Rigetti Computing Today RGTI Rigetti Computing $16.23 +0.03 (+0.20%) 52-Week Range $0.66 ▼ $21.42 Price Target $17.43 Add to Watchlist Shares of Rigetti Computing Inc. NASDAQ: RGTI are down more than 2% the day after the quantum computing company delivered a mixed earnings report. Revenue of $1.8 million was roughly in line with expectations for $1.87 million. The -5 cents earnings per share (EPS) came in 1 cent better than the 6-cent loss analysts had forecast. However, the company also reported a substant ...

Quantum Computing Advancements - Regetti Computing launched its Sephius i36Q multi-chip quantum computer, featuring a chiplet-based system with four chiplets of 9 qubits each, totaling 36 qubits [1][3] - The new system achieves an improved fidelity of 995%, referred to as 2-qubit gate fidelity, with gate speeds of approximately 60-70 nanoseconds [3] - Regetti previously announced an 84-qubit single-chip system with 990% 2-qubit fidelity [3] - Chiplet architecture is crucial for scaling quantum computing to thousands or tens of thousands of qubits [4] Technical Challenges and Goals - Achieving quantum advantage requires at least 1,000 qubits, 999% or better 2-qubit gate fidelity, gate speeds faster than 50 nanoseconds, and real-time error correction [5] - Improving fidelity from 995% to 999% is a significant engineering challenge, drawing parallels to advancements in the CMOS industry [8] - While gate speed improvement is needed, fidelity improvement is considered the more significant hurdle [9] Quantum Computing Applications and Future - Quantum computers can solve currently unsolvable problems with classical computing, while consuming less energy [10] - Quantum computing offers potentially a million or a billion times better computing power with a fraction of the energy consumption [11][12] - Potential applications include weather forecasting, AI (bridging the gap from GenAI to AGI), drug discovery, material synthesis, and encryption [12][13] - The quantum computing business is projected to reach hundreds of billions of dollars in a decade or two, but the technology is still in the R&D stage [13][14] Financial Status - Regetti Computing has approximately $572 million in cash reserves as of the end of the last quarter [19] - The company's current burn rate is around $60 million, providing sufficient funds to commercialize quantum computers and reach profitability [19]

Group 1 - Rigetti Computing, Inc. has shown clear progress in its technology following the release of Q2 2025 earnings [1] - The company operates a "full-stack" setup, which is significant for its quantum computing capabilities [1] Group 2 - The focus of the research is primarily on small- to mid-cap companies, which are often overlooked by investors [1] - Occasionally, larger-cap companies are analyzed to provide a broader perspective on equity markets [1]

On paper, they couldn't be more different. One has a billion-dollar war chest, the other, a half-billion. One favors slow, steady qubits that have been coaxed into new tricks; the other rides lightning-fast gates that could leave competitors in the dust. And yet, in the race toward quantum advantage, Rigetti Computing Inc. RGTI and IonQ Inc. IONQ are barreling toward the same finish line — from opposite ends of the track. RGTI is among today's weakest performers. See the complete data here. IonQ's trapped-i ...

Core Viewpoint - Rigetti Computing reported a larger-than-expected loss for Q2 2025, with significant revenue decline and a focus on advancing its quantum computing technology [1][2]. Financial Performance - The company reported an adjusted loss per share of $0.13, compared to the market expectation of a loss of $0.04 [1]. - Total revenue for the quarter was $1.8 million, a year-over-year decrease of 41.9%, falling short of the expected $1.87 million [1]. - Net loss for the quarter was $39.7 million, which included a non-cash loss of $22.8 million related to warrant derivatives and fair value changes [1]. - Operating expenses were $20.4 million, leading to an operating loss of $19.9 million [1]. - Rigetti completed a $350 million equity financing, enhancing its financial position, and reported approximately $571.6 million in cash and equivalents with no debt as of June 30, 2025 [1]. Technological Advancements - Rigetti introduced its multi-chip quantum computer "Cepheus-1-36Q," claiming it to be the largest in the industry, featuring four small chips with a median two-qubit gate fidelity of 99.5% [2]. - The error rate of the new system is reduced by half compared to the previous Ankaa-3 system [2]. - The company plans to launch a system with over 100 qubits by the end of 2025, maintaining a median two-qubit gate fidelity of 99.5% [2]. - The quantum computing systems leverage quantum mechanics properties, potentially surpassing traditional computing capabilities in specific areas [2]. Industry Context - Despite advancements, no company has yet achieved practical, large-scale quantum computing with precise control over quantum states [3]. - Industry leaders like NVIDIA and Microsoft are pushing towards significant technological breakthroughs in quantum computing [4]. - The quantum technology investment surge has led to a dramatic increase in Rigetti's stock price, which has risen over 1700% in the past year, although it saw a 3.5% drop post-earnings announcement [4].

Financial Performance - Rigetti Computing reported a quarterly loss of $0.05 per share, better than the Zacks Consensus Estimate of a loss of $0.06, and an improvement from a loss of $0.07 per share a year ago, resulting in an earnings surprise of +16.67% [1] - The company posted revenues of $1.8 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 5.71%, and a decline from year-ago revenues of $3.09 million [2] - Over the last four quarters, Rigetti has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during the same period [2] Stock Performance and Outlook - Rigetti Computing shares have increased approximately 4.7% since the beginning of the year, compared to the S&P 500's gain of 8.4% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $2.39 million, and for the current fiscal year, it is -$0.05 on revenues of $8.78 million [7] - The company's Zacks Rank is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Internet - Software industry, to which Rigetti belongs, is currently in the top 39% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - Revenues for Q2 2025 were $1.8 million, down from $3.1 million in Q2 2024, impacted by the expiration of the National Quantum Initiative [10][11] - Gross margins decreased to 31% in Q2 2025 from 64% in Q2 2024, affected by revenue mix and pricing variability in development contracts [11] - Total operating expenses increased to $20.4 million in Q2 2025 from $18.1 million in Q2 2024, due to salary increases, new hires, and higher consulting costs [11][12] - The operating loss for Q2 2025 was $19.9 million, compared to $16.1 million in the prior year [12] - The net loss for Q2 2025 was $39.7 million, significantly higher than the $12.4 million net loss in Q2 2024, influenced by noncash charges related to derivative warrant liabilities [12][13] - As of June 30, 2025, the company had approximately $571.6 million in cash and no debt [13] Business Line Data and Key Metrics Changes - The company achieved a median two-qubit gate error rate of 99.5% with the CFES-136U system, marking a 2x reduction from the previous ANCA-3 system [5][7] - The CFES-136Q is the first multi-chip quantum computer to achieve this level of performance, validating the company's approach to scaling [5][6] Market Data and Key Metrics Changes - The expiration of the National Quantum Initiative and its pending reauthorization in the U.S. Congress is critical for future sales, particularly to U.S. and foreign governments [10][11] Company Strategy and Development Direction - The company aims to continue its focus on R&D and is exploring opportunities for mergers and acquisitions to accelerate its timeline [18][43] - The goal is to deliver a multi-chip 100+ qubit system with 99.5% two-qubit gate fidelity by the end of 2025, with a long-term target of achieving quantum advantage within four years [19][30] - The company believes that superconducting qubits are the leading modality for quantum computers due to their scalability and speed advantages [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving technology milestones and emphasized that technology development remains the key metric for long-term success [8][19] - The management acknowledged the challenges in achieving quantum advantage, including the need for error correction and faster gate speeds [32][36] - There is optimism regarding bipartisan support for the reauthorization of the National Quantum Initiative, which is expected to enhance funding opportunities [70][71] Other Important Information - The company has completed the sale of $350 million in common stock to strengthen its balance sheet [8] - The partnership with Quanta is viewed as strategic, focusing on control systems and hardware stack development [22][98] Q&A Session Summary Question: Use of proceeds from the recent equity raise - The company intends to focus on R&D development and will consider opportunities to accelerate timelines using its balance sheet [18] Question: Update on Quanta's involvement - Quanta is investing in the non-QPU portion of the hardware stack, focusing on control systems to work with the company's QPUs [22] Question: Confidence in achieving 100 qubit chip - The company is confident in reaching 100+ qubits with 99.5% fidelity by the end of the year, leveraging the chiplet approach for easier scaling [28] Question: Roadmap for gate speeds - The company aims to achieve gate speeds faster than 50 nanoseconds, which is critical for quantum advantage [49][50] Question: Current valuations in quantum assets and M&A - The company is open to M&A opportunities but currently sees no practical options that would significantly accelerate its timeline [44] Question: Updates on government funding and initiatives - The company continues to engage with the DOE and DOD, maintaining strong relationships despite the lack of NQI funding [106][107]

Financial Data and Key Metrics Changes - Revenues for Q2 2025 were $1.8 million, down from $3.1 million in Q2 2024, impacted by the expiration of the National Quantum Initiative [11][12] - Gross margins decreased to 31% in Q2 2025 from 64% in Q2 2024, affected by revenue mix and pricing variability in development contracts [12] - Total operating expenses increased to $20.4 million in Q2 2025 from $18.1 million in the prior year, due to salary increases, new hires, and higher consulting costs [12][13] - Operating loss for Q2 2025 was $19.9 million, compared to $16.1 million in Q2 2024, with a net loss of $39.7 million in Q2 2025 versus $12.4 million in Q2 2024 [13][14] - As of June 30, 2025, the company had approximately $571.6 million in cash and no debt [14] Business Line Data and Key Metrics Changes - The company achieved a median two-qubit gate error rate of 99.5% with the CFES-136U system, a 2x reduction from the previous ANCA-3 system [5][6] - The CFES-136Q is the first multi-chip quantum computer to achieve this level of performance, validating the company's approach to scaling quantum computers [5][7] Market Data and Key Metrics Changes - The expiration of the National Quantum Initiative and its pending reauthorization in the U.S. Congress is critical for future sales, particularly to U.S. and foreign governments [11][12] Company Strategy and Development Direction - The company aims to continue its momentum in technology development, with plans to release a 100+ qubit chiplet-based system at 99.5% median two-qubit gate fidelity before the end of 2025 [8][9] - The focus remains on R&D development, with the potential for M&A opportunities to accelerate timelines if beneficial [18][44] - The company believes that superconducting qubits are the leading modality for quantum computers due to their scalability and speed advantages [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving technology milestones and emphasized that the key metric for long-term success is the achievement of technology goals rather than revenue growth [9] - The management team is optimistic about the bipartisan support for the reauthorization of the National Quantum Initiative, which is expected to enhance funding opportunities [69][70] Other Important Information - The company completed the sale of $350 million in common stock to strengthen its balance sheet [9] - The partnership with Quanta is viewed as strategic, focusing on control systems and hardware stack development [24][100] Q&A Session Summary Question: Use of proceeds from the recent equity raise - The company intends to focus on R&D development and will consider M&A opportunities if they can accelerate timelines [18][20] Question: Update on Quanta's involvement - Quanta is focused on developing control systems and is seen as a strategic partner for hardware development [24] Question: Confidence in achieving 100 qubit chip - The company is confident in reaching 100+ qubit systems with 99.5% fidelity by year-end, leveraging the chiplet approach [30][31] Question: Roadmap for gate speeds - The company aims to achieve gate speeds below 50 nanoseconds, which is critical for quantum advantage [47][50] Question: Current status of government funding - There is bipartisan support for the National Quantum Initiative reauthorization, with ongoing discussions in Congress [69][70] Question: Feedback from QBI or NQCC - The company is actively engaged with both organizations and is optimistic about progressing to phase two of the DARPA initiative [76][77] Question: Transitioning to larger chiplet sizes - The company is evaluating the optimal chiplet size and plans to transition before reaching 1,000 qubits [59][60] Question: Implications of chiplet approach on customer interest - The chiplet approach is seen as essential for scaling to fault-tolerant quantum computing, generating interest from government customers [86][87]

Core Insights - Rigetti Computing reported a quarterly loss of 13 cents per share, missing the analyst consensus estimate of a 6-cent loss [1] - Quarterly revenue was $1.8 million, below the analyst consensus estimate of $1.88 million, and down from $3.086 million in the same period last year [1][4] - Total operating expenses for the quarter were $20.4 million, resulting in an operating loss of $19.9 million and a net loss of $39.7 million [4] Company Developments - Rigetti announced the general availability of its multi-chip quantum computer, Cepheus 1-36Q, which is a significant technological advancement for the company [3] - CEO Dr. Subodh Kulkarni expressed confidence in achieving year-end technology goals, highlighting the company's proprietary chiplet approach and strong financial position [2]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited H1 2025 financials show total assets surged to **$636.7 million** from financing, achieving **$3.0 million** net income despite revenue decline and wider operating loss [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets surged to **$636.7 million** driven by cash and investments, with equity increasing and liabilities decreasing Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $57,183 | $67,674 | | Available-for-sale investments | $514,459 | $149,488 | | Total current assets | $433,579 | $206,758 | | Total assets | $636,690 | $284,787 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $10,430 | $11,867 | | Derivative warrant liabilities | $60,116 | $93,095 | | Earn-out liabilities | $6,371 | $45,897 | | Total liabilities | $83,427 | $158,198 | | Total stockholders' equity | $553,263 | $126,589 | | Total liabilities and stockholders' equity | $636,690 | $284,787 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue decreased and operating loss widened, but H1 2025 achieved **$3.0 million** net income primarily due to non-operating fair value gains Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,801 | $3,086 | $3,273 | $6,138 | | Gross Profit | $566 | $1,990 | $1,008 | $3,490 | | Loss from Operations | $(19,882) | $(16,085) | $(41,514) | $(32,670) | | Net Income (Loss) | $(39,654) | $(12,421) | $2,965 | $(33,194) | | Net Income (Loss) per Share - basic | $(0.13) | $(0.07) | $0.01 | $(0.21) | - The significant swing to **net income** for the six months ended June 30, 2025, was primarily due to **non-operating gains** from changes in the fair value of derivative warrant liabilities (**+$32.7M**) and earn-out liabilities (**+$6.6M**)[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw **$389.1 million** cash inflow from financing, offsetting operating and investing outflows, ending with **$57.2 million** cash and equivalents Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(29,820) | $(26,656) | | Net cash used in investing activities | $(369,732) | $(7,033) | | Net cash provided by financing activities | $389,095 | $33,093 | | Net decrease in cash and cash equivalents | $(10,491) | $(708) | | Cash and cash equivalents – end of period | $57,183 | $20,684 | - **Financing activities** were the **primary source of cash**, with **$346.7 million** from an **ATM offering** and **$35.0 million** from a **private placement with Quanta**[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the anticipated loss of EGC status, significant financing activities including a **$350 million** ATM offering, a **$35 million** Quanta private placement, and high revenue concentration from government entities - The company will **lose its 'Emerging Growth Company' (EGC) and 'smaller reporting company' status** as of **December 31, 2025**, which will lead to **increased disclosure requirements and compliance costs**, including an **auditor's attestation on internal controls**[37](index=37&type=chunk) - In May 2025, the company completed an **At-the-Market (ATM) offering**, raising gross proceeds of **$350 million** from the sale of **30.3 million shares** at a weighted average price of **$11.55 per share**[95](index=95&type=chunk)[96](index=96&type=chunk) - A **collaboration agreement** was signed with **Quanta Computer Inc.** in February 2025, involving **mutual commitments to invest at least $250 million each** in quantum computing over **five years**, and Rigetti completed a **$35 million private placement** with Quanta[137](index=137&type=chunk)[138](index=138&type=chunk)[140](index=140&type=chunk) - Revenue is **highly concentrated**, with sales to **government entities** comprising **90.7% of total revenue** for the six months ended June 30, 2025, and **Four customers (B, C, D, F)** accounted for **95% of accounts receivable** as of June 30, 2025[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses H1 2025 revenue decline and wider operating loss, offset by non-cash gains leading to net income, with liquidity bolstered by **$350 million** ATM and **$35 million** private placement, alongside quantum computing milestones [Overview and Recent Developments](index=27&type=section&id=Overview%20and%20Recent%20Developments) Rigetti, building quantum computers, focuses on QPUs/QCaaS, with recent **$350 million** ATM offering, Quanta collaboration, and achieved **99.5%** two-qubit gate fidelity milestone - The company's **long-term business model** centers on revenue from sales of **quantum processing units (QPUs)** and **Quantum Computing as a Service (QCaaS)**, but the majority of current revenues are from **development contracts**[147](index=147&type=chunk) - On July 16, 2025, the company announced it achieved its **mid-year performance milestone** of **99.5% median two-qubit gate fidelity** on a **modular 36-qubit system** and expects to release a **100+ qubit chiplet-based system** with similar fidelity before the end of 2025[152](index=152&type=chunk) - The company completed a **$350 million At-the-Market (ATM) offering** in Q2 2025, raising net proceeds of **$346.7 million**[154](index=154&type=chunk) - A **collaboration agreement with Quanta** was established, involving a **$35 million private placement** and a commitment for each party to **invest at least $250 million** in quantum computing over five years[155](index=155&type=chunk)[157](index=157&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) H1 2025 revenue decreased by **47%**, gross profit fell by **71%**, and operating expenses rose by **18%**, leading to a wider **$41.5 million** operating loss, though non-cash gains resulted in **$3.0 million** net income Comparison of Results for the Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $3,273 | $6,138 | $(2,865) | (47)% | | Gross Profit | $1,008 | $3,490 | $(2,482) | (71)% | | Research and development | $28,977 | $23,341 | $5,636 | 24% | | Selling, general and administrative | $13,545 | $12,819 | $726 | 6% | | Loss from operations | $(41,514) | $(32,670) | $(8,844) | 27% | | Total other income (expense), net | $44,479 | $(524) | $45,003 | NM | | Net income (loss) | $2,965 | $(33,194) | $36,159 | (109)% | - The **decrease in revenue** was mainly due to **reductions in collaborative research and professional services contracts**, impacted by the **pending reauthorization of the National Quantum Initiative Act**[168](index=168&type=chunk) - The **increase in R&D expenses** was mainly due to a **$3.2 million increase in salaries and employee-related costs** and a **$1.1 million increase in stock-based compensation**[175](index=175&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Despite historical losses and a **$551.8 million** accumulated deficit, management believes current liquidity, bolstered by **$389.1 million** from financing, is sufficient for 12 months, with future **$250 million** Quanta collaboration commitments - The company believes its existing cash, cash equivalents, and available-for-sale investments are **sufficient to meet operating needs for at least the next 12 months**[188](index=188&type=chunk) - Cash provided by **financing activities** totaled **$389.1 million** for the six months ended June 30, 2025, primarily from the **ATM offering** and the **Quanta private placement**[206](index=206&type=chunk) - **Long-term cash requirements** include a commitment to **invest at least $250.0 million** in quantum computing over a **five-year period** as part of the **Collaboration Agreement with Quanta**[192](index=192&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risks](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risks - As a **smaller reporting company**, Rigetti is **not required to provide quantitative and qualitative disclosures about market risk**[217](index=217&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were **effective at a reasonable assurance level**[219](index=219&type=chunk) - **No material changes in internal control over financial reporting** occurred during the quarter ended June 30, 2025[220](index=220&type=chunk) [PART II — OTHER INFORMATION](index=36&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The company is **not currently involved in any material legal proceedings**[223](index=223&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) A key risk is the loss of 'emerging growth company' and 'smaller reporting company' status after **December 31, 2025**, leading to increased compliance requirements and costs - A new material risk is that the company will **lose its 'emerging growth company' (EGC) and 'smaller reporting company' status** as of **December 31, 2025**[225](index=225&type=chunk) - The loss of EGC status will subject the company to **increased compliance requirements**, such as **auditor attestation of internal controls** under Sarbanes-Oxley Act Section 404(b) and **more detailed executive compensation disclosures**, leading to **higher compliance costs**[226](index=226&type=chunk)[230](index=230&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the period - None[227](index=227&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) Two board members, Thomas Iannotti and Gail Sandford, adopted Rule 10b5-1 trading plans for common stock sales - On May 15, 2025, director **Thomas Iannotti** adopted a **trading plan** for the sale of **up to 200,000 shares** of Common Stock, scheduled to terminate by **August 13, 2026**[232](index=232&type=chunk) - On June 12, 2025, director **Gail Sandford** adopted a **trading plan** for the sale of shares, scheduled to terminate by **September 10, 2026**[233](index=233&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and interactive data files