Core Insights - D-Wave Quantum Inc. (QBTS) has experienced a remarkable growth of 1,343.6% over the past year, indicating strong investor confidence in its quantum annealing technology [1][7] - The company is focusing on practical applications of quantum technology, particularly in optimization problems, which sets it apart from competitors like IBM and Alphabet [2][5] Company Performance - D-Wave's Advantage2 prototype has demonstrated quantum advantage by completing complex tasks in minutes, which would take classical supercomputers millennia [5][7] - The Leap cloud platform and partnerships with companies such as Ford Otosan and NTT DOCOMO are generating real commercial value for D-Wave [5][7] Industry Context - IBM is developing its Quantum Starling, a fault-tolerant quantum computer expected to launch by 2029, which will significantly enhance operational capabilities [6] - Alphabet's Willow processor has achieved a milestone in quantum error correction, with expectations for real-world applications in the next five years [8] Financial Estimates - The Zacks Consensus Estimate for D-Wave's 2025 earnings suggests a 72% year-over-year improvement [9] - Current estimates indicate a gradual improvement in earnings per share (EPS) from -0.10 a year ago to -0.21 in 2025, with a projected growth of 30% for the current quarter and 45.45% for the next quarter [10]

Financial Data and Key Metrics Changes - Revenues in Q1 2025 were $1,500,000, down from $3,100,000 in Q1 2024, indicating a significant decline [12] - Gross margins decreased to 30% in Q1 2025 from 49% in Q1 2024, primarily due to lower margin revenues from a contract with the UK's NQCC [12] - Total operating expenses (OpEx) increased to $22,100,000 in Q1 2025 from $18,100,000 in the same period last year, driven by salary increases, new hires, and higher stock compensation expenses [13] - The operating loss for Q1 2025 was $21,600,000, compared to $16,600,000 in the prior year [13] - The company recorded a net income of $42,600,000 in Q1 2025, a turnaround from a net loss of $20,800,000 in Q1 2024, largely due to favorable non-cash changes in derivative warrant and earn-out liabilities [14] Business Line Data and Key Metrics Changes - The company is focusing on advancing its utility scale quantum computer concept, collaborating with Riverlane on quantum error correction technology [4][5] - The consortium for the AFOSR award aims to develop chip fabrication technology, with a total award of $5,480,000 [5] Market Data and Key Metrics Changes - The company is actively participating in DARPA's quantum benchmarking initiative, which is critical for advancing utility scale quantum computing [4][28] - The interest in quantum computing remains primarily in R&D, with significant government contracts driving current sales [38][41] Company Strategy and Development Direction - The company is pursuing a chiplet approach to scale qubit counts, aiming for 36 qubits by mid-2025 and over 100 qubits by the end of 2025 [16][18] - The strategy includes enhancing quantum error correction capabilities and integrating digital chip-based technology with existing systems [8][9] - The partnership with Quanta Computer is strategic, focusing on non-GPU hardware components, which will allow the company to concentrate on QPU development [91][94] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the NQI reauthorization bill, which is expected to pass with bipartisan support, although funding may take additional time to materialize [21][48] - The company anticipates that achieving quantum advantage will take at least three to five years, with current efforts focused on R&D and technology milestones [38][42] Other Important Information - The company has closed a $35,000,000 investment from Quanta Computer, which strengthens their strategic collaboration [10][90] - The company is exploring optical signaling as a future technology to improve scalability and reduce thermal load in quantum systems [78][81] Q&A Session Summary Question: Progress on chip tiling and timelines - Management confirmed confidence in the chiplet approach to achieve 36 qubits by mid-2025 and over 100 by the end of 2025, with promising data supporting this strategy [16][17] Question: Updates on the DARPA contract - The DARPA Quantum Benchmarking Initiative is crucial for utility scale quantum computing, with specific milestones related to qubit count and fidelity required to progress to the next phase [26][28] Question: Revenue from DARPA phases - Phase A of the DARPA project includes a $1,000,000 award, with expectations for increased funding in subsequent phases [34] Question: Customer interest in quantum processors - Current interest remains in R&D, with significant government funding impacting the conversion of interest into orders [40][41] Question: Optical signaling and its roadmap - Optical signaling is a key element for future scalability, with expectations to transition from coax to fiber optic cables in the next three to four years [78][81] Question: NQCC revenue recognition timeframe - Revenue from the NQCC opportunity is expected to be recognized over the next year, with a similar timeline for the Air Force contract [84]

Financial Data and Key Metrics Changes - Revenues in Q1 2025 were $1,500,000, down from $3,100,000 in Q1 2024, indicating a significant decline [12] - Gross margins decreased to 30% in Q1 2025 from 49% in Q1 2024, primarily due to lower margins from a contract with the UK's NQCC [12] - Total operating expenses (OpEx) increased to $22,100,000 in Q1 2025 from $18,100,000 in the same period last year, driven by salary increases, new hires, and higher stock compensation expenses [13] - The operating loss for Q1 2025 was $21,600,000, compared to $16,600,000 in the prior year [13] - The company recorded a net income of $42,600,000 in Q1 2025, a turnaround from a net loss of $20,800,000 in the previous year, largely due to favorable non-cash changes in derivative warrant and earn-out liabilities [14] Business Line Data and Key Metrics Changes - The company is focusing on advancing its utility scale quantum computer concept through collaborations and government contracts, which are critical for future sales [4][5] - The NQCC contract is noted for its lower gross margin profile, impacting overall profitability [12] Market Data and Key Metrics Changes - The company has been awarded multiple contracts, including a $1,000,000 award from DARPA for the Quantum Benchmarking Initiative, which is seen as strategically important despite its relatively small monetary value [34] - Interest in quantum computing remains primarily in R&D, with significant reliance on government contracts and academic research funding [41] Company Strategy and Development Direction - The company aims to demonstrate a chiplet approach to scale qubit counts, targeting over 100 qubits by the end of 2025 [16][19] - The strategy includes collaborations with various institutions to enhance quantum error correction capabilities and improve chip fabrication technology [5][6] - The company is optimistic about the NQI reauthorization, which is expected to provide funding for quantum computing initiatives, although delays in passing the bill are noted [22][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the chiplet approach as a means to scale up qubit counts, emphasizing its importance for the entire industry [19] - The company is optimistic about the future of quantum computing, although it acknowledges that achieving quantum advantage is still several years away [39] - Management highlighted the strategic importance of government contracts and collaborations in driving future growth [41][42] Other Important Information - The company has closed a $35,000,000 investment from Quanta Computer, which is expected to strengthen their partnership and reduce R&D costs in non-QPU hardware areas [10][96] - The company is exploring optical signaling as a future technology to improve scalability and reduce thermal load in quantum computing systems [80][84] Q&A Session Summary Question: Progress on chip tiling to reach 36 qubits - Management confirmed that the chiplet approach is critical for scaling qubit counts and expressed confidence in achieving the target by mid-year [16][19] Question: Updates on NQI Reauthorization Act - Management noted bipartisan support for the NQI reauthorization but indicated that it has not yet passed, with funding expected to take additional time to flow [21][50] Question: Details on the DARPA contract - The DARPA Quantum Benchmarking Initiative is crucial for developing utility scale quantum computing, with specific milestones related to qubit fidelity and gate speed [27][90] Question: Customer interest in acquiring processors - Management stated that interest remains high, but funding issues are currently hindering conversion to orders [41][42] Question: Timeframe for the 36 qubit QPU upgrade - Management indicated that the upgrade could occur in the second half of the year, depending on the demonstration of the chiplet approach [51][54] Question: Importance of optical signaling - Management emphasized the significance of optical signaling for future scalability and the transition from coax to fiber optic cables [80][84] Question: Revenue recognition from NQCC and Air Force contracts - Management expects revenue from the NQCC contract to be recognized over the next year, with the Air Force contract contributing approximately $1,000,000 over its three-year term [87]

Core Insights - Rigetti Computing, Inc. reported its financial results for Q1 2025, highlighting significant government-funded projects and advancements in quantum computing technology [1][2][3] Financial Highlights - Total revenues for Q1 2025 were $1.5 million, a decrease from $3.1 million in Q1 2024 [7][23] - Total operating expenses for Q1 2025 were $22.1 million, compared to $18.1 million in Q1 2024 [7][23] - The operating loss for Q1 2025 was $21.6 million, up from a loss of $16.6 million in Q1 2024 [7][23] - Net income for Q1 2025 was $42.6 million, which includes $62.1 million of non-cash gains from changes in fair value of derivative warrant and earn-out liabilities [7][23] - As of March 31, 2025, cash, cash equivalents, and available-for-sale investments totaled $209.1 million, increasing to $237.7 million by April 30, 2025 [7][9] Recent Business Developments - Rigetti was selected to participate in DARPA's Quantum Benchmarking Initiative, advancing to Stage A with a potential value of up to $1 million [4] - The company received a $5.48 million AFOSR award to develop its chip fabrication technology, collaborating with several academic institutions [5] - Rigetti was awarded £3.5 million in Innovate UK Quantum Mission Pilot Awards to enhance quantum error correction capabilities [6] Technical Updates - Rigetti successfully demonstrated the integration of a hybrid microwave-optical quantum transducer with a superconducting qubit, enabling optical control and promising scalability [12] - The company leveraged its new quantum optimization algorithm, quantum preconditioning, to improve classical optimizers for energy grid problems, showcasing practical applications of quantum computing [13] Strategic Collaborations - Rigetti closed a $35 million investment from Quanta Computer, enhancing its strategic collaboration [9] - Collaborations with various institutions aim to create an open-architecture quantum computing testbed and improve quantum error correction [18]

Summary of Rigetti Computing Conference Call Company Overview - Rigetti Computing is a pioneer in full-stack quantum computing, operating superconducting quantum computers since 2017 through a cloud services platform and selling on-premise quantum computers since 2021 [2][8] - The company developed the first multichip processor in the industry and manufactures superconducting quantum processing units (QPUs) in-house at a dedicated facility [2] Core Industry Insights - Quantum computing is an emerging technology that fundamentally differs from classical computing by using qubits instead of bits, allowing for exponential computing capabilities and lower energy consumption [5][6] - Rigetti focuses on gate-based quantum computing, which is expected to dominate the industry, while acknowledging niche applications for other modalities like annealing [12][14] Technological Advantages - The advantages of superconducting technology include scalability and gate speed, with Rigetti's gate speeds comparable to current CPU and GPU technologies [16][17] - Recent advancements have improved two-qubit gate fidelity to 99.5%, with a target of reaching 99.8% to enable commercial applications [24][25] Roadmap and Future Goals - Rigetti aims to demonstrate a quantum computer with over 100 qubits and maintain high fidelity in 2024, with plans to increase qubit count and fidelity in subsequent years [27] - The company is pursuing a modular chiplet architecture to facilitate scaling, which has shown promising results in initial deployments [28][34] Quantum Networking and Error Correction - Rigetti believes in a hybrid computing model where quantum computers coexist with classical systems, rather than requiring a separate quantum network [41][42] - The company is collaborating with Riverlane to develop real-time error correction codes, which are critical for future quantum computing applications [46][51] Strategic Partnerships - Rigetti has formed a strategic partnership with Quanta Computer, which includes a $35 million investment and a commitment of $250 million over five years for non-quantum hardware development [82][86] - This partnership is aimed at enhancing Rigetti's manufacturing capabilities and reducing R&D costs as the business scales [85] Government Funding and Legislative Updates - The National Quantum Computing Act is pending reauthorization, which is crucial for long-term funding and support for quantum initiatives [90][92] - Rigetti has secured funding from DARPA and the Air Force Research Lab, indicating strong government interest in quantum technologies [93] Conclusion - Rigetti Computing is positioned at the forefront of quantum computing technology, focusing on scalability, fidelity, and strategic partnerships to drive future growth and commercialization [95]