D-Wave Quantum Inc. (QBTS) Cash Flow Statement

The OCF/NI ratio fluctuates dramatically, from 3.56 in 2025Q1 to 0.09 in 2025Q2, reflecting the impact of large non-cash charges such as SBC and possibly warrant fair value adjustments. In 2025Q3, net income was -$140.0M while OCF was only -$19.0M, suggesting that the reported loss overstates the actual cash burn. Investors should focus on OCF as a more reliable indicator of liquidity needs, as the gap between net income and OCF is not consistent with typical accrual patterns.

The FCF trajectory shows a clear downward trend, with cumulative FCF over the last ten quarters at approximately -$200M, while revenue has grown only modestly. The FCF margin has remained deeply negative, ranging from -5.1% to -131.4%, with the 2025Q1 anomaly reflecting a one-time revenue spike. This suggests that the company's operating model is still in a hyper-burn phase, and the widening gap between FCF and net income indicates that cash consumption is accelerating as the company scales.

CapEx/Revenue ratios have been volatile, spiking to 144.3% in 2026Q2 due to a low revenue base, but absolute CapEx remains small, suggesting that the company's hardware development is largely outsourced or that the current phase requires less capital intensity. The low CapEx relative to the massive operating losses implies that the business model is more dependent on R&D and talent costs than on physical infrastructure, which may limit the need for large capital raises but also indicates that the company is not investing heavily in future capacity.

The working capital changes show no consistent trend, with positive and negative swings that appear to correlate with revenue spikes and troughs. For example, 2025Q1 saw a -$15.0M working capital outflow, likely due to a large revenue recognition event, while 2024Q4 had a +$17.9M inflow, possibly from deferred revenue or improved collections. This volatility indicates that the company's cash conversion cycle is unstable, and investors should monitor the sustainability of working capital management as revenue scales.

The deployment of capital appears to be opportunistic, with a significant acquisition in 2026Q1 that may have been funded by the reported cash balance of $635M, if accurate. The buyback activity is minimal, suggesting that management is not prioritizing shareholder returns but rather investing in growth through M&A. However, the lack of dividends and the substantial cash outflows for acquisitions and buybacks, combined with ongoing operating losses, raise questions about the sustainability of the company's cash position and the potential need for future dilution.

The cumulative gap between net income and OCF is approximately $377M, which is largely attributable to non-cash items such as stock-based compensation, depreciation, and possibly warrant revaluations. This divergence suggests that the company's economic reality is less severe than the income statement implies, but the persistent negative OCF indicates that the business is still consuming cash at a rate that will require external financing. The gap also highlights the importance of using cash flow metrics to assess the company's true liquidity needs.