QBTS$22.98

Assuming QBTS is a quantum-computing technology company, the income statement shows a business still in heavy investment mode. Revenue rose modestly for several years and then jumped sharply in FY2025, but TTM revenue has fallen meaningfully versus FY2025, suggesting momentum has cooled rather than accelerated. Gross margin improved, yet operating margins remain deeply negative because R&D and SG&A continue to rise faster than sales. Net income is highly volatile and distorted by large non-operating swings, especially the FY2025 and TTM other income/expense losses, which obscure underlying operating performance. The business remains persistently cash-flow negative, with dilution increasing share count. Relative to software-like peers, this is weak and still far from profitability.

QBTS shows a markedly stronger balance sheet than in prior years, with cash and short-term investments rising to $884.5 million in FY2025 and still $588.4 million TTM against only $21.2 million of current liabilities. Current assets of $896.2 million comfortably cover short-term obligations, and total liabilities fell to $63.6 million from $137.2 million in FY2024. Shareholders’ equity improved sharply to $852.2 million, then $1.124 billion TTM, reversing earlier deficits. However, equity quality is mixed because retained earnings remain deeply negative at $1.0 billion, and the TTM balance sheet includes sizeable goodwill ($342.6 million) and intangibles ($215.3 million). Overall, liquidity is excellent, leverage is controlled, but capital quality is somewhat acquisition-dependent.

Cash generation is consistently weak and has worsened, with operating cash flow negative in every year shown: -34.8m in FY2021, -45.2m in FY2022, -60.7m in FY2023, -42.6m in FY2024, and -72.0m in FY2025; TTM was -97.7m. Free cash flow is also persistently negative, reaching -75.8m in FY2025 and -102.2m TTM, even after only modest capital spending. The gap between net income and cash flow remains large, pointing to poor cash conversion. Working capital swings are material, especially other adjustments and uneearned revenue. Financing cash flow is heavily dependent on equity issuance, which rose to 779.4m in FY2025, and TTM investing cash flow was distorted by a 250.8m acquisition.

Liquidity has improved sharply, with the current ratio rising from below 1x in FY2022 to above 21x in the current period and the quick ratio following a similar path, indicating a strong short-term cushion. Leverage looks less burdensome than in the middle of the period, with debt-to-equity falling from 0.59 in FY2024 to 0.04 currently, although net debt and debt service ratios still show some pressure. Efficiency is weak: asset turnover has declined steadily to 0.01, suggesting very limited revenue generation from the asset base, while inventory turnover has also softened. Profitability remains the main weakness, with ROE, ROA, ROIC, and ROCE all deeply negative across the period, despite some improvement in the latest figures.

QBTS shows a clear step-change in its outlook: after several years of modest revenue growth and a flat 2024, analyst estimates point to a sharp acceleration in 2025–2027, with revenue expanding from 24.59 to 85.21. That implies a strong inflection rather than steady compounding. EPS remains negative across the forecast period, but the expected improvement in 2027 suggests losses are narrowing relative to scale, even as revenue growth outpaces earnings progress, leaving margins still under pressure. Forward P/E is only available on the forecast years and stays negative, which fits the absence of positive earnings. Sentiment is strongly supportive, with 15 analysts, a Strong Buy consensus, and a stable recommendation mix over recent months despite a modest shift from Buy to Hold.