Rigetti Computing, Inc. (Nasdaq: RGTI)

Rigetti Computing's Q1 2025 financial performance shows revenue of $1.5 million, a decrease of 52% compared to $3.1 million in Q1 2024. The decline in revenue can be attributed to the timing of government contract awards and project completions. Despite the revenue decrease, the company has secured several significant government-funded projects in the U.S. and U.K. that are expected to contribute to future revenue growth.

Operating expenses increased to $22.1 million in Q1 2025 from $18.1 million in Q1 2024, representing a 22% increase. Research and development expenses, which are critical for advancing the company's quantum computing technology, rose to $15.5 million from $11.5 million in the prior year period. Selling, general, and administrative expenses remained relatively stable at $6.6 million.

The increase in operating expenses resulted in an operating loss of $21.6 million, compared to $16.6 million in Q1 2024. However, the company reported net income of $42.6 million for the quarter, a significant improvement from the net loss of $20.8 million in the same period last year. This positive net income was primarily driven by $62.1 million of non-cash gains from the change in fair value of derivative warrant and earn-out liabilities.

Rigetti's cash position remains strong, with cash, cash equivalents, and available-for-sale investments totaling $209.1 million as of March 31, 2025. Following the completion of the previously announced investment by Quanta Computer, Inc. on April 29, 2025, this position further improved to $237.7 million as of April 30, 2025. This strong liquidity provides Rigetti with the financial flexibility to continue executing its technology development roadmap and scaling strategies.

The company's earnings per share (EPS) on a diluted basis was $0.13 for Q1 2025, compared to a loss of $0.14 per share in Q1 2024. The weighted average shares used to compute diluted EPS increased to 301.6 million from 151.9 million in the prior year period, reflecting equity issuances over the past year.

Rigetti achieved several significant business and technical milestones during Q1 2025 and recent subsequent events, enhancing its position in the quantum computing landscape:

Government Contract Awards

• DARPA's Quantum Benchmarking Initiative: Selected to advance to Stage A, a 6-month performance period worth up to $1 million upon completion of program milestones. Rigetti will focus on its utility-scale quantum computer concept that combines proprietary multi-chip architecture with scalable quantum error correction (QEC) codes. The company is collaborating with Riverlane, a leader in QEC technology, to refine the proposed concept and validate the underlying technology.
• AFOSR Award: Leading a $5.48 million consortium to further develop its breakthrough chip fabrication technology, Alternating-Bias Assisted Annealing (ABAA). Rigetti is collaborating with Iowa State University, the Royal Melbourne Institute of Technology, the University of Connecticut, and Lawrence Livermore National Laboratory to develop a detailed understanding of how ABAA impacts the chip on a microscopic level, aiming to shed light on defects in superconducting qubits.
• Innovate UK Quantum Mission Pilot Awards: Awarded three projects, including leading a £3.5 million consortium to advance quantum error correction capabilities on superconducting quantum computers in collaboration with Riverlane and the National Quantum Computing Centre (NQCC) Superconducting Circuits Team.

Strategic Investment

On April 29, 2025, Rigetti closed its previously announced investment by Quanta Computer Inc. related to their strategic collaboration agreement. In connection with the closing, Quanta purchased approximately $35 million of shares of Rigetti common stock at approximately $11.59 per share. This strategic investment strengthens Rigetti's financial position and validates its technology approach through partnership with a global technology manufacturing leader.

Technical Advancements

• Optical Control of Superconducting Qubits: Published a joint paper with Harvard University, MIT, and University of Chicago in Nature Physics demonstrating "Coherent control of a superconducting qubit using light." This breakthrough could help address scaling challenges by replacing bulky microwave components with optical signals that have a smaller footprint and negligible thermal conductivity.
• Quantum Preconditioning Algorithm: Developed a new quantum optimization algorithm that boosted classical optimizers in addressing a power energy grid problem. Using Rigetti's 84-qubit Ankaa-3 system, the company achieved a relative advantage against classical baselines with high solution accuracy.

Upgrades to NQCC Quantum Computer

As part of the Innovate UK project, Rigetti will upgrade its existing quantum computer at the NQCC, including:

• Deploying a larger 36-qubit quantum processing unit (QPU), updating from the current 24-qubit QPU
• Integrating Rigetti's latest generation control system to enable improved qubit control and a fully programmable, low-latency interface with Riverlane's QEC Stack

Rigetti continues to execute on its strategic vision focused on advancing quantum computing capabilities through several key initiatives:

Core Strategic Focus Areas

• Modular System Architecture: Rigetti is leveraging its proprietary multi-chip architecture to advance scaling of quantum processors. This approach allows for incremental scaling of qubit counts without redesigning the entire system, potentially providing a more practical path to fault-tolerant quantum computing.
• Quantum Error Correction: The company is prioritizing the development of scalable quantum error correction (QEC) codes, a critical requirement for universal, fault-tolerant quantum computing. Through collaborations with partners like Riverlane, Rigetti aims to demonstrate real-time QEC capabilities and advance state-of-the-art metrics.
• In-house Fabrication: Rigetti designs and manufactures its chips in-house at Fab-1, the industry's first dedicated and integrated quantum device manufacturing facility. This vertical integration provides greater control over the fabrication process and enables innovations like the Alternating-Bias Assisted Annealing (ABAA) technology.
• Full-Stack Integration: The company's proprietary quantum-classical infrastructure provides high-performance integration with public and private clouds for practical quantum computing, positioning Rigetti to better serve enterprise, government, and research clients.

Key Development Programs

Rigetti's current technology roadmap includes several significant development programs aimed at advancing quantum computing capabilities:

• Utility-Scale Quantum Computer (USQC): Through the DARPA Quantum Benchmarking Initiative, Rigetti is refining its concept for a utility-scale quantum computer that combines multi-chip architecture with scalable QEC codes.
• Advanced Chip Fabrication: The AFOSR-funded research into ABAA technology aims to provide deeper insights into defects in superconducting qubits, potentially leading to significant improvements in qubit quality and performance.
• Hybrid Optical-Microwave Systems: The successful demonstration of optical control of superconducting qubits opens new possibilities for scaling to higher qubit count systems by reducing the thermal load associated with traditional microwave control systems.
• Quantum Software and Algorithms: The development of quantum preconditioning algorithms that boost classical optimizers represents a practical approach to achieving quantum utility for real-world problems before full fault-tolerance is achieved.

Rigetti's strategic collaboration with Quanta Computer strengthens its manufacturing capabilities and potentially enables faster scaling of its quantum systems. The company's focus on modular architecture, in-house fabrication, and strategic partnerships positions it to address key challenges in scaling quantum computing systems while delivering practical value through cloud-based quantum computing services.