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C3.ai's (AI) Q2 Loss Narrower Than Expected, Revenues Rise Y/Y
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C3.ai (AI - Free Report) reported an adjusted loss of 13 cents per share in second-quarter fiscal 2024, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The company reported a non-GAAP loss of 11 cents in the year-ago quarter.
Revenues of $73.2 million increased 17.3% year over year and were in line with the lower end of the management’s projection between $72 million and $76.5 million. However, the figure lagged the consensus mark by 1.7%.
In the fiscal second quarter, C3.ai benefited from a strong technology partner base. The company closed 40 agreements through its partner network, including Baker Hughes, Booz Allen Hamilton, Microsoft, Amazon Web Services (AWS), and Google Cloud in the reported quarter.
C3.ai’s shares have rallied 160.6% year to date compared with the Zacks Computers and Technology sector’s growth of 44.6%.
C3.ai’s second-quarter results benefited from a strong subscription-based business model and increased demand for the company’s Generative AI and Enterprise AI software.
C3.ai’s subscription revenues (90.7% of revenues) increased 11.7% year over year to $66.4 million. Professional service revenues (9.3% of revenues) surged to $6.8 million.
C3 Generative AI enabled the company to acquire top-notch new customers while expanding its associations with existing customers.
In the reported quarter, the non-GAAP gross margin was 68.8% compared with 76.6% reported in the year-ago quarter.
Research and development and general and administrative expenses declined 11.4% and 2.3% year-over-year to $50.4 million and $20.2 million, respectively. Sales and marketing expenses dropped 3.9% to $49.9 million.
In the fiscal second quarter, C3.ai reported a non-GAAP loss from operations of $25 million compared with a non-GAAP loss from operations of $15 million reported in the year-ago quarter.
Balance Sheet
As of Oct 31, 2023, C3.ai had total cash, cash equivalents and short-term investments of $762.3 million compared with $809.6 million as of July 31, 2023.
Free cash outflow was $55.1 million in the reported quarter.
Guidance
For third-quarter fiscal 2024, C3.ai expects revenues between $74 million and $78 million. Non-GAAP loss from operations is anticipated to be $40-$46 million.
For the fiscal 2024, C3.ai expects revenues between $295 million and $320 million. Non-GAAP loss from operations is expected in the range of $115-$135 million.
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C3.ai's (AI) Q2 Loss Narrower Than Expected, Revenues Rise Y/Y
C3.ai (AI - Free Report) reported an adjusted loss of 13 cents per share in second-quarter fiscal 2024, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The company reported a non-GAAP loss of 11 cents in the year-ago quarter.
Revenues of $73.2 million increased 17.3% year over year and were in line with the lower end of the management’s projection between $72 million and $76.5 million. However, the figure lagged the consensus mark by 1.7%.
In the fiscal second quarter, C3.ai benefited from a strong technology partner base. The company closed 40 agreements through its partner network, including Baker Hughes, Booz Allen Hamilton, Microsoft, Amazon Web Services (AWS), and Google Cloud in the reported quarter.
C3.ai’s shares have rallied 160.6% year to date compared with the Zacks Computers and Technology sector’s growth of 44.6%.
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 second-quarter results benefited from a strong subscription-based business model and increased demand for the company’s Generative AI and Enterprise AI software.
C3.ai’s subscription revenues (90.7% of revenues) increased 11.7% year over year to $66.4 million. Professional service revenues (9.3% of revenues) surged to $6.8 million.
C3 Generative AI enabled the company to acquire top-notch new customers while expanding its associations with existing customers.
In the reported quarter, the non-GAAP gross margin was 68.8% compared with 76.6% reported in the year-ago quarter.
Research and development and general and administrative expenses declined 11.4% and 2.3% year-over-year to $50.4 million and $20.2 million, respectively. Sales and marketing expenses dropped 3.9% to $49.9 million.
In the fiscal second quarter, C3.ai reported a non-GAAP loss from operations of $25 million compared with a non-GAAP loss from operations of $15 million reported in the year-ago quarter.
Balance Sheet
As of Oct 31, 2023, C3.ai had total cash, cash equivalents and short-term investments of $762.3 million compared with $809.6 million as of July 31, 2023.
Free cash outflow was $55.1 million in the reported quarter.
Guidance
For third-quarter fiscal 2024, C3.ai expects revenues between $74 million and $78 million. Non-GAAP loss from operations is anticipated to be $40-$46 million.
For the fiscal 2024, C3.ai expects revenues between $295 million and $320 million. Non-GAAP loss from operations is expected in the range of $115-$135 million.
Zacks Rank & Stocks to Consider
C3.ai currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors intersted in the broader sector are NetEase (NTES - Free Report) , Intel (INTC - Free Report) and Pinterest (PINS - Free Report) . While NetEase and Intel sport a Zacks Rank #1 (Strong Buy) each, Pinterest carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NTES, INTC, and PINS' shares have returned 41.2%, 56.2% and 38.1%, respectively, on a year-to-date basis.
Long-term earnings growth rate for Pinterest, NetEase and Intel is 15.98%, 14.18% and 35.87%, respectively.