Rigetti Computing, Inc.

Good day. Thank you for standing by. Welcome to Regetta's third quarter 2024 earnings conference call. At this time, all participants on the 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 one one on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker, Dr. Subodh Gulakarni, President and CEO, please go ahead, sir.

Good morning, and thank you for participating in Rigetti's earnings conference call covering the third quarter ended September 30, 2024. Joining me today is Jeff Bertelsen, our CFO, who will review our results in some detail following my overview. We will be pleased to answer your questions at the conclusion of our remarks. We would like to point out that this call and Rigetti's third quarter ended September 30, 2024 press release contain forward-looking statements regarding current expectations, objectives, and underlying assumptions regarding our outlook and future operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described and are discussed in more detail in our Form 10-K for the year ended December 31, 2023. are Form 10Q for the three and nine months ended September 30th, 2024, and other documents filed by the company from time to time with the Securities and Exchange Commission. These filings identify and address important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. We urge you to review these discussions of risk factors. Today, I'm pleased to provide an update and report on our progress at Rigetti Computing. I'm excited to announce that we plan to introduce a new modular system architecture at Rigetti. By mid-year 2025, we expect to release a 36-qubit system based on four 9-qubit chips tied together with a targeted 99.5% median 2-qubit gate fidelity. By the end of 2025, we expect to release a system with over 100 qubits with a targeted 99.5% median two qubit gate fidelity. We plan to develop the 336 qubit LiDAR system thereafter. Rigetti remains on track to develop and deploy its anticipated 84 qubit ANCA3 system with the goal of achieving a 99 plus percent median two qubit gate fidelity by the end of 2024. We believe superconducting qubits have many advantages over other qubit modalities, including that they are fabricated using well-established semiconductor design and manufacturing techniques. Superconducting qubits also perform faster gate operations than other qubit modalities. Our system gate speeds consistently achieve an active duration of 60 to 80 nanoseconds, which is four orders of magnitude faster than other modalities such as ion traps and pure atoms. System speed is an important factor to enable hybrid computing with current CPUs and GPUs. After spending years optimizing the performance of our larger scale 84-qubit Anka chips and honing our multi-chip scaling technology, We are manufacturing 9-qubit chips at 99.4% median 2-qubit gate fidelity. And in Q3 of this year, we demonstrated tiling of 9-qubit chips without deterioration in performance. We believe the anticipated 4-chip 36-qubit system will be the most ambitious multi-chip QPUs architecture in the market and a significant milestone for the company and the quantum computing industry. Our approach to scalability mirroring multi-chip architectures for advanced applications with CMOS is supported by our recently announced alternating bias assisted annealing, or ABAA, technique for precisely targeted qubit frequencies. ABAA allows us to consistently manufacture high-performance QPUs with the frequency precision necessary for high fidelities. The combination of our ABAA technique and a multi-chip architecture is the cornerstone of our scaling strategy as we move into developing higher qubit count systems. In addition, quantum error correction will be essential to achieve the accuracy needed for quantum computers to realize their full potential. Together with Riverlane, we are working to advance our understanding of how to build fault tolerant quantum computers using quantum error correction technology. Recently, We published a paper with Riverlane that demonstrates how integrating Riverlane's quantum error decoder into the control system of our 84-qubit ANCA2 system enabled the achievement of real-time, low-latency quantum error correction, a critical process for developing fault-tolerant quantum computers. We believe that our 9-qubit NOVERA QPU is ideal for experimentation across a variety of research areas, including qubit characterization and hybrid quantum algorithms. We are excited to share that a Nowhere RQPU has been co-located at the Israeli Quantum Computing Center, IQCC, with Quantum Machines' OPX1000 control system and NVIDIA's Grace Hopper Superchip servers, which was made available to partners for research and experimentation. The setup was recently leveraged for a reinforcement learning project, which was presented at IEEE Quantum Week 2024 in September. The demonstration entailed optimizing single qubit operations on the Novera QPU and is an exciting use case for using a Novera QPU for quantum machine learning development. Finally, the UK's National Quantum Computing Center, or NQCC, officially opened the doors of its landmark facility, on Harwell campus on October 25, 2024. The facility will support world-class quantum computing research and provide state-of-the-art laboratories for designing, building, and testing quantum computers. The state-of-the-art facility includes our fully operational 24-qubit Anka-class system that will be made available to NQCC researchers for testing, benchmarking, and exploratory applications development. In summary, I'm excited about our 2025 roadmap and progress on the technology front. We believe the combination of our ABAA technique and a multi-chip architecture will serve as the cornerstone of our scaling strategy as we move into developing higher qubit count systems with improved fidelities. Thank you. Jeff will now make a few remarks regarding our recent financial performance.

Thanks, Subodh. Revenues in the third quarter of 2024 were $2.4 million, compared to $3.1 million in the third quarter of 2023. Revenue is an important part of our strategy to fund our ongoing research initiatives. We have added to our sales and marketing staff and have expanded our lobbying efforts to help grow our revenue in the future. Gross margins in the third quarter of 2024 came in at 51%. compared to 73% in the third quarter of 2023. Revenue and gross margin variability is to be expected at this stage of the company's evolution, given the variable nature of our contract deliverables and timing with major government agencies. In addition, our recent contract to deliver a 24-qubit quantum system has a lower gross margin profile than most of our other revenue. On the expense side, Total OPEX in the third quarter of 2024 was $18.6 million, compared to $19.1 million in the same period of the prior year. The year-over-year decrease in total OPEX was primarily driven by $1.1 million of expense recognized in the third quarter of 2023 for the Ampere-Ford Agreement, which expired in October 2023. Stock compensation expense for the third quarter of 2024 was $3.4 million compared to $3.7 million for the third quarter of 2023. Net loss for the third quarter of 2024 was $14.8 million or $0.08 per share compared to a net loss of $22.2 million or $0.17 per share for the third quarter of 2023. The non-cash change in the fair value of derivative warrant and earn out liabilities favorably impacted our net loss for the third quarter of 2024 by 2 million compared to a negative impact of 5.2 million in the comparable prior year period. Cash, cash equivalents and available for sale investments totaled 92.6 million as of September 30, 2024. During the third quarter of 2024, we raised 12 million from the sale of 11.3 million common shares under our current ATM program. As of September 30, 2024, up to 60.2 million of common stock remains available for sale under our current ATM program. As disclosed in today's 10-Q filing, we believe that our existing balances of cash, cash equivalents, and marketable security should be sufficient to meet our anticipated operating cash needs until midway through the first quarter of 2026, based on our current business plan and expectations and assumptions considering current macroeconomic conditions. Thank you. We would now be happy to answer your questions.

Thank you. Ladies and gentlemen, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. to withdraw your questions, simply press star 11 again. Please stand by while we compile the Q&A roster. Now, first question coming from the lineup, David Williams with the Benchmark Company. Your line is now open.

Hey, good morning, and thanks for taking my question. First, I guess congratulations to you and the team on all the continued progress. And Subodh, it sounds like you have increased confidence here in the roadmap and just the ability to achieve the targeted fidelities while continuing to drive that qubit scale count. But I guess I'm curious, has anything changed in the way that you're thinking about the roadmap and maybe the strategy? And it feels like just maybe some of the progress, especially on the tiling, is moving at a really nice clip here. So just anything that you think is outpacing the cadence that you anticipated maybe earlier?

Yeah, thanks, David. Yeah, indeed, as you correctly said, our confidence in our roadmap is increasing. As we disclosed, we are making very high-quality 9-qubit chips with median 1-qubit gate fidelity of 99.9%, 2-qubit gate fidelity of 99.4%. We have high confidence we will drive those numbers up going forward. And we have demonstrated now that we can tile 9-qubit chips without any deterioration in performance. And that continues to be at extremely high gate speeds, as you saw, 60 to 80 nanoseconds. So we have pretty high confidence that we can start tiling nine qubits, and that's why we said we were tiling four nine-qubit chips to get us 36 qubits with incredible gate speeds and fidelities in the mid-99s by the middle to end of next year. And we'll continue thereafter to deliver the 100 qubit along with the 9 qubit tidings plan and then eventually the Lyra, the 336 qubit. So overall, our confidence is pretty good that we will be able to execute this roadmap. Our confidence in superconducting continues to be very high, particularly because of the high gate speeds. We still think superconducting is the only way to really have hybrid computing that can coexist with CPUs and GPUs compared to other modalities where the speeds become a real detriment. So overall, we feel pretty good about our roadmap and execution along that line.

Fantastic. Great to hear. I guess on the other side, you had mentioned, again, the tiling of the nine qubit chips and no performance deterioration. Were there any other metrics that were perhaps better than expected or other areas where you see further improvement is needed perhaps?

Well, certainly we are learning tiling chips. We did our first tiling work a couple years ago with 40-qubit chips. But at that time, the fidelity is very much lower. Now we are dealing with mid-99s for fidelity with the 9-qubit chips. So it was important we demonstrated again that we can tile chips at this high fidelity level without losing any fidelity. What is fascinating to me is that you can tie chips across and have signals communicate across interposals and still maintain entanglement. And all the critical metrics that we care about, fidelity, gate speeds, and other secondary metrics as well. So overall it indeed does work and we feel pretty good that's the right way to go about scaling. The beauty of tiling chips is fundamentally we are taking advantage of the chip-led technology that has been pioneered by the CMOS industry. So we definitely get a huge leverage from the CMOS industry and all the work that they have done in tiling CMOS chips. Certainly it puts some higher pressure on packaging, and testing and measurement, but that work has already been done by the CMOS industry, so we can leverage all that work very nicely. So we feel really good about tiling chips.

Great. And maybe just one more, if you don't mind, but just wanted to ask on the government funding opportunity. I thought it was interesting you talked about maybe spending a little more money there on lobbying efforts, as we know one of your peers has done. But how do you think about maybe the areas of opportunity for funding? Is there anything out there that you see today that you've got a good shot at or anything, maybe just any updates around the government funding? Thank you.

Sure. So certainly we look at the U.S. government as the main place to fund our work. NQI, the original NQI Act signed in 2018 has expired. NQI reauthorization hasn't been signed yet and that certainly has impacted near-term financials including Q3 and for the next quarter or two until the inquiry authorization is signed. But we are pretty confident there's bipartisan support for the inquiry authorization to get signed and it will be signed as soon as a new administration is in place. Regarding other, DOD has some special projects. There's a DARPA project, fairly sizable, almost $300 million over seven years that we are trying to get part of that award. And there are other opportunities too, but you are right. There are multiple opportunities between DOE and DOD, and we are spending more time and effort, including some lobbying effort, to try to get some of that money.

Thank you. And our next question, coming from the lineup, Quinn Bolton with Neat Hemming Company, Alanis Nelson.

Hey, Simone and Jeff. I wanted to follow up on David's question just on sort of the, I guess, change in roadmap to now focus near-term more on tiling than kind of moving to larger single-chip qubit processors. I guess, where do you see sort of the balance between you know, single chip processors and the number of tiles ultimately you might put in a system based on the work you've done, do you think you'll, you know, as you look forward to, you know, 100 qubit to 1,000 plus qubit systems, will larger, you know, tiles become important or do you now think that you could tile 16 or 25, you know, of these lower qubit processors and that might be a more efficient way to maintain gate speed and fidelity as you scale qubit count?

That's a good question. We are not completely sure exactly what the optimal size of the qubit count is at which you should tile. I mean, we certainly are choosing 9 qubit right now because we have a very good 9 qubit high fidelity chip ready. We'll certainly explore other qubit counts to look at tiling as well over time. But right now, there's no reason not to buy 9-qubit chips. We are seeing good results. And our 9-qubit chip is basically 6 millimeter by 6 millimeter. So you can do the math and say that even at the current density, area density, we can get tens of thousands of qubits, even hundreds of thousands of qubits in a practical dimension of like 15 centimeter by 15 centimeter. and that can fit into a dilution refrigerator fairly easily. So we feel pretty good that even nine-qubit tiling can take us quite high. Certainly, if we increase the aerial density by a factor of four, which is not that difficult to do, we can squeeze in a lot more. So that's why we decided to start tiling nine. But over time, if we find that there's a better optimal number of where we can tile qubits, we will certainly take a look at that. As I mentioned earlier, we certainly get the higher qubit count when we tile the chips. We haven't really seen any loss in any kind of critical metrics, fidelity, or any of the secondary or tertiary metrics that we monitor. So no reason not to tile it. This is the right way to do it. It's the only truly scalable way. Certainly, we ourselves are increasing the qubit count on a bigger chip. Some of our competitors are doing that as well. And it's not trivial to keep building a bigger and bigger chip and maintain the quality across the whole chip. The huge advantage, and that's why the CMOS industry has standardized around the chiplet technology, is you can literally make thousands and tens of thousands of these small qubit chips at high yield. And then you can pick and choose the best of those chips and tie them together. That's exactly what's going on in the CMOS industry day in and day out. So the So the 3-nanometer and 5-nanometer CMOS nodes, which are harder to make, they choose a smaller tile size for exactly the same reason why we are choosing 9-qubit. So we are essentially leveraging what the CMOS industry has learned over the years, and we plan to take advantage of that. Hopefully that answers your question.

Yeah, no, I appreciate the color. It sounds like tiling has certainly increased in terms of its importance in your roadmap. Looking forward so so I appreciate those those comments I guess the second question is you know you've you've had your site set on a ninety nine point five percent Keep it fidelity now You know for for some time You know how much higher above ninety nine point five do you think you need to get Cuban fidelity or when? Perhaps more importantly do you start to pivot? To quantum error correction you had the announcement with River Lane on quantum error correction and um, this quarter. And, and so, you know, once you get 99.5, do you start to pivot, especially as the cubic counts go up on your multi-tile approach? Um, does, does, you know, do you start to then focus more attention on quantum error correction or, you know, when, when do you think quantum error correction starts to play a bigger, uh, you know, role in your, in your roadmap?

Well, it's already starting to show up as we announced with Riverlane. I mean, our nine qubits are 99.4 right now, and that's a good place to start doing error correction, which is why we are working with Riverlane right now. And we are showing some pretty good proof of concept of how error correction works in real time at the gate speech we are running at. Certainly, we will continue to push fidelity. There's never an end to what is the limit for fidelity. I mean, as you know, CMOS industry right now is between four nines to six nines, sometimes even higher fidelity, but they continue to improve it, and that's the way semiconductor industry is. And we will go the same route. I mean, right now, we are effectively two nines beginning to approach three nines. That's where we are collectively in the superconducting side. But that's not going to stop. I mean, once we reach three nines in the next three to five years, we will go for the four nines and so on. But to answer your question, in the mid two nines, which is 99.5, let's say error correction starts becoming reasonable, you can start getting value out of your system from a practical standpoint. And we think that's why we think narrow quantum advantage, which we define as taking practical applications and demonstrating superiority in performance or cost. is achievable in the next year or two years with a couple hundred qubits with the mid-99s type fidelity and error correction. So bottom line, error correction is already starting to play a role in the mid-99s, and certainly as we increase fidelity, it becomes more and more important. So it's already here and now.

Got it. And a quick one for Jeff. You mentioned the NQCC contract being a lower margin contract for you. Now that the 24-bit QPU has been installed at the NQCC, is that contract largely over and that gross margin overhang kind of now in the rearview mirror, or are there still revenue to be collected under that NQCC contract that Yeah, we should just be thinking about as we model gross margin over the next couple of quarters.

Jeff, you want to answer the question? I don't know why Jeff is having a problem with his audio stream. But to answer your question, we expect NQCC contract to continue through the first quarter of 2025, and at that point, the NQCC current contract will end. We are working on a new contract with them, but the terms of that have not been decided yet. So the current margin challenge will continue through Q1 2025 with NQCC. Got it. Thank you, Siva.

Yeah. Thank you.

And our next question coming from the line of Chris Sankat with TD Cowan. The line is open. Hi.

Good morning. Thanks so much for taking my questions. This is Stephen calling on behalf of Chris. Sibodh, maybe if I could ask a couple more questions on the quantum error correction front. In terms of the announced progress with River Lane during the quarter, I'm just kind of curious what the next major milestones might be in terms of collaboration with River Lane and also kind of related to error correction, the work that NVIDIA and quantum machines are showcasing with your system at the I think some of the research that they published and also the system that's now installed at the Israeli Quantum Compute Center. I'm just kind of curious for that work, does that tie in tightly with the work you're doing with Riverlane or is that related, a parallel effort that ties in more to feeding back to your fundamental quantum devices and how that tuning is performed to get better and more repeatable fidelity rates?

Sure, so two separate questions here. First, let me take the NVIDIA question. So as you saw in our press release, we are collaborating with NVIDIA at the Israeli Quantum Computing Center. And really the goal is to understand from a fundamental standpoint how a QPU interfaces with a CPU and GPU. The reason that work is extremely important for us as well as the whole industry is And really, that highlights the importance of superconducting quantum computing. Because we are dealing with tens of nanoseconds gauge speed, we can actually talk to modern-day CPU and GPU and keep up with the data flow. Other modalities like trapped ion are pure atoms, although they have the benefit of slightly higher fidelity than where we are right now. they are four orders of magnitude. That's 10,000 times slower than where we are. So from a practical standpoint, it really is not possible for a trapped ion or a pure atom quantum computer to stay in active communication loop with a CPU or a GPU. And that's why the work that IQCC is doing along with Nvidia GPUs, the Grace Hopper GPU and RQPU is so important for everyone to understand. the pros and cons of GPU versus GPU and how the data bifurcation should be done. So that work is critical long-term. That's what hybrid computing is all about, and we are absolutely committed to doing that kind of work to understand how quantum computing fits into the broader data center hybrid computing ecosystem. So that's one. Regarding error correction, I mean, there's a lot of work to do. We are just getting started. If you look at the CMOS industry or just the classical semiconductor industry. There's been a lot of error correction work over the last couple of decades. I don't want to simply put it in a couple of sentences here because you need to really go into the details of the right now we are talking about in the CMOS industry seventh and eighth order error correction code. And there are various steps that happen to get to that level. And I expect us in the quantum computing, there's yet another complication because we are dealing with coupling of qubits. So it's not a simple situation that if there's a faulty CMOS transistor, you try it again and again. We have to do it with multiple couplings, and if one coupling is bad, it doesn't mean the same qubit coupling with other qubits may be bad. So it gets a little more complicated as to how you do quantum error correction, and that's where we are partnering with River Lane, who's an expert in many of these areas. You can certainly take a look at their website and what they have disclosed already in terms of roadmaps. But there's a lot of work going on in the industry right now in quantum error correction and how it differs from classical error correction and what we need to be worried about and how the roadmap will evolve. From our standpoint, certainly the better quality hardware we can make, which is higher fidelity, faster gate speeds, and other metrics, that only helps. So we need to do our part correctly. But on the quantum error correction, they certainly need to take advantage of the hardware and to take full capabilities of the software layers that they do. I hope that answers your question.

Yes, that does. Thank you for that, Subodh. And I guess for my follow up, I just had a question for for Jeff on the P&L in terms of operating expenses. Just given the comments on higher sales and marketing spending, lobbying efforts, and then also looking at it through the development efforts on the 9Q and 36Q modular system for next year, any thoughts on whether we should be modeling for quarterly OPEX to be Closer to that $19 to $20 million range, or would it be higher than $20 million per quarter for OPEX?

Yeah. Are you able to hear me?

Yeah, we can.

Okay. All right. I don't know why I had a technical difficulty before. I mean, I don't think we'll see a significant increase in OPEX going forward. We are planning for a handful of new hires over the course of the next year. And as we had noted, we are starting to spend some more on sales and marketing. But I don't think it'll be, you know, significant or material. So, you know, I would expect, you know, our OPEX to, you know, remain in line or slightly higher than what we've seen, you know, in the most recent quarters.

Great. Thank you, Chad.

Thank you. And our next question coming from the line of Brian Klinslingler with Alliance Global Partners. Your line is now open.

Great. Thanks for taking my questions. Subodh, if the incoming administration is successful in getting the quantum initiative reauthorization passed, does this lead to more government R&D procurements? I guess I'm curious how Regetti might benefit in the short to medium term if this does pass?

Thanks, Brian. I mean, absolutely the NQI Reauthorization Act that is being debated in our Congress right now is critical for our funding in 2025 and the next few years. Right now there are multiple versions. The latest version at least in the Senate, has a significant increase in quantum funding. The original NQI was $500 million over five years. The NQI reauthorization, at least right now, the number that is being discussed is almost five times higher. So we are talking $2.5 billion over five years. So assuming the NQI reauthorization is passed at that level, certainly it will help all quantum computing companies based in the US, and certainly we expect that we receive from places like Fermilab and Oak Ridge National Lab will increase substantially. In addition, and I mentioned this earlier, the Department of Defense also does fund quantum computing through several different initiatives. And there is a DARPA program for what they call benchmarking initiative. That's a sizable program on the order of $300 million over seven years. So we certainly hope we can get some of that. So the amount of dollars that the U.S. government is planning on investing in quantum computing is slated to increase significantly. We are talking 4x, 5x increase starting 2025. And we certainly are looking forward to getting those bills authorized and appropriations done so we can start benefiting from that.

Great, thank you. And then, as you continue to improve fidelity rates and meet your roadmap goals, and with the new news on tiling, what are potential government customers, how are they reacting And are you making any progress on some of the RFPs you've discussed in the past? Maybe not specifically on which countries, but you've mentioned that you have a handful of RFPs out there.

Yeah, I mean, the customers we talk to, like the DOE, DOD, and some other governments like the UK government and so on, they like our tiling approach and the ABA annealing. I mean, they believe and we certainly believe that that's the right way to scale up. I mean, it's easy to say you can keep increasing the size of the chip, but it's not trivial to build hundreds and thousands of qubits of monolithic chip, whereas tiling is a lot more practical. That's why the CMOS industry does it, and that's why we think it's the right time to bring tiling in. So we certainly feel confident that's the right way to go about doing it. Some of our competitors so far have not ventured in this area, could be because we have a lot of IP in this area, but also maybe other factors. We certainly think tiling with the assisted bias annealing is the right way to scale up qubit count, the hundreds and thousands of qubits over the next few years. and we are committed to it. So far we have not seen any negative impact, and obviously we see a lot of benefits in tiling in terms of scale up. So we continue to push that one.

Great, thanks. And my last question is, assuming you can continue to stay on your technology roadmap and reach 100 qubits at 99.5 median fidelity, how, if at all, does this change QPU purchases for R&D purposes? Is it unimpactful? Or do you think you start to see a little bit more adoption from other government labs?

Well, assuming we execute our roadmap and we feel pretty confident we will. So let's say we are at 100 plus qubit at 99.5% median to qubit gate fidelity by this time next year, along with error correction that we talked earlier about. I mean, suddenly you start having a quantum computer that is capable of doing effectively what we call a narrow quantum advantage type application. So take some practical applications and demonstrate superiority in terms of performance or cost. And that certainly will increase the appetite for the US government, but other governments to start doing more research with quantum computing. Already the list of countries that that has a quantum mission and plans to invest in quantum computing is getting to be on the order of 15 or maybe even 20 countries now. And when they see that we are becoming more and more practical in terms of taking on real life applications and demonstrate some superiority, I have to believe that that will increase the funding situation at the various government levels. So we certainly think as we continue to execute our roadmap, national labs, university, academic kind of researchers will continue to increase. I mean, we have already quantified in our investor presentation that, along with IDC report, that the market opportunity for business research applications in the next five years is roughly $7.5 billion. So it's a pretty – and even if it's still talking research at this point, it's still a very sizable market, and that's really what we are focused on right now, getting our quantum computing-capable to take on those kinds of applications, research applications, and get a foothold in that $7.5 billion marketplace in about five years.

Great. Thanks so much.

Thanks, Vlad.

Thank you. And as a reminder, to ask a question, you will need to press star 1-1 and wait for your name to be announced. Our next question, coming from the lineup, Craig Ellis with B. Reilly. Your line is now open.

Yeah, thanks for taking the question, and guys, congratulations on the roadmap and technology development progress. Subodh, I wanted to start just by going back to an angle on the prior question and where David Williams was with his inquiry on U.S.-based engagement activity, but the question's more focused internationally, given the nice progress in the most recent quarter with the Israeli Quantum Computing Center and and UK's NQCC opening with its ANCA class system. The question is, as you look at the next 12 months or so with international engagements, how has your view changed in the last three months given the progress that you're making?

Certainly with the progress we are making, Craig, we are seeing more and more opportunities with other governments. I mean, as I mentioned earlier, there's probably 15 countries, getting close to 20 countries now that have an active quantum program, a national quantum mission of some type with the goal of how quantum computing will help that particular country. And certainly US is the one that we focus on the most along with UK. But as you said, we are getting more involved with the Israeli Quantum Computing Center. But you go along Western Europe, And select countries in Asia, the opportunities are definitely increasing as the hardware gets more capable, as we start doing better quality demonstrations, not only in terms of hardware, but also along with error corrections, like what we just did with Riverlane, or some practical application demonstration that we have done, like we have done some work with Moody's and HSBC and standard charter type financial customers, and ADI in Abu Dhabi, So when we publish those kinds of papers with some practical applications and show potential with quantum computing, that increases the appetite of research-oriented commercial customers as well. So we certainly think as hardware continues to improve as the next year goes on, we will continue to get better and better opportunities with government customers, but also some commercial research-oriented type customers.

That's very helpful. And then the follow-up question is just circling back on the company's TAM view. And I think there were earlier comments about a $7.5 billion TAM over the next few years. Can you just help us calibrate the reasonable outlook that we should have over the next three or four years and then by the end of the decade as we think about where Rigetti's focused and all the progress that it's making with the roadmap and with things like scaling up with this cloud-based Qubit approach. Thank you, Subha.

Sure. So if you take a look at our investor presentation, we cite the $7.6 billion number that IDC has in about five years' time period. Again, primarily government, national labs, and research-oriented customers. At least in the next five years, we believe a sizable part of that market is going to be on-premise quantum computers, and a smaller part will be quantum computing as a service. Over the long run, we certainly expect QCAS to dwarf on-premise quantum computing. But for the next five years, we think majority of the number, and that's what IDC and other reports also concur with that. most of the market is going to be on-premise for research customers because they like to have on-premise computers as opposed to just through the cloud. So that's the number we are focused on right now, on-premise quantum computers over the next few years for research customers. Out of the seven and a half, clearly the IDC and other organizations that have done that market study haven't broken it down by modalities. We certainly expect superconducting to be dominating that number, mainly because of the gate speed and the higher qubit count capability. I mean, it's great for trapped ion and pure atoms to demonstrate what they have done and they'll continue to do that. I'm sure they'll do a nice job in demonstrating high fidelity, low qubit count systems. But when you are four orders of magnitude slower than superconducting, it really cannot lend itself to hybrid computing and any practical applications in the data centers, which are dominated obviously by CPUs and GPUs. So we think a big part of that $7.5 billion is going to be superconducting. All those other modalities will play a role. And within superconducting, really, we think, I mean, along with us, IBM is a key player in that marketplace. There are other competitors too. I mean, Google is there, but they are not quite interested in that kind of a market, nor is Amazon. There's a Finnish company called IQM and a Dutch company called Quantware. So there's a few competitors we have in the superconducting besides us and IBM. But we think given our position, we definitely expect to be a leader in that space. So we expect sizable market share of the superconducting portion. So when you do the math, we think that's a sizable multi-billion dollar opportunity for us to go after in about five years. Does that answer your question?

Yeah, that's extremely helpful. Thank you, Subodh, and good luck as you push ahead.

Thank you, Craig. Thank you.

And I'm showing no further questions in the queue at this time. I will now turn the call back over to Dr. Subodh Kulkarni for any closing remarks.

Thank you for your interest and questions. We look forward to updating you after the beginning of the new year's with our fourth quarter results and full year 2024 results. Thank you again.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation, and you may now disconnect.