Rigetti Computing, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations section should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” “will,” “continue,” “project,” “forecast,” “goal,” “should,” “could,” “would,” “potential,” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those described under Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, as updated under Part II “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. See “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Quarterly Report on Form 10-Q. ​ For purposes of this discussion, “Rigetti,” “the Company,” “we,” “us” or “our” refer to Rigetti Computing, Inc. and its subsidiaries unless the context otherwise requires. ​ Overview ​ We build quantum computers and the superconducting quantum processors that power them. We believe quantum computing represents one of the most transformative emerging capabilities in the world today. By leveraging quantum mechanics, we believe our quantum computers process information in fundamentally new, more powerful ways than classical computers. When scaled, it is anticipated that these systems will be poised to solve problems of staggering computational complexity at unprecedented speed. We are located and headquartered in Berkeley, California. We also operate in Fremont, California; London, United Kingdom; Adelaide, Australia; British Columbia, Canada; and Thane, India. Our revenue is derived primarily from operations in the United States and the United Kingdom. ​ With the goal of unlocking this opportunity, we have developed the world’s first multi-chip quantum processor for scalable quantum computing systems. We believe that this patented and patent pending, modular chip architecture is the building block for new generations of quantum processors that we expect to achieve a clear advantage over classical computers. Our long-term business model centers on revenue generated from sales of quantum processing units (“QPUs”) and quantum computing systems and providing access to quantum computing systems via the cloud in the form of Quantum Computing as a Service (“QCaaS”). Historically, most of our revenues have been derived from development contracts, and we anticipate this market opportunity will continue to represent an important source of revenue for at least the next several years as we work to ramp up sales of QPUs, quantum computing systems and QCaaS. Additionally, we are working to further develop a revenue stream and forging important customer relationships by entering into technology development contracts with various partners. ​ We are a vertically integrated company. We operate Fab-1, a wafer fabrication facility dedicated to prototyping and producing our quantum processors. Through Fab-1, we own the means of production of our breakthrough multi-chip quantum processor technology. We leverage our chips through a full-stack product development approach, from quantum chip design and manufacturing through cloud delivery. We believe this full-stack development approach offers both the fastest and lowest risk path to building commercially valuable quantum computers. We have been generating revenue since 2018 through partnerships with government agencies and commercial organizations; however, we have incurred significant operating losses since inception. Our net loss was $216.2 million for the year ended December 31, 2025. We incurred a loss from operations of $54.0 million for the six months ended June 30, 2026. 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 June 30, 2026, we had an accumulated deficit of $790.5 million. ​ Based on our forecasts, we believe that our existing cash, cash equivalents and marketable securities will 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. ​ ​ 27 Table of Contents We are focused on continuing to improve our system performance. As of the date of this Quarterly Report on Form 10-Q, we have achieved a median 99.8% two-qubit gate fidelity (based on internal testing) with 40 nanosecond gate speeds on our 9-qubit system by using a proprietary adiabatic CZ gate scheme. Leveraging this same gate scheme, we achieved two-qubit gate fidelities (based on internal testing) as high as 99.9% on prototype systems. We continue to be at 99.9% one-qubit gate fidelity (based on internal testing). In January 2026, we announced achievement of a median two-qubit gate fidelity (based on internal testing) of 99.6% on our 36-qubit system. ​ In January 2026, Rigetti Computing India P L, a wholly owned subsidiary of Rigetti Computing, Inc., announced that it received an $8.4 million purchase order to deliver a 108-qubit quantum computer to C-DAC. The system will be installed on-premises at C - DAC’s Bengaluru center and is expected to be deployed in the second half of 2026. ​ In April 2026, Rigetti announced the general availability of its 108-qubit quantum computing system, Cepheus™-1-108Q, with the system being accessible to customers and partners via the Rigetti Quantum Cloud Services (QCS ® ) Platform and through Amazon Braket, the quantum computing service by AWS. The system is also now available on Microsoft Azure Quantum and qBraid. ​ Cepheus-1-108Q is Rigetti’s highest qubit-count system to date and based on Rigetti’s proprietary chiplet-based architecture. The system comprises twelve interconnected 9-qubit chiplets, tripling the number of qubits and chiplets from Rigetti’s previous 36-qubit system, Cepheus-1-36Q. As of the date of this Quarterly Report on Form 10-Q, the system is performing at a 99.1% median two-qubit gate fidelity (based on internal testing) with a gate speed of approximately 60 nanoseconds and a 99.9% median single-gate fidelity (based on internal testing). ​ We believe that we will be able to achieve our plans 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, 2025, as updated under Part II “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. ​ Recent Developments – Department of Commerce Transaction ​ On May 21, 2026, we announced that our wholly-owned subsidiary, Rigetti & Co, LLC (“Rigetti Sub”) entered into a Letter of Intent (“LOI”) with the U.S. Department of Commerce (the “Department”) under the CHIPS Act of 2022, covering an award (the “Award”) of up to $100.0 million in the aggregate, to be disbursed to Rigetti Sub in multiple payments, with $19.9 million to be made available on or about the date of the Award (the “Award Date”), two subsequent potential payments of $22.2 million and $18.5 million, respectively, to be disbursed contingent on the satisfactory completion of certain project milestones, and subject to the Department’s approval, an additional potential $39.4 million that may be disbursed to Rigetti Sub for other project activities (collectively, the “Department of Commerce Transaction”). ​ The LOI contemplates that Rigetti Sub will develop intellectual property and equip facilities at multiple existing U.S. project sites to address key technical challenges to accelerate superconducting quantum computing, including conducting, at project facilities, research and development activities related to the miniaturization and integration of readout electronics and leveraging of new, larger cryostat architectures. The Department of Commerce Transaction is subject to the negotiation and execution of definitive award documentation (the “Definitive Award Documents”). The LOI provides that the period of performance of the Award (“Period of Performance”) terminates on the earlier of the completion of all project milestones and five (5) years from the Award Date. Additionally, the LOI requires that Rigetti Sub expend advance payments solely on eligible project costs as defined in the Definitive Award Documents. Under its terms, the LOI terminates upon the execution of the Definitive Award Documents or by mutual agreement of the parties. ​ Pursuant to the terms of the LOI, in exchange for receiving the Award, the Company will be required to issue shares of the Company’s Common Stock on the Award Date to the Department in the total aggregate potential amount of the Award, at an implied issuance price that is based on the lowest reported closing price per share on: (i) the date that the first draft of the LOI was transmitted from the Department to Rigetti Sub (May 5, 2026), (ii) the date that the LOI was executed by Rigetti Sub and the Department (May 20, 2026), and (iii) the Award Date, in each case, discounted by fifteen percent (15%). The LOI contemplates that, while held by the Department, the securities that the Company will issue pursuant to the Definitive Award Documents will be non-voting to the extent permitted by applicable law and freely transferable. ​ 28 Table of Contents The LOI provides for certain data and intellectual property rights, domestic production, and research security requirements, including U.S. government license rights and restrictions on transfer of intellectual property developed using funds from the Award, U.S.-ownership and manufacturing requirements, and research security compliance and certification obligations. The LOI also provides the right to the Department to claw back up to the full disbursed Award amount for certain breaches involving intellectual property, domestic production, or research security requirements, or for failure to complete or abandonment of the project. ​ Pursuant to the LOI, the Company and the Department have agreed to negotiate in good faith to enter into Definitive Award Documents with respect to the Award within 60 days and no later than 90 days after the date of the LOI (unless otherwise extended by the Department). In the event that Definitive Award Documents are not executed and delivered by us during this period as a result of our failure to negotiate in good faith, then the Department has the right (but not the obligation) to unilaterally declare that the LOI is binding and will serve as the operative Definitive Award Document, issue the Award pursuant to the terms included in the LOI and receive the shares of Company Common Stock on the economic terms set forth in the LOI. The LOI further provides that, if we fail to provide such payment to the Department, the Department will be entitled to seek specific performance, damages, or otherwise seek or impose any other remedy available. ​ The Department of Commerce Transaction remains subject to the negotiation and execution of the Definitive Award Documents, the satisfaction of certain conditions, and final government approvals. There can be no assurance that the Department of Commerce Transaction will be consummated. Even if the Definitive Award Documents are executed, we may not receive the full amount of the Award as subsequent tranches are subject to the achievement of specified milestones, and previously disbursed amounts under the Award may be subject to claw back by the Department in certain circumstances as described above. See “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q for a discussion of risk factors relating to the Department of Commerce Transaction. ​ Macroeconomic Considerations ​ Results of our operations have varied and may continue to vary based on the impact of changes in the domestic or global economy. Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, inflation, interest rates, financial and credit market fluctuations, supply chain constraints, governmental actions and regulations such as international trade policies, tariffs and export controls, national security interests, pandemics, political turmoil, government shutdowns, natural catastrophes, military conflicts, and terrorist attacks in the United States or elsewhere, could negatively affect our business, including progress toward the development of quantum computing by increasing the cost of materials and components and our operating costs. It is not possible at this time to estimate the long-term impact that these and related events could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. If these conditions persist and deepen, we could experience an inability to access additional capital if needed, or our liquidity could otherwise be impacted, and the trading price of our Common Stock could decline. ​ For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, including the risk factor titled “Unstable or unfavorable market and economic conditions in our industry and or the global economy have had and may continue to have serious adverse consequences on our business, financial condition and share price. In the future, we may be required to record significant charges for impairment of our long-lived assets, other assets or investments.” ​ Key Components of Results of Operations ​ Revenue ​ We generate revenue through our development contracts, as well as from our sales of QPUs, quantum computing systems and our QCaaS offerings and other services including training and provision of quantum computing components. Development contracts are generally multi-year, non-recurring arrangements pursuant to which we provide professional services regarding collaborative research in practical applications of quantum computing to technology and business problems within the customer’s industry or organization and assists the customer in developing quantum algorithms and applications to assist customers in areas of business interest. ​ Cost of Revenue ​ Cost of revenue consists primarily of all direct and indirect costs associated with sales of QPUs, quantum computing systems, QCaaS offerings and development contracts and other services, including materials, employee costs for program management and personnel associated with the delivery of goods and services to customers, and sub-contract costs for work performed by third parties. Cost of revenue also includes an allocation of facility costs, depreciation and amortization directly related to the development contracts and QCaaS offerings and other services. 29 Table of Contents Operating Expenses ​ Our operating expenses primarily consist of research and development, and selling, general and administrative expenses. ​ Research and Development ​ Research and development expenses include compensation, employee benefits, stock-based compensation, outside consultant fees, facility costs, depreciation and amortization, materials and components purchased for research and development. We expect research and development expenses to increase as we continue to invest in quantum computing and the superconducting quantum processors needed for quantum computers. We do not currently capitalize any research and development expenditures. Research and development costs are expensed as incurred. ​ Selling, General and Administrative ​ Selling, general and administrative expenses include compensation, employee benefits, stock-based compensation, insurance, facility costs, professional service fees, and other general overhead costs other than those associated with research and development or sales of QPUs, quantum computing systems and providing development contracts, QCaaS offerings and other services. We expect selling, general and administrative expenses to increase as we grow our business, particularly to the extent we are able to demonstrate the usefulness of quantum computers and achieve quantum advantage, and subsequently enhance our product and service offerings, expand our customer base, and implement new marketing strategies. ​ Provision for Income Taxes ​ Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. We have recorded a full valuation allowance against our deferred tax assets. ​ Results of Operations ​ Comparison of the Three and Six Months Ended June 30, 2026 and June 30, 2025 ​ The following table sets forth our results of operations for the periods indicated (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ 2026 versus 2025 ​ ​ June 30, ​ 2026 vs. 2025 ​ ​ ​ ​ ​ ​ 2026 ​ 2025 ​ $ Change ​ % Change ​ ​ 2026 ​ 2025 ​ $ Change ​ % Change ​ ​ Revenue ​ ​ ​ $ 5,138 ​ ​ ​ $ 1,801 ​ ​ ​ $ 3,337 ​ ​ ​ 185 % ​ ​ ​ $ 9,538 ​ ​ ​ $ 3,273 ​ ​ ​ $ 6,265 ​ ​ ​ 191 % ​ Cost of revenue ​ 2,950 ​ 1,235 ​ 1,715 139 % ​ 5,972 ​ 2,265 ​ 3,707 164 % ​ Total gross profit ​ 2,188 ​ 566 ​ 1,622 287 % ​ 3,566 ​ 1,008 ​ 2,558 254 % ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 20,728 ​ 13,522 ​ 7,206 53 % ​ 40,685 ​ 28,977 ​ 11,708 40 % ​ Selling, general and administrative ​ 9,522 ​ 6,926 ​ 2,596 37 % ​ 16,894 ​ 13,545 ​ 3,349 25 % ​ Total operating expenses ​ 30,250 ​ 20,448 ​ 9,802 48 % ​ 57,579 ​ 42,522 ​ 15,057 35 % ​ Loss from operations ​ (28,062) ​ (19,882) ​ (8,180) 41 % ​ (54,013) ​ (41,514) ​ (12,499) 30 % ​ Other income (expense), net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 5,058 ​ 3,042 ​ 2,016 66 % ​ ​ 10,421 ​ 5,194 ​ 5,227 101 % ​ Change in fair value of derivative warrant liabilities ​ (29,602) ​ (20,557) ​ (9,045) 44 % ​ ​ 24,095 ​ 32,705 ​ (8,610) (26) % ​ 30 Table of Contents Change in fair value of earn-out liabilities ​ — ​ (2,257) ​ 2,257 (100) % ​ ​ — ​ 6,580 ​ (6,580) (100) % ​ Total other income (expense), net ​ (24,544) ​ (19,772) ​ (4,772) 24 % ​ 34,516 ​ 44,479 ​ (9,963) (22) % ​ Net income (loss) before provision for income taxes ​ (52,606) ​ (39,654) ​ (12,952) 33 % ​ (19,497) ​ 2,965 ​ (22,462) NM ​ ​ Provision for income taxes ​ — ​ — ​ — ​ ​ ​ — ​ — ​ — ​ ​ ​ Net income (loss) ​ $ (52,606) ​ $ (39,654) ​ $ (12,952) ​ ​ ​ $ (19,497) ​ $ 2,965 ​ $ (22,462) ​ ​ ​ *NM – Not Meaningful Revenue ​ Revenue increased by $3.3 million and $6.3 million for the three and six months ended June 30, 2026, when compared to the three and six months ended June 30, 2025, respectively. The increases were mainly due to higher sales of 9-qubit Novera™ quantum computing systems and related products. ​ The timing and delivery of sales of QPUs, quantum computing system and QCaaS will vary and impact revenue in any given quarterly or annual period. Our development contracts are typically time and materials, cost-share based or fixed price milestone contracts and the timing and amounts of revenue recognized in any given period will vary significantly based on the work performed and/or satisfaction of performance obligations. Revenue is expected to vary in terms of timing and size, resulting in significant fluctuations in revenue levels in future periods. ​ For the next few years, we expect much of our revenue to be generated from development contracts and anticipated sales of on-premises QPUs and quantum computing systems. We expect revenue will vary in future quarterly and annual periods due to changes in the composition of our revenue and variability in the pricing and terms of our sales and development contracts. ​ Cost of Revenue ​ Cost of revenue increased by $1.7 million and $3.7 million for the three and six months ended June 30, 2026 , when compared to the three and six months ended June 30, 2025, respectively. The increases in cost of revenue were mainly due to higher revenue levels during these periods. ​ During the three and six months ended June 30, 2026, a significant portion of our revenue was derived from sales of on-premises 9-qubit Novera quantum computing systems and related products. These sales tend to have a higher gross margin profile than sales of collaborative research and professional services. ​ We expect that cost of revenue and total gross profit as a percentage of revenue will vary in future quarterly and annual periods due to changes in the composition of our revenue and variability in the pricing and terms of our sales and development contracts. ​ Operating Expenses ​ Research and Development ​ Research and development expenses increased by $7.2 million and $11.7 million for the three and six months ended June 30, 2026 , respectively, when compared to the three and six months ended June 30, 2025, respectively. ​ The increase in research and development expenses for the three months ended June 30, 2026 , when compared to the three months ended June 30, 2025, was mainly due to a $2.3 million increase in salaries and employee related costs, a $2.6 million increase in stock-based compensation, a $0.9 million increase in depreciation expenses, a $0.5 million increase in consulting services and a $0.9 million increase in all other research and development costs. The increase in research and development expenses for the six months ended June 30, 2026 , when compared to the six months ended June 30, 2025, was mainly due to a $3.5 million increase in salaries and employee related costs, a $4.0 million increase in stock-based compensation, a $1.6 million increase in depreciation expenses, a $1.2 million increase in materials costs, a $0.5 million increase in consulting services and a $0.9 million increase in all other research and development costs. ​ The increase in salaries and employee related costs and stock-based compensation was due to additional hires, annual salary increases and stock-based compensation awards for existing employees. The increase in depreciation expense was due to additional 31 Table of Contents fixed assets being purchased and placed into service. The increases in consulting, materials and all other research and development costs was due to a ramp-up in our research and development activities related to our goals of achieving quantum advantage and large-scale fault tolerant quantum computing. ​ 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. In the future, we may seek to significantly increase our capital expenditures, including to upgrade our current chip fabrication facility, purchase additional dilution refrigeration equipment, and possibly invest in a new quantum chip fabrication facility, which would require a significant amount of cash for capital expenditures and increase our depreciation expense in future years. ​ Selling, General and Administrative ​ Selling, general and administrative expenses increased by $2.6 million and $3.3 million for the three and six months ended June 30, 2026 , when compared to the three and six months ended June 30, 2025, respectively. ​ The increase in selling, general and administrative expenses for the three months ended June 30, 2026, when compared to the three months ended June 30, 2025, was mainly due to a $0.9 million increase in stock-based compensation, a $0.6 million increase in legal costs, a $0.5 million increase in consulting and lobbying costs and a $0.6 million increase in all other selling, general and administrative expenses. The increase in selling, general and administrative expenses for the six months ended June 30, 2026, when compared to the six months ended June 30, 2025, was mainly due to a $0.7 million increase in salaries and employee related costs, a $1.2 million increase in stock-based compensation, a $0.7 million increase in consulting and lobbying costs and a $0.7 million increase in all other selling, general and administrative expenses. ​ The increase in salaries and employee-related costs and stock-based compensation was mainly due to annual salary increases and stock-based compensation awards for existing employees. The increase in sales and marketing costs was due to increased investment in sales and marketing activities. The increase in all other selling, general and administrative expenses was due to an increase in employee recruitment, higher headcount and inflation, and typical fluctuations in expense levels. ​ We expect to incur additional selling, general and administrative expenses to support the growth of our business. Further, we expect selling, general and administrative expenses to increase over the longer term, particularly after we potentially achieve quantum advantage, and plan to subsequently enhance our sales and service offerings, expand our customer base, and implement new marketing strategies. ​ Other income (expenses), net ​ Interest income ​ Interest income was $5.1 million and $10.4 for the three and six months ended June 30, 2026, respectively, compared to $3.0 million and $5.2 million for the three and six months ended June 30, 2025, respectively . The increase in interest income during the three and six months ended June 30, 2026, when compared to the three and six months ended June 30, 2025, was d ue to an increase in the balances of our invested cash and available-for-sale investments resulting from an equity offering and the Quanta private placement investment during the second quarter of 2025, and cash proceeds from warrant exercises in the fourth quarter of 2025. Fluctuations in the rates of interest earned on our investments also had an impact on interest income during these periods. ​ Change in Fair Value of Warrant Liabilities ​ A discussion of the change in the fair value of the warrant liabilities is included in Note 6 “Warrants” to our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026, included elsewhere in this Quarterly Report on Form 10-Q. ​ The change in fair value of our warrant liabilities for the three and six months ended June 30, 2026 was a loss of $29.6 million and a gain of $24.1 million, respectively. The change in fair value of our warrant liabilities for the three and six months ended June 30, 2025, was a loss of $20.6 million and a gain of $32.7 million, respectively. The change in fair value for the three and six months ended June 30, 2026 and June 30, 2025 was primarily due to fluctuations in our stock price. ​ 32 Table of Contents Change in Fair Value of Earn-Out Liabilities ​ A discussion of the change in the fair value of the earn-out liabilities is included in Note 7 “Earn-out Liabilities” to our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026, included elsewhere in this Quarterly Report on Form 10-Q. ​ As of December 31, 2025 all of the earn-out liabilities were satisfied and the remaining liability balance was zero. The earn-out liabilities had no impact on our condensed consolidated financial statements for the three and six months ended June 30, 2026, and we do not expect the earn-out liabilities to have any impact on the consolidated financial statements in future periods. ​ The change in fair value of our earn-out liabilities for the three and six months ended June 30, 2025 was a loss of $2.3 million and gain of $6.6 million, respectively. The change in fair value for the three and six months ended June 30, 2025 was primarily due to fluctuations in our stock price. Provision for Income Taxes ​ We have incurred a cumulative pre-tax loss for the past three years. We expect to continue to incur losses for income tax purposes for the foreseeable future and will continue to carry a full valuation allowance for our deferred tax assets. Accordingly, we did not record a provision for income taxes for either the three and six months ended June 30, 2026 or the three and six months ended June 30, 2025. ​ Liquidity and Capital Resources ​ We have incurred net losses and negative cash flows since inception. Historically, we have financed our operations primarily through the sale and issuance of Common Stock, preferred stock, warrants, convertible notes, debt and revenues. During the year ended December 31, 2025, we incurred net a loss of $216.2 million. We incurred a loss from operations of $54.0 million for the six months ended June 30, 2026. As of June 30, 2026, we had an accumulated deficit of $790.5 million, and we expect to incur additional losses for the foreseeable future. ​ 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. 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, 2025, as updated under Part II “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. ​ If we are unable to raise capital when needed and on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts. A recession or market corrections resulting from the impact of macroeconomic conditions could materially affect our business and the value of our securities. ​ Our cash requirements include employee-related costs such as salaries and benefits; materials and components for research and development; working capital requirements; capital expenditures for our quantum chip fabrication facility; quantum computing refrigerators and other requirements; planned development of multiple generations of quantum processors; anticipated investments to scale our operations in the future; and strategic collaborative arrangements and investments. In the future, we may seek to significantly increase our capital expenditures, including to upgrade our chip fabrication facility, possibly invest in a new quantum chip fabrication facility and for additional quantum computing refrigerators, which would require a significant amount of cash for capital expenditures. ​ With respect to our longer-term future cash requirements, we will require a significant amount of cash for expenditure as we invest in ongoing research and development and business operations, including with respect to the Collaboration Agreement with Quanta, pursuant to which we are required to invest at least $250.0 million in the field of quantum computing in furtherance of our product roadmap over a five year period commencing on February 27, 2025. ​ 33 Table of Contents Until such time as we can generate significant revenue from sales of QPUs and quantum computing systems, our development contracts and other services, including our QCaaS offering, we believe we will meet our cash requirements and obligations primarily through our existing cash, cash equivalents and available-for-sale investments, potential securities financings or other capital sources. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. In addition, the likelihood that Public Warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. If the trading price for our Common Stock is less than $11.50 per share, we believe holders of our Public Warrants will be unlikely to exercise their warrants. To the extent our warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to the holders of our Common Stock and increase the number of shares eligible for resale in the public market. ​ Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to raise additional funds through equity or debt financings when needed and on attractive terms, we may be required to delay, limit, or substantially reduce our quantum computing development efforts. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as updated under Part II “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Macroeconomic conditions, including inflation, interest rates and impacts from government policy and actions, such as international trade restrictions and policies, tariffs, export controls or other restrictions, 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, labor shortages, reduction in consumer confidence, adverse geopolitical and macroeconomic events including military conflicts, or any similar negative economic condition. In addition, macroeconomic and geopolitical conditions may lead to disruptions to, and volatility and uncertainty in, the credit and financial markets in the U.S. and worldwide. ​ Cash Flows Used in Operating Activities ​ Our cash flows from operating activities are significantly affected by our ability to achieve significant growth to offset expenditures related to research and development, and selling, general and administrative activities. Our operating cash flows are also affected by our working capital needs to support growth in personnel-related expenditures and fluctuations in accounts payable and other current assets and liabilities. ​ Net cash used in operating activities during the six months ended June 30, 2026 was $32.0 million, primarily resulting from our net loss of $19.5 million, further reduced by non-cash income totaling $6.9 million. Changes in operating assets and liabilities had a $5.6 million unfavorable impact on the net cash used in operating activities during the six months ended June 30, 2026. ​ Net cash used in operating activities during the six months ended June 30, 2025 was $29.8 million, primarily resulting from our net income of $3.0 million, reduced by non-cash income totaling $30.5 million. Changes in operating assets and liabilities had a $2.3 million unfavorable impact on the net cash used in operating activities during six months ended June 30, 2025. ​ Cash used in operating activities increased by $2.2 million to $32.0 million during the six months ended June 30, 2026 , from $29.8 million during the six months ended June 30, 2025. The $22.5 million increase in our net loss for the six months ended June 30, 2026, when compared to our net income for the six months ended June 30, 2025, was mostly due to a reduction in non-cash income during the six months ended June 30, 2026. Non-cash income favorably impacting our net loss decreased by $23.5 million to $6.9 million during the six months ended June 30, 2026, when compared to the six months ended June 30, 2025. Higher operating expenses, offset in part by an increase in total gross profit and interest income also negatively impacted our net loss. Operating assets and liabilities had a $3.3 million unfavorable impact on the change in cash used in operating activities during the six months ended June 30 , 2026, when compared to the six months ended June 30, 2025 . ​ Cash Flows Provided by (used in) Investing Activities ​ Cash provided by investing activities during the six months ended June 30, 2026 totaled $15.0 million, resulting from $221.0 million of maturities of available-for-sale securities, partially offset by $189.6 million of purchases of available-for-sale securities and $16.4 million of purchases of property and equipment. ​ 34 Table of Contents Cash used in investing activities during the six months ended June 30, 2025 totaled $369.7 million, resulting from $438.5 million of purchases of available-for-sale securities and $8.2 million of purchases of property and equipment, partially offset by $77.0 million of maturities of available-for-sale securities. ​ Investments in property and equipment relate primarily to process computing equipment, quantum computing refrigerators, and development tools for our chip fabrication facility. ​ Net cash provided by investing activities during the six months ended June 30, 2026 increased by $384.7 million, when compared to the six months ended June 30, 2025, primarily due to a reduction in purchases of available-for-sale securities and higher maturities of available-for-sale securities, offset in part by higher purchases of property and equipment. ​ Cash Flows Provided by Financing Activities ​ Cash provided by financing activities during the six months ended June 30, 2026 totaled $0.5 million, consisting of proceeds from the exercise of stock options and common stock warrants. ​ Cash provided by financing activities during the six months ended June 30, 2025 totaled $389.1 million. We received net proceeds of $346.7 million from the sale of 30,309,780 shares of common stock pursuant to our ATM offering that was completed in the six months ended June 30, 2025. We received proceeds of $35.0 million from the sale of 3,020,412 shares of common stock from the private placement transaction with Quanta. We received proceeds of $6.3 million from tax withholdings on sell-to-cover tax equity award transactions, proceeds of $1.4 million from the exercise of stock options and proceeds of $0.5 million from the exercise of warrants. We also paid $0.8 million for offering costs. ​ Cash provided by financing activities decreased by $388.6 million during the six months ended June 30, 2026, when compared to the six months ended June 30, 2025. The decrease was primarily due to lower proceeds from the sale of common stock. During the six months ended June 30, 2025, we received significant net proceeds from the sale of shares of common stock pursuant to an ATM offering and to Quanta. Lower proceeds from the exercise of stock options and common stock warrants and from tax withholdings on sell-to-cover tax equity award transactions during the six months ended June 30, 2026, when compared to the six months ended June 30, 2025, also contributed to the decrease. ​ Contractual Obligations and Contingencies ​ See Note 16 “Commitments and Contingencies” to our unaudited interim condensed consolidated financial statements located elsewhere in this Quarterly Report on Form 10-Q for a description of our contractual obligations and contingencies. ​ We have purchase commitments in the form of open purchase orders, primarily for property and equipment. As of June 30, 2026, the total of these purchase commitments was $35.0 million, of which approximately $21.0 million is related to property and equipment. These amounts are primarily short-term in nature and are expected to be satisfied within the next year. In certain circumstances, the amount of our purchase commitments may change based on the expected timing of order fulfillment from our suppliers. For information regarding our non-cancellable lease obligations, see the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ending December 31, 2025, and Note 15 “Leases” to our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026, included elsewhere in this Quarterly Report on Form 10-Q. For information regarding the risks related to our manufacturing and supply chain and other risks, see the section titled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as updated under Part II “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. ​ Critical Accounting Policies and Significant Judgements and Estimates ​ This discussion and analysis of financial condition and results of operations is based upon the Company’s condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. We also make estimates and assumptions pertaining to revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. ​ 35 Table of Contents There have been no material changes to our critical accounting estimates from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025. Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. Within our Annual Report on Form 10-K for the year ended December 31, 2025, we have disclosed our critical accounting estimates that we believe have the greatest potential impact on our consolidated financial statements. Historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results. ​ Recently Issued Accounting Pronouncements ​ A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 of our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 included elsewhere in this Quarterly Report on Form 10-Q. ​ Emerging Growth Company Status ​ In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” (“EGC”) may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Therefore, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Following the Business Combination, we still qualify as an emerging growth company and plan to take advantage of the extended transition period that emerging growth company status permits. During the extended transition period, it may be difficult or impossible to compare our financial results with the financial results of another public company that complies with public company effective dates for accounting standard updates because of the potential differences in accounting standards used. ​ We will remain an EGC under the JOBS Act until the earliest of (a) December 31, 2026, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC or (d) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.