Is it time to buy C3ai on Increasing Revenue Growth?
πππ$C3.ai, Inc.(AI)$
C3ai reported a strong quarter with its revenue growing by 20% year over year to USD 86.6 million, exceeding the top end of its guidance. C3ai's full year revenue grew by 16% to USD 310.6 million, also exceeding the top end of its guidance.
According to CEO and Chairman Thomas Siebel the demand for Enterprise AI is intensifying and C3ai's first to market advantage in Enterprise AI positions the company well to capitalise on it. C3ai's Enterprise AI applications have been adopted across 19 industries, increasing its market diversity. C3ai's Federal revenue grew more than 100% for the year due to the interest in C3ai's Generative AI applications.
Subscription revenue for the quarter was USD 79.9 million, constituting 92% of total revenue, an increase of 41% compared to USD 56.9 million last year.
GAAP Gross Profit for the quarter was USD 51.6 million, representing a 60% gross margin. Non GAAP Gross Profit for the quarter was USD 60.9 million, representing a 70% non GAAP gross margin.
GAAP Net Loss per share was - 59 cents. Non GAAP Net Loss per share was - 11 cents.
Cash Reserves was USD 750.4 million in cash, cash equivalent and marketable securities.
Positive Free Cash Flow was USD 18.8 million.
C3ai is leading with Enterprise AI applications. In FY 24, 88% of all bookings were driven by application sales and 12% of its bookings were driven by sales of the C3ai Platform.
C3ai also impressed the market with its guidance for fiscal 2025, calling for full year revenue of USD 370 million to USD 395 million, up 23% from fiscal 2024 and better than Wall Street Analysts expectations at USD 367.5 million.
However C3ai still expects to be unprofitable, forecasting an adjusted loss from operations of USD 95 million to USD 125 million, up from USD 94.8 million in 2024.
Even though C3ai is unprofitable currently, revenue growth is accelerating. This is the 5th consecutive quarter for C3ai increasing revenue growth.
Wall Street Analysts are bullish on C3ai with a Buy rating, average Target price of USD 31.67, an upside potential of 10%.
It is exciting times ahead for C3ai and I believe that it will continue to grow exponentially in the future due to its focus on Generative AI applications for its enterprise customers.
Is it time to buy C3ai on Increasing Revenue Growth? It is a Yes from me especially if the interest in its Generative AI applications continues to be "staggering"!
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Maybe itβs too late now