RGTI — Rigetti Computing, Inc.

Rigetti Computing (RGTI) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: $4.4 million, up from $1.5 million in Q1 2025, primarily driven by on-premises Novera QPU deliveries and government contracts.
• Gross Margin: 31%, slightly improved from 30% in Q1 2025, impacted by a higher contribution from lower-margin third-party refrigeration.
• Operating Expenses: $27.3 million, an increase from $22.1 million in the prior year, with R&D spending being the primary focus.
• Operating Loss: $26 million, compared to a loss of $21.6 million in Q1 2025.
• Net Income: $33.1 million (GAAP), down from $42.6 million in the prior year, influenced by noncash gains from fair value adjustments.
• Non-GAAP Net Loss: $14.7 million, or $0.04 per diluted share, compared to a loss of $15.3 million, or $0.05 per diluted share, in Q1 2025.
• Cash Position: Approximately $569 million, up from $209.1 million a year ago, reflecting capital raises and strategic investments.

2. Strategic Updates and Business Highlights

• Product Launch: The general availability of the 108 qubit Cepheus-1-108Q quantum computing system, which is now accessible via Rigetti Quantum Cloud Services, Amazon Bracket, Microsoft Azure Quantum, and qBraid.
• Customer Adoption: Growing interest from government, academic, and commercial sectors, with notable sales of Novera QPUs and ongoing contracts, including a significant order from the University of Saskatchewan.
• Technology Development: Continued improvements in qubit fidelity and gate speeds, with a target of achieving 99.5% fidelity by the end of 2026.
• Investment Plans: A planned investment of up to $100 million in the UK to accelerate quantum computing development, marking the company's first major investment outside the U.S.

3. Forward Guidance and Outlook

• Revenue Expectations: Anticipation of continued revenue growth, particularly from the recognition of remaining Novera QPU sales in Q2 2026 and the C-DAC order expected to be recognized in Q4 2026.
• Long-term Goals: Aiming for quantum advantage in approximately three years, targeting a system with over 1,000 qubits and high fidelity.
• Capital Expenditures: Expected to remain elevated in 2026 due to investments in infrastructure and refrigeration systems necessary for higher qubit counts.

4. Bad News, Challenges, or Points of Concern

• Operating Losses: The company continues to incur significant operating losses, which increased year-over-year.
• Market Volatility: Revenue recognition is subject to variability based on shipment timing and contract mix, which may impact financial predictability.
• Competitive Pressures: While Rigetti is making strides, it faces competition from other quantum computing companies, particularly in achieving quantum advantage and developing error correction technologies.
• Technical Challenges: Achieving the desired fidelity and coherence times for qubits remains a complex task, with the need for ongoing R&D to address these issues.

5. Notable Q&A Insights

• NVIDIA Collaboration: Rigetti is exploring NVIDIA's quantum models to potentially enhance error correction capabilities, indicating a proactive approach to integrating new technologies.
• Customer Engagement: There is a noted increase in interest from commercial customers, although most current usage is still in the research phase.
• Control Systems Partnership: The partnership with Quanta is yielding benefits in control system design, which is critical for system performance.
• Error Correction: Current systems do not perform on-chip error correction; instead, it is managed externally, highlighting an area for future development.
• Market Readiness: The company remains cautious about the timeline for achieving quantum advantage, emphasizing the complexity of scaling and improving qubit performance.

Overall, Rigetti Computing demonstrated strong revenue growth and strategic advancements in Q1 2026, while also facing challenges related to operating losses and competitive pressures in the evolving quantum computing landscape.