How QBTS (D-Wave Quantum) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a quantum computing technology company like QBTS makes money is essential for investors and anyone interested in the business of advanced computing. In this post, we break down QBTS's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

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Quick QBTS Overview

QBTS operates as a quantum computing technology provider, developing advanced quantum hardware and software solutions for enterprise and research clients. Revenue comes primarily from quantum computing services, hardware sales, and licensing of proprietary quantum algorithms. The company focuses on commercializing quantum computing platforms, with business segments spanning hardware, software, and consulting services.

Revenue Breakdown

• Total Revenue (Q2 2025): $3.10M (+41.8% YoY)
  • Hardware & Services: $3.10M (100% of total)
  • No reported breakdown by segment for Q2 2025; all revenue is aggregated.
  • Growth is powered by increased enterprise adoption of quantum solutions and expansion into new verticals.

Gross Profit and Margins

• Gross Profit: $1.98M (63.8% gross margin)
  • Cost of Revenue: $1.12M (+40.8% YoY)
  • QBTS maintains robust margins due to its scalable digital business model and proprietary technology, which allows for high-value service delivery with relatively low incremental costs.
• Most costs come from quantum hardware manufacturing, cloud infrastructure, and technical support.

Operating Income and Expenses

• Operating Income: Not reported for Q2 2025
• Operating Expenses: $28.5K (+40.8% YoY)
  • R&D: $12.7K (+51.9% YoY, 410.1% of revenue) — Focused on quantum processor development, algorithm optimization, and software platform enhancements.
  • SG&A: $15.8K (+33.0% YoY, 510.0% of revenue) — Includes sales, marketing, administrative, and general corporate expenses.
  • QBTS continues to prioritize innovation and aggressive R&D investment while maintaining lean operations to support growth.

Net Income

• Pre-Tax Income: Not reported for Q2 2025
• Income Tax: Not reported for Q2 2025
• Net Income: $167.3K (+841.2% YoY, 5406.4% net margin)
• QBTS converts a significant portion of sales into profit due to its efficient cost structure and high-value offerings, despite heavy R&D spending.

What Drives QBTS's Money Machine?

• Quantum Computing Services: 100% of revenue — QBTS's core business is delivering quantum computing capabilities to enterprise clients.
• R&D Intensity: R&D expenses account for 410.1% of revenue, reflecting deep investment in next-generation quantum technologies.
• Strategic Investment: Heavy focus on proprietary hardware and software development to maintain technological leadership.
• Future Growth Areas: Expansion into quantum cybersecurity and AI integration, though these segments are not yet profitable.

Visualizing QBTS's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D and SG&A) taking the largest chunk.
• Even after large investments in R&D and operational costs, 5.4% of revenue drops to the bottom line.

Key Takeaways

• QBTS's money comes overwhelmingly from quantum computing services and hardware sales
• High gross and net margins illustrate the power of QBTS's scalable, IP-driven business model
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by enterprise adoption, technological innovation, and expansion into new quantum applications

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FAQ About QBTS's Income Statement

1. What is the main source of QBTS's revenue in 2025?

QBTS generates over 100% of its revenue from quantum computing services and hardware sales. No other significant revenue streams were reported for Q2 2025.

2. How profitable is QBTS in Q2 2025?

QBTS reported net income of $167.3K in Q2 2025, with a net margin of approximately 5,406.4%, reflecting strong profitability driven by efficient cost management and high-value offerings.

3. What are the largest expense categories for QBTS?

The biggest expenses on QBTS's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $12.7K in Q2 2025, as QBTS prioritizes quantum processor development and software innovation.

4. Why does R&D operate at a loss?

R&D, despite being a critical driver of future growth, posted expenses of $12.7K in Q2 2025, exceeding revenue. This is because QBTS aggressively invests in quantum hardware and software development, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does QBTS's effective tax rate compare to previous years?

QBTS's effective tax rate in Q2 2025 was not reported. Historical filings indicate the company benefits from R&D tax credits and international structuring, which typically result in a low to moderate effective tax rate.