Free Cash Flow Positive. Revenue, Earnings
Exceed Guidance
C3.ai, Inc. (“C3 AI,” “C3,” or the “Company”) (NYSE: AI), the
Enterprise AI application software company, today announced
preliminary results for its fourth fiscal quarter and fiscal year
ended April 30, 2023. All numbers reported are unaudited
preliminary estimates. Completed financial results, fiscal 2024
guidance, KPIs, and additional details will be provided on May 31,
2023.
Fiscal Fourth Quarter 2023 Preliminary Business
Update
- Total revenue for the quarter was $72.1 million - $72.4
million, exceeding company guidance.
- Net cash provided by operating activities was $28.1 million -
$29.5 million. Positive free cash flow was $18.0 million - $19.4
million.
- GAAP loss from operations of ($75.9) million - ($77.1)
million.
- Non-GAAP loss from operations of ($23.7) million - ($23.9)
million, exceeding guidance.
We expect to report the following results for the fourth quarter
and full fiscal year ended April 30, 2023:
Three Months Ended April 30,
2023
Prior Guidance
(in millions)
(in millions)
Revenue
$72.1 - $72.4
$70.0 - $72.0
GAAP loss from operations
($75.9) - ($77.1)
Non-GAAP loss from operations
($23.7) - ($23.9)
($24.0) - ($28.0)
Net cash provided by operating
activities
$28.1 - $29.5
Free cash flow
$18.0 - $19.4
Free cash flow adjusted for new C3 AI
HQ
$10.6 - $12.0
Fiscal Year Ended April 30,
2023
Prior Guidance
(in millions)
(in millions)
Revenue
$266.5 - $266.8
$264.0 - $266.0
GAAP loss from operations
($293.1) - ($294.3)
Non-GAAP loss from operations
($68.2) - ($68.4)
($69.0) - ($73.0)
Net cash used in operating activities
($113.3) - ($114.7)
Free cash flow
($184.2) - ($185.6)
Free cash flow adjusted for new C3 AI
HQ
($134.4) - ($135.8)
This news release and all information herein are preliminary,
unaudited estimates.
Comments on Fiscal Fourth Quarter Business Results
Overall business environment for enterprise AI is more active
than we have seen since the company’s inception and seems to be
accelerating. Interest in applying predictive analytics to business
processes has never been greater. This manifested in significantly
increased business activity at C3 AI. During the quarter we closed
43 deals, including 19 pilots that were initiated in Q4 FY 23.
The consumption-based pricing model continues to be well
received by the customers and partners. Largely as a result, the
number of qualified enterprise opportunities for closure within 12
months in our sales pipeline has increased by over 100% in the past
year.
Examples of pilot conversions include Dow, Alberta Treasury
Branches (“ATB”), and Chief Digital and Artificial Intelligence
Office (“CDAO”). Continued product additions and expansions at
Shell, Koch Industries, Department of Defense Rapid Sustainment
Office (“RSO”), PwC, Ball, ExxonMobil, Con Edison, Missile Defense
Agency, Defense Counterintelligence and Security Agency (“DCSA”),
Baker Hughes, New York Power Authority, and others.
Our partner ecosystem is increasingly effective at opening new
doors, providing prospects the assurance of success, and providing
customers with the highest quality service. We are particularly
active with Google Cloud, AWS, Microsoft, Baker Hughes, and Booz
Allen. Continued good progress with the Engie partnership that has
now sold the Engie Ellipse solution – an enhancement of C3 AI
Energy Management – to over 30 customers including: a large U.S.
department store chain; a large U.S. retail chain; a large American
automotive dealership group; a hotel and casino entertainment
company; a Fortune 500 industrial supply company; a Fortune 500
office supply company; a multi-national chain of pet superstores; a
multinational consumer electronics retail chain; and a global
shipping and mailing company.
C3 AI Federal business is increasingly strong, particularly in
Defense and Intelligence. Importantly, the C3 AI predictive
maintenance application, in production use for some years at NAVAIR
Rapid Sustainment Office (“RSO”), was officially designated as the
system of record for all predictive maintenance applications in the
U.S. Air Force. Our growing partnership with Booz Allen is proving
a significant competitive advantage.
C3 Generative AI is being enthusiastically received by both
existing C3 AI customers and new prospects. Now generally
available, we signed three new C3 Generative AI application
agreements with large enterprises in Q4 FY 23. See:
https://c3.ai/products/c3-generative-ai-product-suite/.
The company continues on track with its path to profitability,
with the goal of achieving a non-GAAP profitable business by the
end of fiscal year 2024, ending April 30, 2024. Positive results to
date, estimated to generate $18.0 million to $19.4 million in free
cash flow from business operations in Q4 FY 23, and ending the year
with over $800 million in cash, cash equivalents and
investments.
CEO Remarks:
“As we began the fiscal year on May 1, the company has never
been better positioned,” said Thomas M. Siebel, C3 AI CEO. “I
believe we now have broad consensus that the addressable market for
Enterprise AI is extraordinarily large; we have nearly 1,000
talented, dedicated employees; the C3 AI Platform is increasingly
recognized as the gold-standard in enterprise AI; we have over 40
production enterprise AI applications that offer the market rapid
time to value; our C3 Generative AI offerings are being
enthusiastically received; our growing market-partner ecosystem
enables us to punch above our weight; and with our tried, tested,
and proven management team, our august and distinguished board of
directors, our strong work ethic, and armed with over $800 million
in cash – we are well positioned to accelerate growth, gain market
share, attain sustainable non-GAAP profitability, and establish a
market-leading position globally in enterprise AI. FY 2024 will be
exciting.”
Conference Call Details
What:
C3 AI Fourth Quarter Fiscal 2023 Financial
Results Conference Call
When:
Wednesday, May 31, 2023
Time:
2:00 p.m. PT / 5:00 p.m. ET
Participant Registration:
https://register.vevent.com/register/BI82803676bd9a45f486a3df9d2260d9a6
(live call)
Webcast:
https://edge.media-server.com/mmc/p/4mip8zax (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.
- Non-GAAP loss from operations. Our Non-GAAP loss from
operations exclude the effect of stock-based compensation
expense-related charges and employer payroll tax expense related to
employee stock-based compensation. We believe the presentation of
operating results that exclude these non-cash items provides useful
supplemental information to investors and facilitates the analysis
of our operating results and comparison of operating results across
reporting periods.
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
These preliminary financial and operating results presented
herein are an estimate and subject to the completion of the
Company’s financial closing and other procedures and finalization
of the Company’s consolidated financial statements for its year
ended April 30, 2023, including the completion of the audit of the
Company’s financial statements. Accordingly, actual financial and
operating results that will be reflected in the Company’s Annual
Report on Form 10-K for the year ended April 30, 2023, including
its audited financial statements, when they are completed and
publicly disclosed may differ from these preliminary results. In
addition, any statements regarding the Company's estimated
financial performance for the fourth quarter 2023 do not present
all information necessary for an understanding of the Company's
financial condition and results of operations as of and for the
quarterly period ended April 30, 2023.
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 expectations relating to our
new consumption-pricing model and the impact to our results of
operations, our expectation to be operating profitably on a
non-GAAP basis by the end of fiscal 2024, the expected benefits of
our offerings, our business strategies, plans, and objectives for
future operations, are forward-looking statements. The words
“anticipate,” “believe,” “continue,” “estimate,” “expect,”
“intend,” “may,” “will” and similar expressions are intended to
identify forward-looking statements. We have based these
forward-looking statements largely on our current expectations and
projections about future events and trends that we believe may
affect our financial condition, results of operations, business
strategy, short-term and long-term business operations and
objectives, and financial needs. These forward-looking statements
are subject to a number of risks and uncertainties, including
difficulties in evaluating our prospects and future results of
operations given our limited operating history, our dependence on a
limited number of existing customers that account for a substantial
portion of our revenue, our ability to attract new customers and
retain existing customers, market awareness and acceptance of
enterprise AI solutions in general and our products in particular,
and our history of operating losses. Some of these risks are
described in greater detail in our filings with the Securities and
Exchange Commission, including our Quarterly Reports on Form 10-Q
for the fiscal quarters ended July 31, 2022, October 31, 2022 and
January 31, 2022, and other filings and reports we make with the
Securities and Exchange Commission from time to time, including our
Form 10-K that will be filed for the fiscal year ended April 30,
2023, 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 Application Platform, an end-to-end platform
for developing, deploying, and operating enterprise AI applications
and 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 large
AI transformer models for the enterprise.
C3.AI, INC.
RECONCILIATION OF PRELIMINARY
GAAP TO PRELIMINARY NON-GAAP FINANCIAL MEASURES
(In millions)
(Unaudited)
Range of Preliminary
Results
Three Months Ended April 30,
2023
Fiscal Year Ended April 30,
2023
Reconciliation of GAAP loss from
operations to non-GAAP loss from operations:
Loss from operations on a GAAP basis
$
(75.9
)
$
(77.1
)
$
(293.1
)
$
(294.3
)
Estimated stock-based compensation
expense
50.4
51.4
218.9
219.9
Estimated employer payroll tax expense
related to employee stock-based compensation
1.8
1.8
6.0
6.0
Loss from operations on a non-GAAP
basis
$
(23.7
)
$
(23.9
)
$
(68.2
)
$
(68.4
)
Reconciliation of free cash flow to the GAAP measure of net
cash provided by (used in) operating activities:
The following table below provides a reconciliation of free cash
flow to the GAAP measure of net cash provided by (used in)
operating activities for the periods presented:
Range of Preliminary
Results
Three Months Ended April 30,
2023
Fiscal Year Ended April 30,
2023
Net cash provided by (used in) operating
activities
$
28.1
$
29.5
$
(113.3
)
$
(114.7
)
Less:
Estimated purchases of property and
equipment
(10.1
)
(10.1
)
(69.9
)
(69.9
)
Estimated capitalized software development
costs
—
—
(1.0
)
(1.0
)
Free cash flow
$
18.0
$
19.4
$
(184.2
)
$
(185.6
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230515005247/en/
Investor Contact ir@c3.ai
Press Contact Lisa Kennedy (415) 914-8336 pr@c3.ai
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