Rigetti Computing Inc (RGTI) Q4 2024 Earnings Call Highlights: Strategic Collaborations and ...

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Thu, Mar 6, 2025, 12:13 AM 4 min read

Revenue: $2.3 million in Q4 2024, down from $3.4 million in Q4 2023.
Gross Margin: 44% in Q4 2024, compared to 75% in Q4 2023.
Total Operating Expenses (OpEx): $19.5 million in Q4 2024, compared to $19.7 million in Q4 2023.
Stock Compensation Expense: $3.4 million in Q4 2024, compared to $3.7 million in Q4 2023.
Net Loss: $153 million, or $0.68 per share in Q4 2024, compared to $12.6 million, or $0.09 per share in Q4 2023.
Cash, Cash Equivalents, and Investments: $217.2 million as of December 31, 2024.
Net Proceeds from Share Sale: $153.3 million from the sale of 88.1 million common shares.

Warning! GuruFocus has detected 4 Warning Signs with RGTI.

Release Date: March 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Rigetti Computing Inc (NASDAQ:RGTI) entered into a strategic collaboration with Quanta Computer Inc., committing over $100 million each to accelerate superconducting quantum computing development.
The company sold its first Novera QPU to Montana State University, marking a significant milestone in academic partnerships.
Rigetti launched the 84-qubit Ankaa-3 system, achieving major 2-qubit gate fidelity milestones with a 99.0% median iSWAP gate fidelity and 99.5% median fidelity with fSim gates.
AI-powered tools successfully automated the calibration of a Rigetti QPU, showcasing the potential of AI in quantum computer calibration.
Rigetti's modular approach allows partners to integrate their technology, fostering innovation and flexibility in improving quantum computing capabilities.

Negative Points

Revenues in the fourth quarter of 2024 decreased to $2.3 million from $3.4 million in the same quarter of 2023.
Gross margins dropped significantly to 44% in Q4 2024 from 75% in Q4 2023, primarily due to lower-margin contracts.
The company reported a net loss of $153 million for Q4 2024, a substantial increase from a net loss of $12.6 million in Q4 2023.
The non-cash change in the fair value of derivative warrant and earn-out liabilities negatively impacted the net loss by $135.1 million.
Despite the strategic collaboration and funding, Rigetti acknowledges that commercial sales are still four to five years away, indicating a prolonged R&D phase.

Q & A Highlights

Q: Can you explain the genesis and exclusivity of the strategic collaboration with Quanta Computer Inc.? A: Subodh Kulkarni, President and CEO, explained that Quanta, a leader in GPU servers, sought a partner in quantum computing and chose Rigetti for its superconducting gate-based technology. The partnership, which began discussions a year ago, involves Quanta investing $35 million in Rigetti shares and committing over $250 million to non-QPU hardware development over five years. This collaboration aims to leverage Quanta's manufacturing capabilities and Rigetti's technology to advance quantum computing development.

Q: What is the status of government funding for quantum computing, and how does it impact Rigetti? A: Subodh Kulkarni noted that a bipartisan bill proposing $2.5 billion over five years for DOE labs is pending approval. The funding is expected to be allocated in the second quarter of 2025. Additionally, the DoD's DARPA Quantum Benchmark initiative is anticipated to announce selected companies soon, with significant funding available for developing utility-scale quantum computing.

Q: How does Rigetti plan to scale its quantum computing technology, and what are the expected milestones? A: Subodh Kulkarni outlined Rigetti's plan to scale using a chiplet approach, aiming to demonstrate a 36-qubit chip by mid-2025 and over 100 qubits by year-end. The company targets a 2x reduction in error rates, aiming for 99.5% median 2-qubit gate fidelity. This approach is expected to facilitate scaling to several hundred thousand qubits in the future.

Q: How does Rigetti's open modular architecture benefit its position in the quantum computing industry? A: Subodh Kulkarni emphasized that Rigetti's open modular architecture allows for the integration of innovative third-party solutions, which is appealing to national labs and government agencies. This flexibility differentiates Rigetti from competitors with more closed, mainframe-like approaches, enabling faster adoption of new technologies and solutions.

Q: What are the financial implications of the collaboration with Quanta, and how will it affect Rigetti's R&D spending? A: Jeffrey Bertelsen, CFO, stated that the collaboration with Quanta will continue Rigetti's R&D efforts, with expenditures flowing through operating expenses. The $100 million commitment from Rigetti over five years will support ongoing R&D without a significant step-up in spending, while Quanta's $250 million investment will further enhance Rigetti's roadmap.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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