Rigetti outlines plan for 100-plus qubit quantum system at 99.5% fidelity by year-end while strengthening balance sheet

Earnings Call Insights: Rigetti Computing (RGTI) Q2 2025

Management View

CEO Subodh K. Kulkarni reported continued progress on the technology roadmap, highlighting the demonstration of “the industry’s largest multi-chip quantum computer with impressive performance.” He announced that “Cepheus-1-36Q, the industry’s largest multichip quantum computer is released for general availability and deployed on the Rigetti Quantum Cloud Services platform, QCS, and will be available on Microsoft Azure thereafter.”
Kulkarni emphasized the reduction in error rates, stating, “Just 6 months after our record performance with Ankaa-3, we have once again halved our error rates. With a median 2-qubit gate fidelity 99.5%. Cepheus-1-36Q has achieved a 2x reduction in 2 qubit gate error rate from our previous Ankaa-3 system.”
He detailed the scalability of the chiplet approach and set a new target: “We intend to continue our momentum and expect to release a 100-plus qubit chiplet-based system at 99.5% median 2-qubit gate fidelity before the end of 2025.”
Kulkarni also noted a significant balance sheet development: “During the second quarter of 2025, Rigetti completed the sales of $350 million gross proceeds of its common stock pursuant to our previously disclosed at-the-market equity offering program.”
CFO Jeffrey A. Bertelsen stated, “Revenues in the second quarter of 2025 were $1.8 million compared to $3.1 million in the second quarter of 2024. Gross margins in the second quarter of 2025 came in at 31% compared to 64% in the second quarter of 2024.”

Outlook

Kulkarni reiterated confidence in meeting the technology roadmap, projecting the release of a “multichip 100-plus qubit system with 99.5% 2-qubit gate fidelity before the end of 2025.”
He described the timeline to quantum advantage as “about 3 to 4 years away from getting to the 1,000-plus qubit, 99.9% fidelity with error correction and gate speeds of less than 50 nanoseconds.”
Management indicated no significant increase in operating expenses is currently expected.

Financial Results

Revenue for Q2 2025 was $1.8 million, impacted year-over-year by the expiration of the National Quantum Initiative and its pending reauthorization.
Gross margin was reported at 31% for Q2 2025, with lower margins attributed to pricing and revenue mix, particularly contracts with the U.K.’s NQCC.
Total operating expenses in Q2 2025 were $20.4 million. Stock compensation expense was $3.6 million.
Operating loss for Q2 2025 was $19.9 million. Net loss for Q2 2025 was $39.7 million, including a $22.8 million unfavorable impact from changes in derivative warrant and earn-out liabilities.
Cash, cash equivalents, and available-for-sale investments stood at $571.6 million as of June 30, 2025, with no debt.

Q&A

Troy Donavon Jensen, Cantor Fitzgerald: Asked about the use of proceeds from the equity raise—Kulkarni responded that the focus remains on R&D and accelerating the timeline if opportunities arise, but “we are still about 3 to 4 years away from getting to the 1,000-plus qubit, 99.9% fidelity with error correction and gate speeds of less than 50 nanoseconds.”
Jensen inquired about OpEx—Bertelsen replied, “I don’t think we anticipate any significant uplift.”
Jensen followed up on the Quanta partnership—Kulkarni explained Quanta’s focus on the non-QPU portion of hardware and control systems, aiming for integration in the next few quarters.
David Neil Williams, The Benchmark Company: Asked about confidence in scaling the 99.5% fidelity to 100-plus qubits—Kulkarni stated, “our confidence is fairly high that we will get to 100-plus qubit and beyond, frankly.”
Williams followed up on roadmap acceleration—Kulkarni noted, “We will certainly try to accelerate our time line from that 4-year to Quantum Advantage” but identified multiple technical hurdles.
Kinney Chin, TD Cowen: Asked about M&A and gate speeds—Kulkarni said M&A is not currently expected to accelerate the timeline, and reaching sub-50 nanosecond gate speeds is “not that difficult, honestly.”
Nathaniel Quinn Bolton, Needham & Company: Inquired about chiplet sizing and fab requirements—Kulkarni confirmed a plan to stay with 9-qubit chiplets for the 100-qubit milestone, with flexibility for larger chiplets thereafter.
Bolton also asked about quantum error correction timelines—Kulkarni said, “as we get into 2026 and beyond,” error correction will become a larger focus.
Tyler Perry Cucinotta Anderson, Craig-Hallum: Asked about feedback from QBI and NQCC—Kulkarni described ongoing projects and optimism for advancing to Phase 2 with DARPA.
Brian David Kinstlinger, Alliance Global Partners: Asked if roadmap progress could drive larger orders—Kulkarni indicated government and academic sales remain lumpy and tied to tech milestones, but interest in on-premise quantum computers is growing.

Sentiment Analysis

Analysts conveyed a generally positive tone, highlighting technical achievements and seeking clarity on future milestones, spending discipline, and partnership execution.
Management expressed confidence in technology progress and the chiplet roadmap, using phrases like “our confidence is fairly high” and “we are optimistic,” but tempered with realism about technical challenges and timelines.
Compared to the previous quarter, both analysts and management maintained a constructive but cautious optimism, with management’s confidence strengthened by recent technical milestones and a bolstered cash position.

Quarter-over-Quarter Comparison

The current quarter featured the successful demonstration and deployment of the Cepheus-1-36Q system, reducing error rates and setting a new target of 100-plus qubits at 99.5% fidelity for year-end, compared to the prior quarter’s focus on laying groundwork for these milestones.
Management highlighted a major equity raise in Q2 2025, significantly increasing available cash versus the prior quarter.
Revenue improved sequentially, but year-over-year performance was impacted by the National Quantum Initiative’s status.
Analyst focus shifted from general technology updates and partnerships to more granular questions about scalability, chiplet design, and technical timelines.
Management tone remained confident in both quarters, but the current quarter’s remarks reflected greater momentum following key technical achievements.

Risks and Concerns

Management identified the pending reauthorization of the National Quantum Initiative in the U.S. Congress as a key risk to future sales.
Gross margins were pressured by revenue mix and development contract terms, especially with the U.K.’s NQCC.
Higher operating expenses were driven by salary increases, new hires, and consulting, especially in R&D.
Technical challenges remain in scaling qubit counts, achieving higher fidelities, integrating error correction, and advancing gate speeds.
Analysts repeatedly questioned the timeline to quantum advantage and the path to commercial revenue growth.

Final Takeaway

Rigetti’s Q2 2025 call underscored the company’s advancement in quantum technology with the launch of Cepheus-1-36Q, a clear reduction in error rates, and a strengthened cash position following a substantial equity raise. Management remains focused on delivering a 100-plus qubit system at 99.5% fidelity by year-end, while keeping R&D as the central priority and maintaining spending discipline. Despite ongoing technical hurdles and external funding uncertainties, the company is confident in its proprietary chiplet-based approach and its ability to meet ambitious technology milestones over the next several years.

Read the full Earnings Call Transcript