Rigetti(RGTI) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues in Q4 2024 were $2.3 million, down from $3.4 million in Q4 2023, indicating a decline in revenue [15] - Gross margins in Q4 2024 were 44%, significantly lower than 75% in Q4 2023, primarily due to lower margin revenues from a contract with the UK's NQCC [16] - Total operating expenses (OpEx) in Q4 2024 were $19.5 million, slightly down from $19.7 million in the same period of the prior year [17] - Net loss for Q4 2024 was $153 million, or $0.68 per share, compared to a net loss of $12.6 million, or $0.09 per share, in Q4 2023 [17] - Cash, cash equivalents, and available-for-sale investments totaled $217.2 million as of December 31, 2024 [18] Business Line Data and Key Metrics Changes - Rigetti sold its first Novera QPU to Montana State University in December 2024, marking a significant milestone in sales to academic institutions [7] - An additional Novera sale occurred in Q4 2024 to the UK government, indicating growth in government sales [8] Market Data and Key Metrics Changes - The collaboration with Quanta Computer, which includes a $35 million investment in Rigetti shares and a commitment of over $250 million for hardware development, is expected to strengthen Rigetti's market position [6][28] - The US government is expected to increase funding for quantum computing, with a bipartisan bill proposing $2.5 billion over five years, which could benefit Rigetti [30][34] Company Strategy and Development Direction - Rigetti aims to leverage its partnership with Quanta to enhance its superconducting quantum computing capabilities and expand its market presence [5][6] - The company is focused on R&D milestones, with plans to scale its systems to over 100 qubits by the end of 2025, while maintaining a strong emphasis on error rate reduction [13][39] - Rigetti's open modular architecture is seen as a competitive advantage, allowing for easier integration of third-party innovations [121] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding government funding initiatives and their potential impact on future sales and contracts [34][36] - The company remains focused on R&D, with expectations that commercial sales will not significantly increase in the near term, projecting a timeline of four to five years before commercial viability [39][40] Other Important Information - Rigetti launched its 84-qubit Ankaa-3 system in December 2024, achieving significant milestones in gate fidelity [9][10] - The company is exploring advanced technologies such as fiber optics for signal transmission to enhance scalability and performance [96][98] Q&A Session Summary Question: Can you help us understand the Quanta partnership? - The partnership with Quanta was initiated about a year ago, focusing on leveraging their manufacturing capabilities and financial investment to enhance Rigetti's quantum computing technology [22][24][28] Question: What is the status of government funding? - A bipartisan bill proposing $2.5 billion for quantum computing is expected to be signed soon, with funding likely to benefit DOE labs and Rigetti [30][34] Question: How does the cash position affect R&D and sales? - Rigetti has approximately $500 million available for investment over the next five years, which should support R&D without the immediate need for additional cash raises [36][39] Question: Can you discuss the QPU sale to Montana State University? - The sale was part of Rigetti's strategy to build a quantum ecosystem for research applications, focusing on fundamental understanding rather than commercial competition [45][46] Question: What is the scaling approach for reaching 100 qubits? - Rigetti plans to use a tiling approach to scale its systems, with a target of demonstrating 36 qubits by mid-2025 and over 100 qubits by the end of the year [85][92] Question: How does Rigetti differentiate itself from competitors? - Rigetti's open modular architecture allows for easier integration of third-party innovations, which is a significant advantage over competitors with more closed systems [121]