Executive Summary

Q1 2024 revenue fell 49% QoQ to $0.383M as Akili sharply reduced EndeavorOTC advertising; gross margin compressed to ~55% from 66% in Q4 on fixed-cost deleverage .
GAAP net loss improved to $9.763M (vs. $11.147M in Q4) and non-GAAP net loss to $9.349M (vs. $10.772M in Q4), reflecting lower operating expenses; GAAP OpEx was $11.075M vs. $12.120M in Q4 .
Company fully prepaid ~$8.3M SVB debt on May 8, 2024 and Shionogi canceled a $5.0M bond; Akili now has no outstanding debt obligations, adding balance sheet flexibility and lowering future interest expense .
Board initiated a strategic alternatives process and suspended financial guidance; the Company will not host earnings calls (including for Q1 2024), shifting focus to Shionogi support and existing customers—key catalysts are debt elimination, Shionogi cash inflows, and strategic review outcomes .
Wall Street consensus (S&P Global) was unavailable for AKLI Q1 2024; estimate comparisons cannot be made at this time [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

Eliminated debt obligations: Voluntary full prepayment of SVB facility (~$8.3M) and cancellation/forgiveness of Shionogi corporate bond; reduces interest expense and improves optionality .
Operating discipline: GAAP OpEx down QoQ to $11.1M (from $12.1M) and non-GAAP OpEx to $9.8M (from $11.6M) as advertising and headcount were cut .
Strategic cash from partner: Amended Shionogi agreement delivers $10.5M upfront plus up to $4.5M services fees (≥$1.5M upfront) and up to $3.0M regulatory milestones; supports near-term liquidity and focus on partner execution .
- “We are working expeditiously with our board of directors and our external advisors and look forward to providing an update on this process in the future when appropriate,” — Matt Franklin, CEO .

What Went Wrong

Revenue decline and margin compression: Revenue down to $0.383M from $0.749M in Q4; gross margin ~55% vs. 66% prior, primarily due to lower product revenue against fixed delivery costs .
Commercial pullback: Company will no longer report EndeavorOTC commercial metrics and substantially reduced promotion, likely pressuring future growth; suspended guidance creates uncertainty .
No earnings call and strategic review risks: No Q1 call; Board warns strategic transaction may not be consummated and liquidation is a possible outcome if none is completed .

Financial Results

Metric	Q3 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$0.702	$0.749	$0.383
GAAP Net Loss ($USD Millions)	$(15.876)	$(11.147)	$(9.763)
Non-GAAP Net Loss ($USD Millions)	$(13.888)	$(10.772)	$(9.349)
Gross Margin %	~60%	66%	~55%
GAAP Total Operating Expenses ($USD Millions)	$18.848	$12.120	$11.075
Non-GAAP Total Operating Expenses ($USD Millions)	$14.732	$11.564	$9.773
EPS (Basic & Diluted, $)	n/a	n/a	$(0.12)
Consensus Revenue (S&P Global)	n/a	n/a	n/a
Consensus EPS (S&P Global)	n/a	n/a	n/a

Notes: Wall Street consensus from S&P Global was unavailable for AKLI Q1 2024; estimate comparisons are not provided [GetEstimates error].

Product Breakdown (where disclosed)

Product Revenue ($USD Thousands)	Q3 2023	Q4 2023	Q1 2024
EndeavorOTC	$553	$596	$254
EndeavorRx	n/a	n/a	$129
Total	$702	$749	$383

KPIs (historical disclosure; Q1 2024 no longer reported)

KPI	Q3 2023	Q4 2023	Q1 2024
First-time app downloads (OTC)	176,559	139,499	Not reported
Active subscribers (OTC)	7,535	11,571	Not reported
ARPU (OTC, $)	$93	$88	Not reported

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Non-GAAP Total Operating Expenses	FY 2024	$38–$43M (updated Feb 29, 2024)	No guidance (suspended)	Suspended
Gross Margins (non-prescription model)	Late 2025	60–70%	No guidance (suspended)	Suspended
Cash Runway	Prior view	Sufficient into 2H 2025	Management believes cash is sufficient for at least one year after May 14, 2024 10-Q/press release date	Updated framing
Earnings Calls	Ongoing	Historically hosted (e.g., Q3 2023)	Will not host earnings calls for Q1 2024	Suspended
Debt/Capital Structure	N/A	SVB loan outstanding at Q1-end	Debt fully repaid May 8, 2024; Shionogi bond canceled	Improved balance sheet

Earnings Call Themes & Trends

Note: No Q1 2024 earnings call was held . Themes tracked across disclosures.

Topic	Previous Mentions (Q3 2023 and Q4 2023)	Current Period (Q1 2024)	Trend
Strategic Alternatives	Not highlighted; focus on OTC transition	Board initiated strategic review; potential transactions, no assurance; guidance suspended	New risk focus; heightened uncertainty
Shionogi Partnership	Phase 3 positive; Japan submission planned; OTC label expansion efforts	Amended agreement: $10.5M upfront, fees/milestones; Akili to support regulatory/commercialization	Strengthened near-term cash; execution focus
Commercial Model/Promotion	DTC momentum; KPIs reported; in-house Rx distribution	Substantial reduction in promotional activity; cease reporting OTC KPIs	Pullback; lower growth visibility
Gross Margin	~60% (Q3), 66% (Q4); long-term 60–70% target	~55% (Q1) on revenue decline vs fixed costs	Down near term
Debt/Capital Structure	SVB loan outstanding	Full prepayment May 8; Shionogi bond canceled; no debt obligations	Balance sheet de-risking
Regulatory (EndeavorOTC)	510(k) submission Oct 30, 2023; continued enforcement discretion	Continue pursuing FDA authorization; OTC distribution continues under enforcement discretion	Status quo; de-emphasis on promotion

Management Commentary

“We are working expeditiously with our board of directors and our external advisors and look forward to providing an update on this process in the future when appropriate.” — Matt Franklin, President & CEO (Q1 press release) .
“Our mid-year shift to a leaner, customer-centric model has yielded strong initial results, with revenue growth and gross margin improvement in 2023, that we believe will strengthen our ability to achieve profitability over time.” — Matt Franklin (Q4/FY press release) .
“We anticipate that these business model changes combined with our new direct-to-consumer marketing efforts will accelerate the path to profitability.” — Matt Franklin (Q3 press release; prior strategy) .

Q&A Highlights

No Q1 2024 earnings call was hosted; thus, no Q&A highlights or guidance clarifications were provided .

Estimates Context

S&P Global Wall Street consensus for AKLI Q1 2024 EPS and revenue was unavailable; result vs estimate comparisons cannot be provided at this time [GetEstimates error].
Directionally, revenue and gross margin came in below Q4 due to reduced EndeavorOTC advertising and fixed-cost deleverage; analysts may reassess topline trajectory and near-term margin assumptions given the suspension of promotion and guidance .

Key Takeaways for Investors

Balance sheet de-risked: SVB debt fully repaid and Shionogi bond canceled; expect lower interest expense and improved flexibility for strategic actions .
Near-term revenue/margin pressure: Revenue fell to $0.383M and gross margin to ~55% on lower advertising and fixed costs; likely continued softness while promotion remains subdued .
Operating cost reductions: GAAP and non-GAAP OpEx improved QoQ; continued expense control supports cash runway claims for at least one year from the filing date .
Shionogi cash inflows and execution: $10.5M upfront plus additional fees/milestones provide liquidity; focus shifts to partner support and regulatory milestones in Japan .
Heightened strategic optionality and risk: Guidance suspended; strategic alternatives under review, with explicit disclosure that outcomes could include a transaction or potential dissolution if none occurs .
Data visibility reduction: Company will no longer report EndeavorOTC commercial metrics and did not host the Q1 call, lowering real-time transparency for KPIs and growth pacing .
Trading implications: Stock likely reacts to balance sheet clean-up, cash inflows from Shionogi, and any strategic review updates; absent guidance/KPIs, narrative will be driven by regulatory progress and transaction headlines .

Akili, Inc. (AKLI)·Q1 2024 Earnings Summary