REDWOOD CITY, Calif. / Sep 04, 2024 / Business Wire / C3.ai, Inc. (“C3 AI,” “C3,” or the “Company”) (NYSE: AI), the Enterprise AI application software company, today announced financial results for its fiscal first quarter ended July 31, 2024.
“We had a solid start to the fiscal year, with rising demand for Enterprise AI driving our sixth consecutive quarter of accelerating revenue growth,” said Thomas M. Siebel, Chairman and CEO, C3 AI. “C3 AI is the original Enterprise AI company. Our unwavering commitment to solving the most challenging problems in the enterprise has led us to what we believe are the highest levels of customer satisfaction in the industry.”
Fiscal First Quarter 2025 Financial Highlights
Business Highlights
C3 AI made significant progress in broadening our market presence with particularly strong momentum in Manufacturing and State and Local Government.
Customer Success
C3 AI’s customer base continues to expand both within and across industries while maintaining exceptional levels of customer satisfaction by focusing on delivering measurable enterprise value.
Partner Network
Strong alliances powered pilot growth, markedly increasing activity in State and Local Government in particular.
C3 Generative AI
C3 Generative AI continues to have strong customer demand with diverse use cases, including operator assistance, intelligence analysis, complex documentation drafting, and customer service.
Manufacturing:
Agriculture:
Federal, Defense and Aerospace:
Construction:
Automotive:
Professional Services:
Life Sciences:
State and Local Government:
Financial Outlook:
The Company’s guidance includes GAAP and non-GAAP financial measures.
The following table summarizes C3 AI’s guidance for the second quarter of fiscal 2025 and full-year fiscal 2025:
(in millions) | Second Quarter Fiscal 2025 Guidance |
| Full Year Fiscal 2025 Guidance |
Total revenue | $88.6 - $93.6 |
| $370.0 - $395.0 |
Non-GAAP loss from operations | $(26.7) - $(34.7) |
| $(95.0) - $(125.0) |
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 2025 Financial Results Conference Call | |
When: | Wednesday, September 4, 2024 | |
Time: | 2:00 p.m. PT / 5:00 p.m. ET | |
Participant Registration: | https://register.vevent.com/register/BI1316837a59134b1c95643d24f0bb2076 (live) | |
Webcast: | https://edge.media-server.com/mmc/p/mefprd7q/ (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. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Forward-looking statements in this press release include, but are not limited to, statements regarding our market leadership position, anticipated benefits from our partnerships, financial outlook, our sales and customer opportunity pipeline including our industry diversification, the expected benefits of our offerings (including the potential benefits of our C3 Generative AI offerings), and our business strategies, plans, and objectives for future operations. 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 our history of losses and ability to achieve and maintain profitability in the future, our historic 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, the length and unpredictability of our sales cycles and the time and expense required for our sales efforts. Some of these risks are described in greater detail in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2024, and other filings and reports we make the Securities and Exchange Commissions from time to time, including our Quarterly Report on Form 10-Q that will be filed for the fiscal quarter ended July 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 July 31, | ||||||
|
| 2024 |
|
|
| 2023 |
|
Revenue |
|
|
| ||||
Subscription (1) | $ | 73,456 |
|
| $ | 61,352 |
|
Professional services (2) |
| 13,757 |
|
|
| 11,010 |
|
Total revenue |
| 87,213 |
|
|
| 72,362 |
|
Cost of revenue |
|
|
| ||||
Subscription |
| 33,292 |
|
|
| 30,434 |
|
Professional services |
| 1,755 |
|
|
| 1,379 |
|
Total cost of revenue |
| 35,047 |
|
|
| 31,813 |
|
Gross profit |
| 52,166 |
|
|
| 40,549 |
|
Operating expenses |
|
|
| ||||
Sales and marketing (3) |
| 52,125 |
|
|
| 43,885 |
|
Research and development |
| 52,927 |
|
|
| 50,868 |
|
General and administrative |
| 19,700 |
|
|
| 19,889 |
|
Total operating expenses |
| 124,752 |
|
|
| 114,642 |
|
Loss from operations |
| (72,586 | ) |
|
| (74,093 | ) |
Interest income |
| 10,003 |
|
|
| 10,122 |
|
Other income (expense), net |
| 28 |
|
|
| (239 | ) |
Loss before provision for income taxes |
| (62,555 | ) |
|
| (64,210 | ) |
Provision for income taxes |
| 272 |
|
|
| 148 |
|
Net loss | $ | (62,827 | ) |
| $ | (64,358 | ) |
Net loss per share attributable to Class A and Class B common stockholders, basic and diluted | $ | (0.50 | ) |
| $ | (0.56 | ) |
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted |
| 124,979 |
|
|
| 115,681 |
|
(1) | Including related party revenue of $10,581 for the three months ended July 31, 2023. | |
(2) | Including related party revenue of $5,804 for the three months ended July 31, 2023. | |
(3) | Including related party sales and marketing expense of $810 for the three months ended July 31, 2023. |
C3.AI, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) (Unaudited) | |||||||
| July 31, 2024 |
| April 30, 2024 | ||||
Assets |
|
|
| ||||
Current assets |
|
|
| ||||
Cash and cash equivalents | $ | 133,820 |
|
| $ | 167,146 |
|
Marketable securities |
| 628,715 |
|
|
| 583,221 |
|
Accounts receivable, net of allowance of $390 and $359 as of July 31, 2024 and April 30, 2024, respectively |
| 140,070 |
|
|
| 130,064 |
|
Prepaid expenses and other current assets |
| 23,806 |
|
|
| 23,963 |
|
Total current assets |
| 926,411 |
|
|
| 904,394 |
|
Property and equipment, net |
| 86,480 |
|
|
| 88,631 |
|
Goodwill |
| 625 |
|
|
| 625 |
|
Other assets, non-current |
| 44,104 |
|
|
| 44,575 |
|
Total assets | $ | 1,057,620 |
|
| $ | 1,038,225 |
|
Liabilities and stockholders’ equity |
|
|
| ||||
Current liabilities |
|
|
| ||||
Accounts payable | $ | 31,615 |
|
| $ | 11,316 |
|
Accrued compensation and employee benefits |
| 33,927 |
|
|
| 44,263 |
|
Deferred revenue, current |
| 39,580 |
|
|
| 37,230 |
|
Accrued and other current liabilities |
| 12,805 |
|
|
| 9,526 |
|
Total current liabilities |
| 117,927 |
|
|
| 102,335 |
|
Deferred revenue, non-current |
| 717 |
|
|
| 1,732 |
|
Other long-term liabilities |
| 64,055 |
|
|
| 60,805 |
|
Total liabilities |
| 182,699 |
|
|
| 164,872 |
|
Commitments and contingencies |
|
|
| ||||
Stockholders’ equity |
|
|
| ||||
Class A common stock |
| 123 |
|
|
| 120 |
|
Class B common stock |
| 3 |
|
|
| 3 |
|
Additional paid-in capital |
| 2,027,274 |
|
|
| 1,963,726 |
|
Accumulated other comprehensive income (loss) |
| 281 |
|
|
| (563 | ) |
Accumulated deficit |
| (1,152,760 | ) |
|
| (1,089,933 | ) |
Total stockholders’ equity |
| 874,921 |
|
|
| 873,353 |
|
Total liabilities and stockholders’ equity | $ | 1,057,620 |
|
| $ | 1,038,225 |
|
C3.AI, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) | |||||||
| Three Months Ended July 31, | ||||||
|
| 2024 |
|
|
| 2023 |
|
Cash flows from operating activities: |
|
|
| ||||
Net loss | $ | (62,827 | ) |
| $ | (64,358 | ) |
Adjustments to reconcile net loss to net cash provided by operating activities |
|
|
| ||||
Depreciation and amortization |
| 3,119 |
|
|
| 3,056 |
|
Non-cash operating lease cost |
| 85 |
|
|
| 274 |
|
Stock-based compensation expense |
| 54,683 |
|
|
| 50,880 |
|
Accretion of discounts on marketable securities |
| (3,936 | ) |
|
| (3,974 | ) |
Other |
| 98 |
|
|
| 25 |
|
Changes in operating assets and liabilities |
|
|
| ||||
Accounts receivable (1) |
| (10,037 | ) |
|
| 12,017 |
|
Prepaid expenses, other current assets and other assets (2) |
| 1,604 |
|
|
| 3,051 |
|
Accounts payable (3) |
| 20,033 |
|
|
| (564 | ) |
Accrued compensation and employee benefits |
| (1,755 | ) |
|
| (39 | ) |
Operating lease liabilities |
| (498 | ) |
|
| 8,204 |
|
Other liabilities (4) |
| 6,138 |
|
|
| 2,254 |
|
Deferred revenue (5) |
| 1,335 |
|
|
| (6,890 | ) |
Net cash provided by operating activities |
| 8,042 |
|
|
| 3,936 |
|
Cash flows from investing activities: |
|
|
| ||||
Purchases of property and equipment |
| (924 | ) |
|
| (11,338 | ) |
Capitalized software development costs |
| — |
|
|
| (1,500 | ) |
Purchases of marketable securities |
| (230,924 | ) |
|
| (322,534 | ) |
Maturities and sales of marketable securities |
| 190,298 |
|
|
| 250,572 |
|
Net cash used in investing activities |
| (41,550 | ) |
|
| (84,800 | ) |
Cash flows from financing activities: |
|
|
| ||||
Proceeds from exercise of Class A common stock options |
| 3,127 |
|
|
| 9,595 |
|
Taxes paid related to net share settlement of equity awards |
| (2,945 | ) |
|
| (7,118 | ) |
Net cash provided by financing activities |
| 182 |
|
|
| 2,477 |
|
Net decrease in cash, cash equivalents and restricted cash |
| (33,326 | ) |
|
| (78,387 | ) |
Cash, cash equivalents and restricted cash at beginning of period |
| 179,712 |
|
|
| 297,395 |
|
Cash, cash equivalents and restricted cash at end of period | $ | 146,386 |
|
| $ | 219,008 |
|
Cash and cash equivalents | $ | 133,820 |
|
| $ | 206,442 |
|
Restricted cash included in other assets |
| 12,566 |
|
|
| 12,566 |
|
Total cash, cash equivalents and restricted cash | $ | 146,386 |
|
| $ | 219,008 |
|
Supplemental disclosure of cash flow information—cash paid for income taxes | $ | 292 |
|
| $ | 150 |
|
Supplemental disclosures of non-cash investing and financing activities: |
|
|
| ||||
Purchases of property and equipment included in accounts payable and accrued liabilities | $ | 301 |
|
| $ | 5,764 |
|
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) | $ | 1,345 |
|
| $ | 778 |
|
Receivable from exercise of stock options included in prepaid expenses, other current assets and other assets | $ | — |
|
| $ | 33 |
|
Vesting of early exercised stock options | $ | 105 |
|
| $ | — |
|
(1) | Including changes in related party balances of $12,444 for the three months ended July 31, 2023. | |
(2) | Including changes in related party balances of $(810) for the three months ended July 31, 2023. | |
(3) | Including changes in related party balances of $248 for the three months ended July 31, 2023. | |
(4) | Including changes in related party balances of $(2,448) for the three months ended July 31, 2023. | |
(5) | Including changes in related party balances of $(46) for the three months ended July 31, 2023. |
C3.AI, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except percentages) (Unaudited) | |||||||
|
| ||||||
| Three Months Ended July 31, | ||||||
|
| 2024 |
|
|
| 2023 |
|
Reconciliation of GAAP gross profit to non-GAAP gross profit: |
|
|
| ||||
Gross profit on a GAAP basis | $ | 52,166 |
|
| $ | 40,549 |
|
Stock-based compensation expense (1) |
| 8,408 |
|
|
| 8,516 |
|
Employer payroll tax expense related to employee stock-based compensation (2) |
| 356 |
|
|
| 541 |
|
Gross profit on a non-GAAP basis | $ | 60,930 |
|
| $ | 49,606 |
|
|
|
|
| ||||
Gross margin on a GAAP basis |
| 60 | % |
|
| 56 | % |
Gross margin on a non-GAAP basis |
| 70 | % |
|
| 69 | % |
|
|
|
| ||||
Reconciliation of GAAP loss from operations to non-GAAP loss from operations: |
|
|
| ||||
Loss from operations on a GAAP basis | $ | (72,586 | ) |
| $ | (74,093 | ) |
Stock-based compensation expense (1) |
| 54,683 |
|
|
| 50,880 |
|
Employer payroll tax expense related to employee stock-based compensation (2) |
| 1,272 |
|
|
| 2,500 |
|
Loss from operations on a non-GAAP basis | $ | (16,631 | ) |
| $ | (20,713 | ) |
|
|
|
| ||||
Reconciliation of GAAP net loss per share to non-GAAP net loss per share: |
|
|
| ||||
|
|
|
| ||||
Net loss on a GAAP basis | $ | (62,827 | ) |
| $ | (64,358 | ) |
Stock-based compensation expense (1) |
| 54,683 |
|
|
| 50,880 |
|
Employer payroll tax expense related to employee stock-based compensation (2) |
| 1,272 |
|
|
| 2,500 |
|
Net loss on a non-GAAP basis | $ | (6,872 | ) |
| $ | (10,978 | ) |
|
|
|
| ||||
GAAP net loss per share attributable to Class A and Class B common shareholders, basic and diluted | $ | (0.50 | ) |
| $ | (0.56 | ) |
Non-GAAP net loss per share attributable to Class A and Class B common shareholders, basic and diluted | $ | (0.05 | ) |
| $ | (0.09 | ) |
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted |
| 124,979 |
|
|
| 115,681 |
|
(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, |
| ||||||
|
| 2024 |
|
| 2023 |
| |
Cost of subscription | $ | 7,694 |
| $ | 8,056 |
| |
Cost of professional services |
| 714 |
|
| 460 |
| |
Sales and marketing |
| 18,833 |
|
| 16,779 |
| |
Research and development |
| 18,431 |
|
| 17,033 |
| |
General and administrative |
| 9,011 |
|
| 8,552 |
| |
Total stock-based compensation expense | $ | 54,683 |
| $ | 50,880 |
|
(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 July 31, | |||||||
|
| 2024 |
|
| 2023 | ||
Cost of subscription | $ | 326 |
| $ | 509 | ||
Cost of professional services |
| 30 |
|
| 32 | ||
Sales and marketing |
| 472 |
|
| 1,005 | ||
Research and development |
| 364 |
|
| 817 | ||
General and administrative |
| 80 |
|
| 137 | ||
Total employer payroll tax expense | $ | 1,272 |
| $ | 2,500 |
Reconciliation of free cash flow to the GAAP measure of net cash provided by operating activities:
The following table below provides a reconciliation of free cash flow to the GAAP measure of net cash provided by operating activities for the periods presented:
| Three Months Ended July 31, | ||||||
|
| 2024 |
|
|
| 2023 |
|
Net cash provided by operating activities | $ | 8,042 |
|
| $ | 3,936 |
|
Less: |
|
|
| ||||
Purchases of property and equipment |
| (924 | ) |
|
| (11,338 | ) |
Capitalized software development costs |
| — |
|
|
| (1,500 | ) |
Free cash flow | $ | 7,118 |
|
| $ | (8,902 | ) |
Net cash used in investing activities | $ | (41,550 | ) |
| $ | (84,800 | ) |
Net cash provided by financing activities | $ | 182 |
|
| $ | 2,477 |
|
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