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Based on its current operating plan, Rigetti expects to have cash, cash equivalents, and available-for-sale securities of between $65-$75 million at the end of 2023. At this time, based on its current operating plan, Rigetti anticipates that it will need to raise additional funding by late 2024 or early 2025 to continue its research and development efforts and achieve its business objectives. This estimate reflects Rigetti's current business plan that is based on assumptions that may prove to be wrong, and Rigetti could use its available capital resources sooner than it currently expects.
Reports Q1 revenue $2.2M vs $2.1M last year. "I'm pleased to report that we believe we are on track and progressing toward the nearer-term strategic priorities and technology roadmap we announced in February 2023. Following the implementation of our updated business strategy we announced in February 2023, which is designed to improve our focus, operating efficiency and preserve cash resources, we are starting to see positive impacts," said Dr. Subodh Kulkarni, Rigetti Chief Executive Officer.
Deutsche Bank analyst Sidney Ho lowered the firm's price target on Rigetti Computing to $1.50 from $2 and keeps a Hold rating on the shares post the Q4 results. The analyst remains "convinced" that Rigetti's incremental focus on technology execution and near-term productization is the right strategy, but points out management was clear that revenue growth will be minimal over the next two years.
Needham lowered the firm's price target on Rigetti Computing to $1 from $3 and keeps a Buy rating on the shares. Rigetti slightly beat 2022 sales expectations, but did not provide sales guidance for 2023, the analyst tells investors in a research note. The firm "applauds" management for its frankness about the new technological and operational strategies and believes these are necessary steps for the long-run.
As part of the updated business strategy to narrow Rigetti's focus in the nearer term on Ankaa 84-qubit system performance and the goal of advancing toward achieving narrow quantum advantage, the Company also is reducing its headcount by approximately 28% of overall staff, in order to lower operating expenses in activities outside these focus areas and preserve available cash resources.
In connection with updating its business plan, the Company announced leadership changes at the CFO and CTO positions. Jeffrey Bertelsen will replace Rigetti's current CFO, Brian Sereda, effective February 15, 2023, and Mr. Sereda will thereafter remain with the Company as a non-executive employee until March 31, 2023, in order to support the transition. Mr. Bertelsen comes to the Company with more than 25 years of experience as a finance executive, most recently as CFO and COO of CyberOptics Corporation. In addition, effective February 9, 2023, David Rivas has been promoted to Chief Technology Officer, replacing Mike Harburn who is leaving the Company, effective February 9. Mr. Rivas previously served as Rigetti's Senior Vice President, Systems and Services since March 2019, overseeing the engineering and operations of Rigetti's Quantum Cloud Services platform.
Rigetti Computing announced that its Board has approved an updated business strategy, including revisions to its technology roadmap. In connection with this updated strategy, the Company will transition to a newly appointed CFO and CTO and is implementing a workforce reduction in order to focus the organization and its resources on nearer-term strategic priorities. "Upon assuming my role as CEO, we have moved quickly to review and confirm key strategic priorities for the nearer term," stated Dr. Subodh Kulkarni. "The Company's revised technology roadmap will, concentrate on the goal to deliver the anticipated Ankaa-1 84-qubit system in Q1 2023, aiming to deliver denser qubit spacing and tunable couplers expected to enable better performance compared to Rigetti's current 80-qubit Aspen-M system; prioritize increasing the performance of the anticipated Ankaa-1 84-qubit system once it is launched and focus efforts to achieve narrow quantum advantage, the point at which a quantum computer is able to solve a practical, operationally relevant problem significantly better, faster, or cheaper than a current classical solution. Specifically, upon the anticipated launch of the Ankaa-1 84-qubit system, Rigetti plans to focus its efforts on improving the performance of the system with the goal of reaching at least 99% 2-qubit gate fidelity on the anticipated Ankaa-2 84-qubit system, and if this target is achieved, Rigetti plans to shift its focus to scaling to develop the anticipated Lyra 336-qubit system." An updated Investor Presentation, including the revised technology roadmap reflecting these changes, has been published on the Investor section of the Company's website, and the Company's previously announced roadmap should no longer be referred to or relied upon. Rigetti believes that this revised business plan and technology roadmap will enable it to concentrate its software application development strategy on what the Company believes to be the highest likelihood applications for demonstrating nearer term narrow quantum advantage.
Rigetti Computing announced that Dr. Subodh Kulkarni will join the Company as President and Chief Executive Officer, effective December 12, 2022. Dr. Kulkarni succeeds Dr. Chad Rigetti in the CEO role, and the Company expects that Dr. Kulkarni will be appointed to its board of directors following Dr. Rigetti's previously announced departure from the Company's board of directors on December 15, 2022. Following the appointment of Dr. Kulkarni, Rick Danis, who held the interim CEO role during the transition period, will resume his primary role of General Counsel for the Company. Dr. Kulkarni was most recently President, CEO, and member of the Board of CyberOptics Corporation, a developer and manufacturer of high precision sensors and inspection systems for the semiconductor and electronics industry.
Strangeworks and Rigetti Computing announced Strangeworks' commitment to make available on its platform two new quantum machine learning, QML, applications from Rigetti. These new QML applications are Rigetti's quantum kernel and quantum convolutional "quanvolutional" neural network methods, which are optimized specifically for Rigetti quantum computers and are designed to advance the development of applications related to classification and regression problems. These QML applications are expected to initially be available exclusively on the Strangeworks platform in early 2023. The applications are planned to be made available through Rigetti's on-demand, pay-as-you-go access model via Strangeworks. This on-demand access to Rigetti systems has been enabled by tightly integrating Rigetti's quantum processing units with the Strangeworks platform. The integration has also resulted in higher performance of Rigetti systems on Strangeworks by enabling lower overall program latency and native Quil programming language support. "These new applications will accelerate businesses' ability to create valuable quantum applications by enabling them to bring Rigetti quantum capabilities to their classification, modeling, and detection problems," said whurley, Founder and CEO of Strangeworks. "Today's announcement deepens the partnership between Rigetti and Strangeworks, and advances Strangeworks' goal to make access to quantum applications simple, flexible and performance-driven."
