Its announcement
$Zapata Computing(ZPTA.US$ BOSTON (May 15, 2024) -- Industrially-generated artificial intelligence company Zapata AI (NASDAQ: ZPTA) today announced its financial results for the first quarter of 2024 and provided an update on its business. Business Highlights • The business merger with Andretti Acquisition Corp. was completed on March 28, 2024, and the listing on NASDAQ commenced on April 1, 2024, under the stock code ZPTA • Signed a $1 million commercial expansion agreement with Andretti Global, expanding the scope of the long-standing partnership and joint branding and marketing relationship between the two companies, resulting in a continuous 43% increase in quarterly bookings • Strengthening with Sumitomo Mitsui Trust Bank's existing collaboration applies generative artificial intelligence to simulate financial scenarios and more accurately price derivatives and adjust values • Zapata AI and partners have shown the first example of a generative model running on quantum hardware, outperforming the most advanced classic models to generate viable cancer drug candidates • Partnering with D-Wave to advance quantum-enabled machine learning, with an initial focus on discovering new molecules such as pharmaceuticals, chemicals, and materials • On May 14, 2024, a strategic partnership with Tech Mahindra was announced to use Zapata AI's quanton-based generative artificial intelligence to provide financial product highlights that can improve the operational efficiency and customer responsiveness of Tech Mahindra's global telecom customers • Revenue for the first quarter of 2024 was $1.21 million compared to $1.51 million in the first quarter of 2023 • Operating loss for the first quarter of 2024 was $5.08 million compared to 2023 Operating loss of $5.09 million in the first quarter of 2024 • Cash used in operating activities in the first quarter of 2024 was $2.15 million, compared to $5.32 million in the first quarter of 2023 • Cash and cash equivalents as of March 31, 2024 were $7.25 million, excluding $140,000 restricted cash, and $3.33 million as of December 31, 2023 • As of May 10, 2024, capital raised after the end of the first quarter of 2024 was $5.4 million Executive Review Us We are proud to complete our public listing in the first quarter of 2024, thereby bringing leaders in the field of industrially generated artificial intelligence to market despite challenging market conditions. Through our quantum-inspired generative AI technology, Zapata AI is able to handle critical analytics and business intelligence use cases for enterprise customers through our cloud and hardware-agnostic open source platform Orquestra®, said Christopher Savoy, CEO and co-founder of Zapata AI. The first quarter was very productive in terms of commerce, technology, and operations across all industries. During this time, we expanded our commercial relationship with Andretti Motor Sports Holdings LLC (Andretti Global) and deepened our collaboration on engineering, operations, and race strategy to further drive Andretti Global's remarkable innovation and operational efficiency across multiple racing series around the world. In terms of financial services, we are continuing to develop our partnership with Sumitomo Mitsui Trust Bank, which we announced in November 2023. By using our technology to simulate scenarios on them, we have proven that we can achieve more accurate and faster decisions in trading and improve risk management procedures. In the pharmaceutical field, in a study conducted by partners at Silicon Medicine, the University of Toronto, and Harvard University, we were able to show how quantum-enhanced generative artificial intelligence can help generate viable cancer drug candidates. We anticipate that through our partnership with D-Wave Quantum, Inc. in the first quarter, we will further push the boundaries of the pharmaceutical sector, initially focusing on molecular discovery. We are also continuing to achieve new technological milestones in our quantum benchmarking work with DARPA and the US Department of Defense through relationships dating back to 2022. Recently, we were pleased to announce our strategic partnership with Tech Mahindra yesterday. As a leading global provider of enterprise technology consulting, Tech Mahindra has a strong network of communications service providers, including some of the largest global telecom network operators. By partnering with them, we hope to show how we can help reduce network outages and disruptions, optimize response times and processes, improve proactive network maintenance, and tailor customer interactions. Doing so can improve the quality and reliability of the services provided, as well as customer satisfaction and loyalty, as well as significant cost savings and operational efficiency. In addition to these recent developments, our achievements to date, particularly the real-time data streaming use cases we have put into practice on the racetrack through our partnership with Andretti Global, continue to generate strong interest from potential customers in numerous markets. As we saw in Tech Mahindra, in addition to the opportunities in the telecommunications sector, we look forward to seizing other new opportunities in various other industries in the second quarter and beyond. Pharmaceuticals, financial services, insurance, and defense are all particularly exciting areas for Zapata AI today. Financial and operating results Revenue for the first quarter of 2024 was $1.22 million, while revenue for the first quarter of 2023 was $1.51 million. The change over the same period mainly reflects a decrease of $500,000 from the completion of certain customer contracts signed after the first quarter of 2023, but was partially offset by an increase of $200,000 in continuing customer contracts signed after March 31, 2023. The operating loss for the first quarter of 2024 was 5.08 million US dollars, which was flat, and the operating loss for the first quarter of 2023 was 5.09 million US dollars. The gross margin for the first quarter of 2024 was the same as the first quarter of 2023, as the decline in revenue translated into a decrease in gross profit compared to the same period last year, which was offset by a decrease in operating expenses. The reduction in operating expenses reflects a total reduction of $790,000 in sales and marketing and R&D expenses, which is sufficient to offset an increase of $740,000 in general and administrative expenses. This mainly reflects the increase in expenses associated with Andretti's acquisition of the company's business merger of $2.15 million in cash used in operating activities in the first quarter of 2024, compared to $5.32 million in the first quarter of 2023. The net loss for the first quarter of 2024 was $22.32 million, while the net loss for the first quarter of 2023 was $5.07 million. The net loss for the first quarter of 2024 was affected by significant non-cash expenses, including $9.78 million in senior guaranteed note issuance losses and $4.94 million in issuing liabilities derived from forward purchase agreements. Cash from operating activities in the first quarter of 2024 also benefited from $2.55 million in cash generated from working capital. As of March 31, 2024, cash and cash equivalents were $7.25 million, excluding $140,000 in restricted cash. This is an increase from $3.33 million on December 31, 2023, as $2.15 million in cash used in these operating activities and $01 million in cash used for investment activities were offset by $6.1 million in cash generated from financing activities in the first quarter of 2024. After the end of the first quarter of 2024 to May 10, 2024, Zapata AI raised an additional $5.4 million. Conference Call Information Zapata AI will hold a conference call today, May 15, 2024 at 8:30 a.m. EST to discuss its financial results and provide an update on the business. The conference call will be broadcast live via a webcast on the Zapata AI Investor Relations website, which can be found on ir.zapata.ai. A replay of the webcast will be broadcast shortly after the event for a period of one year.
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