Q3 2025 Rigetti Computing Inc Earnings Call

Speaker #1: After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone.

Speaker #1: You will then hear automated messages advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would like to hand the conference over to your first speaker today, Dr. Subodh Kulkarni, CEO. Please go

Speaker #1: ahead. Good morning,

Speaker #2: and thank you for participating in Rigetti's earnings conference call. Covering the third quarter ended September 30th, 2025. Joining me today is Jeff Bertelsen, our CFO, who will review our results in some detail following my overview.

Speaker #2: Our CTO, David Rivas, is also here to participate in the Q&A session. We will be pleased to answer your questions at the conclusion of our remarks.

Speaker #2: We would like to point out that this call and Rigetti's third quarter ended September 30th, 2025, press release contain forward-looking statements regarding current expectations objectives and underlying assumptions regarding our outlook and future operating results.

Speaker #2: This forward-looking statements are subject to a number of risks and uncertainties. That would cause actual results to differ materially from those described and are discussed in more detail in our Form 10-K for the year ended December 31st, 2024.

Speaker #2: Our Form 10-Q for the three and nine months ended September 30th, 2025, and other documents filed by the company from time to time with the securities and exchange commission.

Speaker #2: This filing identifies and addresses important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements.

Speaker #2: We urge you to review this discussion of risk factors. During today's call, we will refer to certain non-GAAP financial measures. For details on these measures and reconciliations to comparable GAAP measures, and for further information regarding the factors that may affect Rigetti's future operating results, please refer to yesterday's earnings release on Rigetti's website at investors.rigetti.com or to the 8-K furnished with the SEC yesterday after the close.

Speaker #2: Today, I'm pleased to report that during this past quarter, we saw strong momentum with both the demand for our on-premises quantum computers and the development of collaborations to advance our own R&D and the quantum ecosystem more broadly.

Speaker #2: On the technology front, we remain on track to deliver our 100-plus cubit chiplet-based quantum system with an anticipated 99.5% median two cubit gate fidelity by the end of 2025.

Speaker #2: I'm also excited to share our 2026-2027 roadmap updates. We expect to deploy a 150-plus cubit system by or around the end of 2026 with an anticipated 99.7% median two cubit gate fidelity.

Speaker #2: And by or around the end of 2027, we expect to deploy a 1,000-plus cubit system with an anticipated 99.8% median two cubit gate fidelity.

Speaker #2: In September 2025, we announced purchase orders totaling approximately $5.7 million for two 9-cubit Novera quantum computing systems. Both systems are upgradable, allowing the customers to increase the system cubit count for more complex computations and research.

Speaker #2: One system is being purchased by an Asian technology manufacturing company. The system will serve as a testbed to develop internal quantum computing expertise. They also plan to benchmark and validate their own quantum computing technologies with the Novera system.

Speaker #2: The other system is being purchased by a California-based applied physics and artificial intelligence startup. The system will be used research. Our open and modular architecture continues to allow us to integrate innovative solutions with our technology stack, including our project with QFOX and the Air Force Research Laboratory, or AFRL, to advance superconducting quantum computer networking.

Speaker #2: In September 2025, we announced a three-year, $5.8 million contract from AFRL to advance superconducting quantum networking. Rigetti will be collaborating with QFOX, a Dutch quantum technology startup developing leading frequency conversion systems for quantum applications.

Speaker #2: A key challenge to networking superconducting quantum computers is the need to convert the microwave signals, which are used to control superconducting qubits, to optical photons that can travel along those fibers.

Speaker #2: This project aims to deliver systems providing entanglement between superconducting qubits and optical photons the essential building block of quantum networking. Our new collaborations with the Center for Development of Advanced Computing, or CDAC, and Montana State University showcase the increasing maturity of the quantum computing ecosystem.

Speaker #2: MSU is the first academic institution with an on-premises Rigetti Quantum Computer in 9-qubit Novera QPU, which will be used by researchers to advance quantum computing R&D.

Speaker #2: We intend to work with MSU on a variety of initiatives, including research projects related to quantum hardware and hybrid quantum systems and co-development and testing of enabling quantum technologies and quantum system components.

Speaker #2: Collectively, this initiative underscores the importance of public-private partnerships in advancing next-generation quantum technologies. We also signed a memorandum of understanding with CDAC, India's premier R&D organization of the Ministry of Electronics and Information Technology.

Speaker #2: With this MOU, Rigetti and CDAC intend to collaborate on the design and development of hybrid quantum computing systems and related technologies and bring them to market.

Speaker #2: We are proud to be deepening our support for quantum computing capabilities in the academic and government sectors. We are equally excited to support NVIDIA, NVQ Link, NVIDIA's new open platform for AI supercomputer quantum integration.

Speaker #2: By providing low-latency and high-throughput integration between quantum hardware and AI supercomputing, NVQ Link is a very promising resource to accelerate hybrid computation development on the path towards quantum advantage.

Our gaap. Net loss for the third quarter of 2025 was higher than our gaap. Net loss for the third quarter of 2024, primarily due to the non-cash change, in the fair value of our derivative warrant and earnout liabilities.

we recorded a 10.7 million or 3 Cent per share non-gaap, net loss for the third quarter of 2025 compared to a 13.4 million or 7 cents per share non-gaap, net loss for the third quarter of 2024,

As of September 3020 2025 we had approximately 558.9 million of cash cash equivalents and available for sale Investments and no debt.

Subsequent to September 30 2025 and through November 6th. 2025 proceeds of 46.5 million were received from the exercise of slightly more than 4 million of our public warrants.

As of November 6th 2025 cash, cash cash equivalents and available for sale Investments totaled approximately 600 million dollars.

Thank you. We would now be happy to answer your questions.

To press *11 on your telephone and wait for your name to be announced, please. To be added to the Q&A roster, please press *11 again. Stand by while we compile the Q&A roster.

Our first question comes from the line of David Williams of The Benchmark company. Your line is now open.

Hey, good morning, Dylan. Thanks for taking my questions. Um, maybe, uh, maybe first subo, just kind of thinking about the, uh, the uh, DARPA phase B. And, uh, just can you talk maybe a little bit about that. You said that you've received some some nice uh, or constructive feedback, but can you maybe talk around what? Uh,

What is maybe holding that up? And and when you think we might have a, a answer, or you might see that advancement happen.

Sure, David. Uh, as we mentioned in the press release, uh, DARPA did the initial selection of companies that they have, uh, got into Phase B. Unfortunately, we were not one of them, but they gave us good, constructive input on what we need to do to both improve on.

To get into Phase B, we are working on that, and it primarily goes into the area of error corrections and some areas of long-range coupling—things that are important in the long term to get to the Palm fall, to other quantum computing milestones in 2033. These items are not as important in the short term to achieve quantum advantage. So a lot of our focus has been, and continues to be, on getting to quantum advantage in the next.

60 to 5 years with 1,000, qubit and 99.9% to qubit gate, Fidelity gate speeds. And with some error correction, that was input, was more on the

QC Milestone, and where

We need to.

Increase effort further if specifically the area of error correction and in Long Range coupling so we are incorporating that input with a little um we will continue to talk to DARPA. We are still part of very much part of phase a and we continue to

Work with our work closely. So we are optimistic is getting into Facebook so exactly when that's hard to know, but we'll continue to work on it.

But I mean, DARPA's project, as you know, is a 7-year project. So just because we didn't make the initial cut, it's not a big deal. We feel pretty good that we'll make the cut in the next few months here.

Okay, great. And it sounds like this is more kind of on a conceptual basis versus actual performance or what you're achieving today, but but longer term, conceptually how you would characterize the uh, some of the performance metrics is that fair to say? That's fair to say? I mean, we fundamentally the data is really good and they liked it and we are

System. But as more important to the CPS, a 36-qubit chip like the system with 99.5% two-qubit gate fidelity, and about 1697 gauge page. That data is really impressive, and that's all positive. Where the constructive criticism came is, how do we do error correction and things like long-range coupling to enable the FTQC milestone 78 years from now? So, it's really the.

future work that the plan that we have needs further Improvement so it's a fair thing to say, as you correctly pointed out,

Thanks so much for that and then maybe just uh secondly here uh I think in the past you talked about a thousand plus cubits and 99% Fidelity and around, 50 NC gate speeds uh to achieve Quantum advantage and and looking at your road map in the 2027, you're awfully close to that maybe just a bit short on the Fidelity side. So I guess my question is, do you feel uh, or what is your, your comfort level that you can get to that 99% Fidelity in 27? And uh, then is that kind of a, a a right way to kind of Target in terms of when you think you can reach Quantum advantage, or do you think that that pushes out a little bit further? Thank you.

All right, that's a good question. And really, we are excited to disclose that, um, the

2 big milestones, 1 for 26.

999 points.

So let's keep it level. But more importantly, the 20207 Milestone when we believe we will get over thousand cubits at 999.8% 2 cubic gates for 80. Um you're right. I mean, it's a significant jump up from where our VR and frankly, the whole Quantum Computing industry is

Including peers in superconducting quantum computing. But certainly, when you look at other modalities,

Uh, those numbers are impressive. If 1,000 cubed 99.8% at UH, 60 nanosecond gauge speed, um, it gets us awfully close to Quantum Advantage, but not quite there, we for Quantum Advantage. We still think we need the 99.9% to cubic gate fidelity.

Um, as well as some form of error correction. So between 27 and 29, which is when we still believe we will accomplish Quantum Advantage, is getting the fidelity to that 999 and also error correction. Um, hopefully that answers your question.

It does. Thank you so much.

Thank you. One moment for our next question.

Our next question, comes online of Gwen Bolton of nimman company. Your line is now open.

Hi, she wrote it and Jeff. I wanted to follow up on, on David's questions, just kind of around the road map, um, getting to 150, uh, cubits next year and in a thousand plus in 2027. Um, so can you just walk us through? Is this still going to be a chiplet, based approach? Is it going to be on 9 QP? Sorry, 9 qubit tiles or as you get to that thousand cubits system, DC the number of cubits per tile increasing. Um, and then maybe a related question, given DARPA seems to be interested in Quantum error correction and long range. Uh coupling, you know, can you achieve long-range coupling on the tile based system? Um, can you give us your thoughts on that? Thank you.

Sure, so good questions Aquin. Um, so the 150 qubit with 99.7% 2 cubits. Get relatively, we definitely are planning on using 9 qubit, uh, chiplets. Uh, for the 1,000 qubit are thinking right now is to go up to 36 qubit chiplets, uh, to get to the Thousand qubit level at the 99.8% 2, qubit gate Fidelity by the end of 2027. That's our plan right now.

uh the main reason, we feel confident that we will be able to get to thousand kilobytes at the 1998 is because of chiplets and the and the

Data. We are generating with.

The current 36 qubit system.

Because all the experiments we had.

100 qubit system that we hope to launch your fairly solved.

Um, regarding DARPA.

Um, input for error correction, and long-range complaint, fundamentally. We have not seen any challenges in using chiplets and long-range. Coupled with the challenges are.

Um, pretty much the same, whether it's a single monolithic chip or chiplet based system. Um, long range. Coupling is a challenge for the whole industry, not just us. Um, and as far as we have seen chiplets, don't change that challenge. It's still the physical distance between the qubit, and how do you couple cubits across the width across a certain width? Um, it's nothing to do with chiplets per se, so this is pretty good. That

We need, I mean, we obviously need to improve long range. Coupling, that was part of the input, uh, but it doesn't make it worse, just because we have chip,

hopefully, that answers your question.

That that's great. And then um 1 for Jeff. Um, Jeff for Vicky, you mentioned in your script the um afrl contract as well as the 2, uh, 9 qubit novera, sales would start to, um, you know, generate Revenue in in the fourth quarter and into 2026. I guess, maybe on the 2, no Vera sales. I think you uh, in the press release talked about completion or delivery of those systems.

Customers in the first half of 2026. Is this sort of a revenue wreck that you'd be able to rev wreck those sails upon delivery? Um, because their systems maybe not just QP use, is there a percentage completion accounting that that, um, is used for those systems. Maybe just walk us through how you rev wreck on the, uh, on the Nova sales, if their systems rather than just QP use, thank you.

Sure on the uh, uh, 2 Noah system sales. I mean, we, you know, anticipate recognizing the revenue for those upon shipment. Um, right now it looks like 1 of them will go in the first quarter 1 in the second quarter. Um, but uh, you know, upon shipment, uh, would would be the manner of rev wreck.

So I'll go back in the queue. Thank you.

Thanks, thank you. Thank you. 1 moment for our next question.

Our next question, goes online for Chris sanker of TD Colin. Your line is now open.

Good morning. Thanks so much for taking my questions. This is Stephen calling on behalf of Chris. Uh, this first question for others to go to Jeff regarding the, the 2 N system, uh, sales, um, that you discussed, uh, just kind of curious. Like, and just give me the size of the orders. Are they both, uh, uh, complete systems that that include dilution fridges and

control systems or was 1 of them potentially just

A just a keep you chip tail and as far as the upgrade option is that already currently picked into the price that you guys announced or is that an additional, uh, Revenue step up or rather later on further down the line.

Sure, I'll take that. So, they are full systems that include everything from...

A transition refrigerator.

Thank you back to, let's say, 36 qubit or something bigger. Uh, it will be an additional Revenue opportunity because, uh, we have to go and

Add some cables. And uh, those kinds of things inside the database and refrigerator to account for the additional cubits. Certainly obviously the chip has to change too, so there will be an additional Revenue that comes with.

From 9 qubits to a higher.

Got it. Thanks so much for that. And uh, for my second question, uh wanted to ask a little bit about the uh I guess upcoming or future support for nvidia's. Nvq link, uh interface I guess. Can you talk about that some of the like I guess software or Hardware changes that you need to make to your it tpus or control systems in order to support that and, uh, also related, um, any thoughts on those in terms of hybrid quantum, computer support. It's just really more just for the supercomputing space for the. We think that mdq link can also allow um, Quantum systems to be placed alongside in in the AI data centers for Gen, AI type of applications. Thank you.

Oh, great question, Stephen. So if you look at um, nvidia's nvq link announcement, it's an open format for the quantum computers to basically interface directly with AI. Supercomputers so idea is indeed to have Quantum Computing. Uh, start being used with Gen Ai and potentially for AGI type applications. Um, now from our Viewpoint, uh, this was a natural step. We have always said that we believe in hybrid systems, we have always supported hybrid system standards. Um, and that's partly because of the strength of superconducting quantum Computing where we have

Uh, speeds that are commensurate with CPU.

It's logical for us to try to interface with HPCs, and that's why we believe superconducting quantum computing is most amenable for hybrid computing compared to other modalities, which are...

A thousand times lower like trapped. I on a pure atom modalities.

So for us it was a logical step when Nvidia uh started discussing an open platform like nvq link the obviously signed up with it. It

Having a quantum computer as part of a hybrid ecosystem, we certainly expect.

Products like that to start coming into Data Centers. Once we get closer to Quantum Advantage all, the interfaces will be worked out between 9 now and then, so the timeline for having quantum computers in data center doing practical applications doesn't change because of the Nvidia announcement. What it does change is the whole notion of how hybrid system will work and the Open Standards that support hybrid systems.

Hopefully that answers your questions.

Uh yes, thank you so much.

Thank you.

Thank you. One moment for our next question.

Our next question, comes online of Craig. Ellis of by Securities analyst. Now open.

Yeah. Thanks for taking the question and I wanted to follow up on a couple of the prior questions to start. So Superior with regard to nvq link. Uh Nvidia is very very strong in the National Labs. We're getting has a very strong position and National Labs. So can you talk about what we're gets? Um, historic strengths with National Labs mean for uh, engaging with ecosystem partners that can help accelerate. Uh, ragazze integration with uh, hybrid compute and and getting pulled into various workloads, including AI related workloads with me too.

Sure. Okay. So you are indeed, right? I mean the Nvidia has a very strong presence in National Labs. Um, and so do we with Quantum Computing? So it's logical for the interfaces to be worked out at National Lab level, uh, whether it's for the National Lab, um, or the operational lab or other National Labs. Um, also the nqi initiative, although not funded at the

higher level, the funding has restarted last week as you probably saw. So, it's exciting to

Have National Labs, get their funding back again, to some reasonable level. And this in the cooling platform being launched at about the same time period. So certainly we believe uh, as we have discussed in the past and in future CPUs will continue to be used for sequential Computing. And gpus will be used for parallel Computing as they are being used today and qpu is a Quantum processing unit, that will be used for simultaneous computing.

so,

Quantum platform. So definitely expect more work in this direction where we will be able to

Generate data where we take generic applications and split them into.

Sequential parallel and simultaneous and show how the 3 is respective Technologies are suitable and the benefit of having the 3 Technologies work.

together in a

that we believe is the best way to address future computation needs.

That's really helpful in chat if I wanted to ask a follow-up clarification to you regarding the afrl at 5.8 million. I think that was, uh, 3 million or excuse me, a 3 year Deal 3 year deal for 5.8, does that work fairly across 12 quarters? Or how do we think about red bra? And is, is that kicking up in the fourth quarter or early next year?

No uh it uh it will be fairly readable over the the 3 years Craig and um you know it actually you know we got a little bit of it in the third quarter so it'll be you know routable going forward.

Got it. Nice to get that going. And then lastly, if I could guys just any any commentary on uh potential, um exploration of m&a or or other. Um other inorganic activity with a cash balance of 600 million as something that might either accelerate or or add strength to the Rogue map that you've just announced the uh the detailed road map out through 2027. Thank you.

So, so it's a good question and we discuss both our current cash balance and...

With what?

In future.

Opportunities to do.

Anything to help expedite it or road map, as you saw we have been able to accelerate it out of my quite significantly. We are talking about 99.7% next year with 150, qubit. And more importantly, more than thousand cubits. And 999.8 at the inn by the end of 2027 roughly. And that's really without on doing everything organically on our own.

Um, which obviously we prefer is we think we have all the Necessary Technology components internally right now, to be able to execute that road map. And main reason for, that is the success we are having with our chiplet technology. Uh, we feel really good about executing that road map right now.

If we find someone who could help us accelerate, uh, our road map for these. Obviously, we'll take a look at it, but right now we believe, we are in a leadership position and we'll continue to execute, well, to get to that.

Road map.

That's helpful and congrats on the roadmap progress. Thanks.

Thank you. 1 moment for our next question.

Our next question comes from the line of buying Kingston car of Alliance Global Partners Airlines now open.

Great. Thanks so much for taking my question. I follow up on the roadmap. I'm curious what progress you are making currently on fidelity and when you expect to achieve 99.7% medium 2, cubic gate fidelity for a 9-qubit chip and 1. That has to happen in order to start the tiling process to get to 100 qubits by the end of 2026.

So, so good question here. I mean, we we are making 90 with chiplets right now. We are telling them to get to our milestone for this year, which is 108 Cubit more than 100 qubit by 999.5%. Before the end of this year, um, certainly as we are doing that work, we are seeing uh, a very good.

2, cubic Fidelity level with the individual 9 cubed chiplets and that gives us confidence that we should be able to get to 99.7%. Uh, by the end of next year, uh, with more than 150 cubits.

Uh, regarding the Thousand. Qubit. That's a little more challenging as uh, 1 of the earlier questions had come up. We believe, we are going to increase the size of chiplet to about 36 cubits. Uh so we have to prove that out that I

just give it chiplet. We can tie in multiple ones and still maintain High Fidelity. That's the work, you'll be doing next year. In anticipation of De demonstrating more than thousand cubits at

8% by the end of 2027. But we are certainly all aware of the data we are generating right now with the 9 cubic chiplet.

uh, gives us high confidence that we will not only be able to execute this year's road map because most

You bet at 99.5. Uh, but more importantly, end of next year's road map, which is more than 150, qubit at 99.7. So the cheaper,

data is good enough to give us high confidence with both of

Those milestones, and that's what we are relying on to get us a thousand cubits at 9,998 by the end of 2027.

Okay, thank you.

Thank you.

Thank you. 1 moment for our next question.

Our next question comes from the line of Richard, Shannon of Greg Hahn. Capital group your line is not open.

K thanks sabot and Jeffrey. Let me ask a couple questions here. Um,

Looking at your 10 q and you have a passage in here about. You may significantly increase your capex, uh, including upgrading your chip Fab facility or an entirely new 1 here. Maybe you can tell us a little bit about what this potential might be when you when you might decide this. And what what kind of scale investment we talking about here?

So sure. So right now, um, we have a 150. Mm

CHIP app facility in Fremont, California and it's fairly manual in operation. It's obviously doing a good job of giving us the current data and we feel very good that that Fab will continue to give us good data for the next 2, 3 years and quick. Keep people of meeting our needs for the next 2 to 3 years including the Thousand qubit at 999

By the end of 2027. Um, The Challenge we see is

Getting to more than 99.9% 2, cubic gate Fidelity with several thousands of cubits.

we believe that the current Fab will have limitations not capacity limitations, but capability limitations

primarily because your, uh, tools at 150, mm, are are not as good as they are for 200 or 300, mm, because the semiconductor industry has standardized around 200.

Of 300, mm.

So we think we are going to need 200, 300, mm, type tools and more.

Automation in our line for capability, not capacity. And we think we are going to need it for beyond the 3 year Horizon.

now typically it takes a couple years to build a fan, so if you need something in 3 years we there's a high chance we will have to start

Of thinking about real capex needed roughly a year or so from now. And that's what the statement was about. That anticipating that we have to invest in a new Fab. We will have to start thinking about capex leads roughly a year or so from now, uh, there are various Alternatives being discussed by Commerce and other other areas.

Uh, National Lab, uh, somewhere in the US is being contemplated and obviously, if any of those initiatives take off, we will be part of those initiatives. So it will not be that rigid. He has to shoulder all the burden for

Full uh 18 or 12 inch Fab um to answer your question, I mean a Quantum Fab is significantly simpler than a state-of-the-art CMOS fan because our lateral dimensions are a lot more forgiving. Um, our challenges are vertical Dimensions which come from oxidation and those kinds of things.

Uh and also we have a lot less lithographic steps compared to a CMOS Fab. So the combination of forgiving lateral dimensions and significantly reduced number of lithographic steps. Um you're talking about hundreds of millions of dollars for a brand new Quantum Fab of 18 to 12 inch compared to, as you know, we are talking about 20 to 25 billion dollars for a brand new CMOS lab because of the lateral Dimensions involved, uh, as well as the complexity with litho. So a Quantum intrinsically is a lot cheaper, if you were compared to a brand new Co.

But still it is we are talking sizable numbers which are hundreds of millions of dollars and that's what the statement in the 10q is about that. We may start looking into that.

If there is no National initiative that Commerce or somebody else leads, that allows us to be part of the senior question.

it does about let me follow up on that topic here, which is um

To what degree do you would you wish to have something Standalone versus shared here? But also you know you know sharing IP and maybe even worrying about IP leakage here. What's kind of the the puts and takes in in that sort of decision?

Well hello percent takes a no different than the regular semiconductor industry. I mean as you know um

the most advanced Fabs right now are run by companies like tsmc which are Foundry type models and there is no IP leakage. They take if tremendous care. I mean nvda and amda are both making their Advanced chips at tsmc right now and there is no IP contamination. So foundies have mastered out of

Meeting multiple customer design needs.

Without any IP contamination.

Um, and assuming a Foundry model takes off and the U.S. as a country, we have a state-of-the-art fab which doesn't exist today. By the way, I mean, so we will have.

Because we know it works. Um, but at the same time, if it if it doesn't happen the numbers are not that daunting. As I said, we are talking hundreds of millions of dollars not tens of billions of dollars like in cos so it's conceivable that we are grown or we in partnership with some other company. Could do this kind of thing without going to a full allout Foundry model.

Okay. Uh, that's helpful detail here. Uh, maybe a follow-on question here from a for Jeff. Uh, a number of questions here earlier in the, in the, um, call here about the future wrecked for both the um, yeah, for our contract, as well as the system sales here, how do we think of a kind of a general profile of gross margins? This additional revenues or kind of General thought process here especially since uh gross margins here in the third quarter are lower than what you see in the past. Thank you.

Sure. So you know gross margins were lower as you pointed out in the in the third quarter. Um it really is due to the variability in our contracts and sometimes we do these contracts for strategic reasons or because they're going to advance our R&D uh necessarily more than the than the margin profile. Um, you know I do think with uh some of these other sales particularly uh you know some of the novera sales, you know margins will will be a bit better than than certainly than what we've seen here in the in the third quarter and and even you know earlier in the year to a certain extent

Okay. Great. That's all for me, guys. Thank you.

Thanks.

Thank you. 1 moment for our next question.

Our next question comes from line of Troy Jensen of cancer. Fitzgerald. Your line is now, open,

Hey gentlemen, can goods on all the great progress here, maybe a couple quick questions for you. Um, just curious on the 2027 Target of a 1000 cubits. What types of applications would you system be able to uh run at that status?

Great question. I mean, this is where I think the exciting part comes in. I mean, you know, the announcements we have done with Nvidia with the nvq link and hybrid systems. Um, I think it's all coming together in about the same time period. So imagine we avoid where there is a hybrid system offering between us and VD and a few other companies where you have a, a thousand qubit, um, physical thousand, physical qubit at 99.8%, 2 cubits yet, Fidelity interfacing smoothly with the state of the art CPUs and gpus

the we believe is the kind of applications you'll be able to take on would be the complex ones that struggle with CPU and gpus today we are talking about things like

Drug Discovery, or financial forecasting, or material synthesis. Uh, those kinds of applications, we don't think we will be talking about encryption or decryption. Still at that point with those kinds of, uh, metrics. Uh, but certainly areas which where you have thousands of variables that are interacting simultaneously, uh, that current CPU and GPU architecture struggle to, um, keep up with those applications. Will start coming our way. Uh, so as I mentioned, a lot of 4, casting type applications, whether it's Financial, forecasting, or rediscovery, type stuff, or weather forecasting. Kind of stuff is, are the ones that I anticipate will start using Quantum Computing in a hybrid setup, in a couple of year time, period.

Perfect. All right, and then just a question. I'm just curious here. The customers that are buying these 9 qubit systems. Why would they not buy the 36? Qubit system? Now

Uh, a good question. We asked the question to them too, and, um, they are buying physical on premise, quantum computers right now because they want to fundamentally, understand how quantum computers work, because they are doing some research on some aspect of quantum Computing themselves, but they need to understand how fundamentally the hardware Works. What kind of pulses do we send? How do we um tune for brake calibrate and D2 and all those kinds of things?

So 9 qubit is a good starting point for those kinds of things to understand how a quantum computer works. But as I as we discussed, they they clearly are interested in upgrading it at the right time. Uh, once they are confident, they understand how

I'm pretty sure they will want to upgrade it to 10 Soft cubits, whether it's 20 or cubits or 30 or cubits. We'll see what their interest level is, but they will certainly be interested in upgrading, and that's why the systems are designed so that they are upgradeable. There will be an additional Revenue recognition that

The chip, we have to change the wiring and a few other things. Um, but fundamentally the systems are designed so they can

um,

50 yards from cupids.

Okay, makes sense. Keep up the good work gentlemen.

Thank you, goodbye.

Thank you. 1 moment for our next question.

Our next question, comes online of David Williams about the Benchmark company. Utilized now open.

Hey, thanks for letting me ask the follow-up here. Just wanted to to ask, uh, about if you kind of think about uh, your your Foundry as you spoke about earlier. Is there a possibility that you could transfer your technology today to an outside Fab slightly more advanced that you could get better Fidelity and just kind of thinking about the Thousand qubit, um, is there a potential to maybe get to that 99.9%? Uh alternatively, alternatively using another, another Fab source.

A good question, David. And we are talking to existing Founders that are doing some Quantum Computing related, uh, work for some of our peer companies. Um, so we are exploring those options. And certainly if, if it gives us a bump of in performance, we would love to get

as of today, we haven't found anyone who's

quite that capable of running.

The types of materials and processes that we run for superconducting gate-based quantum.

We know in the

other forms, like superconducting analing and some other modalities like photonics. There are some Foundry companies that are doing some work for some of our peer companies, and we are talking to them to see if we can use that model. But as of right now, uh, all the leaders in superconducting Gate Camp, including us and other companies like IBM. And Google, as far as I know, none of us are using a Foundry model at this time.

Um, but we will continue to explore those options. If if an existing Foundry meets our requirements, we would love to have it, obviously, it saves us a lot of capex. If, if that is the case,

Uh, but as of today, we are not.

can meet our requirements.

Okay, thanks. And then maybe just 1 last 1 here on. Uh, on Craig's question about m&a earlier, uh, do do you think you have the right kind of path forward on the control side and you kind of talked about needing to transition to a flexible, uh, cabling platform is that an area that you could potentially be looked at outside sources for for acquiring or do you think you have that uh, that under control today and and have the path forward there? Thank you.

But I mean on the control system itself, as you know, we are partners with quantum computer, who's a leader in?

CPU GPU server. So if you

Strategic partnership is quantum computer for the control system itself. Regarding the cables that go inside the dilution refrigerator, you're right, we need to move to flex cables. In the next 2, to 3 years, we have good technology ourselves along with some subcontractors.

Right now, we have a lot of Ip in that area as well. Um, so we feel generally good about our path forward. Uh, but if again, as I mentioned and if, if we find someone who can help us accelerate our road map, it will absolutely be willing to take a look at at uh, that kind of a company.

Thank you. 1 moment for our next question.

Uh, hey guys, thanks for taking by follow-up. Um, so what you mentioned the energy Department? Um announcing I think it was 625 million to, uh, invest in the National Quantum, uh, research centers, just wondering, you know, how does that affect the business and do you have any updates? What you're hearing in Washington on just the uh, reauthorization of the nqi ACT?

So yeah. So in qi um ran out of the original Act was signed in 2018, I believe it ran out of money somewhere towards the end of 2023. Um and you are reauthorization was supposed to be signed at that time. Obviously, it hasn't happened yet. A lot of discussions have happened. Multiple versions of the bills have gone between the House and Senate uh with numbers as high as 2.5 billion dollars over 5 years, that was practically 4 to 5 times higher than the original nqi, which was 625 million. So 5 years. Now, the latest 1 that got passed last week is a re-state reinstating, the original amount. So at least we are

Up from virtually nothing to back to $625 million over 5 years, $125 million per year, which is better than nothing, but no vehicles.

5 billion.

That are being discussed. Now this is just a first step is what we understand. There's still discussions going on and we definitely expect a

much better funding situation.

For doe.

In the next few months, but exactly when that will happen, given the current government situation, and the time it takes for bills to get signed and appropriated. We can't, we can't tell you what, exactly, uh, the date will be or what amount will be, but definitely a much bigger amount is being discussed for doe in the upcoming months here.

Excellent. Okay. Thank you.

Thank you. One moment for our next collection.

Our next question comes from the line of Tyler Anderson of Greg Holland Capital group. Your line is now open

Hi, this is Tyler Anderson on 4. Richard Shannon. So I have the housekeeping and a technical question for Q4.

What do you guys expect to Share account to be? I noticed there was a few warrants that were exercised subsequent to the

end of the quarter.

Sure uh Tyler. So I would say, you know, when it's going to depend on how many warrants get exercised, of course between you know, November 6th and in the end of December, you know, as of November 6th, we had 330 million shares outstanding so you know I would probably plan on

You know maybe 3:35 or something like that again, it could Flex a little bit depending on on how many warrants get exercised.

Okay, great. Thank you. And then, so these tools that you expect to purchase for New Foundry, do these...

are you waiting for new tooling to be developed or the tools that you expect to purchase are those upgradable once you have those and new capabilities become released

And how does that work? If you do plan on upgrading them, how does that change the pace of your roadmap in terms of qubit density and fidelity?

So the road map is uh right now the road map that we have disclosed for 26 and 27. Just to be clear, we are still counting on our Fremont Fab to be able to give us those chips. So we are not

assuming that we need a new

Fab, or even a new.

Somewhere to help us execute that roadmap. So the 2627 milestones, we feel, are pretty good with the existing fab, as discussed earlier. We are looking at options, including existing foundries that are out there. If an existing foundry model works, that is obviously the easiest one to execute.

assuming it doesn't, then we are looking at investing in a

Fab on our own or through some kind of an initiative that the US government initiate.

um,

and we are open to options.

Um, there are some clearly, a new Fab will be either an 18 inch or 12 inch. So it's very unlikely that any of our existing tools except for vet bats and stuff like that, which are related to be small in the big scheme of things can be repurposed. Most of the tools will have to be new at the 18th or 12 in level, so it will be a substantial new capex but we

We are talking about um again compared to CMOS very small numbers hundreds of millions of dollars and that's assuming that the existing Foundry model.

Or we have to take the entire burden ourselves.

Hopefully, we find easy.

Um, cheaper alternatives here.

Hopefully, that answers your question.

Uh, partially. So with the tools that you purchase, will those potentially be upgradeable?

for just Quantum add-ons, that tooling companies are thinking about

Yeah, they should be.

Fundamentally, they are very similar kinds of tools.

Is there any capability that you would look for in a Foundry?

if you were to purchase 1,

I mean, right right now as you know, in the superconducting gate camp, we

And then we create Gates, um, between the cubits.

So the materials themselves are, um, superconducting materials like aluminum.

um,

Those kinds of materials are which are not calm normally available in the CMOS world. Uh, the processes. There are some unique processes that we do, um, to enable our superconducting gate chips.

Uh again, so slightly different materials and slightly different processes. That's what we need. Uh, some foundries that are doing like superconducting analing type approaches. They have some of the tools that we need, but not all of them. So, we, that those are options. We are looking at right now to see whether we can use some of those models. Uh, after our Fremont Fab before, we have to commit to a brand new Fab ourselves.

Awesome. Thank you and congrats on the road map.

Thank you, Tyler.

Thank you. I'm showing no further questions at this time. I'll now turn it back to Dr. Sabula konari for closer remarks.

Thank you for your interest and questions. We look forward to updating you after the end of next quarter. Thanks again.

Thank you for your participation. In today's conference, this concludes the program. You may now disconnect.