Shares of Rigetti Computing (NASDAQ: RGTI) plummeted 12.64% in pre-market trading on Tuesday following the release of disappointing first-quarter 2025 financial results. The quantum computing company's performance fell significantly short of analyst expectations, raising concerns about its growth trajectory and path to profitability.
Rigetti reported Q1 revenue of $1.5 million, well below the analyst consensus estimate of $2.55 million. This represents a substantial 51.77% decrease compared to the $3.05 million reported in the same period last year. The company attributed the revenue decline to the "lumpy" nature of milestone-based research and development and government contracts, which can vary between quarters.
Adding to investors' concerns, Rigetti's operating loss widened to $21.6 million, compared to the estimated loss of $16.4 million. Total operating expenses for the quarter stood at $22.1 million, reflecting the company's ongoing investments in research and development as well as selling, general, and administrative costs. Despite reporting a net income of $42.6 million, it's worth noting that this figure includes $62.1 million of non-cash gains from changes in fair value of derivative warrant and earn-out liabilities, masking the underlying operational challenges.
Rigetti CEO Dr. Subodh Kulkarni commented on the results, highlighting the company's progress in quantum computing technology and recent government contract awards. "Rigetti is proud to be awarded important government-funded projects in the U.S. and U.K. to advance our technology, which demonstrates our continued leadership in superconducting quantum computing," Kulkarni stated. However, the market appears to be looking for more tangible signs of revenue growth and a clearer path to profitability in the highly competitive and rapidly evolving quantum computing sector.
The sharp pre-market stock decline reflects investor disappointment with Rigetti's slower-than-expected progress in commercializing its quantum computing technology. While the company continues to secure government contracts and research partnerships, including recent awards from DARPA and the UK government, concerns remain about its ability to translate these developments into sustainable financial performance.