Rigetti Computing, Inc. (RGTI) Earnings

Management highlights

### Technology and Product Milestones - Launched general availability of the 108-qubit Cepheus-1-108Q, the industry's largest modular quantum computing system, built from 12 interconnected 9-qubit chiplets, accessible via Rigetti Quantum Cloud Services, Amazon Braket, Microsoft Azure Quantum, and qBraid. - Cepheus-1-108Q currently achieves a median 2-qubit-gate fidelity of 99.1% with 60-nanosecond gate speeds and a median single-qubit gate fidelity of 99.9%, and management expects to improve fidelity throughout 2026. - The company demonstrated a median 99.8% 2-qubit gate fidelity with 40-nanosecond gate speeds on a 9-qubit prototype using a proprietary adiabatic CZ gate scheme, and as high as 99.9% 2-qubit gate fidelity at 28 nanoseconds on a smaller prototype, which will inform future system design. - Engineering teams identified and mitigated coupling interaction issues that become pronounced above 100 qubits, shifting the primary performance bottleneck from coupler behavior to coherence time, which management expects to address with continued optimization. ### Customer and Market Traction - Growing adoption across cloud and on-premises channels, with new on-premises Novera QPU sales to global research institutions including the University of Saskatchewan and C-DAC in India, supporting strong year-over-year revenue growth. - Novera QPUs, designed to integrate into customer-owned cryogenic and control systems, create multi-year engagement pathways with research customers, and demonstrate product flexibility from 9 to over 100 qubits. - Early but increasing interest from commercial customers in materials, logistics, and financial services exploring hybrid and quantum-inspired use cases alongside traditional research and government customers. ### Strategic and Capital Framework - The company remains on track to achieve quantum advantage (1,000 qubits, 99.9% 2-qubit gate fidelity, fast gate speeds, error mitigation) approximately 3 years from Q1 2026, anchored in the company's proprietary chiplet-based superconducting architecture. - Announced a planned investment of up to $100 million in the United Kingdom over the next several years, the company's first major investment outside the U.S., to accelerate development, building on an existing deployment at the U.K. National Quantum Computing Center. - Ended Q1 2026 with $569 million in cash, cash equivalents, and available-for-sale investments and no debt, providing sufficient capital runway to execute on all planned roadmap milestones. Capital allocation remains focused on organic R&D, with M&A only considered if it clearly accelerates the roadmap without compromising financial discipline. - 2026 capital expenditures are expected to be elevated relative to prior years, driven by investments in dilution refrigeration capacity and infrastructure to support higher qubit count systems, not major expansion of the company's existing fab footprint.

Guidance

- Revenue recognition: The remaining portion of the $5.7 million in previously announced Novera QPU purchase orders, with ~$3 million recognized in Q1 2026, is expected to be mostly recognized in Q2 2026. The full $8.4 million C-DAC 108-qubit on-premises system order is expected to be recognized in Q4 2026 following installation and acceptance testing, with a separate future purchase order expected for ongoing maintenance and support services. - Technical milestones: Management targets improving Cepheus-1-108Q median 2-qubit gate fidelity to 99.5% by the end of 2026, while maintaining the company's gate speed advantage over competing modalities. A published updated technology roadmap will be released later in 2026 after incorporating operational data from Cepheus-1-108Q. - Quantum advantage timeline: The company reaffirms its guidance of reaching commercially meaningful quantum advantage approximately 3 years from Q1 2026, full fault-tolerant quantum error correction (requiring hundreds of thousands of qubits) is expected 5 to 7 years from Q1 2026. Chiplet-based scaling architecture is expected to remain durable as the company scales from 108 qubits to hundreds and eventually over 1,000 qubits. The company expects to deliver 150+ qubit systems by the end of 2026, though it may not simultaneously achieve higher fidelity at the larger qubit count in that launch. - U.K. investment spending: The $100 million planned U.K. investment will be deployed over several years, covering headcount expansion, new system deployments, and larger facilities, with operating expense impacts starting to appear in the near term as the program ramps.

Segment performance

Rigetti reports total company revenue of $4.4 million in Q1 2026, compared to $1.5 million in Q1 2025. The 193% year-over-year revenue growth is driven primarily by on-premises Novera QPU deliveries, related system contracts, and government and research projects. Gross margin for Q1 2026 was 31%, flat relative to 30% gross margin in Q1 2025; gross margin was impacted by contract mix, with higher contribution from lower-margin third-party refrigeration included in system deliveries. Total operating expenses were $27.3 million in Q1 2026, up from $22.1 million in the prior-year period, with the majority of spending concentrated in research and development. Operating loss for Q1 2026 was $26 million, compared to an operating loss of $21.6 million in Q1 2025. On a GAAP basis, net income was $33.1 million, driven by $53.7 million in non-cash fair value gains from derivative warrant and earn-out liabilities, compared to $42.6 million GAAP net income in Q1 2025. On a non-GAAP basis (adjusting for stock-based compensation and fair value adjustments), net loss was $14.7 million ($0.04 per diluted share), compared to a non-GAAP net loss of $15.3 million ($0.05 per diluted share) in Q1 2025. No separate segment financial performance is disclosed in the call.

Risks & headwinds

- Quarterly revenue variability: Revenue recognition is heavily dependent on the timing of large system deliveries and contract close, leading to inherent quarterly variability that management notes is expected given the early stage of the quantum computing market, but creates uncertainty around near-term quarterly results. - Technical scaling risk: While prototype performance has demonstrated high fidelity and fast gate speeds at small (sub-10 qubit) scales, translating these gains to large-scale 100+ qubit systems is technically complex and can take longer to achieve than prototype validation would suggest. - Forward-looking statement risk: All forward-looking statements regarding roadmap timelines, technical performance, and revenue growth are subject to risks and uncertainties that could cause actual results to differ materially, with detailed risk factors available in the company's SEC filings, including the 2025 Form 10-K and Q1 2026 Form 10-Q. - Competition and competing technology risk: Alternative quantum computing modalities (trapped ion, neutral atom) do not require dilution refrigeration, a potential perceived disadvantage for superconducting systems, though management notes superconducting technology holds large advantages in gate speed and scalability.

Analyst Q&A

• Q: How does Rigetti view NVIDIA's newly announced open-source quantum calibration and error correction models, and when will Rigetti begin testing them? /

  A: Management is closely evaluating NVIDIA's new open-source tools for calibration, bring-up, and error correction, and is in ongoing discussions with NVIDIA about integration. These tools are complementary, not a replacement for Rigetti's existing internal and partnership work on error correction with firms like River Lane. Rigetti will take advantage of any tools that can accelerate its roadmap.

• Q: What does the planned $100 million U.K. investment cover, and when will spending impact operating expenses? /

  A: The investment will fund participation in the U.K.'s structured multiphase ProQure quantum development program. It will cover headcount expansion, deployment of higher qubit count systems (including a Cepheus-1-108Q-class system) to the U.K. National Quantum Computing Center, and expansion of office and lab facilities. All cost categories (operating and capital) are included in the $100 million total planned over multiple years.

• Q: The company already demonstrated 99.9% 2-qubit gate fidelity on small prototypes using the adiabatic CZ gate scheme; why does it take multiple years to deploy this performance at scale to reach quantum advantage? /

  A: It is relatively easy to demonstrate high performance on small sub-10 qubit prototypes, but solving technical challenges at 100+ qubit scale is far more complex, and few companies have successfully deployed generally available systems at this scale. Rigetti is already incorporating adiabatic CZ into current large-scale systems, and the prototype performance improvements will be rolled out incrementally in new system generations over the next three years, with improvements appearing in systems launched well before the 3-year quantum advantage target.

• Q: Is the coupler architecture fix the company implemented at 108 qubits durable as the company scales past 100 qubits to 1,000 qubits? /

  A: Rigetti's core square grid and tunable coupler architecture, which has now been adopted by other major players like IBM, is well understood and flexible. The company's unique chiplet-based scaling approach makes it easier to manufacture large qubit count systems than monolithic designs, and management sees no fundamental issues with scaling the current coupler architecture to hundreds and 1,000 qubits using chiplets, and remains confident the roadmap is solid.