C3.ai, Inc. (NYSE: AI), the Enterprise AI software company, today announced results for its fiscal first quarter ended July 31, 2021.
“We began our fiscal year 2022 with strong results in the first quarter, including year-over-year increases of 29% in revenue and 31% in gross profit,” said CEO Thomas M. Siebel. “We significantly expanded our market-partner ecosystem in Q1, entering into a strategic alliance with Google Cloud to allow the entire Google Cloud global sales and service organization to co-sell and service the entire family of C3 AI applications.”
First Quarter Financial Highlights
Recent Business Highlights
Financial Outlook:
Our guidance includes GAAP and non-GAAP financial measures.
The following table summarizes our guidance for the second quarter of fiscal 2022 and full-year fiscal 2022:
(in millions) | Second Quarter Fiscal 2022 Guidance |
| Full Year Fiscal 2022 Guidance |
Total revenue | $56.0 - $58.0 |
| $243.0 - $247.0 |
Non-GAAP loss from operations | ($30.0) - ($37.0) |
| ($107.0) - ($119.0) |
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 First Quarter Fiscal 2022 Financial Results Conference Call |
When: | Wednesday, September 1, 2021 |
Time: | 2:00 p.m. PT / 5:00 p.m. ET |
Live Call: | (833) 979-2768, Domestic |
| (236) 714-2883, International |
| Conference ID: 3387525 |
Webcast: | https://event.on24.com/wcc/r/3192961/445B7304E5E112B8CC2231B7EA1A9398 (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
We report 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 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. Some of these risks are described in greater detail in our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2021, 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 leading provider of enterprise AI software for accelerating digital transformation. C3 AI delivers a family of fully integrated products: C3 AI® Suite, an end-to-end platform for developing, deploying, and operating large-scale AI applications; C3 AI Applications, a portfolio of industry-specific SaaS AI applications; C3 AI CRM, a suite of industry-specific CRM applications designed for AI and machine learning; and C3 AI Ex Machina, a no-code AI solution to apply data science to everyday business problems. The core of the C3 AI offering is an open, model-driven AI architecture that dramatically simplifies data science and application development. Learn more at: www.c3.ai.
C3.AI, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In thousands, except per share data) | |||||||
(Unaudited) | |||||||
| Three Months Ended July 31, | ||||||
| 2021 |
| 2020 | ||||
Revenue |
|
|
| ||||
Subscription(1) | $ | 46,122 |
|
| $ | 35,695 |
|
Professional services(2) | 6,284 |
|
| 4,788 |
| ||
Total revenue | 52,406 |
|
| 40,483 |
| ||
Cost of revenue |
|
|
| ||||
Subscription(3) | 9,213 |
|
| 8,587 |
| ||
Professional services | 3,812 |
|
| 1,912 |
| ||
Total cost of revenue | 13,025 |
|
| 10,499 |
| ||
Gross profit | 39,381 |
|
| 29,984 |
| ||
Operating expenses |
|
|
| ||||
Sales and marketing(4) | 36,822 |
|
| 14,358 |
| ||
Research and development | 26,712 |
|
| 13,264 |
| ||
General and administrative | 12,364 |
|
| 5,687 |
| ||
Total operating expenses | 75,898 |
|
| 33,309 |
| ||
Loss from operations | (36,517 | ) |
| (3,325 | ) | ||
Interest income | 345 |
|
| 580 |
| ||
Other (expense) income, net | (899 | ) |
| 3,018 |
| ||
Net (loss) income before provision for income taxes | (37,071 | ) |
| 273 |
| ||
Provision for income taxes | 388 |
|
| 123 |
| ||
Net (loss) income | $ | (37,459 | ) |
| $ | 150 |
|
Net (loss) income attributable to Class A common shareholders, basic and diluted | $ | (0.37 | ) |
| $ | 0.00 |
|
Net (loss) income attributable to Class A-1 common shareholders, basic and diluted | $ | — |
|
| $ | 0.00 |
|
Net (loss) income attributable to Class B common shareholders, basic and diluted | $ | (0.37 | ) |
| $ | 0.00 |
|
Weighted-average shares used in computing net (loss) income per share attributable to Class A common stockholders, basic and diluted | 98,655 |
|
| 30,624 |
| ||
Weighted-average shares used in computing net (loss) income per share attributable to Class A-1 common stockholders, basic and diluted | — |
|
| 6,667 |
| ||
Weighted-average shares used in computing net (loss) income per share attributable to Class B common stockholders, basic and diluted | 3,500 |
|
| — |
| ||
(1) | Including related party revenue of $10,208 and $6,810 for the three months ended July 31, 2021 and 2020, respectively. |
(2) | Including related party revenue of $2,074 and nil for the three months ended July 31, 2021 and 2020, respectively. |
(3) | Including related party cost of revenue of $117 and nil for the three months ended July 31, 2021 and 2020, respectively. |
(4) | Including related party sales and marketing expense of $61 and nil for the three months ended July 31, 2021 and 2020, respectively. |
C3.AI, INC. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except for share and per share data) | |||||||
(Unaudited) | |||||||
| July 31, 2021 |
| April 30, 2021 | ||||
Assets |
|
|
| ||||
Current assets |
|
|
| ||||
Cash and cash equivalents | $ | 273,779 |
|
| $ | 115,355 |
|
Short-term investments | 825,211 |
|
| 978,020 |
| ||
Accounts receivable, net of allowance of $57 and $812 as of July 31, 2021 and April 30, 2021, respectively(1) | 55,831 |
|
| 65,460 |
| ||
Prepaid expenses and other current assets(2) | 12,564 |
|
| 14,302 |
| ||
Total current assets | 1,167,385 |
|
| 1,173,137 |
| ||
Property and equipment, net | 5,687 |
|
| 6,133 |
| ||
Goodwill | 625 |
|
| 625 |
| ||
Other assets, non-current(3) | 17,843 |
|
| 16,582 |
| ||
Total assets | $ | 1,191,540 |
|
| $ | 1,196,477 |
|
Liabilities and stockholders’ equity |
|
|
| ||||
Current liabilities |
|
|
| ||||
Accounts payable(4) | $ | 10,051 |
|
| $ | 12,075 |
|
Accrued compensation and employee benefits | 14,757 |
|
| 21,829 |
| ||
Deferred revenue, current(5) | 98,217 |
|
| 72,263 |
| ||
Accrued and other current liabilities(6) | 17,108 |
|
| 18,318 |
| ||
Total current liabilities | 140,133 |
|
| 124,485 |
| ||
Deferred revenue, non-current | 1,680 |
|
| 2,964 |
| ||
Other long-term liabilities(7) | 5,932 |
|
| 7,853 |
| ||
Total liabilities | 147,745 |
|
| 135,302 |
| ||
Commitments and contingencies |
|
|
| ||||
Stockholders’ equity |
|
|
| ||||
Class A common stock, $0.001 par value. 1,000,000,000 shares authorized as of July 31, 2021 and April 30, 2021; 100,367,938 and 98,667,121 shares issued and outstanding as of July 31, 2021 and April 30, 2021 respectively | 101 |
|
| 99 |
| ||
Class B common stock, $0.001 par value; 3,500,000 shares authorized as of July 31, 2021 and April 30, 2021; 3,499,992 shares issued and outstanding as of July 31, 2021 and April 30, 2021 | 3 |
|
| 3 |
| ||
Additional paid-in capital | 1,430,296 |
|
| 1,410,325 |
| ||
Accumulated other comprehensive income | 187 |
|
| 81 |
| ||
Accumulated deficit | (386,792 | ) |
| (349,333 | ) | ||
Total stockholders’ equity | 1,043,795 |
|
| 1,061,175 |
| ||
Total liabilities and stockholders’ equity | $ | 1,191,540 |
|
| $ | 1,196,477 |
|
(1) | Including amounts from a related party of $1,259 and $15,180 as of July 31, 2021 and April 30, 2021, respectively. |
(2) | Including amounts from a related party of $1,662 and $1,662 as of July 31, 2021 and April 30, 2021, respectively. |
(3) | Including amounts from a related party of $6,187 and $6,602 as of July 31, 2021 and April 30, 2021, respectively. |
(4) | Including amounts from a related party of $112 and $56 as of July 31, 2021 and April 30, 2021, respectively. |
(5) | Including amounts from a related party of $24,637 and $7,697 as of July 31, 2021 and April 30, 2021, respectively. |
(6) | Including amounts from a related party of $2,551 and $3,413 as of July 31, 2021 and April 30, 2021, respectively. |
(7) | Including amounts from a related party of $2,448 and $4,895 as of July 31, 2021 and April 30, 2021, respectively. |
C3.AI, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
| |||||||
| Three Months Ended July 31, | ||||||
| 2021 |
| 2020 | ||||
Cash flows from operating activities: |
|
|
| ||||
Net (loss) income | $ | (37,459 | ) |
| $ | 150 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities |
|
|
| ||||
Depreciation and amortization | 1,141 |
|
| 1,028 |
| ||
Non-cash operating lease cost | 857 |
|
| 842 |
| ||
Stock-based compensation expense | 13,912 |
|
| 2,480 |
| ||
Other | (875 | ) |
| (100 | ) | ||
Changes in operating assets and liabilities |
|
|
| ||||
Accounts receivable(1) | 10,383 |
|
| (29,588 | ) | ||
Prepaid expenses, other current assets and other assets(2) | 2,097 |
|
| 556 |
| ||
Accounts payable(3) | (2,067 | ) |
| (169 | ) | ||
Accrued compensation and employee benefits | (7,072 | ) |
| (5,047 | ) | ||
Operating lease liabilities | (932 | ) |
| (886 | ) | ||
Other liabilities(4) | (3,633 | ) |
| 847 |
| ||
Deferred revenue(5) | 24,670 |
|
| 46,949 |
| ||
Net cash provided by operating activities | 1,022 |
|
| 17,062 |
| ||
Cash flows from investing activities: |
|
|
| ||||
Purchases of property and equipment | (511 | ) |
| (654 | ) | ||
Capitalized software development costs | (500 | ) |
| — |
| ||
Purchases of investments | (95,948 | ) |
| (36,970 | ) | ||
Maturities and sales of investments | 248,986 |
|
| 109,759 |
| ||
Net cash provided by investing activities | 152,027 |
|
| 72,135 |
| ||
Cash flows from financing activities: |
|
|
| ||||
Proceeds from Payroll Protection Program loan | — |
|
| 6,343 |
| ||
Payment of deferred offering costs | (71 | ) |
| — |
| ||
Proceeds from exercise of Class A common stock options | 5,046 |
|
| 335 |
| ||
Net cash provided by financing activities | 4,975 |
|
| 6,678 |
| ||
Net increase in cash, cash equivalents and restricted cash | 158,024 |
|
| 95,875 |
| ||
Cash, cash equivalents and restricted cash at beginning of period | 116,255 |
|
| 33,604 |
| ||
Cash, cash equivalents and restricted cash at end of period | $ | 274,279 |
|
| $ | 129,479 |
|
Cash and cash equivalents | $ | 273,779 |
|
| $ | 128,979 |
|
Restricted cash included in other assets | 500 |
|
| 500 |
| ||
Total cash, cash equivalents and restricted cash | $ | 274,279 |
|
| $ | 129,479 |
|
Supplemental disclosure of cash flow information—cash paid for income taxes | $ | 235 |
|
| $ | 138 |
|
Supplemental disclosures of non-cash investing and financing activities: |
|
|
| ||||
Purchases of property and equipment included in accounts payable and accrued liabilities | $ | 326 |
|
| $ | 243 |
|
Unpaid liabilities related to intangible purchases | $ | 2,500 |
|
| $ | — |
|
Deferred offering costs included in accounts payable and accrued liabilities | $ | 34 |
|
| $ | — |
|
Vesting of early exercised stock options | $ | 1,059 |
|
| $ | 218 |
|
(1) | Including changes in related party balances of $(13,921) and $9 for the three months ended July 31, 2021 and 2020, respectively. |
(2) | Including changes in related party balances of $(415) and nil for the three months ended July 31, 2021 and 2020, respectively. |
(3) | Including changes in related party balances of $56 and nil for the three months ended July 31, 2021 and 2020, respectively. |
(4) | Including changes in related party balances of $(3,309) and nil for the three months ended July 31, 2021 and 2020, respectively. |
(5) | Including changes in related party balances of $16,940 and $21,190 for the three months ended July 31, 2021 and 2020, respectively. |
C3.AI, INC. | |||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||||
(In thousands, except percentages) | |||||||
(Unaudited) | |||||||
| |||||||
| Three Months Ended July 31, | ||||||
| 2021 |
| 2020 | ||||
Reconciliation of GAAP gross profit to non-GAAP gross profit: |
|
|
| ||||
Gross profit on a GAAP basis | $ | 39,381 |
|
| $ | 29,984 |
|
Stock-based compensation expense (1) | 1,423 |
|
| 232 |
| ||
Employer payroll tax expense related to employee stock-based compensation (2) | 65 |
|
| — |
| ||
Gross profit on a non-GAAP basis | $ | 40,869 |
|
| $ | 30,216 |
|
|
|
|
| ||||
Gross margin on a GAAP basis | 75 | % |
| 74 | % | ||
Gross margin on a non-GAAP basis | 78 | % |
| 75 | % | ||
|
|
|
| ||||
Reconciliation of GAAP loss from operations to non-GAAP loss from operations: |
|
|
| ||||
Loss from operations on a GAAP basis | $ | (36,517 | ) |
| $ | (3,325 | ) |
Stock-based compensation expense (1) | 13,912 |
|
| 2,480 |
| ||
Employer payroll tax expense related to employee stock-based compensation (2) | 855 |
|
| — |
| ||
Loss from operations on a non-GAAP basis | $ | (21,750 | ) |
| $ | (845 | ) |
(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 July 31, | ||||||
| 2021 |
| 2020 | ||||
Cost of subscription | $ | 821 |
|
| $ | 184 |
|
Cost of professional services | 602 |
|
| 48 |
| ||
Sales and marketing | 6,135 |
|
| 855 |
| ||
Research and development | 2,758 |
|
| 458 |
| ||
General and administrative | 3,596 |
|
| 935 |
| ||
Total stock-based compensation expense | $ | 13,912 |
|
| $ | 2,480 |
|
(2) | Employer payroll tax expense related to employee stock-based compensation were immaterial and as such were excluded in periods prior to January 31, 2021. Employer payroll tax expense to employee stock-based compensation for gross profits, gross margin and loss from operations includes employer payroll tax expense to employee stock-based compensation as follows: |
| Three Months Ended July 31, | ||||||
| 2021 |
| 2020 | ||||
Cost of subscription | $ | — |
|
| $ | — |
|
Cost of professional services | 65 |
|
| — |
| ||
Sales and marketing | 301 |
|
| — |
| ||
Research and development | 182 |
|
| — |
| ||
General and administrative | 307 |
|
| — |
| ||
Total employer payroll tax expense | $ | 855 |
|
| $ | — |
|
Reconciliation of remaining performance obligations (“RPO”) to Non-GAAP RPO:
The following table presents a reconciliation of RPO to Non-GAAP RPO:
| As of July 31, | ||||||
| 2021 |
| 2020 | ||||
RPO | $ | 290,613 |
|
| $ | 275,082 |
|
Cancellable amount of contract value | 66,638 |
|
| 4,393 |
| ||
Non-GAAP RPO | $ | 357,251 |
|
| $ | 279,475 |
|
| Last Trade: | US$32.36 |
| Daily Change: | -0.60 -1.82 |
| Daily Volume: | 8,858,476 |
| Market Cap: | US$4.000B |
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