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C3.ai (AI) Q3 Loss Narrower Than Expected, Revenues Rise Y/Y
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C3.ai, Inc. (AI - Free Report) reported an adjusted loss of 7 cents per share in third-quarter fiscal 2022, beating the Zacks Consensus Estimate of a loss of 27 cents. The company had reported a non-GAAP loss per share of 23 cents in the prior-year quarter.
Revenues of $69.8 million beat the consensus mark by 4.18% and increased 42.2% year over year, driven by the rapid adoption of its model-driven AI architecture and services.
C3.ai’s subscription revenues (81.8% of revenues) increased 33.8% year over year to $57.1 million. Professional service revenues (18.2% of revenues) increased 98% year over year to $12.7 million.
In the reported quarter, the non-GAAP gross margin expanded 400 basis points (bps) on a year-over-year basis to 79.9%.
Non-GAAP sales and marketing (S&M), research and development (R&D) and general and administrative (G&A) expenses increased 32.9%, 52.3% and 65.9% on a year-over-year basis to $34.1 million, $27.3 million and $9.3 million, respectively.
For the fiscal third quarter, C3.ai reported a non-GAAP loss from operations of $15.7 million compared with the non-GAAP loss from operations of $11.9 million reported in the year-ago quarter.
User Details & Partnerships in Q3
The total number of C3 AI enterprise customers at the end of the fiscal third quarter was 218, up 82% year over year.
Business from contracts executed in the reported quarter showcased a substantial increase in the industry diversification. 32% was from utilities, 30% of C3.ai’s business was from the chemical industry, 20% from agribusiness and 12% from financial services.
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, Royal Philips, Cargill and Swift.
Balance Sheet & Cash Flow
As of Jan 31, 2022, C3.ai had total cash, cash equivalents and short-term investments of $968.64 million compared with $970.42 million as of Oct 31, 2021.
Cash used by operating activities totaled $73.3 million in the reported quarter compared with $17.88 million used in the previous quarter.
Non-GAAP remaining performance obligation was $295.9 million, up 81% year over year.
Guidance
For full-year fiscal 2022, C3.ai expects revenues between $251 million and $252 million. Non-GAAP loss from operations is expected between $90 million and $94 million.
Model N has an Earnings ESP of +5.0% and a Zacks Rank #2.
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LivePerson has an Earnings ESP of +4.69% and a Zacks Rank #2.
LPSN is down 57.2% in the past year against the Zacks Internet – Services industry’s rise of 10.7% and the Computer and Technology sector’s increase of 5.2%.
Paycor HCM has an Earnings ESP of +9.82% and a Zacks Rank #2.
PYCR is up 7.5% in the past year compared with the Zacks Internet – Software industry’s decline of 44.3% and the Computer and Technology sector’s rise of 5.3%.
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C3.ai (AI) Q3 Loss Narrower Than Expected, Revenues Rise Y/Y
C3.ai, Inc. (AI - Free Report) reported an adjusted loss of 7 cents per share in third-quarter fiscal 2022, beating the Zacks Consensus Estimate of a loss of 27 cents. The company had reported a non-GAAP loss per share of 23 cents in the prior-year quarter.
Revenues of $69.8 million beat the consensus mark by 4.18% and increased 42.2% year over year, driven by the rapid adoption of its model-driven AI architecture and services.
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 (81.8% of revenues) increased 33.8% year over year to $57.1 million. Professional service revenues (18.2% of revenues) increased 98% year over year to $12.7 million.
In the reported quarter, the non-GAAP gross margin expanded 400 basis points (bps) on a year-over-year basis to 79.9%.
Non-GAAP sales and marketing (S&M), research and development (R&D) and general and administrative (G&A) expenses increased 32.9%, 52.3% and 65.9% on a year-over-year basis to $34.1 million, $27.3 million and $9.3 million, respectively.
For the fiscal third quarter, C3.ai reported a non-GAAP loss from operations of $15.7 million compared with the non-GAAP loss from operations of $11.9 million reported in the year-ago quarter.
User Details & Partnerships in Q3
The total number of C3 AI enterprise customers at the end of the fiscal third quarter was 218, up 82% year over year.
Business from contracts executed in the reported quarter showcased a substantial increase in the industry diversification. 32% was from utilities, 30% of C3.ai’s business was from the chemical industry, 20% from agribusiness and 12% from financial services.
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, Royal Philips, Cargill and Swift.
Balance Sheet & Cash Flow
As of Jan 31, 2022, C3.ai had total cash, cash equivalents and short-term investments of $968.64 million compared with $970.42 million as of Oct 31, 2021.
Cash used by operating activities totaled $73.3 million in the reported quarter compared with $17.88 million used in the previous quarter.
Non-GAAP remaining performance obligation was $295.9 million, up 81% year over year.
Guidance
For full-year fiscal 2022, C3.ai expects revenues between $251 million and $252 million. Non-GAAP loss from operations is expected between $90 million and $94 million.
Zacks Rank & Stocks to Consider
Currently, C3.ai carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Computer and Technology sector are Model N (MODN - Free Report) , LivePerson (LPSN - Free Report) and Paycor HCM (PYCR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Model N has an Earnings ESP of +5.0% and a Zacks Rank #2.
MODN is down 39% in the past year compared with the Zacks Internet - Software industry’s decline of 44.3% and the Computer and Technology sector’s rise of 5.3% in the past year.
LivePerson has an Earnings ESP of +4.69% and a Zacks Rank #2.
LPSN is down 57.2% in the past year against the Zacks Internet – Services industry’s rise of 10.7% and the Computer and Technology sector’s increase of 5.2%.
Paycor HCM has an Earnings ESP of +9.82% and a Zacks Rank #2.
PYCR is up 7.5% in the past year compared with the Zacks Internet – Software industry’s decline of 44.3% and the Computer and Technology sector’s rise of 5.3%.