What Happened?
On Wednesday, March 5, 2025, superconducting quantum computing company Rigetti Computing announced its financial results for the Q4 2024 quarter and 2024 fiscal year ending December 31, 2024. See its press release for the full details.
The Numbers
Let’s begin by looking at the quarterly results:
Rigetti Computing GAAP Quarterly Financial Results
| Q4 2024 | Q3 2024 | Q/Q | Q4 2023 | Y/Y | |
|---|---|---|---|---|---|
| Revenue ($M) | 2.274 | 2.378 | ↓ 4.4 % | 3.376 | ↓ 32.6 % |
| Operating Expenses ($M) | 19.497 | 18.550 | ↑ 5.1 % | 19.723 | ↓ 1.1 % |
| Net Income (Loss) ($M) | (152.961) | (14.833) | ↑ 931.2 % | (12.572) | ↑ 1116.7 % |
| Diluted Earnings (Loss) Per Share ($) | (0.68) | (0.08) | ↑ 750.0 % | (0.09) | ↑ 655.6 % |
Revenue continues to drop over sequential quarters and year to year in Q4. Now let’s see what happened for the full fiscal year:
Rigetti Computing GAAP Annual Financial Results
| FY 2024 | FY 2023 | Y/Y | |
|---|---|---|---|
| Revenue ($M) | 10.790 | 12.008 | ↓ 10.1 % |
| Operating Expenses ($M) | 74.207 | 81.503 | ↓ 9.0 % |
| Net Income (Loss) ($M) | (200.988) | (75.107) | ↑ 167.6 % |
| Diluted Earnings (Loss) Per Share ($) | (1.09) | (0.57) | ↑ 91.2 % |
It’s much the same story, but what is going on with the massive increase in Net Loss? Let’s look at the historical charts to get a better idea.
The Charts
Figure 1
Figure 2
That Net Loss
The first figure shows the significant Net Loss, and the second shows its effect on diluted earnings per share. What could have happened between Q4 2024 and the two quarters Q3 2024 and Q4 2023?
Let’s look at closing stock prices, courtesy of Yahoo Finance:
- December 29, 2023: $0.99
- September 30, 2024: $0.78
- December 31, 2024: $15.26
The opening price for its first day of trading, March 2, 2022, was $9.75. The company went public through a merger with Supernova Partners Acquisition Company II, Ltd., a special purpose acquisition company (SPAC).
Are these stock price changes reflected somewhere in the financial statement? They are, in at least one place, the derivative warrant liabilities, which were $2.927 million at the end of Q4 2024 and $93.095 million at the end of Q4 2024. A derivative warrant liability is a financial instrument that gives the holder the right to buy stock at a given price before a specific date. Suppose I hold a warrant to buy 1,000 shares of stock, and the calculated fair value was $1 per share twelve months ago. If the fair value today is $11 per share, the company must list ($11 – $1) × 1,000 = $10,000 as a change in fair value derivative warrant liabilities. Since this is a positive number and, as it is a liability, it is expressed as a negative number (usually in parentheses) in the earnings statement. This decreases the Net Income or, alternatively, increases the Net Loss.
At the end of 2024, the quarterly year-over-year change in fair value of derivative warrant liabilities was −$90,885 million. At the end of 2023, it was $3.160 million. That’s a huge contribution to the quarter’s Net Loss, which was similarly large for the year.
Another line item significantly increased the Net Loss, and that’s the change in fair value of earn-out liabilities. Earn-out is also known as a “contingent consideration.” These typically involve mergers and acquisitions, including, and likely primarily, the SPAC merger. They can also be related to significant investments, such as Quanta Computer’s planned investment of $40 million (though this is not certain in this case). The earn-out is part of the deal structure and commits the company to additional payments if certain financial thresholds are met in a given period, and this is a potential, or contingent, liability. One such threshold could be the stock rising above a given price.
At the end of 2024, the quarterly year-over-year change in fair value of earn-out liabilities was −$44.256 million. At the end of 2023, it was $1.413 million. That’s also a huge contribution to the quarter’s and year’s Net Losses.
At the end of Q4, the total increase in Net Loss contributed by these two factors was $135.141 million. The Net Loss was $152.961 million, so “only” $17.82 million was attributed to other factors.
Now that we can put aside these two considerations, we can conclude two things from the first figure:
- Operating Expenses are fairly constant in the neighborhood of $18 to $19 million per quarter, and
- Revenue has stagnated over the last 8 quarters, from approximately $2.2 million to $3.4 million. At $2.274 million in Q4 2024, it has declined sequentially over 3 quarters.
While Rigetti Computing has and is planning to bolster its assets via an equity offering and the Quanta Computing investment, it must interest potential customers in its offerings and close deals totaling far more than $2 million a quarter.
The Quantum Angle
The press release and the items in the Selected Recent News and Announcements section below highlight the company’s quantum computing technical and business progress. Note that Rigetti Computing competes in the same market as IBM, Google, Microsoft, and Amazon Web Services, all of which have had very high-profile product announcements in the last several months.
We want to highlight Rigetti Computing’s research and development (R&D) expenditures. While they increased from $12.987 million to $13.657 million quarterly year-to-year, they were down annually from $52.786 million to $49.750 million. This is a bad direction to go in a highly competitive, if nascent market, and something we hope they can reverse on an annual basis with their increased assets.
The AI Angle
The December announcement of work done by Rigetti, Quantum Machines, Quantum Elements, and Qruise to use AI to calibrate a Rigetti device is a very promising and required development. This illustrates that AI for Quantum has immediate applications, unlike Quantum for AI.
Company Profile
Company
Rigetti Computing (RGTI) (Crunchbase)
Contact Email: press@rigetti.com
Contact Phone: +15102105550
Year Founded
2013
Date Went Public
March 2, 2022
Headquarters
775 Heinz Avenue, Berkeley, California 94710, USA
Company Description
Generated by Perplexity on March 5, 2025
Rigetti Computing is a pioneer in full-stack quantum-classical computing, developing and manufacturing quantum integrated circuits and quantum processors. The company offers cloud-based access to its quantum systems through its Rigetti Quantum Cloud Services platform, allowing programmers to write and execute quantum algorithms. Rigetti designs and fabricates its own quantum processing unit (QPU) chips in-house at its Fab-1 facility, the industry’s first dedicated quantum device manufacturing facility. The company utilizes superconducting transmon qubits in its quantum processors, with recent advancements including introducing a single-chip 84-qubit quantum processor and the 9-qubit Novera QPU.
Senior Leadership
- Subodh Kulkarni, Chief Executive Officer
- David Rivas, Chief Technical Officer
- Jeffrey Bertelsen, Chief Financial Officer
- Andrew Bestwick, Senior Vice President, Quantum Systems
- Jackie Kaweck, Senior Vice President, Human Resources
Selected Recent News and Announcements
- February 27, 2025 – Rigetti Computing Announces Strategic Collaboration Agreement with Quanta Computer to Accelerate Development and Commercialization of Superconducting Quantum Computing
- February 11, 2025 – Research from QphoX, Rigetti, and Qblox Demonstrating Optical Readout Technique for Superconducting Qubits Published in Nature Physics
- December 23, 2024 – Rigetti Computing launches 84-qubit Ankaa™-3 system; Achieves 99.5% median two-qubit gate fidelity milestone
- December 10, 2024 – Quantum Machines and Rigetti Announce Successful AI-Powered Calibration of a Quantum Computer
- November 25, 2024 – Rigetti Announces Successful Completion of $100 Million At-the-Market Equity Offering
Related Content and Analysis
- February 27, 2025 – Sutor Group Earnings Brief: IonQ Announces Financial Results for Q4 2024 and FY 2024
- November 21, 2024 – The Futurum Group – Quantum in Context: D-Wave, IonQ, and Rigetti 3Q2024 Financial Results
- August 13, 2024 – The Futurum Group – Rigetti Computing Reports Second Quarter 2024 Financial Results
- May 22, 2024 – The Futurum Group – Quantum in Context: Rigetti Computing’s Q1 2024 Earnings and 9 Qubits
- March 19, 2024 – The Futurum Group – Quantum in Context: Rigetti Q4 2023 Earnings and Other Numbers
Disclosures and Disclaimers
Bob Sutor is a former employee of IBM and Infleqtion and holds equity positions or stock options in each company. He is a Non-Executive Director for Nu Quantum and Advisor to the venture capital firm Forma Prime.
The information contained in reports, newsletters, articles, and the resources available on the Sutor Group Intelligence and Advisory website is not intended as, and shall not be understood or construed as, legal or financial advice. We are not attorneys, accountants, or financial advisors, nor are we holding ourselves out to be. The information is not a substitute for legal or financial advice from a professional who is aware of the facts and circumstances of your individual or organizational situation.