iLearningEngines, Inc. (ARRW)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 delivered strong top-line growth: revenue rose 33% year-over-year to $124.9M, gross profit increased 38% to $86.2M, and Adjusted EBITDA expanded to $9.0M with margin up ~480 bps year-over-year to 7.2% .
• Annual Recurring Revenue reached $478.9M (+34% YoY) and Net Dollar Retention improved to 132% (vs 125% Mar-31-2023), highlighting durable demand and upsell momentum .
• GAAP net loss of $25.9M was driven by one-time non-operating items (warrant revaluation $15.1M, convertible notes $5.5M, debt extinguishment $10.0M), masking otherwise improving non-GAAP profitability .
• Versus Street, Q1 revenue missed and EPS missed: Revenue $124.94M vs $129.53M consensus; EPS -$0.19 vs -$0.05 consensus, likely a near-term stock reaction catalyst despite underlying ARR/NDR strength .
• Structural catalyst: completed Business Combination (de-SPAC) with Arrowroot in April and began trading as AILE, establishing capital and governance foundations for scaling; post-close cash and equivalents were ~$28M as of April 30, 2024 .

What Went Well and What Went Wrong

What Went Well

• ARR and NDR momentum: ARR increased 34% to $478.9M and trailing 12-month NDR reached 132%, evidencing effective upsell/cross-sell and retention dynamics .
• Margin progress: Adjusted EBITDA rose to $9.0M and Adjusted EBITDA margin expanded ~480 bps YoY in Q1, signaling operating leverage as the platform scales .
• Strategic milestone completed: “With our business combination with Arrowroot Acquisition Corp. and related financing now complete, we believe we are well positioned to invest in continued platform growth,” said CEO Harish Chidambaran .

What Went Wrong

• Non-GAAP beat overshadowed by GAAP noise: GAAP net loss of $25.9M was driven by one-time items (warrant liability fair value change $15.1M; convertible notes fair value change $5.5M; loss on debt extinguishment $10.0M), which depressed reported results .
• Street miss: Q1 revenue of $124.94M missed $129.53M consensus, and EPS of -$0.19 missed -$0.05 consensus, suggesting estimates were ahead of realized non-operating headwinds and near-term expense levels .
• No explicit guidance disclosed for Q2/FY, limiting near-term visibility for investors tracking margin normalization and growth trajectory .

Financial Results

Note: S&P Global consensus was unavailable through our estimates tool mapping for this ticker; third-party consensus values are shown as a proxy pending SPGI resolution .

Guidance Changes

Earnings Call Themes & Trends

Note: A Q1 2024 earnings call transcript was not available in our document catalog; themes are based on press releases (Q4 2023, Q1 2024).

Management Commentary

• “We achieved 33% revenue growth year-over-year and grew annual recurring revenue by 34% year-over-year to $479 million. With our business combination with Arrowroot Acquisition Corp. and related financing now complete, we believe we are well positioned to invest in continued platform growth, helping more and more customers harness AI to improve their business outcomes.” — Harish Chidambaran, CEO .
• Q1 highlights stress non-GAAP progress: Adjusted EBITDA $9M and margin expansion ~480 bps YoY, while GAAP net loss was entirely driven by one-time non-operating adjustments (warrants, convertible notes, debt extinguishment) .

Q&A Highlights

• A Q1 2024 earnings call transcript was not available; no Q&A themes could be confirmed. The company did hold a Q2 2024 call subsequently, but that is outside the Q1 scope [4 not available; Q2 call reference via public web].

Estimates Context

• Street comparison indicates a miss in Q1: Revenue $124.94M vs $129.53M consensus; EPS -$0.19 vs -$0.05 consensus .
• S&P Global consensus could not be retrieved due to current mapping limitations for the ticker; we will update once SPGI mapping is available. In the interim, investors should expect estimates to adjust to incorporate one-time GAAP items and de-SPAC related costs that impacted reported EPS .

Key Takeaways for Investors

• Underlying growth remains robust: ARR ($478.9M) and NDR (132%) confirm durable customer economics and effective upsell motion despite GAAP noise in Q1 .
• Non-GAAP profitability is improving: Adjusted EBITDA margin expanded ~480 bps YoY, suggesting operating leverage as scale increases; monitoring QoQ margin trajectory is prudent .
• GAAP miss driven by one-time items: Warrant revaluation, convertible notes fair value change, and debt extinguishment collectively drove the $25.9M GAAP net loss; these are not indicative of core operating performance .
• Street expectations likely to recalibrate: Q1 revenue and EPS misses signal estimates should incorporate de-SPAC costs and transient non-operating impacts; look for clearer guidance once SPGI mapping is available and management provides outlook .
• Strategic positioning strengthened by de-SPAC completion and listing: Post-close share/warrant structure disclosed and ~$28M cash/equivalents as of Apr 30 afford execution runway for platform investment .
• Near-term trading: Expect sensitivity to future disclosures and any guidance; core KPIs (ARR/NDR, user growth) should anchor medium-term thesis pending normalization of GAAP items .
• Action: Track next disclosure for guidance, margin normalization, and progress on enterprise deployments; focus on ARR/NDR and Adjusted EBITDA as the most decision-useful metrics in the near term .

Sources Read

• Q1 2024 8-K 2.02 and Exhibit 99.1 press release: complete document read .
• Business Combination and related 8-K and exhibits: complete document read –.
• Prior quarter press release (Q4 2023): GlobeNewswire .
• Street estimates proxy (pending SPGI mapping): InvestorPlace Earnings feed .