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Zapata Computing Holdings Inc. (ZPTA)
:ZPTA
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Zapata Computing Holdings
(OTC:ZPTA)
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Rating:39Underperform
Price Target:―
Zapata Computing Holdings faces substantial financial and operational challenges, highlighted by negative profitability, increased leverage, and significant cash flow issues. The upcoming Nasdaq delisting further underscores the company's precarious situation. While there are positive signs in revenue growth and partnerships, these are overshadowed by severe financial risks and operational uncertainties, leading to a low overall stock score.
Zapata Computing Holdings (ZPTA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.10M
Dividend YieldN/A
Average Volume (3M)147.28K
Price to Earnings (P/E)―
Beta (1Y)-248.67
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees50
SectorFinancial
Sector Strength70
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)N/A
Shares Outstanding52,527,676
10 Day Avg. Volume173,551
30 Day Avg. Volume147,277
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap4.02
Enterprise Value/Revenue5.12
Enterprise Value/Gross Profit18.57
Enterprise Value/Ebitda-0.42
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Zapata Computing Holdings Business Overview & Revenue Model
Company DescriptionZapata Computing, Inc. develops and operates quantum software that composes workflows in the YAML-compatible Zapata Quantum Workflow Language, arranges component tasks and algorithms, and tunes parameters across experiments and quantum devices. The company offers Orquestra, a software that is used to compose quantum workflows, conduct workflows across quantum and classical hardware, and record results that are packaged in a database. It serves finance, healthcare and pharmaceuticals, transportation and logistics, materials, energy and utilities, aerospace and automotive, chemistry, digital content, blockchain, and defense industries. The company was incorporated in 2017 and is based in Boston, Massachusetts with additional offices in Brentwood, Tennessee and Toronto, Canada.
How the Company Makes MoneyZapata Computing Holdings generates revenue primarily through the licensing of its quantum software platform, Orquestra, and associated services. The company offers subscription-based access to its platform, which provides customers with the ability to develop and run quantum algorithms and applications. Additionally, Zapata provides consulting services, training, and support to enterprises looking to integrate quantum computing into their operations. Key revenue streams include software licensing fees, professional service charges, and strategic partnerships with technology companies and research institutions that contribute to the advancement and commercialization of quantum computing solutions.
Zapata Computing Holdings Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q2-2024)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Neutral
The earnings call reflects strong momentum in revenue growth, strategic partnerships, and a robust pipeline of opportunities, particularly in the defense and government sectors. However, increased operating costs and a significant net loss are notable challenges.Q2-2024 Updates
Positive Updates
Revenue and Gross Margin Growth
Q2 2024 revenue was $2 million, a 40% increase from $1.43 million in Q2 2023. Gross margin improved significantly to 36% from 19.7% in Q2 2023.
Strong Pipeline and Strategic Partnerships
Identified more than $30 million in qualified sales opportunities. Expanded strategic partnerships, including with KPMG, Andretti Global, and D-Wave.
Defense and Government Sector Expansion
Continued success with DARPA and a new Cooperative Research and Development Agreement with the U.S. Special Operations Command.
Scientific and Commercial Solutions Growth
Scientific Solutions business generates revenue and IP, while Commercial Solutions group leverages IP for AI applications in various industries.
Negative Updates
Increased Operating Costs
Operating costs increased to $8.09 million in Q2 2024, up from $4.42 million in Q2 2023, driven by higher general and administrative expenses.
GAAP Net Loss
GAAP net loss was $15.58 million in Q2 2024, partly due to $8.23 million in noncash expenses related to a derivative liability.
Cash Position and Financing Activities
Cash and cash equivalents were $7.16 million as of June 30, 2024. Raised $6.06 million through financing activities, including an equity line of credit.
Company Guidance
In the recent earnings call for the second quarter of 2024, Zapata AI provided a comprehensive update on its financial performance and strategic initiatives. The company reported a significant increase in revenue to $2 million, up from $1.43 million in the same quarter last year and $1.22 million in Q1 2024. Gross margins also improved markedly to 36%, compared to 19.7% in the year-ago quarter and 13.6% in Q1 of 2024. This improvement was attributed to increased software license deliveries and the progression of customers along their AI journey. The company's operating costs rose to $8.09 million, driven by higher general and administrative expenses, including one-time fees related to its NASDAQ listing. Zapata AI's pipeline of prospective customer engagements now exceeds $30 million, spread across various verticals such as financial services, insurance, telecom, and defense. The company is optimistic about converting these opportunities into commercial agreements, emphasizing its unique approach to AI with small ensemble models and a focus on industrial applications.Zapata Computing Holdings Financial Statement Overview
Summary
Zapata Computing Holdings is experiencing financial stress with negative profitability margins, negative equity, and ongoing cash flow challenges. Despite modest revenue growth, the company's high operational costs and leveraged balance sheet pose risks to financial stability. Improvements in free cash flow growth provide a slight positive outlook, but significant improvements in profitability and balance sheet strength are required.Income Statement
Zapata Computing Holdings shows a modest revenue growth rate of 10.01% from 2022 to 2023. However, the company is struggling with profitability, as evidenced by a negative gross profit margin of -19.38% in 2023 and deteriorating net profit margins, reaching -523.12% in 2023. Both EBIT and EBITDA margins are negative, indicating operational challenges and high costs relative to revenue.45
Neutral
Balance Sheet
The balance sheet of Zapata Computing Holdings reveals significant financial leverage issues, with a negative stockholders' equity of -$10.23 million in 2023, leading to a negative equity ratio. The debt-to-equity ratio cannot be assessed due to negative equity, indicating potential solvency risks. The return on equity is also negative, reflecting the company's inability to generate returns for its shareholders.30
Negative
Cash Flow
Cash flow analysis indicates a challenging liquidity position with a negative free cash flow of -$14.76 million in 2023. Free cash flow improved compared to previous years, with a growth rate of 30.50%, yet it remains negative. The operating cash flow to net income ratio is unfavorable, showing ineffective cash generation from operations.50
Neutral
| Breakdown | TTM | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|
Income Statement | ||||
| Total Revenue | 3.22M | 5.68M | 5.17M | 832.00K |
| Gross Profit | 887.00K | 1.10M | 1.63M | -174.00K |
| EBITDA | -39.56M | -792.00K | -23.21M | -16.82M |
| Net Income | -40.56M | -29.73M | -23.45M | -17.01M |
Balance Sheet | ||||
| Total Assets | 11.19M | 8.07M | 13.45M | 33.02M |
| Cash, Cash Equivalents and Short-Term Investments | 7.30M | 3.47M | 10.07M | 31.03M |
| Total Debt | 4.46M | 9.15M | 605.00K | 240.55K |
| Total Liabilities | 38.14M | 18.29M | 70.53M | 67.86M |
| Stockholders Equity | -26.96M | -10.23M | -57.08M | -34.84M |
Cash Flow | ||||
| Free Cash Flow | -9.13M | -14.76M | -21.24M | -16.42M |
| Operating Cash Flow | -9.11M | -14.76M | -20.99M | -16.30M |
| Investing Cash Flow | 161.02M | 161.04M | -253.00K | -121.00K |
| Financing Cash Flow | -148.29M | -158.45M | 280.00K | 715.00K |
Zapata Computing Holdings Technical Analysis
Positive
0.08
Price Trends
0.02
Positive
0.04
Positive
0.37
Negative
Market Momentum
0.01
Negative
70.79
Negative
95.78
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZPTA, the sentiment is Positive. The current price of 0.08 is above the 20-day moving average (MA) of 0.02, above the 50-day MA of 0.02, and below the 200-day MA of 0.37, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 70.79 is Negative, neither overbought nor oversold. The STOCH value of 95.78 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZPTA.
Zapata Computing Holdings Risk Analysis
Zapata Computing Holdings disclosed 99 risk factors in its most recent earnings report. Zapata Computing Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Zapata Computing Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | 4.46T | 52.26 | 86.48% | 0.02% | 71.55% | 64.54% | |
79 Outperform | 3.06T | 26.90 | 31.85% | 0.33% | 13.19% | 34.51% | |
53 Neutral | 9.20B | -41.36 | -29.79% | ― | -37.20% | -58.82% | |
52 Neutral | 21.42B | -37.25 | -39.91% | ― | 67.83% | -154.69% | |
51 Neutral | 3.23B | -31.47 | -63.89% | ― | -21.56% | -103.08% | |
39 Underperform | $4.10M | ― | 290.77% | ― | ― | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
ZPTA
Zapata Computing Holdings
0.07
-0.29
-80.56%
CCCS
CCC Intelligent Solutions Holdings
9.35
-1.58
-14.46%
TUYA
Tuya
2.45
0.99
67.81%
ARQQ
Arqit Quantum
40.59
34.34
549.44%
ZENV
Zenvia
1.33
-0.17
-11.33%
HPAI
Helport AI Limited
3.83
-1.47
-27.74%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.