Q1 2026 Rigetti Computing Inc Earnings Call

May 11, 2026

Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Rigetti Computing's Q1 2026 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone keypad. As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Mr. Subodh Kulkarni, CEO of Rigetti. Sir, please begin.

Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Rigetti Computing's Q1 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone keypad. As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Mr. Subodh Kulkarni, CEO of Rigetti. Sir, please begin.

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

Speaker #1: As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Mr. Subodh Kulkarni, CEO of Rigetti.

Speaker #1: Sir, please begin.

Speaker #2: Good afternoon and thank you for joining us for Rigetti's first 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.

Subodh Kulkarni: Good afternoon. Thank you for joining us for Rigetti's First Quarter 2026 Earnings Conference Call. I'm pleased to be joined today by our Chief Financial Officer, Jeffrey Bertelsen, who will walk you through our financial results in more detail following my overview. Also with us is our Chief Technology Officer, David Rivas, who will be available to participate in the Q&A session following our prepared remarks. We appreciate your continued interest in Rigetti. We look forward to answering your questions at the conclusion of our remarks. Before we begin, I would like to remind everyone that today's call, along with our Q1 2026 press release, contains forward-looking statements. These statements reflect our current expectations, objectives, and underlying assumptions regarding our outlook and future operating results.

Subodh Kulkarni: Good afternoon. Thank you for joining us for Rigetti's Q1 2026 Earnings Conference Call. I'm pleased to be joined today by our Chief Financial Officer, Jeffrey Bertelsen, who will walk you through our financial results in more detail following my overview. Also with us is our Chief Technology Officer, David Rivas, who will be available to participate in the Q&A session following our prepared remarks. We appreciate your continued interest in Rigetti. We look forward to answering your questions at the conclusion of our remarks. Before we begin, I would like to remind everyone that today's call, along with our Q1 2026 press release, contains forward-looking statements. These statements reflect our current expectations, objectives, and underlying assumptions regarding our outlook and future operating results.

Speaker #2: Also with us is our chief technology officer, David Rivas, who will be available to participate in the Q&A session following our prepared remarks. We appreciate your continued interest in Rigetti, and we look forward to answering your questions at the conclusion of our remarks.

Speaker #2: Before we begin, I would like to remind everyone that today's call, along with our first 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.

Speaker #2: This forward-looking statement is subject to a number of risks and uncertainties that could cause actual results to defer materially from those anticipated. Such risks and uncertainties are described and discussed in greater 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 for the three months ended March 31, 2026, and other periodic reports filed by the company from time to time with the SEC.

Subodh Kulkarni: These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties are described and discussed in greater detail in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended 31 December 2025, our Form 10-Q for the 3 months ended 31 March 2026, and other periodic reports filed by the company from time to time with the SEC. We encourage you to review these filings for a comprehensive discussion of these risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. 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.

Subodh Kulkarni: These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties are described and discussed in greater detail in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended 31 December 2025, our Form 10-Q for the three months ended 31 March 2026, and other periodic reports filed by the company from time to time with the SEC. We encourage you to review these filings for a comprehensive discussion of these risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. 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.

Speaker #2: We encourage you to review these filings for a comprehensive discussion of these risks and uncertainties that could cause actual events and results to defer materially from those contained in the forward-looking statements.

Speaker #2: 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.

Speaker #2: 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 today's earnings release on Rigetti's website at investors.rigetti.com, or to the 8-K furnished with the SEC today after the close.

Subodh Kulkarni: 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 today's earnings release on Rigetti's website at investors.rigetti.com or to the 8-K furnished with the SEC today after the close. Before I begin, I want to frame today's discussion around three key takeaways. First, with the general availability of our 108-qubit Cepheus-1-108Q system on Rigetti Quantum Cloud Services, Amazon Braket, Microsoft Azure Quantum, and qBraid, we believe we have delivered one of the most powerful generally available quantum computers in the world and the largest modular quantum computing system on the market today.

Speaker #2: Before I begin, I want to frame today's discussion around three key takeaways. First, with the general availability of our 108-qubit CFIUS1108Q system, on Rigetti Quantum Cloud Services, Amazon Bracket, Microsoft Azure Quantum, and Qgrade, we believe we have delivered one of the most powerful generally available quantum computers in the world, and the largest modular quantum computing system on the market today.

Speaker #2: Second, we are seeing growing adoption of Rigetti systems across government, academic, and commercial customers, including new on-premises Novera QPU sales that support meaningful year-over-year revenue growth.

Subodh Kulkarni: Second, we are seeing growing adoption of Rigetti systems across government, academic, and commercial customers, including new on-premises Novera QPU sales that support meaningful year-over-year revenue growth. Third, we remain focused on disciplined execution against our roadmap to quantum advantage, continuing to improve fidelity on Cepheus-1-108Q and advancing toward higher qubit, higher fidelity chiplet-based systems underpinned by a strong balance sheet and prudent capital deployment. Now I'll step back and put the Q1 in context. Q1 was an important proof point in our strategy to combine technical progress with real-world use, access, and usage. 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. Our progress this quarter reflects that reality. Let me start with our technology and product milestones.

Speaker #2: Third, we remain focused on disciplined execution against our roadmap to quantum advantage, continuing to improve fidelity on CFIUS1108Q, and advancing toward higher-qubit, higher-fidelity chiplet-based systems underpinned by a strong balance sheet and prudent capital deployment.

Speaker #2: Now, I'll step back and put the quarter in context. Q1 was an important proof point in our strategy to combine technical progress with real-world use access and usage.

Speaker #2: Quantum computing remains a long-cycle opportunity, but 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.

Speaker #2: Our progress this quarter reflects that reality. Let me start with our technology and product milestones. Last month, we announced the general availability of our 108-qubit CFIUS1108Q quantum computing system, accessible to customers via Rigetti Quantum Cloud Services and through Amazon Bracket, the Quantum Computing Service by AWS, as well as Microsoft's Azure Quantum Service, and Qgrade.

Subodh Kulkarni: Last month, we announced the general availability of our 108-qubit Cepheus-1-108Q quantum computing system, accessible to customers via Rigetti Quantum Cloud Services and through Amazon Braket, the quantum computing service by AWS, as well as Microsoft Azure Quantum service and qBraid. Cepheus-1-108Q is our highest qubit count system to date and the industry's largest modular quantum computing system built from 12 interconnected 9-qubit chiplets. This system triples the number of qubits and chiplets from our previous 36-qubit Cepheus-1-36Q system, and more importantly, validates our proprietary chiplet-based scaling architecture in a production setting. Today, Cepheus-1-108Q has achieved a median 2-qubit gate fidelity of approximately 99.1% with gate speeds of roughly 60 ns and a median single-qubit gate fidelity of 99.9%.

Speaker #2: CFIUS1108Q is our highest-qubit count system to date and the industry's largest modular quantum computing system built from 12 interconnected 9-qubit chiplets. This system triples the number of qubits and chiplets from our previous 36-qubit CFIUS136Q system and, more importantly, validates our proprietary chiplet-based scaling architecture in a production setting.

Speaker #2: Today, CFIUS1108Q has achieved a median 2-qubit gate fidelity of approximately 99.1%, with gate speeds of roughly 60 nanoseconds, and a median single-qubit gate fidelity of 99.9%.

Speaker #2: These are meaningful performance levels at this scale and we expect to continue improving fidelity throughout 2026 as we refine the performance of our individual chiplets innovate across materials and fabrication, and incorporate learnings from our prototype and R&D platforms.

Subodh Kulkarni: These are meaningful performance levels at this scale, and we expect to continue improving fidelity throughout 2026 as we refine the performance of our individual chiplets, innovate across materials and fabrication, and incorporate learnings from our prototype and R&D platforms. We achieved a median 99.8% two-qubit gate fidelity with 40-nanosecond gate speeds on our 9-qubit system by using a proprietary adiabatic CZ gate scheme. Leveraging the same gate scheme, we also demonstrated two-qubit gate fidelities as high as 99.9% at 28-nanosecond gate speeds on a prototype system, and those advancements are informing how we operate Cepheus-1-108Q and design future systems. From a systems engineering perspective, this launch is about more than just adding qubits. During development, we identified and mitigated coupling interactions between two-level couplers that become more pronounced beyond the 100-qubit scale.

Speaker #2: We achieved a median 99.8% two-qubit gate fidelity with 40-nanosecond gate speeds on our 9-qubit system by using a proprietary adiabatic CZ gate scheme.

Speaker #2: Leveraging the same gate scheme, we also demonstrated two-qubit gate fidelities as high as 99.9% at 28-nanosecond gate speeds on a prototype system, and those advancements are informing how we operate CFIUS1108Q and design future systems.

Speaker #2: From a systems engineering perspective, this launch is about more than just adding qubits. During development, we identified and mitigated coupling interactions between tuneable couplers, that become more pronounced beyond the 100-qubit scale.

Speaker #2: By refining our chip architecture to address those interactions, we effectively shifted the primary performance limitation from coupler behavior to coherence time, which we are confident we can address as we continue to optimize our entire stack.

Subodh Kulkarni: By refining our chip architecture to address those interactions, we effectively shifted the primary performance limitation from coupler behavior to coherence time, which we are confident we can address as we continue to optimize our entire stack. I also want to highlight what this means for users. With Cepheus-1-108Q now available on Rigetti QCS, Amazon Braket, Microsoft Azure Quantum, and qBraid, researchers and enterprises can access our highest qubit count system on platforms they already use for classical and quantum R&D. Cepheus-1-108Q is the first gate-based device on Amazon Braket with more than 100 qubits, offering improved fidelities that enable wider and deeper circuits for applications such as material science, optimization, and quantum simulation. AWS is a leader in cloud infrastructure, extending our relationship with Amazon Braket, Azure Quantum, and qBraid is an important validation of our technology and our go-to-market strategy.

Speaker #2: I also want to highlight what this means for users. With CFIUS1108Q now available on Rigetti QCS, Amazon Bracket, Microsoft Azure Quantum, and Qgrade, researchers and enterprises can access our highest-qubit count system on platforms they already use for classical and quantum R&D.

Speaker #2: CFIUS1108Q is the first gate-based device on Amazon Bracket with more than 100 qubits, offering improved fidelities that enable wider and deeper circuits for applications such as material science, optimization, and quantum simulation.

Speaker #2: AWS is a leader in cloud infrastructure so extending our relationship with Amazon Bracket and now Azure Quantum and Qgrade is an important validation of our technology and our go-to-market strategy.

Speaker #2: Stepping back, we continue to believe that superconducting gate-based quantum computing with chiplet-based scaling offers a compelling combination of speed and scalability. Our current systems achieve gate speeds on the order of 50 to 70 nanoseconds, which is roughly 1,000 times faster than some other alternative modalities such as trapped ion or neutral atom systems.

Subodh Kulkarni: Stepping back, we continue to believe that superconducting gate-based quantum computing with chiplet-based scaling offers a compelling combination of speed and scalability. Our current systems achieve gate speeds on the order of 50 to 70 nanoseconds, which is roughly 1,000 times faster than some other alternative modalities such as trapped ion or neutral atom systems. As we scale, we intend to maintain those speed advantages while driving fidelity higher and integrating error correction ready gate operations into the stack. Let me now turn to customer momentum and market traction. Our strategy is to meet with customers where they are, whether that is on the public cloud, on hybrid infrastructure, or in dedicated quantum centers.

Speaker #2: As we scale, we intend to maintain those speed advantages while driving fidelity higher and integrating error correction-ready gate operations into the stack. Let me now turn to customer momentum and market traction.

Speaker #2: Our strategy is to meet where customers where they are. Whether that is on the public cloud, on hybrid infrastructure, or in dedicated quantum centers.

Speaker #2: On the cloud side, the combination of Rigetti QCS, Amazon Bracket, Microsoft Azure Quantum, and Qgrade provides global access to our systems including CFIUS1108Q, and we are seeing strong interest from researchers who want to experiment on one of the most capable generally available gate-based platforms in the market today.

Subodh Kulkarni: On the cloud side, the combination of Rigetti QCS, Amazon Braket, Microsoft Azure Quantum, and qBraid provides global access to our systems, including Cepheus-1-108Q. We are seeing strong interest from researchers who want to experiment on one of the most capable, generally available gate-based platforms in the market today. In parallel, we continue to expand our base of on-premises Novera QPUs. The Novera QPU is designed to integrate into a customer's existing cryogenic and control systems, providing a high-performance on-premises platform for quantum R&D. Recent Novera wins include an order from the University of Saskatchewan, where our QPU will support quantum research and education. We have also announced Novera QPU and Novera system sales to additional research organizations globally.

Speaker #2: In parallel, we continue to expand our base of on-premises Novera QPUs. The Novera QPU is designed to integrate into a customer's existing cryogenic and control systems providing a high performance on-premises platform for quantum R&D.

Speaker #2: Recent Novera events include an order from the University of Saskatchewan, where our QPU will support quantum research and education, and we have also announced Novera QPU and Novera System sales to additional research organizations globally.

Speaker #2: These on-premises systems deepen technical engagement, create multi-year usage pathways, and showcase the flexibility of our product portfolio from 9 to more than 100 qubits.

Subodh Kulkarni: These on-premises systems deepen technical engagement, create multiyear usage pathways, and showcase the flexibility of our product portfolio from 9 to more than 100 qubits. As discussed in our prior call, Novera and other system deliveries contribute to significant year-over-year growth, albeit with some variability quarter to quarter based on shipment timing and contract mix. For example, we expect a meaningful portion of previously announced Novera purchase orders to be recognized in H1 2026. We are executing on additional system-level contracts, such as the C-DAC order we announced earlier this year. While the timing of revenue recognition can move between quarters, these contracts underscore growing demand for Rigetti QPUs and systems among national labs, universities, and quantum computing centers. We are also encouraged by continued engagement from commercial customers who are exploring quantum-inspired and hybrid use cases.

Speaker #2: As discussed in our prior call, Novera and other system deliveries contribute to significant year-over-year growth albeit with some variability quarter to quarter based on shipment timing and contract mix.

Speaker #2: For example, we expect a meaningful portion of previously announced Novera purchase orders to be recognized in the first half of 2026 and we are executing on additional system-level contracts such as the CDAC order we announced earlier this year.

Speaker #2: While the timing of revenue recognition can move between quarters, this contract underscores growing demand for Rigetti QPUs and systems among national labs, universities, and quantum computing centers.

Speaker #2: We are also encouraged by continued engagement from commercial customers who are exploring quantum-inspired and hybrid use cases. While commercial revenue remains early, we are seeing increased interest from industries such as materials, logistics, and financial services as they look to understand where quantum computing can augment classical high-performance computing over time.

Subodh Kulkarni: While commercial revenue remains early, we are seeing increased interest from industries such as materials, logistics, and financial services as they look to understand where quantum computing can augment classical high-performance computing over time. More broadly, we are starting to see tangible examples of how even relatively small-scale quantum systems can impact real-world workloads. For example, a team in China recently demonstrated that a 9-qubit quantum system could outperform classical reservoir networks with thousands of nodes on a realistic weather forecasting task, highlighting how modest-sized quantum devices can begin to de-disrupt AI and modeling applications. We view results like this as early validation of the commercial opportunities that systems like our Novera QPUs and Cepheus-class devices are positioned to address as they mature. Let me briefly connect this back to our long-term roadmap.

Speaker #2: More broadly, we are starting to see tangible examples of how even relatively small-scale quantum systems can impact real-world workloads. For example, a team in China recently demonstrated that a 9-qubit quantum system could outperform classical reservoir networks with thousands of nodes on a realistic weather forecasting task, highlighting how modest-sized quantum devices can begin to disrupt AI and modeling applications.

Speaker #2: We view results like this as early validation of the commercial opportunities that systems like our Novera QPUs and CFIUS+ devices are positioned to address as they mature.

Speaker #2: Let me briefly connect this back to our long-term roadmap. We remain focused on a clear sequence of milestones that we believe positions Rigetti to reach quantum advantage in roughly three years.

Subodh Kulkarni: We remain focused on a clear sequence of milestones that we believe positions Rigetti to reach quantum advantage in roughly 3 years. Near term, that means driving Cepheus-1-108Q to a medium two-qubit gate fidelity of approximately 99.5% later this year while maintaining our gate speed advantages. Beyond that, we are working toward deploying systems that leverage our chiplet-based architecture as the foundation for eventually scaling more than 1,000 qubits with fidelities and gate speeds that support error mitigated and ultimately fault-tolerant computation. In support of this roadmap, we recently announced our intention to invest up to $100 million in the United Kingdom over the next several years to accelerate quantum computing development.

Speaker #2: Near term, that means driving CFIUS1108Q to a medium 2-qubit gate fidelity of approximately 99.5% later this year while maintaining our gate speed advantages. Beyond that, we are working toward deploying systems that leverage our chiplet-based architecture as the foundation for eventually scaling more than 1,000 qubits with fidelities and gate speeds that support error-mitigated and ultimately fault-tolerant computation.

Speaker #2: In support of this roadmap, we recently announced our intention to invest up to $100 million in the United Kingdom over the next several years to accelerate quantum computing development.

Speaker #2: This will be our first major investment outside the United States and builds on our existing 36-qubit system deployment at the UK's National Quantum Computing Center, as well as the UK government's multibillion-dollar commitment to quantum technologies.

Subodh Kulkarni: This will be our first major investment outside the United States and builds on our existing 36-qubit system deployment at the UK's National Quantum Computing Centre, as well as UK government's multi-billion dollar commitment to quantum technologies. In parallel, we continue to collaborate with partners such as Riverlane and others to integrate error correction-ready capabilities into the stack. This includes support for high-fidelity native gates, improved circuit compilation, and control electronics enhancements that are designed to be compatible with future error-corrected architectures. Our intention is to update our published technology roadmap later this year once we have incorporated operational data from Cepheus-1-108Q and can provide more detail on the specific steps we expect to take towards quantum advantage. Turning to the financial framework, our approach remains straightforward and disciplined.

Speaker #2: In parallel, we continue to collaborate with partners such as Riverlane and others to integrate error correction-ready capabilities into the stack. This includes support for high-fidelity native gates improved circuit compilation, and control electronics enhancements that are designed to be compatible with future error-corrected architectures.

Speaker #2: Our intention is to update our published technology roadmap later this year once we have incorporated operational data from CFIUS1108Q and can provide more detail on the specific steps we expect to take toward quantum advantage.

Speaker #2: Turning to the financial framework, our approach remains straightforward and disciplined. We exited last year with a strong cash position and no debt, giving us the flexibility to continue investing behind our technology roadmap and customer opportunities.

Subodh Kulkarni: We exited last year with a strong cash position and no debt, giving us the flexibility to continue investing behind our technology roadmap and customer opportunities. Our spending remains concentrated in core R&D, including fabrication, chip design, and control electronics development, along with the CapEx required to support higher qubit count systems and associated cryogenics infrastructure. While this results in elevated CapEx in the near term, we believe these investments are directly tied to the capabilities that will differentiate Rigetti in the market. We are not managing the business around short-term revenue optimization. We are managing it around credible progress toward large-scale, high-fidelity quantum systems that can deliver commercially meaningful value. To that end, our capital allocation remains focused on organic execution, and we will consider M&A only where we can clearly accelerate our roadmap without compromising our financial discipline.

Speaker #2: Our spending remains concentrated in core R&D, including fabrication, chip design, and control electronics development, along with the CapEx required to support higher-qubit count systems and associated cryogenics infrastructure.

Speaker #2: While these result in elevated CapEx in the near term, we believe these investments are directly tied to the capabilities that will differentiate Rigetti in the market.

Speaker #2: We are not managing the business around short-term revenue optimization. We are managing it around credible progress toward large-scale, high-fidelity quantum systems that can deliver commercially meaningful value.

Speaker #2: To that end, our capital allocation remains focused on organic execution, and we will consider M&A only where we can clearly accelerate our roadmap without compromising our financial discipline.

Speaker #2: To close my remarks before turning it over to Jeff, I want to reiterate the three key messages we hope you take away from today's call.

Subodh Kulkarni: To close my remarks before turning it over to Jeff, I want to reiterate the 3 key messages we hope you take away from today's call. First, Cepheus-1-108Q is now generally available through Rigetti QCS, Amazon Braket, Microsoft Azure Quantum, and qBraid, and we believe it represents one of the most powerful generally available gate-based quantum computers in the world and the largest modular system on the market today. Second, customer adoption continues to build across cloud and on-premises channels with Novera sales and other contracts, supporting strong year-over-year revenue growth and deepening our engagement with leading research institutions and emerging commercial users.

Speaker #2: First, CFIUS1108Q is now generally available through Rigetti QCS, Amazon Braket, Microsoft Azure Quantum, and Qbraid, and we believe it represents one of the most powerful generally available gate-based quantum computers in the world and the largest modular system on the market today.

Speaker #2: Second, customer adoption continues to build across cloud and on-premises channels, with Novera sales and other contracts supporting strong year-over-year revenue growth and deepening our engagement with leading research institutions and emerging commercial users.

Speaker #2: Third, we remain committed to disciplined execution on the roadmap that targets quantum advantage in about three years, anchored in our chiplet-based architecture high-speed superconducting qubits improving fidelity a strong balance sheet and strategic initiatives such as our planned $100 million UK investment that enables us to invest with patience and control.

Subodh Kulkarni: Third, we remain committed to disciplined execution on a roadmap that targets quantum advantage in about 3 years, anchored in our chiplet-based architecture, high-speed superconducting qubits, improving fidelity, a strong balance sheet, and strategic initiatives such as our planned $100 million UK investment that enables us to invest with patience and control. Thank you for your continued support and interest in Rigetti. I will now turn the call over to our CFO, Jeffrey Bertelsen, who will walk you through our financial results in more detail.

Speaker #2: Thank you for your continued support and interest in Rigetti. I'll now turn the call over to our CFO, Jeff Bertelsen, who will walk you through our financial results in more detail.

Speaker #2: Thank you, Subodh, and good afternoon, everyone. I will spend a few minutes walking through our first quarter 2026 financial results. Our balance sheet and how we are thinking about capital deployment as we continue to execute on the roadmap, Subodh described.

Jeffrey Bertelsen: Thank you, Subodh. Good afternoon, everyone. I will spend a few minutes walking through our Q1 2026 financial results, our balance sheet, and how we are thinking about capital deployment as we continue to execute on the roadmap Subodh described. For the Q1 2026, revenue was $4.4 million, compared to $1.5 million in the Q1 2025. The year-over-year increase was driven primarily by on-premises Novera QPU deliveries and related contracts, as well as certain government and research projects. Gross margin for the Q1 was 31%, compared to approximately 30% in the Q1 2025. Our Q1 2026 gross margin was impacted by contract mix, including a higher contribution from QPU and system deliveries that include lower margin third-party refrigeration.

Speaker #2: For the first quarter of 2026, revenue was $4.4 million. Compared to $1.5 million in the first quarter of 2025, the year-over-year increase was driven primarily by on-premises Novera QPU deliveries and related contracts, as well as certain government and research projects.

Speaker #2: Gross margin for the first quarter was 31%, compared to approximately 30% in the first quarter of 2025. Our first quarter 2026 gross margin was impacted by contract mix, including a higher contribution from QPU and system deliveries that include lower-margin third-party refrigeration.

Jeffrey Bertelsen: Total operating expenses for Q1 were $27.3 million, compared to $22.1 million in the same period last year. Spending remains concentrated in research and development, including engineering headcount, fabrication, and system integration, consistent with the priorities we outlined on our Q4 call. Stock-based compensation for the quarter was $5.9 million, compared to $4.2 million in Q1 2025. Operating loss for Q1 was $26 million, compared to an operating loss of $21.6 million in Q1 2025. On a GAAP basis, net income for Q1 2026 was $33.1 million, compared to net income of $42.6 million in the prior year period.

Speaker #2: Total operating expenses for the first quarter were $27.3 million, compared to $22.1 million in the same period last year. Spending remains concentrated in research and development including engineering headcount, fabrication, and system integration consistent with the priorities we outlined on our fourth quarter call.

Speaker #2: Stock-based compensation for the quarter was $5.9 million, compared to $4.2 million in the first quarter of 2025. Operating loss for the first quarter was $26 million, compared to an operating loss of $21.6 million in Q1 2025.

Speaker #2: On a GAAP basis, net income for the first quarter of 2026 was $33.1 million, compared to net income of $42.6 million in the prior year period.

Speaker #2: The first quarter of 2026 included $53.7 million of non-cash gains from the change in fair value of derivative warrant and earn-out liabilities compared to $62.1 million in the prior year period.

Jeffrey Bertelsen: The Q1 of 2026 included $53.7 million of non-cash gains from the change in fair value of derivative warrant and earn out liabilities, compared to $62.1 million in the prior year period. As a reminder, these non-cash fair value adjustments can introduce significant volatility into our GAAP results quarter to quarter and do not affect how we operate the business or allocate capital. On a non-GAAP basis, which excludes stock-based compensation and fair value adjustments to warrant and earn out liabilities, net loss for the quarter was $14.7 million or $0.04 per diluted share, compared to a non-GAAP net loss of approximately $15.3 million or $0.05 per diluted share in the Q1 of 2025.

Speaker #2: As a reminder, these non-cash fair value adjustments can introduce significant volatility into our gap results quarter to quarter and do not affect how we operate the business or allocate capital.

Speaker #2: On a non-gap basis, which excludes stock-based compensation and fair value adjustments to warrant and earn-out liabilities, net loss for the quarter was $14.7 million, or 4 cents per diluted share, compared to a non-gap net loss of approximately $15.3 million or 5 cents per diluted share in the first quarter of 2025.

Speaker #2: Let me provide a bit more color on revenue drivers and how we are thinking about the remainder of the year. As we outlined in our fourth quarter call, we expected strong year-over-year revenue growth in the first quarter of 2026, driven by shipment of a portion of the $5.7 million of on-premises Novera Quantum computing system purchase orders announced late last year.

Jeffrey Bertelsen: Let me provide a bit more color on revenue drivers and how we are thinking about the remainder of the year. As we outlined in our Q4 call, we expected strong year-over-year revenue growth in the Q1 2026, driven by shipment of a portion of the $5.7 million of on-premises Novera quantum computing system purchase orders announced late last year. Q1 results are consistent with that view, and we continue to expect the remaining Novera revenue to be recognized primarily in the Q2 2026. We also continue to execute on the $8.4 million C-DAC order for an on-premises 108-qubit system in India, which we expect to recognize in the Q4 2026 following installation and performance acceptance testing.

Speaker #2: The first quarter results are consistent with that view, and we continue to expect the remaining Novera revenue to be recognized primarily in the second quarter of 2026.

Speaker #2: We also continue to execute on the $8.4 million CDAC order for an on-premises $108 qubit system in India. We expect to recognize in the fourth quarter of 2026 following installation and performance acceptance testing.

Speaker #2: As we said last quarter, the initial CDAC order did not include ongoing maintenance and support. We still expect to receive a separate purchase order for those services.

Jeffrey Bertelsen: As we said last quarter, the initial C-DAC order did not include ongoing maintenance and support. We still expect to receive a separate purchase order for those services. More broadly, our revenue profile continues to be influenced by the timing of system deliveries and government-funded projects. We continue to view this variability as inherent to the current stage of the market and not as a driver of our long-term capital allocation or technology strategy. Turning to the balance sheet, we ended Q1 2026 with approximately $569 million in cash equivalents, and available for sale investments, compared with $209.1 million as of 31 March 2025, and approximately $589.8 million at the end of 2025.

Speaker #2: More broadly, our revenue profile continues to be influenced by the timing of system deliveries and government-funded projects. We continue to view this variability as inherent to the current stage of the market and not as a driver of our long-term capital allocation or technology strategy.

Speaker #2: Turning to the balance sheet, we ended the first quarter of 2026 with approximately $569 million in cash, cash equivalents, and available for sale investments.

Speaker #2: Compared with $209.1 million as of March 31, 2025, and approximately $589.8 million at the end of 2025. The year-over-year increase relative to Q1 2025 reflects the capital raised and strategic investment activity we have previously discussed, while the sequential decline from year-end reflects ongoing operating spend and capital expenditures.

Jeffrey Bertelsen: The year-over-year increase relative to Q1 2025 reflects the capital raised and strategic investment activity we have previously discussed, while the sequential decline from year-end reflects ongoing operating spend and capital expenditures. We continue to operate with no debt. At our current operating profile, we believe our capital position provides sufficient runway to execute against the technology and system deployment milestones we have laid out, including continued progress on scale, fidelity, and system integration, as well as our planned investment in the United Kingdom. Capital expenditures in the quarter were primarily driven by investments in Fab One and additional dilution refrigeration capacity to support higher qubit count systems over the next several years, consistent with the framework we outlined in Q4.

Speaker #2: We continue to operate our operating profile. We believe our capital position provides sufficient runway to execute against the technology and system deployment milestones we have laid out, including continued progress on scale, fidelity, and system integration, as well as our planned investment in the United Kingdom.

Speaker #2: Capital expenditures in the quarter were primarily driven by investments in Fab One and additional dilution refrigeration capacity, to support higher qubit count systems over the next several years, consistent with the framework we outlined in the fourth quarter.

Speaker #2: We continue to expect 2026 CapEx to be elevated relative to prior years, largely due to refrigeration infrastructure needs rather than major changes to our fab footprint.

Jeffrey Bertelsen: We continue to expect 2026 CapEx to be elevated relative to prior years, largely due to refrigeration and infrastructure needs rather than major changes to our fab footprint. Our approach to capital deployment remains disciplined and consistent with what we have discussed on the Q4 call. The majority of our spending is directed toward core R&D activities that directly advance our technology platform, including our chiplet-based architecture control systems and cloud integration. We are not managing the business around short-term revenue optimization. We are managing it around credible long-term progress toward quantum advantage in commercially relevant systems. To close, our financial strategy is unchanged from what we outlined last quarter. We are focused on maintaining flexibility, funding innovation responsibly, and aligning capital deployment with the long-term value creation potential of our technology roadmap.

Speaker #2: Our approach to capital deployment remains disciplined and consistent with what we have discussed on the Q4 call. The majority of our spending is directed toward core R&D activities that directly advance our technology platform, including our chiplet-based architecture control systems and cloud integration.

Speaker #2: We are not managing the business around short-term revenue optimization. We are managing it around credible long-term progress toward quantum advantage and commercially relevant systems.

Speaker #2: To close, our financial strategy is unchanged from what we outlined last quarter. We are focused on maintaining flexibility, funding innovation responsibly, and aligning capital deployment with the long-term value creation potential of our technology roadmap.

Jeffrey Bertelsen: While quarterly results will continue to reflect the early-stage nature of the quantum computing market and the timing of large system contracts, we believe our balance sheet and capital discipline position us to execute with patience and control. With that, I will turn it back to the operator who will open the call for your questions.

Speaker #2: While quarterly results will continue to reflect the early-stage nature of the quantum computing market and the timing of large system contracts, we believe our balance sheet and capital discipline position us to execute with patience and control.

Speaker #2: With that, I will turn it back to the operator, who will open the call for your questions.

Operator: Ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star one one again. Again, ladies and gentlemen, if you have a question or comment, please press star one one on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Brian Kinstlinger from Alliance Global Partners. Your line is now open.

Speaker #1: Ladies and gentlemen, if you have a question or comment at this time, please press star 11 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star 11 again.

Speaker #1: Again, ladies and gentlemen, if you have a question or comment, please press star one-one on your telephone keypad. Please stand by while we compile the Q&A roster.

Speaker #1: Our first question or comment comes from the line of Brian Kitzlinger from Alliance Global Partners. Your line is now open.

Brian Kinstlinger: Great, thanks so much for taking my questions. I'll ask two. The first one, is can you talk about the announced Nvidia quantum models, when you expect they might be available, and when you might begin to test them to see the impact it has on reducing your error rates?

Speaker #3: Great, thanks so much for taking my questions. I'll ask two. The first one is, can you talk about the announced NVIDIA Quantum models, when you expect they might be available, and when you might begin to test them to see the impact it has on reducing your error rates?

Subodh Kulkarni: Thanks, Brian. Nvidia did announce an open source model Nvidia is seeking to help out with calibration and bring up of quantum computers as well as error corrections. We continue to look at that as a possible means of accelerating our roadmap. We continue to talk to Nvidia. We also continue to talk to other partners in the industry, such as Riverlane in the UK, where we are partnering to do error correction. They're not replacements for each other. They can work in a complementary fashion. Certainly the announcement made by Nvidia to help accelerate quantum computing in terms of calibration bring up but also error correction, we are taking a close look and will definitely take advantage of those tools that are available now. Hopefully that answers your question.

Speaker #4: Thanks, Brian. NVIDIA did announce an open-source model, NVIDIA Icing, to help out with calibration and bring-up of quantum computers, as well as error corrections.

Speaker #4: We continue to look at that as a possible means of accelerating our roadmap. We continue to talk to NVIDIA. And we also continue to talk to other partners in the industry, such as Riverlane, in the UK, where we are partnering to do error correction.

Speaker #4: They are not replacements for each other. They can work in a complementary fashion. So, certainly, the announcement made by NVIDIA to help accelerate quantum computing in terms of calibration, bring-up, but also error correction—we are taking a close look and will definitely take advantage of those tools that are available now.

Speaker #4: Hopefully, that answers your question.

Speaker #3: Yeah, great. My follow-up, the $100 million investment in the UK, are those people, infrastructure, offices, and then will that be expensed, or capitalized? And if it's expensed, when will we start to see that begin to increase the OPEX?

Brian Kinstlinger: Yeah, great. My follow-up, the $100 million investment in the UK, are those people, infrastructure, offices? Will that be expensed or capitalized? If it's expensed, when will we start to see that begin to increase the OpEx?

Subodh Kulkarni: Let me put that UK investment in context. I mean, UK has announced a fairly ambitious program that they call ProQure, where it's a multi-stage program. Right now, the first phase will kick off this July or August for a couple of years. The next phase that they call MegaQuOp will kick off at that time for another year or two, and then Giga-QOPS and so on. MegaQuOp means 1 million error-free quantum operations per second. Giga-QOPS means 1 billion error-free quantum operations per second, and so on. It's a very well-structured, laid out program. Right now, applications are being requested. We will be one of them. Assuming we are chosen for the preliminary phase, we definitely plan to increase our head count, so there will be additional people cost.

Speaker #4: So let me put the UK investment in context. I mean, UK has announced a fairly ambitious program that they call ProCure, where it's a multi-stage program.

Speaker #4: Right now, the first phase will kick off this July or August for a couple of years. The next phase, that they call MegaCoop, will kick off at that time for another year or two, and then GigaCoop, and so on.

Speaker #4: MegaCoop means 1 million error-free quantum operations per second. GigaCoop means 1 billion error-free quantum operations per second, and so on. So it's a very well-structured, laid-out program.

Speaker #4: Right now, applications are being requested. We will be one of them. Assuming we are chosen for the preliminary phase, we definitely plan to increase our headcount.

Speaker #4: So, it will be additional people cost. We definitely plan to increase the number of quantum computers we have in the UK right now. If you visit the National Quantum Computing Center, outside Oxford in the UK, you will find our quantum computer in that center.

Subodh Kulkarni: We definitely plan to increase the number of quantum computers we have in the UK. Right now, if you visit the National Quantum Computing Centre, outside Oxford in the UK, you will find our quantum computer in that center. For the next phase, we definitely plan to include our Cepheus-1, like 108-qubit or higher qubit count quantum computer source there over the next couple of years as we make them available. There will be some capital cost involved, but also facilities. I mean, right now our quantum computer sits in the NQCC facility. We definitely plan to have, and we have a relatively small office in London right now. We definitely plan to have a bigger facility in the UK as we go forward.

Speaker #4: But for the next phase, we definitely plan to include our CPS1, like 108 qubit or higher qubit count quantum computers over there over the next couple of years as we make them available.

Speaker #4: So there will be some capital cost involved, but also facilities. I mean, right now, our quantum computer sits in the NQCC facility. We definitely plan to have—and we have—a relatively small office in London right now.

Speaker #4: We definitely plan to have a bigger facility in the UK as we go forward. So the $100 million is over the next few years, but captures all the cost.

Subodh Kulkarni: The $100 million is over the next few years, but captures all the cost in the rough order of magnitude that we talked about so far. Hopefully that answered your question.

Speaker #4: In the rough order of magnitude that we talked about so far. Hopefully, that answered your question.

Speaker #3: Yeah, great. Thank you so much.

Brian Kinstlinger: Yeah. Great, Subho. Thank you so much.

Speaker #4: Thanks, Brian.

Subodh Kulkarni: Thanks, Brian.

Operator: Thank you. Our next question or comment comes from the line of Krish Sankar from TD Cowen. Your line is now open.

Speaker #1: Thank you. Our next question or comment comes from the line of Chris Sankar from TD Cowen. Your line is now open.

Speaker #5: Yeah, hi. Thanks for taking my question. Supposedly, I just wanted to ask you about the integrated error mitigation. Is this on-chip with a qubit gate, or is it a separate control chip?

Krish Sankar: Yeah. Hi. Thanks for taking my question. Subho, I just wanted to ask you on the integrated error mitigation, is this an ARM chip with the qubit gate or is it a separate control chip? Is it basic or FPGA? Can you give some color on that?

Speaker #5: Is it ASIC or SPGA? Can you give some color on that?

Subodh Kulkarni: Hey, Krish, are you talking about the Nvidia specific announcement?

Speaker #4: Yeah, Krish, are you talking about the NVIDIA-specific announcement?

Speaker #5: Yeah, the one you said about the integrated error mitigation. Yeah.

Krish Sankar: Yeah, the one inside the integrated error mitigation, yeah.

Speaker #4: Yeah, I mean, in general, right now, we don't do error correction on the quantum chip itself. There are approaches that are being looked at to do that kind of stuff.

Subodh Kulkarni: Yeah. I mean, in general, right now, we don't do error correction on the quantum chip itself. There are approaches that are being looked at to do that kind of stuff, right now our quantum chip is not doing error correction at the chip level. Most of the error correction and all the experiments we do are outside in the ambient conditions in the control systems area, and we are sending the signals to the quantum computer and then getting them back from the quantum computer.

Speaker #4: But right now, our quantum chip is not doing error correction on the chip level. So most of the error correction, and all the experiments we do, are outside in the ambient conditions, in the control systems area.

Speaker #4: And we are sending the signals to the quantum computer and then getting them back from the quantum computer.

Krish Sankar: Got it. Just a question on the QPU pipeline. How is it looking? Has it evolved? Like, over the last 1 quarter, I understand besides the University of Saskatchewan, is the funnel expanding? Is it stable? How to think about it?

Speaker #5: Got it. Got it. Just a question on the QPU pipeline. How is that looking? Has it evolved? Is it over the last one-quarter? I understand besides the University of Saskatchewan, is the funnel expanding?

Speaker #5: Is it stable, or how should we think about it?

Speaker #4: You're talking about the overall demand for QPUs in general, I assume. That's what your question is.

Subodh Kulkarni: You're talking about the overall demand for QPUs in general, I assume. That's what your question is.

Krish Sankar: That's right. Yeah.

Speaker #5: That's right. Yeah. Yeah.

Krish Sankar: That's right. Yeah.

Speaker #4: Yeah. As we mentioned, interest in quantum computing continues to increase rapidly. And as we start getting closer and closer to that quantum advantage, which we define roughly as 1,000 qubit, 99.9% two-qubit gate fidelity, less than 50 nanosecond gate speed, and some form of error mitigation or control.

Subodh Kulkarni: Yeah. As we mentioned, interest in quantum computing continues to increase rapidly. As we start getting closer and closer to that quantum advantage, which we define roughly as a 1,000-qubit, 99.9% two-qubit gate fidelity, less than 50 nanosecond gate speed, and some form of error mitigation or control. We roughly think that's about 3 years from now. Definitely we are already starting to see increase in interest from not only academic and government national lab kind of customers, but also commercial customers who want to do quantum computing related R&D activities, not necessarily use them for their data center operations. We definitely expect that interest to continue to increase rapidly as we get closer to the quantum advantage milestone roughly 3 years from now.

Speaker #4: And we roughly think that's about three years from now. Definitely, we are already starting to see an increase in interest from not only academic and government national lab kind of customers, but also commercial customers who want to do quantum computing-related R&D activities, not necessarily use them for their data center operations.

Speaker #4: We definitely expect that interest to continue to increase rapidly as we get closer to the quantum advantage milestone, roughly three years from now. And we are already starting to see that, as you can see in our disclosures and sales numbers.

Subodh Kulkarni: We're already starting to see that, as you can see in our disclosures and sales numbers. Overall, definitely expect quantum computing interest to increase even though we are still in the R&D stages.

Speaker #4: But overall, definitely expect quantum computing interest to increase, even though we are still in the R&D stages.

Speaker #5: Thanks a lot, Subodh.

Krish Sankar: Thanks a lot, Subbu.

Speaker #4: Thanks, Krish.

Subodh Kulkarni: Thanks, Krish.

Speaker #1: Thank you. Our next question or comment comes from the line of Quinn Bolton from Needham and Company. Mr. Bolton, your light is now open.

Operator: Thank you. Our next question or comment comes from the line of Quinn Bolton from Needham & Company. Mr. Bolton, your line is now open.

Quinn Bolton: Thank you for taking the question. I guess, Subbu, just maybe a follow-up on Krish's question there, just with the adiabatic CZ process. You know, that you're already showing on prototypes getting to 99.9% two-qubit gate fidelity. You know, how long does that take to get into process? It sounds like you're targeting that 99.9%, you know, over a 3-year period that would be part of the system that gets you to quantum advantage. You know, why does it take so long to get there? You know, just what are the steps you need to bring that process from sort of a prototype level into kind of a, you know, a higher, you know, volume production level?

Speaker #6: Thank you for taking the question. I guess, Subodh, just maybe a follow-up on Krish's question there, just with the adiabatic CZ process. You're already showing on prototypes getting to 99.9% two-qubit gate fidelity.

Speaker #6: How long does that take to get into process? It sounds like you're targeting that 99.9% over a three-year period that would be part of the system that gets you to quantum advantage.

Speaker #6: Why does it take so long to get there, or just what are the steps you need to bring that process from sort of a prototype level into kind of a higher volume production level?

Speaker #4: It's a good question, Quinn. I mean, we will obviously push as fast as possible to get adiabatic CZ and fast gates into higher-scale systems.

Subodh Kulkarni: It's a good question, Quinn. I mean, we will obviously push as fast as possible to get adiabatic CZ and fast gates into higher scale systems. We are already using adiabatic CZ in our Cepheus-1-108Q, but it's not a very fast gate adiabatic CZ that we have been able to get at the prototype stage. You're right. At the prototype stage, we have 99.9% with gate speeds of 28 nanoseconds. You can see that our 100-8Q is still 2x slower than our prototype system and fidelity is not as high as the prototype system. We definitely take the learnings from the prototype system and try to include that in our larger scale systems as soon as possible. It just takes time. I mean, these are extremely complex problems to solve at scale.

Speaker #4: We are already using adiabatic CZ in our CPS1108Q, but it's not a very fast gates adiabatic CZ that we have been able to get at the prototype stage.

Speaker #4: You're right. At the prototype stage, we have 99.9% with gate speeds of 28 nanoseconds. So you can see that our 108Q is still 2x slower than our prototype system, and fidelity is not as high as the prototype system.

Speaker #4: So, we're definitely taking the learnings from the prototype system and then trying to include that in our larger-scale systems as soon as possible.

Speaker #4: It just takes time to—I mean, these are extremely complex problems. To solve at scale, it's relatively easy to demonstrate on prototype stages. And that's why you see many announcements from many different organizations about quantum computing, and they're typically in the sub-10-qubit type level.

Subodh Kulkarni: It's relatively easy to demonstrate on prototype stages, and that's why you see many announcements from many different organizations about quantum computing. They're typically in the sub 10 qubit type level. It's only when you start getting to a 100 qubit or above, you hardly find two or three companies that have enabled quantum computers at that scale, we are one of them. We are proud to be one of them with the 108Q system right now that is available for anyone to use. That's where the problems becomes quite significant to tackle and solve. Yeah, we have demonstrated very, very good performance in adiabatic CZ fast gates at a few qubit level. We now need to take that learning and push it as fast as possible.

Speaker #4: It's only when you start getting to 100 qubits or above, and you hardly find two or three companies that have enabled quantum computers at that scale, and we are one of them.

Speaker #4: We are proud to be one of them with the 108Q system right now. That is available for anyone to use. That's where the problems become quite significant to tackle and solve.

Speaker #4: So yeah, we have demonstrated very, very good performance with adiabatic CZ, fast gates, at a few-qubit level. Being able to take—we need to take that learning and push it as fast as possible.

Speaker #4: Definitely, it will be part of the final system that will approach quantum advantage in three years. But I'm pretty sure it will be included much before that in whatever we will start deploying next year and the year after that.

Subodh Kulkarni: Definitely, it will be part of the final system that will approach quantum advantage in 3 years, but I'm pretty sure it will be included much before that. Whatever we will start deploying next year and the year after that, we will definitely see adiabatic CZ and fast gates coming in there.

Speaker #4: We will definitely see adiabatic CZ and fast gates coming in there.

Speaker #6: Got it. And then, I guess a sort of related question—as you look to that system that gives you quantum advantage, would you expect that system to run quantum error correction, or would you still be thinking about implementation of on-chip quantum error correction as sort of being out beyond the quantum advantage chip in three-ish years?

Quinn Bolton: Got it. I guess a sort of related question. You know, as you look to that system that gives you quantum advantage, would you expect that system to run quantum error correction, or would you still be thinking about implementation of on-chip quantum error correction sort of being out beyond the quantum advantage, you know, chip in three-ish years?

Subodh Kulkarni: It's a good question. There's a lot of TBDs still right now on when it comes to quantum error correction specifically. We touched upon earlier, in the earlier question, touched upon Nvidia's IC model and how that could change, improve our roadmap, accelerate our roadmap. Our view right now is that the quantum advantage system, the roughly 1,000 qubit system at the 99.9% two-qubit gate fidelity level, will use some form of error mitigation, not necessarily full-fledged quantum error correction the way we envision quantum error correction to be in roughly 4 or 5 years. Our view is for quantum advantage, we will have some form of error mitigation, error correction.

Speaker #4: It's a good question. There's a lot of TBD still right now when it comes to quantum error correction specifically. We touched upon it earlier; in an earlier question, I touched upon NVIDIA's Ising model.

Speaker #4: And how that could change—improve our roadmap, accelerate our roadmap. Our view right now is that the quantum advantage system, the roughly 1,000-qubit system, at the 99.9% two-qubit gate fidelity level, will use some form of error mitigation—not necessarily full-fledged quantum error correction the way we envision quantum error correction to be in roughly four or five years.

Speaker #4: So our view is for quantum advantage, we will have some form of error mitigation, error correction. But for full implementation of QEC, particularly when we talk about QLDPC—quantum low-density parity-check code kind of error correction—we are talking about fault-tolerant quantum computing, which means we are talking about hundreds of thousands of qubits.

Subodh Kulkarni: For a full implementation of QEC, particularly when we talk about, like, QLDPC, quantum low-density parity-check code kind of error correction, we are talking about fault-tolerant quantum computing, which is we are talking about hundreds of thousands of qubits. That we think is in the 5 to 7 year kind of a timeline period. That's when you'll really start looking quantum error correction in its full manner. For the quantum advantage, we'll be talking error mitigation and some form of error correction. Hopefully that answers your question.

Speaker #4: And that, we think, is in the 5- to 7-year kind of timeline period. That's when you will really start talking quantum error correction in its full manner.

Speaker #4: For the quantum advantage, we'll be talking error mitigation and some form of error correction. Hopefully, that answers your question.

Quinn Bolton: That does. I appreciate it. Maybe just one quick one for Jeff. You said on the $5.7 of Novera QPU sales that you had announced last year, you expected to capture most of the remainder in Q2. Looking at the Q you filed today, it looks like you had about $3 million of hardware-based sales. Is the remainder of that $5.7, you know, roughly $2.7 be recognized in Q2, is that sort of the right ballpark to be think about how the $5.7 split between Q1 and Q2?

Speaker #6: That does. I appreciate it. Then maybe just one quick one for Jeff. You said on the $5.7 million of Novera QPU sales that you had announced last year, you expected to capture most of the remainder in the second quarter.

Speaker #6: Looking at the Q you filed today, it looks like you had about $3 million of hardware-based sales. So is the remainder of that $5.7 million—roughly $2.7 million—to be recognized in Q2?

Speaker #6: Is that sort of the right ballpark to be thinking about how the 5.7 split between Q1 and Q2?

Speaker #5: Yeah. Of that 5.7, we recognized a little bit less than half of that in Q1. And then we expect the remainder to go in Q2.

Jeffrey Bertelsen: Yeah. Of that $5.7, we recognized a little bit less than half of that in Q1. We expect the remainder to go in Q2.

Speaker #6: Perfect. Okay. Thank you.

Quinn Bolton: Perfect. Okay. Thank you.

Subodh Kulkarni: Thanks, Krish.

Speaker #4: Thanks, Quinn.

Operator: Thank you. Our next question or comment comes from the line of Craig Ellis from B. Riley Securities. Mr. Ellis, your line is now open.

Speaker #1: Thank you. Our next question to comment comes from the line of Craig Ellis from B Riley Securities. Mr. Ellis, your line is now open.

Speaker #7: Yeah. Thanks for taking the question, Subodh. I wanted to start following up with some of the comments you made about the 108-qubit Cepheus's availability on Rigetti's QCS and then on Amazon Bracket and Microsoft Azure Quantum and QBread.

Craig Ellis: Yeah, thanks for taking the question, Subodh. I wanted to start following up with some of the comments you made about the 108-qubit Cepheus' availability on Rigetti's QCS and then on Amazon Braket, Microsoft Azure Quantum, and qBraid. The question is this: as it's attained general availability, what are you seeing in terms of engagement across the various platforms, and are you getting any feedback in terms of what the workload tests are framing up as?

Speaker #7: The question is this: As it's attained general availability, what are you seeing in terms of engagement across the various platforms? And are you getting any feedback in terms of what the workload tests are framing up as?

Subodh Kulkarni: Good question, Craig. It's still relatively early to talk about usage and what we are seeing since we just deployed the system as a month or so ago. Definitely interest is high. Definitely we are seeing usage to be quite high. It's too early to make judgments on the basis of early data. Certainly we expect this to be used very well over the next few months as word gets around and people explore and use it. We'll continue to re-improve the system, as we mentioned. We'll continue to improve the fidelity, so we'll deploy higher fidelity one way queue system sometime later this year. We definitely expect usage to continue to improve as we improve the performance of the system.

Speaker #4: Good question, Craig. It's still relatively early to talk about usage and what we are seeing. Since we just deployed the system a month or so ago, definitely interest is high.

Speaker #4: Definitely, we are seeing usage to be quite high. But it's too early to make judgments on the basis of early data. Certainly, we expect this to be used very well over the next few months.

Speaker #4: As the world gets around and people explore and use it, and we'll continue to improve the system as we mentioned, we'll continue to improve the fidelity.

Speaker #4: So, we'll deploy higher-fidelity 108Q systems sometime later this year. And we definitely expect usage to continue to improve as we improve the performance of the system.

Craig Ellis: That's helpful. The follow-up question relates to one of your partnerships. We established the Quanta partnership in Q1 2025. The investment in Rigetti was formalized in early Q2 2025. As you look back at the first year of that deal, what would you identify as the top 2 or 3 things that are really going well and helping you in your ambition to scale up qubit count and system capabilities and what would be the 1 or 2 things that you would hope that partnership could do this year?

Speaker #7: That's helpful. And then the follow-up question relates to one of your partnerships. So we established the Quanta partnership in Q1 of '25. The investment in Rigetti was formalized in early Q2 '25.

Speaker #7: As you look back at the first year of that deal, what would you identify as the top two or three things that are really going well?

Speaker #7: And helping you in your ambition to scale up qubit count and system capabilities. And what would be the one or two things that you would hope that partnership could do this year?

Subodh Kulkarni: Thanks, Craig. That's a really good question. We entered into a strategic partnership agreement with Quanta. As you mentioned, they did invest at that time about $40 million into Rigetti. More importantly, there was a commitment on both sides to invest. We continue to invest in the quantum computing side. Quanta investments are more on the non-quantum computing, but the rest of the hardware part of the stack. They have done that. We definitely one of the key accomplishments we can point out to is how well they have designed the new control system that we have started including in our most recent offerings. Our latest deployments that we are talking about to commercial customers and other customers are we are exploring use of Quanta made control systems instead of our home-built systems.

Speaker #4: Thanks, Craig. That's a really good question. We entered into a strategic partnership agreement with Quanta, as you mentioned. They did invest at that time about $40 million in Rigetti.

Speaker #4: But more importantly, there was a commitment on both sides to invest we continue to invest in the quantum computing side. Quanta investments are more on the non-quantum computing.

Speaker #4: But the rest of the hardware part of the stack. And they have done that. We definitely one of the key accomplishments we can point out to is how well they have designed the new control system that we have started including in our most recent offerings.

Speaker #4: So our latest deployments that we are talking about to commercial customers and other customers are we are exploring use of Quanta-made control systems instead of our homebuilt systems.

Speaker #4: And Quanta, obviously, is a large company with extremely high capabilities in CPU, GPU, cloud servers. So they know how to build server boxes, control system electronics.

Subodh Kulkarni: Quanta obviously is a large company with extremely high capabilities in CPU, GPU, cloud servers, so they know how to build server boxes, control system electronics, and we can clearly see that their professionalism in building those boxes. They have a dedicated team working on control systems that work with our systems, going forward, we definitely will be using Quanta's control systems as part of our stack. It's not an exclusive arrangement. We will continue to maintain our capabilities in that area, and Quanta will also talk to other quantum computing companies as well, so it's not like a mutually exclusive thing. We definitely are benefiting with Quanta's expertise in control systems, and we definitely expect them to be contributing to other parts of the stack.

Speaker #4: And we can clearly see their professionalism in building those boxes, and they have a dedicated team working on control systems that work with our systems.

Speaker #4: And we, going forward, definitely will be using Quanta's control systems as part of our stack. It's not an exclusive arrangement. We will continue to maintain our capabilities in that area.

Speaker #4: And Quanta will also talk to other quantum computing companies as well, so it's not like a mutually exclusive thing. But we definitely are benefiting from Quanta's expertise in control systems, and we definitely expect them to be contributing to other parts of the stack.

Speaker #4: So the first year, I would say definitely control system. Next year or two, we expect them to not only continue to develop better quality control systems, meeting our overall system requirements, but also get into the rest of the hardware stack.

Subodh Kulkarni: The first year, I would say definitely control system. Next year or 2, we expect them to not only continue to develop better quality control systems meeting our overall system requirements, but also get into the rest of the hardware stack. Hopefully that answers your question.

Speaker #4: Hopefully, that answers your question.

Craig Ellis: It does. Thank you.

Speaker #7: It does. Thank you.

Speaker #4: Thanks, Craig.

Subodh Kulkarni: Thanks, Craig.

Speaker #1: Thank you. Our next question to comment comes from the line of Vijay Rakesh from Mizuho. Your line is now open.

Operator: Thank you. Our next question or comment comes from the line of Vijay Rakesh from Mizuho. Your line is now open.

Vijay Rakesh: Hi, Subodh and Jeff. Just a quick question. As you look at the Cepheus 108-qubit one, any thoughts on what you're getting on the price uplift versus the 36-qubit one, and how the customer response has been on the Cepheus 108-qubit as you know, show availability on Azure and Braket, et cetera? A follow-up.

Speaker #8: Yeah. Hi, Subodh and Jeff. Just a quick question. So as you look at the Cepheus 108-qubit one, any thoughts on how what you're getting on the price of Uplift versus the 36-qubit one?

Speaker #8: And how the customer response has been on the Cepheus 108-qubit as you show availability on Azure and Bracket, etc.? That follow-up.

Speaker #4: Yeah, Vijay. It's still relatively early. We deployed the system just over a month ago, so it's still very early to talk about usage and what we are seeing.

Subodh Kulkarni: Yeah, Vijay. It's still relatively early. We deployed the system just over a month ago, so it's still very early to talk about usage and what we are seeing. Definitely interest is high. Definitely we are seeing a lot of customers use the system right now, but it's still early to quantify that and talk about uplift over 36Q in terms of usage. Regarding price, I mean, we really are still talking about research kind of customers. We are not talking about jobs that are very long in duration. Most of the usage is on the order of a few seconds to a few minutes at the most because people are still experimenting with quantum computing. Fundamental understanding of quantum computing, how it can be used, basic algorithm development type research applications.

Speaker #4: Definitely interest is high. Definitely, we are seeing a lot of customers use the system. Right now. But it's still early to quantify that and talk about Uplift over 36Q in terms of usage.

Speaker #4: Regarding price, I mean, we really are still talking about research kind of customers. So we are not talking about jobs that are very long in duration.

Speaker #4: Most of the usage is on the order of a few seconds to a few minutes at the most, because people are still experimenting with quantum computing and fundamental understanding of quantum computing—how it can be used, basic algorithm development, type research applications.

Subodh Kulkarni: We are not really seeing commercial customers with data center type operations trying to engage with quantum computing. Frankly, we shouldn't be seeing that for the next year or 2. It's only when we start approaching quantum advantage in about 3 years should we expect those kinds of engagements to increase on cloud quantum computers. QCS is one of the most powerful quantum computers on the cloud that is generally available for anyone right now. Definitely, I think this is what leading usage of quantum computing is what we are seeing right now. As we continue to improve the performance, increase the qubit count, increase fidelity, we definitely expect more and more commercial customers to start using quantum computers.

Speaker #4: So, we are not really seeing commercial customers with data center-type operations trying to engage with quantum computing. And, frankly, we shouldn't be seeing that for the next year or two.

Speaker #4: It's only when we start approaching quantum advantage in about three years should we expect those kinds of engagements to increase on cloud quantum computers.

Speaker #4: Cepheus 108 is one of the most powerful quantum computers on the cloud that is generally available for anyone right now. So definitely, I think this is what leading usage of quantum computing is—what we are seeing right now.

Speaker #4: So as we continue to improve the performance, increase the qubit count, increase fidelity, we definitely expect more and more commercial customers to start using quantum computers.

Subodh Kulkarni: Having said that, right now we are still in the early stages, so hard to quantify the usage and uplift over 36 qubit.

Speaker #4: Having said that, right now, we are still in the early stages, so it's hard to quantify the usage and uplift over the 36-qubit.

Subodh Kulkarni: Having said that, right now we are still in the early stages, so hard to quantify the usage and uplift over 36 qubit.

Vijay Rakesh: Got it. On the, on the C-DAC, the $8.4 million, you know, win there, when do you start to see that layering into the guide? Or, when do you start to see shipments there? Thanks.

Speaker #7: Got it. And then on the CDAC, the $8.4 million win there—when do you start to see that layering into the guide, or when do you start to see shipments there?

Speaker #7: Thanks.

Subodh Kulkarni: As we have stated, when we disclosed the order, our plan is to fulfill that order in H2 of this year, most likely in the Q4 time period. That's when we will physically ship the 108 qubit system. I mean, a quantum computer comprises various parts, dilution refrigerator, the parts inside, the cables, and all that stuff. Overall, our plan is to get them up and running before the end of this year, and that's when we expect most of our revenues to get booked.

Speaker #4: So, as we have stated when we disclosed the order, our plan is to fulfill that order in the second half of this year, most likely in the Q4 time period.

Speaker #4: That's when we'll physically ship the 108-qubit system. There are—I mean, a quantum computer comprises various parts that we should refrigerate. The parts inside, the cables, and all that stuff.

Speaker #4: So overall, our plan is to get them up and running before the end of this year. And that's when we expect most of our revenues to get booked.

Speaker #7: Got it. Thank you.

Vijay Rakesh: Got it. Thank you.

Speaker #4: Thanks, Vijay.

Subodh Kulkarni: Thanks, Vijay.

Speaker #1: Thank you. Our next question to comment comes from the line of Antoine Lagalt from Wedbush Securities. Mr. Lagalt, your line is now open.

Operator: Thank you. Our next question or comment comes from the line of Antoine Legault from Wedbush Securities. Mr. Legault, your line is now open.

Antoine Legault: Thank you. Thanks for taking my question. Just Subbu, could you remind us, you know, how you remain confident, you know, that the architectural fix that you recently achieved with tunable couplers, how durable is that, you know, as you scale beyond 108 qubits to a few hundred to eventually over 1,000 qubits?

Speaker #9: Thank you. Thanks for taking my question. Just Subodh, could you remind us how you remain confident that the architectural fix that you recently achieved with tunable couplers—how durable is that as you scale beyond 108 qubits to a few hundred, and eventually over 1,000 qubits?

Subodh Kulkarni: That's a good question, Antoine. We look at that very carefully as we continue to update our roadmap. Our fundamental architecture is still continues to be square grid and tunable couplers. By the way, that's what we see other large companies do too. Google's architecture is similar to ours. IBM recently changed their architecture from fixed coupler to tunable coupler technology, so very similar to what we are doing right now. All three of us are deploying more or less similar architecture at that level. Tunable couplers, we all like them because it gives you an extraordinary degree of flexibility to adjust the coupling between the qubits. We definitely take advantage of that when it comes to the parking the qubits at the right frequency and the couplers at the right frequency too.

Speaker #4: That's a good question, Antoine. And we look at that very carefully as we continue to update our roadmap. Our fundamental architecture still continues to be square grid and tunable couplers.

Speaker #4: By the way, that's what we see other large companies do too. Google's architecture is similar to ours. IBM recently changed their architecture from fixed coupler to tunable coupler technology.

Speaker #4: So, very similar to what we are doing right now, so all three of us are deploying more or less similar architecture at that level.

Speaker #4: Tunable couplers—we all like them because they give you an extra degree of flexibility to adjust the coupling between the qubits. So we definitely take advantage of that when it comes to parking the qubits at the right frequency.

Speaker #4: And the couplers at the right frequency, too. As of today, where the difference is coming in, in our view, is that when we scale up qubit count, we need chiplets.

Subodh Kulkarni: As of today, we, the way the difference is coming in is our view is that when we scale up qubit count, we need chiplets. So far we have not seen IBM, Google or anyone else at least get a data on chiplets. We continue to monitor that area very closely. Our reasons for the use of chiplets is because it is fundamentally a lot easier to build a smaller dimension chiplet than the larger dimension monolithic chip. We have not seen any concerns with tunable coupler and the square grid architecture because of using chiplets.

Speaker #4: So far, we have not seen IBM, Google, or anyone else at least get data on chiplets. We continue to monitor that area very closely.

Speaker #4: Our reasons for the use of chiplets is because it's fundamentally a lot easier to build a smaller-dimension chiplet than a larger-dimension monolithic chip.

Speaker #4: We have not seen any concerns with the tunable coupler and the square grid architecture because of using chiplets. So we feel very confident that the roadmap we have from the current 108-qubit to improve the fidelity, as well as the qubit count using chiplets, is pretty solid.

Subodh Kulkarni: We feel very confident that the roadmap we have from the current 108 qubit to improve the fidelity as well as the qubit count using chiplets is pretty solid, and we believe we will be able to execute it to get us to quantum advantages roughly 3 years.

Speaker #4: And we believe we will be able to execute it to get us to quantum advantage in roughly three years.

Antoine Legault: Understood. Thank you. I'll get back with you.

Speaker #9: Understood. Thank you. I'll get back with you.

Speaker #4: Thank you, Antoine.

Subodh Kulkarni: Thank you, Antoine.

Speaker #1: Thank you. Our next question to comment comes from the line of Troy Jensen from Cantor Fitzgerald. Mr. Jensen, your line is now open.

Operator: Thank you. Our next question or comment comes from the line of Troy Jensen from Cantor Fitzgerald. Mr. Jensen, your line is now open.

Troy Jensen: Hey, John. Thanks for taking my questions. Just Subbu, just going right off what you just said here, if, you know, quantum advantage is 3 years away for you guys, is it safe to say that's 2 chip cycles away? I guess on that point, can you just talk about chip cycles? I think previously it was probably like 9 months you guys are spitting out new chips, and, you know, is it gonna be a little slower going forward, 12 to 18 months? Any help on that would be great.

Speaker #10: Hey, Don. Thanks for taking my questions. Just going right off what you just said here—quantum advantage is three years away for you guys.

Speaker #10: I mean, it's safe to say that's two chip cycles away. And I guess on that point, can you just talk about chip cycles? I think previously, it was probably like nine months.

Speaker #10: You guys were spitting out new chips. And is it going to be a little slower going forward, 12 to 18 months? But any help on that would be great.

Speaker #4: Yeah, Don, I mean, as you know, we basically own our own fabs. So, we have been operating our fab in Fremont, California, for the last several years.

Subodh Kulkarni: Yeah. Troy, as you know, we basically own our own fab, so we have been operating our fab in Fremont, California, for the last several years. It depends on how many changes we do in the chip when it comes to chip cycle. Yeah, we do launch a major revision of the chip once a year. Honestly, because we control our fab, we can do it much faster if we decide to just focus on some particular aspect of the chip. We can turn around chips at a faster rate than once a year, maybe even twice a year. 3 years gives us plenty of turns of chips in terms of major revisions.

Speaker #4: So it depends on how many changes we do in the chip. When it comes to chip cycle, so yeah, we do launch a major revision of the chip once a year.

Speaker #4: But honestly, because we control our fab, we can do it much faster if we decide to just focus on some particular aspect of the chip.

Speaker #4: So, we can turn around chips at a faster rate than once a year—maybe even twice a year. So, three years gives us plenty of turns of chips in terms of major revisions.

Subodh Kulkarni: Certainly a big part of getting to quantum advantage from where we are today comes from the chip side. Don't forget there are other components coming on the stack that are quite important when it comes to quantum advantage.

Speaker #4: Certainly, a big part of getting to quantum advantage from where we are today comes from the chip side. But I don't forget, there are other components coming on the stack that are quite important when it comes to quantum advantage.

Troy Jensen: Right.

Subodh Kulkarni: The design part of the chip obviously, but also the dilution refrigerator, the cabling, the control systems, the other, the error correction, the error mitigation parts, the other parts of the software parts of the stack, all of them contribute in terms of the performance. We need to keep improving on all parts of those to get to quantum advantage. 3 years we think is a realistic timeline. We have seen some other companies claim quantum advantage faster than that. Frankly, we are a little skeptical. If you look at Cepheus right now, it's one of the best quantum computers in the world out there. If not one of the best, probably the best. We think it still will take us roughly 3 years to get to quantum advantage.

Speaker #4: The design part of the chip, obviously, but also the dilution refrigerator, the cabling, the control systems, the other error correction, the error mitigation parts, the other parts of the software, parts of the stack—all of them contribute in terms of the performance. And we need to keep improving on all parts of those to get to quantum advantage.

Speaker #4: So three years, we think, is a realistic timeline. We have seen some other companies claim quantum advantage faster than that. Frankly, we are a little skeptical if you look at CFIUS right now, which is one of the best quantum computers in the world out there.

Speaker #4: If not one of the best, probably the best. And we think it still will take us roughly three years to get to quantum advantage.

Speaker #4: So when there are companies out there who will talk about quantum advantage this year, some of them also talked about quantum advantage last year, to be honest.

Subodh Kulkarni: There are companies out there who will talk about quantum advantage this year. Some of them also talked about quantum advantage last year, to be honest. We remain skeptical when companies make all kinds of claims without any data to support that. We feel pretty good about Cepheus-1 performance right now at a 108 qubit level. We think 3 years is a realistic timeline to get all the metrics in the right place to deliver quantum advantage. Hopefully that answers your question.

Speaker #4: So we remain skeptical when companies make all kinds of claims without any data to support that. We feel pretty good about CFIUS's performance right now at the 108-qubit level.

Speaker #4: We think three years is a realistic timeline to get all the metrics in the right place to deliver quantum advantage. Hopefully, that answers your question.

Speaker #10: Yeah, that was perfect. But let me follow up. You mentioned dilution refrigeration. That's one area where your competitors—not so much IBM and Google, but competitive methodologies—kind of hammer you guys on.

Troy Jensen: Yeah, that's perfect. Let me follow up. You mentioned dilution refrigeration. You know, that's one area where your competitors, not so much, you know, IBM and Google, but competitive methodologies can hammer you guys on. Can you just talk a little bit about what needs to happen there? Once you're at this quantum advantage, you know, what is the dilution refrigeration cost? You know, 'cause I get it, if superconducting is the only technology that can commercialize quantum, you know, who cares about dilution refrigeration cost? If there's others that can and don't have that, can you just kinda hit that? That'd be great.

Speaker #10: Can you just talk a little bit about what needs to happen there? And once you're at this quantum advantage, what is the dilution refrigeration cost?

Speaker #10: Because I get it. If superconducting is the only technology that can commercialize quantum, who cares about dilution refrigeration costs? But if there are others that can and don't have that, could you just kind of hit that?

Speaker #10: That'd be great.

Subodh Kulkarni: Sure. In superconducting quantum computing, we definitely need dilution refrigeration to cool our chips down to get the superconducting effects. We are talking about cooling our chips down to 10 millikelvin. Dilution refrigeration is a critical technology that enables us to get to those extremely cold temperatures. Dilution refrigeration itself, the technology was invented several decades ago. It's been around for select military space type applications. It's only finding its way in the commercial world now with quantum computing. It's not like it's a brand-new technology that we are dealing with. It's been around for a while. There are 4 or 5 companies that have entered this area. They make dilution refrigerators that we can get off the shelf.

Speaker #4: Sure. So in superconducting quantum computing, we definitely need dilution refrigeration to cool our chips down to get the superconducting effects. So we are talking about cooling our chips down to 10 millikelvin.

Speaker #4: And dilution refrigeration is a critical technology that enables us to get to those extremely cold temperatures. Dilution refrigeration itself, the technology, was invented several decades ago.

Speaker #4: So, it's been around for select military, space-type applications. It's only finding its way into the commercial world now with quantum computing. So it's not like it's a brand new technology that we are dealing with.

Speaker #4: It's been around for a while. There are four or five companies that have entered this area. They make dilution refrigerators that we can get off the shelf.

Subodh Kulkarni: We have relationships with 3 of them right now, and we'll continue to discuss with their roadmaps and how they plan to improve it. If you look at a superconducting quantum computer, whether it's ours or IBM's or Google's or other companies, a dilution refrigerator looks like a little bit like a large kitchen refrigerator, frankly, about 3 ft by 3 ft, maybe 4 ft by 4 ft, and a cylindrical kind of a form factor. The chip itself is fairly small. Our 108-qubit Cepheus, the 12, 9-qubit chiplets, each of the chiplet is about 6 mm by 6 mm, so we are not talking large dimensions for a 108-qubit. Even when we go to several hundred to a 1,000 qubit, we are not going to be talking very large dimensions here.

Speaker #4: We have relationships with three of them right now, and we will continue to discuss the roadmaps and how they plan to improve it.

Speaker #4: If you look at a superconducting quantum computer, whether it's ours or IBM's or Google's or other companies', the dilution refrigerator looks a little bit like a large kitchen refrigerator, frankly.

Speaker #4: About three feet by three feet, maybe four feet by four feet. And a cylindrical kind of form factor. The chip itself is fairly small.

Speaker #4: Our 108-qubit CFIUS, the 12, 9-qubit chiplets—each of the chiplets is about 6 millimeters by 6 millimeters. So we are not talking large dimensions for 108 qubits.

Speaker #4: Even when we go to several hundred to a thousand qubits, we are not going to be talking about very large dimensions here. We are talking a few centimeters.

Subodh Kulkarni: We are talking a few centimeters by a few centimeters. To cool that dimension to 10 millikelvin, the roadmaps that we have seen from commercial companies such as Bluefors, Oxford Instruments, or Maybell Quantum allow us to get the 1,000 qubit or tens of thousands of qubits in the dilution refrigerator along with the roadmap. We certainly watch developments of those companies very carefully, and we take advantage of their developments as they come along. It's a complex technology, but it's clearly not a bottleneck for getting superconducting quantum computing to quantum advantage and beyond. We realize that other modalities don't have that issue to deal with dilution refrigerator.

Speaker #4: By a few centimeters, so to cool that dimension to 10 millikelvin, the roadmaps that we have seen from commercial companies such as Blueforce or Oxford Instruments or Mabel allow us to get the 1,000-qubit on tens of thousands of qubits in the dilution refrigerator, along with the roadmap.

Speaker #4: We certainly watch developments of those companies very carefully, and we take advantage of their developments as they come along. It's a complex technology, but it's clearly not a bottleneck for getting superconducting quantum computing to quantum advantage and beyond.

Speaker #4: So, we realize that other modalities don't have that issue to deal with—the dilution refrigerator. But frankly, when we look at the benefits we get because of superconducting, which are speed and scalability—I mean, our speed is 1,000 to 10,000 times faster than some of those other modalities that operate at room temperature.

Subodh Kulkarni: Frankly, when we look at the benefits we get because of superconducting, which are speed and scalability, I mean, our speeds are 1,000 to 10,000 times faster than some of those other modalities that operate at room temperature. That's a huge advantage when it comes to computing, obviously, when you have a 1,000 to 10,000 times speed advantage. Also scalability. Because we are dealing with chips, we can scale them up much faster than electromechanical things like trapped ion or pure atom. We look at the challenges and the opportunities that come with superconducting gate, and frankly, the challenges with dilution refrigerator are relatively small compared to the benefits we get in terms of scalability and speed.

Speaker #4: And that's a huge advantage when it comes to computing, obviously, when you have a 1,000 to 10,000 times speed advantage, but also scalability because we are dealing with chips.

Speaker #4: We can scale them up much faster than electromechanical things like trapped ion or pure atom. So we look at the challenges and opportunities that come with superconducting gate, and frankly, the challenges with dilution refrigerator are relatively small compared to the benefits we get in terms of scalability and speed.

Troy Jensen: Got it. Thank you. You guys keep up the good work.

Speaker #10: Got it. Thank you. Got to keep up the good work.

Speaker #4: Thanks, Troy.

Subodh Kulkarni: Thanks, Troy.

Speaker #1: Thank you. Our next question or comment comes from the line of John McPeak from Rosenblatt Securities. Mr. McPeak, your line is now open.

Operator: Thank you. Our next question or comment comes from the line of John McPeake from Rosenblatt Securities. Mr. McPeake, your line is now open.

Speaker #11: Thank you. Hey, guys—Subodh and Jeff, congrats on getting this CFIUS out on the cloud. And then I just have a question on that one.

John McPeake: Thank you. Hey, guys. Subodh and Jeff, congrats on getting the Cepheus out on the cloud.

Subodh Kulkarni: Thanks, John.

John McPeake: I just have a question on that one? You're saying later this year, I think, to get to 99.5 from 99.1. Maybe we could just dig in a little bit there on, you know, what needs to happen. I just have a quick follow-up. I know this question's kind of been asked, but maybe dig in a little bit more.

Speaker #11: You're saying later this year, I think, to get to 99.5 from 99.1—maybe we could just dig in a little bit there. What needs to happen?

Speaker #11: Then I just have a quick follow-up. I know this question's kind of been asked, but maybe you can dig in a little bit more.

Subodh Kulkarni: Sure, John. As we disclosed in our earnings release, right now the limiting factor for our fidelity, particularly the 2 qubit gate fidelity, is our coherence time. That's the amount of time we can maintain the quantum state cell. Right now it's in the 25 to 30 microsecond range.

Speaker #4: Sure, John. So, as we disclosed in our earnings release, right now the limiting factor for our fidelity, particularly the two-qubit gate fidelity, is our coherence time.

Speaker #4: That's the amount of time we can maintain the quantum states in. And right now, it's in the 25 to 30 microsecond range. We need to roughly double that, ideally triple that, to get to the 99.5% type fidelity.

Subodh Kulkarni: We need to roughly double that, ideally triple that to get to the 99.5% type fidelity. We know exactly where the fidelity is being lost, if you will. We have several experiments that we are working on. We know what coherence depends on. We feel pretty good about improving our coherence time and therefore the fidelity as the year goes on. Hopefully that answers your question.

Speaker #4: So we know exactly where the fidelity is being lost, if you will. We have several experiments that we are working on. We know what coherence depends on.

Speaker #4: So, we feel pretty good about improving our coherence time and, therefore, the fidelity as the year goes on. Hopefully, that answers your question.

John McPeake: It does. The lab machine at 99.9, I think it was a lab machine. What, how many physicals were on? Is that a 9-qubit?

Speaker #11: It does. The lab machine at 99.9—I think it was a lab machine—what, how many physicals were on? Was that a 9-qubit?

Subodh Kulkarni: The prototype was even smaller than 9-qubit, but we recently had data that we disclosed with 9 qubits. We are already with the fast adiabatic CZ scheme, we have reached 9-qubit at very high fidelity now. We need to get that to 36-qubit next and then the 108-qubit. We'll push on that as fast as we can.

Speaker #4: The prototype was even smaller than the 9-qubit, but we recently had data that we disclosed with the 9-qubit. So we are already using the fast adiabatic CZ scheme.

Speaker #4: We have reached 9-qubit at very high fidelity now. We need to get that to 36-qubit next, and then the 108-qubit. So we'll push on that as fast as we can.

Speaker #11: Okay. And then the other question is just on DARPA—any kind of update there? I think you guys were going to re-engage.

John McPeake: Okay. The other question is just on DARPA. Any kind of update there? I think you guys were going to reengage.

Speaker #4: Well, we continue to be part of DARPA, so it's not a question of re-engage. We continue to stay engaged with DARPA. We are part of the QBI program.

Subodh Kulkarni: Well, we continue to be part of DARPA, so it's not a question of reengage. We continue to stay engaged with DARPA. We are part of the QBR program. They gave us feedback towards the end of last year. We are working on those things, error correction, the scaling area are some of the challenges we have. We continue to work on that. We continue to stay engaged with them. We feel pretty good that way. It's an open-ended program. As we hit certain milestones, they will get us into phase B and eventually into phase C and so on. It's a program with seven to eight-year timeline with milestones based graduation into the next phase, if you will.

Speaker #4: They gave us feedback towards the end of last year. We are working on those things—error correction, the scaling area, some of the challenges we have.

Speaker #4: So, we continue to work on that. We continue to stay engaged with them, so we feel pretty good that way. And it's an open-ended program as we hit certain milestones.

Speaker #4: They will get us into Phase B and eventually into Phase C, and so on. So it's a program with a seven- to eight-year timeline, with milestones-based graduation into the next phase, if you will.

Speaker #4: So we continue to stay engaged, and we feel confident that as we continue to improve our performance, we'll get to Phase B and eventually to Phase C and beyond.

Subodh Kulkarni: We continue to stay engaged, and we feel confident that as we continue to improve our performance, we'll get to phase B and eventually to phase C and beyond.

John McPeake: You have a full US supply chain, which I'm sure helps. I do one more. The end of the year, I think we were talking about a 150 machine. Should I still think about that 150 qubit machine?

Speaker #11: And you have a full U.S. supply chain, which I'm sure helps. And I'll do one more. At the end of the year, I think we were talking about a 150-machine—should I still think about that 150-qubit machine?

Speaker #4: Yeah, I mean, overall, what we have said is the most important big milestone we have is the quantum advantage, which is roughly three years from now.

Subodh Kulkarni: Yeah. I mean, overall what we have said is, the most important big milestone we have is the quantum advantage, which is roughly three years from now.

Speaker #4: And that's 1,000 qubits at 99.9% two-qubit gate fidelity. So, clearly, we are right now at 108 qubits at 99.1%. If you go smaller, we are at significantly higher fidelity, but they are smaller.

Subodh Kulkarni: That's the 1,000 qubit at 99.9% two qubit gate fidelity. We are right now at 108Q at 99.1%. If you go smaller, we are at significantly higher fidelity, but they are smaller. We need to increase our qubit count roughly by 10x. We need to improve our fidelity from the low ninety-nines to the high ninety-nines. It's going to be a staircasing situation where there will be times where we increase the qubit count without increasing the fidelity, and there will be times where we increase the fidelity without increasing the qubit count. Ideally, we'll do both simultaneously, but sometimes it gets difficult to do that kind of stuff both at the same time.

Speaker #4: So, we need to increase our qubit count roughly by 10x. We need to improve our fidelity from the low 99s to the high 99s.

Speaker #4: So, you are going to—it's going to be a staircasing situation, where there will be times where we increase the qubit count without increasing the fidelity, and there will be times when we increase the fidelity without increasing the qubit count.

Speaker #4: Ideally, we will do both simultaneously, but sometimes it gets difficult to do that kind of stuff both at the same time. So as this year goes on, definitely expect us to introduce a higher-fidelity, 108-qubit.

Subodh Kulkarni: As this year goes on, definitely expect us to introduce a higher fidelity 108 qubit. We will be talking about 150 qubits or higher. We are not quite sure whether we will be able to include the higher fidelity at the 150 qubit level or not. Definitely the goal is to try to increase both qubit count and fidelity.

Speaker #4: We will be talking about 150 qubits or higher. We are not quite sure whether we will be able to include the higher fidelity at the 150-qubit level or not.

Speaker #4: But definitely, the goal is to try to increase both qubit count and fidelity.

Speaker #11: Okay. It's not an easy task. Thank you.

John McPeake: Okay. It's not easy stuff. Thank you.

Speaker #4: Thanks, John.

Subodh Kulkarni: Thanks, John.

Operator: Thank you. Our next question or comment comes from the line of Richard Shannon from Craig-Hallum Capital Group. Mr. Shannon, your line is now open. I'm unable to promote his line. We will not be able to pull up Mr. Shannon's line. At this time, I would like to turn the conference over to Mr. Subodh Kulkarni for any closing remarks.

Speaker #1: Great, thank you. Our next question or comment comes from the line of Richard Shannon from Craig-Hallum Capital Group. Mr. Shannon, your line is now open.

Speaker #1: I'm unable to promote his line. We will not be able to pull up Mr. Shannon's line at this time. I would like to turn the conference over to Mr. Subodh Kulkarni for any closing remarks.

Speaker #4: Thank you for your interest in Rigetti, the earnings call, and the thoughtful questions and discussions today. We are encouraged by the progress we are making on our technology roadmap and the growing engagement we are seeing from customers across cloud and on-premises channels.

Subodh Kulkarni: Thank you for your interest in Rigetti's earnings call and the thoughtful questions and discussions today. We are encouraged by the progress we are making on our technology roadmap, the growing engagement we are seeing from customers across cloud and on-premises channels, and the strength of our balance sheet to support disciplined execution. We remain focused on delivering against the milestones we have laid out and on building a business that can create durable long-term value as quantum computing matures. On behalf of the entire Rigetti team, thank you for your continued interest and support, and we look forward to updating you on our progress next quarter.

Speaker #4: And the strength of our balance sheet to support disciplined execution. We remain focused on delivering against the milestones we have laid out and on building a business that can create durable, long-term value as quantum computing matures.

Speaker #4: On behalf of the entire Rigetti team, thank you for your continued interest and support. We look forward to updating you on our progress next quarter.

Speaker #1: Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speaker standby.

Operator: Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.