iLearningEngines Reports Second Quarter 2024 Results
iLearningEngines (NASDAQ: AILE) reported strong Q2 2024 results with revenue growing 33.9% year-over-year to $135.5 million. The company's Annual Recurring Revenue (ARR) increased 33.2% to $520.8 million, while maintaining a Net Dollar Retention (NDR) around 130%. Despite a net loss of $314.0 million, primarily due to one-time expenses related to their business combination, Adjusted EBITDA was positive at $4.0 million.
Key highlights include adding over 100 end customers, reaching 4.9 million licensed users, and securing an additional $20 million in debt financing. The company completed its business combination with Arrowroot Acquisition Corp. and was added to the Russell 3000 index.
iLearningEngines (NASDAQ: AILE) ha riportato risultati robusti nel secondo trimestre del 2024, con un aumento del fatturato del 33,9% rispetto all'anno precedente, arrivando a 135,5 milioni di dollari. L'Annual Recurring Revenue (ARR) della compagnia è aumentato del 33,2%, raggiungendo i 520,8 milioni di dollari, mantenendo un Net Dollar Retention (NDR) intorno al 130%. Nonostante una perdita netta di 314,0 milioni di dollari, principalmente a causa di spese straordinarie legate alla fusione aziendale, l'Adjusted EBITDA è stato positivo, attestandosi a 4,0 milioni di dollari.
Tra i punti salienti c'è l'aggiunta di oltre 100 clienti finali, raggiungendo 4,9 milioni di utenti in possesso di licenze, e l'ottenimento di ulteriori 20 milioni di dollari in finanziamenti attraverso debito. L'azienda ha completato la fusione con Arrowroot Acquisition Corp. ed è stata aggiunta all'indice Russell 3000.
iLearningEngines (NASDAQ: AILE) reportó resultados sólidos en el segundo trimestre de 2024, con un crecimiento de ingresos del 33,9% interanual, alcanzando los 135,5 millones de dólares. Los Ingresos Recorrentes Anuales (ARR) de la empresa aumentaron un 33,2% hasta alcanzar los 520,8 millones de dólares, mientras mantenía una Retención de Dólares Netos (NDR) alrededor del 130%. A pesar de una pérdida neta de 314,0 millones de dólares, principalmente debido a gastos únicos relacionados con la combinación de negocios, el EBITDA Ajustado fue positivo en 4,0 millones de dólares.
Los aspectos más destacados incluyen la adición de más de 100 clientes finales, alcanzando los 4,9 millones de usuarios con licencia y asegurando 20 millones de dólares adicionales en financiamiento de deuda. La empresa completó su combinación de negocios con Arrowroot Acquisition Corp. y fue añadida al índice Russell 3000.
아이리닝엔진스 (NASDAQ: AILE)는 2024년 2분기 강력한 실적을 보고하며 매출이 전년 대비 33.9% 증가하여 1억 3,550만 달러에 달했다. 회사의 연간 반복 수익(ARR)은 33.2% 증가하여 5억 2,080만 달러에 이르렀으며, 순 달러 유지율(NDR)은 약 130%로 유지되었다. 3억 1,400만 달러의 순손실이 있었지만, 주로 사업 결합과 관련된 일회성 비용 때문이며, 조정된 EBITDA는 400만 달러로 긍정적인 결과를 보였다.
주요 사항으로는 100명 이상의 최종 고객을 추가하고, 490만 명의 라이선스 사용자를 달성하며, 2천만 달러의 추가 부채 자금을 확보한 것이 있다. 회사는 Arrowroot Acquisition Corp.와의 사업 결합을 완료하였고, Russell 3000 지수에 추가되었다.
iLearningEngines (NASDAQ: AILE) a présenté de solides résultats pour le deuxième trimestre 2024, avec une croissance du chiffre d'affaires de 33,9 % d'une année sur l'autre, atteignant 135,5 millions de dollars. Le chiffre d'affaires récurrent annuel (ARR) de l'entreprise a augmenté de 33,2 % pour atteindre 520,8 millions de dollars, tout en maintenant un taux de rétention des dollars nets (NDR) autour de 130 %. Malgré une perte nette de 314,0 millions de dollars, principalement en raison de dépenses ponctuelles liées à leur combinaison d'entreprise, l'EBITDA ajusté était positif à 4,0 millions de dollars.
Les faits saillants incluent l'ajout de plus de 100 clients finaux, atteignant 4,9 millions d'utilisateurs licenciés, et l'obtention de 20 millions de dollars supplémentaires en financement par emprunt. L'entreprise a finalisé sa combinaison d'entreprise avec Arrowroot Acquisition Corp. et a été ajoutée à l'indice Russell 3000.
iLearningEngines (NASDAQ: AILE) hat starke Ergebnisse für das zweite Quartal 2024 präsentiert, mit einem Umsatzwachstum von 33,9% im Jahresvergleich auf 135,5 Millionen Dollar. Der jährlich wiederkehrende Umsatz (ARR) des Unternehmens stieg um 33,2% auf 520,8 Millionen Dollar, während die Netto-Dollarrückhaltung (NDR) bei etwa 130% blieb. Trotz eines Nettoverlusts von 314,0 Millionen Dollar, der hauptsächlich auf einmalige Ausgaben im Zusammenhang mit ihrer Unternehmensfusion zurückzuführen ist, war das bereinigte EBITDA mit 4,0 Millionen Dollar positiv.
Zu den wichtigsten Highlights gehört die Akquisition von über 100 Endkunden, das Erreichen von 4,9 Millionen lizenzierten Nutzern und die Sicherung zusätzlicher 20 Millionen Dollar an Schuldenfinanzierung. Das Unternehmen hat seine Unternehmensfusion mit Arrowroot Acquisition Corp. abgeschlossen und wurde zum Russell 3000 Index hinzugefügt.
- Revenue grew 33.9% year-over-year to $135.5 million
- Annual Recurring Revenue (ARR) increased 33.2% to $520.8 million
- Net Dollar Retention (NDR) remains strong at around 130%
- Adjusted EBITDA was positive at $4.0 million
- Added over 100 end customers and reached 4.9 million licensed users
- Secured additional $20 million in debt financing
- Completed business combination and added to Russell 3000 index
- Net loss of $314.0 million, primarily due to one-time expenses
- Cost of Revenue increased from 29.7% to 30.9% of revenue
- SG&A expenses increased significantly from 36.4% to 101.6% of revenue
- General and Administrative expenses rose from 5.2% to 70.7% of revenue
Insights
iLearningEngines' Q2 2024 results show strong growth but with significant one-time expenses. Revenue grew
However, the company reported a substantial net loss of
The slight increase in Cost of Revenue and stable R&D expenses as a percentage of revenue suggest good cost management. The significant jump in SG&A expenses is largely due to one-time items and should normalize in future quarters.
iLearningEngines' performance demonstrates the growing demand for AI-powered learning and work automation solutions in the enterprise sector. The addition of over 100 new end customers and 176,000 licensed users in Q2 alone indicates strong market traction.
The company's focus on Hyper Automation apps in their R&D roadmap aligns with current industry trends towards increased automation and AI integration in enterprise workflows. With over 4.9 million licensed users, iLearningEngines has a substantial base for data collection and AI model improvement, potentially creating a flywheel effect for product enhancement.
The expansion of their VAR network to over 30 partners, representing more than 1,000 end customers, suggests an effective go-to-market strategy that could fuel further growth. This indirect sales approach may help iLearningEngines scale more efficiently in the competitive AI enterprise solutions market.
Second quarter revenue grew
Net loss driven entirely by one-time items; Adjusted EBITDA1 of
BETHESDA, Md., Aug. 13, 2024 (GLOBE NEWSWIRE) -- iLearningEngines, Inc. (NASDAQ: AILE) (“iLearningEngines”, “ILE”, or “the Company”), a leader in AI-powered learning and work automation for enterprises, today announced financial results for the second quarter ended June 30, 2024.
“We are pleased to report financial results for our first quarter as a publicly traded company,” said Harish Chidambaran, Chief Executive Officer of iLearningEngines. “We delivered
Second Quarter 2024 Financial Highlights –Three Months Ended June 30, 2024
- Revenue – Revenue increased
33.9% year-over-year to$135.5 million . - Annual Recurring Revenue (“ARR”)2 – ARR increased
33.2% year-over-year to$520.8 million . - Net Dollar Retention (“NDR”)2 – Trailing 12-month NDR continues around
130% . - GAAP Net Loss – Net loss was
$314.0 million , which included an$82.3 million one-time catch-up share-based compensation expense related to the previously announced business combination (the “Business Combination”) transaction with Arrowroot Acquisition Corp. (“Arrowroot”) and$5.7 million of share-based compensation expense for the quarter, and other one-time expenses of$37.4 million change in fair value of warrant liability,$169.9 million change in fair value of convertible notes, and an$8.2 million gain on debt extinguishment.
- Adjusted EBITDA & Adjusted EBITDA Margin1 – Adjusted EBITDA was
$4.0 million .- Cost of Revenue: Cost of Revenue increased marginally from
29.7% of revenue ($30.1 million ) in the three months ended June 30, 2023 to30.9% of revenue ($41.8 million ) in the three months ended June 30, 2024. This slight increase is linked to the implementation revenue from the new contracts that started in the three months ended June 30, 2024. - Research and Development (“R&D”): R&D slightly increased from
30.1% of revenue ($30.4 million ) in the three months ended June 30, 2023 to30.4% of revenue ($41.2 million ) in the three months ended June 30, 2024. The spend in research and development is linked to the product roadmap of Hyper Automation apps. - Selling General and Administration (“SG&A”): SG&A increased from
36.4% of revenue ($36.9 million ) in the three months ended June 30, 2023 to101.6% of revenue ($137.7 million ) in the three months ended June 30, 2024.- Selling and Marketing (“S&M”) expenses improved marginally from
31.2% of revenue ($31.6 million ) in the three months ended June 30, 2023 to30.9% of revenue ($41.9 million ) in the three months ended June 30, 2024. - General and Administrative (“G&A”) expenses marginally increased from
5.2% of revenue ($5.3 million ) in the three months ended June 30, 2023 to70.7% of revenue ($95.8 million ) in the three months ended June 30, 2024.
- Selling and Marketing (“S&M”) expenses improved marginally from
- Cost of Revenue: Cost of Revenue increased marginally from
- Shares outstanding – As of June 30, 2024 the Company had: (i) approximately 141.2 million shares of common stock outstanding, (ii) warrants to purchase 22.6 million shares of common stock, consisting of 14.4 million public warrants, each exercisable for one share of common stock at a price of
$11.50 per share, and 8.3 million private warrants, each exercisable for one share of common stock at a price of$11.50 per share, outstanding, and (iii) approximately 1.3 million restricted stock units, each convertible into one share of common stock, subject to vesting conditions, outstanding.
Second Quarter 2024 Unaudited Financial Summary & Operating Metrics (In millions, except percentages)
Three Months Ended June 30, | ||||||
Metric | 2024 | 2023 | % Change | |||
Revenue | 135.5 | 101.2 | ||||
Gross profit | 93.7 | 71.2 | ||||
Net loss | (314.0) | (1.9) | NM | |||
Adjusted EBITDA | 4.0 | 1.3 | ||||
Adjusted EBITDA Margin |
Six Months Ended June 30, | ||||||
Metric | 2024 | 2023 | % Change | |||
Revenue | 260.5 | 195.2 | ||||
Gross profit | 179.9 | 133.6 | ||||
Net loss | (340.0) | (1.5) | NM | |||
Adjusted EBITDA | 13.0 | 3.6 | ||||
Adjusted EBITDA Margin |
As of June 30, | ||||
Metric | 2024 | 2023 | % Change | |
ARR2 | 520.8 | 391.0 |
1 Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. For descriptions and reconciliations of our non-GAAP financial measures to their most comparable GAAP financial measures, please see the section titled “Non-GAAP Financial Measures” and the tables at the end of this press release.
2 For additional information regarding ARR and NDR, please see the section titled “Certain Definitions” at the end of this press release.
Second Quarter 2024 Business Highlights
- VARs and customers – The Company now has over 30 VARs signed. These VARs represent over 1,000 end customers with over 4.7 million end users. In the quarter ended June 30, 2024 the Company added over 108 end customers and 176,000 licensed users.
- Licensed Users – As of June 30, 2024, the Company had more than 4.9 million licensed users, up from 4.4 million at the end of 2023.
- Business Combination – As previously announced, on April 16, 2024, the Company successfully completed the Business Combination and began trading as a public company under the ticker “AILE” on April 17, 2024. The Company subsequently appointed Matthew Barger, Ian Davis, Bruce Mehlman, Michael Moe and Tom Olivier to its Board of Directors.
- Non- recurring items incurred because of the Business Combination are listed below:
$82.3 million one-time catch-up share-based compensation expense.- Other one-time expenses of:
$37.4 million change in fair value of warrant liability;$169.9 million change in fair value of convertible notes; and$8.2 million gain on debt extinguishment.
- Accordion Loan – On June 28, 2024, the Company secured an additional
$20.0 million in financing from the accordion feature of Loan and Security Agreement with East West Bank, with Valley Bank joining the syndicate to increase our total debt balance to$60.0 million . - Liquidity situation – As of June 30, 2024 our Cash and accounts receivable balance was
$130.4 million . Accrued liabilities stood at$9.1 million .
About iLearningEngines
iLearningEngines (Nasdaq: AILE) is a leading Applied AI platform for learning and work automation. iLearningEngines enables Enterprises to rapidly productize and deploy a wide range of AI applications and use cases (AI Engines) at scale.
iLearningEngines is powered by proprietary vertical specific AI models and data with a flexible No Code AI canvas to drive rapid out-of-the-box deployment while offering low latency and high levels of data security and compliance.
Serving over 1,000 enterprise end customers, iLearningEngines is deployed globally into some of the most demanding vertical markets including Healthcare, Education, Insurance, Retail, Energy, Manufacturing and Public Sector to achieve mission critical outcomes.
For more information about iLearningEngines, please visit: www.ilearningengines.com & https://investors.ilearningengines.com/ or contact investors@ilearningengines.com
ILEARNINGENGINES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED INCOME STATEMENT (In thousands) | ||||||||||||||||||||||||
Six months Ended June 30, | Amount Change | % Change | Three months Ended June 30, | Amount Change | % Change | |||||||||||||||||||
(Dollars in thousands) | 2024 | 2023 | 2024 vs 2023 | 2024 vs 2023 | 2024 | 2023 | 2024 vs 2023 | 2024 vs 2023 | ||||||||||||||||
Revenue | $ | 260,473 | $ | 195,225 | $ | 65,248 | 33.4 | % | $ | 135,538 | $ | 101,245 | $ | 34,293 | 33.9 | % | ||||||||
Cost of revenue | 80,559 | 61,645 | 18,914 | 30.7 | % | 41,845 | 30,094 | 11,751 | 39.0 | % | ||||||||||||||
Gross profit | 179,914 | 133,580 | 46,334 | 34.7 | % | 93,693 | 71,151 | 22,542 | 31.7 | % | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Selling, general, and administrative expenses | 178,885 | 68,466 | 110,419 | 161.3 | % | 137,662 | 36,854 | 100,808 | 273.5 | % | ||||||||||||||
Research and development expenses | 78,344 | 59,015 | 19,329 | 32.8 | % | 41,245 | 30,433 | 10,812 | 35.5 | % | ||||||||||||||
Total operating expenses | 257,229 | 127,481 | 129,748 | 101.8 | % | 178,907 | 67,287 | 111,620 | 165.9 | % | ||||||||||||||
Operating (loss) income | (77,315 | ) | 6,099 | (83,414 | ) | NM | (85,214 | ) | 3,864 | (89,078 | ) | NM | ||||||||||||
Other (expense) income: | ||||||||||||||||||||||||
Interest expense | (3,384 | ) | (3,155 | ) | (229 | ) | 7.3 | % | (1,398 | ) | (1,567 | ) | 169 | (10.8 | )% | |||||||||
Change in fair value of warrant liability | (52,513 | ) | (690 | ) | (51,823 | ) | NM | (37,395 | ) | (410 | ) | (36,985 | ) | NM | ||||||||||
Change in fair value of WTI loan | 1,292 | - | 1,292 | NM | 1,292 | - | 1,292 | NM | ||||||||||||||||
Change in fair value of loan restructuring liability | (15,547 | ) | - | (15,547 | ) | NM | (15,547 | ) | - | (15,547 | ) | NM | ||||||||||||
Change in fair value of derivative financial instrument - Make-Whole Provision | (14,643 | ) | - | (14,643 | ) | NM | (14,643 | ) | - | (14,643 | ) | NM | ||||||||||||
Change in fair value of convertible notes | (175,325 | ) | (3,038 | ) | (172,287 | ) | NM | (169,860 | ) | (3,038 | ) | (166,822 | ) | NM | ||||||||||
Gain from forgiveness of deferred transaction costs | 700 | - | 700 | NM | 700 | - | 700 | NM | ||||||||||||||||
Gain/(loss) on debt extinguishment | (1,881 | ) | - | (1,881 | ) | NM | 8,160 | - | 8,160 | NM | ||||||||||||||
Other expense | (52 | ) | (15 | ) | (37 | ) | 246.7 | % | (52 | ) | 45 | (97 | ) | (215.6 | )% | |||||||||
Foreign exchange (loss)/gain | (4 | ) | (2 | ) | (2 | ) | 100.0 | % | (2 | ) | 6 | (8 | ) | (133.3 | )% | |||||||||
Total other expense | (261,357 | ) | (6,900 | ) | (254,457 | ) | NM | (228,745 | ) | (4,964 | ) | (223,781 | ) | NM | ||||||||||
Net loss before income tax expenses | (338,672 | ) | (801 | ) | (337,871 | ) | NM | (313,959 | ) | (1,100 | ) | (312,859 | ) | NM | ||||||||||
Income tax expense | (1,289 | ) | (652 | ) | (637 | ) | 97.7 | % | (67 | ) | (804 | ) | 737 | (91.7 | )% | |||||||||
Net loss | $ | (339,961 | ) | $ | (1,453 | ) | $ | (338,508 | ) | NM | $ | (314,026 | ) | $ | (1,904 | ) | $ | (312,122 | ) | NM | ||||
ILEARNINGENGINES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) | ||||||||
As of | ||||||||
June 30, 2024 | December 31, 2023 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 39,242 | $ | 4,763 | ||||
Restricted cash | - | 2,000 | ||||||
Accounts receivable, net of provision for credit loss of | 91,182 | 73,498 | ||||||
Contract asset | 253 | 509 | ||||||
Prepaid expenses and other current assets | 88 | 62 | ||||||
Prepaid income tax | 17 | - | ||||||
Total current assets | 130,782 | 80,832 | ||||||
Receivable from Technology Partner | 17,150 | 13,602 | ||||||
Receivable from related party | - | 465 | ||||||
Other assets | 640 | 729 | ||||||
Deferred tax assets, net | 8,114 | 5,703 | ||||||
Deferred transaction costs | - | 3,990 | ||||||
Total assets | $ | 156,686 | $ | 105,321 | ||||
Liabilities and shareholders’ equity (deficit) | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 966 | $ | 3,753 | ||||
Accrued expenses | 9,138 | 2,982 | ||||||
Current portion of long-term debt, net | - | 10,517 | ||||||
Contract liability | 95 | 2,765 | ||||||
Payroll taxes payable | 3,037 | 3,037 | ||||||
Derivative financial instrument – Make-Whole provision | 15,839 | - | ||||||
Derivative financial instrument – forward purchase agreement | 267 | - | ||||||
Excise tax payable | 2,473 | - | ||||||
Related party payable | 35 | - | ||||||
Equity-settled transaction costs payable | 6,500 | - | ||||||
Other current liabilities | 123 | 116 | ||||||
Total current liabilities | 38,473 | 23,170 | ||||||
Convertible notes | - | 31,547 | ||||||
Warrant liability | 5,568 | 11,870 | ||||||
Revolving line of credit, net of capitalized financing cost of | 59,256 | - | ||||||
Long-term debt, net | - | 10,679 | ||||||
Subordinated payable to Technology Partner | 50,415 | 49,163 | ||||||
Other non-current liabilities | 51 | 74 | ||||||
Total liabilities | 153,763 | 126,503 | ||||||
Shareholders’ equity (deficit): | ||||||||
Common Shares | 14 | 8 | ||||||
Additional paid-in capital | 405,192 | 36,386 | ||||||
Prepaid forward purchase agreement | (4,746 | ) | - | |||||
Accumulated deficit | (397,537 | ) | (57,576 | ) | ||||
Total shareholders’ equity (deficit) | 2,923 | (21,182 | ) | |||||
Total liabilities and shareholders’ equity (deficit) | $ | 156,686 | $ | 105,321 | ||||
ILEARNINGENGINES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | ||||||||
Six Months Ended June 30, | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (339,961 | ) | $ | (1,453 | ) | ||
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||||||||
Depreciation and amortization | 61 | 39 | ||||||
Amortization of debt issuance | 667 | 1,040 | ||||||
Provision for deferred taxes | 726 | 371 | ||||||
Accretion of interest on subordinated payable to Technology Partner | 1,252 | 834 | ||||||
Change in fair value of warrant liability | 52,513 | 690 | ||||||
Change in fair value of WTI loan | (1,292 | ) | - | |||||
Change in fair value of loan restructuring liability | 15,547 | - | ||||||
Change in fair value of convertible notes | 175,325 | 3,038 | ||||||
Change in fair value of derivative financial instrument - Make-Whole provision | 14,643 | - | ||||||
Gain from forgiveness of deferred transaction cost | (700 | ) | - | |||||
Loss on debt extinguishment | 1,881 | - | ||||||
Provision for current expected credit losses | 511 | - | ||||||
Share-based compensation | 88,043 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (18,195 | ) | (13,817 | ) | ||||
Receivable from related party | 465 | 130 | ||||||
Contract asset | 256 | 6,474 | ||||||
Prepaid expenses and other current assets | 31 | 29 | ||||||
Receivable from Technology Partner | (3,548 | ) | (5,556 | ) | ||||
Trade accounts payable | 4,153 | 304 | ||||||
Accrued expenses and other current liabilities | 683 | 36 | ||||||
Contract liability | (2,670 | ) | 1,133 | |||||
Payroll taxes payable | - | 248 | ||||||
Net cash flows used in operating activities | (9,609 | ) | (6,460 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment (included in Other assets) | (14 | ) | (7 | ) | ||||
Net cash flows used in investing activities | (14 | ) | (7 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from related party payable | 35 | - | ||||||
Repayments on term loans | (26,169 | ) | (4,427 | ) | ||||
Proceeds from term loans | - | 5,000 | ||||||
Proceeds from 2023 and 2024 convertible notes | 29,415 | 9,900 | ||||||
Proceeds from revolving line of credit | 60,000 | |||||||
Payment of debt issuance for revolving line of credit | (781 | ) | - | |||||
Proceeds for subscription of convertible notes | 400 | - | ||||||
Payment returned for subscription of convertible notes | (400 | ) | - | |||||
Payment of costs directly attributable to the issuance of common stock in connection with Business Combination | (15,918 | ) | - | |||||
Proceeds from Business Combination | 5,430 | - | ||||||
Pre-payment of forward purchase agreement | (4,994 | ) | - | |||||
Taxes paid related to net share settlement of restricted stock units | (4,916 | ) | - | |||||
Net cash flows provided by financing activities | 42,102 | 10,473 | ||||||
Net change in cash | 32,479 | 4,006 | ||||||
Cash, beginning of year | 6,763 | 856 | ||||||
Cash, end of period | $ | 39,242 | $ | 4,862 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for interest | $ | 753 | $ | 1,286 | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Warrants issued in connection with new debt | $ | - | $ | 515 | ||||
Issuance of ILE common stock for fee equitization | $ | 10,300 | $ | - | ||||
Issuance of ILE common stock for WTI warrants pursuant to the Amended Term Loan and loan restructuring shares | $ | 79,560 | $ | - | ||||
Cancellation of loan restructuring shares | $ | (8,160 | ) | $ | - | |||
Issuance of common stock to settle Amended Term Loan | $ | 1,594 | $ | - | ||||
Certain Definitions
(a) “ARR” or "Annual Recurring Revenue” means the annualized recurring value of all active maintenance and support contracts at the end of a reporting period. ARR is useful for assessing the performance of the Company’s recurring maintenance and support revenue base and identifying trends affecting the Company’s business. ARR mitigates fluctuations due to seasonality, contract term, sales mix, and revenue recognition timing resulting from revenue recognition methodologies under GAAP. ARR should be viewed independently of revenue as it is an operating measure and is not intended to be combined with or to replace GAAP revenue.
(b) “NDR” or “Net Dollar Retention” means an operational performance measure that is used to assess client retention and its dollar impact on business. NDR is defined as the ARR in dollars generated in the current period by clients that existed in the prior comparable period divided by the ARR in dollars by those same clients in the prior period. NDR illustrates the impact of upgrades, downgrades, and cancellations in the current period on the existing client base. Since NDR does not factor in revenue from clients acquired in the current period and includes any churn from existing contracted customers, it is believed that it is an accurate measure of client retention. For the avoidance of doubt, NDR does not exclude prior year contracted customers that were not retained in the current year.
- NDR is calculated as the dollar value of recurring revenue from existing clients at the end of the prior period, plus the current period’s dollar impact of upsells or cross-sells from the prior period’s existing clients, minus the current period’s dollar impact of churn or downgrades from the prior period’s existing clients, divided by prior period recurring revenues from existing clients.
- The dollar impact of upsells or cross-sells is calculated as the sum of incremental recurring revenue between the end of the prior period and the end of the current period from the prior period’s existing clients that expanded usage of our products resulting in incremental recurring revenues earned in the current period.
- The dollar impact of churn or downgrades is calculated as the difference in recurring revenue between the end of the prior period and the end of the current period from the prior period’s existing clients that have decreased in usage or are no longer revenue contributing customers.
(c) “NM” means not meaningful
Non-GAAP Financial Measures
In addition to financial information prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), this press release also contains adjusted EBITDA and adjusted EBITDA margin. The Company believes these measures provide investors and management with supplemental information relating to operating performance and trends that facilitate comparisons between periods.
Adjusted EBITDA is calculated net (loss) income plus: (1) interest, (2) taxes, (3) depreciation and amortization, (4) stock-based compensation and other stock-settled obligations; (5) goodwill, long-lived assets and intangible asset impairments; (6) legal reserves and settlements; (7) restructuring and other related reorganization costs; and (8) non-recurring expenses and income. Adjusted EBITDA is a performance measure that the Company uses to assess its operating performance and the operating leverage within its business. The Company monitors Adjusted EBITDA as a non-GAAP financial measure to supplement the financial information it presents in accordance with GAAP to provide investors with additional information regarding its financial results. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by revenue.
The Company believes the use of non-GAAP financial measures helps indicate underlying trends in the Company’s business and are important in comparing current results with prior period results and understanding projected operating performance. Non-GAAP financial measures provide the Company and its investors with an indication of the Company’s baseline performance before items that are considered by the Company not to be reflective of the Company’s ongoing results. See the attached reconciliation tables for details of the amounts excluded and included to arrive at certain of the non-GAAP financial measures.
These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. In addition, from time to time in the future there may be other items that the Company may exclude for purposes of its non-GAAP financial measures; and the Company may in the future cease to exclude items that it has historically excluded for purposes of its non-GAAP financial measures. Likewise, the Company may determine to modify the nature of its adjustments to arrive at its non-GAAP financial measures. The Company strongly encourages investors to review its consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP financial measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures.
The following table presents a reconciliation of unaudited Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP, for the periods presented:
Three months Ended June 30, | Six months Ended June 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||
Net loss | $ | (314,026 | ) | $ | (1,904 | ) | $ | (339,961 | ) | $ | (1,453 | ) |
Interest expense | 1,398 | 1,567 | 3,384 | 3,155 | ||||||||
Income tax expense | 67 | 804 | 1,289 | 652 | ||||||||
Depreciation and amortization | 7 | 13 | 61 | 39 | ||||||||
EBITDA | (312,554 | ) | 480 | (335,227 | ) | 2,393 | ||||||
Other expense (income) | 52 | (45 | ) | 52 | 17 | |||||||
Share-based compensation expense | 88,043 | - | 88,043 | - | ||||||||
Transaction costs(1) | 424 | 1,175 | 1,483 | 1,201 | ||||||||
Change in fair value of warrant liability | 37,395 | (280 | ) | 52,513 | - | |||||||
Change in fair value of WTI loan | (1,292 | ) | - | (1,292 | ) | - | ||||||
Change in fair value of loan restructuring liability | 15,547 | - | 15,547 | - | ||||||||
Change in fair value of derivative financial instrument - Make-Whole Provision | 14,643 | - | 14,643 | - | ||||||||
Change in fair value of convertible notes | 169,860 | - | 175,325 | - | ||||||||
Gain/(loss) on extinguishment | (8,160 | ) | - | 1,881 | - | |||||||
Adjusted EBITDA | $ | 3,958 | $ | 1,330 | $ | 12,968 | $ | 3,611 |
(1) Represents legal, tax, accounting, consulting, and other professional fees related to the Merger with Arrowroot and previously explored strategic alternatives, all of which are non-recurring in nature. Additionally, in May 2024, the Cooley amendment was further amended, resulting in a reduction of deferred transaction fees payable for
Forward-Looking Statements
Certain statements included in this press release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995 with respect to the Business Combination. Forward looking statements generally are accompanied by words such as “believe,” “may,” “will, “estimate,” “continue,” “anticipate,” “intend,” expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” the negative forms of these words and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the Company’s ability to invest in continued platform growth; the potential benefits of the Business Combination, the Company’s future growth prospects, the Company’s ability to drive value for new and existing customers and the Company’s ability to address market opportunities across artificial intelligence. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the iLearningEngines’ management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by an investor as a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions this press release relies on. Many actual events and circumstances are beyond the control of iLearningEngines. These forward-looking statements are subject to a number of risks and uncertainties, including changes in domestic and foreign business, market, financial, political, and legal conditions; iLearningEngines’ failure to realize the anticipated benefits of the Business Combination; risks related to the rollout of iLearningEngines’ business and the timing of expected business milestones; iLearningEngines’ dependence on a limited number of customers and partners; iLearningEngines’ ability to obtain sufficient financing to pay its expenses incurred in connection with the closing of the Business Combination; the ability of iLearningEngines to issue equity or equity-linked securities or obtain debt financing in the future; risks related to iLearningEngines' need for substantial additional financing to implement its operating plans, which financing it may be unable to obtain, or unable to obtain on acceptable terms; iLearningEngines’ ability to maintain the listing of its securities on Nasdaq or another national securities exchange; the risk that the Business Combination disrupts current plans and operations of iLearningEngines; the effects of competition on iLearningEngines future business and the ability of iLearningEngines to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; risks related to political and macroeconomic uncertainty; the outcome of any legal proceedings that may be instituted against iLearningEngines or any of their respective directors or officers, including litigation related to the Business Combination; the impact of the global COVID-19 pandemic on any of the foregoing risks; and those factors discussed in the Company’s registration statement on Form S-4, as amended or supplemented, under the heading “Risk Factors,” and other documents the Company has filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that iLearningEngines does not presently know, or that iLearningEngines does not currently believe are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect iLearningEngines’ expectations, plans, or forecasts of future events and views as of the date of this communication. iLearningEngines anticipate that subsequent events and developments will cause iLearningEngines’ assessments to change. However, while iLearningEngines may elect to update these forward-looking statements at some point in the future, iLearningEngines specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing iLearningEngines’ assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.
IR & Press Contacts:
Investor Contact:
Kevin Hunt, ICR Inc.
iLearningEnginesIR@icrinc.com
Press Contact:
Dan Brennan, ICR Inc.
iLearningPR@icrinc.com
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