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Rigetti Computing, Inc. (Nasdaq: RGTI) (“Rigetti” or the “Company”), a pioneer in full-stack quantum-classical computing, today announced its financial results for the second quarter and six months ended June 30, 2022.
“We delivered against our core objectives for the second quarter 2022 results, advancing our product roadmap, continuing to attract key talent, and strengthening our base of customers and partnerships,” said Chad Rigetti, founder and CEO of the Company. “Our technical teams made tremendous progress in the second quarter, and we remain on track to meet our anticipated roadmap milestone previously announced in connection with our first quarter 2022 earnings results. We also deepened existing relationships and won new deals in the U.K. and U.S. as we continued to work hand-in-hand with top organizations in pursuit of quantum advantage.”
“Alongside our technology and business progress, we’re excited to announce our committed equity facility. We believe this facility should provide us financial flexibility to support our focus on our mission and business objectives. Furthermore, in the current uncertain macro environment, we believe entering into this facility is prudent.”
Second Quarter 2022 Financial Highlights
Revenue for the second quarter of fiscal year 2022 was $2.1 million, increasing by 39% from $1.5 million in the prior year period.
Total gross profit for the second quarter was $1.3 million, compared with $1.2 million in the prior year period.
Total GAAP operating expenses for the second quarter of 2022 were $26.9 million, compared with $10.9 million in the prior year period. Total non-GAAP operating expenses2 for the second quarter of 2022 were $16.4 million, compared with $9.3 million in the prior year period.
Net GAAP loss for the second quarter of 2022 was $10.0 million, or $0.09 per share, compared with $10.1 million, or $0.46 per share, in the prior year period.
Adjusted EBITDA3 for the second quarter of 2022 was a loss of $15.1 million, versus a loss of $8.1 million in the prior year period.
The Company had cash and cash equivalents of $184.0 million as of June 30, 2022.
Technology Roadmap
The Company remains on track to introduce its planned single-chip 84-qubit quantum computer in 2023, its planned 336-qubit multi-chip processor later in 2023, its planned 1,000+ qubit system in late 2025, and its planned 4,000+ qubit system in or after 2027. The Company plans to use its patented, multi-chip scaling technology in both its planned 1,000+ qubit system and its planned 4,000+ qubit system. These plans are consistent with the Company’s technology roadmap announced in its first quarter 2022 earnings press release on May 16, 2022.
Committed Equity Facility
On August 11, 2022, the Company entered into a common stock purchase agreement with B. Riley Principal Capital II, LLC (“B. Riley”). Under the agreement, the Company has the right, without obligation, to sell and issue up to $75 million of shares of its common stock to B. Riley, subject to certain limitations and satisfaction of certain conditions, over a 24-month period. The Company issued to B. Riley 171,008 shares of common stock as consideration for B. Riley’s commitment to purchase shares of Company common stock under the agreement. Further details will be provided in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 to be filed with the Securities and Exchange Commission.
Fiscal Year 2022 Outlook
In our Q1 earnings release in May, we estimated that revenues for fiscal year 2022 would be in the range of $12 to $13 million. This estimate included approximately $4.0 million tied to contracts that are being negotiated with a government entity that is also an existing customer. The contracting process has taken longer than anticipated, and revenue recognition for some or all of the estimated $4.0 million, a portion of which relates to work that has already been performed and costs that have already been incurred, could be deferred to a fiscal period after fiscal year 2022 if negotiations are not completed and contracts are not executed until after 2022. In such case, the Adjusted EBITDA loss for fiscal year 2022 could be greater than the $50 to $53 million range we estimated in May. Moreover, if negotiations result in contract terms that are less favorable than we anticipated, the total expected value of these contracts could decrease.
Recent Business Developments
Rigetti announced the launch of its 32-qubit Aspen-series quantum computer in the U.K. on June 21, 2022. As Rigetti’s first U.K.-based quantum computer, this system is expected to be available over the Cloud through Rigetti QCS™ to the Company’s U.K. partners, including Oxford Instruments, the University of Edinburgh, Phasecraft, and Standard Chartered Bank. The Rigetti-led consortium aims to advance practical quantum computing applications in the areas of machine learning, materials simulation, and finance, and is backed by funding from the U.K. government’s Quantum Technologies Challenge, led by U.K. Research & Innovation. Delivering this system achieves a key milestone of the consortium in its efforts to accelerate the commercialization of quantum computing in the U.K.
Rigetti UK Limited, a wholly owned subsidiary of Rigetti, jointly received two Innovate U.K. awards on April 29, 2022, as part of the ISCF Commercializing Quantum Technologies Challenge. Rigetti expects to utilize each award alongside its partners to make advancements within critical areas of quantum computing. As part of the awards, Rigetti and Riverlane plan to work together on research and development for quantum error correction. Additionally, Rigetti, Phasecraft, and BT (formerly British Telecom) plan to develop quantum algorithms and software for solving optimization and constraint satisfaction problems with quantum computers.
Rigetti has been selected by the Defense Advanced Research Projects Agency (DARPA) to lead a program to develop benchmarks for quantum application performance on large-scale quantum computers. The program is worth up to $2.9 million to Rigetti and its partners over three years based on the achievement of certain milestones, of which approximately $1.5 million is subject to DARPA’s exercise of an option to extend the initial eighteen-month term. This award is part of DARPA’s Quantum Benchmarking Program. The goal of this program is to re-invent key quantum computing metrics, make those metrics testable, and estimate the required quantum and classical resources needed to reach critical performance thresholds.
Following the conclusion of the 2022 Russell indexes annual reconstitution, Rigetti was included in the Russell 2000 index.
September 2022 Investor Day
Rigetti will host its inaugural Investor Day on Friday morning, September 16, 2022, in Fremont, California, at its Fab-1 facility, the industry’s first dedicated quantum fab. The theme of the event will be “Integrating Quantum into the Fabric of the Cloud.” The Company will announce additional information regarding the event, including webcast detail information, in the coming weeks. The Company also is providing an in-person attendance option for a limited group of analyst and investor attendees. For more information regarding the event, please reach out to RGTI@investorrelations.com.
“We delivered against our core objectives for the second quarter 2022 results, advancing our product roadmap, continuing to attract key talent, and strengthening our base of customers and partnerships,” said Chad Rigetti, founder and CEO of the Company. “Our technical teams made tremendous progress in the second quarter, and we remain on track to meet our anticipated roadmap milestone previously announced in connection with our first quarter 2022 earnings results. We also deepened existing relationships and won new deals in the U.K. and U.S. as we continued to work hand-in-hand with top organizations in pursuit of quantum advantage.”
“Alongside our technology and business progress, we’re excited to announce our committed equity facility. We believe this facility should provide us financial flexibility to support our focus on our mission and business objectives. Furthermore, in the current uncertain macro environment, we believe entering into this facility is prudent.”
Second Quarter 2022 Financial Highlights
Revenue for the second quarter of fiscal year 2022 was $2.1 million, increasing by 39% from $1.5 million in the prior year period.
Total gross profit for the second quarter was $1.3 million, compared with $1.2 million in the prior year period.
Total GAAP operating expenses for the second quarter of 2022 were $26.9 million, compared with $10.9 million in the prior year period. Total non-GAAP operating expenses2 for the second quarter of 2022 were $16.4 million, compared with $9.3 million in the prior year period.
Net GAAP loss for the second quarter of 2022 was $10.0 million, or $0.09 per share, compared with $10.1 million, or $0.46 per share, in the prior year period.
Adjusted EBITDA3 for the second quarter of 2022 was a loss of $15.1 million, versus a loss of $8.1 million in the prior year period.
The Company had cash and cash equivalents of $184.0 million as of June 30, 2022.
Technology Roadmap
The Company remains on track to introduce its planned single-chip 84-qubit quantum computer in 2023, its planned 336-qubit multi-chip processor later in 2023, its planned 1,000+ qubit system in late 2025, and its planned 4,000+ qubit system in or after 2027. The Company plans to use its patented, multi-chip scaling technology in both its planned 1,000+ qubit system and its planned 4,000+ qubit system. These plans are consistent with the Company’s technology roadmap announced in its first quarter 2022 earnings press release on May 16, 2022.
Committed Equity Facility
On August 11, 2022, the Company entered into a common stock purchase agreement with B. Riley Principal Capital II, LLC (“B. Riley”). Under the agreement, the Company has the right, without obligation, to sell and issue up to $75 million of shares of its common stock to B. Riley, subject to certain limitations and satisfaction of certain conditions, over a 24-month period. The Company issued to B. Riley 171,008 shares of common stock as consideration for B. Riley’s commitment to purchase shares of Company common stock under the agreement. Further details will be provided in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 to be filed with the Securities and Exchange Commission.
Fiscal Year 2022 Outlook
In our Q1 earnings release in May, we estimated that revenues for fiscal year 2022 would be in the range of $12 to $13 million. This estimate included approximately $4.0 million tied to contracts that are being negotiated with a government entity that is also an existing customer. The contracting process has taken longer than anticipated, and revenue recognition for some or all of the estimated $4.0 million, a portion of which relates to work that has already been performed and costs that have already been incurred, could be deferred to a fiscal period after fiscal year 2022 if negotiations are not completed and contracts are not executed until after 2022. In such case, the Adjusted EBITDA loss for fiscal year 2022 could be greater than the $50 to $53 million range we estimated in May. Moreover, if negotiations result in contract terms that are less favorable than we anticipated, the total expected value of these contracts could decrease.
Recent Business Developments
Rigetti announced the launch of its 32-qubit Aspen-series quantum computer in the U.K. on June 21, 2022. As Rigetti’s first U.K.-based quantum computer, this system is expected to be available over the Cloud through Rigetti QCS™ to the Company’s U.K. partners, including Oxford Instruments, the University of Edinburgh, Phasecraft, and Standard Chartered Bank. The Rigetti-led consortium aims to advance practical quantum computing applications in the areas of machine learning, materials simulation, and finance, and is backed by funding from the U.K. government’s Quantum Technologies Challenge, led by U.K. Research & Innovation. Delivering this system achieves a key milestone of the consortium in its efforts to accelerate the commercialization of quantum computing in the U.K.
Rigetti UK Limited, a wholly owned subsidiary of Rigetti, jointly received two Innovate U.K. awards on April 29, 2022, as part of the ISCF Commercializing Quantum Technologies Challenge. Rigetti expects to utilize each award alongside its partners to make advancements within critical areas of quantum computing. As part of the awards, Rigetti and Riverlane plan to work together on research and development for quantum error correction. Additionally, Rigetti, Phasecraft, and BT (formerly British Telecom) plan to develop quantum algorithms and software for solving optimization and constraint satisfaction problems with quantum computers.
Rigetti has been selected by the Defense Advanced Research Projects Agency (DARPA) to lead a program to develop benchmarks for quantum application performance on large-scale quantum computers. The program is worth up to $2.9 million to Rigetti and its partners over three years based on the achievement of certain milestones, of which approximately $1.5 million is subject to DARPA’s exercise of an option to extend the initial eighteen-month term. This award is part of DARPA’s Quantum Benchmarking Program. The goal of this program is to re-invent key quantum computing metrics, make those metrics testable, and estimate the required quantum and classical resources needed to reach critical performance thresholds.
Following the conclusion of the 2022 Russell indexes annual reconstitution, Rigetti was included in the Russell 2000 index.
September 2022 Investor Day
Rigetti will host its inaugural Investor Day on Friday morning, September 16, 2022, in Fremont, California, at its Fab-1 facility, the industry’s first dedicated quantum fab. The theme of the event will be “Integrating Quantum into the Fabric of the Cloud.” The Company will announce additional information regarding the event, including webcast detail information, in the coming weeks. The Company also is providing an in-person attendance option for a limited group of analyst and investor attendees. For more information regarding the event, please reach out to RGTI@investorrelations.com.
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