BERKELEY, Calif., May 17, 2022 — Rigetti Computing, Inc. (Nasdaq: RGTI) (“Rigetti” or the “Company”), a pioneer in full-stack quantum-classical computing, has announced its financial results for the first quarter of fiscal year 2022 and provided business updates.
“Rigetti delivered in the first quarter of 2022 to lay the foundation for our next growth phase,” said Chad Rigetti, founder and CEO of the Company. “We are excited to announce the anticipated launches of our next-generation single-chip 84-qubit quantum computer expected in 2023 and 336-qubit multi-chip processor expected later in 2023. As key touchpoints along our broader roadmap, we believe these machines will deliver increased performance across the key dimensions of speed, scale, and fidelity.
“Rigetti’s technology is nine years in the making, and we believe we are at an opportunity rich period of time. Our entrance to the public markets in March was another exciting milestone that has provided us with additional funding resources and increased brand recognition. I am incredibly grateful to our team whose deep technical expertise and powerful mission-driven focus is showing the world quantum’s promise,” concluded Rigetti.
Financial Results for the First Quarter of Fiscal Year 2022
Revenue for the first quarter of fiscal year 2022 was $2.1 million, compared with $2.4 million in the prior year period. The year-over-year decline was due to the completion of the first phase of a large government agency project in the first quarter of 2021. The second phase of this project is expected to begin in 2022. The Company currently generates the majority of its revenues from development contracts with government agencies, and it expects this to continue over at least the next few years as the Company develops and grows its Quantum Cloud Services (QCaaS) business. Cost of revenue for the quarter was $0.4 million, compared with $0.3 million in the prior year period, mainly due to employee-related costs.
Total gross profit in the first quarter of 2022 was $1.7 million, compared with $2.1 million in the prior year period. Gross margin in the first quarter of 2022 was 80.3%, compared with 88.4% in the prior year period and remaining essentially flat when compared with the Company’s full 2021 fiscal year.
Total GAAP operating expenses for the first quarter of 2022 were $25.5 million, compared with $9.8 million in the prior year period. The year-over-year increase in total GAAP operating expenses was mainly due to higher research and development expenses and general and administrative expenses. Total GAAP operating expenses in the first quarter of 2022 included a one-time deal bonus of $2.0 million in the aggregate to certain employees, resulting from the Company’s successful business combination close, and significantly higher stock compensation expenses of $11.5 million, versus $0.6 million in the first quarter of 2021. The majority of the year-over-year increase in stock compensation was driven by the Company’s successful business combination close.
Non-GAAP operating expenses1 for the first quarter of 2022 were $15.6 million, compared with $8.0 million in the prior year period. The Company is providing non-GAAP operating expenses as this metric removes depreciation, stock-based compensation and change in fair value of a forward contract liability, which the Company believes makes it a useful comparative metric for investors. Non-GAAP operating expenses include an aggregate of $2.0 million in one-time deal bonuses to certain employees in connection with the business combination close.
Net GAAP loss for the first quarter of 2022 was $10.5 million, or $0.20 per share, compared with $7.8 million, or $0.36 per share, in the prior year period.
Adjusted EBITDA2, which excludes depreciation, stock compensation, interest expense (net), change in fair value of derivative warrant liabilities, change in fair value of forward contract agreement liability, change in fair value of earn-out liability, and merger-related transaction costs, was a loss of $13.9 million in the first quarter of 2022, versus a loss of $6.0 million in the prior year period.
The Company had cash and cash equivalents of $206.6 million as of March 31, 2022, compared with $11.7 million as of December 31, 2021. The increase in cash and cash equivalents was the result of the Company’s successful closing of its business combination with Supernova Partners Acquisition Company II, Ltd. on March 2, 2022.
The Company plans to introduce its single-chip 84-qubit quantum computer in 2023, its 336-qubit multi-chip processor later in 2023, its 1,000+ qubit system in late 2025, and its 4,000+ qubit system in or after 2027. More detail on each anticipated milestone in the Company’s technology roadmap is provided below.
- The single-chip 84-qubit quantum computer is expected to be based on the Company’s next-generation chip designed for higher fidelities and increased connectivity.
- The 336-qubit multi-chip processor is expected to combine the anticipated improvements of the Company’s 84-qubit processor with the modular, multi-chip scaling technology of its Aspen-M machine.
- Both the 1,000+ and 4,000+ qubit systems are expected to utilize the advantages of the Company’s multi-chip technology and next-generation architecture, similar to the Company’s expectations for its 336-qubit multi-chip system.
This expected timeline and roadmap are based on several factors, which include the following considerations.
- First, higher-than-anticipated labor, equipment, and system component expenses are leading to increases in the costs associated with system development.
- Second, market and supply chain conditions have hampered the timely availability of input materials for the Company’s machines.
- Third, the Company’s available working capital coming out of its business combination close was lower than anticipated, which has limited the Company’s ability to absorb these increased costs and timing factors.
The Company expects total revenue for fiscal year 2022 to be between $12.0 million and $13.0 million and Adjusted EBITDA2 loss for fiscal year 2022 to be between $50.0 million and $53.0 million. This outlook takes into account several factors, including the following:
- The primary factor to the Company’s revenue guidance is the combination of anticipated lower-than-expected new government contract opportunities and the timing of government funding and appropriations. Although the Company anticipates closing additional agreements in 2022, the Company believes these agreements will not have a material impact on its 2022 revenue.
- The Company expects higher costs associated with equipment, system components, and labor in 2022 due to the expected persistence of global macro conditions, including inflation and supply chain disruptions, throughout at least the remainder of 2022.
- The Company expects its non-GAAP expense profile to grow in line with its operational ramp up for the remainder of 2022.
- Due to the current macro-economic environment, market volatility, lack of visibility, and broader uncertainty, the Company is not providing any financial guidance beyond 2022.
Recent Business Developments
- The Company announced the establishment of its Revenue Organization on March 21, 2022. The Revenue Organization will oversee all revenue generating activities within Rigetti going forward.
- Greg Peters has been appointed to the position of Chief Revenue Officer (CRO), effective March 14, 2022. As CRO, Peters is leading the Company’s global commercialization and growth efforts with the goal of expanding the Company’s QCaaS business in the public and private sectors. Peters has more than 30 years of prior experience in high technology roles at Hewlett-Packard, Agilent Technologies and Keysight Technologies.
- Eric Ostby has been appointed to the position of Vice President of Product, effective April 12, 2022. As Product VP, Ostby will lead Rigetti QCS™ product and platform development to advance the Company’s QCaaS business in the public and private sectors. Ostby has more than a decade of experience in strategy development and product management at Google, Ingram Micro, and Boston Consulting Group. Most recently, Ostby served as Product Lead at Google for their quantum computing service and hardware development teams.
About Rigetti Computing
Rigetti is a pioneer in full-stack quantum-classical computing. The Company has operated quantum computers over the cloud since 2017 and serves global enterprise, government, and research clients through its Rigetti Quantum Cloud Services platform. The Company’s proprietary quantum-classical infrastructure provides ultra-low latency integration with public and private clouds for high-performance practical quantum computing. Rigetti has developed the industry’s first multi-chip quantum processor for scalable quantum computing systems. The Company designs and manufactures its chips in-house at Fab-1, the industry’s first dedicated and integrated quantum device manufacturing facility. Rigetti was founded in 2013 by Chad Rigetti and today employs more than 160 people with offices in the United States, U.K., and Australia. Learn more at www.rigetti.com.
Source: Rigetti Computing