Rigetti Computing, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Good afternoon, and thank you for joining us for Rigetti's second quarter 2026 earnings conference call.

I'm pleased to be joined today by our Chief Financial Officer, Jeff Bertelsen, who will walk you through our financial results in more detail following my overview. We appreciate your continued interest in Rigetti and look forward to answering your questions at the conclusion of our prepared remarks. Before we begin, I would like to remind everyone that today's call, along with our second quarter 2026 press release, contains forward-looking statements. These statements reflect our current expectations, objectives, and underlying assumptions regarding our outlook and future operating results and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated.

These risks and uncertainties are described in more detail in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2025, our Form 10-Q filing for the quarter ended June 30, 2026, and other periodic reports filed from time to time with the SEC. Rigetti undertakes no obligation to update any forward-looking statements made during this call except as required by law. During today's call, we will refer to certain non-GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures, please refer to today's earnings release on our investor relations website at www.rigetti.com and to the 8-K furnished with the SEC. Before I dive into the quarter, I want to frame our discussion around three key takeaways.

First, we continue to demonstrate technical leadership with our Cepheus-class systems, including ongoing progress to improve the performance of our 108Q, Cepheus-1-108Q platform. Second, the letter of intent we signed with the U.S. Department of Commerce for up to $100 million in funding over three years further validates our superconducting chiplet-based approach and strengthens our ability to invest against our roadmap to quantum advantage. Third, we recently announced an expanded collaboration with HPE and the Pittsburgh Supercomputing Center to develop a hybrid quantum classical supercomputer, reflecting growing demand for our approach and positioning Rigetti to deliver differentiated quantum-enhanced HPC solutions. Q2 was another important proof point in our strategy to combine technical progress with real-world access and long-term strategic partnerships.

Quantum computing remains a long cycle opportunity, we are increasingly seeing the ecosystem coalesce around platforms that can scale in a practical way and that are available to users where they already run their workloads. We believe Rigetti is well-positioned in the current environment for three reasons. We are focused on superconducting gate-based quantum computing, which offers a combination of scalability and speed that is difficult to replicate with other modalities. We are pursuing an open modular architecture that allows us to integrate innovative solutions from partners to advance our technology faster, such as QEC technology from Riverlane and transduction technology from QphoX. We pioneered and continue to lead in chiplet-based architectures, which we believe provide a more practical path to scaling to 1,000 qubits and beyond than monolithic approaches. Let me start with our technology and product progress.

Cepheus 1108Q remains one of the highest qubit count generally available gate-based quantum computers in the world and the largest modular quantum computing system on the market today. The system is built from 12 interconnected 9-qubit chiplets and is accessible to customers via Rigetti Quantum Cloud Services and through Amazon Braket, Microsoft Azure Quantum, and qBraid. We are just one of three companies, including IBM and Google, who have delivered gate-based systems with over 100 qubits, and we believe that our modular approach gives us a strong advantage on the path towards higher qubit count systems. Today, Cepheus 1108Q continues to operate at a median single qubit gate fidelity of approximately 99.9% and a median two qubit gate fidelity of roughly 99.1% with gate speeds around 60 nanoseconds.

These performance levels at the 100-plus qubit scale are meaningful, our teams remain focused on improving fidelity throughout 2026 as we refine chip design, materials, and fabrication processes and incorporate learnings from our R&D platforms. From a systems engineering perspective, our work this quarter extended beyond adding qubits. We continue to mitigate coupling interactions between tunable couplers that become more pronounced beyond the 100-qubit scale and to address coherence time limitations that are now the primary constraint on fidelity. As we discussed with investors in May, our current coherence times are in the 25-30 microsecond range, and we are executing on a set of chip design and material initiatives intended to roughly double or triple those times over the next several years.

This includes joint IP with Fermilab, where capping niobium superconducting contacts with tantalum has demonstrated meaningful coherence time improvements in fundamental experiments, we are now incorporating those learnings into production chip designs. We are also refining deposition, oxidation, and etch processes to smooth interfaces in the Josephson junction area, which we believe will further improve coherence and ultimately gate fidelities. Beyond Cepheus 1108Q, we remain on track with the chiplet-based roadmap we laid out earlier this year and have begun investing in dilution refrigeration and infrastructure that can support 1,000-qubit systems. Our objective remains to reach approximately 1,000 qubits, two-qubit gate fidelities of 99.9%, and gate speeds below 40 nanoseconds in roughly three years. I would now like to spend a few minutes on the U.S. Department of Commerce letter of intent we announced on May 21.

Under this LOI, the department has selected Rigetti for a potential award of up to $100 million in funding over three years to accelerate superconducting quantum computing R&D that addresses key technical challenges in scaling and advancing our systems. The contemplated transaction structure includes the department receiving an equity stake in Rigetti consistent with the total amount of funding, and the funding itself would be allocated under the CHIPS Research and Development Office broad agency announcement pursuant to the CHIPS Act. We believe that this prospective partnership reflects the view that quantum computing will have far-reaching impacts on national security, economic interests, and overall prosperity, and that superconducting qubit platforms are central to U.S. leadership in this field. It also reflects the administration's broader CHIPS R&D investments in quantum computing and related technologies designed to build domestic industry, create high-paying jobs, and strengthen technological resilience.

For Rigetti, this LOI is strategically significant in several ways. It will allow us to tackle key scaling bottlenecks more rapidly associated with multi-chip architectures. It will enable us to accelerate multiple generations of superconducting quantum processors and associated control electronics at Fab-1, our dedicated quantum device manufacturing facility. It will deepen our collaboration with the U.S. government at a time when global investment in quantum computing is increasing and geopolitical competition in this domain is intensifying. It is important to emphasize that the LOI is not yet a definitive agreement. Any final structure will also include issuance of securities to the department and will be subject to customary approvals and conditions. We view this prospective partnership as aligned with our long-term strategy and our commitment to disciplined capital deployment. Jeff will provide additional context on how we are thinking about this funding opportunity within our broader capital framework.

Turning to customer momentum and market traction. Our strategy is to meet customers where they are across public cloud, hybrid infrastructure, and dedicated quantum systems. On the cloud, Rigetti Quantum Cloud Services, Amazon Braket, Microsoft Azure Quantum, and qBraid provide global access to our systems, including Cepheus 1108Q. We continue to see engagement from researchers and enterprises seeking to experiment on one of the most capable, generally available gate-based platforms, where they benefit from ease of use and consistent uptime. In parallel, we are building a growing base of on-premises system deployments. Earlier this year, we outlined three systems targeted for delivery in 2026. Two nine-qubit Novera systems and a 108-qubit system for C-DAC in India. We remain on track and are seeing additional demand for Novera QPUs from national labs and universities, with recent wins including the University of Saskatchewan and a research arm of a large Japanese conglomerate.

These deployments deepen technical engagement, create multi-year usage pathways, and generate high-value feedback that informs our roadmap. At this stage of the market, we are prioritizing customers committed to active experimentation and collaboration, and we are deliberate in how we build those relationships. As part of this customer momentum, we recently expanded our collaboration with HPE and the Pittsburgh Supercomputing Center. Rigetti will deliver a nine-qubit Novera quantum computing system into PSC's new TangleLab testbed, which is being funded by a National Science Foundation grant. Working with HPE, this deployment is designed to integrate the Novera system with an HPE-powered supercomputing environment so that researchers and industry users can develop and test hybrid quantum classical workloads on real hardware. We view this as an important step in moving our HPE relationship from early experimentation toward commercially relevant quantum-enabled HPC solutions.

More broadly, global investment in quantum computing continues to expand, led by governments and national labs, and increasingly complemented by commercial interests. Outside the U.S., we are seeing structured programs such as the U.K. government's six-year ProQure initiative, where we intend to invest up to $100 million over time in systems, talent, and infrastructure. In India, our 108-qubit C-DAC award reflects national-level interest in superconducting platforms. Across Europe and Asia, we are seeing growing number of coordinated quantum initiatives. Commercial revenue remains early, but engagement is increasing across industries such as materials, logistics, and financial services as they explore hybrid and quantum-inspired workloads. As system performance improves and the industry moves closer to quantum advantage, we expect commercial adoption to build on the government and research foundation in place today. Let me briefly connect these developments back to our long-term roadmap.