anticipated. The risk therefore runs along two tracks at once: when large system sales land, and how the other revenue streams develop.

Sentiment among analysts remains constructive but more cautious on valuation. Several firms trimmed their price targets yesterday while keeping buy ratings, media reports said. Long-term upside stays visible. Near-term expectations are marked down.

What has to go right?

The bull case rests on a straightforward sequence:

• Convert the $38.3 million in obligations into revenue on schedule
• Revive quarterly bookings after the 19% decline
• Demonstrate progress against development milestones that unlock further CHIPS tranches

Repeatable sales, rather than isolated large deliveries, would make the business more predictable and give technical advances visible financial weight.

The bear case writes itself from the recent order trend. Should the 19% quarterly decline persist, the renewal of the contract base weakens. Revenue growth alone will not suffice if losses stay this wide. Delayed customer acceptances combined with expenses rising faster than sales would push any path to sustainable scale further out.

Two checkpoints sit closest on the calendar. First, proof of achieved development milestones and the funding tranches tied to them. Second, the gate-model system promised before the end of 2026. Commercially, the delivery to Florida Atlantic University slated for the fourth quarter of 2026 offers a concrete marker. Technical progress strengthens the case only when reliably realized revenue follows it.