C3 AI Fiscal Fourth Quarter 2023 Preliminary Results Exceed Guidance
Free Cash Flow Positive. Revenue, Earnings Exceed Guidance
Fiscal Fourth Quarter 2023 Preliminary Business Update
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Total revenue for the quarter was
$72.1 million -$72.4 million , exceeding company guidance. -
Net cash provided by operating activities was
$28.1 million -$29.5 million . Positive free cash flow was$18.0 million -$19.4 million . -
GAAP loss from operations of
($75.9) million -($77.1) million . -
Non-GAAP loss from operations of
($23.7) million -($23.9) million , exceeding guidance.
We expect to report the following results for the fourth quarter and full fiscal year ended
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Prior Guidance |
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Revenue |
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GAAP loss from operations |
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Non-GAAP loss from operations |
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Net cash provided by operating activities |
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Free cash flow |
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Free cash flow adjusted for new C3 AI HQ |
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Fiscal Year Ended |
Prior Guidance |
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Revenue |
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GAAP loss from operations |
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Non-GAAP loss from operations |
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Net cash used in operating activities |
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Free cash flow |
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Free cash flow adjusted for new C3 AI HQ |
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This news release and all information herein are preliminary, unaudited estimates.
Comments on Fiscal Fourth Quarter Business Results
Overall business environment for enterprise AI is more active than we have seen since the company’s inception and seems to be accelerating. Interest in applying predictive analytics to business processes has never been greater. This manifested in significantly increased business activity at C3 AI. During the quarter we closed 43 deals, including 19 pilots that were initiated in Q4 FY 23.
The consumption-based pricing model continues to be well received by the customers and partners. Largely as a result, the number of qualified enterprise opportunities for closure within 12 months in our sales pipeline has increased by over 100% in the past year.
Examples of pilot conversions include Dow, Alberta Treasury Branches (“ATB”), and
Our partner ecosystem is increasingly effective at opening new doors, providing prospects the assurance of success, and providing customers with the highest quality service. We are particularly active with
C3 AI Federal business is increasingly strong, particularly in Defense and Intelligence. Importantly, the C3 AI predictive maintenance application, in production use for some years at NAVAIR Rapid Sustainment Office (“RSO”), was officially designated as the system of record for all predictive maintenance applications in the
C3 Generative AI is being enthusiastically received by both existing C3 AI customers and new prospects. Now generally available, we signed three new C3 Generative AI application agreements with large enterprises in Q4 FY 23. See: https://c3.ai/products/c3-generative-ai-product-suite/.
The company continues on track with its path to profitability, with the goal of achieving a non-GAAP profitable business by the end of fiscal year 2024, ending
CEO Remarks:
“As we began the fiscal year on
Conference Call Details
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What: |
C3 AI Fourth Quarter Fiscal 2023 Financial Results Conference Call |
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When: |
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Time: |
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Participant Registration: |
https://register.vevent.com/register/BI82803676bd9a45f486a3df9d2260d9a6 (live call) |
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Webcast: |
https://edge.media-server.com/mmc/p/4mip8zax (live and replay) |
Investor Presentation Details
An investor presentation providing additional information and analysis can be found at our investor relations page at ir.c3.ai.
Statement Regarding Use of Non-GAAP Financial Measures
The Company reports the following non-GAAP financial measures, which have not been prepared in accordance with generally accepted accounting principles in
- Non-GAAP loss from operations. Our Non-GAAP loss from operations exclude the effect of stock-based compensation expense-related charges and employer payroll tax expense related to employee stock-based compensation. We believe the presentation of operating results that exclude these non-cash items provides useful supplemental information to investors and facilitates the analysis of our operating results and comparison of operating results across reporting periods.
We use these non-GAAP financial measures internally for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP to non-GAAP financial measures.
Use of Forward-Looking Statements
These preliminary financial and operating results presented herein are an estimate and subject to the completion of the Company’s financial closing and other procedures and finalization of the Company’s consolidated financial statements for its year ended
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical facts, including our market leadership position, anticipated benefits from our partnerships and investments, financial outlook, our expectations relating to our new consumption-pricing model and the impact to our results of operations, our expectation to be operating profitably on a non-GAAP basis by the end of fiscal 2024, the expected benefits of our offerings, our business strategies, plans, and objectives for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including difficulties in evaluating our prospects and future results of operations given our limited operating history, our dependence on a limited number of existing customers that account for a substantial portion of our revenue, our ability to attract new customers and retain existing customers, market awareness and acceptance of enterprise AI solutions in general and our products in particular, and our history of operating losses. Some of these risks are described in greater detail in our filings with the
About
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RECONCILIATION OF PRELIMINARY GAAP TO PRELIMINARY NON-GAAP FINANCIAL MEASURES (In millions) (Unaudited) |
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Range of Preliminary Results |
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Three Months Ended |
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Fiscal Year Ended |
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Reconciliation of GAAP loss from operations to non-GAAP loss from operations: |
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Loss from operations on a GAAP basis |
$ |
(75.9 |
) |
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$ |
(77.1 |
) |
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$ |
(293.1 |
) |
$ |
(294.3 |
) |
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Estimated stock-based compensation expense |
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50.4 |
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51.4 |
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218.9 |
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219.9 |
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Estimated employer payroll tax expense related to employee stock-based compensation |
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1.8 |
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1.8 |
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6.0 |
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6.0 |
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Loss from operations on a non-GAAP basis |
$ |
(23.7 |
) |
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$ |
(23.9 |
) |
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$ |
(68.2 |
) |
$ |
(68.4 |
) |
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Reconciliation of free cash flow to the GAAP measure of net cash provided by (used in) operating activities:
The following table below provides a reconciliation of free cash flow to the GAAP measure of net cash provided by (used in) operating activities for the periods presented:
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Range of Preliminary Results |
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Three Months Ended |
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Fiscal Year Ended |
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Net cash provided by (used in) operating activities |
$ |
28.1 |
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$ |
29.5 |
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$ |
(113.3 |
) |
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$ |
(114.7 |
) |
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Less: |
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Estimated purchases of property and equipment |
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(10.1 |
) |
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(10.1 |
) |
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(69.9 |
) |
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(69.9 |
) |
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Estimated capitalized software development costs |
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— |
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— |
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(1.0 |
) |
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(1.0 |
) |
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Free cash flow |
$ |
18.0 |
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$ |
19.4 |
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$ |
(184.2 |
) |
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$ |
(185.6 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230515005247/en/
Investor Contact
ir@c3.ai
Press Contact
(415) 914-8336
pr@c3.ai
Source: