Building quantum computers is a long game. It is going to take years, perhaps a decade, for many quantum computers to reach their full potential in terms of not just computing power, but perhaps more important, quality and accuracy. It is not a game for the faint of heart or for those whose bank accounts are running low.
That is why many observers believe that either big, deep-pocketed companies like IBM or Google, or firms supported by a wealthy parent, like Quantinuum, which is majority-owned by Honeywell, stand the best chance of creating quantum computers that eventually will realize the full potential of the technology and deliver on the promise of commercial viability. Well-funded private start-ups, like ColdQuanta, also have a chance to thrive if they can continue to advance their technology while doing a good job of managing their finances.
Meanwhile, a handful of pure-play quantum computing start-ups have tried another method to load up their coffers with enough money to see them through quantum computing’s long development cycle: Becoming publicly-traded firms through mergers with special purpose acquisition companies (SPACs), widely viewed as a controversial route to public funding.
Two of those firms–College Park, Maryland-based IonQ and Berkeley, California-based Rigetti Computing–both reported first quarter 2023 earnings last week on the same day, virtually at the same time, but their financial realities are diverging from there. While IonQ touted its strong cash position and rapidly growing revenue, Rigetti’s growth was more muted and it can clearly see a deadline ahead of it by which it will need to raise more money if it is going see through its hopes and ambitions.
IonQ reported first quarter revenue of $4.3 million, more than twice the $2 million it collected for the same quarter last year. The company also raised its full-year 2023 outlook, and is now anticipating that it will report full-year 2023 revenue of between $18.8 million and $19.2 million, up from the earlier guidance that had $18.8 million as its high water mark.
Meanwhile, Rigetti reported first quarter 2023 revenue of $2.2 million, essentially flat compared to the first quarter of 2022, when it collected $2.1 million in revenue.
As is expected to be the case with technology start-ups trying to establish a new computing paradigm, both IonQ and Rigetti continue to report net losses quarter to quarter as they continue to invest large chunks of their capital in R&D and talent. IonQ posted a net loss of $27.3 million for the period, while Rigetti’s net loss was $23.4 million.
But, where the two companies really diverge is in how much cash, cash equivalents, and investments they have on hand. For IonQ, the figure was $525.5 million at the end of the first quarter, and for Rigetti it was $122 million. That may not tell investors everything, as companies burn through cash at different rates and for different reasons, but the executives of IonQ and Rigetti made clear the companies are in very different positions where their financial health is concerned.
IonQ CEO Peter Chapman said during the firm’s earnings call, according to the Seeking Alpha transcript, “In our view, we have distanced ourselves from the pack of pure play quantum computing companies, by having the best cash position by a wide margin. We also believe we are sufficiently funded to get the company to profitability based on our current roadmap.”
At nearly the same time, Rigetti CFO Jeff Bertelsen, was telling investors that Rigetti’s cash position likely will dwindle by the end of this year to around between $65 million and $75 million. “At this time, based on our current operating plan, we anticipate that Rigetti will need to raise additional funding by late 2024 or early 2025 to continue its research and development efforts and to achieve its business objectives.”
IonQ's stock price stood at $8.00 per share late Tuesday, while Rigetti's was $0.52.