Executive Summary

Q1 revenue fell to $1.47M and gross margin to 30% amid mix headwinds (NQCC low-margin delivery), while GAAP net income printed $42.6M entirely due to $62.1M non-cash fair value gains on warrants/earn-outs; operating loss was $(21.6)M, and diluted EPS was $0.13 .
Cash, cash equivalents and AFS investments were $209.1M at 3/31 and increased to $237.7M by 4/30 after Quanta’s $35M equity investment, enhancing runway and enabling focus on QPU R&D while Quanta invests in non‑QPU hardware over five years .
Management reiterated 2025 technical milestones: 36‑qubit tiled system mid-year and >100 qubits by year-end at ~99.5% two‑qubit fidelity, plus continued work toward faster gates and real‑time QEC; DARPA Stage A carries ~$1M near‑term with larger phases possible .
Near-term stock catalysts: mid‑year 36‑qubit tile demonstration, DARPA Phase B selection, U.S. NQI reauthorization/appropriations timing, and early evidence of Quanta partnership leverage in control systems and hardware stack .

What Went Well and What Went Wrong

What Went Well
- Strengthened liquidity and strategic positioning: $237.7M pro forma cash/investments post Quanta close; Quanta to invest ~$250M in non‑QPU hardware over five years, allowing Rigetti to concentrate R&D on the QPU stack .
- Technology momentum: reaffirmed 36‑qubit chiplet mid‑2025 and >100 qubits by YE at high fidelity; continued progress on optical control research published in Nature Physics and quantum preconditioning algorithm results on 84‑qubit Ankaa‑3 .
- DARPA Stage A selection and AFOSR/Innovate UK awards validate roadmap and QEC focus; DARPA Stage A worth up to ~$1M, with larger later phases targeted .
What Went Wrong
- Revenue declined to $1.47M (vs $2.27M in Q4 and $2.38M in Q3), reflecting lumpiness and dependence on government/academic R&D budgets; NQCC mix pressured gross margin to 30% (from 44% in Q4 and 49% in Q1’24) .
- Operating loss widened sequentially to $(21.6)M; OpEx rose to $22.1M on annual comp, FICA from RSU vesting, stock comp spot bonuses, and less engineering time in revenue .
- GAAP profitability was non‑operational, driven by $62.1M non‑cash fair value gains; underlying business remains loss‑making pending revenue scale and funding tailwinds .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$2.378	$2.274	$1.472
Gross Profit ($USD Millions)	$1.204	$1.003	$0.442
Gross Margin %	50.6% (calc. from cited rev/GP)	44%	30%
Operating Expenses ($USD Millions)	$18.550	$19.497	$22.074
Operating Income (Loss) ($USD Millions)	$(17.346)	$(18.494)	$(21.632)
Net Income (Loss) ($USD Millions)	$(14.833)	$(152.961)	$42.619
Diluted EPS ($USD)	$(0.08)	$(0.68)	$0.13
Cash, Cash Equivalents & AFS Investments (period-end)	$92.6M (9/30/24)	$217.2M (12/31/24)	$209.1M (3/31/25)

Notes: Q1 GAAP net income reflects $62.1M non-cash gains on warrant/earn‑out fair value changes . CFO cited Q1 gross margin at 30% (vs 49% in Q1’24), pressured by NQCC contract mix .

Segment breakdown: Not disclosed; management highlighted NQCC program and Novera QPU sales as contributors, with NQCC at structurally lower margins .
KPIs (technology/ops)
- Ankaa‑3 (84 qubits) live; achieved 99.0% median iSWAP fidelity and 99.5% median fSim; gate speeds ~70ns on Ankaa‑3 .
- Chiplet roadmap: 36‑qubit (4×9) mid‑2025; >100 qubits by YE 2025 at ~99.5% median 2‑qubit fidelity .
- Optical signaling: research demonstrating coherent control of superconducting qubit using light published in Nature Physics .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal revenue/EPS guidance	2025	None disclosed	None disclosed	Maintained (no formal guidance)
NQCC revenue recognition	~Next 12 months	N/A	Recognized over time “over the course of the next year”	New disclosure (timing)
AFOSR consortium award rev	~Next 12 months (3-year total)	N/A	Roughly ~$1M over the upcoming year (3‑year program)	New disclosure (timing)
DARPA Stage A	6‑month Stage A	N/A	Up to ~$1M upon milestone completion; larger later phases possible	New disclosure (Stage A)
OpEx trend	Near-term	N/A	Q1 elevated by FICA/RSU and spot bonuses; “hopefully…a little bit of a reduction” going forward	Qualitative easing

No tax rate, OI&E, margin, dividend or segment guidance was provided.

Earnings Call Themes & Trends

Topic	Q3 2024 (Q-2)	Q4 2024 (Q-1)	Q1 2025 (Current)	Trend
Chiplet/tiling roadmap	Announced 36‑qubit tile mid‑2025; >100 qubits YE; 9‑qubit tiles at 99.4% fidelity; validated tiling without performance loss	Reiterated plan; focus on tiling vs monolithic, path to 12×9 ≈108 qubits	Confident mid‑year 4×9 and YE >100 qubits at high fidelity	On track
Government/NQI funding	Emphasized role of gov’t programs (DOE/DoD); NQCC highlighted	Detailed expectation for DOE/DoD funding; DARPA benchmarking program	NQI reauth bipartisan but delayed; 4–6 weeks appropriation post‑passage	Still pending
Quanta collaboration	N/A in Q3	Strategic collaboration announced; $35M equity; ~$250M non‑QPU invest commitment	$35M equity closed 4/29; roadmap for Quanta to assume control systems/hardware R&D	Deepening
Optical signaling	N/A in Q3	Nature Physics optical readout publication	Nature Physics paper on optical control; fiber optics roadmap over 3–4 years	Advancing research
Margins/mix	NQCC 24‑qubit delivery ongoing	NQCC drives lower GM (44% in Q4)	Q1 GM 30% on NQCC mix; YoY 49%→30%	Headwind persists

Management Commentary

“We also are making great strides in developing innovative approaches to scaling to higher qubit count systems, which is possible due to our open and modular system architecture, in-house full-stack expertise, and world-class partners.” — CEO Subodh Kulkarni .
On gross margin and mix: “Gross margins in the first quarter of 2025 came in at 30%… due to ongoing revenues from our contract with the UK's NQCC… which has a lower gross margin profile than most of our other revenue.” — CFO Jeff Bertelsen .
On chiplet scaling milestones: “We are pretty confident that… 4 9‑qubit chiplets sometime in the middle of this year and… over 100 qubits by the end of this year is going to work.” — CEO .
On DARPA: “Phase A is a $1 million award… Phase B… increase significantly… Phase C… increase quite a bit… we view this as a very strategic… project.” — CEO .
On Quanta partnership: “They have committed to investing $250 million over the next 5 years in the non‑QPU hardware… enabling our focus in the QPU portion of the stack.” — CEO .

Q&A Highlights

Chiplet progress/timing: Management reiterated confidence in mid‑2025 36‑qubit (4×9) tile and YE >100‑qubit system at ~99.5% median 2‑qubit fidelity; prior 2‑tile demonstrations de‑risk tiling approach .
NQI funding outlook: Bipartisan support persists; bill passage timing uncertain; appropriations typically 4–6 weeks after passage, constraining near‑term academic/DOE demand conversion .
DARPA Stage A and revenue: Stage A is ~$1M and strategic; larger revenue potential in later phases; focus is technology milestones rather than near‑term dollars .
NQCC margins/upgrade path: NQCC margins are structurally lower (cost‑sharing model) but strategically important; 36‑qubit upgrade could occur either by cabling existing 84‑qubit hardware or by bringing chiplet‑based 36‑qubit post‑demonstration .
Operating expenses: Q1 OpEx elevated by FICA/RSU vesting effects and spot bonuses; management anticipates a “little bit of a reduction” going forward .

Estimates Context

S&P Global consensus for Q1 2025 EPS and revenue was not available via our estimates tool at the time of analysis; as a result, we cannot assess beats/misses versus Street for this quarter. We attempted to retrieve “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and counts, but no data was returned for Q1 2025 (and adjacent quarters) for RGTI [Values would be retrieved from S&P Global].
Implication: Given absent consensus, investors should benchmark results to trajectory and qualitative milestones. Revenue declined sequentially amid lumpy government/academic demand and NQCC mix; GAAP profitability was non‑operational (fair value gains), so underlying loss profile remains the primary lens .

Key Takeaways for Investors

Liquidity and strategic partner leverage are the near‑term moats: $237.7M pro forma cash/investments and Quanta’s non‑QPU hardware commitment reduce capital intensity on control systems/packaging while keeping Rigetti focused on QPU performance scaling .
Execution bar for 2025: Demonstrate mid‑year 36‑qubit tiling and YE >100 qubits at ~99.5% fidelity; these are pivotal proof points for scalability and a key stock catalyst path alongside DARPA Phase B advancement .
Revenue/GM volatility likely persists until NQI reauthorization/appropriations and other program awards normalize demand; mix remains a margin headwind as NQCC revenues carry structurally lower margins .
GAAP profitability is not reflective of core economics; focus on operating loss/OpEx discipline and cash burn run‑rate given non‑cash fair value noise .
Technology leadership markers to watch: gate speed progress toward <30ns, sustained ~99.5–99.7% two‑qubit fidelities at higher qubit counts, and practical advances in error correction/optical I/O enabling future scaling .
Program revenue timing: Expect NQCC to recognize over the next year and AFOSR roughly ~$1M over the upcoming year; DARPA Stage A up to ~$1M upon milestones — all helpful but not yet transformative .
Medium-term thesis: If Rigetti hits 2025 tiling/fidelity milestones and secures incremental government wins (DARPA/DOE/UK) while leveraging Quanta for non‑QPU hardware scale‑up, it can sustain a path toward “quantum advantage” milestones over 3–5 years; failure or delays on these milestones would challenge the bull case .

Appendix: Additional Detail (from Q1 2025 press release/8‑K and call)

Q1 financials detail: Revenue $1.472M; OpEx $22.074M; Operating loss $(21.632)M; Net income $42.619M; Diluted EPS $0.13; Net income includes $62.099M non‑cash gains on fair value of warrants/earn‑outs; Cash, cash equivalents and AFS $209.1M at 3/31 .
Post‑quarter: Quanta $35M equity closed 4/29/25; pro forma cash/investments $237.7M at 4/30 .
Gross margin context: 30% in Q1 vs 49% in Q1’24 due to NQCC mix .
Prior quarters reference: Q4 revenue $2.274M, GM 44%, OpEx $19.497M, net loss $(152.961)M (non‑cash charges heavy); Q3 revenue $2.378M, net loss $(14.833)M .

Rigetti Computing, Inc. (RGTI)·Q1 2025 Earnings Summary