Rigetti Computing 2025 Q1 Earnings Misses Targets as Net Income Swings 305%

Rigetti Computing (RGTI) reported its fiscal 2025 Q1 earnings on May 12th, 2025. Rigetti's earnings report revealed a notable miss on revenue expectations, with the company posting $1.47 million against an anticipated $2.55 million. Despite the revenue shortfall, Rigetti achieved a significant turnaround in net income, recording $42.62 million, aided largely by non-cash gains. Looking forward, Rigetti maintains an optimistic outlook, focusing on strategic projects and technological advancements that are expected to contribute to future revenue growth. The company's guidance remains in line with previous projections.

Revenue
Rigetti Computing's total revenue decreased by 51.8% in Q1 2025, totaling $1.47 million, down from $3.05 million in Q1 2024. Collaborative research and professional services generated $1.33 million, while access to quantum computing systems contributed $140,000, culminating in the total revenue figure.

Earnings/Net Income
Rigetti Computing returned to profitability with an EPS of $0.14 in Q1 2025, reversing a loss of $0.14 per share in Q1 2024, marking a 200.0% positive change. The company achieved a substantial turnaround with a net income of $42.62 million in Q1 2025, reflecting a 305.2% positive swing from a net loss of $20.77 million in Q1 2024. The EPS performance indicates strong financial recovery.

Price Action
The stock price of Rigetti Computing edged down 1.95% during the latest trading day, surged 19.13% during the most recent full trading week, and has surged 23.00% month-to-date.

Post-Earnings Price Action Review
The strategy of buying RGTI when revenue beats expectations and holding for 30 days shows potential for gains but entails risks. Positive market optimism can lead to stock price surges, capturing short-term momentum if the sentiment persists. However, Rigetti's history of quarterly losses and unmet revenue estimates poses significant risk. Negative surprises can result in substantial stock declines, and the market's reaction to earnings beats can be unpredictable. Despite potential gains, Rigetti's volatile stock price and financial uncertainties require careful consideration of broader market conditions and investor sentiment. Investors should weigh potential benefits against risks and have a comprehensive risk management plan. While opportunities for short-term gains exist, the strategy remains risky, necessitating thorough analysis of company fundamentals, market conditions, and risk tolerance.

CEO Commentary
Subodh Kulkarni, President and CEO, expressed optimism about Rigetti's advancements, stating, "We believe chiplets are the right way to scale up superconducting qubits." He emphasized the company's participation in DARPA's Quantum Benchmarking Initiative, highlighting the strategic importance of achieving utility-scale quantum computing. Kulkarni noted that recent awards are crucial in advancing their technology, particularly in superconducting quantum computing and error correction. Despite challenges in the funding landscape, he maintained confidence in future government support and partnerships, asserting, "We are still very much in R&D," with a focus on technology milestones.

Guidance
Rigetti Computing anticipates approximately $1 million in revenue from the DARPA Phase A contract, emphasizing its strategic importance over immediate financial gain. Kulkarni indicated that NQCC revenue will be recognized over the next year, while the Air Force contract is expected to contribute about $1 million over three years. Rigetti remains focused on achieving significant technology development milestones, particularly in scaling qubit counts and enhancing fidelity towards utility-scale quantum computing.

Additional News
Rigetti Computing's strategic collaboration with Quanta Computer resulted in a $35 million investment, bolstering its financial stability and technological partnerships. The alliance aims to enhance Rigetti's capabilities in superconducting quantum computing. Additionally, Rigetti has been awarded multiple government-funded projects, including the DARPA Quantum Benchmarking Initiative and Innovate UK's Quantum Mission Pilot Awards, further establishing its leadership in quantum technology. These initiatives are set to advance superconducting quantum computing and error correction capabilities, contributing to Rigetti's long-term growth and technological prowess.