C3.ai, Inc. (AI) on Q3 2025 Results - Earnings Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the C3.ai Third Quarter Fiscal Year 2025. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Amit Berry. Please go ahead. Amit Berry: Good afternoon, and welcome to C3.ai's earnings call for the third quarter of fiscal year 2025, which ended on January 31, 2025. My name is Amit Berry, and I lead Investor Relations at C3.ai. With me on the call today are Tom Siebel, Chairman and Chief Executive Officer; and Hitesh Lath, Chief Financial Officer. After the market closed today, we issued a press release with details regarding our third quarter results as well as our supplemental to our results both of which can be accessed through the Investor Relations section of our website at ir.c3.ai. This call is being webcast, and a replay will be available on our IR website following the conclusion of the call. During today's call, we will make statements related to our business that may be considered forward-looking under federal securities laws. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors, please refer to our filings with the SEC. All figures will be discussed on a non-GAAP basis unless otherwise noted. Also, during today's call, as we refer to certain non-GAAP financial measures, a reconciliation of GAAP to non-GAAP measures is included in our press release. Finally, at times in our prepared remarks and in response to your questions, we may discuss metrics that are incremental to our usual presentation to give greater insight into the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future. And with that, let me turn the call over to Tom. Tom Siebel: Thank you, Matt, and thank you, everyone, for joining us this afternoon to talk about our business results for the third quarter. Let me provide some kind of introductory comments. Clearly, the market for what's going on in enterprise AI is huge and it is rapidly growing. This has been - this interest has been clearly accelerated okay, by Generative AI and Agentic AI, which is becoming a large and rapidly growing business for us. Now as a matter of background, some of you will recall that we began work with Generative AI in 2020 associated with some classified work that we're doing for the United States Missile Defense Agency that I believe continues today. And so when Generative AI became - most of the world became generally aware of it, I believe, in November of 2022, we were well prepared to take advantage of this technology as we do. Now many organizations, government agencies, corporations are really kind of wrestling with the problematic issues associated with these language models and Agentic AI with which everybody on the call is familiar problems like hallucination, problems like unimodal or bimodal data sources, problems like data exfiltration, problems that are now being well documented, where we're opening up new attacks, cyberattack vectors, IP liability exposure, et cetera. Now by combining the work that we did, you'll recall that we did really billions of dollars of software engineering associated with the C3 Agentic AI platform, okay, which - where we address these issues of identity, security and factor authentication, omni modal data fusion, what have you. So by using these language models and Agentic AI in the context of the C3 platform orchestration layer, we've really solved all those problems. And so as a result, C3 Generative AI is installed today in some of the most secure installations on the planet earth. These would include United States Intelligence agencies, Department of Defense Missile Defense Agency, Coke Industries, Nucor and many others where we've solved all of these problems. And so it's - we're able to address some very interesting issues. And the range of issues that we can address is just becoming wider and wider every day, whether it's - whether we're dealing with hypersonics and space, whether we're dealing thinking about the coordination of swarms, whether we're dealing about using Generative AI to help people operate large plants or whether we're using - whether it is generative self-assisted delivery of government services, I think health impairment services, Medicare, Medicaid, what have you, it's really very interesting. And so when proposing to do something today for you that is historic, and it is - and I believe this has never been done before. So what we have done is we have taken C3 Generative AI and we loaded - we built what is really a small language model, and the small language model consists of the business results and call strip from our second quarter and the business results from our third quarter and we're going to - I'm going to let C3 Generative AI handle much of the substance of this call and brief you on the quarter, after which Hitesh will provide details on the kind of more specific financial results of the quarter. And then Hitesh and I will be available to answer any other questions you have. So ladies and gentlemen, please allow me to introduce to you for, I think, the first conference call ever done this way. Please meet C3 Agentic AI. Here is the analysis summarizing the major themes across Q2 and Q3. In Q2, C3.ai demonstrated strong financial performance and strategic growth, setting the stage for further advancements in Q3. Our revenue growth accelerated to 29% year-over-year in Q2, reaching $94.3 million, with subscription revenue increasing by 22% to $81.2 million. This growth was supported by a robust partner ecosystem, including Microsoft, AWS, Google and others, which played a critical role in driving our market leadership. The most significant development in Q2 was the expansion of our strategic alliance with Microsoft Azure, which we believe will be an inflection point in the enterprise AI industry. This partnership not only expanded our sales reach but also shortened our sales cycles, positioning us for accelerating growth. Building on the momentum from Q2, Q3 total revenue reached $98.8 million, a 26% increase year-over-year. Subscription revenue grew by 22% to $85.7 million, and our non-GAAP gross profit was $68.2 million, representing a 69% gross margin. Our non-GAAP operating loss improved to $23.1 million, better than our guidance of $38.6 million to $46.6 million. These results underscore our continued financial strength and operational efficiency. A key theme across both quarters has been the expansion and deepening of our strategic alliances, particularly with Microsoft, AWS and McKinsey QuantumBlack. In Q3, our partnership with Microsoft yielded significant results. Since the announcement at Microsoft Ignite, we closed 28 agreements across nine different industries, marking a 460% increase quarter-over-quarter. Our sales cycles with Microsoft shortened by nearly 20%, thanks to an effective co-sell motion. We have integrated with Microsoft's global sales infrastructure, running numerous partnership onboarding and joint enablement sessions. These efforts have led to a 244% year-over-year surge in our joint qualified sales pipeline with Microsoft as we pursue 621 target accounts recognized as eligible customer opportunities. This disciplined data-driven approach is already showing measurable outcomes, and we are excited about the enthusiasm we see in the field. Our expanded strategic alliance with AWS in Q3 deserves particular mention. Under the new agreement, C3.ai and AWS will focus on offering advanced enterprise AI solutions together, further enhancing our global reach and execution speed. And our alliance with McKinsey QuantumBlack announced in Q3 is another pivotal development. This partnership leverages McKinsey QuantumBlack's expertise in modern business transformation with our leadership in enterprise AI. McKinsey's track record in advising top enterprises and driving large-scale transformations complements our AI solutions, bridging the gap between strategic foresight and operational impact. In Q3, 71% of our agreements were delivered in collaboration with our partners, highlighting the importance of our ecosystem in driving our business forward. Customer success remains a cornerstone of our strategy. In Q3, we secured new and expanded agreements with clients such as Flex, Worley, New York Power Authority, Sanofi, Nucor Corporation, Holcim, Shell, ExxonMobil, GSK, Quest Diagnostics and Swift, among others. In the federal sector, we closed agreements with the U.S. Department of Defense, the U.S. Air Force, the U.S. Navy and the Missile Defense Agency. We also expanded our work with state and local governments closing 21 agreements across various states. Our focus on Generative AI continues to drive innovation and customer traction. In Q3, we closed 20 C3 Generative AI pilots with clients including Mars, Liberty Coca-Cola Beverages, the U.S. Department of Defense and various government agencies. Our success with C3 Generative AI demonstrates our ability to deliver safe, secure and reliable AI solutions that drive measurable business outcomes. A significant highlight of Q3 was our continued leadership in Agentic AI. We made further advancements in Agentic AI in Q3 and including high-quality agentic planning and orchestration, as well as agentic retrieval and reasoning over omni modal data. These innovations enhance the autonomy, accuracy and efficiency of AI models further strengthening our market position. Our latest work includes a foundational time series embedding model, which unifies and simplifies the development, deployment and maintenance of AI use cases involving time series data. This model has enabled new systems for deep integration between C3 Generative AI's agents and time series data, significantly speeding up scaling and adoption. The emergence of new, more efficient models like DeepSeek is another trend that bodes well for C3.ai. The lower cost of inference and proliferation of foundation models will accelerate AI adoption across enterprises. As the cost of inference decreases, the focus shifts from building advanced models to translating AI into applications that deliver tangible business outcomes. C3.ai is uniquely positioned to capitalize on this shift with over 130 AI applications that are enterprise-ready, specific customer wins in Q3 further illustrate our growth potential. GSK for instance is leveraging our AI solutions to better predict demand and respond to market fluctuations, while SmithRx is using C3 Generative AI to streamline member support and improve customer service. Looking ahead, the foundation we have built over Q2 and Q3 position C3.ai for sustained growth. Our strategic alliances with Microsoft, AWS and McKinsey QuantumBlack have dramatically increased our global sales reach and execution speed. As we enter Q4, all our solutions are now immediately orderable on the Microsoft, AWS and Google Cloud portals, and we can contract rapidly using their contract vehicles. This significantly shortens our sales cycles. Our partner ecosystem, combined with our leadership in Agentic AI and Generative AI sets the stage for continued acceleration in the coming years. As we enter Q4, our focus will be on ensuring the company is properly organized to expand both direct sales and services and provide support capacity to our dramatically enlarged distribution ecosystem. Fiscal years 2026 and 2027 will be about realizing continually expanded growth and market share. The market has never been larger. The opportunity has never been greater and our product family has never been stronger. The company has never been better positioned to capitalize on all of this. In conclusion, we made amazing progress last quarter, laying the groundwork to substantially increase our global distribution capacity for all our enterprise AI applications. We now have a legion of experienced enterprise cloud sales and service professionals at Microsoft, AWS, McKinsey and Google Cloud distributing and servicing our solutions globally. This inflection point for C3.ai is a growth accelerator. I am confident we have the people, the leadership and the execution plans to achieve these goals in the coming quarters and years. Thank you, C3 Agentic AI and now let me turn this over to my colleague, Hitesh Lath, the Chief Financial Officer at C3.ai for additional commentary on our business results. Hitesh? Hitesh Lath: Thank you, Tom. I will now provide a recap of our financial results and additional color on our business. All figures are non-GAAP unless otherwise noted. Total revenue for the quarter increased 26% year-over-year to $98.8 million. Subscription revenue increased 22% year-over-year to $85.7 million representing 87% of total revenue. Revenue from sale of software licenses that are demonstration versions of C3.ai applications was $28.6 million during the quarter. We sell these licenses to our distribution partners to enable them to demonstrate our software effectively to their customers and to large strategic customers to enable them to accelerate AI adoption across their companies. I will also note that our non-Baker Hughes revenue grew by 43% year-over-year in this quarter. Professional services revenue was $13.1 million. This represents 13% of total revenue during the third quarter of fiscal '25. Prioritized Engineering Services or TES revenue was $5.7 million. As we said in prior quarters, we expect the professional services revenue, including PES to generally stay within 10% to 20% of total revenue for fiscal '25. Our subscription and PES revenue combined was $91.4 million and accounted for 93% of total revenue, an increase of 18% compared to $77.5 million one year ago. Gross profit for the quarter was $68.2 million and gross margin was 69%. Gross margin for professional services remained high at over 85%. Operating loss for the quarter was $23.1 million, and our net loss for the quarter was $15.8 million. Our operating loss was substantially better than guidance due to continued focus on expense management. In particular, we elected to reduce our marketing spend, including advertising and to focus on expanding the sales organization and dramatically expanding our strategic partner ecosystem, impact of which will manifest over time. Our non-GAAP net loss per share was $0.12. Our net cash used in operating activities was $22 million. Free cash flow for the quarter was negative $22.4 million as compared to negative $45.1 million in the third quarter of last year. Free cash flow for the first nine months of the year also improved to negative $54.8 million as compared to negative $109.2 million in the first nine months of last year. We continue to be very well capitalized and closed the quarter with $724.3 million in cash, cash equivalents and marketable securities. At the end of third quarter, our accounts receivable balance was $180.4 million, including unbilled receivables of $89.8 million. Total allowance for bad debt remains at less than $650,000 and we do not have concerns regarding collections. The general health of our accounts receivables remain strong. During the third quarter, we signed 50 pilots. At the end of the quarter, we had cumulatively signed 310 pilots, of which 245 are still active. This means they are either in their original three to six month term or extended for some duration, or converted to a subscription or consumption contract or are currently being negotiated for conversion to subscription or consumption contract. We are excited about our expanding distribution network and go-to-market initiatives with Microsoft, AWS and McKinsey. We expect to continue to see some moderation in our gross margins, due to higher mix of pilots in the near term, which carry a greater cost of revenue, during the pilot phase of the customer life cycle. We also expect some moderation in our operating margin in the near term, due to additional investments we are making in our business, including in our sales force, partner ecosystem, customer support, and research and development. As we continue to make significant investments in the business. We expect to be free cash flow negative for fiscal '25, but remain on track to be free cash flow positive for Q4. Now I'll move on to our guidance for the next quarter. Our revenue guidance for Q4 of fiscal year '25, is $103.6 million to $113.6 million. For the full fiscal '25, we are anticipating revenue in the range of $383.9 million to $393.9 million. Our guidance for non-GAAP loss from operations for Q4, is $30 million to $40 million, and our non-GAAP loss from operations for the year, is expected to be in the range of $87 million to $97 million. Our guidance is predicated on the assumption of geopolitical stability. Were there to be a situation that the U.S. Government closed, the budget did not pass, or we see indications of global trade war, those could have unknown and adverse consequences on the business results. With that, I'd like to turn the call over to the operator, to begin the question-and-answer session. Operator? Operator: Thank you. [Operator Instructions] Now first question coming from the line of Timothy Horan with Oppenheimer. Your line is now open. Timothy Horan: Good morning. Thanks guys. Great job on the relationship here with Microsoft, Amazon, McKinsey. Can you give a little bit more color? What's going on with the total number of pitches that you're going on at this point and pipeline, and when do you think that will start converting to revenue? Thank you. Tom Siebel: It is converting to revenue. I believe that we're involved with just one of these companies with Microsoft, we're involved with over 600 engagements today where we are the preferred enterprise AI solution, and they are the preferred platform solution. So I mean understand that, I think this agreement was signed September 30. Memory serves you correct. We announced it in a made stage format at Microsoft Ignite in Chicago. I believe it was November 20. Not much happened between November 20, and the end of the year, because that would be the end of the quarter for Microsoft. So they were focused on their business. And then you get to the first of the year, you get to like the roughly, people get to after work when like 15th of January or whatever. And so, we've really been at this for a little bit over a month with Microsoft. And today, we're engaged in over 600 joint selling relationships with them in Europe, South America, North America, EMEA what have you in across a wide range of industries. So that's just Microsoft. Okay. And so, now we have AWS, we have this business with McKinsey, QuantumBlack is huge. And these relationships that we have are most unusual. These are not simple distribution arrangements. These are, co-selling arrangements, teaming arrangements. And it is, this occupied a lot of our attention. Okay. In the last four months. And we were, for whatever reason that we could talk about some other time. Okay. We were swarmed by these guys, and I think the right thing to do was to respond accordingly. The agreements are all inked. They are executed, they are announced and we are open for business. So it is, there's no way, know-how. This is not a growth accelerator for C3.ai. This is a genuine big deal. Timothy Horan: So the 600 engagements have only been since you've announced the deal with Microsoft? And maybe just some color how long does it usually take from initial engagement until you sign a contract? Tom Siebel: Well, we've already closed. We said how many have we closed so far. Last quarter, we closed, how many? Hitesh Lath: 28. We have closed 28 agreements in Microsoft already. Tom Siebel: 28 already in last quarter? So I mean, that's pretty quick. Timothy Horan: Great. And then just lastly, just a little bit more color on the remaining procurement obligations. What's going on with the trends there? Tom Siebel: I didn't hear the question. So if one of you guys could... Hitesh Lath: Can you repeat the question, please? Timothy Horan: Yes, just remaining performance obligations. Can you just talk about the trends there when - what we should kind of expect going forward? Hitesh Lath: Yes. The total ARPU at the end of the quarter, it was around $208 million. And as we've indicated in the past, RPO is not the leading indicator of our business. So you should continue to expect some decline in our RPO in the near term. Timothy Horan: Thank you. Operator: Thank you. Our next question coming from the line of Patrick Walravens with Citizens JMP. Your line is now open. Tom Siebel: Pat, we cannot hear you. Operator: Please check your mute button. Patrick Walravens: My apologies. So let me add my congratulations on the - all the partnership momentum. Tom, would you be okay talking about the note that you published on February 18. So sorry - but if you could just talk about what the health setback was, and what steps you're taking in terms of running the business, I think that would be great? Tom Siebel: Yes. I came down with something like flu-like symptoms after Christmas, which lasted some weeks and that kind of degenerated into kind of a pretty bad flu like symptoms, and the - so I was sick. And then that turned out was a precursor for an autoimmune disease, that autoimmune disease has been identified as - I'm sorry, giant cell arteritis, okay? And so when we get into February, this autoimmune disease kicks in, and attacks my optical nerve. And so my optical paths kind of fried and, so my vision is impaired. Now as it relates to operating the business, it has so - Tom has to learn some new skills, and we put the accommodations in place. I mean, you know me to be intimately familiar with the details of this business, okay? And you can imagine that we spent exacting detail with this management team or how we were reorganizing this company around this new opportunity that's here. We've done the same - we have the same meeting with all of our salespeople around from the world. I spent a lot of time personally with all of the - a lot of time personally, okay, with all of the partners that we've discussed. I put the accommodations in place for - about really the only thing I can't do is read e-mail. So the - so we put the competition in place, there is somebody here with a hot computer, who reads the e-mails to me. I comment, I respond, I approve, I don't prove what have you. I am here in the office. I am managing the business every day. In the short-term, my travel, the medical community has me on kind of - they don't want me going real far or a high altitude, and so we've made arrangements for Jim Snabe, who you most certainly know or know of, and one of our more distinguished directors. Jim, of course, was the Co-CEO of SAP, Chairman of Maersk, Chairman of Allianz, Chairman of Siemens. And so Jim assumed the role as a special assistant to the Chief Executive, okay? And he's filling in for the events that Tom can't do, let's say, I was supposed to be at VivaTech at Paris, or what have you, or maybe we need to do an executive customer review at Shell in London. And so this is how it's organized. I am fully engaged managing details of the business every day, as you know me a little bit, and you know I'm generally in touch with those details. My health is excellent, okay? So beyond all of the infirmities that I had, I just can't see. And the show that - how - is that answer acceptable? Or would you like to know more? Patrick Walravens: No, that is a very complete answer. Everyone on this call is wishing you a speedy recovery, Tom. Thank you so much for the details. Tom Siebel: Thank you, buddy. Operator: Thank you. Our next question coming from the line of Austin Dietz with UBS. Your line is now open. Austin Dietz: Yeah, Tom, best of luck on the health front. And then, yes, a question for Tom or Hitesh. Within Pro Services this quarter, the services fees outperformed by, I think, $4 million or so relative to the first half of the year. I think it was up $6.5 million, or so compared to the year ago quarter. Can you maybe just speak to what drove the services outperformance this quarter? Hitesh Lath: Yes. So this is Hitesh. Our professional services revenue, it includes prioritize engineering services revenue, as well as revenue from consulting services, paid installation services and training services. So we saw an uptick in revenue from consulting services, paid implementation services, and training services during the quarter. Austin Dietz: Okay. Got it. And then on - it was helpful color on the demonstration licenses piece this quarter. It feels like those demonstration licenses, have really been outperforming pretty considerably over the last few quarters. So I guess, like why are we seeing so much outperformance in demonstration licenses this year? Sort of what's been driving that? And how should we think about those going forward? Tom Siebel: This is Tom. Let me comment on this. I mean come guys. I mean I don't know how many salespeople we just took on, okay, at Azure and AWS. But I believe it's tens of thousands, okay? And the - and they have a very, very complex bag of technology that they need to sell whether they're selling all these fabrics or C3 buckets, or all these various tools in the widgets they sell now we're selling solutions, okay? We're selling predictive maintenance. We're selling reliability. We're selling predictive maintenance for furnaces, for polyethylene facilities. We're selling supply chain optimization for consumer packaged goods companies. And so, it is absolutely imperative, okay, that we arm these people with complete sales kits, not only sales presentation, Q&A, a generative AI for asking for answering questions. But also demonstration software so that they can go kick in the door, and do the first demo to the customer on their own, and then we can come in. So I mean we were simply overwhelmed by interest in big, important people organizations in the last three, four months. And for us not to arm them, with demonstration licenses is just not rational. And - so now the way that the way that the demonstration licenses. Do not have continuing performance - ongoing performance obligations, so that the way that they work under ASC 606 is you recognize the revenue in the period in, which they're delivering. But that was a must-do to make these people effective. And I mean they're not selling on their own, they're selling with us, okay? But this shows them, so we're there on the sales call, we're there are on the demo, we're are there on the statement of work, where they're working on making the pilot successful, but also they need to be able to operate independently of us, and this is a absolute critical success factor. And so it did result in an increase in that form of revenue. Austin Dietz: Awesome. Thanks, Tom. Thanks, Hitesh. Hitesh Lath: Thank you. Operator: Thank you. And I would now like to turn the conference call back to Mr. Seibel for any closing remarks. Tom Siebel: Ladies and gentlemen, thank you so much for your time, and continuous attention. It's difficult to describe how exciting it is here, and it is - it's - we are involved in some of the largest, the most complex and most fascinating enterprise AI deployments on earth. We - and it's - this is - I assure you, it's the professional experience of a lifetime, and I think we are on the verge of building one of the world's great companies. So thank you for your attention today, and we look forward to keeping you posted on our progress as we power forward. Thank you all. Operator: This concludes today's conference call. Thank you all for participating, and you may now disconnect.
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C3 AI's Market Activity and Insider Trading Insight

  • CEO Thomas M. Siebel sold 634 shares of C3 AI (NYSE:AI) but still holds a significant stake, indicating confidence in the company.
  • The stock has declined over 55% from its peak last year, currently priced at $19.35, showcasing market volatility.
  • Despite the downturn, there is optimism for recovery based on C3 AI's market capitalization and active trading volume.

C3 AI, listed on the NYSE under the symbol AI, is a company specializing in enterprise artificial intelligence software. It provides AI solutions to various industries, helping businesses improve efficiency and decision-making. The company faces competition from other tech giants in the AI space, but it remains a significant player due to its specialized offerings.

On April 16, 2025, Thomas M. Siebel, the CEO and a major shareholder of C3 AI, sold 634 shares of Class A Common Stock at $19.47 each. Despite this sale, Siebel still holds a substantial 4,990,226 shares, indicating his continued confidence in the company's potential. This transaction is officially documented on the SEC website.

C3 AI's stock has seen a notable decline, dropping over 55% from its peak last year. Currently, the stock is priced at $19.35, reflecting a 3.10% decrease today. The stock's price has fluctuated between $18.97 and $19.86 during the day's trading, highlighting ongoing market volatility.

Despite the downturn, there is optimism about C3 AI's potential to recover. As highlighted by George Tsilis, investors are looking for industry leaders to weather market challenges. C3 AI's market capitalization is approximately $2.5 billion, with a trading volume of 2,434,674 shares, indicating active investor interest.

Over the past year, C3 AI's stock has reached a high of $45.08 and a low of $17.03. This wide range underscores the stock's volatility and the challenges the company faces in stabilizing its market position. However, with strategic leadership and a focus on innovation, C3 AI aims to navigate these challenges effectively.

C3.ai Inc (NYSE:AI) Faces Market Challenges Amid Insider Trading and Broader Tech Sector Pressure

  • C3.ai Inc (NYSE:AI) sees a 6.3% drop in stock price as it approaches its fiscal third-quarter earnings report, amidst broader tech sector challenges.
  • Insider trading activity by Senior VP of Operations, Witteveen Merel, selling 337 shares, could influence investor sentiment.
  • The company's financial metrics show a negative P/E ratio of -12.27 and an enterprise value to operating cash flow ratio of -48.55, highlighting its current financial challenges.

C3.ai Inc (NYSE:AI) is a prominent player in the artificial intelligence sector, providing enterprise AI software solutions. The company is known for its innovative approach to AI applications across various industries. However, it faces competition from other tech giants in the AI space, which can impact its market position and stock performance.

On February 25, 2025, Witteveen Merel, Senior VP of Operations at C3.ai, sold 337 shares of Class A Common Stock at $26.41 each. This insider trading activity, reported on Form 4, leaves Merel with 5,883 shares. Insider transactions can sometimes signal confidence or concern about a company's future performance, influencing investor sentiment.

C3.ai's stock is currently experiencing a decline, with a 6.3% drop to $28.87 as it nears its fiscal third-quarter earnings report. The stock has faced challenges, losing 17.5% over the past three months and 16.1% for the year. Despite these setbacks, the stock is trading near its 126-day moving average, a historically bullish trendline that could support a rebound.

The broader tech sector, including C3.ai, is under pressure due to reports of expanded chip controls targeting China. This has contributed to a 3.7% drop in C3.ai's shares. The Nasdaq Composite also fell nearly 1.1%, reflecting the impact of geopolitical tensions on tech stocks. These developments could affect C3.ai's market performance in the short term.

C3.ai's financial metrics reveal challenges, with a negative P/E ratio of -12.27 and an enterprise value to operating cash flow ratio of -48.55, indicating difficulties in generating positive earnings and cash flow. However, the company maintains a strong current ratio of 7.52, suggesting a solid ability to cover short-term liabilities. Investors are closely watching the upcoming earnings report for signs of revenue growth and improved financial performance.

C3.ai's Recent Stock Activity and Financial Performance

  • C3.ai's CFO sold 3,949 shares, leaving him with 851 shares, amidst the stock's recent dip below $50.
  • The company reported a revenue increase to $94.4 million in the fiscal second quarter of 2025, with year-over-year growth accelerating from 11% to 21%.
  • Despite challenges, analyst optimism remains high with a raised price target, and C3.ai maintains a strong liquidity position with a current ratio of 7.52.

On December 17, 2024, Lath Hitesh, the Chief Financial Officer of C3.ai (NYSE:AI), sold 3,949 shares of Class A Common Stock at $42.36 each. This transaction leaves him with 851 shares. C3.ai, established in 2009, is a leader in enterprise artificial intelligence, offering over 100 applications across 19 industries to aid AI adoption.

C3.ai's stock has recently dipped below $50, despite a 3.16% increase, prompting investor interest. The company has faced stock volatility, with fluctuations following its latest quarterly results. Despite this, C3.ai's stock has risen about 45% for the year, recovering from earlier losses, as highlighted by its strong performance since mid-November.

In the fiscal second quarter of 2025, C3.ai reported a revenue increase to $94.4 million, with year-over-year growth accelerating from 11% to 21%. This growth momentum has contributed to the stock's performance, raising questions about investment opportunities. Despite a 6.4% decline since the December 9 earnings report, revenue grew by 29% year over year.

Analyst Aaron Kimson from JMP Securities remains optimistic, raising the price target from $40 to $55, suggesting a 41% upside from the current $39 share price. C3.ai's consistent growth over seven quarters highlights the expanding market for generative AI applications. A strategic partnership with Microsoft is expected to enhance growth prospects, expanding C3.ai's reach through Azure's global sales force.

Despite a negative P/E ratio of -20 and challenges in generating positive cash flow, C3.ai maintains a strong liquidity position with a current ratio of 7.52. This indicates ample current assets to cover liabilities, reflecting investor confidence in the company's potential, despite its current unprofitability.

C3.ai's Strategic Alliance with Microsoft and Its Financial Outlook

  • C3.ai (NYSE:AI) has partnered with Microsoft to enhance AI technology adoption, positively impacting its stock price.
  • The company is expected to report a loss of $0.16 per share in its upcoming quarterly earnings, with projected revenue of $91 million, a 24.3% year-over-year increase.
  • Despite a negative P/E ratio of -16.89 and an earnings yield of -5.92%, C3.ai's strong liquidity position, with a current ratio of 7.86, indicates its ability to cover liabilities.

C3.ai, trading on the NYSE under the symbol AI, is a company that provides AI solutions to businesses. It has formed a strategic alliance with Microsoft to boost AI technology adoption. This partnership has recently driven a significant increase in its stock price, although it has seen some pullback due to options expiration.

C3.ai is set to release its quarterly earnings on December 9, 2024. Wall Street expects a loss of $0.16 per share, a 23.1% decline from the previous year. Despite this, the company's revenue is projected to be $91 million, marking a 24.3% increase from the same quarter last year. This growth highlights the company's expanding presence in the AI sector.

The consensus earnings per share estimate has remained unchanged over the past 30 days. This stability suggests that analysts have not revised their initial projections, which can influence investor reactions and stock price movements. Changes in earnings projections often correlate with stock price fluctuations, as highlighted by empirical studies.

C3.ai's financial metrics reveal challenges, with a negative P/E ratio of -16.89 and an earnings yield of -5.92%. These figures indicate current financial difficulties. However, the company has a strong liquidity position, with a current ratio of 7.86, showing it can cover its current liabilities with its current assets.

Despite recent stock price volatility, the strategic alliance with Microsoft offers long-term growth potential for C3.ai. While quarterly reports can impact stock prices, they should not be the sole factor in investment decisions. A long-term strategy typically yields better results, although acquiring stocks at a discount can enhance returns.

C3.ai, Inc. (NYSE:AI) Faces Market Reassessment Amid Strategic Shifts

  • Analyst skepticism, particularly from Morgan Stanley's Sanjit Singh, highlights concerns over C3.ai's valuation, high customer acquisition costs, and a transition to a consumption-based pricing model.
  • The company's strategic shift towards a consumption-based pricing model and focus on bookings growth are central to its efforts to adapt to market demands, despite the uncertainty surrounding its future performance.

C3.ai, Inc. (NYSE:AI) operates at the cutting edge of the enterprise artificial intelligence (AI) sector, offering a wide array of AI applications tailored for industries ranging from healthcare to defense. Based in Redwood City, California, C3.ai has carved out a niche for itself by addressing complex business challenges through AI, positioning it as a leader in this rapidly evolving field.

The skepticism from analysts, particularly highlighted by Morgan Stanley's Sanjit Singh, points to concerns over C3.ai's valuation and its approach to revenue generation. Singh's analysis, which sets a price target of $31 for C3.ai, underscores the challenges the company faces, including high customer acquisition costs and a transition to a consumption-based pricing model. These factors, combined with the company's ongoing cash burn, have led to questions about the predictability of its revenue streams. Singh's cautionary stance reflects broader market apprehensions about the company's ability to meet the high expectations already priced into its stock.

C3.ai's strategic shift towards a consumption-based pricing model and its focus on bookings growth as a key metric have been central to its efforts to adapt to market demands and showcase its potential for sustainable growth. However, the lack of clarity around these initiatives has contributed to the uncertainty surrounding the company's future performance. As C3.ai approaches its Q1 FY25 earnings, the market is keenly awaiting insights into its federal business and other areas that could provide a clearer picture of its growth trajectory and financial health.

The company's innovative product offerings and expansion into new market segments, bolstered by partnerships with major industry players, remain critical to its long-term success. However, the current analyst sentiment, as expressed by Morgan Stanley's Singh, suggests that C3.ai's stock may not offer the upside potential investors are seeking in the near term. This perspective, coupled with the broader challenges facing the AI and technology sectors, highlights the importance for investors to stay informed and closely monitor C3.ai's strategic moves and financial performance.

In summary, while C3.ai has established a strong foundation in the enterprise AI market, its stock valuation and future prospects are currently under scrutiny. The absence of recent analyst coverage and the cautious outlook provided by Morgan Stanley underscore the need for potential investors to carefully consider the company's financial health and strategic direction. As the AI sector continues to evolve, C3.ai's ability to navigate its challenges and capitalize on its strategic initiatives will be crucial in determining its stock performance and analyst expectations.

C3.ai Jumps 23% on Q3 Beat & Strong Guidance

C3.ai (NYSE:AI) experienced a notable surge in its stock price of over 23% intra-day Thursday after reporting fiscal third-quarter results that exceeded expectations and provided an optimistic outlook. The company reported a fiscal third-quarter loss of $0.13 per share, significantly outperforming the anticipated loss of $0.28 per share. Revenue for the quarter reached $78.4 million, exceeding the consensus forecast of $76.14 million.

Subscription revenue was a major contributor, accounting for 90% of total revenue at $70.4 million, up 23% from $57.0 million in the comparable period the previous year.

For the upcoming fourth quarter of fiscal year 2024, C3.ai projects revenue to range from $82 million to $86 million, against Wall Street expectations of $83.91 million. The company's full fiscal year 2024 revenue is expected to be between $306 million and $310 million, surpassing Wall Street's projection of $305.5 million.

C3.ai Shares Drop 11% on Weak Outlook

C3.ai (NYSE:AI), a provider of AI software solutions, reported mixed results for its fiscal second quarter. While the company's revenue fell short of estimates, there was discussion about the potential for faster growth due to a transition to a consumption-based pricing model.

Following the report, C3.ai experienced a more than 11% drop in its stock price intra-day today.

The company posted an adjusted loss of $0.13 per diluted share on revenue of $73.2 million. This is in contrast to the anticipated adjusted loss of $0.18 on revenue of $73.2 million.

Looking forward, C3.ai forecasts an adjusted loss from operations between $40 million to $46 million for the third quarter, on projected revenue of $74 million to $78 million. This projection contrasts with Wall Street's estimates, which anticipated revenue of $77.69 million.

For the full year, C3.ai now expects its revenue to be in the range of $295 million to $320 million. The adjusted operating loss is anticipated to be between $115 million to $135 million, a revision from the previously forecasted loss range of $70 million to $100 million.