Artificial intelligence is the hottest trend in years, and although many companies in the space are startups, publicly listed companies specializing in AI are also benefiting. One such company is C3ai Inc., which saw its shares surge in late trading today after it exceeded expectations in its latest quarterly earnings report.
For the quarter that ended Jan. 31, C3 AI reported a non-generally accepted accounting principles loss per share of six cents, down from a loss of seven cents in the same quarter of last year. Revenue came in at $66.7 million, down 4% year-over-year but exceeding guidance of $63 million to $65 million. Analysts had expected an EPS loss of 22 cents on revenue of $64.22 million.
Subscription revenue in the quarter came in at $57 million, GAAP gross profit was $44.4 million and non-GAAP profit was $51 million. Non-GAAP remaining performance obligations sat at $436.3 million as of the end of January. C3 AI now has 236 customers and $789.8 million in cash and equivalents at hand.
Highlights in the quarter included C3 AI and Google Cloud closing deals with eight new customers and expanding their joint pipeline. The combined sales teams have identified 291 enterprise opportunities for its joint solutions, over 100 of which we are currently engaged in licensing discussions.
C3 AI also renewed and expanded in go-to-market partnership with Amazon Web Services Inc., including AWS funding C3 AI to enhance C3 AI Law Enforcement optimized for AWS. The company also collaborated with Microsoft Azure to close a deal with a global U.S. energy company and a European technology company serving the construction and mining sectors.
At a time most companies a citing worsening macroeconomic conditions and are laying off staff, C3 AI, like much of the nascent AI industry, is seeing the opposite.
“As we enter Q4 FY 23, we are seeing tailwinds from improved business optimism and increased interest in applying C3 AI solutions to address an increasing range of applications across a broad range of industries,” Thomas M. Siebel (pictured), chief executive officer of C3 AI, said in a media release. “The overall business sentiment appears to be improving. This is a dramatic change from what we experienced in mid-2022.”
For its fiscal fourth quarter of 2023, C3 AI expects a non-GAAP loss for operations of between $24 million and $28 million on revenue of $70 million to $72 million – analysts had expected a revenue outlook of $69.9 million. For its full fiscal year, the company expects revenue of $264 million to $266 million, ahead of a consensus estimate of $261 million.
An AI stock with an earnings beat and a higher-than-expected outlook can only go one direction and that’s exactly what C3 AI shares did, up 18% in late trading.