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C3.ai (AI) Q1 Loss Wider Than Expected, Revenues Rise Y/Y

C3.ai's (AI) first-quarter fiscal 2022 results benefit from rapid adoption of its model-driven AI architecture and services.

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C3.ai, Inc. AI reported first-quarter fiscal 2022 adjusted loss of 37 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 32 cents per share. The company had reported breakeven earnings in the year-ago period.



Revenues of $52.4 million beat the consensus mark by 2.68% and increased 29.5% year over year driven by the rapid adoption of its model-driven AI architecture and services.



On Dec 11, 2020, C3.ai completed its initial public offering.

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C3.ai, Inc. Price, Consensus and EPS Surprise

C3.ai, Inc. Price, Consensus and EPS Surprise

C3.ai, Inc. price-consensus-eps-surprise-chart | C3.ai, Inc. Quote

Quarter Details

C3.ai’s subscription revenues (88% of revenues) increased 29.2% year over year to $46.1 million. Professional service revenues (12% of revenues) increased 31.2% year over year to $6.3 million.



In the reported quarter, the non-GAAP gross margin expanded 330 basis points (bps) on a year-over-year basis to 78%.



Non-GAAP sales and marketing (S&M), research and development (R&D), and general and administrative (G&A) expenses increased 125%, 85.6%, and 78.1% on a year-over-year basis to $30.4 million, $23.8 million, and $8.5 million, respectively.



For the fiscal first quarter, the company reported a non-GAAP loss from operations of $21.8 million compared with the non-GAAP loss from operations of $0.8 million reported in the year-ago quarter.

User Details & Partnerships in Q1

The total number of C3 AI enterprise customers at the end of the fiscal first quarter was 98, up 85% year over year.



C3.ai continued to accelerate customer momentum and expanded its enterprise AI footprint in Defense, Chemicals, Financial Services, Manufacturing, Oil & Gas, Energy Sustainability, and Utilities, with new enterprise production deployments at LyondellBasell, Shell, ENGIE, and Con Edison.



This Zacks Rank #3 (Hold) company also initiated new enterprise AI projects with Baker Hughes BKR, Ball Corporation BLL, Cargill, Cummins, ENGIE, FIS, Koch Industries, Missile Defense Agency, Morsco, and Standard Chartered Bank SCBFF and expanded business with Cargill, LyondellBasell, and Standard Chartered Bank. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



The company grew its enterprise AI production application footprint through both new customer acquisitions and expanded use by existing customers, with 101 discrete applications in production at the end of the first quarter, up from 67 in the year-ago quarter.



C3.ai production applications showed continued industry diversification, growing to 12 industries in the fiscal first quarter compared with 7 industries in the year-ago quarter.



The company continued to invest in its university partnerships at UC Berkeley, the University of Illinois Urbana-Champaign, Princeton, MIT, Carnegie-Mellon, Stanford, and KTH in Sweden with the C3.ai Digital Transformation Institute (“C3.ai DTI”) to accelerate research into the new science of digital transformation.



In the fiscal first quarter, C3.ai DTI announced $4.4 million in additional cash awards to support 21 research projects focused on using AI techniques and digital transformation to advance energy efficiency, and lead the way to a lower-carbon, higher-efficiency economy.

Balance Sheet & Cash Flow

As of Jul 31, 2021, C3.ai had total cash, cash equivalents, and short-term investments of $1.09 billion, which remained the same sequentially.



Cash provided by operating activities totaled $1.02 million in the reported quarter compared with $37.5 million used in the previous quarter.



Non-GAAP remaining performance obligation was $357.3 million, up 28% year over year.

Key Developments in Q1

C3 AI advanced its product leadership position in enterprise AI. In the first quarter, the company released two major upgrades to the C3 AI Suite and has now released 40 enterprise AI software applications into production release for Financial Services, Manufacturing, Telecommunications, Public Sector, Energy, Utilities, Defense, and Intelligence.

Guidance

For second-quarter fiscal 2022, C3.ai expects revenues between $56 million and $58 million. Non-GAAP loss from operations is expected between $30 million and $37 million



For full-year fiscal 2022, C3.ai expects revenues between $243 million and $247 million. Non-GAAP loss from operations is expected between $107 million and $119 million.



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