Rigetti(RGTI)2023-11-10 03:07Financial Data and Key Metrics - Revenue in Q3 2023 was 2.8 million in Q3 2022 [43] - Gross margin in Q3 2023 was 73%, compared to 72% in Q3 2022 [43] - Operating loss in Q3 2023 was 31.3 million in Q3 2022 [44] - Net loss in Q3 2023 was 0.17 per share, compared to a net loss of 0.16 per share in Q3 2022 [44] - Cash, cash equivalents, and available-for-sale securities totaled 105.5 million as of June 30, 2023 [20] - The company expects to have 94 million in cash, cash equivalents, and available-for-sale securities by the end of 2023 [8] Business Line Data and Key Metrics - QPU systems sales grew in Q3 2023, with the delivery of a 9-qubit QPU to a premier National Laboratory [15] - The company achieved higher than 98% median 2-qubit fidelity with its 9-qubit system, 98% with its 24-qubit system, and over 97% with its Ankaa-2 84-qubit system [18] - The company plans to achieve 98% median 2-qubit fidelity with the Ankaa-2 84-qubit system and over 99% in 2024 [18] - The company is developing the 336-qubit Lyra system and aims to demonstrate Narrow Quantum Advantage (NQA) in two to three years [18] Market Data and Key Metrics - The company was awarded a five-year IDIQ contract with the Air Force Research Lab (AFRL) to supply Quantum Foundry Services, including quantum integrated circuits, quantum-limited amplifiers, cryogenic microwave components, and 9-qubit QPUs [3] - The company was also awarded a DARPA IMPAQT contract to advance quantum algorithms for solving combinatorial optimization problems [16] - The company received an Innovate UK Grant to enhance money laundering detection using quantum machine learning techniques, in collaboration with HSBC, the University of Edinburgh, and the National Quantum Computing Center [5] Company Strategy and Industry Competition - The company is focused on improving system performance and fidelity, with the goal of achieving Narrow Quantum Advantage in two to three years [18][38] - The company is leveraging its fabrication capabilities to support government agencies and national labs in advancing quantum computing research and development [15][16] - The superconducting modality is seen as a leading contender in quantum computing due to its scalability, with the company currently at 84-qubits, ahead of other competitive modalities [12] Management Commentary on Operating Environment and Future Outlook - Management expects revenue variability due to the nature of contract deliverables and timing with major government agencies [43] - The company is focused on reducing error rates to achieve quantum advantage, which is expected to drive explosive growth opportunities in the future [37][38] - Management highlighted the growing pipeline for QPU sales, with more than a dozen customers currently in discussions [55] Other Important Information - The company raised 19.1 million, down from 11.5 million reduction in stock compensation expense [19] - The non-cash change in the fair value of the Ford agreement for the ampere warrant increased G&A expense by 387,000 reduction in Q3 2022 [7] Q&A Session Summary Question: Details on the Air Force Research Lab contract and revenue expectations - The contract is expected to be sizable, with monetization already starting in Q3 2023 and expected to increase in Q4 and subsequent quarters [23][47] Question: Inbound activity and optimism for future QPU sales - The company sold its first QPU in Q2 2023 and another in Q3 2023, with a growing pipeline of more than a dozen customers interested in 9-qubit, 24-qubit, and 84-qubit systems [34][35][55] Question: Commercial interest in quantum cloud services - Commercial interest in quantum cloud services is still relatively low compared to national labs and university researchers, as the industry is still away from quantum advantage [53] Question: Business development and future strategy - The company's strategy is to focus on technology development, improve fidelity to 99%, and scale up to 336-qubit systems, while also capitalizing on QPU sales opportunities for researchers [57][58]