After financial oops, quantum computing company Rigetti finally releases Q3 results

Back on November 14, Rigetti Computing, a publicly traded quantum computing company, had to file for an extension to file its third quarter financial results after a $1.6 million electricity bill appeared out of thin air.

Only now has Rigetti Computing (NASDAQ: RGTI) announced its financial results for the third quarter ended September 30, 2022 and its quarterly report on Form 10-Q for the nine months ended September 30, 2022 [1].

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01Report Highlights

Rigetti Computing reported third quarter revenue of $2.8 million and gross profit of $2.0 million, compared to a GAAP net loss of $18.8 million, and ended the quarter with $161 million in cash and cash equivalents.

The company needed to delay reporting its third quarter results by about a week while it proceeded with the restatement of its first and second quarter results due to the discovery of unpaid and unrecognized electric utility costs from prior periods. They also needed to make adjustments to the accounting for the financial warrants issued.Rigetti also said that as a result of these adjustments, and as a result of the search for a new CEO to replace Chad Rigetti, who has decided to resign and leave the company by December 15, 2022, they would be taking the 2022 EBITDA loss from $50-$53 million to $56-$58 million.

02Financial highlights for the third quarter of 2022

Revenues for the third quarter of 2022 were $2.8 million compared to $2.9 million for the same period in the prior year.

Total gross profit for the third quarter of 2022 was $2.0 million, compared to $2.5 million for the same period of the prior year.

Total GAAP operating expenses for the third quarter of 2022 were $33.4 million compared to $11.6 million for the same period in the prior year.

Non-GAAP total operating expenses1 for the third quarter of 2022 were $16.8 million compared to $9.9 million for the same period in the prior year.

GAAP net loss for the third quarter of 2022 was $18.8 million, or $0.16 per share, compared to $9.8 million, or $0.43 per share, for the same period in the prior year.

Adjusted EBITDA for the third quarter of 2022 was a loss of $14.8 million, compared to a loss of $7.4 million for the same period in the prior year.

As of September 30, 2022, the Company had cash, cash equivalents and available-for-sale investments of $161.0 million.

03Fiscal 2022 Outlook: Total Revenues of Approximately $12 to $13 Million

The Company continues to expect total revenues for fiscal year 2022 to be in the range of $12 million to $13 million.

Estimated revenues include approximately $4 million related to a contract under negotiation with a government entity, which is also an existing customer. Although the contracting process has taken longer than anticipated, the Company has made progress in the negotiations and expects to complete the negotiations by the end of the fiscal year. However, if negotiations are not completed and the contract is not executed until after 2022, a portion of the estimated $4 million in revenue recognition may be deferred to fiscal periods beyond fiscal 2022. The total expected value of these contracts could be reduced if negotiations result in less favorable contract terms than the Company expects.

In addition to this, the Company is revising its FY2022 Adjusted EBITDA loss guidance from $(50.0)-(53.0) million to $(56.0)-(58.0) million. As previously disclosed, the Company accrued approximately $1.6 million of additional estimated charges in the first and second quarters of 2022 in aggregate and recorded approximately $0.1 million of related additional charges in the third quarter of 2022 as a result of the discovery of unpaid and unrecognized electric utility costs from prior periods.

In addition, the Company expects to incur unanticipated costs related to the resignation of Chad Rigetti as President and Chief Executive Officer of the Company, the appointment of Rick Danis as Interim President and Chief Executive Officer of the Company and additional legal and consulting fees related to the pending restatement of the financial statements for the first and second quarters of 2022, and has included in the revised fiscal 2022 Adjusted EBITDA loss guidance to take these costs into account.

The Company is in the process of seeking a new Chief Executive Officer. If a new CEO is appointed before the end of fiscal 2022, the Company will incur additional costs related to that appointment. In addition, if the delayed government contracts described above are not finalized, the Company may not be able to recover the costs of work already incurred in the current fiscal year or at all. If any of these scenarios occur, the Adjusted EBITDA loss for fiscal 2022 could be greater than the estimated guidance range described above.