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01/10 23:52
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several concerning financial metrics: a significant revenue drop, decreased gross margins, and increased operating losses. Despite optimistic future guidance and strategic partnerships, the immediate financial health is weak. The Q&A section highlights uncertainties in achieving technological milestones and government funding. The lack of clear timelines for critical advancements adds to the uncertainty. Although there are positive strategic developments, the negative financial performance and uncertainties are likely to weigh on investor sentiment, leading to a negative stock price reaction over the next two weeks.
Revenue $1.8 million in Q2 2025 compared to $3.1 million in Q2 2024, a decrease due to the expiration of the National Quantum initiative and its pending reauthorization in the U.S. Congress.
Gross Margins 31% in Q2 2025 compared to 64% in Q2 2024, a decrease due to revenue mix and variability in pricing terms of development contracts, including lower-margin contracts with the U.K.'s NQCC for Quantum Systems.
Operating Expenses (OpEx) $20.4 million in Q2 2025 compared to $18.1 million in Q2 2024, an increase due to annual salary increases, new hires, higher consulting costs in R&D, and higher costs for the annual shareholder meeting.
Stock Compensation Expense $3.6 million in Q2 2025 compared to $3.3 million in Q2 2024, an increase.
Operating Loss $19.9 million in Q2 2025 compared to $16.1 million in Q2 2024, an increase.
Net Loss $39.7 million in Q2 2025 compared to $12.4 million in Q2 2024, an increase due to noncash charges for the change in the fair value of derivative warrant and earn-out liabilities, which had a $22.8 million unfavorable impact in Q2 2025 compared to a $3.4 million favorable impact in Q2 2024.
Cash, Cash Equivalents, and Investments $571.6 million as of June 30, 2025, with no debt.
Release of Cepheus-1-36Q: Rigetti released Cepheus-1-36Q, the industry's largest multi-chip quantum computer, for general availability on the Rigetti Quantum Cloud Services platform and Microsoft Azure. It achieved a 2x reduction in 2-qubit gate error rate compared to the previous Ankaa-3 system.
Technological advancements: Transitioned from monolithic chip to chiplets, improving chip uniformity, manufacturing complexity, and fabrication yield. Optimized 2-qubit gates and advances in multilayer chip and tunable coupler design contributed to higher performance.
Revenue performance: Quarterly revenue decreased to $1.8 million in Q2 2025 from $3.1 million in Q2 2024, impacted by the expiration of the National Quantum Initiative and its pending reauthorization.
Financing: Raised $350 million through an at-the-market equity offering program, strengthening the balance sheet to support commercial scale-up.
Operational expenses: Total operating expenses increased to $20.4 million in Q2 2025 from $18.1 million in Q2 2024, driven by salary increases, new hires, and higher consulting costs in R&D.
Gross margins: Gross margins declined to 31% in Q2 2025 from 64% in Q2 2024 due to revenue mix and lower-margin contracts.
Scaling quantum computers: Rigetti plans to release a 100-plus qubit chiplet-based system with 99.5% median 2-qubit gate fidelity by the end of 2025, aiming for quantum advantage and fault tolerance.
Revenue Decline: Revenues in Q2 2025 were $1.8 million, a significant drop from $3.1 million in Q2 2024, primarily due to the expiration of the National Quantum Initiative and its pending reauthorization in the U.S. Congress.
Gross Margin Reduction: Gross margins fell to 31% in Q2 2025 from 64% in Q2 2024, impacted by revenue mix and lower-margin development contracts, including those with the U.K.'s NQCC.
Increased Operating Expenses: Total operating expenses rose to $20.4 million in Q2 2025 from $18.1 million in Q2 2024, driven by salary increases, new hires, higher consulting costs in R&D, and increased costs for the annual shareholder meeting.
Widening Net Loss: Net loss for Q2 2025 was $39.7 million, significantly higher than the $12.4 million net loss in Q2 2024, exacerbated by noncash charges related to derivative warrant and earn-out liabilities.
Dependence on Government Initiatives: Future sales are heavily reliant on the renewal of the U.S. National Quantum Initiative and contracts with U.S. and foreign governments, creating uncertainty.
Lower Revenue from Key Contracts: Contracts with the U.K.'s NQCC for Quantum Systems have lower gross margins, impacting overall profitability.
Technology Goals: Rigetti plans to release a 100-plus qubit chiplet-based system with 99.5% median 2-qubit gate fidelity before the end of 2025. This is part of their roadmap to achieve quantum advantage and fault tolerance by quadrupling chiplet count and decreasing error rates.
Revenue and Sales Outlook: Future sales are expected to be influenced by the renewal of the U.S. National Quantum Initiative, sales to U.S. and foreign governments, and partnerships like Novera.
Financial Position: Rigetti has strengthened its balance sheet with $571.6 million in cash, cash equivalents, and available-for-sale investments as of June 30, 2025, positioning the company for commercial scale-up of its quantum computers.
The selected topic was not discussed during the call.
The earnings call highlights a strong financial position with $571.6 million in cash, optimistic guidance on achieving high fidelity in quantum computing, and potential revenue from Novera system sales. The Q&A section reveals confidence in reaching technical milestones and integrating with NVIDIA's NVQLink, despite some uncertainties about DARPA selection and external foundry capabilities. The positive sentiment from analysts and management's forward-looking strategies suggest a likely positive impact on stock price.
The earnings call reveals several concerning financial metrics: a significant revenue drop, decreased gross margins, and increased operating losses. Despite optimistic future guidance and strategic partnerships, the immediate financial health is weak. The Q&A section highlights uncertainties in achieving technological milestones and government funding. The lack of clear timelines for critical advancements adds to the uncertainty. Although there are positive strategic developments, the negative financial performance and uncertainties are likely to weigh on investor sentiment, leading to a negative stock price reaction over the next two weeks.
The earnings call summary reveals concerning financial performance with declining revenue, gross margins, and increased operating losses. While there are strategic developments, such as the Quanta investment and Ankaa-3 launch, competitive pressures, supply chain challenges, and operational risks remain significant. The Q&A section highlights uncertainties around funding and project timelines. Despite some positive aspects, the overall sentiment is negative due to financial struggles and external risks, suggesting a potential stock price decline of -2% to -8%.
The earnings call reveals several negative financial aspects: declining revenues, reduced gross margins, and a widening operating loss. Despite some promising developments, such as strategic collaborations and new projects, the financial performance is concerning. The Q&A section also highlights uncertainties in funding timelines and lack of clarity in management responses. These factors, combined with the negative financial metrics, suggest a negative market sentiment and potential stock price decline in the short term.
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