Rigetti Revenue Drops 42 Percent in Q2

Rigetti Computing (RGTI 10.34%), a quantum computing developer focused on scalable hardware and cloud-based solutions, announced its second quarter 2025 results on August 12, 2025. The headline news was a steep revenue decline and a wider net loss than analysts projected, with GAAP revenue of $1.8 million and a GAAP net loss of $39.7 million, both missing analyst estimates, while the company simultaneously achieved a significant milestone with the release of its 36-qubit multi-chip quantum system. GAAP revenue was $1.8 million, missing the $1.87 million GAAP consensus estimate. Both GAAP net loss and revenue fell short of analyst expectations. The company reported $571.6 million in cash, cash equivalents, and investments as of June 30, 2025, reflecting the successful completion of a $350 million equity raise during the period. Overall, the quarter was defined by continued investment in technology and a bolstered balance sheet, set against persistent challenges in commercial revenue generation and profitability.

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Focus Areas

Rigetti Computing develops quantum computers and cloud-based quantum computing services for scientific and commercial use. Its core expertise includes designing and manufacturing quantum processors, with a focus on modular chip platforms that allow for rapid scaling of quantum systems.

The company has concentrated on three main pillars: technological progress in quantum hardware, scalability of its quantum processors, and collaborations with government agencies and tech partners. Achieving high-fidelity (low-error) quantum operations, expanding processor size, and deploying its systems through the cloud continue to be the most crucial drivers for future success. Its intellectual property portfolio -- more than a hundred patents with more than a hundred more pending -- supports its innovation efforts and its competitive position within the quantum industry.

Quarter Highlights: Financial Performance and Product Advances

The quarter’s financial performance was marked by a significant year-over-year decline in GAAP revenue. GAAP revenue fell to $1.8 million, a 41.6% drop from Q2 2024. GAAP revenue also missed analyst estimates by 3.8%. GAAP net loss widened to $39.7 million, more than tripling the loss from Q2 2024. A large share of this loss was due to noncash charges—specifically, a $22.8 million expense for changes in the valuation of derivative warrant and earn-out liabilities. Even when excluding these, ongoing operating losses remain a concern as the company continues to ramp up investment in research and development.

Gross margin compressed sharply to 31%, down from 65% in Q2 2024 as the company placed continued emphasis on research-and-development spending. Cash outflows from operations (GAAP) for the first half of 2025 reached $29.8 million, greater than the $26.7 million in the first half of 2024.

On the product side, Rigetti delivered a headline technological advance with the general availability of the Cepheus-1-36Q quantum computer. This is a modular, multichip system featuring 36 qubits (quantum bits). Qubits are the core units of quantum information, and increasing the quantity while improving their reliability is critical to quantum computer performance. The Cepheus-1-36Q system achieved a median two-qubit gate fidelity of 99.5%, halving the error rate of its predecessor, the Ankaa-3 platform, as reported for the two-qubit gate error rate between Ankaa-3 and Cepheus-1-36Q. In quantum computing, gate fidelity refers to how accurately a quantum operation is performed. Higher numbers indicate less error, which translates directly to more useful and reliable computation.

This latest processor, built on a proprietary chiplet-based architecture, supports quicker computation through faster quantum logic gates and is meant to pave the way to even larger and more robust systems. Management highlighted the successful quadrupling of its chiplet count and outlined plans to scale to a 100-plus qubit system by the end of 2025. The new hardware is available through Rigetti's Quantum Cloud Services and will be offered on Microsoft (NASDAQ:MSFT) Azure thereafter.

A key operational highlight was strengthening of the balance sheet. Rigetti completed a $350 million equity offering, driving cash, cash equivalents, and investments up to $571.6 million, a substantial boost from earlier this year. The company holds no outstanding debt. No new major revenue-generating commercial partnerships were announced, but prior collaborations -- including with Quanta Computer, DARPA, and the Air Force’s Office of Scientific Research -- support the ongoing flow of strategic funding and technology validation. There was no dividend declared, as Rigetti does not currently pay a dividend.

The company continued to rely on government and research contracts for most of its revenue. Commercial market adoption for quantum computing at scale remains years away. As a result, revenue remains volatile and is driven primarily by project delivery milestones and grant timing, not by recurring product sales.

Looking Ahead and Management Outlook

Rigetti’s management reiterated its technology roadmap for the remainder of FY2025, with a flagship goal of releasing a 100-plus qubit chiplet-based quantum system at 99.5% median two-qubit gate fidelity by year-end. This target builds on the modular design and fidelity gains demonstrated in the latest release. The existing strong liquidity position supports continued investment and patience as the commercial quantum computing market develops. However, management did not offer explicit numerical guidance on forward revenue or earnings projections.

For investors and partners, the focus in the coming quarters will be on Rigetti’s ability to further scale its chiplet-based hardware, improve reliability, and maintain funding momentum while waiting for broader commercial adoption of quantum technology. Ongoing developments in government policy, such as the passage and funding of the National Quantum Initiative, may also influence revenue opportunities for projects and research collaborations.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.