Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations section should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect," "will," "continue," "project," "forecast," "goal," "should," "could," "would," "potential," and the like, and/or future tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those described under Part I "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, as updated under Part II "Item 1A. Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. See "Cautionary Note Regarding Forward-Looking Statements" elsewhere in this Quarterly Report on Form 10-Q.

​

For purposes of this discussion, "Rigetti," "the Company," "we," "us" or "our" refer to Rigetti Computing, Inc. and its subsidiaries unless the context otherwise requires.

​

Overview

​

We build quantum computers and the superconducting quantum processors that power them. We believe quantum computing represents one of the most transformative emerging capabilities in the world today. By leveraging quantum mechanics, we believe our quantum computers process information in fundamentally new, more powerful ways than classical computers. When scaled, it is anticipated that these systems will be poised to solve problems of staggering computational complexity at unprecedented speed. We are located and headquartered in Berkeley, California. We also operate in Fremont, California; London, United Kingdom; Adelaide, Australia; British Columbia, Canada; and Mumbai, India. Our revenue is derived primarily from operations in the United States and the United Kingdom.

​

With the goal of unlocking this opportunity, we have developed the world's first multi-chip quantum processor for scalable quantum computing systems. We believe that this patented and patent pending, modular chip architecture is the building block for new generations of quantum processors that we expect to achieve a clear advantage over classical computers. Our long-term business model centers on revenue generated from sales of quantum processing units (QPUs) and quantum computing systems made accessible via the cloud in the form of Quantum Computing as a Service ("QCaaS") products. However, the substantial majority of our revenues are currently derived from development contracts, and we anticipate this market opportunity will continue to represent an important source of revenue for at least the next several years as we work to ramp up sales of QPUs and our QCaaS business. Additionally, we are working to further develop a revenue stream and forging important customer relationships by entering into technology development contracts with various partners.

​

We are a vertically integrated company. We operate Fab-1, a wafer fabrication facility dedicated to prototyping and producing our quantum processors. Through Fab-1, we own the means of production of our breakthrough multi-chip quantum processor technology. We leverage our chips through a full-stack product development approach, from quantum chip design and manufacturing through cloud delivery. We believe this full-stack development approach offers both the fastest and lowest risk path to building commercially valuable quantum computers. We have been generating revenue since 2018 through partnerships with government agencies and commercial organizations; however, we have incurred significant operating losses since inception. Our net losses were $201.0 million and $75.1 million for the years ended December 31, 2024 and December 31, 2023, respectively. We incurred an operating loss for the three and nine months ended September 30, 2025. We expect to continue to incur additional losses for the foreseeable future as we invest in research, development, and infrastructure consistent with our long-term business strategy. As of September 30, 2025, we had an accumulated deficit of $752.8 million.

​

Based on our forecasts, we believe that our existing cash, cash equivalents and available for sale investments should be sufficient to meet our anticipated operating cash needs for at least the next 12 months based on our current business plan, and expectations and assumptions considering current macroeconomic conditions. Our operating plans may change because of factors currently unknown, and we may need to seek additional funds sooner than planned, through public or private equity or debt financing or other sources, such as strategic collaborations or other transactions. In addition, we may seek additional capital even if we believe that we have sufficient funds for current or future operating plans.

​

In the fourth quarter of 2024, we announced the launch of our 84-qubit Ankaa-3 system, our newest flagship quantum computer featuring an extensive hardware redesign. We also achieved major two-qubit gate fidelity milestones with Ankaa-3: successfully halving error rates in 2024 to achieve a 99.0% median two-qubit iSWAP gate fidelity, as well as demonstrating a 99.5% median two-qubit

fidelity with fSim gates. For more information on iSWAP gate fidelity and fSIM gates, see the section entitled "Our Technology-Our Superconducting Quantum Processors-Fidelity" in Part I, Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2024.

​

Our goal for 2025 is to introduce the next generation of our modular system architecture, while continuing to increase fidelities. On July 16, 2025, we announced that we achieved our mid-year performance milestone of 99.5% median two-qubit gate fidelity on a modular 36-qubit system, a 2x reduction in median two-qubit gate error rate from our previous best results on our 84-qubit single chip Ankaa™-3 system. Composed of four 9-qubit chips ("chiplets") tiled together and optimized for CZ gates, a commonly used two-qubit gate for executing quantum circuits with equivalent computational power to iSWAP gates, the 36-qubit system is based on our proprietary modular chip technology and provides a path to building a 100+ qubit chiplet-based system. Our 36-qubit system, Cepheus™-1-36Q, has been released for general availability and deployed on our Cloud Services Platform (QCS®) and Microsoft Azure.We expect to release a 100+ qubit chiplet-based system with a 99.5% median two-qubit gate fidelity before the end of 2025.

​

We believe that we will be able to achieve our plans for 2025 described above and elsewhere in this Quarterly Report on Form 10-Q; however, we face various risks and uncertainties relating to our business that could cause actual results to differ materially from our expectations stated herein. This Quarterly Report on Form 10-Q, including this Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the section entitled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, as updated under Part II "Item 1A. Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q.

​

Recent Developments

​

​

​

​

​

2025 ATM Offering

​

On May 29, 2025, we entered into an Open Market Sale Agreement^TM (the "Sales Agreement") with Jefferies LLC with respect to an At-the-Market ("ATM") offering program, pursuant to which we sold, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of $350 million. The shares offered and sold in the ATM offering were issued pursuant to a shelf registration statement on Form S-3 and the related prospectus supplement. During the nine months ended September 30, 2025, we raised gross proceeds of $350 million from the sale of 30,309,780 shares of our common stock pursuant to the Sales Agreement, at a weighted average price of $11.55 per share. All of the shares were sold during our second quarter ended June 30, 2025. The net proceeds from the Sales Agreement during the nine months ended September 30, 2025 were $346.7 million. As of September 30, 2025, there were no remaining shares available for sale pursuant to the Sales Agreement.

​

Quanta Collaboration Agreement

​

In February 2025, our wholly-owned subsidiary entered into a Collaboration Agreement with Quanta, whereby the parties mayenter into written statements of work from time to time pursuant to which Quanta will develop Covered Components listed in such statement of work that meet our specifications and requirements. "Covered Components" may include control systems, dilution refrigerators, flexible cables, and select other non-QPU components suitable for our quantum computing products. No statements of work were entered into by the parties in connection with the entry into the Collaboration Agreement. In addition, the parties have each

agreed to invest at least $250 million over the next five years in the field of quantum computing (and Quanta's investment will be towards personnel and capital expenditures for developing products and services and manufacturing capability in furtherance of our product roadmap). No equity or joint venture was formed under the Collaboration Agreement and costs incurred by us under the Collaboration Agreement, consisting of expenditures for research and development and related capital, will be accounted for in accordance with GAAP as incurred.

​

Under the Collaboration Agreement, we will retain all rights, title and ownership to all QPU Technology (as defined in the Collaboration Agreement) and related intellectual property ("IP") rights created in the course of activities specified in a statement of work under the Collaboration Agreement. Other than the QPU Technology and IP rights described above, to the extent there is any jointly created, invented or other developed technology in the course of the performance of activities specified in a statement of work under the Collaboration Agreement, the Company and Quanta will jointly own, and each party will hold a one-half undivided interest in, all such joint project technology and all newly-created or newly-arising IP rights with respect thereto.

​

In connection with the Collaboration Agreement, on February 27, 2025, we entered into a Securities Purchase Agreement with Quanta, pursuant to which we agreed to sell and issue to Quanta in a private placement transaction 3,020,412 shares of our Common Stock at a price per share of approximately $11.59, for an aggregate value of approximately $35.0 million. The private placement transaction, which was subject to regulatory clearance, closed on April 29, 2025.

​

Macroeconomic Considerations

​

Results of our operations have varied and may continue to vary based on the impact of changes in the domestic or global economy. Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, interest rates, financial and credit market fluctuations, supply chain constraints, international trade policies including tariffs and export controls, national security interests, pandemics, political turmoil, government shutdowns, natural catastrophes, warfare, and terrorist attacks in the United States or elsewhere, could negatively affect our business, including progress toward the development of quantum computing by increasing the cost of materials and components and our operating costs. It is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. If these conditions persist and deepen, we could experience an inability to access additional capital if needed, or our liquidity could otherwise be impacted, and the trading price of our Common Stock could decline.

​

For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled Part I "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, including the risk factor titled "Unfavorable conditions in our industry or the global economy could limit our ability to grow our business and negatively affect our results of operations."

​

Key Components of Results of Operations

​

Revenue

​

We generate revenue through our development contracts, as well as from our sales of QPUs, and our QCaaS offerings and other services including training and provision of quantum computing components. Development contracts are generally multi-year, non-recurring arrangements pursuant to which we provide professional services regarding collaborative research in practical applications of quantum computing to technology and business problems within the customer's industry or organization and assists the customer in developing quantum algorithms and applications to assist customers in areas of business interest.

​

Cost of Revenue

​

Cost of revenue consists primarily of all direct and indirect costs associated with sales of QPUs, QCaaS offerings and development contracts and other services, including materials, employee costs for program management and personnel associated with the delivery of goods and services to customers, and sub-contract costs for work performed by third parties. Cost of revenue also includes an allocation of facility costs, depreciation and amortization directly related to the development contracts and QCaaS offerings and other services.

​

Operating Expenses

​

Our operating expenses primarily consist of research and development, and selling, general and administrative expenses.

​

​

​

​

Research and Development

​

Research and development expenses include compensation, employee benefits, stock-based compensation, outside consultant fees, facility costs, depreciation and amortization, materials and components purchased for research and development. We expect research and development expenses to increase as we continue to invest in quantum computing and the superconducting quantum processors needed for quantum computers. We do not currently capitalize any research and development expenditures. Research and development costs are expensed as incurred.

​

Selling, General and Administrative

​

Selling, general and administrative expenses include compensation, employee benefits, stock-based compensation, insurance, facility costs, professional service fees, and other general overhead costs other than those associated with research and development or sales of QPUs and providing development contracts, QCaaS offerings and other services. We expect selling, general and administrative expenses to increase as we grow our business, particularly to the extent we are able to demonstrate the usefulness of quantum computers and achieve broad quantum advantage, and subsequently enhance our product and service offerings, expand our customer base, and implement new marketing strategies.

​

Provision for Income Taxes

​

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. We have recorded a full valuation allowance against our deferred tax assets.

​

Results of Operations

​

Comparison of the Three and Nine Months Ended September 30, 2025 and September 30, 2024

​

The following table sets forth our results of operations for the periods indicated (in thousands):

​

*NM - Not Meaningful

​

Revenue

​

Revenue decreased by $0.4 million and $3.3 million for the three and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, respectively. The decreases were mainly due to reductions in revenue from collaborative research, related materials and professional services contracts. Our revenue has been negatively impacted by expiration of the National Quantum Initiative Act in September 2023 and its pending reauthorization in the United States Congress.

​

Our development contracts are typically fixed price milestone or cost share-based contracts and the timing and amounts of revenue recognized in any given period will vary significantly based on the delivery of the associated milestones and/or the work performed. The timing and delivery of sales of QPUs and QCaaS will also vary and impact revenue in any given quarterly or annual period. Revenue is expected to vary in terms of timing and size, resulting in significant fluctuations in revenue levels in future periods.

​

For the next few years, we expect much of our revenue to be generated from development contracts and anticipated sales of on-premises QPUs.

​

Cost of Revenue

​

Cost of revenue increased by $0.4 million during the three months ended September 30, 2025, when compared to the three months ended September 30, 2024. The change in cost of revenue during the nine months ended September 30, 2025 was not significant, when compared to the nine months ended September 30, 2024. Costof revenue during the three and nine months ended September 30, 2025 was negatively impacted by an unfavorable revenue mix, with more revenue and cost of revenue coming from contracts with higher costs and a lower gross margin profile. During the nine months ended September 30, 2025, the impact of the unfavorable revenue mix was mostly offset by the impact of lower revenue levels on cost of revenue.

​

Our cost of revenue and gross margins are impacted by the composition of our revenue and variability in the pricing and terms of our development contracts. During the three and nine months ended September 30, 2025, we recognized revenue and cost of revenue from contracts to deliver 24-qubit and 36-qubit quantum computing systems, which have higher costs and a lower gross margin profile than most of our other contracts.

​

We expect that cost of revenue and total gross profit as a percentage of revenue will vary in future quarterly and annual periods due to changes in the composition of our revenue and variability in the pricing and terms of our development contracts.

​

Operating Expenses

​

Research and Development

​

Research and development expenses increased by $2.3 million and $7.9 million during the three and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, respectively.

​

The increase in research and development expenses during the three and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, was mainly due to increases in salaries, employee related costs and stock based compensation for existing employees to remain competitive in the marketplace for talent and new hires. Salaries and employee related costs increased by $0.8 million and $4.0 million during the three and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, respectively. Employee related stock-based compensation costs increased by $0.8 million and $1.9 million during the three and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, respectively. Higher costs for materials, consultants and information technology also contributed to the increase in both periods.

​

We anticipate that research and development expenditures will grow in the future as we continue to focus on our technology roadmap and long-term goal of achieving broad quantum advantage. In the future, we may seek to significantly increase our capital expenditures, including to upgrade our current chip fabrication facility, and possibly invest in a new quantum chip fabrication facility, which would require a significant amount of cash for capital expenditures and increase our depreciation expense in future years.

​

Selling, General and Administrative

​

Selling, general and administrative expenses increased by $0.1 million and $0.9 million for the three and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, respectively. The increase for the three months ended September 30, 2025 was mainly due to higher costs for stock-based compensation and consulting. The increase for the nine months ended September 30, 2025 was mainly due to higher costs for proxy distribution and solicitation related to our annual meeting during the nine months ended September 30, 2025, when compared to costs for our annual meeting during the nine months ended September 30, 2024, which was driven by the increase in the number of beneficial owners of our common stock. Salaries,

employee related costs and stock-based compensation for existing employees were also higher during the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024.

​

We expect to incur additional selling, general and administrative expenses to support the growth of our business. Further, we expect selling, general and administrative expenses to increase over the longer term, particularly after we potentially achieve quantum advantage, and plan to subsequently enhance our sales and service offerings, expand our customer base, and implement new marketing strategies.

​

Other income and (expense), net

​

Interest expense

​

Interest expenses decreased by $0.7 million and $2.8 million for the three and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, respectively. The reduction in interest expense was due to the prepayment of our outstanding debt with Trinity Capital Inc. ("Trinity Capital") in December 2024. A discussion regarding the debt prepayment is included in Note 6 to our condensed consolidated financial statements for the three and nine months ended September 30, 2025, included elsewhere in this Quarterly Report on Form 10-Q.

​

Interest income

​

Interest income was $5.6 million and $10.8 million for the three and nine months ended September 30, 2025, respectively, compared to $1.2 million and $3.6 million for the three and nine months ended September 30, 2024, respectively. The increase in interest income during the three and nine months ended September, 2025, when compared to the three and nine months ended September 30, 2024, was due to an increase in the balances of our invested cash and available-for-sale investments resulting from our equity offerings during late 2024 and the nine months ended September 30, 2025. Fluctuations in the rates of interest earned on our investmentsalso had an impact on interest income during these periods.

​

Change in Fair Value of Warrant Liabilities

​

A discussion of the change in the fair value of the warrant liabilities is included in Note 7 to our condensed consolidated financial statements for the three and nine months ended September 30, 2025, included elsewhere in this Quarterly Report on Form 10-Q.

​

The change in fair value of our warrant liabilities for the three and nine months ended September 30, 2025 was a loss of $182.0 million and $149.3 million, respectively. The change in fair value of our warrant liabilities for the three and nine months ended September 30, 2024 was a gain of $1.2 million and $0.7 million, respectively. The change in fair value for the three and nine months ended September 30, 2025 was primarily due to fluctuations in our stock price.

​

Change in Fair Value of Earn-Out Liabilities

​

A discussion of the change in the fair value of the earn-out liabilities is included in Note 8 to our condensed consolidated financial statements for the three and nine months ended September 30, 2025, included elsewhere in this Quarterly Report on Form 10-Q.

​

The change in fair value of our earn-out liabilities for the three and nine months ended September 30, 2025 was a loss of $4.1 million and a gain of $2.5 million, respectively. The change in fair value of our earn-out liabilities for the three and nine months ended September 30, 2024 was a gain of $0.8 million and $0.5 million, respectively. The change in fair value for the three and nine months ended September 30, 2025 was primarily due to fluctuations in our stock price.

​

As of September 30, 2025, all of the earn-out liabilities have been satisfied and the remaining liability balance is zero. We do not expect the earn-out liabilities to have any impact on the condensed consolidated financial statements in future periods.

​

Provision for Income Taxes

​

We have incurred a cumulative pre-tax loss for the past three years. We expect to continue to incur losses for income tax purposes for the foreseeable future, and will continue to carry a full valuation allowance for our deferred tax assets. Accordingly, we did not record a provision for income taxes for either the three and nine months ended September 30, 2025 or the three and nine months ended September 30, 2024.

​

On July 4, 2025, new federal tax and budget legislation, known as the "One Big Beautiful Bill Act" ("OBBA") was signed into law. We evaluated the impact of the OBBA during the three months ended September 30, 2025 and determined that its provisions did not have a material impact on the condensed consolidated financial statements.

​

Liquidity and Capital Resources

​

We have incurred net losses and negative cash flows since inception. Historically, we financed our operations primarily through the sale and issuance of Common Stock, preferred stock, warrants, convertible notes, debt and revenues. During the years ended December 31, 2024 and December 31, 2023, we incurred net losses of $201.0 million and $75.1 million, respectively. We incurred an operating loss for the three and nine months ended September 30, 2025. As of September 30, 2025, we had an accumulated deficit of $752.8 million, and we expect to incur additional losses for the foreseeable future. Subsequent to September 30, 2025 and through November 6, 2025, we received proceeds of $46.5 million from the exercise of Public Warrants.

​

We believe that our existing balances of cash, cash equivalents and available-for-sale investments should be sufficient to meet our anticipated operating cash needs for the next 12 months based on our current business plan, and expectations and assumptions considering current macroeconomic conditions. Our operating plan may change because of factors currently unknown, including factors described herein, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations or other transactions. In addition, we may seek additional capital even if we believe that we have sufficient funds for current or future operating plans.

​

We have based these estimates on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect, and future capital requirements and the adequacy of available funds will depend on many factors including those described in the section titled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, as updated under Part II "Item 1A. Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q.

​

If we are unable to raise capital when needed and on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts. A recession or market corrections resulting from the impact of macroeconomic conditions could materially affect our business and the value of our securities.

​

Our cash requirements include employee-related costs such as salaries and benefits; materials and components for research and development; working capital requirements; capital expenditures for our quantum chip fabrication facility; quantum computing refrigerators and other requirements; planned development of multiple generations of quantum processors; anticipated investments to scale our operations in the future; and strategic collaborative arrangements and investments. In the future, we may seek to significantly increase our capital expenditures, including to upgrade our current chip fabrication facility, and possibly invest in a new quantum chip fabrication facility, which would require a significant amount of cash for capital expenditures.

​

With respect to our longer-term future cash requirements, we will require a significant amount of cash for expenditure as we invest in ongoing research and development and business operations, including with respect to the Collaboration Agreement with Quanta, pursuant to which we are required to invest at least $250.0 million in the field of quantum computing in furtherance of our product roadmap over a five year period commencing on February 27, 2025.

​

Until such time as we can generate significant revenue from sales of QPUs, our development contracts and other services, including our QCaaS offering, we believe we will meet our cash requirements and obligations primarily through our existing cash, cash equivalents and available-for-sale investments, potential securities financings or other capital sources. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. In addition, the likelihood that Public Warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. If the trading price for our Common Stock is less than $11.50 per share, we believe holders of our Public Warrants will be unlikely to exercise their warrants. To the extent our warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to the holders of our Common Stock and increase the number of shares eligible for resale in the public market.

.

Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to raise additional funds through equity or debt financings when needed and on attractive terms, we may be required to delay, limit, or substantially reduce our quantum computing development efforts. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section under Part I "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, as updated under Part II "Item 1A. Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q.

​

Macroeconomic conditions, including inflation, interest rates and impacts from government policy and actions, such as international trade restrictions and policies and tariffs, may have adverse consequences, which may result in an economic recession globally or in the U.S., which could lead to a reduction in product demand, a decrease in corporate capital expenditures, prolonged unemployment, labors shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic events, or any similar

negative economic condition. In addition, macroeconomic and geopolitical conditions may lead to disruptions to, and volatility and uncertainty in, the credit and financial markets in the U.S. and worldwide.

​

Cash Flows Used in Operating Activities

​

Our cash flows from operating activities are significantly affected by our ability to achieve significant growth to offset expenditures related to research and development, and selling, general and administrative activities. Our operating cash flows are also affected by our working capital needs to support growth in personnel-related expenditures and fluctuations in accounts payable and other current assets and liabilities.

​

Net cash used in operating activities during the nine months ended September 30, 2025 was $43.6 million, primarily resulting from our net loss of $198.0 million, partially offset by non-cash expenses totaling $158.7 million. Changes in operating assets and liabilities had a $4.3 million negative impact on net cash used in operating activities during nine months ended September 30, 2025.

​

Net cash used in operating activities during the nine months ended September 30, 2024 was $42.1 million, primarily resulting from our net loss of $48.0 million, partially offset by non-cash expenses totaling $13.2 million. Changes in operating assets and liabilities had a $7.2 million negative impact on net cash used in operating activities during the nine months ended September 30, 2024.

​

Cash used in operating activities increased by $1.5 million to $43.6 million during the nine months ended September 30, 2025, from $42.1 million during the nine months ended September 30, 2024. The $150.0 million increase in our net loss for the nine months ended September 30, 2025, when compared to our net loss for the nine months ended September 30, 2024, was mostly due to the non-cash change in the fair value of our derivative warrant liabilities. Non-cash expenses impacting our net loss increased by $145.5 million to $158.7 million during the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024. Operating assets and liabilities had a $2.9 million favorable impact on the change in cash used in operating activities during the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024.

​

Cash Flows Used in Investing Activities

​

Cash used in investing activities during the nine months ended September 30, 2025 totaled $389.7 million, resulting from $522.6 millionof purchases of available-for-sale securities and $14.1 millionof purchases of property and equipment, partially offset by $147.0 millionof maturities of available-for-sale securities.

​

Cash used in investing activities during the nine months ended September 30, 2024 totaled $0.8 million, resulting from $98.5 million of purchases of available-for-sale securities and $9.8 million of purchases of property and equipment, offset in part by $107.5 million of maturities of available-for-sale securities

​

Investments in property and equipment relate primarily to process computing equipment, quantum computing refrigerators, and development tools for our chip fabrication facility.

​

Net cash used in investing activities during the nine months ended September 30, 2025 increased by $388.9 million when compared to the nine months ended September 30, 2024, primarily due to investment of proceeds from our $350.0 million ATM offering, resulting in higher purchases of available-for-sale securities.

​

Cash Flows Provided by Financing Activities

​

Cash provided by financing activities during the nine months ended September 30, 2025 totaled $391.9 million. We received net proceeds of $346.7 million from the sale of 30,309,780 shares of common stock pursuant to our ATM program that was completed during the nine months ended September 30, 2025. We received proceeds of $35.0 million from the sale of 3,020,412 shares of common stock from the private placement transaction with Quanta. We received proceeds of $6.3 million from tax withholdings on sell-to-cover equity award transactions, proceeds of $1.8 million from the exercise of stock options and proceeds of $3.0 million from the exercise of warrants. We also paid $0.9 million for offering costs.

​

Cash provided by financing activities during the nine months ended September 30, 2024 totaled $41.8 million. We received net proceeds of $12.8 million from the sale of 10,056,799 shares of common stock to B. Riley through our prior Purchase Agreement and net proceeds of $38.8 million from the sale of 30,718,121 shares of common stock pursuant to our prior ATM program. Proceeds from the sale of common stock were offset in part by principal payments of $9.5 million under the Amended Loan Agreement with Trinity Capital and payments of $0.5 million for deferred offering costs.

​

Cash provided by financing activities increased by $350.1 million during thenine months ended September 30, 2025, when compared to the nine months ended September 30, 2024. The increase was primarily due to the $346.7 million of net proceeds we received from our $350.0 million ATM offering completed in June 2025. Other factors favorably impacting the increase in cash provided

by financing activities during the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024, include proceeds of $35.0 million from the sale of common stock to Quanta, $6.3 million from tax withholdings on sell-to-cover equity award transactions, $4.8 million from stock option and warrant exercises and a $9.5 million reduction in payments of principal of notes payable due to the prepayment of our outstanding debt with Trinity Capital in December 2024. These increases were offset in part by proceeds of $51.7 million from sales of common stock during the nine months ended September 30, 2024.

​

Contractual Obligations and Contingencies

​

See Note 16 to our unaudited interim condensed consolidated financial statements located in "Part I - Financial Information, Item 1. Notes to Condensed Consolidated Financial Statements" in this Quarterly Report for a description of our contractual obligations and contingencies.

​

Critical Accounting Policies and Significant Judgements and Estimates

​

This discussion and analysis of financial condition and results of operations is based upon the Company's condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. We also make estimates and assumptions pertaining to revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

​

There have been no material changes to our critical accounting estimates from those described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024.

Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. Within our Annual Report on Form 10-K for the year ended December 31, 2024, we have disclosed our critical accounting estimates that we believe have the greatest potential impact on our consolidated financial statements. Historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results.

​

Recently Issued Accounting Pronouncements

​

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 of our condensed consolidated financial statements for the three and nine month periods ended September 30, 2025 included elsewhere in this Quarterly Report on Form 10-Q.

​

Emerging Growth Company and Smaller Reporting Company Status

​

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an "emerging growth company" ("EGC") may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Therefore, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Following the Business Combination, we still qualify as an emerging growth company and plan to take advantage of the extended transition period that emerging growth company status permits. During the extended transition period, it may be difficult or impossible to compare our financial results with the financial results of another public company that complies with public company effective dates for accounting standard updates because of the potential differences in accounting standards used.

​

We will remain an EGC under the JOBS Act until the earliest of (a) December 31, 2026, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the date on which we are deemed to be a "large accelerated filer" under the rules of the SEC or (d) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.

We are also currently a "smaller reporting company" as defined in the Exchange Act. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our voting and non-voting Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

We determined as of June 30, 2025, the last business day of our second fiscal quarter in 2025, that we will no longer qualify as a smaller reporting company and will no longer be eligible to take advantage of the scaled disclosures available to smaller reporting companies beginning with our Quarterly Report on Form 10-Q for the first quarter of 2026. On August 27, 2025, the staff of the SEC published new guidance regarding filer status transition for certain smaller reporting companies that no longer qualify as a smaller reporting company. Based on this guidance, the Company has determined that it will be a "non-accelerated filer" as of December 31, 2025 for filings that are due in 2026. Based on the current rules of the SEC, the Company expects that it will continue to qualify as an EGC until December 31, 2026.