Rigetti Computing (RGTI) 12 Aug 222022 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to the Rigetti Computing Second Quarter 2022 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Polly Pearson with Sharon Merrill Associates. Please go ahead.

good and operator you, evening everyone. Thank will results. we be reviewing earnings XXXX quarter second Rigetti’s Today here Chad me and With is Brian Rigetti CEO Sereda, Computing, of CFO. Rigetti, Founder and

point QX press These contain the I’d call and Before expectations, concerning release this future underlying I Rigetti’s like assumptions forward-looking turn regarding to and call out current over, objectives statements that results. operating to Also to risks useful effort are that results from uncertainties investors, to to measures. today provide actual and non-GAAP differ subject in those comments described. statements cause could materially financial an information include

on and now, operating website I filed or to to that these may For And earnings please comparable with details factors Chad. over Chad? further at investors.rigetti.com the future Rigetti’s today’s measures Rigetti’s results, GAAP for measures on X-K and today. affect the will the refer to earlier regarding it SEC information turn to reconciliations release

strong call. of to quarter, talent and partner roadmap, second continuing strengthening delivered attract our Polly welcome relationships. on and product advancing base our We to you, and Thank everyone our XXXX results customer key quarter earnings this

our our R&D roadmap we remain that year. meet progress product targets. development and XXXX Our track qubit to This qubit teams excellent on system XX system later and made planned includes in XXX next-generation technology and

continues a Rigetti selection improvement for to as computing. quantum And benchmark UK that to unveiled compared and Our Quantum reported focused quantum new be quantum Cloud awards processing UK-based past classical new computing Services team we in to achieved for hybrid quantum and February, applications DARPA a advance computer developing program a X.Xx first We technology our lead quantum speed, on applications. performance government major announced step a our forward two projects demonstrating systems. won in this pioneer we to

have commercializing pioneered world’s like to our the services unlock a software or at in business leverage we computers working computing is hardware hybrid are quantum the quantum platform. processors architecture, technologies classical in expect it cloud Rigetti build decade, we our service And we core to powerful QCaaS to Over quantum as using a the and one next model most the the future. quantum accelerators as Rigetti.

we a distinctive position for years, delivering carved a industry classical power. have leading the as Over the out quantum in computational platform

and leadership trailblazing no Our is accident. hybrid

this One and units, is quantum February. platform. deliberately processors on of classical second, We have system XX coprocessor by integrate or their success These processing X.Xx Aspen-XX And offer our CLOPS. team results we or successfully greater front. This were showing to architecture computer. for we than the at X,XXX qubit qubit and achieving flexibility, introduced Recently, benchmarked Aspen-M-X qubit QPUs, using win. our to when Since computing In quantum to system systems on system vision features able with practical our past since with CLOPS and platform, CLOPS first quantum low Aspen-M-X the reached we to big computing. this that XXXX By fast we time. quantum team circuit a been our developed This of operations release speed Rigetti’s processing classical milestone achieve integrated since both have hybrid then, optimizing and CLOPS our Originally XX infrastructure. results. acceleration and system infrastructure. I’d IBM, for represent been our system. our to a on February, XX qubit pursuing the faster our processing processing XX% the designed assesses is comparable for like tightly speed speeds a IBM’s XXXX, a a quantum with with These have we patented and superconducting for QCS to are access computing performance the was continued measuring latencies, these layer improve we than our XX functionality effort on iterate new congratulate underpin metric per

successfully information and such hybrid please our the for as regarding calculated release. running on leadership we important about disclaimers QCaaS cloud pioneering have a performance for progress hybrid is which is quantum We with as applications with our Rigetti to native over In CLOPS quantum business partnerships emphasis well of as to significant use how Ampere. Ampere’s our the CLOPS cases. with in core XXXX. refer more made our processing in by Ampere, QPUs applications For advancing systems also viable integrating has Rigetti learning combined classical is measure, been world real delivering work platform platform. hybrid with on an the model. earnings cloud machine cloud performance rounds use the includes chipmakers, tests couple engaging This completing of Rigetti’s first since in delivery, as

we emphasis continue our for objectives and designed our allow application and efficiency to commercializing cloud co-processing, the provide hybrid our go-to-market adoption, tour and to when the integrating building Fab-X announce facility, our dedicated choose initiative obtain The cloud to value scaling quantum with with into to for business attendees access computing. our facility. a delivery fab delivery latest Investor customers beginning the we our capital delivery XX event fab. quantum margin or campaign. industry’s theme most allows be processors will view, inaugural expect the on the our maximum or In first research development of note, Day that suitable us and quantum on plans quantum times also and to new model for strong this faster for integration at their is Cloud cloud the most QPU opportunity are approach We to profiles. of excited this partners optimize and achieve fabric September On paired practical will quantum systems

event, out please reach at the to attending our team in Relations interested are you Investor If rgti@investorrelations.com.

in-person. for attend option to announcing also a will We be those unable webcast

will updates Now, our on technology quarter. color provide I for the more

are connection quarter product with in roadmap and roadmap We earnings. first targets about excited very announced to on track our meet technology our remain our XXXX

are on progress system chip a This testing the XX our tunable conductivity and month. generation lattice higher of for coupling will completed be new to recently chips We packaging design this processor the qubit first expected introduce next begin We excellent expect planned and our bring XXXX. to to technology. the making

around continue progressed, XX% improvements has development X of gate line we test systems. our As the on qubit anticipated fidelities with qubit high in devices, XX see to performance

our assembled multi-chip machine, well continue beginning XXXX, and continue unique the qubit a late multi-chip expected this this Our approach next be generation XXX together based We introduced architecture, proprietary our technology. Aspen-M critical to advance we to in using planned positioned systems we very enable pioneering will scaling relative on with to multi-chip XXX position that hold qubit currently chips technology, modular With that believe machines. technology. to and we our are direct strong our patented and competitors

R&D our delivering recently completed teams example, our towards engineering XXX have For milestones important several and system. qubit

QX, we patent leverage on tunable this in to generation in chips, processors. the next technology paving way separate First, qubits pending between multi-chip our demonstrated coupling

system. this designing begun packaging the Second, advanced for and we producing density higher have

costs bring Third, a system qubit and based to system We we performance, to radiofrequency control system reduce our the be XXX for for on next greater approach expected on increased technology. believe executed the our scalability and QPUs first can control chip generation proof-of-concept this beyond.

top during with partnerships, continue existing and hand deals new hand quarter both organizations of work advantage. in and of the U.S. relationships XXXX, we to the deepened pursuit quantum second Turning to won we UK in as in

Edinburgh, computer, XX-qubit is and UK Chartered the During our Bank. of machine. consortium leading a Oxford funding, quarter, the quantum Standard UK Instruments, we launched government that University by Backed based first includes a Phasecraft, Rigetti

recently to UK research computing learning, practical through commercializing the won this Riverlane these and plan the work areas of on development. UK, applications technologies initiatives, in of Our correction Under finance. advance we Building is quantum two new Innovate goal to challenge. one IFCF the we momentum and alongside error materials awards quantum simulation on in machine have

a total build industry. formerly with is software the an term. Rigetti of computing. the current million on and algorithms and $X.X Of option subject XX-month work This satisfaction here evaluating to to British $X.X its award milestones. based X by extend with needed we is quantum over applications lead Telecom which, our years certain the and on the that to reformulate classical and key DARPA focused and expands to The Back announced for optimization and program other, testable estimate critical those quantum the work metrics the metrics and project make Rigetti to solving worth plan constraint On on thresholds. for to performance to problems and to initial was telecom benchmark BT up approximately selected in DARPA’s is quantum developing partners we Phasecraft reach DARPA to for exercise of U.S., multiyear quantum and required million to resources achievement aims

Additionally, further strong for valuable finance. we for in in and making development. work quantitative to Notably, with identifying use cases NASDAQ process and potential advantage good now we the are our selecting are and progress applications finance continue see of quantum in

Azure to users Turning this on-boarded private our platform, preview first we quarter. cloud our

on flexibility public to this technology provide equity mission and our Alongside months. We our announce momentum believe business in announce access business, excited continued this committed to on to support we a to expect should our focus systems coming are the Rigetti We financial on and plan. facility. Azure facility

focus macro the to the Rigetti Given to important and at with the In moving of of With this mission. is and prudent commitment the add progress, the confidence potential advancements, and vote operate believe build and to intention capital from powerful forefront an we towards most our believe balance sheet, cash industry computers. markets. environment, conclusion, current world’s are with we our business both an technology progress we remains enduring

technologies During advances, make partnerships. continued key and the we driving our strengthening quantum quarter, to forward tremendous

that, we As to prior remain Brian our technology our let’s laid the objectives out that earnings meet a With on it result, for financials. on to call. over we turn track

advance costs combination, agency quarter were as connection in the with business government in as SG&A and the in company costs. tied of an fees meeting large August by last as in because costs ago. year closing late quarter and subscription subcontractor on timing year-over-year million activities XX% amount XXXX. versus The in the variability to speaks materials of in in higher expenses third-party company XX% million and $X.X plan in of XXXX second We public same year period initiated R&D marketing roadmap strategies. additional GAAP from in Gross legal our agency a ago. other the was ago. we $XX.X the our and significantly decline the of revenues were XX% Higher higher in the to the driven well investing to in increase million resources increased year. for $X.X million period revenue quarter Chad. stock third-party a a a continue increase in to well and transition that including the year-over-year year projects. higher year R&D our period same forward in $X.X expenses the additional This came headcount, second stock software of versus revenues year-over-year contract insurance to We toward quarter contract signed as $XX.X ago. Sales for go-to-market driven the quarterly period technology R&D million mainly execute stock period audit, to second a various drive same activities same new by by $X.X we the million in the sales increase of development from in driven second with mainly headcount primarily compensation quarter and million margins to and in QX a increased second million compensation public $XX.X Total government XXXX due was OpEx by Thanks, the basis. compared and objectives. as a increased applied at $X.X phase headcount, the were XXXX versus was going is to compensation and was This around and same earned This continue

such related the to contract are same this million $X.X were a by recent pleased deals a we were G&A due compensation same with with us change compared million Non-GAAP and liability. the agreement million $XX.X quarter gain a progress period value strategic increased as in our OpEx ago. established experience to announcement. was as increase year are in continue quarterly director depreciation, technology collaboration Ampere. a $XX.X and relationships expenses and $X.X the was contract and insurance. compensation We value area second ago. offset as expect seeing in DARPA in hands-on public $X.X stock in as quarter our to fair operating of million the This costs period change other employee well including higher stock in OpEx Non-GAAP officer forward to Higher removes fair the and year forward agreement versus G&A our connected second company, expenses in contract partially to winning million

period $XX.X with million a $XX.X per share a $X.XX a for loss loss the additional as prior XXXX EBITDA was reference second GAAP of million quarter included of press net a or in Net per year in share quarter year release loss $X.X in an have table Adjusted second We same was or in GAAP in reconciliation loss $XX a of compared investors. million $X.XX the of of compared period. ago. to the million our the

net to the For table our please reconciliation EBITDA, adjusted in of refer to release. GAAP reconciliation press loss

XX, of equivalents we as December XXXX. XXXX, $XXX million $XX.X June of As cash had million of XX, versus

As we a our this pipe achieved reminder, year cash through March the proceeds due is business in higher and to combination of successful gain the balance financing. net

steps with continue growth. technology our and important in our we invest to work we we are roadmap, for to As foundation believe lay closely the partners taking

do While and cost to fluctuations pressure in areas persist, various such we labor continue as macro supply. headwinds and see

includes year, to contracts tied QX that on our a is This estimated for Regarding our $X also as that in negotiated earnings entity XXXX $XX million is we for revenue customer. million call are with approximately this million. to an revenue outlook being discussed existing May, $XX government fiscal our

fiscal May. greater QX the the anticipated our $X after potentially finish or could in year than could mentioned announced we to a market deferred added this estimated contracting for color be were issued and recognition for range As some with If committed XXXX to XXXX. results loss occur, I’d of release the longer press million adjusted equity beyond we the today, fiscal that some to has process million in today. $XX revenue million EBITDA $XX all be taken than period to our on like facility estimated

further roadmap. believe working good we sheet that capital sheet While of on to our and macroeconomic strengthens sheet downturn. given in us uncertainty markets balance and and our balance access depth believe priorities capital remains shape prudent balance technology to the markets amount having is general capital on allow key current the our both We focused additional our of duration would remain and and

capital equity conditions. We Thanks for the closing Chad also back another believe vote is again from everyone. that to important confidence having current his despite With access will call markets I to that, the comments. of hand

laid our earnings quarter continue our second disciplined as solid Thanks, deliver track we to Brian. roadmap technology and engineering in remain we With execution, the to meet results XXXX quarter out on first on call.

Now, Operator? open questions. for up let’s it

Our Instructions] Williams [Operator you. question Company. David Thank Benchmark The the from first line with comes of

ahead. go Please open. is line Your

letting me progress for wins. customer the with the on afternoon. the ask congrats Hey, Thanks good question and

thanks. Hey,

customer the trying the are kind that’s this that if the takes at about I a am And understand – the of and I are are I guess it’s maybe completed? the What it pricing? existing in script, guess talked bit challenges, hurdles that why taking timing? Is or longer talked big, or the about have to you contract just to and it Brian, what call there you hurdles an Is longer, taking about contract. think customer? puts getting first, trying the maybe overcome? but guess end I the maybe of you we

but it you the is incurred, contract costs can And not so around imagine. much of contracts structure structure from details the these as etcetera. lot goes of There a pricing, to

this negotiation opportunities So typical years for out process development expand services, existing agreement lengthy very with strong for customer working contract, the government several nothing expect for And already. forward. customer, and provide technology period relationship it’s an we will a going contract of this the ordinary, relationship

contract important to point an the stage is might you important say relationship. an inflection and company it’s this So, an the in

it Okay, this that mentioned not would produce be expect XXXX. there. color longer that then What revenues to would timeframe fantastic. is that And year from that to that push if Thanks that for maybe you contract? took had you the into able

at and have guidance. very this well, be expect believe close of point. of we meet do the completed Yes, are depends we to can – will we the contract our year, that some estimate the and are contract, executed if that we revenue end time timing it’s there recognized, difficult it this before potential good of the fiscal when a revenue contracts those in closing some to But on negotiations

the fantastic. Okay, I like or just the balance seems just but and maybe the share out? Is increased kind there guess strong is should another purchase we really here? that a rationale. maybe given for But there the we think you here Brian, profitability of pushed about the And maybe that capital thinking understand anything just should cost from one then or sheet be perspective it fundamental I agreement has the been

at – just remain allows its to absolutely current just mean, continue company and just short-term the want no not us to roadmap mainly of market the that, not double one of we and to we current I because capital conditions, the down at cycle duration and from technology it markets, the want we point for to can deviate focus the be have think sure that would focused. I long-term just our to to on be again, balance of macroeconomic given strengthen conditions, can opportunity sheet the all. The prudent. the No, we condition time, this estimate to

kind the maybe the able advantages you can give accomplish quick, Okay, have of the performance around kind how just talked to and performance, advantage? color what little and much. that increased and you magnitude of improvement a so you kind been about that since more the thanks and and in February real roadmap as X.Xx think you Chad you that about what of just And of then that performance about progress the means think

the We have been X.Xx excited demonstrate, are we performance CLOPS. about very able to in the improvement

in industry innovation hybrid Rigetti’s are is a We classical result long-term investment and an quantum and leader commitment, pioneering this this of computing. in

our the the stack performance in is with of that and infrastructure optimized to result pioneering enduring fast happen to quarter Our integrating work tremendous teams for from a of classical quantum make very this and over full is environment our that ability technology deliver for leadership. that CLOPS engineering commitment

much the Great. Thanks it. for so help. Appreciate

Thank comes you. question line Sankar with from And the Krish our of next Cowen.

Your line is Please open. ahead. go

Hi, on behalf I questions. guys. my taking calling for had This is Krish. a couple. of Stephen Thanks

with running revenues Chad of both compared First during underlying any was system you of for relatively from some wondering to of either what’s more professional of… provide or demand I access stable the I for trends revenues, quarter kind the was curious or was that could Brian, were it and lumpiness on quantum second quarter sides in color services fees, the terms the there portion the research QX if was

sorry. Yes,

consistency seeing are quarter-over-quarter. We

ongoing model, I ultimately see our long-term our think, see computing-as-a-service we And don’t are headed. happen. we model again, is vision continuing hasn’t And to – change. the will cloud strength anticipate where in quantum we that that, that through no this where business deviated

more as to the anticipate user grow we over just base As as that a will time broaden fact, computing. for – continue matter that quantum of we

actually third quantum more the online, revenues for that or computing near-term, center with the now of services be amount a drive on will quantum could UK should primarily quarter. from just that professional expect access, the to decent that, there in research we lay And follow-up

UK our is computer big quantum a up Bringing forward. step the first in

facilities the existing quantum long-term towards excited to contract. very for our deliver contract and are machine our It’s computing quantum UK milestone about strategy under building services We a cloud to our machine. This that and this model. underpin this is big teams

like, $X.X benchmarking wondering other what Rigetti’s value that sort XX DARPA million Could you provide a of Alright. the months any potential for you guys win. DARPA you performance Chad, initial was third that program or proceeds color some percentage portion some And my more the follow-up, I of of there? on from

This on over program capability. as and up and organization an prime Yes. with program contractor partners. forward for $X.X the is is a X million and this that’s us important Rigetti for to step Rigetti years DARPA

$X.X Our million. program over portion the full is approximately

you much. Thank so Okay.

you. Needham. Janoskie of with next comes line our Thank the from And question Trevor

Your open. ahead. line is go Please

Hey Chad. question. Brian. This Quinn Hey Trevor Yes. for Bolton. the And letting thanks for is ask on me

the On to changing million if clarify, is $X this million to guidance falls to wanted $X XXXX, to basically your business outlook, million? XXXX $X I

guidance. changing not are We

we of this of $XX We specific process. year by the contracting million remain And identify million. to expect close protracted with the to that want revenue we confident But a associated the we $XX going risk year. to end are

And on of this in sense Okay. the could the with an part nothing it a single or clarification, for the possible $X or another contract government is better am and XXXX? of on contract, a if I the work customer contract XXXX. million be that is is completed trying all this negotiations to get recognized already performed

now, multiple being a that to It right invoice, we be that complete customer $XX had against existing of to in able to longstanding and anticipate an and contracts an the relationship million range. As $XX with contract is have million secure, fully we invoice with.

a scores, increase. of you more this Okay. would in QV on led color But function helpful? on collapse the info that, that CLOPS very layers? to Is on congrats And encouraging. it made could that’s mainly CLOPS Any provide changes the score be score,

Sure.

engineering for that that Our directly get something this not performance been processors computing. in to are CLOPS where quantum our developments use integrated cases have long-term optimizing they result to The deliver going commitment to our with particular are we to are from practical led we classical into. improvements able

clock has by system that of kind quantum the CLOPS and a of of computing an system, faster characterizes aggregate goal a can focused. area. where communication, throughput to with towards overall, quantum the throughput something customer believe performance impacts this capabilities. overall and of been this inclusive as optimization system. well systems, overall important performance. speed the user And as to when classical is it’s – the quantum of of customer faster and We directly computers walk-off we kind what relates the a our very overall describe driven And delivering It speed However, computing classical is and between and of result experience and we it back computing time, remain forth

speed we with So, in the be really leadership CLOPS all excited the And matters computing. forms of are now in in right position to industry.

Awesome. Thank you.

Thank you. And our next line Ho with question comes of from Sidney the Deutsche Bank.

line Please ahead. Your open. go is

good you, Thank This afternoon. Zamarud Khan Sydney. and is for

few questions Just me. a for

first previously you when machines and The is your touch your to just how Could Strangework. about spoke Chad, one of is, expect progressing live? would that on go deployment systems quantum you you through

We relationship on Strangeworks, to work them continue the to are strong have bringing with customers with a shared continuing platform. to on

be will provide upcoming Investor more able on to We in fulsome September. this Day update at our

of UK. system the on helpful. congrats And in quantum the Got deployment your it. then That’s

is public As a you sort customers start the both your question revenues revenue from prepared like seeing or of and in realistic mentioned the in EU? to what UK opportunities and private remarks, in my is you for timeline

that particular generating revenue agreement the are we UK, to Yes. deliver already provide QPU that partners and with in QPU partnership under to program. access In the under this and case

being out currently is So, quantum to carry partners development towards advantage. research that and by QPU used

quarter getting next users forward the well. after and this additional going as we on in beta We to this the are private over also Azure QPUs really announcements first excited anticipate quarter welcomed

I just it. a was That’s for blog qubit takes industry, error could Got PEC cancellation, in your one the recently. is of – guess you am that system, Thank qubit helpful. by with to by just developments curious probabilistic then your progress you. me. one post X,XXX there system? of error last ahead potentially on I a that your the introduce really XXX achieved announced possibility recent hear given in one competitors mitigation your And in

for the question. you Thank

work techniques, within techniques. as long-term when to facing believe the We to broadly, be well much unlocking and are performance in of We possibility and potential identified the another to over correction Rigetti what are more techniques very component further And next the cases. computing years. by in a with a as an we practical mitigation on real of and those be anticipate industry customer error error manner a the stackable seeing those is encouraged handful unlock essential in real quantum Error they where TAM area. mitigation error applications full to going have enable world especially are reduce rates. very one use higher can We it’s potential promising of

Thanks team. Thanks Chad.

from have do we Company. And you. of with line a Thank Williams question follow-up the David Benchmark

Your line is open. Please go ahead.

Again, guys. here. thanks a for letting me follow-up ask Hey

of price that that anything takedown be guess ask Just I in that to filing on what and around maybe impact, in would does, just SEC if the structure what wanted the terms the share terms an repurchase, maybe the requires and of flow of helpful. your are expectations

are there plenty filings. of David, Yes.

those as It’s see to referred to will today. start a synthetic You ATM. flow out

in the downturn protracted is but for that as we geopolitical in a as a no requirement us protecting proven macroeconomic an facility. of anything it’s a not defensive, needed method event in is us this as view the There So, environment markets. the sell persists. as Again, a markets, – the there and to current

on this balance sheets can objectives view the at hand. we maintain a we as just strategy So, to focus that a so strong

terms they Great. funding? And around – in when there they down those Okay. and of in of the shares, terms you color window then when can the request when take maybe any

our don’t orders shares us. they similar through bank. to works up very it’s an to sell to say, Again, aftermarket would place Well, it facility we where

happened that And fairly immediately Okay. afterwards.

at availability. timing certainly, our the Well, uncertain, but it’s

as it the plans use plan see immediate immediate-term. to in as as again in have available cost any don’t and raising opportunistically well. parameters would again, certain the do needed. you into – you the a facility of measured we way so is but a capital and urgency and market to it, very selling us, shares in it way to say We be around the low is So, in see market, has effective might to will filings. very It But the no

Thanks well. very so much. Okay,

further Thank the conference Chad for I no showing you. And over to time. would And am to back this I Rigetti questions like at hand remarks. further any

computers. Thank and you, would support investors and is a developing their world’s most our operator. mission for like To the driven on teams, Rigetti close, to thank collaboration. company, powerful laser I focused partners

Day Looking conference conferences, these ahead, team investor Separately, excited in to Investor announcing the at ask We we September. webcasting event. we to information. our again directly. we interested to inaugural that team please this organizer That our for out will know will our those today. investors several interested with Thank soon host our concludes IR be attendance contact at in Well, a for IR capacity to conferences. call. everyone more the event. meeting or that the joining encourage be us are reach attending limited is out this reach We you coming Please

for concludes today’s call. This you Thank participating. conference

now disconnect. may You