C3.ai, Inc. (NYSE: AI), a leading provider of enterprise AI applications software today announced results for its fiscal third quarter ended January 31, 2021.
“We continue to establish our leadership as the only enterprise AI software pure play," said CEO Thomas M. Siebel. “This is a large and rapidly growing market; we continue to innovate; we continue to expand our market-partner ecosystem and associated distribution capacity; and we continue to demonstrate technology leadership. I believe that we are increasingly well-positioned to establish a global market leadership position in enterprise AI software.”
Third 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 fourth quarter of fiscal 2021 and full-year fiscal 2021:
(in millions) | Fourth Quarter Fiscal 2021 Guidance |
| Full Year Fiscal 2021 Guidance | ||
Total revenue | $50.0 - $51.0 |
| $180.9 - $181.9 | ||
Non-GAAP loss from operations | ($28.0) - ($27.0) |
| ($50.1) - ($49.1) | ||
Historically, the difference between GAAP and non-GAAP measures has been limited to stock-based compensation expense. Beginning with guidance for the fourth quarter of fiscal 2021 and full-year fiscal 2021, and in future periods, the difference between GAAP and non-GAAP measures will include stock-based compensation and employer payroll tax expense related to employee stock-based compensation.
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 2021 Financial Results Conference Call | |
When: | Monday, March 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: 4668908 | |
Webcast: | https://event.on24.com/wcc/r/3015157/885F1E2FD850F2DBC977CC64443C1836 (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 results.
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, plans to license certain technologies, 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 (the “SEC”), including our final prospectus filed on December 9, 2020, 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 a 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.
Source: C3.ai, Inc.
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, | |||||||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | |||||||||
Revenue |
|
|
|
|
|
|
| |||||||||
Subscription(1) | $ | 42,699 |
|
| $ | 34,629 |
|
| $ | 114,248 |
|
| $ | 98,627 |
| |
Professional services(2) |
| 6,410 |
|
|
| 6,654 |
|
|
| 16,685 |
|
|
| 16,421 |
| |
Total revenue |
| 49,109 |
|
|
| 41,283 |
|
|
| 130,933 |
|
|
| 115,048 |
| |
Cost of revenue |
|
|
|
|
|
|
| |||||||||
Subscription |
| 7,023 |
|
|
| 8,862 |
|
|
| 22,694 |
|
|
| 23,493 |
| |
Professional services |
| 5,203 |
|
|
| 2,069 |
|
|
| 10,113 |
|
|
| 5,785 |
| |
Total cost of revenue |
| 12,226 |
|
|
| 10,931 |
|
|
| 32,807 |
|
|
| 29,278 |
| |
Gross profit |
| 36,883 |
|
|
| 30,352 |
|
|
| 98,126 |
|
|
| 85,770 |
| |
Operating expenses |
|
|
|
|
|
|
| |||||||||
Sales and marketing |
| 28,450 |
|
|
| 23,162 |
|
|
| 64,898 |
|
|
| 60,385 |
| |
Research and development |
| 18,748 |
|
|
| 12,331 |
|
|
| 48,145 |
|
|
| 47,122 |
| |
General and administrative |
| 8,184 |
|
|
| 5,291 |
|
|
| 21,433 |
|
|
| 19,541 |
| |
Total operating expenses |
| 55,382 |
|
|
| 40,784 |
|
|
| 134,476 |
|
|
| 127,048 |
| |
Loss from operations |
| (18,499 | ) |
|
| (10,432 | ) |
|
| (36,350 | ) |
|
| (41,278 | ) | |
Interest income |
| 129 |
|
|
| 1,136 |
|
|
| 997 |
|
|
| 3,115 |
| |
Other (expense) income, net |
| 1,721 |
|
|
| (402 | ) |
|
| 4,163 |
|
|
| (498 | ) | |
Net loss before provision for income taxes |
| (16,649 | ) |
|
| (9,698 | ) |
|
| (31,190 | ) |
|
| (38,661 | ) | |
Provision for income taxes |
| 203 |
|
|
| 98 |
|
|
| 456 |
|
|
| 283 |
| |
Net loss | $ | (16,852 | ) |
| $ | (9,796 | ) |
| $ | (31,646 | ) |
| $ | (38,944 | ) | |
Net loss attributable to Class A common shareholders, basic and diluted | $ | (0.23 | ) |
| $ | (0.27 | ) |
| $ | (0.64 | ) |
| $ | (1.11 | ) | |
Net loss attributable to Class A-1 common shareholders, basic and diluted | $ | (0.10 | ) |
| $ | (0.27 | ) |
| $ | (0.52 | ) |
| $ | (1.11 | ) | |
Net loss attributable to Class B common shareholders, basic and diluted | $ | (0.13 | ) |
| $ | — |
|
| $ | (0.12 | ) |
| $ | — |
| |
Weighted-average shares used in computing net loss per share attributable to Class A common stockholders, basic and diluted |
| 68,648,229 |
|
|
| 30,132,463 |
|
|
| 43,480,533 |
|
|
| 28,478,395 |
| |
Weighted-average shares used in computing net loss per share attributable to Class A-1 common stockholders, basic and diluted |
| 6,666,665 |
|
|
| 6,666,666 |
|
|
| 6,666,665 |
|
|
| 6,666,666 |
| |
Weighted-average shares used in computing net loss per share attributable to Class B common stockholders, basic and diluted |
| 3,499,992 |
|
|
| — |
|
|
| 3,499,992 |
|
|
| — |
| |
(1) Including related party revenue of $7,951, $9,865, $21,571 and $30,560 for the three and nine months ended January 31, 2021 and 2020, respectively. | ||||||||||||||||
(2) Including related party revenue of $0, $112, $0 and $210 for the three and nine months ended January 31, 2021 and 2020, respectively. | ||||||||||||||||
C3.AI, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) (unaudited) | ||||||||
| January 31, |
| April 30, | |||||
| 2021 |
| 2020 | |||||
Assets |
|
|
| |||||
Current assets |
|
|
| |||||
Cash and cash equivalents | $ | 960,122 |
|
| $ | 33,104 |
| |
Short-term investments |
| 162,880 |
|
|
| 211,874 |
| |
Accounts receivable, net of allowance of $762 and $755 as of January 31, 2021 and April 30, 2020, respectively(1) |
| 30,231 |
|
|
| 30,827 |
| |
Prepaid expenses and other current assets |
| 13,503 |
|
|
| 5,400 |
| |
Total current assets |
| 1,166,736 |
|
|
| 281,205 |
| |
Property and equipment, net |
| 6,844 |
|
|
| 8,723 |
| |
Goodwill |
| 625 |
|
|
| 625 |
| |
Long-term investments |
| — |
|
|
| 725 |
| |
Other assets, non-current |
| 10,369 |
|
|
| 13,830 |
| |
Total assets | $ | 1,184,574 |
|
| $ | 305,108 |
| |
Liabilities, redeemable convertible preferred stock, redeemable convertible Class A-1 common stock and stockholders’ (deficit) equity |
|
|
| |||||
Current liabilities |
|
|
| |||||
Accounts payable | $ | 12,608 |
|
| $ | 4,726 |
| |
Accrued compensation and employee benefits |
| 17,996 |
|
|
| 13,693 |
| |
Deferred revenue, current(2) |
| 59,950 |
|
|
| 53,537 |
| |
Accrued and other current liabilities |
| 13,544 |
|
|
| 9,083 |
| |
Total current liabilities |
| 104,098 |
|
|
| 81,039 |
| |
Deferred revenue, non-current |
| 2,360 |
|
|
| 6,758 |
| |
Other long-term liabilities |
| 4,004 |
|
|
| 6,001 |
| |
Total liabilities |
| 110,462 |
|
|
| 93,798 |
| |
Commitments and contingencies |
|
|
| |||||
Redeemable convertible preferred stock, $0.001 par value. No shares and 233,107,379 shares authorized as of January 31, 2021 and April 30, 2020, respectively; no shares and 37,128,768 shares issued and outstanding as of January 31, 2021 and April 30, 2020, respectively; Liquidation preference of $376,178 as of April 30, 2020 |
| — |
|
|
| 375,207 |
| |
Redeemable convertible class A-1 common stock, $0.001 par value. No shares and 6,666,667 shares authorized as of January 31, 2021 and April 30, 2020, respectively; no shares and 6,666,665 shares issued and outstanding as of January 31, 2021 and April 30, 2020, respectively; Liquidation preference of $18,800 as of April 30, 2020 |
| — |
|
|
| 18,800 |
| |
Stockholders’ (deficit) equity |
|
|
| |||||
Class A common stock, $0.001 par value. 1,000,000,000 and 390,000,000 shares authorized as of January 31, 2021 and April 30, 2020, respectively; 97,431,675 and 31,210,159 shares issued and outstanding as of January 31, 2021 and April 30, 2020 respectively |
| 98 |
|
|
| 31 |
| |
Class B common stock, $0.001 par value; 3,500,000 and 21,000,000 shares authorized as of January 31, 2021 and April 30, 2020, respectively; 3,499,992 and no shares issued and outstanding as of January 31, 2021 and April 30, 2020, respectively |
| 3 |
|
|
| — |
| |
Additional paid-in capital |
| 1,399,281 |
|
|
| 110,485 |
| |
Accumulated other comprehensive income |
| 13 |
|
|
| 424 |
| |
Accumulated deficit |
| (325,283 | ) |
|
| (293,637 | ) | |
Total stockholders’ (deficit) equity |
| 1,074,112 |
|
|
| (182,697 | ) | |
Total liabilities, redeemable convertible preferred stock, redeemable convertible Class A-1 common stock and stockholders’ (deficit) equity | $ | 1,184,574 |
|
| $ | 305,108 |
| |
(1) Including amounts from a related party of $1,030 and $250 as of January 31, 2021 and April 30, 2020, respectively. | ||||||||
(2) Including amounts from a related party of $9,358 and $1,499 as of January 31, 2021 and April 30, 2020, respectively. | ||||||||
C3.AI, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) | ||||||||
| Nine Months Ended January 31, | |||||||
| 2021 |
| 2020 | |||||
Cash flows from operating activities: |
|
|
| |||||
Net loss | $ | (31,646 | ) |
| $ | (38,944 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities |
|
|
| |||||
Depreciation and amortization |
| 3,189 |
|
|
| 566 |
| |
Non-cash operating lease cost |
| 2,474 |
|
|
| 2,267 |
| |
Stock-based compensation expense |
| 14,270 |
|
|
| 5,424 |
| |
Other |
| (115 | ) |
|
| (324 | ) | |
Changes in operating assets and liabilities |
|
|
| |||||
Accounts receivable(1) |
| 588 |
|
|
| 33,744 |
| |
Prepaid expenses, other current assets and other assets |
| (6,931 | ) |
|
| (6,928 | ) | |
Accounts payable |
| 7,447 |
|
|
| (917 | ) | |
Accrued compensation and employee benefits |
| 4,303 |
|
|
| 1,081 |
| |
Lease liability |
| (2,636 | ) |
|
| (2,344 | ) | |
Other liabilities |
| 1,213 |
|
|
| (397 | ) | |
Deferred revenue(2) |
| 2,016 |
|
|
| (20,335 | ) | |
Net cash used in operating activities |
| (5,828 | ) |
|
| (27,107 | ) | |
Cash flows from investing activities: |
|
|
| |||||
Purchase of property and equipment |
| (1,166 | ) |
|
| (1,629 | ) | |
Capitalized software development costs |
| — |
|
|
| (581 | ) | |
Proceeds from sale of non-marketable equity security |
| 725 |
|
|
| — |
| |
Purchase of investments |
| (232,287 | ) |
|
| (197,067 | ) | |
Maturity and sale of investments |
| 280,997 |
|
|
| 58,625 |
| |
Net cash provided by (used in) investing activities |
| 48,269 |
|
|
| (140,652 | ) | |
Cash flows from financing activities: |
|
|
| |||||
Proceeds from initial public offering and private placements, net of underwriting discounts |
| 851,859 |
|
|
| — |
| |
Proceeds from repayment of shareholder loan |
| 26,003 |
|
|
| — |
| |
Proceeds from issuance of Series G, net of issuance costs |
| — |
|
|
| 25,333 |
| |
Proceeds from issuance of Series H, net of issuance costs |
| — |
|
|
| 49,836 |
| |
Repurchase of common stock and options in tender offer |
| — |
|
|
| (3,548 | ) | |
Payment of deferred offering costs |
| (6,710 | ) |
|
| — |
| |
Proceeds from issuance of common stock |
| — |
|
|
| 44,028 |
| |
Proceeds from exercise of Class A common stock options |
| 13,825 |
|
|
| 3,846 |
| |
Net cash provided by financing activities |
| 884,977 |
|
|
| 119,495 |
| |
Net increase (decrease) in cash, cash equivalents and restricted cash |
| 927,418 |
|
|
| (48,264 | ) | |
Cash, cash equivalents and restricted cash at beginning of period |
| 33,604 |
|
|
| 99,107 |
| |
Cash, cash equivalents and restricted cash at end of period | $ | 961,022 |
|
| $ | 50,843 |
| |
Cash and cash equivalents | $ | 960,122 |
|
| $ | 50,343 |
| |
Restricted cash included in other assets |
| 900 |
|
|
| 500 |
| |
Total cash, cash equivalents and restricted cash | $ | 961,022 |
|
| $ | 50,843 |
| |
Supplemental disclosures of cash flow information—cash paid for income taxes | $ | 435 |
|
| $ | 541 |
| |
Supplemental disclosure of non-cash investing and financing activities: |
|
|
| |||||
Purchases of property and equipment included in accounts payable and accrued liabilities | $ | 349 |
|
| $ | — |
| |
Deferred offering costs included in accounts payable and accrued liabilities | $ | 503 |
|
| $ | — |
| |
Vesting of early exercised stock options | $ | 2,073 |
|
| $ | 427 |
| |
(1) Including changes in related party balances of $(780) and $19,826 for the nine months ended January 31, 2021 and 2020, respectively. | ||||||||
(2) Including changes in related party balances of $7,859 and $(8,596) for the nine months ended January 31, 2021 and 2020, 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, | |||||||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | |||||||||
Gross profit on a GAAP basis | $ | 36,883 |
|
| $ | 30,352 |
|
| $ | 98,126 |
|
| $ | 85,770 |
| |
Stock-based compensation expense(1) |
| 378 |
|
|
| 134 |
|
|
| 858 |
|
|
| 339 |
| |
Gross profit on a NON-GAAP basis | $ | 37,261 |
|
| $ | 30,486 |
|
| $ | 98,984 |
|
| $ | 86,109 |
| |
|
|
|
|
|
|
|
| |||||||||
Gross margin on a GAAP basis |
| 75 | % |
|
| 74 | % |
|
| 75 | % |
|
| 75 | % | |
Gross margin on a NON-GAAP basis |
| 76 | % |
|
| 74 | % |
|
| 76 | % |
|
| 75 | % | |
|
|
|
|
|
|
|
| |||||||||
Loss from operations on a GAAP basis | $ | (18,499 | ) |
| $ | (10,432 | ) |
| $ | (36,350 | ) |
| $ | (41,278 | ) | |
Stock-based compensation expense(1) |
| 6,589 |
|
|
| 2,061 |
|
|
| 14,270 |
|
|
| 5,424 |
| |
Loss from operations on a NON-GAAP basis | $ | (11,910 | ) |
| $ | (8,371 | ) |
| $ | (22,080 | ) |
| $ | (35,854 | ) | |
|
|
|
|
|
|
| ||||||||||
(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, | |||||||||||||
| 2021 |
| 2020 |
| 2021 |
| 2020 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Cost of subscription | $ | 214 |
|
| $ | 104 |
|
| $ | 557 |
|
| $ | 246 |
| |
Cost of professional services |
| 164 |
|
|
| 30 |
|
|
| 301 |
|
|
| 93 |
| |
Sales and marketing |
| 2,790 |
|
|
| 613 |
|
|
| 5,835 |
|
|
| 1,894 |
| |
Research and development |
| 846 |
|
|
| 308 |
|
|
| 1,952 |
|
|
| 910 |
| |
General and administrative |
| 2,575 |
|
|
| 1,006 |
|
|
| 5,625 |
|
|
| 2,281 |
| |
Total stock-based compensation expense | $ | 6,589 |
|
| $ | 2,061 |
|
| $ | 14,270 |
|
| $ | 5,424 |
| |
| Last Trade: | US$32.42 |
| Daily Change: | -0.88 -2.64 |
| Daily Volume: | 4,288,630 |
| Market Cap: | US$4.070B |
December 11, 2024 December 09, 2024 November 20, 2024 October 31, 2024 | |
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