Rigetti Computing, Inc. (RGTI) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights a strong financial position with $571.6 million in cash, optimistic guidance on achieving high fidelity in quantum computing, and potential revenue from Novera system sales. The Q&A section reveals confidence in reaching technical milestones and integrating with NVIDIA's NVQLink, despite some uncertainties about DARPA selection and external foundry capabilities. The positive sentiment from analysts and management's forward-looking strategies suggest a likely positive impact on stock price.
Key Financial Performance
Revenue $1.9 million in Q3 2025, compared to $2.4 million in Q3 2024, a decrease due to the expiration of the National Quantum Initiative and its pending reauthorization in the U.S. Congress.
Gross Margins 21% in Q3 2025, compared to 51% in Q3 2024, a decrease due to the composition of revenue and variability in pricing and terms of contracts, including lower-margin contracts with the U.K.'s National Quantum Computing Center.
Operating Expenses (OpEx) $21 million in Q3 2025, compared to $18.6 million in Q3 2024, an increase due to annual salary increases, new hires, higher stock-based compensation, and consulting costs primarily in R&D.
Stock Compensation Expense $4.3 million in Q3 2025, compared to $3.4 million in Q3 2024, an increase due to higher stock-based compensation.
Operating Loss $20.5 million in Q3 2025, compared to $17.3 million in Q3 2024, an increase due to higher operating expenses.
GAAP Net Loss Higher in Q3 2025 compared to Q3 2024, primarily due to the noncash change in the fair value of derivative warrant and earn-out liabilities.
Non-GAAP Net Loss $10.7 million or $0.03 per share in Q3 2025, compared to $13.4 million or $0.07 per share in Q3 2024, an improvement.
Cash, Cash Equivalents, and Investments $558.9 million as of September 30, 2025, with an additional $46.5 million received from public warrant exercises, totaling approximately $600 million as of November 6, 2025.
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Operating Highlights
100-plus qubit chiplet-based quantum system: On track to deliver by the end of 2025 with 99.5% median 2-qubit gate fidelity.
150-plus qubit system: Expected deployment by the end of 2026 with 99.7% median 2-qubit gate fidelity.
1,000-plus qubit system: Expected deployment by the end of 2027 with 99.8% median 2-qubit gate fidelity.
9-qubit Novera quantum computing systems: Two systems sold for $5.7 million in September 2025 to an Asian technology manufacturing company and a California-based startup for quantum computing expertise and research.
Italian subsidiary: Plans to open a subsidiary in Italy to pursue business opportunities and talent as the region increases quantum initiatives.
Memorandum of Understanding with C-DAC: Collaboration with India's premier R&D organization to design and develop hybrid quantum computing systems.
AFRL contract: Secured a 3-year $5.8 million contract to advance superconducting quantum networking in collaboration with QphoX.
Montana State University partnership: First academic institution with on-premises Rigetti quantum computer for advancing quantum R&D.
NVIDIA NVQLink collaboration: Supporting NVIDIA's platform for AI supercomputer quantum integration to accelerate hybrid computation development.
DARPA Quantum Benchmarking Initiative: Engaged in Stage A; not selected for Phase B but optimistic for future participation.
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Risk or Challenges
Revenue Decline: Revenues in Q3 2025 were $1.9 million, down from $2.4 million in Q3 2024, impacted by the expiration of the National Quantum Initiative and its pending reauthorization in the U.S. Congress.
Gross Margin Decline: Gross margins dropped to 21% in Q3 2025 from 51% in Q3 2024 due to revenue composition and variability in contract pricing, including lower-margin contracts with the U.K.'s National Quantum Computing Center.
Increased Operating Expenses: Total operating expenses rose to $21 million in Q3 2025 from $18.6 million in Q3 2024, driven by salary increases, new hires, higher stock-based compensation, and consulting costs, primarily in R&D.
Operating Loss: Operating loss increased to $20.5 million in Q3 2025 from $17.3 million in Q3 2024, reflecting higher expenses and lower gross margins.
DARPA Phase B Exclusion: Rigetti was not selected for Phase B of DARPA's quantum benchmarking initiative, which could delay potential opportunities and funding from this program.
Dependence on Government Initiatives: Future sales are tied to the renewal of the U.S. National Quantum Initiative and sales to government entities, creating uncertainty in revenue streams.
Lower Gross Margin Contracts: Recent contracts, such as those with the U.K.'s National Quantum Computing Center, have lower gross margin profiles, impacting overall profitability.
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Guidance & Outlook
100-plus qubit chiplet-based quantum system: Expected to be delivered by the end of 2025 with an anticipated 99.5% median 2-qubit gate fidelity.
150-plus qubit system: Planned deployment by or around the end of 2026 with an anticipated 99.7% median 2-qubit gate fidelity.
1,000-plus qubit system: Planned deployment by or around the end of 2027 with an anticipated 99.8% median 2-qubit gate fidelity.
Revenue impact from recent sales: The sales of two 9-qubit Novera systems and the AFRL contract are expected to benefit revenue in Q4 2025 and into 2026.
Collaboration with C-DAC: Plans to design and develop hybrid quantum computing systems and related technologies for market introduction.
Italian subsidiary: Rigetti plans to open an Italian subsidiary in the coming months to pursue business opportunities and talent in the region.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you discuss the status of the DARPA Phase B project and what is holding it up?
A:DARPA did the initial selection for Phase B, but the company was not selected. They received constructive feedback focusing on error corrections and long-range coupling for the FTQC milestone in 2033. The company is optimistic about making the cut in the next few months and continues to work closely with DARPA.
Q:Is the focus on conceptual performance metrics rather than current achievements for the DARPA project?
A:Yes, the feedback from DARPA was more about future work and plans for error correction and long-range coupling rather than current performance metrics, which were positively received.
Q:What is the comfort level in achieving 99% fidelity by 2027 to reach quantum advantage?
A:The company is confident in achieving 99.7% fidelity with 150+ qubits by 2026 and 99.8% fidelity with over 1,000 qubits by 2027. However, achieving quantum advantage will require 99.9% fidelity and error correction, which they aim to accomplish between 2027 and 2029.
Q:Will the 1,000-qubit system in 2027 still use a chiplet-based approach?
A:Yes, the 1,000-qubit system will use 36-qubit chiplets. The company is confident in achieving 99.8% fidelity with this approach, and long-range coupling challenges are not worsened by using chiplets.
Q:How will revenue from the AFRL contract and Novera system sales be recognized?
A:Revenue from the AFRL contract will be recognized ratably over three years. For the two Novera system sales, revenue will be recognized upon shipment, expected in Q1 and Q2 of 2026.
Q:Are the two Novera system sales complete systems or just QPU chips?
A:The two Novera systems are complete systems, including dilution refrigerators and control systems. Upgrades from 9-qubit to higher qubit counts will generate additional revenue.
Q:What changes are needed to support NVIDIA's NVQLink interface, and what are its implications?
A:The company supports hybrid systems and sees NVQLink as a natural step to integrate quantum computing with AI supercomputers for GenAI and AGI applications. This aligns with their vision of hybrid ecosystems, but practical applications in data centers will depend on achieving quantum advantage.
Q:What is Rigetti's position with National Labs and its integration with NVQLink?
A:Rigetti has a strong position with National Labs, similar to NVIDIA. They plan to demonstrate hybrid systems combining CPUs, GPUs, and QPUs for applications like financial forecasting and drug discovery.
Q:What is the progress on achieving 99.7% fidelity for 9-qubit chiplets and the 2027 roadmap?
A:The company is confident in achieving 99.7% fidelity with 150+ qubits by 2026 and is working on scaling to 36-qubit chiplets for the 1,000-qubit system by 2027. Current data from 9-qubit chiplets supports these milestones.
Q:What are the plans for upgrading or building a new chip fab facility?
A:The current 150mm fab in Fremont is sufficient for the next 2-3 years but may need upgrading to 200mm or 300mm for beyond 2027. A new fab would cost hundreds of millions of dollars, significantly less than CMOS fabs, and discussions are ongoing about potential national initiatives or partnerships.
Q:What is the potential for using external foundries for quantum chip production?
A:The company is exploring external foundries but has not found one that meets their requirements for superconducting gate-based quantum computing. They will continue to evaluate options to save on CapEx.
Q:What applications could the 1,000-qubit system in 2027 support?
A:The 1,000-qubit system could support applications like drug discovery, financial forecasting, and material synthesis in hybrid setups with CPUs and GPUs. Encryption and decryption are not expected to be feasible at that stage.
Q:Why are customers buying 9-qubit systems instead of 36-qubit systems?
A:Customers are buying 9-qubit systems to understand the fundamentals of quantum computing. These systems are upgradable to higher qubit counts, providing additional revenue opportunities for the company.
Q:What is the impact of the recent $625 million funding for the National Quantum Research Center?
A:The funding reinstates the original NQI amount but is lower than the $2.5 billion discussed. It provides some support for DOE initiatives, and further funding increases are expected in the coming months.
Q:What is the expected share count for Q4, considering recent warrant exercises?
A:The share count is expected to be around 335 million, depending on additional warrant exercises.
Q:Review of Unclear Management Responses
A:Management avoided providing specific timelines for achieving DARPA Phase B selection and was vague about the exact capabilities of external foundries to meet their requirements. They also did not provide detailed plans for how the $625 million funding for the National Quantum Research Center would directly impact their business.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AFRL quantum
AI supercomputer
AI supercomputing
Advanced Computing
Advanced Research
Agency DARPA
California physic
Center Development
Computing DAC
DAC India
DAC Montana
DAC design
Defense Advanced
MSU
NVIDIA
NVQLink
QBI project
QphoX
RD
computation
computing system
ecosystem
end qubit
fidelity end
integration
measure
premise
project quantum
quantum hardware
quantum networking
quantum technology
qubit Novera
qubit system
qubits photon
resource
system qubit
system technology
yesterday
RGTI Transcript
Rigetti Computing, Inc. (RGTI) Q1 2026 Earnings Call Transcript
Unknown5-12
The earnings call summary shows a mixed picture: a 25% revenue increase and improved margins are positive, but a net loss of $10.2 million and negative cash flow from operations are concerning. The lack of strategic updates and potential risks highlighted in forward-looking statements add uncertainty. The Q&A section provides no additional insight, leaving the outlook unclear. Without market cap data, the impact on stock price is uncertain, leading to a neutral sentiment prediction.
Rigetti Computing, Inc. (RGTI) Q4 2025 Earnings Call Transcript
Positive3-5
The earnings call shows promising developments, including strategic partnerships with NVIDIA and Riverlane, and government funding. The 108-qubit system deployment by March with high fidelity is a positive catalyst. Although management was vague on some financial details, the overall sentiment from new partnerships and product milestones suggests a positive outlook for the stock.
Rigetti Computing, Inc. (RGTI) Q3 2025 Earnings Call Transcript
Positive11-11
The earnings call highlights a strong financial position with $571.6 million in cash, optimistic guidance on achieving high fidelity in quantum computing, and potential revenue from Novera system sales. The Q&A section reveals confidence in reaching technical milestones and integrating with NVIDIA's NVQLink, despite some uncertainties about DARPA selection and external foundry capabilities. The positive sentiment from analysts and management's forward-looking strategies suggest a likely positive impact on stock price.
Rigetti Computing, Inc. (RGTI) Q2 2025 Earnings Call Transcript
Unknown8-12
The earnings call reveals several concerning financial metrics: a significant revenue drop, decreased gross margins, and increased operating losses. Despite optimistic future guidance and strategic partnerships, the immediate financial health is weak. The Q&A section highlights uncertainties in achieving technological milestones and government funding. The lack of clear timelines for critical advancements adds to the uncertainty. Although there are positive strategic developments, the negative financial performance and uncertainties are likely to weigh on investor sentiment, leading to a negative stock price reaction over the next two weeks.
RGTI Report
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