Rigetti Computing's Q4 2025 Earnings Call: Roadmap Shifts, Revenue Recognition Changes, and DARPA Timeline Delays Spark Contradictions

Generated by AI agentAinvest Earnings Call DigestReviewed byThe Newsroom
3min read
RGTI--

- RigettiRGTI-- reported Q4 2025 revenue of $1.9M (down from $2.3MMMM-- in Q4 2024) with a 35% gross margin, while anticipating revenue from Novera and C-DAC orders in 2026.

- The company achieved 99.9% two-qubit gate fidelity on its ProDrive platform and plans to deploy a 108-qubit system by March 2026, with larger systems expected by 2026-2027.

- Partnerships with NVIDIANVDA--, Reveriane, and QphoX aim to advance hybrid computing and error correction, addressing scaling challenges in quantum technology.

- Rigetti maintains $590M in cash, targeting quantum advantage by ~2027 with 1,000+ qubits and 99.9% fidelity, emphasizing disciplined execution and global on-premise demand.

Date of Call: Mar 4, 2026

Financials Results

  • Revenue: $1.9M, compared to $2.3M in Q4 2024
  • EPS: Non-GAAP net loss of $0.03 per share, compared to a loss of $0.06 per share in the prior year quarter
  • Gross Margin: 35%, compared to 44% in Q4 2024
  • Operating Margin: Operating loss of $22.6M, compared to $18.5M in Q4 2024

Guidance:

  • 108 Qubit system deployment expected around end of March with ~99.5% median Two-qubit gate fidelity.
  • System with more than 150 qubits and ~99.7% median Two-qubit gate fidelity expected by end of 2026.
  • System with more than 1,000 qubits and ~99.8% median Two-qubit gate fidelity anticipated by end of 2027.
  • Revenue recognition for ~half of $5.7M Novera order expected in Q1 2026, remainder in Q2 2026.
  • C-DAC $8.4M order revenue to be recognized in second half of 2026 upon validation.
  • Continued focus on on-premise systems for government, national labs, academic institutions, and select commercial customers.

Business Commentary:

Technical Advancements and Milestones:

  • Rigetti achieved a 2-qubit gate fidelity of 99.9% at a 28-nanosecond gate speed on its ProDrive platform, and maintains a 99.9% 1-qubit gate fidelity.
  • The company demonstrated median 2-qubit gate fidelities of 99.7% on a 9-qubit system, 99.6% on a 36-qubit system, and 99% on a 108-qubit system.
  • These milestones reflect significant progress in materials, fabrication, and system-level design, narrowing the fidelity gap with other quantum modalities.

System Deployment and Customer Engagement:

  • Rigetti deployed multiple systems to the cloud, including an 84-qubit monolithic chip system and a 36-qubit chiplet-based system.
  • The company secured an $8.4 million order from India's C-DAC for a 108-qubit on-premises quantum computer, with deployment scheduled for the second half of 2026.
  • Increased demand for on-premises systems among national governments and research institutions is driven by the need for direct hardware access for hybrid computing and systems-level R&D.

Financial Overview and Strategic Focus:

  • Fourth-quarter revenue was $1.9 million, compared to $2.3 million in the same quarter last year, with gross margins at 35%, down from 44% in Q4 2024.
  • Revenue variability is expected due to the timing of system deliveries and government contract activity.
  • The company exited the year with approximately $590 million in cash, providing flexibility and runway to execute its roadmap to quantum advantage.

Partnerships and Ecosystem Development:

  • Rigetti is partnering with companies like Reveriane to advance real-time quantum error correction and with NVIDIA to support hybrid computing environments.
  • The collaboration with QphoX and the UK's National Quantum Compute Center on optical readout technology addresses scaling bottlenecks.
  • This ecosystem approach accelerates innovation and reduces execution risk as the industry evolves.

Roadmap and Quantum Advantage Timeline:

  • Rigetti aims to deploy a 108-qubit system by the end of March with 99.5% median Two-qubit gate fidelity and plans to exceed 150 qubits by the end of 2026.
  • The company is approximately 3 years away from achieving quantum advantage, requiring systems with around 1,000 qubits, 99.9% Two-qubit gate fidelity, and integrated error mitigation.
  • The focus remains on disciplined execution and scaling to reach commercial quantum advantage.

Sentiment Analysis:

Overall Tone: Positive

  • CEO states '2025 was a year of technical validation and disciplined execution' and highlights 'significant progress' including 99.9% Two-qubit gate fidelity milestone. CFO notes cash increased to ~$590M, providing 'sufficient runway' and the company is 'building for a meaningful durable impact over the next 5 to 10 years.' Management expresses excitement about momentum in technology, partnerships, and customer orders.

Q&A:

  • Question from Kevin Garrigan (Jefferies): What are the key remaining gating items to deliver the 108 qubit system as a customer-ready system?
    Response: Issues with tunable coupler interactions at scale were addressed via architectural refinements, and the system is on track for deployment by end of March.

  • Question from Troy Jensen (Cantor Fitzgerald): Can you clarify the exact fidelity levels for single and dual mode when deploying the 108 qubit system?
    Response: One-qubit gate fidelity will be 99.9%, and median Two-qubit gate fidelity is expected to be ~99.5%.

  • Question from Quinn Bolton (Needham & Company): Is the 108 qubit system already at 99.5% Two-qubit gate fidelity in lab, or is work still needed?
    Response: Multiple areas are at 99.5% or better, but the whole grid is not yet; chip redesign and data verification are ongoing to ensure confidence before deployment.

  • Question from David Williams (StoneX): Can you talk about progress on the NV Link collaboration with NVIDIA?
    Response: Partnership aims to create a hybrid quantum ecosystem; superconducting gate-based systems' speed (~tens of nanoseconds) is key for practical integration with classical computing, unlike much slower modalities.

  • Question from Krish Sankar (TD Cowen): Where are you on the decision to build another fab or outsource, and have competitor acquisitions changed that?
    Response: Existing Fab 1 is capable of reaching quantum advantage in ~3 years; competitor actions are unclear, but Rigetti does not need a new fab near-term and will evaluate options.

  • Question from Craig Ellis (B. Riley Securities): Can you elaborate on the Japanese research sale and the international pipeline?
    Response: Order for a 9-qubit Novera QPU from a premium Japanese research organization is expected to ship in April and be recognized in Q2. Interest in on-premises systems is growing globally.

  • Question from John McPeake (Rosenblatt Securities): Is the 150-plus qubit system still on the roadmap for end of 2026?
    Response: Yes, it is still on the roadmap, but most current effort is focused on the >1,000 qubit system for ~2027.

  • Question from Brian Kinstlinger (Alliance Global Partners): What was the competitive landscape and evaluation process in Japan and India?
    Response: Customers typically choose superconducting modality for scalability and speed; Rigetti's differentiators are open modular architecture and chiplet technology, enabling upgrades and integration with third-party solutions.

Contradiction Point 1

DARPA Program Advancement Timeline

Timeline for advancing to DARPA Phase B shifted from "coming months" to "end of the year."

What are your key takeaways from the recent earnings report? - Troy Jensen (Cantor Fitzgerald)

20260305-2025 Q4: The company is confident of advancing to Phase B by the end of the year after addressing a list of requirements... - [Subodh Kulkarni](CEO)

Can you clarify the single and dual gate fidelity levels, current gate speed, and provide an update on the DARPA program for the 108-qubit system? - David Williams (The Benchmark Company)

2025Q3: The company is optimistic about being chosen in the coming months and remains engaged in Phase A. - [Subodh Kulkarni](CEO)

Contradiction Point 2

Revenue Recognition for Novera Systems

Revenue recognition shift from "upon shipment" to "all at once upon installation."

Quinn Bolton (Needham & Company), what are your thoughts on the earnings report? - Quinn Bolton (Needham & Company)

20260305-2025 Q4: The C-DAC order revenue will be recognized all at once in the second half of 2026 upon installation and spec validation... - [Jeffrey Bertelsen](CFO)

What is the current two-qubit fidelity status of the 108-qubit system and the expected gross margins for the $5.7M Novera sales and $8.4M C-DAC order? - Quinn Bolton (Needham & Company)

2025Q3: Revenue for the two Novera system sales will be recognized upon shipment... - [Jeffrey Bertelsen](CFO)

Contradiction Point 3

Status of the 150+ Qubit Roadmap

Roadmap confirmation shifts from a focus on 2026 to a primary focus on the 1,000+ qubit system for 2027/2028.

John McPeake (Rosenblatt Securities) - John McPeake (Rosenblatt Securities)

20260305-2025 Q4: Yes, the 150+ qubit system is still on track for around the end of 2026. Most current effort is focused on the 1,000+ qubit system for 2027/2028. - [Subodh Kulkarni](CEO)

Is the 150+ qubit system (99.7% fidelity) by end of 2026 still on the roadmap, are the issues on the 108-qubit system critical for future milestones, and how many logical qubits might the 1,000+ qubit machine yield? - David Williams (The Benchmark Company)

2025Q3: The 2026 milestone targets 150+ qubits at 99.7% fidelity, and the 2027 milestone targets 1,000+ qubits at 99.8% fidelity. - [Subodh Kulkarni](CEO)

Contradiction Point 4

Timeline to Achieve Quantum Advantage

Conflicting statements on when a 1,000+ qubit, high-fidelity system will be ready.

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20260305-2025 Q4: The 150+ qubit system is still on track for around the end of 2026. Most current effort is focused on the 1,000+ qubit system for 2027/2028. - [Subodh Kulkarni](CEO)

Is the 150+ qubit system (99.7% fidelity) by end of 2026 still on the roadmap, and how many logical qubits might the 1,000+ qubit machine yield? - Troy Jensen (Cantor Fitzgerald)

2025Q2: The focus remains on R&D development to accelerate the technology roadmap. The company... believes it is still about 3 to 4 years away from a 1,000+ qubit, 99.9% fidelity system with error correction and sub-50 nanosecond gate speeds. - [Subodh K. Kulkarni](CEO)

Contradiction Point 5

Strategic Approach to Mergers and Acquisitions

Inconsistency regarding the company's openness and need for M&A to accelerate its roadmap.

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20260305-2025 Q4: The company is open to M&A that accelerates its roadmap (e.g., >1,000 qubits, 99.8% fidelity, sub-15 ns speed in a couple of years). However, they see no immediate need as their chiplet strategy and partnerships... are sufficient. - [Subodh Kulkarni](CEO)

What is the progress on the partnership with NVIDIA for NVLink and the hybrid quantum-classical ecosystem, and what is the M&A landscape to accelerate the roadmap? - Kinney Chin (TD Cowen) [on behalf of Krish Sankar]

2025Q2: Will continue to look at M&A opportunities that could accelerate the timeline, but currently sees no tactical opportunities. - [Subodh K. Kulkarni](CEO)