Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rigetti Computing Inc (RGTI, Financial) is on track to develop and deploy its 84-qubit Ankaa-3 system with a goal of achieving 99%-plus median 2-qubit gate fidelity by the end of 2024.
- The company's current 24-qubit system is performing in the 99% range for 2-qubit fidelity, with gate speeds of 60 to 80 nanoseconds, making it twice as fast as some other superconducting quantum computing players.
- Rigetti Computing Inc (RGTI) has introduced a modular chip architecture that reduces manufacturing complexity and allows for accelerated, predictable scaling.
- The company has released preliminary research on a resource estimation framework, which is part of the DARPA Benchmarking Program, to improve the industry's understanding of fault-tolerant quantum computers.
- Rigetti Computing Inc (RGTI) has a strong cash position with $100.5 million in cash, cash equivalents, and available-for-sale investments as of June 30, 2024, which is expected to meet operating cash needs until midway through the first quarter of 2026.
Negative Points
- Revenues in the second quarter of 2024 were $3.1 million, a slight decrease from $3.3 million in the second quarter of 2023.
- Gross margins in the second quarter of 2024 were 64%, down from 82% in the second quarter of 2023, due to the variable nature of contract deliverables and timing with major government agencies.
- The recent contract to deliver a 24-qubit quantum system has a lower gross margin profile than most other revenue sources.
- Net loss for the second quarter of 2024 was $12.4 million, although this was an improvement from a net loss of $17 million in the second quarter of 2023.
- The company anticipates revenue lumpiness due to the timing of on-premise QPU orders and deliveries, which are difficult to predict given the nature of government and national lab contracts.
Q & A Highlights
Q: As Rigetti improves fidelity and gate speed, how are partners reacting, especially international and US entities?
A: Subodh Kulkarni, CEO, explained that partners, including the DOE, DOD, and UK government, are pleased with the progress in fidelity and gate speed. The speed, in particular, is crucial for practical quantum computing applications, and Rigetti's systems are significantly faster than other modalities, which is promising for achieving quantum advantage.
Q: Can you explain the variability in gross margins and what to expect in the coming quarters?
A: Jeffrey Bertelsen, CFO, noted that the variability is due to the nature of projects and revenue size. The 24 QPU system has a lower margin, but future Novera sales are expected to have better margins, which should help stabilize gross margins.
Q: What gives Rigetti confidence in achieving 99% gate fidelity for the 84-qubit QPU by year-end?
A: Subodh Kulkarni, CEO, stated that the 24-qubit and 84-qubit systems use the same chip. They are already characterizing multiple 84-qubit chips, and based on current data, they are confident in reaching the 99% fidelity target by year-end.
Q: How is the revenue pipeline looking, and what should investors expect in terms of revenue growth?
A: Subodh Kulkarni, CEO, mentioned that government funding for quantum computing is increasing, which is positive for Rigetti. However, revenue will remain lumpy due to the nature of government contracts. They expect an upward trend in revenue over the next couple of years as interest in on-premise QPUs grows.
Q: How is Rigetti positioned in the competitive landscape, and what are the prospects for commercial revenue?
A: Subodh Kulkarni, CEO, emphasized that Rigetti's superconducting modality is advantageous due to its speed. While commercial interest is currently limited to research-level engagements, they expect government contracts to dominate in the near term. Commercial interest will likely grow once quantum advantage is demonstrated.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
