Rigetti Computing, Inc.
For the period ended Mar 31, 2025. Filed May 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 12, 2025
RGTI$11.75+19.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001558370-24-015139
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001558370-25-007375
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 101 current paragraphs.
50 unchanged; 32 reworded; 19 added; 30 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
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.
Current report
In the fourth quarter of 2024, we announced the launchof 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.
Current report
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.
Current report
Quanta Collaboration Agreement
Current report
In February 2025, our wholly-owned subsidiary, Rigetti Sub, entered into a Collaboration Agreement with Quanta, whereby the parties may enter 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 the specifications and requirements provided by Rigetti Sub. “Covered Components” may include control systems, dilution refrigerators, flexible cables, and select other non-QPU components suitable for Rigetti Sub’s 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 the Rigetti Sub product roadmap). No equity or joint venture was formed under the Collaboration Agreement and costs by the Company incurred under the Collaboration Agreement will be accounted for in accordance with GAAP as incurred.
Current report
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.
Current report
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.
Current report
*NM – Not Meaningful
Current report
Revenue decreased by $1.6 million for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024. The decrease was mainly due to a $1.5 million reduction in revenue from collaborative research 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.
Current report
Cost of revenue decreased by $0.5 million for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024. Thedecreasein cost of revenue during the current period was primarily due to lower revenue, partially offset by an unfavorable revenue mix.
Current report
Research and development expenses increased by $4.0 million for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024.
Current report
The increase in research and development expenses for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024, was mainly due to a $2.1 million increase in salaries and employee related costs, a $1.1 million increase in stock-based compensation and a $0.4 million increase in consulting charges. All other expenses increased by $0.4 million. The increase in salaries and employee related costs was due to annual salary increases, new hires, higher FICA taxes related to the vesting of restricted stock units and the increase in our stock price and a reduction in the amount of engineering time used to deliver revenue. The increase in stock-based compensation was mainly due to employee spot bonuses paid with restricted stock units. More consultants were used in the three months ended March 31, 2025, when compared to the three months ended March 31, 2024.
Current report
Selling, general and administrative expenses increased by less than $0.1 million for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024. When comparing the three months ended March 31, 2025 to the three months ended March 31, 2024, increases in salaries and employee related costs of $0.1 million and legal costs of $0.7 million, mostly attributable to the Quanta Collaboration Agreement, were offset by a decrease in facilities costs of $0.7 million and all other costs of $0.1 million.
Current report
Interest expenses decreased by $1.1 million for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024. The reduction in interest expense was due to the prepayment of our outstanding debt with Trinity Capital Inc. in December 2024. A discussion regarding the debt prepayment is included in Note 6 to our condensed consolidated financial statements for the three months ended March 31, 2025, included elsewhere in this Quarterly Report on Form 10-Q.
Current report
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 an income tax provision for either the three months ended March 31, 2025 or the three months ended March 31, 2024.
Current report
Cash provided by financing activities during thethree months ended March 31, 2025 totaled $6.9 million. We received proceeds of $6.3 million from tax withholdings on sell-to-cover tax equity award transactions, proceeds of $0.3 million from the exercise of stock options and proceeds of $0.4 million the exercise of warrants. We paid $0.1 million for deferred offering costs.
Current report
withholdings on sell-to-cover tax equity award transactions, an increase in proceeds of $0.7 million from the exercise of stock options and warrants and a $3.0 million reduction in payments of principal of notes payable due to the prepayment of our outstanding debt with Trinity Capital Inc. in December 2024.
Current report
Contractual Obligations and Contingencies
Current report
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.
Removed paragraphs (30)
Previous report
Accordingly, based on our estimates and current business plan, we expect that we will need to obtain additional capital to fund our research and development efforts and business objectives as currently planned. Our estimate does not assume any additional financing, and there is no assurance that additional financing will be available.
Previous report
If we are unable to raise additional funding when needed and on attractive terms, we may be required to delay, limit, or substantially reduce our quantum computing development efforts.
Previous report
In February 2023, we announced an updated business strategy, including revisions to our technology roadmap. In connection with this updated strategy, we implemented a workforce reduction beginning in February 2023 to focus the organization and our resources on nearer-term strategic priorities and our efforts to achieve narrow quantum advantage.
Previous report
Key achievements in 2023 included the launch of the Ankaa 84-qubit Ankaa™-2 system to customers via Rigetti Quantum Cloud Services (QCS). The Ankaa-2 system achieved 98% median 2-qubit fidelity, which represents a 2.5x performance improvement compared to our previous QPUs.
Previous report
We also plan to continue to pursue sales of Novera™, our first commercially available QPU launched in 2023, which features a 9-qubit chip, tunable couplers for fast 2-qubit operations and a 5-qubit chip for testing single-qubit operations.
Previous report
We believe that this business plan should enable us to concentrate our software application development strategy on what we believe to be the highest likelihood applications for demonstrating nearer term narrow quantum advantage.
Previous report
In February 2023, the reduction in the workforce impacted approximately 50 employees or 28% of our then workforce. We began implementing activities with respect to the revised business plan and reduction in workforce in February 2023. Affected employees were offered separation benefits, including severance payments and temporary healthcare coverage assistance. We incurred a $1.0 million restructuring charge in the three months ended March 31, 2023, for severance payments and temporary healthcare coverage for affected employees. In addition to the restructuring charge, we also incurred $1.0 million of expenses for contractual severance benefits related to executive officers of the Company that were terminated in the three months ended March 31, 2023.
Previous report
We have experienced and may experience further increases in the cost of raw materials, component parts, and labor, which we largely attribute to inflation, the U.S. Federal Reserve raising interest rates, high demand, and supply chain restraints. Rising costs and supply chain constraints have been further exacerbated by the ongoing military conflict involving Russia and Ukraine and sanctions related thereto, the state of war between Israel, Hamas and Hezbollah and the related risk of a larger conflict.
Previous report
If these conditions persist and deepen, we could experience an inability to access additional capital, or our liquidity could otherwise be impacted. 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 other efforts. However, like many other companies, we are continuing to take actions to monitor our operations to account for the increases in the cost of capital. Specifically, this includes efforts to enhance our operational efficiency, including with respect to capital expenditures, maximize our R&D productivity spend through strategic collaborations, and being highly selective in hiring top-tier talent.
Previous report
Restructuring
Previous report
In February 2023, we announced an updated business strategy, including revisions to our technology roadmap. In connection with this updated strategy, we implemented a workforce reduction in order to focus the organization and its resources on nearer-term strategic priorities. The reduction in the workforce impacted approximately 50 employees or approximately 28% of our then workforce. Affected employees were offered separation benefits, including severance payments and temporary healthcare coverage assistance.
Previous report
Research and development expenses decreased by $0.3 million and $3.9 million for the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, respectively.
Previous report
The decrease in research and development expenses for the three months ended September 30, 2024, when compared to the three months ended September 30, 2023, is mainly due to a $0.8 million reduction in IT costs due to systems rationalization and a $0.6 million reduction in stock-based compensation expenses, partially offset by a $0.5 million increase in facilities costs due to higher property and use taxes, and a $0.5 million increase in salaries and employee related costs due to additional salaries and headcount. All other research and development costs increased by a cumulative $0.1 million for the three months ended September 30, 2024, when compared to the three months ended September 30, 2023.
Previous report
The decrease in research and development expenses for the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023, is largely due to a $2.0 million decrease in salaries and employee related costs due to our February 2023 restructuring and because more engineering time was used to deliver revenue, a $2.6 million decrease in IT costs due to systems rationalization and a $1.0 million reduction in depreciation expense. These decreases were offset in part by an increase in facilities costs of $1.6 million due to higher property and use tax payments. All other research and development costs increased by a cumulative $0.1 million for the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023.
Previous report
Selling, general and administrative expenses decreased by $0.2 million and $2.2 million for the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, respectively.
Previous report
The decrease for the three months ended September 30, 2024, when compared to the three months ended September 30, 2023, is primarily due to $1.1 million of expense recognized in the three months ended September 30, 2023 for the Ampere Forward Agreement, which expired in October 2023. The reduction for the three months ended September 30, 2024 related to the Ampere Forward Agreement was mostly offset by higher expenses for salaries, stock-based compensation and IT expenses.
Previous report
The decrease for the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023, is primarily due to $2.2 million of expense recognized in the nine months ended September 30, 2023 for the Ampere Forward Agreement and an impairment charge of $0.8 million for deferred offering costs in the nine months ended September 30, 2023. This decrease was partially offset by an increase in stock-based compensation expenses of $1.3 million for the nine months ended September 30, 2024. Stock compensation expenses were favorably impacted during the nine months ended September 30, 2023 due to forfeitures resulting from the February 2023 restructuring. All other expenses decreased by a cumulative $0.4 million for the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023.
Previous report
Restructuring
Previous report
In February 2023, we announced an updated business strategy, including revisions to our technology roadmap. In connection with this updated strategy, we implemented a workforce reduction in order to focus the organization and our resources on nearer-term strategic priorities. The reduction in the workforce impacted approximately 50 employees or approximately 28% of our then workforce. Affected employees were offered separation benefits, including severance payments and temporary healthcare coverage assistance.
Previous report
We began implementing activities with respect to our revised business plan, updated technology roadmap and reduction in workforce in February 2023, resulting in a $1.0 million restructuring charge for the three months ended March 31, 2023. No further restructuring charges related to this action are expected.
Previous report
Our outstanding debt carries a variable rate of interest. Interest expenses decreased by $0.7 million and $1.7 million during the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, respectively. The reduction in interest expense was due to principal repayments and the lower outstanding principal throughout the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023.
Previous report
We did not record income tax expense during the three and nine months ended September 30, 2024 or 2023 due to the Company’s loss position and full valuation allowance.
Previous report
We received net proceeds of $225.6 million from the closing of the Business Combination on March 2, 2022. During the three months ended March 31, 2024, we received proceeds of $12.8 million, from the sale of 10,056,799 shares of our common stock to B. Riley under a Purchase Agreement which has since terminated, because there are no remaining shares available for sale under the agreement. On March 15, 2024, we entered into an ATM Sales Agreement pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock, having an aggregate offering price of up to $100,000,000, subject to certain limitations as set forth in the ATM Sales Agreement. During the nine months ended September 30, 2024, we received net proceeds of $38.8 million from the sale of 30,718,121 shares of our common stock under the ATM sales agreement.
Previous report
These conditions have been further exacerbated by recent and potential future disruptions due to the ongoing military conflict involving Russia and Ukraine and sanctions related thereto, the state of war between Israel, Hamas and Hezbollah and the related risk of a larger conflict.
Previous report
Amended Loan Agreement – Trinity Capital
Previous report
As of September 30, 2024, the total principal amount outstanding under the Amended Loan Agreement was $12.9 million. The Amended Loan Agreement bears interest at a rate equal to the greater of 11% or the US Prime Rate plus 7.50% per annum, payable monthly, and is secured by a first-priority security interest in substantially all of our assets.
Previous report
Our cash commitments as of September 30, 2024 were primarily as follows (in thousands):
Previous report
Financing obligations consist of payments related to the Amended Loan Agreement with Trinity Capital. Operating lease obligations consist of obligations under non-cancelable operating leases for our offices, facilities and equipment. The table above does not include amounts owed for purchases of capital equipment; supplies; materials; or fixed or minimum services under non-cancelable contracts.
Previous report
Cash provided by financing activities during the nine months ended September 30, 2023 totaled $10.5 million, reflecting $15.1 million of proceeds from the sale of 8.2 million shares of common stock to B. Riley through the Purchase Agreement, and $1.0 million of proceeds from the exercise of stock options and warrants, offset in part by principal payments of $5.4 million under the Amended Loan Agreement and payments of $0.1 million for deferred financing costs.
Previous report
We expect to satisfy our cash needs primarily through on-hand cash, cash equivalents and available-for-sale investments, the sale of common stock through the ATM Agreement, subject to market and other conditions, and other potential securities financings or capital sources.
Reworded paragraphs (32)
Previous wording
We are a vertically integrated company. We own and operate Fab-1, a dedicated and integrated laboratory and manufacturing facility, through which we own the means of producing 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.
Current wording
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.
Previous wording
We have been generating revenue since 2018, primarily through partnerships with government agencies and commercial organizations; however, we have not yet generated profits. We have incurred significant operating losses since inception. Our net losses were $75.1 million and $71.5 million for the years ended December 31, 2023 and 2022, respectively, and our net loss was$48.0 million for the nine months ended September 30, 2024. 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, 2024, we had an accumulated deficit of $401.8 million.
Current wording
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 months ended March 31, 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 March 31, 2025, we had an accumulated deficit of $512.1 million.
Previous wording
We believe that our existing cash, cash equivalents and marketable securities should be sufficient to meet our anticipated operating cash needs until midway through the first quarter of 2026, based on our current business plan, and expectations and assumptions considering current macroeconomic conditions.
Current wording
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.
Previous wording
We plan to continue working to improve the performance of our QPUs with the goal of reaching at least 99% 2-qubit gate fidelity on an anticipated Ankaa-3 84-qubit system by the end of 2024. We plan to introduce a new modular system architecture in 2025. By mid-year 2025, we expect to release a 36-qubit system based on four 9-qubit chips tiled together with a targeted 99.5% median 2-qubit fidelity. By the end of 2025, we expect to release a system with over 100 qubits with a targeted 99.5% median 2-qubit fidelity. We plan to develop Lyra™, an anticipated 336-quibit system, thereafter.
Current wording
In 2025, we plan to introduce the next generation of our modular system architecture, while aiming to continue to increase fidelities. By mid-year 2025, we expect to release a 36-qubit system based on four 9-qubit chips tiled together, with a targeted 2x reduction in error rates from our error rates achieved at the end of 2024. By the end of 2025, we expect to release a system with over 100 qubits with a targeted 2x reduction in error rates from our error rates achieved at the end of 2024.
Previous wording
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, or our liquidity could otherwise be impacted.
Current wording
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, 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.
Previous wording
Unfavorable conditions in the economy in the United States and abroad may negatively affect the growth of our business and have affected our results of operations. For example, macroeconomic events, including rising inflation, the U.S. Federal Reserve raising interest rates, the ongoing military conflict involving Russia and Ukraine and sanctions related thereto, the state of war between Israel, Hamas and Hezbollah and the related risk of a larger conflict have led to economic uncertainty globally. The effect of macroeconomic conditions may not be fully reflected in the results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. 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, 2023, including the risk factor titled“Unstable market and economic conditions have had and may continue to have serious adverse consequences on our business, financial condition and share price.”
Current wording
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.”
Previous wording
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 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, particularlyto the extent we achieve narrow and broad quantum advantage, and anticipate subsequently enhancing our product and service offerings, expanding our customer base, and implementing new marketing strategies.
Current wording
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 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, particularlyto 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.
Previous wording
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023
Current wording
Comparison of the Three Months Ended March 31, 2025 and March 31, 2024
Previous wording
Revenue decreased by $0.7 million and $0.1 million for the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, respectively. The decreases were due to lower QCaaS revenue for the three and nine months ended September 30, 2024 of $0.8 million and $1.8 million, respectively, offset in part by higher revenue from development contracts and sales of QPUs. 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.
Current wording
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.
Previous wording
Cost of revenue increased by $0.3 million and $1.9 million for the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, respectively. Theincreasesin cost of revenue are primarily due to changes in the composition of our revenue and variability in the pricing and terms of our development contracts. During the nine months ended September 30, 2024, we entered into a new contract to deliver a 24-qubit quantum computing system having higher costs and a lower gross margin profile than most of our other contracts. The increase in cost of revenue resulting from the unfavorable mix was partially offset by the impact of lower revenue.
Current wording
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 months ended March 31, 2025, we recognized revenue and cost of revenue from a contract to deliver a 24-qubit quantum computing system which has higher costs and a lower gross margin profile than most of our other contracts.
Previous wording
We anticipate that R&D expenditures will grow in the future as we continue to focus on our technology roadmap and long-term goal of achieving broad quantum advantage.
Current wording
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.
Previous wording
Interest income was $1.2 million and $3.6 million for the three and nine months ended September 30, 2024, down from $1.3 million and $3.7 million for the three and nine months ended September 30, 2023, respectively. The decrease in interest income during the three and nine months ended September 30, 2024, when compared to the three and nine months ended September 30, 2023, is due to lower balances of invested cash and available-for-sale investments, offset in part by higher rates of interest earned on our investments.
Current wording
Interest income was $2.2 million and $1.1 million for the three months ended March 31, 2025 and the three months ended March 31, 2024, respectively. The increase in interest income during the three months ended March 31, 2025, when compared to the three months ended March 31, 2024, was due to an increase in the balances of our invested cash and available-for-sale investments resulting from our equity offerings in late 2024, and fluctuations in the rates of interest earned on our investments.
Previous wording
A discussion of the change in the fair value of the warrant liabilities is included in Note 8 to our condensed consolidated financial statements for the three and nine months ended September 30, 2024, included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
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 months ended March 31, 2025, included elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
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 of our warrant liabilities for the three and nine months ended September 30, 2023 wasa loss of $3.4 million and $4.3 million, respectively. The change in fair value for the three and nine months ended September 30, 2024 was primarily due to the change in our stock price and related share price volatility.
Current wording
The change in fair value of our warrant liabilities for the three months ended March 31, 2025 was a gain of $53.3 million, compared to a loss of $2.6 million for the three months ended March 31, 2024. The gain for the three months ended March 31, 2025 was primarily due to the change in our stock price and related share price volatility.
Previous wording
A discussion of the change in the fair value of the earn-out liabilities is included in Note 9 to our condensed consolidated financial statements for the three and nine months ended September 30, 2024, included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
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 months ended March 31, 2025, included elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
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 of our earn-out liabilities three and nine months ended September 30, 2023 was a loss of $1.7 million and $2.4 million, respectively. The change in fair value for the three and nine months ended September 30, 2024 was primarily due to the change in our stock price and related share price volatility.
Current wording
The change in fair value of our earn-out liabilities for the three months ended March 31, 2025 was a gain of $8.8 million, compared to a loss of $1.6 million for the three months ended March 31, 2024. The gain for the three months ended March 31, 2025 was primarily due to the change in our stock price and related share price volatility.
Previous wording
We have incurred net losses and negative cash flows since inception. Historically, we have financed our operations primarily through proceeds from the Business Combination (see Note 2 to our condensed consolidated financial statements for the three and nine months ended September 30, 2023), issuance of common stock, preferred stock, warrants, convertible notes, venture backed debt and revenues. Our net losses were $75.1 million and $71.5 million for the years ended December 31, 2023 and 2022, respectively, and our net loss was$48.0 million for the nine months ended September 30, 2024. 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, 2024, we had an accumulated deficit of $401.8 million.
Current wording
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. As of March 31, 2025, we had an accumulated deficit of $512.1 million, and we expect to incur additional losses for the foreseeable future.
Previous wording
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 at least the next 12 months, and to midway through the first quarter of 2026, based on our current business plan, and expectations and assumptions considering current macroeconomic conditions. Based on our estimates and current business plan, we expect that we will need to obtain additional capital to fund our research and development efforts and business objectives as currently planned. Our estimate does not assume any additional financing and we cannot be sure that additional financing will be available. If we are unable to raise additional funding when needed and on attractive terms, we may be required to delay, limit or substantially reduce our quantum computing development efforts. 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 under Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as updated under Part II “Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q.
Current wording
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 at least 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.
Previous wording
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 additional market corrections resulting from the impact of difficult macroeconomic conditions or disruption could materially affect our business and the value of our securities.
Current wording
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.
Previous wording
We will require a significant amount of cash for expenditure as we invest in ongoing research and development and business operations. Until such time as we can generate significant revenue from sales of QPUs, our development contracts and other services, including our QCaaS offerings, we expect to finance our cash needs 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.
Current wording
In the longer term, 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 expect to finance our cash needs 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.
Previous wording
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, 2023, as updated under Part II “Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q. Furthermore, we currently have on file with the SEC an effective shelf registration statement on Form S-3, which allows us to offer and sell up to an aggregate amount of $250.0 million of any combination of common stock, common stock or preferred stock upon conversion of debt securities, common stock upon conversion of preferred stock, or common stock, preferred stock or debt securities upon exercise of warrants from time to time, pursuant to which we have entered into an ATM offering for the sale of up to an aggregate amount of $100 million of common stock from time to time, of which $60.2 million of common stock remains available for sale as of the date hereof.
Current wording
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.
Previous wording
We expect these increased costs will persist for the foreseeable future and may increase. Additionally, inflation and rising interest rates 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, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic events, or any similar negative economic condition.
Current wording
Macroeconomic conditions, including inflation, interest rates and impacts from government policy and actions, such as international trade restrictions and policies, 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
Previous wording
Economic conditions in some parts of the world have been worsening, with disruptions to, and volatility and uncertainty in, the credit and financial markets in the U.S. and worldwide resulting from uncertainty in the levels of future economic activity, inflation and interest rates. 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.
Current wording
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.
Previous wording
Net cash used in operating activities during thenine months ended September 30, 2023 was $38.2 million, primarily resulting from our net loss of $62.5 million, partially offset by non-cash charges totaling $24.9 million. Changes in operating assets and liabilities had a minimal impact on net cash used in operating activities during the nine months ended September 30, 2023.
Current wording
Net cash used in operating activities during the three months ended March 31, 2025 was $13.7 million, primarily resulting from non-cash expenses totaling $57.1 million, partially offset by our net income of $42.6 million. Changes in operating assets and liabilities had a $0.9 million positive impact on net cash used in operating activities during three months ended March 31, 2025.
Previous wording
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.
Current wording
Net cash used in operating activities during the three months ended March 31, 2024 was $13.1 million, primarily resulting from our net loss of $20.8 million, partially offset by non-cash income totaling $8.8 million. Changes in operating assets and liabilities had a $1.2 million negative impact on net cash used in operating activities during the three months ended March 31, 2024.
Previous wording
Cash used in operating activities increased by $3.9 million to $42.1 million duringthe nine months ended September 30, 2024, from $38.2 million during the nine months ended September 30, 2023. Our net loss decreased by $14.5 million to $48.0 million for the nine months ended September 30, 2024. Non-cash charges impacting our net loss decreased by $11.8 million to $13.2 million during the nine months ended September 30, 2024, from $24.9 million during the nine months ended September 30, 2023. Operating assets and liabilities had a $6.7 million unfavorable impact on the change in cash used in operating activities during nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
Current wording
Cash used in operating activities increased by $0.6 million to $13.7 million during the three months ended March 31, 2025, from $13.1 million during the three months ended March 31, 2024. We recorded net income of $42.6 million for the three months ended March 31, 2025, a $63.4 million improvement when compared to the net loss for the three months ended March 31, 2024, mostly due to non-cash changes in the fair value of derivative warrant and earn-out liabilities. Non-cash expenses impacting our net income increased by $65.9 million to $57.1 million during the three months ended March 31, 2025, when compared to non-cash income of $8.8 million during the three months ended March 31, 2024. Operating assets and liabilities had a $2.1 million favorable impact on the change in cash used in operating activities forthree months ended March 31, 2025, compared to thethree months ended March 31, 2024.
Previous wording
Cash used in investing activities during thenine 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.
Current wording
Cash used in investing activities during the three months ended March 31, 2025 totaled $23.6 million, resulting from $44.1 million of purchases of available-for-sale securities and $2.5 million of purchases of property and equipment, partially offset by $23.0 million of maturities of available-for-sale securities.
Previous wording
Cash provided by investing activities during the nine months ended September 30, 2023 totaled $11.5 million, resulting from $98.1 million of maturities of available-for -sale securities, partially offset by $7.5 million of purchases of property and equipment and $79.0 million of purchases of available-for-sale securities.
Current wording
Cash provided by investing activities during the three months ended March 31, 2024 totaled $6.2 million, resulting from $39.0 million of maturities of available-for-sale securities, partially offset by $27.3 million of purchases of available-for-sale securities and $5.5 million of purchases of property and equipment.
Previous wording
Net cash used in investing activities during the nine months ended September 30, 2024 increased by $12.3 million when compared to the nine months ended September 30, 2023, primarily due to an increase in purchases of property and equipment and fluctuations in the level of investment in available-for-sale securities.
Current wording
Net cash used in investing activities during the three months ended March 31, 2025 increased by $29.8 million, when compared to the three months ended March 31, 2024, primarily due to an increase in purchases ofavailable-for-sale securities and a decrease in maturities of available-for-sale securities offset by a decrease in purchases of property and equipment.
Previous wording
Cash provided by financing activities during thenine 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 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.
Current wording
Cash provided by financing activities during the three months ended March 31, 2024 totaled $20.7 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 $11.0 million from the sale of 6,645,982 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 $3.0 million under our prior loan agreement with Trinity Capital, Inc. and payments of $0.2 million for deferred offering costs.
Previous wording
Net cash provided by financing activities during thenine months ended September 30, 2024 increased by $31.2 million when compared to thenine months ended September 30, 2023. The increase was primarily due to a $36.6 million increase in proceeds from the sale of common stock through our prior Purchase Agreement with B. Riley and our ATM program in the nine months ended September 30, 2024, offset in part by a $4.1 million increase in principal payments under the Amended Loan Agreement and a reduction in proceeds from the exercise of stock options and warrants.
Current wording
Net cash provided by financing activities during the three months ended March 31, 2025 decreased by $13.8 million, when compared to thethree months ended March 31, 2024. The decrease was primarily due to proceeds received during the three months ended March 31, 2024 from the sale of Common Stock through our prior Purchase Agreement with B. Riley and our prior ATM program totaling $23.9 million, offset in part by proceeds of $6.3 million received during the three months ended March 31, 2025 from tax
Previous wording
We will remain an emerging growth company under the JOBS Act until the earliest of (a) December 31, 2026, the last day of our first fiscal year following the fifth anniversary of the completion of SNII’s initial public offering, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.24 billion, (c) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (d) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.
Current wording
We will remain an emerging growth company 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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Inflation and rising interest rates 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, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic events, or any similar negative economic condition. Economic conditions in some parts of the world have been worsening, with disruptions to, and volatility and uncertainty in, the credit and financial markets in the U.S. and worldwide resulting from the effects of inflation and rising interest rates.