Rigetti Computing (RGTI) delivered its first quarter 2025 earnings this week, revealing a sharp divide between technical progress and financial performance. Consequently, the stock declined by nearly 15%.
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Q1 Highlights
The quantum computing company posted a net income of $42.6 million, reversing a $20.8 million loss from the same period last year. But that headline number tells only half the story.
Revenue fell to $1.5 million, a 52% drop from the $3.1 million reported in Q1 2024. Gross margin declined to 30%, down from 49% a year ago. Operating expenses rose 22% year-over-year to $22.1 million, driven by increased research and development spending. Rigetti’s operating loss widened to $21.6 million, suggesting deeper cash burn to sustain its innovation engine.
The company’s net income was not driven by core operations, but by a $62.1 million non-cash gain related to the revaluation of derivative warrant and earn-out liabilities. That accounting boost provided temporary relief but did not reflect underlying business growth.
Investors reacted swiftly. RGTI shares dropped 14.6% on May 13, closing at $9.87, down from $11.57 before the earnings report. The decline reflects growing investor concern about falling revenue and rising costs, even as the company posts accounting profits.
Technological Excellence
Despite the financial setbacks, Rigetti continues to push the boundaries of quantum technology. It was selected to participate in DARPA’s Quantum Benchmarking Initiative, a key government project aimed at building utility-scale quantum systems. The company also secured a $5.5 million U.S. Air Force research grant to advance chip fabrication techniques through a process called Alternating-Bias Assisted Annealing.
In the U.K., Rigetti received three Innovate UK Quantum Mission awards to improve quantum error correction and scale its superconducting systems. As part of this initiative, Rigetti will upgrade its National Quantum Computing Centre system from 24 to 36 qubits. A recent partnership with Quanta Computer brought in a $35 million equity investment, part of a larger $250 million strategic collaboration over five years. This infusion increased Rigetti’s cash reserves to $237.7 million as of April 30.
The company’s research continues to gain recognition. A joint paper with Harvard, MIT, and the University of Chicago—published in Nature Physics—demonstrated optical control of superconducting qubits. The breakthrough could reduce system complexity and improve scalability.
A Speculative Growth Play
Rigetti remains a long-term bet. CEO Subodh Kulkarni emphasized that commercial quantum advantage is still several years away. In the meantime, revenue will continue to depend on research contracts and government funding.
For investors, RGTI stands out as a speculative growth play with long-term potential. Strong cash reserves, high-profile partnerships, and cutting-edge research support the company’s vision. However, with shrinking revenues, widening losses, and limited commercial adoption, Rigetti’s near-term risk remains high.
Is Rigetti Stock a Good Buy?
Despite the mixed bag results, Rigetti sports a Strong Buy rating based on six analysts. The average RGTI stock price target is $15, implying a 42.18% upside.
