PART I — FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited H1 2025 financials show total assets surged to $636.7 million from financing, achieving $3.0 million net income despite revenue decline and wider operating loss Condensed Consolidated Balance Sheets As of June 30, 2025, total assets surged to $636.7 million driven by cash and investments, with equity increasing and liabilities decreasing Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $57,183 | $67,674 | | Available-for-sale investments | $514,459 | $149,488 | | Total current assets | $433,579 | $206,758 | | Total assets | $636,690 | $284,787 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $10,430 | $11,867 | | Derivative warrant liabilities | $60,116 | $93,095 | | Earn-out liabilities | $6,371 | $45,897 | | Total liabilities | $83,427 | $158,198 | | Total stockholders' equity | $553,263 | $126,589 | | Total liabilities and stockholders' equity | $636,690 | $284,787 | Condensed Consolidated Statements of Operations Q2 2025 revenue decreased and operating loss widened, but H1 2025 achieved $3.0 million net income primarily due to non-operating fair value gains Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,801 | $3,086 | $3,273 | $6,138 | | Gross Profit | $566 | $1,990 | $1,008 | $3,490 | | Loss from Operations | $(19,882) | $(16,085) | $(41,514) | $(32,670) | | Net Income (Loss) | $(39,654) | $(12,421) | $2,965 | $(33,194) | | Net Income (Loss) per Share - basic | $(0.13) | $(0.07) | $0.01 | $(0.21) | - The significant swing to net income for the six months ended June 30, 2025, was primarily due to non-operating gains from changes in the fair value of derivative warrant liabilities (+$32.7M) and earn-out liabilities (+$6.6M)22 Condensed Consolidated Statements of Cash Flows H1 2025 saw $389.1 million cash inflow from financing, offsetting operating and investing outflows, ending with $57.2 million cash and equivalents Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(29,820) | $(26,656) | | Net cash used in investing activities | $(369,732) | $(7,033) | | Net cash provided by financing activities | $389,095 | $33,093 | | Net decrease in cash and cash equivalents | $(10,491) | $(708) | | Cash and cash equivalents – end of period | $57,183 | $20,684 | - Financing activities were the primary source of cash, with $346.7 million from an ATM offering and $35.0 million from a private placement with Quanta27 Notes to Condensed Consolidated Financial Statements Notes detail the anticipated loss of EGC status, significant financing activities including a $350 million ATM offering, a $35 million Quanta private placement, and high revenue concentration from government entities - The company will lose its 'Emerging Growth Company' (EGC) and 'smaller reporting company' status as of December 31, 2025, which will lead to increased disclosure requirements and compliance costs, including an auditor's attestation on internal controls37 - In May 2025, the company completed an At-the-Market (ATM) offering, raising gross proceeds of $350 million from the sale of 30.3 million shares at a weighted average price of $11.55 per share9596 - A collaboration agreement was signed with Quanta Computer Inc. in February 2025, involving mutual commitments to invest at least $250 million each in quantum computing over five years, and Rigetti completed a $35 million private placement with Quanta137138140 - Revenue is highly concentrated, with sales to government entities comprising 90.7% of total revenue for the six months ended June 30, 2025, and Four customers (B, C, D, F) accounted for 95% of accounts receivable as of June 30, 2025126 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses H1 2025 revenue decline and wider operating loss, offset by non-cash gains leading to net income, with liquidity bolstered by $350 million ATM and $35 million private placement, alongside quantum computing milestones Overview and Recent Developments Rigetti, building quantum computers, focuses on QPUs/QCaaS, with recent $350 million ATM offering, Quanta collaboration, and achieved 99.5% two-qubit gate fidelity milestone - The company's long-term business model centers on revenue from sales of quantum processing units (QPUs) and Quantum Computing as a Service (QCaaS), but the majority of current revenues are from development contracts147 - On July 16, 2025, the company announced it achieved its mid-year performance milestone of 99.5% median two-qubit gate fidelity on a modular 36-qubit system and expects to release a 100+ qubit chiplet-based system with similar fidelity before the end of 2025152 - The company completed a $350 million At-the-Market (ATM) offering in Q2 2025, raising net proceeds of $346.7 million154 - A collaboration agreement with Quanta was established, involving a $35 million private placement and a commitment for each party to invest at least $250 million in quantum computing over five years155157 Results of Operations H1 2025 revenue decreased by 47%, gross profit fell by 71%, and operating expenses rose by 18%, leading to a wider $41.5 million operating loss, though non-cash gains resulted in $3.0 million net income Comparison of Results for the Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $3,273 | $6,138 | $(2,865) | (47)% | | Gross Profit | $1,008 | $3,490 | $(2,482) | (71)% | | Research and development | $28,977 | $23,341 | $5,636 | 24% | | Selling, general and administrative | $13,545 | $12,819 | $726 | 6% | | Loss from operations | $(41,514) | $(32,670) | $(8,844) | 27% | | Total other income (expense), net | $44,479 | $(524) | $45,003 | NM | | Net income (loss) | $2,965 | $(33,194) | $36,159 | (109)% | - The decrease in revenue was mainly due to reductions in collaborative research and professional services contracts, impacted by the pending reauthorization of the National Quantum Initiative Act168 - The increase in R&D expenses was mainly due to a $3.2 million increase in salaries and employee-related costs and a $1.1 million increase in stock-based compensation175 Liquidity and Capital Resources Despite historical losses and a $551.8 million accumulated deficit, management believes current liquidity, bolstered by $389.1 million from financing, is sufficient for 12 months, with future $250 million Quanta collaboration commitments - The company believes its existing cash, cash equivalents, and available-for-sale investments are sufficient to meet operating needs for at least the next 12 months188 - Cash provided by financing activities totaled $389.1 million for the six months ended June 30, 2025, primarily from the ATM offering and the Quanta private placement206 - Long-term cash requirements include a commitment to invest at least $250.0 million in quantum computing over a five-year period as part of the Collaboration Agreement with Quanta192 Item 3. Quantitative and Qualitative Disclosures About Market Risks As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risks - As a smaller reporting company, Rigetti is not required to provide quantitative and qualitative disclosures about market risk217 Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level219 - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025220 PART II — OTHER INFORMATION Item 1. Legal Proceedings The company is not currently involved in any material legal proceedings - The company is not currently involved in any material legal proceedings223 Item 1A. Risk Factors A key risk is the loss of 'emerging growth company' and 'smaller reporting company' status after December 31, 2025, leading to increased compliance requirements and costs - A new material risk is that the company will lose its 'emerging growth company' (EGC) and 'smaller reporting company' status as of December 31, 2025225 - The loss of EGC status will subject the company to increased compliance requirements, such as auditor attestation of internal controls under Sarbanes-Oxley Act Section 404(b) and more detailed executive compensation disclosures, leading to higher compliance costs226230 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the period - None227 Item 5. Other Information Two board members, Thomas Iannotti and Gail Sandford, adopted Rule 10b5-1 trading plans for common stock sales - On May 15, 2025, director Thomas Iannotti adopted a trading plan for the sale of up to 200,000 shares of Common Stock, scheduled to terminate by August 13, 2026232 - On June 12, 2025, director Gail Sandford adopted a trading plan for the sale of shares, scheduled to terminate by September 10, 2026233 Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and interactive data files
Rigetti(RGTI) - 2025 Q2 - Quarterly Report