0001104659-26-058641
SEC filingRevenue surged 199% YoY to $4.4M driven by quantum system sales, but operating loss widened to $26M as R&D investment increased.
Revenue for the three months ended March 31, 2026, increased 199% year-over-year to $4.4 million, driven primarily by higher sales of 9-qubit Novera quantum computing systems and related products. Gross profit rose 212% to $1.38 million, yielding a gross margin of 31.3% compared to 30.0% in the prior year period, reflecting operating leverage on higher revenue.
Total operating expenses grew 24% to $27.3 million. Research and development expenses increased 29% to $20.0 million, driven by higher salaries ($1.2 million), stock-based compensation ($1.4 million), materials ($0.9 million), and depreciation ($0.7 million). Selling, general and administrative expenses rose 11% to $7.4 million, largely due to increased employee costs. The operating loss widened to $25.95 million from $21.63 million.
Net income was $33.1 million, down from $42.6 million in the prior year, primarily due to a $53.7 million non-cash gain from the change in fair value of derivative warrant liabilities in the current period (compared to a $53.3 million gain last year) and the absence of an $8.8 million gain from earn-out liabilities, which were fully satisfied in 2025. Interest income increased to $5.4 million from $2.2 million due to higher invested cash balances.
The MD&A does not provide a formal segment breakdown. Revenue is derived from development contracts, sales of quantum processing units (QPUs), quantum computing systems, and Quantum Computing as a Service (QCaaS). The current period growth was driven by system sales, while development contracts remain a significant revenue source. The company expects continued variability in revenue mix and timing between these streams.
Management expects to continue investing heavily in research and development to advance its technology roadmap, including upgrading fabrication facilities and potentially investing in a new chip fabrication plant. The company does not anticipate profitability in the near term, expecting additional operating losses. Liquidity is considered sufficient for at least the next 12 months based on existing cash, cash equivalents, and available-for-sale investments ($125.0 million in maturities partially offset by $100.8 million in purchases during the quarter). Cash used in operating activities was $16.2 million, up from $13.7 million. Management may seek additional capital through equity or debt financings, which could dilute existing shareholders. The collaboration with Quanta requires a minimum $250 million investment in quantum computing over five years, representing a significant future cash commitment.
As of March 31, 2026, Rigetti held $48.1M in cash and equivalents, plus $520.8M in available-for-sale securities (short-term $370.1M, long-term $150.7M). Total assets stood at $650.7M, with no debt reported. Stockholders' equity was $583.6M. The company has a strong liquidity position to fund operations and commitments.
The most notable commitment is a Collaboration Agreement with Quanta Computer Inc. (Note 14), requiring Rigetti to invest at least $250.0M in quantum computing over five years from February 27, 2025. Quanta is also committing $250.0M. No other material purchase commitments were disclosed. Remaining performance obligations (RPO) were $2.8M, with $0.8M expected beyond 12 months.
During Q1 2026, Rigetti did not repurchase shares, pay dividends, or issue/repay debt. Capital expenditures totaled $4.4M, primarily for property and equipment. The company continues to invest in its quantum computing infrastructure.
The company operates as a single segment. Revenue for Q1 2026 was $4.4M, up from $1.5M a year ago. Geographic breakdown: United States $0.8M, Europe $0.6M, Asia and other $3.0M. The segment reported net income of $33.1M, which includes significant non-operating gains from warrant liabilities. Operating loss was $26.0M.
Net income was positive at $33.1M, but operating cash flow was negative -$16.2M, a worsening from -$13.7M in the prior year. The divergence is largely due to significant non-cash adjustments: a $53.7M loss from fair value changes in derivative warrant liabilities, partially offset by $5.9M stock-based compensation and $2.6M depreciation. Working capital was a net use of cash, with increases in accounts receivable and prepaids outpacing growth in payables and deferred revenue. Capital expenditures rose to $4.4M from $2.5M, increasing cash burn. Free cash flow was -$20.6M, compared to -$16.2M. Financing activities provided minimal cash ($0.1M), with no share repurchases or dividends. The company relies on investment maturities ($125M) and securities sales to fund operations, but operating cash flow remains negative.