Rigetti Computing, Inc. — FY2022 Form 10-K
Business context and reporting period. Rigetti develops superconducting quantum computers and sells cloud access, research and development services, and related offerings. This filing covers the fiscal year ended December 31, 2022—not a standalone fourth-quarter report. Fiscal 2021 covered 11 months because the company changed its year-end; comparisons below identify that difference. Management also provided unaudited, recast 12-month 2021 comparisons.
Financial results and liquidity
| Metric | FY2022 | Comparison / context |
|---|---|---|
| Revenue | $13.1 million | Up 60% versus 11-month FY2021 ($8.2 million); up 52% versus unaudited recast 12-month FY2021 ($8.6 million). |
| Gross profit and margin | $10.2 million; approximately 78% | Compared with $6.6 million and approximately 80% for 11-month FY2021. |
| Operating expenses | $119.3 million | Up from $40.7 million for 11-month FY2021; includes $60.0 million R&D, $47.6 million general and administrative, and $5.4 million goodwill impairment. |
| Operating loss | $(109.1) million | Compared with $(34.1) million for 11-month FY2021. |
| Net loss | $(71.5) million; $(0.70) per share | Compared with $(38.2) million; $(1.64) per share for 11-month FY2021. Net loss includes substantial noncash fair-value gains on warrants and earn-out liabilities. |
| Cash flow | Operating: $(62.7) million Investing: $(107.0) million Financing: $215.5 million | Investing outflow included $22.7 million of property and equipment purchases and $84.3 million of available-for-sale securities purchases. Financing inflow primarily reflected the business combination and PIPE. |
| Cash and investments | $57.9 million cash and equivalents; $84.9 million available-for-sale investments | $142.8 million combined at December 31, 2022. |
| Debt | $30.7 million principal outstanding | $9.5 million principal scheduled for 2023. The secured Trinity facility’s stated rate was 15.25% as of February 2023; reported effective rates, including fees, were 20.75%–26.83% at year-end. |
| Current assets and liabilities | $154.5 million current assets; $21.8 million current liabilities | Includes marketable investments and $8.3 million current debt, net of discount. |
Material changes versus the prior period
- Revenue growth came principally from extensions of three government contracts into later phases and increased revenue from a commercial QCaaS customer.
- Costs and losses rose substantially, especially R&D and general and administrative expenses. FY2022 stock-based compensation was $44.8 million, versus $1.8 million for the 11-month FY2021 period; the business combination triggered recognition of previously deferred compensation.
- Net loss was partly offset by $22.1 million of gains from changes in warrant fair value and $19.2 million of gains from changes in earn-out liability fair value. These are noncash items and materially affect reported earnings.
- The March 2022 business combination generated $225.6 million of net proceeds. The company also adopted lease accounting Topic 842, recognizing operating lease assets and liabilities.
Outlook, risks, and unusual items
- Funding: Management said cash, cash equivalents, and marketable securities were expected to cover at least 12 months of operating needs under its business plan, but it expected to need additional capital by late 2024 or early 2025. Financing may be unavailable or dilutive; without it, development efforts could be delayed or reduced.
- Strategy and restructuring: In February 2023, Rigetti revised its roadmap to prioritize performance improvements to its 84-qubit Ankaa systems, with stated goals of at least 98% two-qubit gate fidelity for Ankaa-1 and 99% for Ankaa-2, before pursuing the planned 336-qubit Lyra system if targets are met. The company reduced its workforce by about 50 people, or 28%, and expected approximately $1.4 million in restructuring charges in Q1 2023. These are forward-looking plans, not achieved results.
- Revenue profile: Most revenue came from development contracts rather than recurring QCaaS. Government entities represented 81.3% of FY2022 revenue, and the three largest customers together represented 66%. Management anticipated development contracts would remain the majority of revenue for several years and noted possible near-term revenue reduction following the strategy change.
- Technology and execution: Commercial quantum advantage has not been demonstrated. The company has missed or changed prior roadmap milestones and faces technical, competitive, customer adoption, supplier, cloud-provider, and commercialization risks.
- Controls and reporting: Management concluded disclosure controls were ineffective at year-end due to material weaknesses in complex financial-instrument accounting and the financial close/reporting process. Errors led to restatements of Q1 and Q2 2022 interim statements and a delayed Q3 filing. Management was implementing remediation; the weaknesses were not yet considered remediated. The auditor gave an opinion on the financial statements, not internal-control effectiveness.
- Other notable matters: A $5.4 million noncash goodwill impairment was recorded after a stock-price decline. In January 2023, Nasdaq notified Rigetti that its share price did not meet the $1 minimum bid-price rule, with a stated compliance deadline of July 24, 2023. After Silicon Valley Bank’s closure in March 2023, the company reported approximately $1.0 million of cash at SVB and potential transition disruption; most other cash and investments were held in custodial accounts at U.S. Bank with SVB Asset Management as advisor.
Most important facts for investors to verify
- Current cash, investment availability, cash burn, financing plans, and whether the late-2024/early-2025 capital estimate remains valid.
- Progress against Ankaa fidelity, external deployment, and Lyra roadmap targets, including what has been independently validated.
- Revenue composition, contract backlog and conversion, customer concentration, and dependence on government funding and cloud partners.
- Debt repayment schedule, interest and fees, secured-asset terms, and availability or actual use of the B. Riley equity facility.
- Remediation and testing of internal-control weaknesses, any further corrections, and timeliness of SEC filings.
- Nasdaq listing compliance and any subsequent developments concerning SVB-related banking access.