Executive Summary

Zapata AI reported Q1 2024 revenue of $1.22M, down 19% YoY, with operating loss essentially flat at $5.08M; net loss widened to $22.32M driven by non‑cash charges tied to senior secured notes and a forward purchase agreement derivative .
Liquidity improved: cash and cash equivalents rose to $7.25M at March 31 from $3.33M at year‑end, aided by $6.10M financing inflows in Q1; an additional $5.4M was raised post‑quarter through May 10, 2024 .
Commercial traction: quarterly bookings grew 43% sequentially (off a small base) on a $1M expansion with Andretti Global; new/expanded collaborations with Sumitomo Mitsui Trust Bank, D‑Wave, and Tech Mahindra support the “industrial generative AI” pipeline .
Risk flags: going‑concern substantial doubt disclosed; high customer concentration and significant related‑party exposure (Andretti) persist; multiple financing constructs (equity line, forward purchase agreement, senior secured notes) introduce dilution/structure complexity .
No numeric guidance was issued; S&P Global consensus estimates are unavailable for this ticker mapping, so “beat/miss” versus Street cannot be assessed.*

What Went Well and What Went Wrong

What Went Well

Commercial momentum: “Entered into a $1 million commercial expansion agreement with Andretti Global…resulting in 43% sequential growth in quarterly bookings” .
Strategic partnerships: New technical/commercial collaboration with D‑Wave for quantum‑enabled ML (molecular discovery) and a strategic collaboration with Tech Mahindra targeting telco reliability/efficiency outcomes .
Cash discipline vs prior year: Cash used by operating activities improved to $2.15M vs $5.32M in Q1’23, reflecting working capital tailwinds and lower OpEx (S&M and R&D down YoY) .

What Went Wrong

Top‑line contraction and mix: Revenue fell to $1.22M (−19% YoY) due to completion of customer contracts post‑Q1’23, partially offset by new/ongoing contracts; gross profit declined to $0.17M on lower revenue and flat gross margin .
Large GAAP loss from non‑cash items: Net loss of $22.32M included $9.78M loss on issuance of senior secured notes and $4.94M loss on issuance of a forward purchase agreement derivative liability, plus higher interest/other expense .
Going‑concern risk and concentration: Management disclosed “substantial doubt” about going concern absent additional financing; four customers comprised 36%, 22%, 20%, 14% of revenue (36% related party), and $3.0M was payable to a related party, indicating concentration and related‑party dependencies .

Financial Results

Metric	Q1 2023	Q1 2024	YoY %
Revenue ($USD Millions)	$1.51	$1.22	−19.4%
Gross Profit ($USD Millions)	$0.21	$0.17	−19.4%
Gross Margin (%)	13.6% (GP $0.21/Rev $1.51)	13.6% (GP $0.17/Rev $1.22)	0.0 pp
Operating Loss ($USD Millions)	$(5.09)	$(5.08)	+0.3%
Net Loss ($USD Millions)	$(5.07)	$(22.32)	n/m
Diluted EPS ($)	$(1.09)	$(4.09)	n/m
Cash from Operating Activities ($USD Millions)	$(5.32)	$(2.15)	+59.6%
Cash & Equivalents, end period ($USD Millions)	$4.90 (incl. restricted cash)	$7.39 (incl. restricted cash)	+50.9%

Estimates comparison: S&P Global consensus unavailable for this ticker mapping; no EPS or revenue “beat/miss” determination can be made.*

Segment reporting: The company operates as a single operating segment .

KPIs and Concentration:

Sequential bookings growth: +43% on Andretti expansion (no baseline disclosed) .
Customer concentration (Q1’24 revenue): four customers at ~36% (related party), 22%, 20%, 14% of revenue .
Deferred revenue: $0.65M at 3/31/24 vs $0.74M at 12/31/23 (all prior deferred revenue recognized in Q1’24) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q2+	None disclosed	None disclosed	N/A
Margins	FY/Q2+	None disclosed	None disclosed	N/A
OpEx/Tax/Other	FY/Q2+	None disclosed	None disclosed	N/A

No formal numerical guidance issued in the press release or 10‑Q .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q‑2, Q‑1)	Current Period (Q1 2024)	Trend
Industrial Generative AI positioning	Limited public quarterly disclosures (pre‑De‑SPAC)	“Industrial Generative AI company” focus via Sense, Prose, Orquestra platform	Consistent platform narrative
Partnerships (Andretti, SMTB, D‑Wave, Tech Mahindra)	Andretti agreements date to 2022; SMTB partnership announced Nov 2023 (not in quarterly transcripts)	$1M Andretti expansion; SMTB derivatives pricing simulations; D‑Wave collaboration; Tech Mahindra telco collaboration	Expanding partner ecosystem
Quantum‑enabled ML/pharma	N/A	First instance claimed of generative model on quantum HW outperforming classical for cancer candidates (with partners)	Early technical milestones
Government/Defense programs	Prior DARPA benchmarking work since 2022	Continued progress with DARPA/DoD benchmarking	Ongoing

Note: No call transcript available in our corpus for detailed Q&A theme evolution .

Management Commentary

“We were proud to complete our public listing in Q1 2024…Through our quantum‑inspired generative AI techniques, Zapata AI is able to tackle important analytics and business intelligence use cases…on our…platform, Orquestra” — Christopher Savoie, CEO .
“We expanded our commercial relationship with Andretti Global…In financial services, we continued to evolve our partnership with Sumitomo Mitsui Trust Bank…to enable more accurate and faster decision‑making in trading and improve risk management” .
On Tech Mahindra: collaboration aims to reduce network outages, optimize response times, and tailor customer interactions for telcos, targeting cost savings and reliability gains .

Q&A Highlights

An earnings call was scheduled for May 15, 2024; a replay was to be posted on the IR site, but no transcript was available in our document set, so no Q&A details can be provided from primary sources .

Estimates Context

Street consensus (S&P Global Capital IQ) for revenue and EPS is unavailable due to missing CIQ mapping for WNNR/ZPTA at this time; therefore, comparisons to consensus and any “beat/miss” determinations are not presented.*

Key Takeaways for Investors

Revenue decline with flat operating loss shows early‑stage revenue volatility but better Op cash burn YoY; non‑cash financing charges drove GAAP net loss, masking underlying OpEx improvements .
Liquidity improved (cash up to $7.25M) and post‑quarter raises ($5.4M) help runway, but management disclosed substantial doubt about going concern absent additional capital—monitor drawdowns under the Lincoln Park facility and FPA dynamics .
Commercial signals are directionally positive (43% sequential bookings growth; multiple partnerships), but the base is small—look for conversion to recognized revenue in coming quarters .
Related‑party exposure (Andretti) is material on both revenue and payables; watch for diversification of customer base and timing of Andretti cash flows .
Capital structure complexity (senior secured notes, forward purchase agreement derivative, unvested sponsor shares, warrants) introduces potential dilution and P&L noise; understand reset/settlement mechanics and potential OET cash inflows (e.g., $2.5M received in April for partial early termination) .
No guidance and no Street consensus mean the stock is likely to trade on execution headlines (new deals, revenue conversion, financing milestones) rather than “beat/miss”; catalysts include monetization of Tech Mahindra pipeline and further enterprise wins .

Appendix: Additional Data Points

Revenue bridge commentary: −$0.5M from completed contracts post‑Q1’23, +$0.2M from ongoing contracts entered after March 31, 2023 .
OpEx mix: S&M and R&D down by $0.79M combined YoY; G&A up $0.74M tied to business combination fees .
Capital flows: Q1’24 financing cash inflow of $6.10M; senior secured notes outstanding $2.0M (mature Dec 15, 2026) after conversions at De‑SPAC; FPA derivative liability at $4.935M initial fair value .

Footnotes:
*Estimates: S&P Global Capital IQ consensus unavailable for this ticker mapping (tool returned missing CIQ mapping).

Zapata Computing Holdings Inc. (WNNR)·Q1 2024 Earnings Summary