Rigetti Computing Q2 2025 Earnings Report

Rigetti Computing EPS Results

• Actual EPS: N/A
• Consensus EPS: -$0.06
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Rigetti Computing Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $1.87 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Rigetti Computing Announcement Details

• Quarter: Q2 2025
• Date: 8/12/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, August 12, 2025
• Conference Call Time: 5:00PM ET

Rigetti Computing (NASDAQ:RGTI), through its subsidiaries, builds quantum computers and the superconducting quantum processors. The company offers cloud in a form of quantum processing unit, such as 9-qubit chip and Ankaa-2 system under the Novera brand name; and sells access to its quantum computers through quantum computing as a service. It also provides quantum cloud services that provides various range of support in programming, public or private clouds integration, and connectivity, as well as quantum operating system software that supports both public and private cloud architectures. In addition, the company offers professional services, such as algorithm development, benchmarking, quantum application programming, and software development. The company serves commercial enterprises, government organizations, and international government entities. It has operations in the United States and the United Kingdom. Rigetti Computing, Inc. was founded in 2013 and is headquartered in Berkeley, California.

Rigetti Computing Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Rigetti released CFS-136Q, the industry’s largest multi-chip quantum computer, achieving 99.5% median two-qubit gate fidelity and a 2x reduction in error rates versus its prior system.
• Neutral Sentiment: The company expects to deploy a 100+ qubit chiplet-based system at 99.5% two-qubit fidelity by year-end 2025 and targets quantum advantage in about four years with >1,000 qubits, 99.9% fidelity, faster gate speeds, and error correction.
• Positive Sentiment: Rigetti strengthened its balance sheet by raising $350 million through its ATM equity program, finishing Q2 with ~$571.6 million in cash and equivalents and no debt to fund R&D.
• Negative Sentiment: Second-quarter revenue fell to $1.8 million from $3.1 million YoY due to the National Quantum Initiative’s lapse, while gross margin dropped to 31% and net loss widened to $39.7 million amid non-cash charges.
• Negative Sentiment: Revenue remains dependent on government initiatives, with the expiration and pending reauthorization of the U.S. National Quantum Initiative and DARPA projects key drivers of future sales.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Rigetti Computing Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

[Operator]

You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Doctor. Sabod Kulkarni, Chief Executive Officer. Please go ahead.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Good afternoon and thank you for participating in Rigetti's earnings conference call covering the second quarter ended 06/30/2025. Joining me today is Jeff Bertelsen, our CFO, who will review our results in some detail following my overview. Our CTO, David Rivaas, is also here to participate in the Q and A session. We will be pleased to answer your questions at the conclusion of our remarks. We would like to point out that this call and Regretti's second quarter ended 06/30/2025 press release contain forward looking statements regarding current expectations, objectives and underlying assumptions regarding our outlook and future operating results.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

These forward looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described and are discussed in more detail in our Form 10 ks for the year ended 12/31/2024, our Form 10 Q for the three and six months ended 06/30/2025, and other documents filed by the company from time to time with the Securities and Exchange Commission. These filings identify and address important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward looking statements. We urge you to review these discussions of risk factors. Today, I'm pleased to report that we continue to achieve our ambitious roadmap goals and maintain our momentum on the technology front, most recently by demonstrating the industry's largest multi chip quantum computer with impressive performance. Our multi chip quantum computer, CPS one thirty six q, the industry's largest multi chip quantum computer is released for general availability and deployed on the Rigetti Quantum Cloud Services Platform, QCS, and will be available on Microsoft Azure thereafter.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Just six months after our record performance with AMCA three, we have once again had our error rates, With a median two qubit rate of 99.5%, CFES-136U has achieved a 2x reduction in two qubit gate error rate from our previous ANCA-three system. CFIUS136Q is the first multi chip quantum computer in the industry to achieve this level of performance. With four chips, CFIUS136Q contains the largest number of chiplets in a quantum computer and further validates our approach to scaling Rigetti's quantum computers. It's our view that superconducting qubits are the leading modality for quantum computers due to their ability to scale and their ability to achieve gate speeds more than 1,000 times faster than other modalities like ion traps and pure atoms. Our superconducting qubits leverage technologies like chiplets that have been maturing in the semiconductor industry for decades.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Use of this well established methods enables Rigetti to scale its quantum computers to higher levels of performance and qubit counts. This legacy of technological advancement continues with the CFIUS one architecture and includes the following features that contribute to improved performance. Transitioning from a monolithic chip to chiplets enables greater control over chip uniformity, which in turn improves performance. Leveraging chiplets also reduces manufacturing complexity and improves fabrication yield. Optimized two qubit gates enable faster gate times while reducing coherent errors, which improves fidelity and is important for executing quantum error correction techniques.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

These improvements enable a 2x reduction in error rates. Advances in multi layer chip and tunable coupler design also enables higher performance. Our industry leading proprietary chiplet approach to scaling makes us confident that we will hit our end of year technology goals. We believe quadrupling our chiplet count and significantly decreasing error rates is a a clear path towards quantum advantage and fault tolerance. We intend to continue our momentum and expect to release a 100 plus qubit chiplet based system at 99.5% median two qubit gate fidelity before the 2025.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

While we are pleased with our sequential growth in quarterly revenues, we believe achievement of our technology milestones remains the key metric to achieving our long term success. On the financing front, I'm pleased to report that Rigetti has significantly strengthened its balance sheet. During the 2025, Rigetti completed the sales of $350,000,000 gross proceeds of its common stock pursuant to our previously disclosed at the market equity offering program. We are well positioned to support commercial scale up of our superconducting gate based quantum computers. Thank you.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Jeff will now make a few remarks regarding our recent financial performance.

[Jeffrey Bertelsen, CFO at Rigetti Computing]

Thanks, Subodh. Revenues in the 2025 were $1,800,000 compared to $3,100,000 in the 2024. On a year over year basis, our revenue for the quarter was impacted by expiration of the National Quantum Initiative and its pending reauthorization in the U. S. Congress.

[Jeffrey Bertelsen, CFO at Rigetti Computing]

Renewal of The US National Quantum Initiative, sales to US and foreign governments, and Novera are all important to future sales. Gross margins in the 2025 came in at 31% compared to 64% in the 2024. The lower gross margins on a year over year basis were impacted by revenue mix and variability in the pricing in terms of our development contracts, including our contracts with The UK's NQCC for Quantum Systems, which have lower gross margins than most of our other revenue. On the expense side, total OpEx in the 2025 was $20,400,000 compared to $18,100,000 in the same period of the prior year. The increase in total OpEx was due to annual salary increases, new hires, and higher consulting costs, mainly in research and development.

[Jeffrey Bertelsen, CFO at Rigetti Computing]

Higher costs for our annual shareholder meeting due to the increase in the number of beneficial owners of our stock also contributed to the increase. Stock compensation expense for the 2025 was $3,600,000 compared with $3,300,000 for the 2024. Our operating loss for the 2025 came in at $19,900,000 compared to $16,100,000 in the prior year period. We recorded a $39,700,000 net loss for the 2025, compared to a net loss of $12,400,000 for the 2024. Our net loss for the 2025 includes noncash charges for the change in the fair value of our derivative warrant and earn out liabilities, which had a $22,800,000 unfavorable impact on our net loss for the quarter.

[Jeffrey Bertelsen, CFO at Rigetti Computing]

Derivative warrant and earn out liabilities had a $3,400,000 favorable impact on our net loss for the 2024. As of 06/30/2025, we had approximately $571,600,000 of cash, cash equivalents and available for sale investments and no debt. Thank you. We would now be happy to answer your questions.

[Operator]

Our first question comes from Troy Jensen with Cantor Fitzgerald. Your line is open.

[Troy Jensen, Managing Director at Cantor Fitzgerald]

Hey gentlemen, first off congrats on all the great traction here.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Thanks Troy.

[Troy Jensen, Managing Director at Cantor Fitzgerald]

Hey. So, Sudhoo, for you, maybe to start off with just use of proceeds, you've got a ton of money on the balance sheet now. I mean, is the intention to accelerate R and D, do a little M and A or just kind of a cushion on the balance sheet to fund operating losses?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Our focus, Troy, continues to be on R and D development. We will obviously look at every opportunity to accelerate our timeline. Right now, we believe we are funding R and D adequately to hit the milestones that we have laid out. As you saw, we demonstrated a four by nine qubit multi chip system. We are deploying it as we speak.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Our plan for the end of the year is to deliver a multi chip 100 plus qubit system with ninety nine point five percent two qubit gate fidelity, and from there on to continue to increase the fidelity as well as qubit count using chiplet approach. Every opportunity we get to accelerate that timeline, we continue to look at it and we will do so. At this point, we believe we are still about three to four years away from getting to the 1,000 plus qubit, 99.9% fidelity with error correction and gate speeds of less than 50 nanoseconds, which is when we achieve quantum advantage. If we can accelerate that timeline using our balance sheet, as you correctly pointed out, we will obviously look at that. But I believe right now, we are still looking at roughly four to four about four years to get to that quantum advantage point. Hope that answers your question. Yeah,

[Troy Jensen, Managing Director at Cantor Fitzgerald]

it does very much. So, just with respect to OpEx, it would assume just kind of sequential growth going forward, but no big stepping, no big leaps in spending.

[Jeffrey Bertelsen, CFO at Rigetti Computing]

Yeah, Troy. I think that's a good summary for right now anyway. As Subot said, we're adequately funded in R and D, but we'll look for opportunities. But right now, I don't think we anticipate any significant uplift.

[Troy Jensen, Managing Director at Cantor Fitzgerald]

Okay, perfect. And maybe just one follow-up. Could you just give us an update on Quanta, what they're doing, what we can't see to kind of satisfy their commitment here to with your investment, further investment in Rigetti?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Sure. So as we have disclosed in the past, Quanta is a very strategic partner for us on the hardware side outside the QPU area. So we continue to stay focused on the QPU side. Quanta will invest is investing right now on the non QPU portion of the hardware stack. That primarily means control system and the rest of the hardware stack.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Right now, their focus is to essentially come up to speed in control systems, and our goal is to get them up and running with control systems that work with our QPUs fairly soon here in the next few quarters. Once they're up to speed in quantum computing and control systems, they will obviously accelerate development of that, allowing us more focus on the QPU side. So they continue to be a very good and very strategic partner for us. The partnership is going really well. We are excited to co develop the quantum systems, our quantum systems with them. Hopefully, that answers your question. Yeah.

[Troy Jensen, Managing Director at Cantor Fitzgerald]

No. That's great, guys. Keep up the great work.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Thank you.

[Operator]

Thank you. Our next question comes from David Williams with The Benchmark Company. Your line is open.

[David Williams, Equity Research Analyst at The Benchmark Company LLC]

Hey. Good afternoon, gentlemen, and congrats on on meeting the the targets on the the Cepheus chip. That's impressive. But I I guess maybe, Subodh, the last time we we spoke, you had you were you had confidence that, that you could get to this 99.5, but said that you had a little bit of work to do, and and you clearly hit that here. I guess, how confident are you in being able to parlay that on the 100 qubit chip?

[David Williams, Equity Research Analyst at The Benchmark Company LLC]

And are there any major, I guess, steps or or target challenges ahead of you in order to to get that that 100 qubit at the same fidelity?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Thanks, David, for the question. Certainly getting to four chiplets with nine qubits out of the 36 qubit level was a significant accomplishment this last quarter, and we are really happy to get that. Regarding your question about 100 plus qubit, we are confident we'll get there with ninety nine point five percent two qubit gate fidelity before the end of this year. The beauty of the chiplet approach is once the once the fundamental architecture is defined and the performance is there, scaling up becomes a lot easier by definition. And that's the whole reason for the chiplet approach.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

You intrinsically are using the same nine qubit chip multiple times. And that gets you the unit, you get better uniformity on your wafers, you get better years, and it really allows us to get a perfect nine qubit chip and then replicate it multiple times, which is why the semiconductor industry uses chiplets with the CMOS technology right now for all the advanced applications. So all the reasons that help semiconductor CMOS industry with chiplets are the same reasons why we chose the chiplet approach. Now that we have proven that it works at this high fidelity, our confidence is fairly high that we will get to 100 plus qubit and beyond frankly. We really need to get to thousand qubit and multi thousand qubits here soon to get to that quantum advantage point and then for a tolerant quantum computing beyond that.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

So our confidence is fairly high, but obviously, this is still a technology development and challenges will always be there. So we are not taking it for granted by any means, and we'll continue to work hard to get it there. Hopefully, that answers your question.

[David Williams, Equity Research Analyst at The Benchmark Company LLC]

No. It absolutely does. And I guess the the follow-up to that would be does do you think that your your road map can be accelerated beyond I know you've talked about three to four years, but it seems like you're making your just such great progress on the scalability side that you might be able to accelerate that even though maybe the error correction is lacking. Do you think you'll hit one of your targets maybe on the CUBIT side before you get to the others that you talked about this three to four years out? Thanks.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

We we will certainly try to accelerate our timeline from that four year to quantum advantage. Having said that, there are chiplets certainly helps us quite a bit to achieving that milestone. At the same time, there are other important metrics as well. I mean, we talked about getting to a thousand qubit for that quantum advantage or more, getting to 99.9% or better two qubit gate fidelity. Error correction, as you correctly pointed out, has to be there too.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

And also, including the gate speeds to better than fifty nanoseconds faster than that. There are other challenges in the dilution refrigerator. There's a lot of cables that we use right now. Right now, we are still using primarily coax cables. And when you get to a thousand qubit or higher, your density of cables and other components in the division refrigerator become quite intense.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

So you have to start looking at things like flex cable technology and other things that we will encounter. So there are I don't want to make it sound simply that just because triplets have been demonstrated itself, relatively easy path and we'll be able to accelerate the timeline from what we have already told you. We'll certainly look at opportunities, but there are multiple there are multiple dimensions we need to tackle. And that's where the number roughly four years comes from. And our our view is that four years is probably the fastest any of us in in the quantum computing space can get to quantum advantage.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

We've already quantified what our view is to get to quantum advantage. You need a minimum of thousand qubits. You need a minimum of 99.9% to qubit capability. You need to be faster than 50 nanosecond gate speed, and you need error correction. None of us doing gate based quantum computing there yet by any means, and that's where the four years comes from.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

So even though you may have heard about some companies talking about quantum advantage now and very soon, our view is that it's going to take time to hit those four things. And certainly, for some modalities like trapped ion and pure atoms where they have fundamental science challenges to improve their gate speeds to get to these tens of nanoseconds. I mean, right now they are dealing with hundreds of microseconds, and they have some serious scientific fundamental inventions needed situation on hand to get to the gate speeds that you need to get to to get demonstrate practical quantum advantage. So, we continue to look at opportunities to accelerate and we hope we find them, But the realistic timeline is what we are using for quantum advantage in about roughly four years with those four things that I mentioned earlier. Hopefully, that answers your question.

[David Williams, Equity Research Analyst at The Benchmark Company LLC]

Yes. Fantastic. Thanks so much for the color, and you've certainly done a good job hitting your milestones so far. So we'll certainly be looking for that acceleration. I appreciate it. Thank you.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Thanks, David.

[Operator]

Thank you. Our next question comes from Krish Sankar with TD Cowen. Your line is open.

[Steven Chin, Vice President at TD Cowen]

Hi, this is Steven calling on behalf of Krish. Thanks so much for taking my questions. Subodh, if I could start first, I wanted to explore the M and A related question again. I guess just with the stronger balance sheet that you guys have now. And I just want to get your view on kind of current valuations in quantum assets currently.

[Steven Chin, Vice President at TD Cowen]

And is M and A an important part of growth story over the next year or two? And specifically, just asking related to like more adjacent technologies, whether it's some manufacturing, advanced packaging, software related capabilities.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Thanks, Eun. We will continue to look at opportunities where M and A could help us with our timeline. Our view is that we are very much in technology development right now. The timeline that we have laid out the four years to quantum advantage is primarily within our control right now. If we find opportunities in M and A where we can accelerate our timeline, we will certainly look at that.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

As of today, we don't see anything out there that can help us. We are in the leadership camp right now when it comes to overall quantum computing performance. There's probably a couple of tech giants that have one or two critical metrics that are ahead of us. But besides that, I mean, frankly, and those tech giants are out of our league to consider m and a. Besides those kinds of opportunities, we really don't see anyone out there who's anywhere close to VR.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

So we are quite a bit ahead of everyone when it comes to technology right now, except for a couple of tech giants in a couple of key metrics. So, really, we don't see any practical opportunity to use M and A to help us with our timeline acceleration. But we'll continue to look at that, and if there are opportunities out there, we'll certainly not be shy to exercise those opportunities.

[Steven Chin, Vice President at TD Cowen]

Got it. That's helpful. My second question is related to gate speeds. You kinda mentioned it at first that getting below fifty nanoseconds is is important for ultimately reaching quantum advantage for the industry. I think previously you mentioned you guys were around seventy nanoseconds currently and just kind of curious if you can provide some thoughts on the roadmap for getting to sub fifty nanoseconds And also, are the implications in terms of overall quantum system performance?

[Steven Chin, Vice President at TD Cowen]

Like, is it a benefit or boost to coherence times, fidelity rates, or like, in terms of the overall productivity and performance of the systems? If you could help provide some color, that'd be helpful.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Good question, Steven. I mean, the four things that we have mentioned to get to quantum advantage are the qubit count, which we believe has to be minimum 1,000, two qubit gate federative, which we believe has to be minimum 99.9, error correction, and then gate speeds faster than 50. Of the four things, we feel most confident that we will be able to get to gate speeds, faster gate speeds relatively quickly. That's not the determining factor, if you will, to get to quantum advantage. We are, as you correctly said, with ANCA three we are at about seventy nanoseconds.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

We are deploying CFIUS one right now, which is little faster than ANCA three as my remarks pointed out, we are still quantifying it. But it will be in the fifty to sixty nanosecond type range. We certainly think we will be able to accelerate that faster. So getting to fifth fifty nanoseconds or faster is not that difficult, honestly. We believe gate speed is extremely important.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Ultimately, you are building a quantum computer. Speed absolutely matters. So once you combine all the metrics, gate speeds are going to be critical when it comes to time for performing any operation and completion kind of tasks. Our view, as we have pointed out multiple times before, is that a quantum computer is not going to exist in a silo in some kind of a quantum network. It is going to sit in existing data centers with CPUs and GPUs in form of a hybrid system.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

It will have to interface with existing networks. So I think our view is that you need to design a quantum computer that fits into the overall data centers, which means that your clock speeds and other metrics have to be commensurate with CPU, GPU clock speeds. And for that, you do need the quantum computer to be faster than fifty nanoseconds. One would argue even that is on the slower side compared to CPUs and GPUs, but at least there is a chance to be able to use that gate speed to stay up with CPU and GPU clock speeds. But once you start talking the hundreds of microseconds that some other modalities like trapped ion or pure atoms use, you're really, like, thousand times, if not 10,000 times slower than superconducting quantum computers and certainly CPUs and GPUs.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

And that makes it really hard to think about a quantum computer existing in currency data center using current networks. So our view of a hybrid system using existing networks really forces you to talk about tens of nanoseconds of gate speeds. Hopefully, answers your question.

[Steven Chin, Vice President at TD Cowen]

Yes. Super helpful, Subodh. And just a quick follow-up or a housekeeping item for Jeff. Jeff, like post the equity raise, what share count should we be modeling for Q3?

[Jeffrey Bertelsen, CFO at Rigetti Computing]

Sure. So we I would say roughly 300,000,000 and say 27,000,000 ish, roughly.

[Steven Chin, Vice President at TD Cowen]

Perfect. Thank you so much.

[Operator]

Thank you. Our next question comes from Quinn Bolton with Needham and Company. Your line is open.

[Quinn Bolton, Senior Analyst at Needham & Company]

Hey, guys. Congratulations on the nice results and the technical milestone for the midyear. Wanted to start just with that sort of the roadmap on the size of the chiplet versus the number of chiplets in your tiled approach. It sounds like you're going to stick with the nine qubit QPU for the near term, but getting to a thousand qubits, know, if you stuck with a nine qubit solution would require over a 100 chiplets. And so I'm kinda wondering, you know, when do you start to see a trade off between the number of chiplets versus the number of qubits on a given chiplet?

[Quinn Bolton, Senior Analyst at Needham & Company]

Like, where is that sweet spot? Do you think yeah. Where do you think that sweet spot ultimately ends ends up?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

A good question, Quinn. Honestly, we don't know the answer right now as to what when exactly would be the right time to transition from a nine qubit chiplet to something higher. Clearly, will do it before we get to thousand qubits, as you correctly said. Otherwise, we are talking about more than a 100 chiplets, and that will start putting unnecessary pressure on the packaging side. And and no reason to push push it that hard at this time.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Certainly, there's more flexibility on the size of the chiplet itself. So we'll stay with nine qubit at least until we get to the 100 plus qubit milestone before the end of this year. And then for next year's milestone, which would be higher qubit count and better fidelity than this year, we will look at options of staying with nine qubit or trying to attempt something bigger like a 16 qubit, some square number. So sixteen, twenty five, 36 kind of qubits for the next chiplet size. We are doing the work right now to decide which is the next optimal chiplet size.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

But certainly, once we go over a few 100 qubits, we will be using a higher qubit count chiplet to get to a thousand plus qubit.

[Quinn Bolton, Senior Analyst at Needham & Company]

And would as you go to larger square qubit tiles, would that require any significant CapEx on the equipment in Fab one? Or do you think the existing equipment set should allow you to go to sort of any reasonable square number of qubits on a single tile.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

There will be some there's always going to be some need for new capital or upgraded capital for our fab in Fremont, California. We continue to do the necessary investments there. We don't see anything. Our Anka three chip, if you will, was 84 qubit at roughly one by 1.5 centimeter. And the nine qubit chip that we are dealing with chiplet right now, we are dealing with six millimeter by six millimeter.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

So, certainly, we have capability to handle a chip, if you will, up to 1.5 centimeters. So, we don't think we need something drastic, the different for fab to get a higher chiplet size. Packaging is certainly an area we are looking at right now as we start building more than 10 or 20 chiplets. Do we need better quality packaging equipment or do we need something different? We are doing that work right now.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

But we don't think some significantly new equipment that's very, very high price tab is needed at this time to get to the higher qubit count.

[Quinn Bolton, Senior Analyst at Needham & Company]

Got it. Okay. That's great. Wanted to move on just to, you mentioned one of the four requirements for Quantum Advantage would be the quantum error correction. And I know this year's milestones are really around the tiled approach and hitting 100 qubits with 99.5% fidelity by year end.

[Quinn Bolton, Senior Analyst at Needham & Company]

As you get to that 100 plus qubit solution by year end, when do you think you start trying to implement the low density parity check error codes that I think you guys had submitted as part of your QBI DARPA program?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Correct. And quantum error correction is obviously very important area long term, and it will become more and more of a discussion as we get into 2026 and beyond. This year, we are we are correct, we are focusing much more on the fidelity side and increasing the qubit count to more than 100 qubit. We continue to work on quantum error correction on our own along with our partner River Lane in Cambridge, UK. Have done jointly, we have done some excellent work demonstrating real time error correction to some level, low latency error correction, and then we will take that work to get to real time error correction soon.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

But there's a lot of work to be done on that front. We believe we need several 100 qubits at 99.7 or 99.8% or something along those lines to truly demonstrate the value of error correction in a real time sense. So we are not quite at that point on the hardware side to try the sophisticated error correction codes like the QLDPC code that you referred. We we are a year or two away from starting to do that kind of work. Hopefully, that answered your question.

[Quinn Bolton, Senior Analyst at Needham & Company]

Yeah, it did. And then, lastly, just any updated chatter on when the DOE, National Quantum Act, or the reauthorization of NQI might make it through Congress? Does it feel like there's any momentum there? Is it going in front of committees? Are there hearings being held in Congress to try to advance that bill towards signage?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Yes. Absolutely. It looks like there's bipartisan support. There has been bipartisan support for a while, it continues to be the case. There are several versions of the NQI reauthorization bill that are in different committees, and a lot of hearings have happened in the last few months along those lines.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

The house has multiple versions. The senate has multiple versions. Nothing has been consolidated consolidated down to a single version. Yet, we hope that happens in the next few weeks or months and it becomes the NQA Reauthorization Act. Obviously, we are looking forward to getting that done and signed, but hasn't happened yet.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

But certainly support seems to be there and all the hearings that we have participated in ourselves as well as following Looks like it's going to happen. It's just a question of when, not if.

[Quinn Bolton, Senior Analyst at Needham & Company]

Got it. Okay. Thank you.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Thanks, Glenn.

[Operator]

Thank you. Our next question comes from Richard Shannon with Craig Hallum Capital Group. Your line is open.

[Tyler Anderson, Equity Research Associate at Craig-Hallum Capital Group LLC]

Hi, Simba. This is Tyler Anderson on for Richard, and congrats on all the work this quarter. I was wondering, do you have any feedback or updates from QBI or NQCC to give?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

I mean, we certainly talk to both of the organizations, the DARPA organization as well as NQCC organization on an ongoing basis. They are very much aware of our progress. Within QCC, as we have disclosed in the past, there are several active projects that are going on right now. One of them being upgrading their existing 24 qubit system to what we have right now in California, the four by nine qubit chiplet type system. So, are going to be working with them to upgrade their system, along with demonstrating some other fundamental technology blocks like optical interconnects and other things.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

So those projects are ongoing. We will continue to disclose that appropriately as we hit some technology milestones or publish some papers. With DARPA, we clearly are in phase one right now. They will be narrowing the group down for phase two before the end of this year. We certainly are optimistic given our results and where we are that we will make it to phase two, but it's ultimately dark past decision.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Our key differentiation from everyone else's are open modular approach as well as the chiplet design. We clearly believe this is a leadership system that we have introduced with four chiplets. So I'm sure that will play a huge role in DARPA's decision making. So we continue to stay optimistic on that front, but we will find out when they when they decide before the end of this year.

[Tyler Anderson, Equity Research Associate at Craig-Hallum Capital Group LLC]

Yeah. That's great. And then do you have any timeline on when you plan to reach a 16 tile chiplet? And are there any learnings that you've had from transitioning back to the chiplet approach?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Well, there's plenty of learnings that we have derived from going to from monolithic chip to chiplets. A lot of it is part of our know how as well as many of the patents we have filed in this area. Certainly, you can take a look at our patent portfolio. Many many of those patents have started issuing now, and you can take a look at what exactly we covered in those patents. It's obviously very important critical piece of IP for us to be the first and foremost in demonstrating chiplet and having a proprietary approach to scaling up.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

There's a lot of learning. I mean, you clearly have to design the qubits appropriately because you are using chiplets, not a single chip. So there's you need to adjust the geometries and the wiring layouts and so on. Not very different than what we have learned in the CMOS industry when we use chiplets. If you look at all the work that happened a decade or so ago in the CMOS industry to incorporate chiplets in advanced devices, some of the things are similar that we are learning.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

But some of because by definition, we are coupling qubits across the chiplets through an interposer. There are some new things that we are covering as we go along, and that's where a lot of know how is getting developed and IP is getting developed.

[Tyler Anderson, Equity Research Associate at Craig-Hallum Capital Group LLC]

Okay. And then are you planning on staying with a square layout for your tiles? And and piggybacking off of Quinn's question, do you have any range that you could give for the logical qubit overhead for QLDPC code?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

So for the time being, we'll continue to stay with the square chiplets. So right now it's nine, as I mentioned to Quinn. We'll probably look at a higher number before we go to a thousand qubits. We we are pretty sure we'll look at a higher number before we go to a thousand qubits. Up to 100, we'll save it nine for sure.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

But beyond that, we'll look at a higher number than nine. Regarding this whole discussion of logical qubit, as you probably are well aware, I mean, there's no clear definition of logical qubits. It a lot of it depends on the error correction and how you how you lay it out. So we'll continue to stay with physical qubit and fidelity, which basically gives you effectively logical qubit. So once you are in that ninety nine point nine percent one thousand plus qubit range, we believe we will get to an overhead of 10 to one or better.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

But it's all projections right now. I mean, no one has demonstrated anywhere close to 100 logical qubits yet. So our projections say that once we are at 1,000 plus qubits at 99.9%, two qubit gate federated or better, we will be in that range, but we need to get there. But really, it a lot depends on the definition of logical qubits and error correction and so on. So we'll continue to use physical qubits and two qubit gate fidelity and metrics like that, which are clear and not controversial.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Otherwise, you get into once you say logical qubit, you have to define what a logical qubit is, how you did your error correction, and then numbers are all over the place at that one, making it very difficult to compare. Hopefully, answers your question.

[Tyler Anderson, Equity Research Associate at Craig-Hallum Capital Group LLC]

That does. And I got one more. Speaking of controversial, so does having this chiplet is that garnering any more attention towards people getting any more on premise systems, whether it's from people who you've already sold to or someone new?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

I mean, we certainly right now we deal with the US government, the UK government as our two primary customers, if you will. And we continue to talk to some other governments on a selective basis. All of them are very interested in the chiplet approach. Our belief and many of those customers believe as well is this is truly the only scalable way to get to more than a thousand qubits. None of us see how you can take a single monolithic chip and take it to more than a thousand qubits and certainly to tens of thousands and hundreds of thousands of qubits, which you eventually have to, to get to a fault tolerant quantum computer.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

So everyone sees chiplet as a necessary component to get to fault tolerant quantum computing. So when we talk to the DOEs, DOEs, the UK National Guard, NQCC, they all understand the strategic value of chiplets and demonstrating that to get to fault tolerant quantum computing. Hopefully, that answered your question.

[Tyler Anderson, Equity Research Associate at Craig-Hallum Capital Group LLC]

It does. And I agree with the statement on the need for chiplets. Thank you. I appreciate your time.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Thank you, Tyler.

[Operator]

Thank you. Our next question comes from Brian Kinstlinger with Alliance Global Partners. Your line is open.

[Brian Kinstlinger, MD, Director - Research & Head - Technology Research at Alliance Global Partners]

Great. Thanks for taking my question. While we both can agree that the most important metrics today are based on progress in your roadmap and you clearly stated that you still have four years left on that roadmap to achieve Quantum Advantage, Is there some combination of your four metrics that begin to drive revenue or larger scale orders in your opinion?

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Certainly, we agree that right now it's all about technology development and technology metrics. That's the most important thing. Obviously, sales we monitor, we report. We are dealing with primarily government labs and academic institutes right now. Sales, as you call them, they are more like research contracts.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

They are one off. So we will continue to participate with DOE, DOD, UK government and other governments as appropriate. As we really don't believe that those numbers, one off numbers, they can fluctuate very widely, are really representative of what's what's happening. But at the same time, yeah, the the government national labs, universities are interested in getting on premise quantum computers for research applications, not for production workflows, not in their data centers or anything like that, but for research applications. And as we continue to get closer and closer to quantum advantage, you are going to see more and more of those orders.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

If you look at the national quantum missions, if you will, of various countries starting The US, we are talking substantial numbers. I mean, the NQI reauthorization, the number we talked about is $2,500,000,000 over five years. So that's roughly $500,000,000 a year. The DOD DARPA initiative is already they have disclosed it to be more than half a billion dollars for the current QBI initiative, and there will be more projects like that from the DOD side. Then you go to The UK, you're talking of hundreds of millions of dollars and many other countries in the Western world along with some of the select countries in Asia, friendlier countries in Asia.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

They're all talking about hundreds of millions of dollars a year. And some of that will be used for on premise quantum computers and we will continue to look at those opportunities to participate on a selective basis. So even though it's not our focus, we'll continue to look at those opportunities, and we are pretty confident we will get those opportunities. But by no means do we want that to become the focus of the company while we are continuing to work on getting to quantum advantage as fast as we can. Hopefully, answers your question.

[Brian Kinstlinger, MD, Director - Research & Head - Technology Research at Alliance Global Partners]

Yep. Great. Thanks.

[Operator]

Thank you. Our next question comes from Craig Ellis with B. Riley Securities. Your line is open.

[Craig Ellis, Director - Research at B Riley Financial]

Yes, thanks for taking the question and congratulations on the progress technically and Sue Boat on the extended visibility that it gives you to get to a 100 qubit system and beyond that. I had a question related to how the technology advances and the way you collaborate with your partner, Quanta, on the way things progress. So I would expect that at some point when you scale up to larger qubit sizes, that I'm not sure what the thresholds might be, but at some point there would be systems implications and a system for a certain qubit count would have to evolve for one of a higher qubit count. The question is, how do you ensure that quanta is progressing with the system development issues so that as you scale up to 100, multi 100 qubits, 1,000 qubits, that on the system side, they're delivering on time and that the entire system is going to be one that works really well? Thank you.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Good question, Craig. I mean, certainly, anytime you do a strategic partnership with anyone, you have to worry about those exact questions that your partner is capable of up to speed. They are not the ones who are going to slow you down and so on. And we will continue to work closely with Quanta. I mean, they are a very, very capable company as you know.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Are the leaders in CPU, GPU servers on the cloud right now. They have the number one market share for GPU servers. They have a significant capable and large technical team, and they are putting some of their best people on the quantum computing program right now. So we have seen no indications that they are going to drop the ball on their side. They're very actively involved.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

And right now we continue to make our own control systems, but we continue to basically get them up to speed. They are very capable on the CPU GPU side. So when it comes to the hybrid system side, they are going to be teaching us effectively on on the CPU GPU side. So I believe the collaboration is working out great right now. It's still very early days.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

They are coming up to speed in 2026, at least certainly before the 2026. I believe we will start using control systems from Quanta, and then they'll start getting into the rest of the hardware stack. So given the overall timeline for quantum advantage of about four years from now, and that's when volumes will start picking up in two to three years, I believe Quanta is very well positioned to help us with the acceleration ramp. I mean, that's what really bring this strength of high volume, low cost manufacturing of these GPU servers. And that's really where we will start getting the benefit of Quanta's capabilities a couple years from now when we start talking higher volumes. Hopefully, answered your question.

[Craig Ellis, Director - Research at B Riley Financial]

It does. Thanks, Subodh. And then the follow-up question relates to the flip side of the current state of the government funding resolution issue. No, it's not yet signed. And yet, I wouldn't think that that would preclude you from interacting with national labs or the DOE and talking about roadmap issues, technology progress.

[Craig Ellis, Director - Research at B Riley Financial]

Can you just talk about the things that you're able to do with some of those entities to position the business best for when we do get those funding resolutions and the team can better realize the related revenue opportunities from them? Thank you.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Yeah, it's a good question. Mean, we continue to engage very actively with both DOE and DOD right now. So even though the NQR reauthorization has not been signed and appropriated yet, our relationships continue to be very strong. So if you physically visit Fermilab and SQMS center in Fermilab, you will see several dilution refrigerator systems over there in incorporating our chips. One of them is the full fledged nine qubit system that we deployed last year.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

But there are many other systems that are using our chips and various experiments are being done. So along with it, we talk with other DOE labs as well. And you obviously are familiar with our involvement with QBI and the DARPA initiative. So nothing has changed from an interaction standpoint. Everyone continues to be very interested in superconducting technology and our open modular approach, particularly the chiplet approach in superconducting computing technologies.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

So all that is progressing. Obviously, they are stranded without getting additional dollars from the NQI reauthorization. So they need more money to continue their experiments. So overall, the technology is progressing well. We continue to do our roadmap.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

They are continuing to do their work. It's just that all of us would like government to fund these initiatives at a higher level than what the current situation is. But as far as I can see, our internal roadmap has not been impacted that drastically because of the lack of NQI funding so far. But we certainly want our government to step up and start funding these initiatives.

[Craig Ellis, Director - Research at B Riley Financial]

Got it. Thank you, Subodh.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Thank you, Greg.

[Operator]

Thank you. This concludes the question and answer session. I would now like to turn it back to Doctor. Subodh Kulkarni, Chief Executive Officer, for closing remarks.

[Subodh Kulkarni, CEO, President & Director at Rigetti Computing]

Thank you for your interest and excellent questions. We look forward to updating you with our progress in future quarters. Thanks again.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Subodh Kulkarni, CEO, President & Director
• Jeffrey Bertelsen, CFO

Analysts

• Troy Jensen, Managing Director at Cantor Fitzgerald
• David Williams, Equity Research Analyst at The Benchmark Company LLC
• Steven Chin, Vice President at TD Cowen
• Quinn Bolton, Senior Analyst at Needham & Company
• Tyler Anderson, Equity Research Associate at Craig-Hallum Capital Group LLC
• Brian Kinstlinger, MD, Director - Research & Head - Technology Research at Alliance Global Partners
• Craig Ellis, Director - Research at B Riley Financial