管理層發言
Good day, and thank you for standing by. Welcome to the Rigetti Computing Second Quarter 2026 Financial Results Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Subodh Kulkarni, Chief Executive Officer of Rigetti. Please go ahead.
Good afternoon, and thank you for joining us for Rigetti's Second 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. We appreciate your continued interest in Rigetti and look forward to answering your questions at the conclusion of our prepared remarks. Before we begin, I would like to remind everyone that today's call, along with our second 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 and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties are described in more 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 filing for the quarter ended June 30, 2026, and other periodic reports filed from time to time with the SEC. 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. For details on these measures and reconciliations to comparable GAAP measures, please refer to today's earnings release on our Investor Relations website at www.rigetti.com and to the 8-K furnished with the SEC. Before I dive into the quarter, I want to frame our discussion around three key takeaways. First, we continue to demonstrate technical leadership with our Cepheus-class systems, including ongoing progress to improve the performance of our 108-qubit Cepheus-1 platform. Second, the letter of intent we signed with the U.S. Department of Commerce for up to $100 million in funding over three years further validates our superconducting chiplet-based approach and strengthens our ability to invest against our roadmap to Quantum Advantage. Third, we recently announced an expanded collaboration with HPE and the Pittsburgh Supercomputing Center to develop a hybrid quantum-classical supercomputer, reflecting growing demand for our approach and positioning Rigetti to deliver differentiated quantum-enhanced HPC solutions. Q2 was another important proof point in our strategy to combine technical progress with real-world access and long-term strategic partnerships. 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. We believe Rigetti is well positioned in the environment for three reasons. We are focused on superconducting gate-based quantum computing, which offers a combination of scalability and speed that is difficult to replicate with other modalities. We are pursuing an open modular architecture that allows us to integrate innovative solutions from partners to advance our technology faster, such as quantum error correction technology from Riverlane and transduction work from QphoX. We pioneered and continue to lead in chiplet-based architectures, which we believe provide a more practical path to scaling to 1,000 qubits and beyond than monolithic approaches. Let me start with our technology and product progress. Cepheus-1-108Q remains one of the highest qubit-count, generally available gate-based quantum computers in the world and the largest modular quantum computing system on the market today. The system is built from 12 interconnected 9-qubit chiplets and is accessible to customers via Rigetti Quantum Cloud Services and through Amazon Braket, Microsoft Azure Quantum and qBraid. We are one of three companies, including IBM and Google, that have delivered gate-based systems with over 100 qubits, and we believe our modular approach gives us a strong advantage on the path towards higher qubit-count systems. Today, Cepheus-1-108Q continues to operate at a median single-qubit gate fidelity of approximately 99.9% and a median two-qubit gate fidelity of roughly 99.1% with gate speeds around 60 nanoseconds. These performance levels at the 100-plus qubit scale are meaningful, and our teams remain focused on improving fidelity throughout 2026 as we refine chip design, materials and fabrication processes and incorporate learnings from our R&D platforms. From a systems engineering perspective, our work this quarter extended beyond adding qubits. We continue to mitigate coupling interactions between tunable couplers that become more pronounced beyond the 100-qubit scale and to address coherence-time limitations that are now the primary constraint on fidelity. As we discussed with investors in May, our current coherence times are in the 25 to 30 microsecond range, and we are executing on a set of chip-design and material initiatives intended to roughly double or triple those times over the next several years. This includes joint IP with Fermilab where capping niobium superconducting contacts with tantalum has demonstrated meaningful coherence-time improvements in fundamental experiments, and we are now incorporating those learnings into production chip designs. We are also refining deposition, oxidation and etch processes to smooth interfaces in the Josephson junction area, which we believe will further improve coherence and ultimately gate fidelities. Beyond Cepheus-1-108Q, we remain on track with the chiplet-based roadmap we laid out earlier this year and have begun investing in dilution refrigeration and infrastructure that can support 1,000-qubit systems. Our objective remains to reach approximately 1,000 qubits, two-qubit gate fidelities of 99.9% and gate speed below 40 nanoseconds in roughly three years. I would now like to spend a few minutes on the U.S. Department of Commerce letter of intent we announced on May 21. Under this LOI, the department has selected Rigetti for a potential award of up to $100 million in funding over three years to accelerate superconducting quantum computing R&D that addresses key technical challenges in scaling and advancing our systems. The contemplated transaction structure includes the department receiving an equity stake in Rigetti, consistent with the total amount of funding, and the funding itself would be allocated under the CHIPS Research and Development Office broad agency announcement pursuant to the CHIPS Act. We believe that this prospective partnership reflects the view that quantum computing will have far-reaching impacts on national security, economic interest and overall prosperity and that superconducting qubit platforms are central to U.S. leadership in this field. It also reflects the administration's broader CHIPS R&D investments in quantum computing and related technologies designed to build domestic industry, create high-paying jobs and strengthen technological resilience. For Rigetti, this LOI is strategically significant in several ways. It would allow us to tackle key scaling bottlenecks more rapidly associated with multichip architectures. It would enable us to accelerate multiple generations of superconducting quantum processors and associated control electronics at Fab-1, our dedicated quantum device manufacturing facility. It would deepen our collaboration with the U.S. government at a time when global investment in quantum computing is increasing and geopolitical competition in this domain is intensifying. It is important to emphasize that the LOI is not yet a definitive agreement. Any final structure will also include issuance of securities to the department and will be subject to customary approvals and conditions. We view this prospective partnership as aligned with our long-term strategy and our commitment to disciplined capital deployment. Jeff will provide additional context on how we are thinking about this funding opportunity within our broader capital framework. Turning to customer momentum and market traction, our strategy is to meet customers where they are across public cloud, hybrid infrastructure and dedicated quantum systems. On the cloud, Rigetti Quantum Cloud Services, Amazon Braket, Microsoft Azure Quantum and qBraid provide global access to our systems, including Cepheus-1-108Q. We continue to see engagement from researchers and enterprises seeking to experiment on one of the most capable generally available gate-based platforms where they benefit from ease of use and consistent uptime. In parallel, we are building a growing base of on-premises system deployments. Earlier this year, we outlined three systems targeted for delivery in 2026: two Novera systems and a 108-qubit system for C-DAC in India. We remain on track and are seeing additional demand for Novera QPUs from national labs and universities with recent wins, including the University of Saskatchewan and a research arm of a large Japanese conglomerate. These deployments deepen technical engagement, create multiyear usage pathways and generate high-value feedback that informs our roadmap. At this stage of the market, we are prioritizing customers committed to active experimentation and collaboration, and we are deliberate in how we build those relationships. As part of this customer momentum, we recently expanded our collaboration with HPE and the Pittsburgh Supercomputing Center. Rigetti will deliver a 9-qubit Novera quantum computing system into PSC's new TangleLab test bed, which is being funded by a National Science Foundation grant. Working with HPE, this deployment is designed to integrate the Novera system with an HPE-powered supercomputing environment so that researchers and industry users can develop and test hybrid quantum-classical workloads on real hardware. We view this as an important step in moving our HPE relationship from early experimentation toward commercially relevant quantum-enabled HPC solutions. More broadly, global investment in quantum computing continues to expand, led by governments and national labs and increasingly complemented by commercial interest. Outside the United States, we are seeing structured programs such as the U.K. government's six-year ProQure initiative, where we intend to invest up to $100 million over time in systems, talent and infrastructure. In India, our 108-qubit C-DAC award reflects national-level interest in superconducting platforms. And across Europe and Asia, we are seeing a growing number of coordinated quantum initiatives. Commercial revenue remains early, but engagement is increasing across industries such as materials, logistics and financial services as they explore hybrid and quantum-inspired workloads. As system performance improves and the industry moves closer to quantum advantage, we expect commercial adoption to build on the government and research foundation in place today. Let me briefly connect these developments back to our long-term roadmap. We remain focused on a clear sequence designed to position Rigetti to reach quantum advantage in roughly three years. Near term, that means driving Cepheus-1-108Q toward a median two-qubit gate fidelity of approximately 99.5% later this year while maintaining our gate-speed advantages. Beyond that, we are working toward deploying higher-qubit systems that leverage our chiplet-based architecture as the foundation for scaling beyond 1,000 qubits with fidelities and speeds better mitigated and eventually fault-tolerant computation. In support of this roadmap, we continue to invest in Fab-1 and associated refrigeration infrastructure as well as partnerships with organizations such as Riverlane, Quanta and QphoX to integrate innovative solutions into the stack. The prospective CHIPS Act funding would further reinforce our ability to execute on multiple generations of processes while maintaining prudent capital discipline. We intend to update our published technology roadmap later this year once we have additional operational data from Cepheus-1-108Q and clearer visibility into subsequent system deployments. Our objective is to provide investors with a transparent view of the milestones that matter most for Quantum Advantage, including specific targets for qubit count, fidelity, coherence time and gate speed. With that overview, I will now turn the call over to our CFO, Jeffrey Bertelsen, to discuss our financial results and capital deployment in more detail.
Thank you, Subodh, and good afternoon, everyone. I will spend a few minutes walking through our second quarter 2026 financial results, our balance sheet and liquidity and how we are thinking about capital deployment as we continue to execute on the roadmap Subodh described, including the potential implications of the Department of Commerce LOI. For the second quarter of 2026, revenue was approximately $5.1 million compared to $1.8 million in the second quarter of 2025. The year-over-year increase was driven by on-premises Novera QPU sales, reflecting recognition of previously announced Novera purchase orders. Gross margin for the quarter was approximately 43% compared to 31% in the second quarter of 2025, with variability driven by contract mix and pricing and the relative contribution from the Novera QPU sales. Total operating expenses for the second quarter were $30.3 million compared to $20.4 million in the same period last year, with spending concentrated in research and development, including engineering headcount, fabrication, chip design and control electronics development as well as investments in refrigeration and infrastructure to support higher qubit-count systems. Stock-based compensation for the quarter was approximately $7 million compared to $3.6 million in the second quarter of 2025. Operating loss was $28.1 million compared to $19.9 million in the prior-year period. On a GAAP basis, net loss for the quarter was $52.6 million compared to a net loss of $39.7 million in the prior-year period, with results again impacted by noncash fair-value adjustments to derivative warrant and earn-out liabilities. As we have said previously, these fair-value adjustments can introduce significant quarter-to-quarter volatility into our GAAP results 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 approximately $16 million or $0.05 per diluted share compared to a non-GAAP net loss of $13.3 million or $0.04 per diluted share in the second quarter of 2025. Let me provide a bit more color on revenue drivers and how we are thinking about the remainder of the year. As we discussed on our prior call, we expected strong year-over-year revenue growth in the first half of 2026, driven by the previously announced Novera purchase orders we received late last year and earlier in 2026. In Q2, we continued to progress on the $8.4 million C-DAC order for an on-premises 108-qubit system in India, which we still expect to recognize in the fourth quarter of this year following installation and performance acceptance testing. More broadly, our revenue profile continues to be influenced by the timing of system deliveries and government-funded projects. We view this variability as inherent to the current stage of the quantum computing market and not as a driver of our long-term capital allocation or technology strategy. Turning to the balance sheet, we ended the second quarter of 2026 with approximately $541.3 million in cash, cash equivalents and available-for-sale investments compared with $569 million as of March 31, 2026, and $589.8 million as of December 31, 2025. We continue to operate with no debt. And given our current operating profile, we believe our capital position provides sufficient runway to execute against our technology and system deployment milestones, including continued progress on scale, fidelity, system integration and our planned investment in the United Kingdom. Capital expenditures in the quarter were primarily driven by investments in Fab-1 and additional dilution refrigeration capacity to support higher qubit-count systems. As we noted previously, we expect 2026 CapEx to be elevated relative to prior years, largely due to investments in dilution refrigeration and fab equipment. Our approach to capital deployment remains disciplined and consistent with what we have discussed on prior calls. 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 and commercially relevant systems. Should we move from the current LOI to definitive agreements with the Department of Commerce, we would expect the CHIPS Act funding to be deployed in a way that is tightly aligned with this philosophy. That means focusing the capital on specific technical programs that address scaling bottlenecks and packaging and enhancements while being mindful of potential dilution associated with any equity issuance. 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 of our technology roadmap, including the CHIPS Act funding. Quarterly results will continue to reflect the early-stage nature of the quantum computing market and the timing of large system contracts, but we believe our balance sheet and capital discipline position us to execute with patience and control. With that, I will turn it back to Subodh for closing remarks before we open the call for questions.
Thank you, Jeff. We are encouraged by the progress we are making on our technology roadmap, the strengthening engagement we are seeing from customers across cloud and on-premises channels and the strategic support we are beginning to see from governments such as the United States and the United Kingdom. We remain focused on delivering against the milestones we have laid out, including fidelity improvements on Cepheus-1-108Q, higher qubit systems and disciplined execution of our capital plan. On behalf of the entire Rigetti team, thank you for your continued interest and support. Operator, we are now ready to open the call for questions.
分析師問答
And our first question comes from Brian Kinstlinger of Alliance Global Partners.
On the last conference call, you highlighted coherence time as the primary limitation on your new architecture to fidelity and that you believe you could address that challenge. You gave some details around that today. When is a reasonable time frame where we can expect to see that impact fidelity?
Indeed, as we discussed on the call, coherence time is the limiting factor for two-qubit gate fidelity at this time, and that's why we are so focused on improving coherence time. Right now, it's in the 25 to 30 microsecond range. We want to obviously increase it as much as possible, but we think a factor of two or three improvement is practical in the near term, and that's what we are working on. The kind of things we are working on, which we disclosed during the call, include smoother interfaces at the Josephson junction level and capping niobium with tantalum, which seems to improve coherence time, and we have published some papers along those lines. Those are the kinds of things we are doing. We definitely expect fidelity to increase at the 108-qubit level before the end of this year, and we'll update everyone when we are ready to deploy a new system. I want to put some of these developments in perspective: keep in mind that there are only three very capable more-than-100-qubit systems in the gate-based world in quantum computing right now. Besides IBM at 120 qubits, we are at 108 and Google is at 105 qubits. Many other companies are well below that; many are well below 50 qubits when it comes to actual systems. We get incredible feedback from end users who are using our systems every day that our system is one of the easiest to use and has consistent uptime. So we want to be careful that before we upgrade our system with higher coherence time and higher fidelity, we have checked off all the other metrics, and we don't inadvertently go backwards in technical progress. We are careful with how we are doing the experiments and how we will deploy improvements in the actual system that is deployed for the wider user base. I hope that answers your question.
Does. If I can just ask one follow-up. A few months back, there was a change in the leadership in DARPA's QBI. Has this had any impact on Rigetti's chances of getting to Phase B? And do you think this is still achievable by year-end?
Certainly, there was a change in leadership at DARPA. Our plan stays the same. DARPA gave us a set of areas where they wanted to see improvements to get into Phase B. We continue to work with them. We have periodic calls and meetings, and we will continue to demonstrate improvements in the areas they highlighted. We still feel optimistic that we will get into DARPA Phase B relatively soon. It's impossible to predict exact timelines on all these processes, but we continue to make very good progress and remain hopeful we'll get into Phase B soon. Along with DARPA, there are other initiatives, as I mentioned earlier, such as the U.K. government's ProQure initiative and other programs across the world. So we are engaged in multiple initiatives; it's not just DARPA alone. As you saw, the Department of Commerce in the U.S. created a separate initiative focused on accelerating roadmaps, and we are part of that. DARPA will continue to be an important player in the quantum computing ecosystem, but it is one of several active government initiatives in this space.
And our next question comes from Krish Sankar of TD Cowen.
The first question on the current fab facility in Fremont. With the current tooling and your processes, what's the annual QPU production capacity? And what kind of CapEx requirement should we expect for that?
So Krish, right now the fab we have in Fremont is a 150-millimeter fab. Capacity is not a concern at all. We have plenty of capacity in that fab with 150 millimeters because each quantum chip is capable of significant computation. We make a number of 9-qubit chips right now. With our chiplet architecture, we are using 9-qubit chiplets to get a 36-qubit system or 108-qubit system. In the future, we believe we will make things like 36-qubit chiplets that will take us to 1,000 qubits and beyond, and we will continue to increase the size of chiplets. To give you a reference, the 9-qubit chiplet is roughly 6 millimeters by 6 millimeters. We can build plenty of 9-qubit chiplets on a single 150-millimeter wafer, and we can run a number of wafers a day. So capacity is not an issue at all. The challenge, of course, is capability. There are some limitations with 150-millimeter equipment and it is not an automated line. We believe there are limitations that come with a non-automated line and 150-millimeter size. So we continue to look at alternative options for upgrading the fab, but it's mostly for capability, not for capacity.
Got you. Very helpful, Subodh. And then a follow-up on the HPE 9-qubit Novera QPU system. Will you be providing QPU chips only, or will it be QPU, dilution refrigeration, controls and other infrastructure? And what is the timing for delivery on that?
Yes, it's a good question. We are excited to partner with HPE and the Pittsburgh Supercomputing Center. If you go out there today, many people talk about hybrid computing, but few places actually demonstrate hybrid computing end to end. We believe we will be one of the first to do that with HPE and PSC. Our contribution to that NSF-sponsored project is a full 9-qubit system: the QPU plus the necessary dilution refrigeration, the control system and supporting infrastructure. HPE's contribution is the HPC and the interfaces, and PSC will integrate and operate the test bed. It will be an exciting project to combine HPC and quantum computing and allow access to researchers and industry users to develop and test hybrid workflows on real hardware. Because we use superconducting gate technology, we have a speed advantage: our gate speeds are in the 50 to 60 nanosecond range, which is roughly 1,000x to 10,000x faster than trapped-ion or atom-based modalities. That speed will be evident in hybrid computations where latency between classical and quantum steps matters. Trapped-ion or atom-based systems with much slower gate speeds will have a tougher time keeping up with CPU and GPU based workflows. With superconducting qubits, you will see how speed helps overall computation and delivering answers much faster. We are excited about this partnership and demonstrating hybrid computing, particularly with superconducting systems.
Maybe just to follow up on that with Jeff's last question, timing of delivery and how to think about revenue recognition for this?
We believe the delivery will be sometime in 2027. We don't know the exact quarter yet; the program just got kicked off recently. As we determine exact timing, we will be transparent about the timelines. At this point, it will be a 2027 delivery. We'll let you know once we know exactly when it will happen.
And our next question comes from Troy Jensen of Cantor Fitzgerald.
Maybe a quick question to start with Subodh here. Any thoughts on the executive order? Has there been any change in government activity post-signing of that order? I'm wondering if it's mainly security-focused or more system-level, but I'd love to get your thoughts and if anything has materially changed since then.
With the executive order passed by the President, there has been increased emphasis on quantum computing. A number of initiatives have started because of those executive orders. They are generally in the early stages, but you are already seeing some of them; the Department of Commerce initiative under the CHIPS Act is one example. We expect more funding to come into the quantum computing ecosystem from the U.S. government because of those executive orders. There are various bills being debated—whether it's the National Quantum Initiative authorization that funds Department of Energy labs or the NDAA which funds Department-level work—and there are many line items included for quantum computing. Overall, the executive orders highlighted the importance of quantum computing for national security and strategic reasons and are helping to free up funding in quantum computing. You are already seeing that with the Department of Commerce, and we expect additional activity from both the Department of Energy and other government agencies.
All right. Makes sense. Congrats on the HPE announcement. I think that's huge. Obviously, you're close to them in Quanta. I assume there are lots of potential big data center partnerships you could have. Is HPE primarily on the networking side or the server side for this engagement? Any more details on that would be helpful.
We are excited to partner with HPE; they are a top player in HPC. The partnership will evolve as we move into demonstration and identify additional opportunities. It's not exclusive; we'll continue to engage other HPC players, and HPE will similarly talk to other quantum companies. The exciting part is bringing state-of-the-art HPC together with a state-of-the-art quantum computer to demonstrate how workloads can be triaged: CPUs for sequential tasks, GPUs for parallel tasks and quantum for certain simultaneous computations. With superconducting qubits, the speeds are commensurate with CPU and GPU, and that's where the platform can show benefits in time-to-result, accuracy or for problems that are infeasible on purely classical HPC. We look forward to putting the system together between now and 2027 and making it available more broadly. We'll continue discussions with HPE and other HPC vendors on how to leverage quantum computing across different workloads.
And our next question comes from John McPeake of Rosenblatt Securities.
Great. Subodh and Jeff, congrats on the execution and steady progress. I have a couple for Jeff. You talked about CapEx; that was one of my questions. But deferred revenues ticked up more than in any quarter I've seen in the history. You actually had your largest billings quarter if you look at the change in deferred and revenues. Could you talk a bit about what's driving that?
Sure. That mainly relates to the C-DAC order; there were prepayments and related contract billing that added to deferred revenue. So that was the main driver of the increase.
Okay, that makes sense. Then one for Subodh. I've heard compliments about your QPUs from some optical interconnect companies. I'm curious if you've had discussions about using your open architecture to explore optical interconnects for your Novera QPUs?
Thanks, John. We appreciate hearing that third-party feedback. We talk to multiple optical players. Among publicly disclosed partnerships, we have mentioned QphoX where we are working on transduction—converting microwave signals to optical and vice versa. Currently our 9-qubit and 108-qubit systems use coaxial signaling and flex cabling; that will continue for a while. We plan to use flex cable technology to get to 1,000 qubits. Beyond 1,000 qubits, for tens of thousands and hundreds of thousands of qubits, we cannot rely on flex or coax cables, and that's where optical signaling comes in. Early research with companies like QphoX shows promising results on converting microwave to optical signals without losing fidelity, but it remains early-stage research before converting into a production roadmap and definite timelines. We still have work to do, but it's encouraging and points the way to scaling to much larger qubit counts.
And our next question comes from Quinn Bolton of Needham & Company.
This is Shadi Mitwalli on for Quinn. Now that you have your 108-qubit system up and running in the cloud, can you talk about what you're seeing in terms of user engagement? I have a follow-up.
As I mentioned earlier, we are getting excellent feedback from end users using our 108-qubit system. Thousands of users are accessing it through AWS, Azure and other cloud platforms, and they consistently say our system is one of the easiest to use, reliable and has consistent uptime. There are only three more-than-100-qubit systems in the world—IBM at 120 qubits, Rigetti at 108 and Google at 105—so we are among the most capable gate-based systems available. Most current work is research-oriented: customers are using these systems to explore algorithm design and to understand how quantum computing fits into their environments. We openly acknowledge we are not yet at quantum advantage; we need to get closer to 1,000 physical qubits, two-qubit fidelities near 99.9% and error mitigation or correction before demonstrating clear commercial workload value. For now, customers are focused on research experimentation, which aligns with how we are positioning our systems. Overall, we are very pleased with the engagement and feedback from users of the 108-qubit system.
Got it. That's great to hear. On the $100 million LOI, it sounds like this will likely be milestone or technical-based. Can you talk about what Rigetti would need to achieve to unlock that funding?
Good question. The agreement is not definitive yet, so we are still discussing with the Commerce Department what exactly will be required to draw down the $100 million. Broadly, the funding is intended to accelerate our roadmap: areas include cryogenics, miniaturization of electronics in the readout chain and other scaling-related capabilities. We are defining exactly which milestones will be accelerated and how the funds will be allocated. It's a work in progress; once definitive agreements are reached, we will disclose more details on milestones and timing.
And our next question comes from Tyler Anderson of Craig-Hallum.
This is Tyler Anderson on for Richard Shannon. For the HPE and PSC deployment, is the fridge and control unit yours, or is this going to be provided by a third party?
The overall system is provided by Rigetti. We design and build the full system; we will use third-party components—dilution refrigerators purchased from vendors, control electronics from partners such as Quanta—but the system integration, co-design and overall delivery are managed by Rigetti.
That's very interesting with Quanta. On coherence improvements—capping niobium with tantalum and other changes—was integrating these technologies required to reach the fidelities you initially targeted, or are these incremental improvements you've been keeping to deploy as needed to increase coherence? I have a quick follow-up.
When doing advanced R&D on complex systems, development proceeds iteratively. We've worked with Fermilab on niobium capping with tantalum, and those results show promise. There are reasons we have not yet deployed every experimental improvement in the production cloud system: the system in production is working very well and is used by many customers daily, so before we upgrade it we need exhaustive testing to ensure we don't inadvertently worsen other metrics. We therefore develop and test improvements on separate systems before integrating them into broadly accessible machines. So these are not held in some secret reserve; they are carefully tested and validated before deployment so we don't degrade any other aspect of system performance.
That makes sense—doing incremental changes and validating each one. If you implement all these improvements and see a strong coherence-time improvement, combined with adiabatic gates which have shown fidelity benefits, could that accelerate the roadmap?
Yes. Adiabatic gates, which we published a white paper on last year, show promise and are part of our technology plan. We currently use a version of adiabatic techniques in our 108-qubit system, but not the full implementation described in our white paper. Development continues and we plan to include adiabatic CZ gates as part of our roadmap for future systems. If coherence and gate techniques perform as expected, they could accelerate aspects of the roadmap, subject to rigorous validation before broad deployment.
And our next question comes from Gary Mobley of StoneX Group.
I know in the past you've done work for the U.K.'s NQCC, and I believe that was at one point a substantial portion of your revenue. What's the prospect for renewal of that funding and potential reengagement looking forward?
That ties into the U.K.'s broader quantum ecosystem. The U.K. government has announced ProQure, a multiyear initiative similar in intent to DARPA QBI, with milestones aimed at fault-tolerant systems over roughly six to seven years. The path differs between the programs, but both target similar long-term objectives. Our system is currently at NQCC—a 36-qubit system—and provides strong feedback on usability and reliability. We are engaged in the U.K. ecosystem and continue discussions tied to their procurement and funding decisions. We hope to announce developments as the U.K. government progresses their decisions, and we plan to remain invested in the U.K.
When you examine your pipeline of potential deals, how does it compare today versus a year ago or other recent points in time? Where does that pipeline growth trace back to—government-funded programs, university research, or commercial experimentation?
We see a lot more interest today than a year or two ago across governments, universities and commercial organizations. Governments have become more active—examples include the Department of Commerce CHIPS initiative, NSF funding for hybrid projects and U.K. government programs. Countries such as India have national-level initiatives that led to our C-DAC award. Universities are increasing their engagement beyond traditional centers like Yale or MIT; we are partnering with a broader set of universities such as Montana State University and the University of Saskatchewan. Importantly, commercial companies are increasingly buying on-premises research systems. Our first two 9-qubit systems delivered this year were to commercial organizations that recognize these are research systems but are investing to build internal capability and understanding. That commercial interest is newer and is driving some of the sales growth we have seen. Overall, the pipeline is broader and more active across government, academia and commercial sectors compared to a year or two ago.
And our next question comes from Nehal Chokshi of Northland Capital Markets.
It looks like the 36-qubit median two-qubit gate fidelity improved from 99.5% in the first quarter to 99.6% in the second quarter. Could you say what drove that improvement?
We continue to work on fidelity daily. Multiple improvements contribute across qubit design, fabrication and materials. At the 9-qubit level we are at about 99.8% two-qubit gate fidelity, and the 36-qubit median improved to 99.6% in Q2. Most of that improvement came from design optimization—how lines and couplings are laid out—and some fab-process refinements. We are incorporating those learnings and will continue to apply them to 108-qubit systems and future larger systems.
To be clear, have the improvements implemented on the 36-qubit system been applied to the 108-qubit system yet, or are they in flight to see if they also improve the 108-qubit system?
Generally, we are deliberate about not changing too many variables on the production cloud system where many users are active. We are working on additional 108-qubit systems independent of the one deployed in the cloud, and that's where we are incorporating learnings from 9-qubit and 36-qubit systems. We do testing on separate hardware to validate improvements before updating the broadly accessible system so we don't inadvertently degrade other performance metrics. That testing is ongoing.
I show no further questions at this time. I'd like to turn it back to Subodh Kulkarni for closing remarks.
Thank you. In closing, we are encouraged by our progress in the second quarter and remain focused on executing against our strategic priorities as we advance Rigetti's position in the quantum computing ecosystem. In the coming months, we will be meeting with investors at a number of conferences and related events, and we hope to see you there. Thank you for your continued interest in Rigetti.
This concludes today's conference call. Thank you for participating, and you may now disconnect.