iLearningEngines Reports Fourth Quarter and Full Year 2023 Results


Fourth quarter revenue grew 39% year-over-year to $116 million

Posts record full year revenue of $421 million, up 36% year-over-year, and ARR growth accelerates to 43% year-over-year

BETHESDA, Md., April 22, 2024 (GLOBE NEWSWIRE) -- iLearningEngines, Inc. (NASDAQ: AILE) (“iLearningEngines”, “ILE”, or “the Company”), a leader in AI-powered learning automation and information intelligence for corporate and educational use, today announced financial results for the fourth quarter and fiscal year ended December 31, 2023.

"The fourth quarter capped off a strong 2023,” said Harish Chidambaran, Chief Executive Officer of iLearningEngines. “During 2023, we expanded our core markets, grew end customers and licensed users, achieved 36% revenue growth year-over-year, and reached $447 million of annual recurring revenue . We are pleased to be carrying this business momentum into the first half of 2024.”

Key Fourth Quarter & Full Year 2023 Financial Highlights

  • Revenue – fourth quarter 2023 revenue of $116 million increased 39% year-over-year. Full year 2023 revenue of $421 million increased 36% year-over-year.
  • Annual Recurring Revenue (“ARR”)1 – ARR of $447 million increased 43% year-over-year.
  • Net Dollar Retention (“NDR”)1 – NDR of 125% in 2023 increased compared to 117% in 2022.
  • Net Loss – Fourth quarter GAAP net loss of $4 million. Full year 2023 GAAP net loss of $4 million.
  • Adjusted EBITDA & Adjusted EBITDA Margin2 – Fourth quarter 2023 adjusted EBITDA of $10 million, and full year 2023 adjusted EBITDA of $23 million. Adjusted EBITDA margin expanded by 240 basis points in Q4 2023 compared to Q4 2022, and 85 basis points in full year 2023 compared to full year 2022.

1 For additional information regarding ARR and NDR, please see the section titled “Certain Definitions” at the end of this press release.
2 Adjusted EBITDA and Adjusted EBITDA margin are a 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.

  • Financial Summary & Operating Metrics (In millions) - Fourth Quarter 2023
MetricQ4 2023Q4 2022Δ Y/Y
Revenue116 83 39%
ARR447 314 43%
Gross profit80 58 38%
Net (loss) income(4)8 NM 
Adjusted EBITDA10 3 NM 
Adjusted EBITDA Margin8.6%3.5%NM 

  • Financial Summary & Operating Metrics (In millions) - Full Year 2023
MetricFY 2023FY 2022Δ Y/Y
Revenue421 309 36%
ARR447 314 43%
Gross profit288 215 34%
Net (loss) income(4)11 NM 
Adjusted EBITDA23 13 NM 
Adjusted EBITDA Margin5.6%4.1%NM 

Recent Business Highlights

  • Strong customer and partner growth includes adding three new value-added resellers (“VARs”) in 2023, bringing total Contracted Customers to 29.
  • Reached more than 4.4 million licensed users at the end of 2023.
  • On April 16, 2024, successfully completed a business combination (the “Business Combination”) transaction with Arrowroot Acquisition Corp. ("Arrowroot") and began trading as a public company under the ticker “AILE” on April 17, 2024.
  • Appointed Matthew Barger, Ian Davis, Bruce Mehlman, Michael Moe, and Tom Olivier to its Board of Directors.
  • Finished 2023 with 508 employees globally, including 98 full-time employees and 410 contractors.

“Our differentiated AI solutions enable customers to productize their institutional knowledge and drive mission-critical business outcomes,” continued Chidambaran. “In 2024, we intend to continue to invest heavily in R&D, including our industry-specific datasets, while we also execute our sales strategy to drive value for new and existing customers.”

The Company intends to host a conference call in May 2024 to discuss first quarter 2024 financial results.

About iLearningEngines

iLearningEngines is a leading provider of cloud-based, AI driven, learning and workforce automation solutions mission-critical training for enterprises. iLearningEngines has consistently ranked as one of the fastest growing companies in North America on the Deloitte Technology Fast 500. iLearningEngines’ AI and Learning Automation platform is used by enterprises to productize their enterprise knowledge for consumption throughout the enterprise. The intense demand for scalable outcome-based training has led to deployments in some of the most regulated and detail-oriented vertical markets, including Healthcare, Education, Insurance, Retail, Oil & Gas / Energy, Manufacturing and Government. iLearningEngines was founded by Harish Chidambaran in 2010, and is headquartered in Bethesda, MD with international offices in Dubai, UAE and Trivandrum, Pune and Kochi, India. For more information about iLearningEngines, please visit:

IR & Press Contacts
Investor Contact:
Kevin Hunt, ICR Inc.

Press Contact:
Dan Brennan, ICR Inc.

(In thousands, except share amounts)

  Year Ended December 31, Amount Change % Change
 2023   2022   2021   2023 vs 2022  2022 vs 2021  2023 vs 2022 2022 vs 2021
Revenue $420,582   $309,170   $217,867   $111,412   $91,303   36.0% 41.9%
Cost of revenue  132,154    93,890    64,834    38,264    29,056   40.8% 44.8%
Gross profit  288,428    215,280    153,033    73,148    62,247   34.0% 40.7%
Operating expenses:                          
Selling, general, and administrative expenses  140,897    105,966    74,434    34,931    31,532   33.0% 42.4%
Research and development expenses  128,544    97,436    70,913    31,108    26,523   31.9% 37.4%
Total operating expenses  269,441    203,402    145,347    66,039    58,055   32.5% 39.9%
Operating income  18,987    11,878    7,686    7,109    4,192   59.9% 54.5%
Other (expense) income:                          
Interest expense  (6,274)   (6,614)   (5,047)   340    (1,567)  5.1% 31.0%
Change in fair value of warrant liability  (771)   248    (83)   (1,019)   331   NM  NM 
Change in fair value of convertible notes  (14,147)   -    -    (14,147)   -   NM  NM 
Other expense  (45)   (21)   (3)   (24)   (18)  NM  NM 
Total other expense, net  (21,237)   (6,387)   (5,133)   (14,850)   (1,254)  NM  24.4%
Net income before income tax (expense) benefit  (2,250)   5,491    2,553    (7,741)   2,938   NM  NM 
Income tax (expense) benefit  (2,157)   5,975    (32)   (8,132)   6,007   NM  NM 
Net (loss) income $(4,407)  $11,466   $2,521   $(15,873)  $8,945   NM  NM 

(In thousands, except share amounts)

 As of December 31,
Current assets:     
Cash$4,763  $856 
Restricted cash 2,000   - 
Accounts receivable, net of provision for credit loss of $336 and $0,   respectively 73,498   34,698 
Contract asset 509   9,408 
Prepaid expenses 62   88 
Total current assets 80,832   45,050 
Receivable from Technology Partner 13,602   10,217 
Receivable from related party 465   595 
Other assets 729   885 
Deferred tax assets, net 5,703   6,798 
Deferred transaction costs 3,990   - 
Total assets$105,321  $63,545 
Liabilities and shareholders’ deficit     
Current liabilities:     
Trade accounts payable$3,753  $787 
Accrued expenses 2,982   1,284 
Current portion of long-term debt, net 10,517   8,138 
Contract liability 2,765   2,106 
Payroll taxes payable 3,037   2,789 
Other current liabilities 116   237 
Total current liabilities 23,170   15,341 
Convertible notes 31,547   - 
Warrant liability 11,870   7,645 
Long-term debt, net 10,679   9,713 
Subordinated payable to Technology Partner 49,163   47,495 
Other non-current liabilities 74   126 
Total liabilities 126,503   80,320 
Shareholders’ deficit:     
Common Shares $0.0001 par value: 200,000,000 shares authorized: 95,782,605 shares issued and outstanding at December 31, 2023 and December 31, 2022 10   10 
Additional paid-in capital 36,384   36,384 
Accumulated deficit (57,576)  (53,169)
Total shareholders’ deficit (21,182)  (16,775)
Total liabilities and shareholders’ deficit$105,321  $63,545 

(In thousands)

  Years ended December 31,
2023 2022 2021
Cash flows used in operating activities:            
Net (loss) income $(4,407)  $11,466   $2,521  
Adjustments to reconcile net income to net cash flows used in operating activities:            
Depreciation and amortization  128    77      
Share based compensation expense          39  
Amortization of debt discount and debt issuance costs  2,103    3,248    2,186  
Provision for deferred taxes  1,095    (6,798)     
Accretion of interest on subordinated payable to Technology Partner  1,668    1,667    1,668  
Change in fair value of warrant liability  771    (248)   83  
Change in fair value of convertible debts  14,147          
Provision for credit losses  336          
Changes in operating assets and liabilities:            
Accounts receivable  (39,136)   (18,740)   (5,395) 
Receivable from related party  130    20    (350) 
Contract asset  8,899    7,645    2,115  
Advance to customer      362    (362) 
Prepaid expenses and other current assets  26    (31)   (56) 
Receivable from Technology Partner  (3,385)   (9,490)   (727) 
Trade accounts payable  1,906    163    536  
Accrued expenses and other current liabilities  (47)   702    (718) 
Contract liability  659    613    613  
Subordinated payable to Technology Partner          (10,503) 
Payroll taxes payable  248    401    116  
Deferred transaction costs  (1,307)         
Net cash flows used in operating activities  (16,166)   (8,943)   (8,234) 
Cash flows (used in) provided by investing activities:            
Purchase of property and equipment  (24)       (18) 
Cash acquired from business acquisition      161      
Net cash flows (used in) provided by investing activities:  (24)   161    (18) 
Cash flows provided by financing activities:            
Proceeds from term loans  15,000    10,000    7,000  
Repayment of term loans  (10,303)   (4,766)   (272) 
Proceeds from convertible notes  17,400          
Other financing activities      (3)   1  
Net cash flows provided by financing activities:  22,097    5,231    6,729  
Net change in cash  5,907    (3,551)   (1,523) 
Cash and restricted cash, beginning of year  856    4,407    5,930  
Cash and restricted cash, end of year $6,763   $856   $4,407  
Supplemental disclosure of cash flows information:            
Cash paid during the year for interest $2,510   $3,557   $922  
Supplemental disclosure of non-cash investing and financing information:            
Issuance of warrants to purchase common shares $3,455   $1,027   $3,193  
Issuance of equity for acquisition of In2vate, LLC $   $883   $  
Accrued transaction costs $2,683   $   $  
Capital contribution from cancellation of convertible notes $   $   $574  
Reconciliation of cash and restricted cash            
Cash $4,763   $856   $4,407  
Restricted cash $2,000   $   $  
Total cash and restricted cash at end of year $6,763   $856   $4,407  

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.

  1. 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.
  2. 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.
  3. 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

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 potential benefits of the Business Combination, the Company’s future growth prospects, the Company’s plans to invest heavily in R&D, including industry-specific datasets, 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.

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 Adjusted EBITDA to net (loss) income, the most directly comparable financial measure stated in accordance with GAAP, for the periods presented:

  Year Ended December 31,
   2023   2022   2021 
  (Dollars in thousands)
Net (loss) income $(4,407) $11,466  $2,521 
Interest expense  6,274   6,614   5,047 
Income tax expense (benefit)  2,157   (5,975)  32 
Depreciation and amortization  128   77   - 
EBITDA  4,152   12,182   7,600 
Other expense  45   21   3 
Share-based compensation expense  -   -   39 
Transaction costs3  4,280   709   159 
Change in fair value of warrant liability  771   (248)  83 
Change in fair value of convertible notes  14,147   -   - 
Adjusted EBITDA $23,395  $12,664  $7,884 
Adjusted EBITDA Margin  5.6%  4.1%  3.6%


3 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.

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