The caret signifies a power operation. The curly bracketed expression, `{1,2,3}`

, is an array containing the values 1, 2, and 3.

As noted by @JasonClement, this formula only returns a value when entered as an array formula with `Ctrl`+`Shift`+`Enter`. As an array formula, the result is a 4-by-3 matrix containing the values below.

```
A1^1 A1^2 A1^3
A2^1 A2^2 A2^3
A3^1 A3^2 A3^3
A4^1 A4^2 A4^3
```

When entered in a single cell, however, only the top-left value of the matrix is returned.

The secret to this formula is that it must be entered as a single formula *into a range the same size as the matrix*. To do this, select an empty 4-by-3 range, e.g. `D1:F4`

. Without changing the selection, click in the formula bar and type the formula. Then press `Ctrl`+`Shift`+`Enter`. You'll see the full matrix of results printed in the range you selected.