Executive Summary
In Q2 2024, Rigetti Computing Inc reported revenues of $3.1 million, reflecting a slight decrease from $3.3 million in Q2 2023, primarily driven by the variable nature of contractual government engagements. Despite the revenue dip, the gross profit margin remained robust at 64%, though down from 82% a year ago, as the company navigates the complexities of delivering lower-margin systems like the 24-qubit quantum processor. Notably, the net loss narrowed significantly to $12.4 million, or $0.07 per share, compared to $17 million, or $0.13 per share, in the previous year, indicative of improved operational efficiencies and cost management. Management remains optimistic about the future, citing increased government funding in quantum technologies and a promising pipeline of orders, while also emphasizing the ongoing efforts to achieve 99%-plus fidelity in its upcoming 84-qubit Ankaa-3 system.
Key Performance Indicators
QoQ: -793.38% | YoY:-27.11%
QoQ: -40.21% | YoY:-26.79%
QoQ: -48.36% | YoY:-44.38%
Key Insights
Revenue: $3.1 million (YoY: -7.24%, QoQ: +1.11%)
Net Income: -$12.4 million (YoY: -26.79%, QoQ: -40.21%)
Gross Margin: 64% (Previous Year: 82%)
Operating Expenses: $18.1 million (YoY: -4.74%)
Cash and Cash Equivalents: $20.7 million
Total Assets: $162.4 million
Current Ratio: 4.29
Debt Equivalence Ratio: 0.197
The company experienced revenue variability attributed to delays in contract deliverables with government agencies, but overall operational expenditures slightly decreased due to improved ...
Financial Highlights
Revenue: $3.1 million (YoY: -7.24%, QoQ: +1.11%)
Net Income: -$12.4 million (YoY: -26.79%, QoQ: -40.21%)
Gross Margin: 64% (Previous Year: 82%)
Operating Expenses: $18.1 million (YoY: -4.74%)
Cash and Cash Equivalents: $20.7 million
Total Assets: $162.4 million
Current Ratio: 4.29
Debt Equivalence Ratio: 0.197
The company experienced revenue variability attributed to delays in contract deliverables with government agencies, but overall operational expenditures slightly decreased due to improved resource allocation towards revenue-generating activities. Management emphasized that ongoing Research & Development remains a significant focus to advance their technology.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.09M |
-7.24% |
1.11% |
| Gross Profit |
1.99M |
-27.11% |
-793.38% |
| Operating Income |
-16.09M |
-0.93% |
-3.01% |
| Net Income |
-12.42M |
-26.79% |
-40.21% |
| EPS |
-0.07 |
-44.38% |
-48.36% |
Key Financial Ratios
operatingProfitMargin
-521%
operatingCashFlowPerShare
$-0.08
freeCashFlowPerShare
$-0.09
Management Commentary
Management highlighted several key themes during the earnings call:
1. Technology Advancements: "Rigetti remains on track to develop and deploy its anticipated 84-qubit Ankaa-3 system with the goal of achieving a 99-plus percent median 2-qubit gate fidelity by the end of 2024."
2. Revenue Composition: “The revenues in the second quarter of 2024 include the sale of the Novera QPU ship to Horizon Quantum Computing in April…with a gross margin profile lower than most of our other revenue."
3. Cost Management: "Total OpEx in the second quarter of 2024 was $18.1 million, primarily driven by an increase in the amount of engineering time used to deliver revenue."
4. Market Outlook: "Most of the governments and national labs are increasing their budgets for quantum computing significantly, which provides a great backdrop for our business."
These insights showcase Rigetti's commitment to pioneering advanced quantum computing technologies while fostering stronger relationships with key governmental clients, which is likely to enhance revenue stability over time.
"We believe that our existing balances of cash, cash equivalents, and marketable securities should be sufficient to meet our anticipated operating cash needs until midway through the first quarter of 2026."
— Jeff Bertelsen
"Many of our current customers, the national labs, believe that we are indeed approaching what we call the narrow quantum advantage or the broad quantum advantage era in the next couple of years."
— Subodh Kulkarni
Forward Guidance
Rigetti's management expects revenue growth over the next year or two as government budgets for quantum technology increase significantly. The aim is to reach 99% fidelity in the upcoming Ankaa-3 quantum processor by the end of 2024, which is anticipated to drive increased interest and orders from both government and commercial clients. This growth will be critical as the company prepares for larger-scale orders that are expected to stabilize and increase revenue streams, despite the inherent lumpiness associated with government contracts.