D-Wave Quantum Inc.QBTS
D-Wave Quantum Inc. Stock Compensation Disclosure
12. STOCK-BASED COMPENSATION
2020 Equity Incentive Plan
In April 2020, the Board of Directors of D-Wave Systems approved the 2020 Equity Incentive Plan (the "2020 Plan") which provides for the grant of qualified incentive stock options ("ISO") and non-qualified stock options ("NSO"), restricted stock, RSUs or other awards to the Company’s employees, officers, directors, advisors, and outside consultants. Following the Merger, awards outstanding under the 2020 Plan continued to be governed by the 2020 Plan; however, the Company will not grant any further awards under the 2020 Plan.
2022 Equity Incentive Plan
On August 5, 2022, the shareholders approved the D-Wave Quantum Inc. 2022 Equity Incentive Plan (the “2022 Plan”), which became effective immediately upon the closing of the Merger. The aggregate number of Common Shares reserved for future issuance under the 2022 Plan was 30,676,577 shares as of December 31, 2025, inclusive of shares reserved for outstanding awards. The number of shares reserved for issuance under the 2022 Plan automatically increases on January 1st of each year for a period of ten years commencing on January 1, 2023 and ending on (and including) January 1, 2032, in an amount equal to 5% of the fully-diluted Common Shares outstanding (as defined by the 2022 Plan) on December 31st of the preceding year; provided, however, that the Board of Directors of the Company may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of Common Shares. An automatic increase on the reserve of 20,200,821 shares became effective on January 1, 2026. While the 2022 Plan allows for the issuance of awards with a service condition, a performance condition, a market condition, or some combination of the three, to date, the Company has only issued awards subject to a service conditions. Awards issued under the 2022 Plan have vesting periods ranging from under 1 year to 4 years from the original grant date, and all awards issued to date under the 2022 Plan will expire 10 years from the original grant date.
Share-based compensation awards are settled by issuing new shares.
Stock option valuation
The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model and has used this method during the year ended December 31, 2024. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option.
⮚Risk-Free Interest Rate. The Company estimates its risk-free interest rate by using the yield on actively traded non-inflation-indexed U.S. treasury securities with contract maturities equal to the expected term.
⮚Expected Term. The expected term of the Company’s options represents the period that the stock-based awards are expected to be outstanding.
⮚Expected Volatility. Given the limited quoted price history for the Common Shares, the expected volatility is based on the Company's historical stock price volatility and that of comparable publicly-traded companies.
⮚Expected Dividend Yield. The Company has not declared or paid dividends to date and does not anticipate declaring dividends.
The assumptions used to estimate the fair value of stock options granted during the year ended December 31, 2024 are as follows:
| Year ended December 31, | |||||
| 2024 | |||||
| Expected dividend yield | — | ||||
| Expected volatility | 103.0% - 107.0% | ||||
| Expected term (years) | 5.0 - 6.1 | ||||
| Risk free interest | 4.0% - 4.2% | ||||
No stock options were granted during the year ended December 31, 2025.
Common stock option activity
The following table summarizes the Company’s stock option activity during the periods presented (in thousands except share and per share data):
| Number of options | Weighted average exercise price ($) | Weighted average remaining contractual term (years) | Aggregate intrinsic value ($) | ||||||||||||||||||||
| Outstanding as of December 31, 2024 | 10,984,738 | 1.67 | 6.64 | 75,270 | |||||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Exercised | (7,369,835) | 1.55 | |||||||||||||||||||||
| Forfeited and expired | (6,733) | 4.30 | |||||||||||||||||||||
| Outstanding as of December 31, 2025 | 3,608,170 | 1.90 | 6.36 | 87,511 | |||||||||||||||||||
| Options exercisable as of December 31, 2025 | 2,841,910 | 1.80 | 5.90 | 69,201 | |||||||||||||||||||
| Options unvested as of December 31, 2025 | 766,260 | 2.25 | 8.07 | 18,310 | |||||||||||||||||||
During the years ended December 31, 2025 and 2024, the total intrinsic value of options exercised was $140.0 million and $6.2 million, respectively.
During the year ended December 31, 2024, the weighted-average grant date fair value of stock options granted was $1.05 per share. No stock options were granted during the year ended December 31, 2025.
The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Common Shares for those stock options that had exercise prices lower than the fair value of the Common Shares as of period end.
Restricted stock unit awards
The following table summarizes the RSU activity and related information under the 2022 Plan:
| Number of RSUs | Weighted average Grant Date Fair Value ($) | ||||||||||
| Unvested as of December 31, 2024 | 8,787,022 | 2.25 | |||||||||
| Granted | 5,200,975 | 10.83 | |||||||||
| Forfeited and expired | (256,192) | 5.34 | |||||||||
| Vested | (5,515,890) | 3.77 | |||||||||
| Unvested as of December 31, 2025 | 8,215,915 | 6.56 | |||||||||
During the years ended December 31, 2025 and 2024, the total fair value of RSUs vested was $123.4 million and $12.8 million, respectively.
Employee Stock Purchase Plan
In August 2022, the Company established the 2022 Employee Stock Purchase Plan (the "ESPP"), providing eligible employees of the Company and designated subsidiaries an opportunity to purchase the Common Shares at discounted rates. An eligible employee is defined as someone who: (i) is regularly employed by the Company or its designated subsidiaries for at least 20 hours per week and more than five months in a calendar year, and (ii) is classified as an employee for tax purposes. Regarding the Non-423 Component (as defined in the ESPP), any employee of the Company or its affiliates, as determined by a committee appointed by the Board, is eligible.
Management computes compensation expense by combining three components: (i) a 15% discount offered, (ii) a call option on 0.85 share of stock with an exercise price equal to the fair market value, and (iii) a put option on 0.15 share of stock with an exercise price equal to the fair market value. The requisite service period is the six-month purchase period. Any reductions in withholding amounts (or percentages) will be disregarded for compensation cost recognition. If a participant or the ESPP is terminated, management will reverse any expense accrued for unvested shares.
As of December 31, 2025, the maximum number of Common Shares remaining available to be issued under the ESPP was 11,783,518. During the year ended December 31, 2025, 129,748 Common Shares were issued under the ESPP, and compensation cost recognized related to the ESPP was $0.6 million.
Stock-based compensation expense
The following table summarizes the stock-based compensation expense classified in the consolidated statements of operations and comprehensive loss as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cost of revenue | $ | 772 | $ | 647 | |||||||
| Research and development | 7,916 | 5,089 | |||||||||
| General and administrative | 10,021 | 8,166 | |||||||||
| Sales and marketing | 3,948 | 1,759 | |||||||||
| Total stock-based compensation | $ | 22,657 | $ | 15,661 | |||||||
During the years ended December 31, 2025 and 2024, total compensation cost capitalized as part of property and equipment and intangible assets was $0.4 million and $0.1 million, respectively.
As of December 31, 2025, total unrecognized stock-based compensation cost, net of estimated forfeitures, related to our unvested stock awards was $52.2 million. This amount is based on an estimated future forfeiture rate of 2.34% per year and will be recognized over a weighted-average period of approximately 3.2 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 29, 2024 | |
| 2022 | Apr 18, 2023 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.