10-Q: Rigetti Computing Q1 2026 Revenue Surges 199%

Rigetti Computing reports a significant 199% year-over-year revenue increase for Q1 2026, driven by strong sales of quantum computing systems, while managing increased R&D investments.

Summary

• Rigetti Computing reported a substantial revenue increase of 199% to $4.4 million for the first quarter ended March 31, 2026, compared to $1.47 million in the same period of 2025.
• Gross profit also saw a significant rise of 212% to $1.38 million.
• Operating expenses increased by 24% to $27.3 million, primarily due to a 29% rise in Research and Development (R&D) expenses.
• The company reported a net income of $33.1 million for the quarter, a decrease from $42.6 million in the prior year period, largely influenced by changes in the fair value of derivative warrant liabilities and the absence of earn-out liabilities recognized in the prior year.
• Cash and cash equivalents increased to $48.1 million, and available-for-sale investments totaled $520.8 million as of March 31, 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report due to significant revenue growth and technological advancements, though continued operating losses and the need for future capital remain key considerations.

Positives

• Revenue surged by 199% to $4.4 million in Q1 2026, indicating strong market adoption and sales growth.
• Gross profit increased by 212%, demonstrating improved efficiency in revenue generation.
• Interest income more than doubled to $5.4 million, reflecting a larger investment portfolio and potentially higher interest rates.
• The company's cash and cash equivalents increased to $48.1 million, providing a solid liquidity position.
• Significant investments in R&D continue, with a 29% increase, signaling a commitment to technological advancement in quantum computing.
• The company announced the general availability of its 108-qubit quantum computing system, Cepheus-108Q, accessible via multiple cloud platforms.

Negatives

• Net income decreased by $9.5 million to $33.1 million compared to the prior year, primarily due to non-cash accounting adjustments related to warrant liabilities and the absence of a significant gain from earn-out liabilities recognized in Q1 2025.
• Operating expenses increased by 24% to $27.3 million, driven by higher R&D investments.
• The company continues to operate at a loss from operations ($26.0 million for the quarter), consistent with its strategy of investing in long-term growth.
• Despite revenue growth, the company has an accumulated deficit of $737.8 million.

Risks

• The company's limited operating history and early stage of development make forecasting future results challenging.
• There is a risk of failing to meet publicly announced technological milestones or changes to the technology roadmap.
• The company relies on government entities and a few key customers for a significant portion of its revenue, creating customer concentration risk.
• Macroeconomic conditions, including inflation, interest rates, and geopolitical events, could negatively impact the business.
• The company may need to seek additional capital, and failure to do so could force delays or reductions in R&D programs.
• The development of a scalable business model and achieving quantum advantage are not guaranteed and depend on future breakthroughs.

Future Outlook

Rigetti expects to continue investing in R&D to advance its quantum computing technology roadmap, aiming for quantum advantage and large-scale fault-tolerant quantum computing. The company anticipates that revenue will continue to be generated from development contracts and sales of on-premises QPUs and quantum computing systems, with expected fluctuations in quarterly and annual periods. Management believes current cash, cash equivalents, and available-for-sale investments are sufficient for at least the next 12 months, but may seek additional capital through financings or collaborations.

Management Comments

• "We believe quantum computing represents one of the most transformative emerging capabilities in the world today."
• "When scaled, it is anticipated that these systems will be poised to solve problems of staggering computational complexity at unprecedented speed."
• "Our long-term business model centers on revenue generated from sales of quantum processing units (QPUs) and quantum computing systems and providing access to quantum computing systems via the cloud in the form of Quantum Computing as a Service (QCaaS)."
• "We believe that this patented and patent pending, modular chip architecture is the building block for new generations of quantum processors that we expect to achieve a clear advantage over classical computers."
• "Based on our forecasts, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to meet our anticipated operating cash needs for at least the next 12 months..."
• "We expect to continue to incur additional losses for the foreseeable future as we invest in research, development, and infrastructure consistent with our long-term business strategy."

Industry Context

StockSavvy.ai notes that Rigetti's significant revenue growth in Q1 2026 aligns with the broader industry trend of increasing investment and adoption in quantum computing, particularly as companies like Rigetti bring more powerful systems to market and make them accessible via cloud platforms. The substantial R&D investment reflects the highly competitive and capital-intensive nature of developing advanced quantum technologies.

Comparison to Industry Standards

• While direct comparisons are difficult due to the nascent stage of the quantum computing industry, Rigetti's reported 199% revenue growth in Q1 2026 is exceptionally high, suggesting strong early traction for its systems.
• Competitors like IBM, Google, and IonQ are also investing heavily in quantum hardware and software. IBM's roadmap includes systems with over 1,000 qubits, while Google has demonstrated quantum supremacy on specific tasks. IonQ focuses on trapped-ion quantum computers.
• Rigetti's focus on superconducting qubits and a modular chiplet architecture (as seen in Cepheus-108Q) is a key differentiator, aiming for scalability and performance that can compete with other modalities.
• The company's reported median two-qubit gate fidelity of 99.1% on its 108-qubit system is a critical performance metric. Industry benchmarks for high-fidelity two-qubit gates are generally above 99%, with leading systems pushing towards 99.9%.

Legal Proceedings

• The company is not currently a party to any material legal proceedings that, if determined adversely, would have a material adverse effect on its business, financial position, results of operations, or cash flows.

Related Party Transactions

• The company entered into a Collaboration Agreement with Quanta Computer Inc. (Quanta) on February 27, 2025, involving mutual investments and potential joint ownership of developed technology.
• Rigetti sold 3,020,412 shares of its Common Stock to Quanta for approximately $35.0 million in a private placement transaction that closed on April 29, 2025.
• Quanta has the option to appoint a board observer and is subject to a three-year lock-up on the acquired shares.

Stakeholder Impact

• Shareholders: Potential dilution from future capital raises, but also potential upside from technological advancements and revenue growth.
• Employees: Continued investment in R&D and growth may lead to job creation and opportunities, but also pressure to meet ambitious technological goals.
• Customers: Access to advanced quantum computing systems (e.g., Cepheus-108Q) via cloud platforms and potential for collaborative development.
• Suppliers: Increased demand for materials and components for quantum processor manufacturing.
• Creditors: The company's financial position and ability to meet future obligations depend on its ability to secure funding and achieve profitability.

Next Steps

• Continue to invest in quantum computing and superconducting quantum processors.
• Upgrade current chip fabrication facility and potentially invest in a new one.
• Develop multiple generations of quantum processors.
• Scale operations and enhance product and service offerings.
• Expand customer base and implement new marketing strategies.
• Update technology roadmap later in 2026, including anticipated milestones and timelines.
• Continue to invest $250 million in quantum computing over five years as part of the Quanta Collaboration Agreement.

Key Dates

Recommendation

Rigetti demonstrates strong revenue growth and technological progress, particularly with the launch of its 108-qubit system. However, the company continues to incur significant operating losses and has an accumulated deficit, indicating substantial financial risk. While the long-term potential of quantum computing is high, the path to profitability remains uncertain and dependent on future breakthroughs and capital raises. Therefore, a 'hold' recommendation is appropriate, advising investors to monitor progress on revenue generation, cost management, and successful execution of its technology roadmap while acknowledging the inherent risks.

Keywords

Rigetti Computing, Quantum Computing, Q1 2026, Form 10-Q, Revenue Growth, R&D Investment, Quantum Processors, QCaaS, Cepheus-108Q, Financial Results