C3.ai's Stock Drops As AI Software Company Misses on Top Line

Dow Jones2023-12-07

Company's revenue outlook for the current quarter misses consensus view at the midpoint

C3.ai Inc. came up shy on the top line for its latest quarter, and its shares were falling in Wednesday's after-market activity.

The company, which makes enterprise artificial-intelligence software, logged a fiscal second-quarter net loss of $69.8 million, or 59 cents a share, whereas it lost $68.9 million, or 63 cents a share, in the year-earlier quarter. On an adjusted basis, C3.ai (AI) lost 13 cents a share, while analysts had been modeling an 18-cent per-share loss.

Revenue at C3.ai came in at $73.2 million, up from $62.4 million a year before, whereas the FactSet consensus called for $74.3 million.

Shares were off nearly 8% in Wednesday's extended session.

"We saw unprecedented interest and traction in our generative AI offerings," Chief Executive Thomas Siebel said in a release. "Importantly, we are seeing a return to accelerating revenue growth as we continue our transition to a consumption-based pricing model."

The company noted that it closed 62 agreements, including 36 pilots, during the fiscal second quarter. That compares with the 24 pilots that C3.ai closed during its fiscal first quarter.

C3.ai disclosed that its move to a consumption-based pricing model "has been met with great reception among C3 AI's prospects, customers, and partners," and that the company has closed more than 100 pilots on its new pricing plan since it began the transition.

Looking to the fiscal third quarter, the company anticipates $74 million to $78 million in revenue, whereas the FactSet consensus was for $77.7 million. The company models $295 million to $320 million on the top line for its full fiscal year, which compares with the $307.9 million consensus view.

C3.ai shares are up 161% so far in 2023.

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