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C3.ai (AI) Q4 Loss Narrower Than Expected, Revenues Rise Y/Y

C3.ai, Inc. AI reported a fourth-quarter fiscal 2023 adjusted loss of 13 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 17 cents. The company had reported a non-GAAP loss of 21 cents in the year-ago quarter.

Revenues of $72.4 million beat the consensus mark by 0.1% and inched up 0.1% year over year.

Quarter Details

C3.ai’s subscription revenues (78.5% of revenues) increased 1% year over year to $56.9 million. Professional service revenues (21.5% of revenues) declined 2.9% to $15.5 million.

In the reported quarter, the non-GAAP gross margin contracted 700 basis points (bps) on a year-over-year basis to 74%.

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

 

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

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Research and development and general and administrative expenses increased 7.1% and 9.9% on a year-over-year basis to $49.7 million and $19.4 million, respectively. Sales and marketing expenses increased 9% to $51.7 million.

In the fiscal fourth quarter, C3.ai reported a non-GAAP loss from operations of $23.5 million compared with a non-GAAP loss from operations of $20.7 million reported in the year-ago quarter.

User & Partnership Details

The total number of C3.ai enterprise customers at the end of the quarter was 244, up 9.4% year over year.

C3.ai and Alphabet’s GOOGL Google Cloud and Amazon’s AMZN AWS continued expanding their partnership base in the fourth quarter of fiscal 2023.

C3.ai and Alphabet’s Google Cloud made joint investments in the reported quarter in industry applications with the launch of new enterprise AI applications. The two companies’ 12-month opportunity pipeline surged 460% year over year to 140 opportunities at the end of fiscal 2023.

C3.ai broadened its qualified pipeline with AWS by over 24% in the fiscal fourth quarter, with particular focus on state and local government.

Balance Sheet

As of Apr 30, 2023, C3.ai had total cash, cash equivalents and short-term investments of $730.98 million compared with $772.4 million as of Jan 31, 2023.

Cash outflow from operations was $115.7 million compared with the previous quarter’s outflow of $142.7 million.

GAAP Remaining performance obligation was $381.4 million, down 20% year over year.

Guidance

For first-quarter fiscal 2024, C3.ai expects revenues between $70 million and $72.5 million. Non-GAAP loss from operations is anticipated within $25 million to $30 million.

For fiscal 2024, C3.ai expects revenues between $295 million and $320 million. Non-GAAP loss from operations is expected in the range of $50 million to $75 million.

Zacks Rank and Stock to Consider

Currently, C3.ai carries a Zacks Rank #3 (Hold).

Its shares are up 257.5% year to date compared with the Zacks Computer and Technology sector’s rise of 31.6% over the same time frame.

Here is a better-ranked stock to consider in the broader tech sector:

Momo MOMO sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MOMO’s shares have fallen 10.2% in the year-to-date period against the Zacks Internet - Software industry’s rise of 35.9%. MOMO is set to report its first-quarter 2023 results on Jun 6.

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