0001104659-25-109141
SEC filingRevenue fell 18% YoY in Q3 2025 as development contracts declined; net loss surged on non-cash warrant valuation losses.
For the three months ended September 30, 2025, Rigetti reported revenue of $1.9 million, down 18% from $2.4 million in the same period of 2024. The decline was attributed to reduced revenue from collaborative research, related materials, and professional services contracts, partly reflecting the expiration of the National Quantum Initiative Act. Gross profit fell 66% to $0.4 million, and gross margin contracted sharply from 50.6% to 20.8%, driven by an unfavorable revenue mix from delivery of lower-margin 24-qubit and 36-qubit quantum computing systems. Operating expenses increased 13% to $21.0 million, with research and development costs up 18% to $15.0 million due to higher salaries, stock-based compensation, and materials. Selling, general and administrative expenses rose 2% to $5.9 million. Loss from operations widened 18% to $20.5 million. Net loss surged to $201.0 million from $14.8 million, primarily due to a non-cash $182.0 million loss from the change in fair value of derivative warrant liabilities, coupled with a $4.1 million loss from earn-out liabilities. Interest income increased to $5.6 million from $1.2 million, benefiting from higher invested cash balances following equity offerings. No income tax provision was recorded due to a full valuation allowance.
Rigetti operates as a single segment; however, the MD&A highlights a revenue mix shift toward lower-margin hardware contracts. Development contracts remain the primary revenue source, but the company is also generating revenue from sales of QPUs and QCaaS offerings. In the nine-month period, revenue fell 39% to $5.2 million, with gross margin declining from 55.1% to 27.0%. The company notes that timing and size of contract milestones and QPU deliveries cause significant revenue fluctuations.
Management's outlook focuses on product milestones rather than financial guidance. The goal for 2025 is to introduce the next-generation modular system and achieve a 99.5% median two-qubit gate fidelity on a 100+ qubit chiplet-based system before year-end. The company expects continued operating losses and plans to invest heavily in R&D, including potential capital expenditures for chip fabrication facilities. Liquidity is sufficient for at least the next 12 months, supported by $350 million in net proceeds from the 2025 ATM offering and $35 million from a Quanta private placement. No quantitative revenue or margin guidance is provided.
As of September 30, 2025, Rigetti held $26.1M in cash and cash equivalents and $532.8M in available-for-sale investments (U.S. treasury securities), totaling $559M in liquid assets. The company has no debt outstanding after prepaying the Loan and Security Agreement in full on December 9, 2024. Stockholders' equity stood at $371.8M, driven largely by additional paid-in capital from ATM offerings and warrant exercises.
On February 27, 2025, Rigetti entered into a Collaboration Agreement with Quanta Computer, committing to invest at least $250.0M in quantum computing over five years. Quanta similarly committed $250.0M. The agreement also included a private placement of 3.0M shares for $35.0M. Operating lease liabilities total $7.6M (current + non-current). Remaining performance obligations on customer contracts were $5.5M as of September 30, 2025.
No share buybacks or dividends were authorized or paid. Total capital expenditures (property and equipment purchases) were $14.1M for the nine months ended September 30, 2025, funded by operating cash flow and equity issuances. The company raised $346.7M net from an ATM offering during the period and $35M from Quanta private placement. All debt was repaid; no new debt issued.
Rigetti operates as a single segment. Revenue declined 38.7% YoY to $5.2M for the nine months, primarily due to lower collaborative research and professional services. Geographically, the U.S. contributed 50% of revenue, Europe 47%, and Asia/others 3%. Government customers accounted for 91.4% of total revenue. Stock-based compensation was $12.0M, up from $9.7M a year ago.
For the nine months ended September 30, 2025, Rigetti Computing's cash flow from operations (CFO) was -$43.6 million, worsening by $1.6 million from the prior year's -$42.1 million. The net loss for the period was -$198.0 million, meaning CFO was $154.4 million better than the net loss, primarily due to large non-cash charges: $149.3 million from change in fair value of derivative warrant liabilities, $12.0 million stock-based compensation, and $5.8 million depreciation. However, working capital changes consumed $4.3 million (mainly accrued expenses and prepaids). Capital expenditures (capex) totaled $14.1 million, up from $9.8 million, reflecting continued investment in quantum computing infrastructure. Free cash flow (not explicitly stated) would be negative at -$57.7 million (CFO minus capex). The cash burn was funded by $391.9 million in financing activities, including $346.7 million from ATM offerings and $35.0 million from a private placement. No dividends or share repurchases were made. The massive inflow from stock sales more than offset the operating and investing cash outflows, leading to a net cash decrease of only $41.5 million. An anomaly: the large non-cash fair value adjustment on derivative liabilities ($149.3 million gain) heavily distorted net income but did not affect cash. Overall, the company remains dependent on external equity financing to sustain operations and investment.