Rigetti Computing, Inc. (RGTI) Earnings

Management highlights

### Core Strategic Positioning - Rigetti focuses on superconducting gate-based quantum computing, which offers a unique combination of scalability and speed not easily replicated by other modalities - The company pursues an open modular chiplet-based architecture, allowing integration of innovative solutions from third-party partners to accelerate technology development, which management believes is a more practical path to scaling to 1,000+ qubits than monolithic approaches - The company frames quantum computing as a long-cycle opportunity, with the ecosystem increasingly coalescing around practical, scalable platforms available to users on existing infrastructure ### Technology and Product Progress - The company's CFIUS-1108Q is one of the highest qubit count generally available gate-based quantum computers globally, and the largest modular quantum computing system on the market today, built from 12 interconnected 9-qubit chiplets - CFIUS-1108Q currently operates at a median single qubit gate fidelity of ~99.9%, median two-qubit gate fidelity of ~99.1%, and gate speeds of ~60 nanoseconds - Coherence time (currently 25-30 microseconds) is the primary constraint on higher fidelity; management is executing on chip design and material initiatives, including joint IP with Fermilab using tantalum capping for niobium superconducting contacts which has demonstrated meaningful coherence improvements in testing, to double or triple coherence times over the next several years - The company remains on track with its chiplet-based roadmap and has begun investing in dilution refrigeration and infrastructure to support 1,000-qubit systems, with a long-term target of 1,000 qubits, 99.9% two-qubit gate fidelity, and gate speeds below 40 nanoseconds in approximately three years ### Strategic Partnerships and Government Funding - Rigetti signed a letter of intent (LOI) with the U.S. Department of Commerce for up to $100 million in CHIPS Act funding over three years to accelerate superconducting quantum computing R&D, which validates the company's chiplet-based approach; the LOI is not a definitive agreement, and funding would be exchanged for an equity stake consistent with the total award value - The company recently expanded its collaboration with HPE and the Pittsburgh Supercomputing Center (PSC) to develop a hybrid quantum-classical supercomputer, funded by an NSF grant; Rigetti will deliver a full 9-qubit Novera system to PSC's Tangle Lab testbed, marking a shift from experimental collaboration to development of commercially relevant quantum-enabled HPC solutions - The company has recent on-premises system wins including the University of Saskatchewan and a research arm of a large Japanese conglomerate, and remains on track to deliver three systems in 2026: two 9-qubit Novera systems and a 108-qubit system for CDAC in India ### Customer and Market Traction - Rigetti's systems are available globally via Rigetti Quantum Cloud Services, Amazon Braket, Microsoft Azure Quantum, and Q-Braid, with growing engagement from researchers and enterprises experimenting on the platform - Global investment in quantum computing is expanding, led by government and national lab initiatives, with growing commercial interest across materials, logistics, and financial services as organizations explore hybrid and quantum-inspired workloads

Guidance

- The $8.4 million CDAC 108-qubit on-premises system order for India is still expected to be recognized as revenue in Q4 2026, following installation and performance acceptance testing - Management expects 2026 capital expenditures to be elevated relative to prior years, driven by investments in dilution refrigeration and FAB1 equipment to support higher qubit count systems - The company targets a median two-qubit gate fidelity of approximately 99.5% for CFIUS-1108Q by the end of 2026, while maintaining existing gate speed advantages - Rigetti plans to publish an updated technology roadmap later in 2026, with clear, transparent milestones for quantum advantage including specific targets for qubit count, fidelity, coherence time, and gate speed - Delivery of the HPE/PSC 9-qubit Novera system is expected to occur in 2027, with the exact quarter to be confirmed as the program progresses

Segment performance

Rigetti Computing reports consolidated financial results only, with no separate segment breakdown provided in the call. For Q2 2026, total revenue was $5.1 million, up 183% year-over-year from $1.8 million in Q2 2025. The year-over-year revenue increase was driven entirely by on-premises Novera QPU sales, from recognition of previously announced purchase orders. Gross margin for the quarter was 43%, up from 31% in Q2 2025, with variability driven by contract mix, pricing, and the relative contribution of Novera QPU sales. Total operating expenses were $30.3 million, up from $20.4 million year-over-year, with spending concentrated in R&D for engineering headcount, fabrication, chip design, control electronics development, and infrastructure for higher qubit count systems. GAAP operating loss was $28.1 million, up from $19.9 million in Q2 2025, and GAAP net loss was $52.6 million, up from $39.7 million year-over-year, impacted by non-cash fair value adjustments to derivative liabilities. Non-GAAP net loss (excluding stock-based compensation and fair value adjustments) was $16 million ($0.05 per diluted share), compared to a non-GAAP net loss of $13.3 million ($0.04 per diluted share) in Q2 2025. As of Q2 end 2026, Rigetti held $541.3 million in cash, cash equivalents, and available-for-sale investments, with no debt on its balance sheet.

Risks & headwinds

- The $100 million Department of Commerce LOI is not a definitive agreement, and final award is subject to customary approvals, conditions, and negotiation of definitive terms, including equity issuance structure - Coherence time improvements require iterative testing and refinement of chip design, materials, and fabrication processes, with no guarantee that planned improvements will deliver the expected increases to fidelity or that upgrades will not inadvertently degrade other performance metrics of deployed systems - Revenue results remain highly variable quarter-to-quarter due to the early stage of the quantum computing market and the timing of large system deliveries and government-funded project recognition, which does not reflect long-term operational or strategic performance - Scaling beyond 1,000 qubits will require development of new optical interconnect technologies, which is still in early research with no guarantee of successful commercialization on targeted timelines - Government program timelines (including DARPA Phase B selection) are inherently unpredictable, and there is no guarantee of selection or funding on expected timelines

Analyst Q&A

• Q: When will coherence time improvements impact 108-qubit system fidelity, and what is the status of DARPA Phase B selection following DARPA leadership changes? /

  A: Coherence time improvements from material and design changes (including tantalum capping and smoother Josephson junction interfaces) are expected to increase 108-qubit fidelity before the end of 2026. Rigetti tests changes exhaustively before deployment to avoid inadvertently degrading existing stable performance, as the currently deployed 108-qubit system is already well-regarded by users for reliability and ease of use. Leadership changes at DARPA have not impacted Rigetti's progress; the company continues to work toward Phase B requirements, remains optimistic about selection relatively soon, and is participating in multiple other government quantum initiatives globally so DARPA is not the only path forward.

• Q: What is the QPU production capacity of the Fremont FAB1 facility, and will CapEx need to increase for capacity gains? /

  A: FAB1 is a 150mm fab with more than enough current production capacity for current demand, even with the chiplet architecture. A single 150mm wafer can produce many 9-qubit chiplets, so capacity is not a concern. Any future CapEx for FAB upgrades will be for improved capability (to address limitations of non-automated 150mm equipment) rather than increased production capacity.

• Q: What is driving the recent large increase in deferred revenue, and is Rigetti exploring optical interconnects for future chiplet scaling? /

  A: The increase in deferred revenue is almost entirely driven by prepayments from the CDAC 108-qubit system order. Rigetti is already conducting early exploratory research on optical interconnects with partner QFOX, focused on microwave-to-optical signal conversion for scaling beyond 1,000 qubits. Current plans use flex cable technology to reach 1,000 qubits, so optical interconnects remain early-stage research with no definitive deployment timeline yet.

• Q: What user engagement trends are you seeing on the publicly deployed 108-qubit system, and what milestones must Rigetti hit to unlock the full $100 million Commerce Department LOI? /

  A: The 108-qubit system receives strong positive feedback from thousands of global users via cloud platforms, who praise its reliability, consistency, and ease of use. Most current use is for research and algorithm development, which aligns with expectations this early in quantum computing development. The LOI terms are still being negotiated with the Department of Commerce, but the broad goal of the funding is to accelerate Rigetti's scaling roadmap, with work focused on cryogenics and readout electronics miniaturization.