10-K: Rigetti Computing's 2025 10-K: Losses Mount Amid Quantum Progress

Rigetti Computing reports increased net losses in 2025 despite significant technological advancements in quantum computing and a substantial capital raise.

Summary

• Net loss increased to $216.2 million in 2025 from $201.0 million in 2024, reflecting an 8% increase.
• Revenue decreased by $3.7 million (34%) to $7.088 million in 2025 compared to $10.790 million in 2024, primarily due to reduced collaborative research contracts and QPU sales.
• Achieved a 99.6% median two-qubit gate fidelity on the 36-qubit Cepheus-1-36Q system as of January 2026, successfully halving error rates from the previous Ankaa-3 system.
• Received purchase orders totaling approximately $5.7 million for two Novera systems in 2025, with expected delivery in the first half of 2026.
• Received an $8.4 million purchase order from India's Centre for Development of Advanced Computing (C-DAC) in January 2026 for a 108-qubit quantum computer, expected deployment in the second half of 2026.
• Completed an At-the-Market (ATM) offering in Q2 2025, raising gross proceeds of $350 million ($346.7 million net).
• Quanta Computer Inc. invested $35 million in Rigetti common stock in April 2025 and committed to invest at least $250 million over five years in quantum computing.
• Research and development expenses increased by $11.6 million (23%) to $61.345 million in 2025.
• Cash and cash equivalents decreased to $44.851 million at December 31, 2025, from $67.674 million at December 31, 2024.
• A non-cash loss of $150.6 million was recorded from changes in the fair value of derivative warrant liabilities in 2025.
• Earn-out liabilities were fully satisfied in 2025, resulting in a $2.5 million gain from fair value changes.
• Amended bylaws, effective February 27, 2026, to change the quorum for stockholder meetings to one-third (33-1/3%) of voting power from a majority.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed but predominantly negative report. While technological progress and significant capital raises are positive, the substantial increase in net losses, significant revenue decline, and ongoing need for future capital, coupled with the inherent early-stage risks of quantum computing, indicate a challenging financial position.

Positives

• Achieved significant technological advancements, including a 99.6% median two-qubit gate fidelity on the 36-qubit Cepheus-1-36Q system, halving error rates from the Ankaa-3 system.
• Successfully launched the 36-qubit Cepheus-1-36Q system, demonstrating a path to scaling using modular chip architecture.
• Reported high median two-qubit gate fidelities as of January 2026: 99.7% on a 9-qubit system, 99.6% on a 36-qubit system, and 99.0% on a 108-qubit system (Cepheus-1-108Q).
• Secured substantial purchase orders, including $5.7 million for two Novera systems in 2025 and an $8.4 million order for a 108-qubit system from C-DAC in January 2026.
• Successfully raised significant capital through a $350 million ATM offering and a $35 million private placement with Quanta Computer Inc.
• Established a strategic collaboration agreement with Quanta Computer Inc., including a commitment from Quanta to invest at least $250 million over five years in quantum computing.
• Maintains a strong intellectual property portfolio with 121 issued patents and 160 pending patents covering hardware, software, algorithms, and chip design.
• Management concluded that disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2025.
• Management concluded that internal control over financial reporting was effective as of December 31, 2025.

Negatives

• Net loss increased to $216.2 million in 2025 from $201.0 million in 2024, indicating continued unprofitability.
• Revenue decreased by 34% ($3.7 million) in 2025 compared to 2024, primarily due to a reduction in collaborative research and QPU sales.
• Accumulated deficit reached $771.0 million as of December 31, 2025.
• Incurred a significant non-cash loss of $150.6 million from changes in the fair value of derivative warrant liabilities in 2025.
• Highly dependent on government contracts, which comprised 90.2% of total revenue in 2025, exposing the company to specific risks.
• Operating plan may require additional funds sooner than planned, and there is no assurance that additional financing will be available on favorable terms.
• Loss of 'smaller reporting company' (SRC) status beginning with the Q1 2026 Quarterly Report on Form 10-Q will result in increased legal, accounting, and financial compliance costs.

Risks

• Limited operating history makes it difficult to forecast future results of operations.
• Past failures to meet publicly announced milestones and potential future failures or changes to the technology roadmap.
• Requires a significant amount of cash for R&D and business operations, and may need additional capital sooner than planned, with no guarantee of availability.
• Inability to scale the business quickly enough to meet customer and market demand could result in lower profitability or failure to execute business strategies.
• Failure to manage growth effectively, including employee base and operations, could harm the business.
• Ability to use net operating loss carryforwards and other tax attributes may be limited due to prior ownership changes.
• Faces significant technical and engineering challenges in developing quantum computers, reducing error rates, and achieving quantum advantage (QA) or large-scale fault-tolerant quantum computing (LFTQC).
• Risk of expending resources on particular products, designs, sectors, or investments that fail or forego more profitable opportunities.
• The quantum computing industry is highly competitive on a global scale, with larger tech companies and sovereign nations as competitors.
• Dependence on a limited number of customers, particularly the public sector, for a significant percentage of revenue.
• Government contracts are subject to risks including early termination, audits, investigations, sanctions, and penalties.
• Business is dependent upon relationships with cloud providers, which could be terminated or not scale as anticipated.
• Dependence on certain suppliers; failure to maintain relationships or replace them could have a material adverse effect.
• Collaboration agreements with third parties (e.g., Quanta) may not achieve their anticipated goals.
• Success depends on continuous innovation, timely execution, and cost reduction; failure could render systems obsolete or less competitive.
• Potential for disruptions, outages, defects, and other performance and quality problems with quantum computing systems or reliance on public cloud infrastructure.
• Highly dependent on attracting and retaining senior executive leadership and other key technical employees.
• Quantum computing systems may not be compatible with some or all industry-standard software and hardware in the future.
• Cybersecurity threats and potential compromises of information technology systems or data could lead to adverse consequences.
• Unstable or unfavorable market and economic conditions (e.g., inflation, interest rates, geopolitical conflicts) could adversely affect business, financial condition, and share price.
• May be required to record significant charges for impairment of long-lived assets, other assets, or investments in the future.
• Past material weaknesses in internal control over financial reporting, with a risk of identifying additional material weaknesses in the future.
• Facilities or operations could be damaged or adversely affected by prolonged power outages, natural disasters, or other catastrophic events.
• International sales and operations subject the company to additional risks and costs, including foreign currency exchange rate fluctuations.
• International operations may subject the company to greater than anticipated tax liabilities.
• Subject to stringent and evolving U.S. state, federal, and foreign laws, regulations, and rules related to privacy, data use, and security.
• Subject to U.S. and foreign anti-corruption, anti-bribery, and similar laws; non-compliance can lead to criminal or civil liability.
• Subject to government export and import controls that could impair ability to compete internationally or lead to liability.
• Failure to obtain, maintain, and protect intellectual property rights could impair ability to protect and commercialize proprietary products and technology.
• Some intellectual property may be subject to federal regulations due to government-funded research, limiting exclusive rights.
• Future sales or issuances of securities may adversely affect the market price and be dilutive to existing securityholders.
• Public Warrants and Private Warrants are accounted for as liabilities, and changes in their fair value could materially affect financial results.
• Exercise of outstanding warrants and stock options, and vesting of restricted stock units, increases shares eligible for future resale, resulting in dilution.
• Terms of Public Warrants may be amended in a manner adverse to a holder if holders of at least 50% of outstanding Public Warrants approve.
• Company may redeem unexpired Public Warrants prior to their exercise at a time disadvantageous to the holder, potentially making them worthless.
• Delaware law and the Certificate of Incorporation and Bylaws contain anti-takeover provisions that could delay or discourage takeover attempts.
• Exclusive forum provisions in the Certificate of Incorporation and Warrant Agreement could limit stockholders' and warrant holders' ability to obtain a favorable judicial forum.
• Risk of securities litigation, which is expensive and could divert management attention.
• Information available in public media from third parties may not be reliable or accurate and could impact stock price.

Future Outlook

Rigetti Computing expects to continue incurring operating and net losses for the foreseeable future as it invests heavily in research and development and infrastructure to achieve quantum advantage (QA) and large-scale fault-tolerant quantum computing (LFTQC). The company believes its existing cash, cash equivalents, and available-for-sale investments will be sufficient to meet anticipated operating cash needs for at least the next twelve months, but acknowledges the potential need for additional funds sooner than planned. Rigetti anticipates increasing investment in sales and marketing efforts in the future, particularly after demonstrating the usefulness of quantum computers and achieving quantum advantage.

Management Comments

• "Our mission is to build the worlds most powerful computers to help solve humanitys most important and pressing problems."
• "We believe quantum computing represents one of the most transformative emerging capabilities in the world today."
• "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."
• "We believe this full-stack development approach offers both the fastest and lowest risk path to building commercially valuable quantum computers."
• "We believe that our existing balances of cash, cash equivalents and available-for-sale investments will be sufficient to meet our anticipated operating cash needs for at least the next twelve months based on our current business plan, and expectations and assumptions considering current macroeconomic conditions."
• "We anticipate that research and development expenditures will grow in the future as we continue to focus on our technology roadmap and goals of achieving quantum advantage and large-scale fault tolerant quantum computing."

Industry Context

StockSavvy.ai notes that Rigetti operates in a nascent but rapidly evolving and highly competitive quantum computing market. The company's focus on superconducting qubits and a full-stack, vertically integrated approach with in-house fabrication (Fab-1) positions it against major tech giants (IBM, Google, Microsoft, Amazon) and other specialized quantum firms (IonQ, Quantinuum, PsiQuantum), as well as government-funded research. The industry is characterized by significant R&D investment, a race to achieve 'quantum advantage' and 'large-scale fault-tolerant quantum computing,' and a high degree of uncertainty regarding commercial viability and market adoption. Rigetti's strategy of deep partnerships with commercial and government entities aligns with the industry's collaborative development model, which is crucial for advancing such complex technology.

Comparison to Industry Standards

• Rigetti's superconducting quantum computers achieve gate speeds of 50-70 nanoseconds, which is approximately 1,000 times faster than other modalities such as trapped ions or pure atoms, based on publicly available information.
• The 36-qubit Cepheus-1-36Q system is believed to be the industry's largest multi-chip quantum computer, showcasing Rigetti's proprietary modular chip architecture.
• Rigetti achieved a 99.6% median two-qubit gate fidelity on Cepheus-1-36Q as of January 2026, representing a significant improvement by halving error rates from its previous Ankaa-3 system.
• The company's goal for quantum advantage (QA) requires a quantum computer with over 1,000 qubits, a two-qubit gate fidelity above 99.9%, and gate speed of less than 50 nanoseconds, setting a high benchmark for performance.
• For quantum error correction, the smallest surface code logical qubit for superconducting processors is 17:1 physical qubits to logical qubits, compared to 16:1 for trapped ions, with superconducting processors believed to be better positioned to scale to the large number of qubits required for complex applications (e.g., 100:1 or 1000:1).

Corporate Governance

Legal Proceedings

• The company may be subject to litigation and other legal proceedings in the ordinary course of business.
• Currently not a party to any material legal proceedings that would have a material adverse effect on the business, financial position, results of operations, or cash flows if determined adversely.
• Faces an inherent risk of exposure to product liability claims if quantum computers do not perform as expected or malfunction.
• May face patent infringement and other intellectual property claims that could be costly to defend, result in injunctions, or limit the ability to use certain key technologies.
• Exposed to risks associated with litigation, investigations, and regulatory proceedings related to data privacy, security, government contracts, and anti-corruption laws.

Related Party Transactions

• Private placement warrants were originally issued to the initial shareholder of Supernova Partners Acquisition Company II, Ltd. (Supernova).
• Private placement warrants are not redeemable by the company as long as they are held by Supernova Partners II LLC (Supernova Sponsor) or its permitted transferees.
• Earn-out liabilities related to Sponsor Vesting Shares, held by SNII, Supernova Partners II LLC, and SNII's directors and officers (collectively, the Sponsor Holders), were fully satisfied in 2025.
• Thomas Iannotti, a member of the board of directors, adopted a Rule 10b5-1 trading arrangement on November 24, 2025, for the sale of up to 100,000 shares of common stock.

Stakeholder Impact

• **Shareholders**: Face potential dilution from warrant exercises and future capital raises, continued stock price volatility, and the impact of ongoing net losses and high R&D investments on profitability. Long-term value creation is contingent on achieving quantum advantage and commercial viability.
• **Employees**: The company's future success is highly dependent on attracting and retaining key talent, particularly quantum physicists and engineers, in a competitive market. Stock-based compensation is a significant component of their remuneration.
• **Customers**: Gain access to advanced quantum computing systems (Novera, Ankaa-3, Cepheus-1-36Q, Cepheus-1-108Q) and services, with the potential for solving complex computational problems. However, they rely on the company's ability to deliver on its technology roadmap and maintain cloud service availability.
• **Suppliers**: The company's operations depend on a limited number of suppliers for critical components, exposing them to risks of supply chain disruptions and potential changes in business relationships.
• **Creditors**: The company's history of operating losses and ongoing need for additional financing may impact its creditworthiness and the terms of future debt arrangements.
• **Government Entities**: Continue to be a significant source of revenue through contracts and grants, but the company is subject to stringent government regulations, potential early termination of contracts, and changes in fiscal policies.

Next Steps

• Continue to invest in ongoing research and development and business operations, including potential upgrades to the Fab-1 chip fabrication facility or investment in a new facility.
• Increase sales and marketing activities to expand QPU sales and direct licensing of the Rigetti Quantum Cloud Services (QCS) platform, particularly after achieving quantum advantage.
• Deliver two Novera systems in the first half of 2026, based on existing purchase orders.
• Deploy a 108-qubit quantum computer to C-DAC in Bengaluru, India, in the second half of 2026.
• Maintain the effectiveness of the registration statement and current prospectus relating to shares of common stock underlying the warrants until their expiration or redemption.
• Comply with increased disclosure and compliance obligations associated with the loss of 'smaller reporting company' status, beginning with the Quarterly Report on Form 10-Q for the first quarter of 2026.
• Continue to improve system performance, aiming for higher qubit counts and fidelities, and to develop quantum computing systems that demonstrate clear performance advantages over classical computing alternatives.
• The 2022 Equity Incentive Plan shares reserved for issuance will automatically increase on January 1st of each year for a period of nine years, ending on January 1, 2032.

Key Dates

Recommendation

Rigetti Computing demonstrates significant technological progress in the nascent quantum computing industry, including improved gate fidelities and new system launches, backed by a substantial capital raise. However, the company continues to incur significant net losses and declining revenue, indicating that commercial viability and profitability remain distant. The high R&D investment and strategic partnerships are crucial for long-term potential, but the inherent risks of an early-stage, capital-intensive industry, coupled with past milestone delays and competitive pressures, suggest a 'Hold' recommendation. Investors should monitor progress towards quantum advantage and financial performance closely.

Keywords

Quantum Computing, Superconducting Qubits, Quantum Advantage, QPU, QCaaS, Rigetti, SEC Filing, 10-K, Financial Results, Technology Roadmap, Capital Raise, Warrants, Fab-1, Artificial Intelligence, Machine Learning, Optimization, Simulation, Corporate Governance