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Share Name | Share Symbol | Market | Type |
---|---|---|---|
C3 AI Inc | NYSE:AI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.44 | -1.81% | 23.87 | 24.65 | 23.68 | 24.51 | 3,730,624 | 01:00:00 |
Revenue Tops Guidance. Growth Accelerates.
Revenue Target Raised
C3.ai, Inc. (“C3 AI,” “C3,” or the “Company”) (NYSE: AI), the Enterprise AI application software company, today announced financial results for its fiscal third quarter ended January 31, 2024.
“We had a great quarter. Total revenue of $78.4 million grew 18% year-over-year, exceeding our guidance range. Customer engagement grew 80% year-over-year,” said C3 AI CEO and Chairman Thomas M. Siebel. “Our significant first mover advantage in Enterprise AI is generating tailwinds as market interest in adopting AI accelerates.”
Fiscal Third Quarter 2024 Financial Highlights
Business Highlights
C3 AI is leveraging its first-to-market advantage in Enterprise AI and powerful market demand trends to drive strong business results.
Business Diversification
The Company continues to diversify across industries. In Q3, our bookings distribution by industry was:
State and Local Government
29%
Federal, Defense and Aerospace
25%
Manufacturing
16%
Agriculture
11%
Chemicals
8%
Professional Services
7%
Energy and Utilities
2%
Food Processing and Consumer Packaged Goods
1%
Oil and Gas
1%
Customer Success
C3 AI remains the leader in AI-powered predictive maintenance solutions, continuing to deliver significant economic value across industries, with heavy adoption in the industrial sector.
C3 Generative AI continues to gain traction with organizations that rely on technology solutions to produce accurate information and process highly sensitive data.
State and local government agencies continue to realize benefits with C3 AI such as improved transparency, productivity, and service levels made possible by the C3 AI Platform.
Federal Momentum
C3 Generative AI
C3 Transform 2024
C3 AI will be holding our fifth annual international user group conference, C3 Transform, in Boca Raton from March 5–7, 2024. Over 500 customers and partners are registered to attend, including leaders across most every sector. By bringing together C3 AI experts and early adopters who can speak to the value of Enterprise AI, C3 Transform gives attendees the chance to discover exactly how they can use Enterprise AI and Generative AI securely and effectively. The C3 Transform agenda is available as part of our FY24-Q3 Investor Supplemental.
[1] Refer to FY23-Q4 Investor Supplemental for more details on Customer Engagement methodology.
Financial Outlook:
The Company’s guidance includes GAAP and non-GAAP financial measures.
The following table summarizes C3 AI’s guidance for the fourth quarter of fiscal 2024 and full-year fiscal 2024:
(in millions)
Fourth Quarter Fiscal 2024 Guidance
Full Year Fiscal 2024 Guidance
Total revenue
$82.0 - $86.0
$306.0 - $310.0
Non-GAAP loss from operations
$(43.5) - $(51.5)
$(115.0) - $(123.0)
A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. Stock-based compensation expense-related charges, including employer payroll tax-related items on employee stock transactions, are impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP results included in this press release. Our fiscal year ends April 30, and numbers are rounded for presentation purposes.
Conference Call Details
What:
C3 AI Third Quarter Fiscal 2024 Financial Results Conference Call
When:
Wednesday, February 28, 2024
Time:
2:00 p.m. PT / 5:00 p.m. ET
Participant Registration:
https://register.vevent.com/register/BI043fc55bffbb4cfa8dff21f890170f73 (live call)
Webcast:
https://edge.media-server.com/mmc/p/4qy3odyu/ (live and replay)
Investor Presentation Details
An investor presentation providing additional information and analysis can be found at our investor relations page at ir.c3.ai.
Statement Regarding Use of Non-GAAP Financial Measures
The Company reports the following non-GAAP financial measures, which have not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
We use these non-GAAP financial measures internally for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP to non-GAAP financial measures.
Use of Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical facts, including our market leadership position, anticipated benefits from our partnerships and investments, financial outlook, our sales and customer opportunity pipeline, the expected benefits of our offerings (including the potential benefits of our C3 Generative AI offerings), our business strategies, plans, and objectives for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including difficulties in evaluating our prospects and future results of operations given our operating history, our dependence on a limited number of existing customers that account for a substantial portion of our revenue, our ability to attract new customers and retain existing customers, market awareness and acceptance of enterprise AI solutions in general and our products in particular, and our history of operating losses. Some of these risks are described in greater detail in our filings with the Securities and Exchange Commission, including our Quarterly Reports on Form 10-Q for the fiscal quarters ended July 31, 2023, October 31, 2023 and, when available, January 31, 2024, although new and unanticipated risks may arise. The future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Except to the extent required by law, we do not undertake to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations.
About C3.ai, Inc.
C3.ai, Inc. (NYSE:AI) is the Enterprise AI application software company. C3 AI delivers a family of fully integrated products including the C3 AI Platform, an end-to-end platform for developing, deploying, and operating enterprise AI applications, C3 AI applications, a portfolio of industry-specific SaaS enterprise AI applications that enable the digital transformation of organizations globally, and C3 Generative AI, a suite of domain-specific generative AI offerings for the enterprise.
C3.AI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended January 31,
Nine Months Ended January 31,
2024
2023
2024
2023
Revenue
Subscription(1)
$
70,400
$
57,043
$
198,201
$
173,577
Professional services(2)
8,001
9,626
25,791
20,808
Total revenue
78,401
66,669
223,992
194,385
Cost of revenue
Subscription
32,273
21,294
93,644
54,551
Professional services
841
977
3,399
6,878
Total cost of revenue
33,114
22,271
97,043
61,429
Gross profit
45,287
44,398
126,949
132,956
Operating expenses
Sales and marketing(3)
57,140
43,497
150,920
131,420
Research and development
49,480
55,051
150,747
160,979
General and administrative
21,213
17,888
61,317
57,770
Total operating expenses
127,833
116,436
362,984
350,169
Loss from operations
(82,546
)
(72,038
)
(236,035
)
(217,213
)
Interest income
9,995
6,987
30,597
13,749
Other income (expense), net
409
2,032
(468
)
66
Loss before provision for income taxes
(72,142
)
(63,019
)
(205,906
)
(203,398
)
Provision for income taxes
489
143
863
485
Net loss
$
(72,631
)
$
(63,162
)
$
(206,769
)
$
(203,883
)
Net loss per share attributable to Class A and Class B common stockholders, basic and diluted
$
(0.60
)
$
(0.57
)
$
(1.75
)
$
(1.87
)
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted
120,486
110,735
118,259
108,869
(1)
Including related party revenue of $10,581 and $55,884 for the nine months ended January 31, 2024 and 2023, respectively, and $20,316 for the three months ended January 31, 2023.
(2)
Including related party revenue of $5,804 and $8,749 for the nine months ended January 31, 2024 and 2023, respectively, and $8,599 for the three months ended January 31, 2023.
(3)
Including related party sales and marketing expense of $810 and $10,546 for the nine months ended January 31, 2024 and 2023, respectively, and $3,515 for the three months ended January 31, 2023.
C3.AI, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)
(Unaudited)
January 31, 2024
April 30, 2023
Assets
Current assets
Cash and cash equivalents
$
114,561
$
284,829
Marketable securities
608,761
446,155
Accounts receivable, net of allowance of $359 and $359 as of January 31, 2024 and April 30, 2023, respectively(1)
173,478
134,586
Prepaid expenses and other current assets(2)
29,227
23,309
Total current assets
926,027
888,879
Property and equipment, net
91,003
84,578
Goodwill
625
625
Long-term investments
—
81,418
Other assets, non-current(3)
46,334
47,528
Total assets
$
1,063,989
$
1,103,028
Liabilities and stockholders’ equity
Current liabilities
Accounts payable(4)
$
19,845
$
24,610
Accrued compensation and employee benefits
37,822
46,513
Deferred revenue, current(5)
39,121
47,846
Accrued and other current liabilities(6)
12,391
17,070
Total current liabilities
109,179
136,039
Deferred revenue, non-current
2,183
4
Other long-term liabilities
54,632
37,320
Total liabilities
165,994
173,363
Commitments and contingencies
Stockholders’ equity
Class A common stock
118
110
Class B common stock
3
3
Additional paid-in capital
1,914,450
1,740,174
Accumulated other comprehensive income (loss)
430
(385
)
Accumulated deficit
(1,017,006
)
(810,237
)
Total stockholders’ equity
897,995
929,665
Total liabilities and stockholders’ equity
$
1,063,989
$
1,103,028
(1)
Including amounts from a related party of $74,620 as of April 30, 2023.
(2)
Including amounts from a related party of $4,983 as of April 30, 2023.
(3)
Including amounts from a related party of $11,279 as of April 30, 2023.
(4)
Including amounts due to a related party of $2,200 as of April 30, 2023.
(5)
Including amounts from a related party of $249 as of April 30, 2023.
(6)
Including amounts due to a related party of $2,448 as of April 30, 2023.
C3.AI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended January 31,
2024
2023
Cash flows from operating activities:
Net loss
$
(206,769
)
$
(203,883
)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization
9,469
3,257
Non-cash operating lease cost
656
5,820
Stock-based compensation expense
159,032
168,474
Accretion of discounts on marketable securities
(13,238
)
(1,990
)
Other
110
211
Changes in operating assets and liabilities
Accounts receivable(1)
(38,892
)
(63,609
)
Prepaid expenses, other current assets and other assets(2)
(3,379
)
(7,745
)
Accounts payable(3)
(4,945
)
(26,250
)
Accrued compensation and employee benefits
171
1,069
Operating lease liabilities
14,330
(3,296
)
Other liabilities(4)
6,296
(4,606
)
Deferred revenue(5)
(6,546
)
(10,197
)
Net cash used in operating activities
(83,705
)
(142,745
)
Cash flows from investing activities:
Purchases of property and equipment
(22,718
)
(59,767
)
Capitalized software development costs
(2,750
)
(1,000
)
Purchases of marketable securities
(657,431
)
(497,288
)
Maturities and sales of marketable securities
590,299
674,440
Net cash (used in) provided by investing activities
(92,600
)
116,385
Cash flows from financing activities:
Proceeds from issuance of Class A common stock under employee stock purchase plan
5,055
—
Proceeds from exercise of Class A common stock options
11,379
2,364
Taxes paid related to net share settlement of equity awards
(10,397
)
(4,815
)
Net cash provided by (used in) financing activities
6,037
(2,451
)
Net decrease in cash, cash equivalents and restricted cash
(170,268
)
(28,811
)
Cash, cash equivalents and restricted cash at beginning of period
297,395
352,519
Cash, cash equivalents and restricted cash at end of period
$
127,127
$
323,708
Cash and cash equivalents
$
114,561
$
311,142
Restricted cash included in other assets
12,566
12,566
Total cash, cash equivalents and restricted cash
$
127,127
$
323,708
Supplemental disclosure of cash flow information—cash paid for income taxes
$
760
$
219
Supplemental disclosures of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued liabilities
$
2,475
$
12,618
Right-of-use assets obtained in exchange for lease obligations (including remeasurement of right-of-use assets and lease liabilities due to changes in the timing of receipt of lease incentives)
$
1,858
$
2,033
Unpaid liabilities related to intangible purchases
$
—
$
1,500
Vesting of early exercised stock options
$
406
$
842
(1)
Including changes in related party balances of $12,444 and $46,295 for the nine months ended January 31, 2024 and 2023, respectively.
(2)
Including changes in related party balances of $(810) and $(3,525) for the nine months ended January 31, 2024 and 2023, respectively.
(3)
Including changes in related party balances of $248 and $(18,549) for the nine months ended January 31, 2024 and 2023, respectively.
(4)
Including changes in related party balances of $(2,448) and $(2,510) for the nine months ended January 31, 2024 and 2023, respectively.
(5)
Including changes in related party balances of $(46) and $186 for the nine months ended January 31, 2024 and 2023, respectively.
C3.AI, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except percentages)
(Unaudited)
Three Months Ended January 31,
Nine Months Ended January 31,
2024
2023
2024
2023
Reconciliation of GAAP gross profit to non-GAAP gross profit:
Gross profit on a GAAP basis
$
45,287
$
44,398
$
126,949
$
132,956
Stock-based compensation expense (1)
8,983
6,357
26,492
17,665
Employer payroll tax expense related to employee stock-based compensation (2)
405
201
1,243
773
Gross profit on a non-GAAP basis
$
54,675
$
50,956
$
154,684
$
151,394
Gross margin on a GAAP basis
58
%
67
%
57
%
68
%
Gross margin on a non-GAAP basis
70
%
76
%
69
%
78
%
Reconciliation of GAAP loss from operations to non-GAAP loss from operations:
Loss from operations on a GAAP basis
$
(82,546
)
$
(72,038
)
$
(236,035
)
$
(217,213
)
Stock-based compensation expense (1)
54,983
55,831
159,032
168,474
Employer payroll tax expense related to employee stock-based compensation (2)
1,773
1,175
5,547
4,208
Loss from operations on a non-GAAP basis
$
(25,790
)
$
(15,032
)
$
(71,456
)
$
(44,531
)
Reconciliation of GAAP net loss per share to non-GAAP net loss per share:
Net loss on a GAAP basis
$
(72,631
)
$
(63,162
)
$
(206,769
)
$
(203,883
)
Stock-based compensation expense (1)
54,983
55,831
159,032
168,474
Employer payroll tax expense related to employee stock-based compensation (2)
1,773
1,175
5,547
4,208
Net loss on a non-GAAP basis
$
(15,875
)
$
(6,156
)
$
(42,190
)
$
(31,201
)
GAAP net loss per share attributable to Class A and Class B common shareholders, basic and diluted
$
(0.60
)
$
(0.57
)
$
(1.75
)
$
(1.87
)
Non-GAAP net loss per share attributable to Class A and Class B common shareholders, basic and diluted
$
(0.13
)
$
(0.06
)
$
(0.36
)
$
(0.29
)
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted
120,486
110,735
118,259
108,869
(1)
Stock-based compensation expense for gross profits and gross margin includes costs of subscription and cost of professional services as follows. Stock-based compensation expense for loss from operations includes total stock-based compensation expense as follows:
Three Months Ended January 31,
Nine Months Ended January 31,
2024
2023
2024
2023
Cost of subscription
$
8,674
$
5,996
$
25,244
$
15,754
Cost of professional services
309
361
1,248
1,911
Sales and marketing
17,528
18,316
52,533
54,175
Research and development
18,757
23,646
52,475
72,768
General and administrative
9,715
7,512
27,532
23,866
Total stock-based compensation expense
$
54,983
$
55,831
$
159,032
$
168,474
(2)
Employer payroll tax expense related to employee stock-based compensation for gross profits and gross margin includes costs of subscription and cost of professional services as follows. Employer payroll tax expense related to employee stock-based compensation for loss from operations includes total employer payroll tax expense related to employee stock-based compensation as follows:
Three Months Ended January 31,
Nine Months Ended January 31,
2024
2023
2024
2023
Cost of subscription
$
392
$
190
$
1,183
$
646
Cost of professional services
13
11
60
127
Sales and marketing
496
277
1,964
1,163
Research and development
738
618
1,970
1,947
General and administrative
134
79
370
325
Total employer payroll tax expense
$
1,773
$
1,175
$
5,547
$
4,208
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228457783/en/
Investor Contact ir@c3.ai
C3 AI Public Relations Edelman Lisa Kennedy (415) 914-8336 pr@c3.ai
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