QBTS Investment Check Before Q3 Earnings: Liquidity Solid Amid Risks

Ahead of third-quarter 2025 earnings, D-Wave Quantum’s QBTS balance sheet is materially stronger than a year ago, implying low near-term liquidity and solvency risk as compared to the year-ago period. But can this capital strength translate into sustainable operational momentum and shareholder value in Q3? Let’s delve deeper.

Ahead of Q3 Release: Balance Sheet Strong but Operational Efficiency a Challenge

The improvement in D-Wave’s balance sheet has been fueled largely by equity financing rather than by internal cash generation. As of June 30, 2025, the company held $819.3 million in cash and cash equivalents and total assets of $843.6 million, providing ample liquidity that comfortably exceeds near-term obligations. Current liabilities were limited to $19.3 million, while total liabilities were $149.3 million, resulting in stockholders’ equity of $694.3 million — a structure that underscores low leverage and solid solvency fundamentals.

This strengthened cash position primarily reflects the company’s aggressive capital-raising initiatives in the first half of 2025. Through a combination of at-the-market (ATM) equity offerings, warrant exercises and other financings, D-Wave generated approximately $675.0 million in financing cash flows during the six months ended June 30, 2025, including roughly $390.6 million from a $400 million ATM program and $99.3 million from warrant exercises.

From an operational standpoint, however, its performance remains mixed. Net cash used in operating activities totaled $34.6 million during the first half, and the company continues to post GAAP losses, largely driven by non-cash items, including a significant negative change in the fair value of warrant liabilities.

What Q3 Results Can Bring?

Ahead of third-quarter 2025 results, with ample liquidity and a multi-quarter cash runway, the market expects narrowing losses and steady revenue growth from the company’s quantum cloud and annealing offerings. The company’s cash burn trends and its ability to limit further dilution amid continued R&D spending can be crucial. Any uptick in recurring revenues or new enterprise partnerships could indicate early leverage of its capital base, while recurring non-cash swings, especially from warrant revaluations, may again blur true performance.

For the third quarter, QBTS is expected to report earnings improvement of 36.4% on revenue growth of 66.8%.

Year to date, shares of D-Wave have rallied 381.6%, outperforming the broader industry, sector and the S&P 500’s 18%, 23% and 14.5% growth, respectively. During this period, the company’s direct peers like Rigetti Computing RGTI and IonQ IONQ gained 214.3% and 57%, respectively.

YTD Stock Comparison

Valuation Remains Stretched

D-Wave Quantum’s shares are currently overvalued, as suggested by its Value Score of F. 

In terms of the forward 12-month price/sales (P/S), QBTS is trading at 387.37X, significantly higher than its one-year median of 118.53X and the Zacks Computer and Technology sector’s 6.62X. The stock is also trading at a premium to IONQ’s 128.12X. However, it remains discounted compared to RGTI’s P/S of 772.30X.

Price/Sales Ratio (Forward 12 Months)

Bottom Line

Despite a strong liquidity position, D-Wave Quantum remains burdened by operating losses, dilution risk and stretched valuation. Its forward P/S multiple far exceeds sector and peer medians, implying that much of the optimism is already priced in. With profitability still distant and sensitivity to non-cash swings, QBTS, a Zacks Rank #4 (Sell) stock, does not offer an ideal entry point at the moment. Investors may be better off taking profits or waiting for a more attractive valuation reset.

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This article originally published on Zacks Investment Research (zacks.com).

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