ai-20220731
04-30FALSE00015775262023Q1200.20.2110.020.04400015775262022-05-012022-07-310001577526us-gaap:CommonClassAMember2022-08-29xbrli:shares0001577526us-gaap:CommonClassBMember2022-08-2900015775262022-07-31iso4217:USD00015775262022-04-300001577526us-gaap:CommonClassAMember2022-07-31iso4217:USDxbrli:shares0001577526us-gaap:CommonClassAMember2022-04-300001577526us-gaap:CommonClassBMember2022-04-300001577526us-gaap:CommonClassBMember2022-07-310001577526srt:AffiliatedEntityMember2022-07-310001577526srt:AffiliatedEntityMember2022-04-300001577526us-gaap:LicenseAndServiceMember2022-05-012022-07-310001577526us-gaap:LicenseAndServiceMember2021-05-012021-07-310001577526ai:ProfessionalServicesMember2022-05-012022-07-310001577526ai:ProfessionalServicesMember2021-05-012021-07-3100015775262021-05-012021-07-310001577526us-gaap:InvestorMemberus-gaap:LicenseAndServiceMember2022-05-012022-07-310001577526us-gaap:InvestorMemberus-gaap:LicenseAndServiceMember2021-05-012021-07-310001577526us-gaap:InvestorMemberai:ProfessionalServicesMember2022-05-012022-07-310001577526us-gaap:InvestorMemberai:ProfessionalServicesMember2021-05-012021-07-310001577526us-gaap:InvestorMember2022-05-012022-07-310001577526us-gaap:InvestorMember2021-05-012021-07-310001577526us-gaap:CommonStockMember2022-04-300001577526us-gaap:AdditionalPaidInCapitalMember2022-04-300001577526us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-300001577526us-gaap:RetainedEarningsMember2022-04-300001577526us-gaap:CommonStockMember2022-05-012022-07-310001577526us-gaap:AdditionalPaidInCapitalMember2022-05-012022-07-310001577526us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-05-012022-07-310001577526us-gaap:RetainedEarningsMember2022-05-012022-07-310001577526us-gaap:CommonStockMember2022-07-310001577526us-gaap:AdditionalPaidInCapitalMember2022-07-310001577526us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-310001577526us-gaap:RetainedEarningsMember2022-07-310001577526us-gaap:CommonStockMember2021-04-300001577526us-gaap:AdditionalPaidInCapitalMember2021-04-300001577526us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-300001577526us-gaap:RetainedEarningsMember2021-04-3000015775262021-04-300001577526us-gaap:CommonStockMember2021-05-012021-07-310001577526us-gaap:AdditionalPaidInCapitalMember2021-05-012021-07-310001577526us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-05-012021-07-310001577526us-gaap:RetainedEarningsMember2021-05-012021-07-310001577526us-gaap:CommonStockMember2021-07-310001577526us-gaap:AdditionalPaidInCapitalMember2021-07-310001577526us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-310001577526us-gaap:RetainedEarningsMember2021-07-3100015775262021-07-310001577526srt:NorthAmericaMember2022-05-012022-07-310001577526srt:NorthAmericaMember2021-05-012021-07-310001577526us-gaap:EMEAMember2022-05-012022-07-310001577526us-gaap:EMEAMember2021-05-012021-07-310001577526srt:AsiaPacificMember2022-05-012022-07-310001577526srt:AsiaPacificMember2021-05-012021-07-310001577526ai:RestOfWorldMember2022-05-012022-07-310001577526ai:RestOfWorldMember2021-05-012021-07-310001577526us-gaap:GeographicConcentrationRiskMembercountry:USus-gaap:RevenueFromContractWithCustomerMember2022-05-012022-07-31xbrli:pure0001577526us-gaap:GeographicConcentrationRiskMembercountry:USus-gaap:RevenueFromContractWithCustomerMember2021-05-012021-07-310001577526us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:FR2021-05-012021-07-3100015775262022-08-012022-07-310001577526ai:CustomerOneMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-05-012022-07-310001577526ai:CustomerTwoMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-05-012022-07-310001577526ai:CustomerOneMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2021-05-012021-07-310001577526ai:CustomerTwoMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2021-05-012021-07-310001577526ai:CustomerOneMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-05-012022-07-310001577526ai:CustomerOneMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-05-012022-04-300001577526ai:CustomerTwoMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-05-012022-04-300001577526us-gaap:AccountsReceivableMemberai:CustomerThreeMemberus-gaap:CustomerConcentrationRiskMember2021-05-012022-04-300001577526us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-07-310001577526us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-07-310001577526us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-07-310001577526us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-07-310001577526us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-04-300001577526us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-04-300001577526us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-04-300001577526us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-04-300001577526us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-07-310001577526us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-07-310001577526us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-07-310001577526us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-07-310001577526us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-04-300001577526us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-04-300001577526us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-04-300001577526us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-04-300001577526us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueMeasurementsRecurringMember2022-07-310001577526us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:FairValueMeasurementsRecurringMember2022-04-300001577526us-gaap:MoneyMarketFundsMember2022-07-310001577526us-gaap:MoneyMarketFundsMember2022-04-300001577526us-gaap:CertificatesOfDepositMember2022-07-310001577526us-gaap:CertificatesOfDepositMember2022-04-300001577526us-gaap:CommercialPaperMember2022-07-310001577526us-gaap:CommercialPaperMember2022-04-300001577526us-gaap:CorporateDebtSecuritiesMember2022-07-310001577526us-gaap:CorporateDebtSecuritiesMember2022-04-300001577526us-gaap:USTreasurySecuritiesMember2022-07-310001577526us-gaap:USTreasurySecuritiesMember2022-04-300001577526us-gaap:USGovernmentDebtSecuritiesMember2022-07-310001577526us-gaap:USGovernmentDebtSecuritiesMember2022-04-300001577526ai:DebtSecuritiesAvailableForSaleExcludingMoneyMarketAccountsMember2022-07-310001577526ai:DebtSecuritiesAvailableForSaleExcludingMoneyMarketAccountsMember2022-04-30ai:investment0001577526us-gaap:LeaseholdImprovementsMember2022-07-310001577526us-gaap:LeaseholdImprovementsMember2022-04-300001577526us-gaap:ComputerEquipmentMember2022-05-012022-07-310001577526us-gaap:ComputerEquipmentMember2022-07-310001577526us-gaap:ComputerEquipmentMember2022-04-300001577526ai:FurnitureAndOfficeEquipmentMember2022-05-012022-07-310001577526ai:FurnitureAndOfficeEquipmentMember2022-07-310001577526ai:FurnitureAndOfficeEquipmentMember2022-04-300001577526us-gaap:ConstructionInProgressMember2022-07-310001577526us-gaap:ConstructionInProgressMember2022-04-300001577526ai:WebHostingServicesNovember2019November2022Member2019-11-012019-11-300001577526ai:WebHostingServicesNovember2022Member2019-11-012019-11-300001577526ai:WebHostingServicesNovember2021Member2019-11-012019-11-300001577526ai:WebHostingServicesNovember2020Member2019-11-012019-11-300001577526ai:WebHostingServicesNovember2019November2022Member2022-05-012022-07-310001577526ai:WebHostingServicesNovember2019November2022Member2021-05-012021-07-310001577526ai:CloudServicesJuly2022July2025Member2022-07-012022-07-310001577526ai:CloudServicesJuly2022July2025Member2022-05-012022-07-310001577526ai:C3aiDTIDigitalTransformationInstituteGrantsProgramMember2020-02-012020-02-290001577526ai:C3aiDTIDigitalTransformationInstituteGrantsProgramMember2022-07-310001577526ai:C3aiDTIDigitalTransformationInstituteGrantsProgramMember2022-04-3000015775262021-08-25utr:sqft00015775262021-08-252021-08-250001577526srt:MaximumMember2021-08-250001577526us-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMemberai:LandlordMember2021-08-25ai:phaseai:vote0001577526us-gaap:EmployeeStockOptionMember2022-05-012022-07-310001577526us-gaap:EmployeeStockOptionMember2021-05-012022-04-300001577526us-gaap:CommonClassAMember2021-12-310001577526us-gaap:CommonClassAMember2021-12-012021-12-310001577526us-gaap:CommonClassAMember2022-03-012022-03-310001577526us-gaap:CommonClassAMember2022-05-012022-07-310001577526ai:TwentyTwentyIncentivePlanMemberai:CommonClassAAndCommonClassBMember2022-05-010001577526us-gaap:CommonClassAMemberus-gaap:EmployeeStockMemberai:TwentyTwentyEmployeeStockPurchasePlanMember2020-11-270001577526us-gaap:EmployeeStockMemberai:CommonClassAAndCommonClassBMemberai:TwentyTwentyEmployeeStockPurchasePlanMember2022-05-010001577526us-gaap:EmployeeStockMemberai:TwentyTwentyEmployeeStockPurchasePlanMember2020-11-270001577526ai:TwentyTwentyIncentivePlanMemberus-gaap:EmployeeStockOptionMember2022-05-012022-07-3100015775262021-05-012022-04-300001577526us-gaap:EmployeeStockOptionMember2022-07-310001577526us-gaap:RestrictedStockUnitsRSUMember2022-05-012022-07-310001577526us-gaap:RestrictedStockUnitsRSUMember2022-04-300001577526us-gaap:RestrictedStockUnitsRSUMember2022-07-310001577526us-gaap:CommonClassAMemberus-gaap:RestrictedStockUnitsRSUMember2022-05-012022-07-310001577526us-gaap:CostOfSalesMemberus-gaap:LicenseAndServiceMember2022-05-012022-07-310001577526us-gaap:CostOfSalesMemberus-gaap:LicenseAndServiceMember2021-05-012021-07-310001577526ai:ProfessionalServicesMemberus-gaap:CostOfSalesMember2022-05-012022-07-310001577526ai:ProfessionalServicesMemberus-gaap:CostOfSalesMember2021-05-012021-07-310001577526us-gaap:SellingAndMarketingExpenseMember2022-05-012022-07-310001577526us-gaap:SellingAndMarketingExpenseMember2021-05-012021-07-310001577526us-gaap:ResearchAndDevelopmentExpenseMember2022-05-012022-07-310001577526us-gaap:ResearchAndDevelopmentExpenseMember2021-05-012021-07-310001577526us-gaap:GeneralAndAdministrativeExpenseMember2022-05-012022-07-310001577526us-gaap:GeneralAndAdministrativeExpenseMember2021-05-012021-07-310001577526ai:TwentyTwentyIncentivePlanMemberus-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-05-012022-07-310001577526us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-05-012022-07-310001577526us-gaap:ShareBasedCompensationAwardTrancheTwoMemberai:TwentyTwentyIncentivePlanMemberus-gaap:EmployeeStockOptionMember2022-05-012022-07-310001577526us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:RestrictedStockUnitsRSUMember2022-05-012022-07-310001577526us-gaap:CommonClassAMember2021-05-012021-07-310001577526us-gaap:CommonClassBMember2022-05-012022-07-310001577526us-gaap:CommonClassBMember2021-05-012021-07-310001577526us-gaap:EmployeeStockOptionMember2022-05-012022-07-310001577526us-gaap:EmployeeStockOptionMember2021-05-012021-07-310001577526us-gaap:RestrictedStockUnitsRSUMember2022-05-012022-07-310001577526us-gaap:RestrictedStockUnitsRSUMember2021-05-012021-07-310001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2019-06-012019-06-300001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2020-06-012020-06-300001577526ai:BakerHughesCompanyMemberai:SoftwareSubscriptionAgreementMember2019-06-300001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2021-10-012021-10-310001577526ai:BakerHughesCompanyMemberai:SoftwareSubscriptionAgreementMember2021-10-310001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2022-04-300001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2022-07-310001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMemberus-gaap:LicenseAndServiceMember2022-05-012022-07-310001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMemberus-gaap:LicenseAndServiceMember2021-05-012021-07-310001577526ai:ProfessionalServicesMemberai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2022-05-012022-07-310001577526ai:ProfessionalServicesMemberai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2021-05-012021-07-310001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2022-05-012022-07-310001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2021-05-012021-07-310001577526ai:SoftwareSubscriptionAgreementMemberai:CertainCustomersInOilAndGasFieldMember2022-05-012022-07-310001577526ai:SoftwareSubscriptionAgreementMemberai:CertainCustomersInOilAndGasFieldMember2021-05-012021-07-310001577526ai:SoftwareSubscriptionAgreementMember2022-05-012022-07-310001577526ai:SoftwareSubscriptionAgreementMember2021-05-012021-07-310001577526us-gaap:UnbilledRevenuesMemberai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2022-07-310001577526us-gaap:UnbilledRevenuesMemberai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2022-04-300001577526ai:SoftwareSubscriptionAgreementMemberai:BakerHughesCompanyMember2021-07-31
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 001-39744
C3.ai, Inc.
(Exact name of registrant as specified in its charter)

Delaware26-3999357
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1300 Seaport Blvd,Suite 500
Redwood City,CA94063
(Address of principal executive offices)(Zip code)
Registrant's telephone number, including area code: (650) 503-2200
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.001 per shareAINew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes     No   
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes        No  
As of August 29, 2022, the registrant had outstanding 104,981,537 shares of Class A common stock and 3,499,992 shares of Class B common stock.
1

Table of Contents
TABLE OF CONTENTS
Page
2

Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy, plans and objectives of management for future operations, and the benefits and timing of the rollout of new technology, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
our expectations regarding our revenue, expenses, and other operating results, including statements relating to the portion of our remaining performance obligations that we expect to be recognized as revenue in future periods;
our ability to acquire new customers and successfully retain existing customers;
our ability to increase usage of our C3 AI Software, which includes our C3 AI Application Platform, C3 AI Applications, C3 AI Ex Machina, C3 AI CRM and C3 AI Data Vision;
our ability to achieve or sustain profitability;
future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;
the costs and success of our sales and marketing efforts, and our ability to promote our brand;
our growth strategies for our C3 AI Software;
our expectations regarding our C3 AI Software;
the estimated addressable market opportunity for our C3 AI Software;
our reliance on key personnel and our ability to identify, recruit, and retain skilled personnel;
our ability to effectively manage our growth, including any international expansion;
our ability to protect our intellectual property rights and any costs associated therewith;
the effects of the ongoing coronavirus, or COVID-19, pandemic or other public health crises;
our ability to compete effectively with existing competitors and new market entrants; and
the growth rates of the markets in which we compete.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” contained in Part II, Item 1A of this Quarterly Report on Form 10-Q and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
3

Table of Contents
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.
Where You Can Find More Information
Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (https://ir.c3.ai), our filings with the Securities and Exchange Commission (SEC), our website, webcasts, press releases, and conference calls. We use these mediums, including our website, to communicate with investors and the general public about our company, our products, and other issues. It is possible that the information that we make available on our website may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website.
We may also use our Twitter, LinkedIn, and Facebook accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts, in addition to following our SEC, our website, webcasts, press releases, and conference calls. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. These channels may be updated from time to time on our investor relations website.


4

Table of Contents
SELECTED RISKS AFFECTING OUR BUSINESS
Investing in our Class A common stock involves numerous risks, including the risks described in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. Below is a summary of some of the risks and uncertainties as of the date of the filing of this Quarterly Report on Form 10-Q, any one of which could materially adversely affect our business, financial condition, operating results, and prospects. You should read this summary together with the more detailed description of each risk factor contained below.
Risks Related to Our Business and Our Industry
We have a limited operating history, which makes it difficult to evaluate our prospects and future results of operations.
Historically, a limited number of customers have accounted for a substantial portion of our revenue. If existing customers do not renew their contracts with us, or if our relationships with our largest customers are impaired or terminated, our revenue could decline, and our results of operations would be adversely impacted.
Our business depends on our ability to attract new customers and on our existing customers purchasing additional subscriptions from us and renewing their existing subscriptions.
We have a history of operating losses and may not achieve or sustain profitability in the future.
We face intense competition and could lose market share to our competitors, which could adversely affect our business, financial condition and results of operations.
Our sales cycles can be long and unpredictable, particularly with respect to large subscriptions, and our sales efforts require considerable time and expense.
If the market for our C3 AI Software fails to grow as we expect, or if businesses fail to adopt our C3 AI Software, our business, operating results, and financial condition could be adversely affected.
If we fail to respond to rapid technological changes, extend our C3 AI Software, or develop new features and functionality, our ability to remain competitive could be impaired.
If we were to lose the services of our Chief Executive Officer, or CEO, or other members of our senior management team, we may not be able to execute our business strategy.
The COVID-19 pandemic had and could continue to have an adverse impact on our business, our operations, and the markets and communities in which we, our partners, and our customers operate.
Our actual or perceived failure to comply with privacy or data protection laws, regulations, or obligations could harm our business.
If we or our service providers experience a security breach or unauthorized parties otherwise obtain access to our customers’ data, our data, or our C3 AI Software, our C3 AI Software may be perceived as not being secure, our reputation may be harmed, demand for our C3 AI Software may be reduced, and we may incur significant liabilities.
Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could adversely affect our financial results or financial condition.
Risks Related to Our International Operations
We are continuing to expand our operations outside the United States, where we may be subject to increased business and economic risks that could harm our business.
We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we are not in compliance with applicable laws.
5

Table of Contents
Risks Related to Taxes
Our results of operations may be harmed if we are required to collect sales or other related taxes for our subscriptions in jurisdictions where we have not historically done so.
Risks Related to Our Intellectual Property
We are currently, and may be in the future, party to intellectual property rights claims and other litigation matters, which, if resolved adversely, could harm our business.
Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses.
Our failure to protect our intellectual property rights and proprietary information could diminish our brand and other intangible assets.
Our use of third-party open source software could negatively affect our ability to offer and sell subscriptions to our C3 AI Software and subject us to possible litigation.
Risks Related to Ownership of Our Class A Common Stock
The trading price of our Class A common stock may be volatile, and you could lose all or part of your investment.
The dual class structure of our common stock has the effect of concentrating voting control to our Chairman and CEO, Thomas M. Siebel.
Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by our stockholders to change our management or hinder efforts to acquire a controlling interest in us, and the market price of our Class A common stock may be lower as a result.
General Risks
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
Our business could be disrupted by catastrophic events.
6

Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
C3.AI, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)
(Unaudited)
July 31, 2022April 30, 2022
Assets
Current assets
Cash and cash equivalents$221,883 $339,528 
Short-term investments685,397 620,633 
Accounts receivable, net of allowance of $57 and $157 as of July 31, 2022 and April 30, 2022, respectively(1)
81,298 80,271 
Prepaid expenses and other current assets(2)
18,056 20,004 
Total current assets1,006,634 1,060,436 
Property and equipment, net38,928 14,517 
Goodwill625 625 
Long-term investments30,885 32,086 
Other assets, non-current(3)
60,097 63,218 
Total assets$1,137,169 $1,170,882 
Liabilities and stockholders’ equity
Current liabilities
Accounts payable(4)
$40,748 $54,218 
Accrued compensation and employee benefits29,208 32,223 
Deferred revenue, current(5)
43,644 48,854 
Accrued and other current liabilities(6)
17,651 14,874 
Total current liabilities131,251 150,169 
Deferred revenue, non-current21 288 
Other long-term liabilities(7)
26,919 30,948 
Total liabilities158,191 181,405 
Commitments and contingencies (note 6)
Stockholders’ equity
Class A common stock, $0.001 par value. 1,000,000,000 shares authorized as of July 31, 2022 and April 30, 2022; 104,843,908 and 102,725,041 shares issued and outstanding as of July 31, 2022 and April 30, 2022, respectively
105 103 
Class B common stock, $0.001 par value; 3,500,000 shares authorized as of July 31, 2022 and April 30, 2022; 3,499,992 and 3,499,992 shares issued and outstanding as of July 31, 2022 and April 30, 2022, respectively
3 3 
Additional paid-in capital1,594,487 1,532,917 
Accumulated other comprehensive loss(2,348)(2,148)
Accumulated deficit(613,269)(541,398)
Total stockholders’ equity978,978 989,477 
Total liabilities and stockholders’ equity$1,137,169 $1,170,882 
(1)     Including amounts from a related party of $33,608 and $35,848 as of July 31, 2022 and April 30, 2022, respectively.
(2)     Including amounts from a related party of $4,862 and $4,862 as of July 31, 2022 and April 30, 2022, respectively.
(3)     Including amounts from a related party of $14,925 and $16,141 as of July 31, 2022 and April 30, 2022, respectively.
(4)     Including amounts from a related party of $4,688 and $18,549 as of July 31, 2022 and April 30, 2022, respectively.
(5)     Including amounts from a related party of $81 and $132 as of July 31, 2022 and April 30, 2022, respectively.
(6)     Including amounts from a related party of $2,422 and $2,510 as of July 31, 2022 and April 30, 2022, respectively.
(7)     Including amounts from a related party of nil and $2,448 as of July 31, 2022 and April 30, 2022, respectively.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7

Table of Contents
C3.AI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended July 31,
20222021
Revenue
Subscription(1)
$57,026 $46,122 
Professional services(2)
8,282 6,284 
Total revenue65,308 52,406 
Cost of revenue
Subscription(3)
14,092 9,213 
Professional services4,314 3,812 
Total cost of revenue18,406 13,025 
Gross profit46,902 39,381 
Operating expenses
Sales and marketing(4)
42,987 36,822 
Research and development55,877 26,712 
General and administrative21,247 12,364 
Total operating expenses120,111 75,898 
Loss from operations(73,209)(36,517)
Interest income2,538 345 
Other (expense) income, net(1,021)(899)
Net loss before provision for income taxes(71,692)(37,071)
Provision for income taxes179 388 
Net loss$(71,871)$(37,459)
Net loss per share attributable to Class A and Class B common shareholders, basic and diluted$(0.67)$(0.37)
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted106,842 102,155 
(1)     Including related party revenue of $16,330 and $10,208 for the three months ended July 31, 2022 and 2021, respectively.
(2)     Including related party revenue of $129 and $2,074 for the three months ended July 31, 2022 and 2021, respectively.
(3)     Including related party cost of revenue of nil and $117 for the three months ended July 31, 2022 and 2021, respectively.
(4)     Including related party sales and marketing expense of $3,500 and $61 for the three months ended July 31, 2022 and 2021, respectively.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8

Table of Contents
C3.AI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
Three Months Ended July 31,
20222021
Net loss$(71,871)$(37,459)
Other comprehensive loss
Unrealized (loss) gain on available-for-sale marketable securities, net of tax(200)106 
Total comprehensive loss$(72,071)$(37,353)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9

Table of Contents
C3.AI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive LossAccumulated DeficitTotal Stockholders’
Equity
SharesAmount
Balance as of April 30, 2022106,225 $106 $1,532,917 $(2,148)$(541,398)$989,477 
Issuance of Class A common stock upon exercise of stock options, net of repurchases278  1,101 — — 1,101 
Vesting of early exercised Class A common stock options— — 333 — — 333 
Vesting of restricted stock units1,841 2 13,669 — — 13,671 
Stock-based compensation expense— — 46,467 — — 46,467 
Other comprehensive loss— — — (200)— (200)
Net loss— — — — (71,871)(71,871)
Balance as of July 31, 2022108,344 $108 $1,594,487 $(2,348)$(613,269)$978,978 
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive IncomeAccumulated DeficitTotal Stockholders’
Equity
SharesAmount
Balance as of April 30, 2021102,167 $102 $1,410,325 $81 $(349,333)$1,061,175 
Issuance of Class A common stock upon exercise of stock options, net of repurchases1,693 2 5,000 — — 5,002 
Vesting of early exercised Class A common stock options— — 1,059 — — 1,059 
Vesting of restricted stock units8 — — — — — 
Stock-based compensation expense— — 13,912 — — 13,912 
Other comprehensive income— — — 106 — 106 
Net loss— — — — (37,459)(37,459)
Balance as of July 31, 2021103,868 $104 $1,430,296 $187 $(386,792)$1,043,795 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
10

Table of Contents
C3.AI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended July 31,
20222021
Cash flows from operating activities:
Net loss$(71,871)$(37,459)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization1,461 1,141 
Non-cash operating lease cost1,862 857 
Stock-based compensation expense56,630 13,912 
Other78 (875)
Changes in operating assets and liabilities
Accounts receivable(1)
(927)10,383 
Prepaid expenses, other current assets and other assets(2)
2,910 2,097 
Accounts payable(3)
(21,318)(2,067)
Accrued compensation and employee benefits491 (7,072)
Operating lease liabilities(991)(932)
Other liabilities(4)
(1,106)(3,633)
Deferred revenue(5)
(5,477)24,670 
Net cash (used in) provided by operating activities(38,258)1,022 
Cash flows from investing activities:
Purchases of property and equipment(15,536)(511)
Capitalized software development costs
(1,000)(500)
Purchases of investments(226,367)(95,948)
Maturities and sales of investments162,429 248,986 
Net cash (used in) provided by investing activities(80,474)152,027 
Cash flows from financing activities:
Payment of deferred offering costs (71)
Proceeds from exercise of Class A common stock options1,087 5,046 
Net cash provided by financing activities1,087 4,975 
Net (decrease) increase in cash, cash equivalents and restricted cash(117,645)158,024 
Cash, cash equivalents and restricted cash at beginning of period352,519 116,255 
Cash, cash equivalents and restricted cash at end of period$234,874 $274,279 
Cash and cash equivalents$221,883 $273,779 
Restricted cash included in other assets, non-current12,566 500 
Restricted cash included in prepaid expenses and other current assets425  
Total cash, cash equivalents and restricted cash$234,874 $274,279 
Supplemental disclosure of cash flow information—cash paid for income taxes$66 $235 
Supplemental disclosures of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued liabilities$19,326 $326 
Unpaid liabilities related to intangible purchases$1,500 $2,500 
Deferred offering costs included in accounts payable and accrued liabilities$ $34 
Vesting of early exercised stock options$333 $1,059 
(1)Including changes in related party balances of $(2,240) and $(13,921) for the three months ended July 31, 2022 and 2021, respectively.
(2)Including changes in related party balances of $(1,216) and $(415) for the three months ended July 31, 2022 and 2021, respectively.
(3)Including changes in related party balances of $(13,861) and $56 for the three months ended July 31, 2022 and 2021, respectively.
(4)Including changes in related party balances of $(2,536) and $(3,309) for the three months ended July 31, 2022 and 2021, respectively.
(5)Including changes in related party balances of $(51) and $16,940 for the three months ended July 31, 2022 and 2021, respectively.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
11

Table of Contents
C3.AI, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.Summary of Business and Significant Accounting Policies
Business
C3.ai, Inc. (including its subsidiaries, “C3 AI” or “the Company”) is an enterprise artificial intelligence (“AI”) software provider. The Company’s C3 AI Application Platform supports accelerating digital transformation in various industries with prebuilt and configurable C3 AI Applications for business use cases including predictive maintenance, fraud detection, sensor network health, supply network optimization, energy management, anti-money laundering, and customer engagement. The Company supports customers in the United States, Europe, and the rest of the world. The Company was initially formed as a limited liability company in Delaware on January 8, 2009 and converted to a Delaware corporation in June 2012.
Basis of Presentation and Principles of Consolidation
The Company prepares its unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with U.S. GAAP. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2022, which was filed with the SEC on June 23, 2022.
In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of July 31, 2022 and the results of operations for the three months ended July 31, 2022. The results of operations for the three months ended July 31, 2022 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period.
The condensed consolidated financial statements include the accounts of C3 AI and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results and outcomes could differ significantly from the Company’s estimates, judgments, and assumptions. Significant estimates include determining standalone selling price for performance obligations in contracts with customers and estimating variable consideration, the estimated expected benefit period for deferred contract acquisition costs, the useful lives of long-lived assets and other assumptions used to measure stock-based compensation, and the valuation of deferred income tax assets and uncertain tax positions. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions.
Fiscal Year
The Company’s fiscal year ends on April 30.
12

Table of Contents
C3.AI, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in Note 1. Summary of Business and Significant Accounting Policies in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the fiscal year ended April 30, 2022, which was filed with the SEC on June 23, 2022. There have been no significant changes to these policies during the three months ended July 31, 2022.
2.Revenue
Disaggregation of Revenue
The following table presents revenue by geographical region (in thousands):
Three Months Ended July 31,
20222021
North America (1)
$51,938 $36,452 
Europe, the Middle East and Africa (1)
10,703 12,219 
Asia Pacific (1)
2,367 3,735 
Rest of World (1)
300  
Total revenue$65,308 $52,406 
__________________
(1)The United States comprised 79% and 69% of the Company’s revenue for the three months ended July 31, 2022 and 2021, respectively. France comprised 13% of the Company’s revenue for the three months ended July 31, 2021. No other country comprised 10% or greater of the Company’s revenue for the three months ended July 31, 2022 or 2021.
Deferred Revenue
As of July 31, 2022 and April 30, 2022, the Company's deferred revenue balances were $43.7 million and $49.1 million, respectively. Revenue of $27.6 million and $38.3 million was recognized during the three months ended July 31, 2022 and 2021, respectively, that was included in the deferred revenue balances as of April 30, 2022 and 2021, respectively.
Remaining Performance Obligation
Remaining performance obligations are committed and represent non-cancellable contracted revenue that has not yet been recognized and will be recognized as revenue in future periods. Some contracts allow customers to cancel the contracts without a significant penalty, and the cancellable amount of contract value is not included in the remaining performance obligations.
The Company excludes amounts related to performance obligations and usage-based royalties that are billed and recognized as they are delivered or billed and recognized in the same period. This primarily consists of monthly usage-based runtime and hosting charges in the duration of some revenue contracts.
Revenue expected to be recognized from remaining performance obligations was approximately $458.2 million as of July 31, 2022, of which $173.5 million is expected to be recognized over the next 12 months and the remainder thereafter.
Customer Concentration and Accounts Receivable
All of the Company’s Customer-Entities consist of corporate and governmental entities. A limited number of Customer-Entities have accounted for a large part of the Company’s revenue and accounts receivable to date. For the purpose of determining customer concentration and accounts receivable, unbilled receivables have been excluded from accounts receivable balance. Two separate Customer-Entities accounted for 25% and 14%, respectively, of revenue for the three months ended July 31, 2022. Two separate Customer-Entities accounted for 23% and 13%, respectively, of revenue for the three months ended July 31, 2021. One Customer-Entity accounted for 14% of accounts receivable at July 31, 2022. Three separate Customer-Entities accounted for 32%, 13% and 12%, respectively, of accounts receivable at April 30, 2022. A Customer-Entity is defined as each entity that is the ultimate parent of a party contracting with the Company.
13

Table of Contents
C3.AI, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Accounts receivable includes billed and unbilled receivables, net of allowance of doubtful accounts. Trade accounts receivable are recorded at invoiced amounts and do not bear interest. The expectation of collectability is based on a review of credit profiles of customers, contractual terms and conditions, current economic trends, and historical payment experience. The Company regularly reviews the adequacy of the allowance for doubtful accounts by considering the age of each outstanding invoice and the collection history of each customer to determine the appropriate amount of allowance for doubtful accounts. Accounts receivable included unbilled receivables as of July 31, 2022 and April 30, 2022 of $39.3 million and $19.9 million, respectively.
3.Fair Value Measurements
The Company’s financial instruments consist primarily of cash equivalents, restricted cash, available-for-sale marketable securities, accounts receivable, and accounts payable. Cash and cash equivalents and available-for-sale marketable securities are reported at their respective fair values on the condensed consolidated balance sheets. The remaining financial instruments are reported on the condensed consolidated balance sheets at amounts that approximate current fair values.
The following table summarizes the types of assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):
As of July 31, 2022As of April 30, 2022
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents:
Money market funds$112,208 $ $ $112,208 $107,726 $ $ $107,726 
Certificates of deposit 5,000  5,000  3,000  3,000 
Commercial paper 61,756  61,756  142,511  142,511 
Corporate debt securities 1,779  1,779  8,884  8,884 
Available-for-sale marketable securities:
U.S. treasury securities 12,789  12,789  12,763  12,763 
Certificates of deposit 95,054  95,054  97,205  97,205 
U.S. government agencies securities 22,009  22,009  13,890  13,890 
Commercial paper 280,168  280,168  241,132  241,132 
Corporate debt securities 306,262  306,262  287,729  287,729 
Total cash equivalents and available-for-sale marketable securities$112,208 $784,817 $ $897,025 $107,726 $807,114 $ $914,840 
The estimated fair value of securities classified as Level 2 financial instruments was determined based on third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. Inputs used for fair value measurement categorized as Level 2 include benchmark yields, reported trades, broker or dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications.
14

Table of Contents
C3.AI, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4.Investments
Cash Equivalents and Available-for-Sale Marketable Securities
The following table summarizes the Company’s cash equivalents and available-for-sale marketable securities (in thousands):
As of July 31, 2022As of April 30, 2022
Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair ValueAmortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Cash equivalents:
Money market funds$112,208 $ $ $112,208 $107,726 $ $ $107,726 
Certificates of deposit5,000 5,000 3,000   3,000 
Commercial paper61,756   61,756 142,511   142,511 
Corporate debt securities1,779   1,779 8,889  (5)8,884 
Available-for-sale marketable securities:
U.S. treasury securities12,795  (6)12,789 12,764  (1)12,763 
Certificates of deposit95,054   95,054 97,205   97,205 
U.S. government agencies securities22,307  (298)22,009 14,113  (223)13,890 
Commercial paper280,168   280,168 241,134  (2)241,132 
Corporate debt securities308,306 5 (2,049)306,262 289,646 20 (1,937)287,729 
Total cash equivalents and available-for-sale marketable securities$899,373 $5 $(2,353)$897,025 $916,988 $20 $(2,168)$914,840 
The following table summarizes the Company’s available-for-sale marketable securities by contractual maturity (in thousands):
As of July 31, 2022As of April 30, 2022
Amortized CostFair ValueAmortized CostFair Value
Within one year$687,642 $685,397 $622,517 $620,633 
After one year through five years30,988 30,885 32,345 32,086 
Total$718,630 $716,282 $654,862 $652,719 
15

Table of Contents
C3.AI, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table summarizes the fair values and unrealized losses of the Company’s available-for-sale marketable securities classified by length of time that the securities have been in a continuous unrealized loss position but were not deemed to be other-than-temporarily impaired, as of July 31, 2022 (in thousands):
As of July 31, 2022
Less Than 12 Months12 Months or GreaterTotal
Unrealized LossesFair ValueUnrealized LossesFair ValueUnrealized LossesFair Value
U.S. treasury securities$(6)$12,789 $ $ $(6)$12,789 
U.S. government agencies securities(273)18,443 (25)3,566 (298)22,009 
Commercial paper 3,000    3,000 
Corporate debt securities(1,968)276,734 (81)16,605 (2,049)293,339 
Total$(2,247)$310,966 $(106)$20,171 $(2,353)$331,137 
As of July 31, 2022, the Company had 296 investment positions in an unrealized loss position. As of April 30, 2022, the Company had 284 investment positions that were in an unrealized loss position. The Company considers factors such as the duration, the magnitude and the reason for the decline in value, the potential recovery period, creditworthiness of the issuers of the securities and its intent to sell. For marketable securities, it also considers whether (i) it is more likely than not that the Company will be required to sell the debt securities before recovery of their amortized cost basis, and (ii) the amortized cost basis cannot be recovered as a result of credit losses. No significant facts or circumstances have arisen to indicate that there has been any significant deterioration in the creditworthiness of the issuers of the securities held by the Company. Based on the Company’s review of these securities, including the assessment of the duration and severity of the unrealized losses and the Company’s ability and intent to hold the investments until maturity, there were no other-than-temporary impairments for these marketable securities at July 31, 2022.
5.Balance Sheet Details
Property and Equipment
Property and equipment consisted of the following at July 31, 2022 and April 30, 2022 (in thousands):
Useful LifeAs of July 31,As of April 30,
(in months)20222022
Leasehold improvements*$8,878 $8,878 
Computer equipment364,141 3,321 
Office furniture and equipment60348 348 
Capital in progressNA36,044 11,261 
Property and equipment—gross49,411 23,808 
Less: accumulated depreciation and amortization(10,483)(9,291)
Property and equipment—net$38,928 $14,517 
__________________
*Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the remaining lease term.
NA = Not Applicable
Capital in progress primarily consisted of costs related to various leasehold improvements in connection with the new leased space, as described below, that have not yet been placed into service.
Depreciation and amortization expense related to property and equipment was $1.2 million and $1.1 million for the three months ended July 31, 2022 and 2021, respectively.
16

Table of Contents
C3.AI, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Accrued Compensation and Employee Benefits
Accrued compensation and employee benefits consisted of the following at July 31, 2022 and April 30, 2022 (in thousands):
As of July 31,As of April 30,
20222022
Accrued stock-settled bonus$10,163 $ 
Accrued bonus2,482 16,078 
Accrued vacation3,960 3,814 
Accrued payroll taxes and benefits3,626 3,593 
Accrued commission1,501 1,440 
Accrued salaries7,476 7,298 
Accrued compensation and employee benefits$29,208 $32,223 
Accrued and Other Current Liabilities
Accrued and other current liabilities consisted of the following at July 31, 2022 and April 30, 2022 (in thousands):
As of July 31,As of April 30,
20222022
Liability for common stock exercised prior to vesting$1,597 $1,970 
Accrued general expenses8,016 4,972 
Operating lease liabilities, current2,705 3,613 
Commissions payable to a related party2,422 2,510 
Other2,911 1,809 
Accrued and other current liabilities$17,651 $14,874 
6.Commitments and Contingencies
Non-cancellable Purchase Commitments
The Company entered into a non-cancellable arrangement with a web-hosting services provider in November 2019. Under the arrangement, the Company committed to spend an aggregate of at least $30.0 million between November 2019 and November 2022, with a minimum amount of $10.0 million in each of the three years, on services with this vendor. The Company has incurred costs totaling $4.1 million and $3.2 million during the three months ended July 31, 2022 and 2021, respectively, under the arrangement.
The Company entered into a non-cancellable arrangement with a cloud services provider in July 2022. Under the arrangement, the Company committed to spend an aggregate of at least $100.0 million for the period of three years beginning July 2022, on services with this vendor. The Company has incurred immaterial costs under the arrangement during the three months ended July 31, 2022.
C3.ai Digital Transformation Institute Grants
In February 2020, the Company entered into an agreement establishing the C3.ai Digital Transformation Institute (“C3.ai DTI”), a program established to attract many of the world’s leading research institutions to join in a coordinated and innovative effort to advance the digital transformation of business, government, and society. As part of the agreement, the Company has agreed to issue grants to C3.ai DTI, which are subject to compliance with certain obligations. The grants shall be paid by the Company over five years in the form of cash, publicly traded securities, or other property of equivalent net value. As of July 31, 2022 and April 30, 2022, the total potential remaining contributions are $31.6 million and $31.6 million, respectively. The future grant payments are conditional in nature and subject to execution of the program in line with specific requirements.
17

Table of Contents
C3.AI, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Leases
On August 25, 2021, the Company entered into a new lease to acquire approximately 283,015 square feet of office space in several phases in Redwood City, California. Total undiscounted base rent payments over the term of this lease are approximately $103.1 million. In addition to base rent, the Company will be responsible for the Company’s allocated share of costs incurred and expenditures made by the landlord in the operation and management of the leased space. Under the terms of the lease agreement, the Company has a rent abatement with respect to each phase for the initial six months following the rent commencement date for such phase, with initial monthly base rent payments expected to commence April 1, 2023, which will be approximately $0.5 million at commencement and will increase up to a maximum monthly base rent of approximately $1.0 million. The lease agreement also includes an aggregate tenant improvement allowance of $44.2 million for certain costs. The term of the lease is 126 months from the date that rent commences with respect to phase one of the leased space, which will be nine months after the date when phase one of the leased space is delivered to the Company. Pursuant to the lease agreement, the Company provided the landlord an unconditional and irrevocable letter of credit of $12.6 million, which is subject to reduction pursuant to the terms of the lease agreement. The lease commencement date of the first two phases was determined to have occurred in the quarter ended January 31, 2022, when the landlord delivered the leased space to the Company. The Company recorded $26.5 million of lease liability in other long-term liabilities and corresponding right-of-use asset in other assets, non-current in the condensed consolidated balance sheets.
Legal Proceedings
The Company is involved in various legal proceedings and periodically receives claims arising in the ordinary course of business. In the Company’s opinion, resolution of these matters is not expected to have a material adverse impact on its condensed consolidated statement of operations, cash flows, or balance sheet.
Securities Litigation
On March 4, 2022, a putative securities class action complaint (captioned The Reckstin Family Trust v. C3.ai, Inc. et al., 22-cv-01413-HSG) was filed in the U.S. District Court for the Northern District of California against the Company, and certain current and former officers and directors. The complaint generally alleges that the defendants made material misstatements or omissions about the Company’s partnership with Baker Hughes and other strategic alliances, the Company’s market potential, and the uptake of the Company’s products. The complaint alleges that defendants made these misstatements or omissions in connection with the Company’s initial public offering (“IPO”) in violation of Sections 11 and 15 of the Securities Act of 1933 and between December 9, 2020 and February 15, 2022, inclusive, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint seeks unspecified damages, interest, fees and costs. Additionally, on May 23, 2022, a putative shareholder derivative action (captioned Suri v. Siebel et al., 22-cv-03031) was filed in the U.S. District Court for the Northern District of California. The plaintiff asserts claims on the Company’s behalf against certain of the Company’s officers and directors for breach of fiduciary duty, gross mismanagement, abuse of control, unjust enrichment, and contribution under the Securities Exchange Act of 1934 based on allegations similar to those in the securities class action. The Company is named as a nominal defendant. The derivative complaint seeks unspecified damages, an award of costs and expenses, including reasonable attorneys’ fees, and corporate governance reforms. The Company does not believe the claims have merit. As of the date of this report, the Company does not believe it is probable that these cases will result in an unfavorable outcome; however, if an unfavorable outcome were to occur in these cases, it is possible that the impact could be material to the Company's results of operations in the period(s) in which any such outcome becomes probable and estimable.
In addition, from time to time, the Company is involved in various other legal proceedings arising in the ordinary course of business. Apart from the foregoing, the Company is not presently a party to any other such litigation the outcome of which, the Company believes, if determined adversely to the Company, would individually, or taken together, have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition.
7.    Stockholders’ Equity
Preferred Stock
The Company has authorized the issuance of 200,000,000 shares of undesignated preferred stock with a par value of $0.001 per share with rights and preferences, including voting rights, designated from time to time by the board of directors. As of July 31, 2022, there were no shares of Preferred Stock issued or outstanding.
18

Table of Contents
C3.AI, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Common Stock
The Company has authorized the issuance of 1,000,000,000 shares of Class A common stock and 3,500,000 shares of Class B common stock. The shares of Class A common stock and Class B common stock are identical, except with respect to voting, conversion, and transfer rights. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to 50 votes. Class A and Class B common stock have a par value of $0.001 per share and are referred to as common stock throughout the notes to the unaudited condensed consolidated financial statements, unless otherwise noted. Holders of common stock are entitled to receive any dividends as may be declared from time to time by the board of directors.
Shares of Class B common stock may be converted to Class A common stock at any time at the option of the stockholder. Each share of Class B common stock will be automatically converted into one share of Class A common stock upon the earliest of the following: (i) the date that is six months following the death or incapacity of Mr. Siebel; (ii) the date that is six months following the date that Mr. Siebel is no longer providing services to the Company as an officer, employee, director, or consultant; (iii) December 11, 2040, which is the twentieth anniversary of the completion of the IPO; or (iv) the date specified by the holders of a majority of the then outstanding shares of Class B common stock, voting as a separate class. Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock.
Common Stock Subject to Repurchase
Under the Company’s Amended and Restated 2012 Equity Incentive Plan (the “2012 Incentive Plan”) and the Company’s Amended and Restated 2020 Equity Incentive Plan (the “2020 Incentive Plan”), certain optionholders are allowed to exercise stock options to purchase Class A common stock prior to vesting. The Company has the right to repurchase at the original purchase price any unvested but outstanding common shares upon termination of service of the optionholder. The consideration received for an early exercise of a stock option is considered to be a deposit of the exercise price and the related amount is recorded as a liability. The net proceeds from the early exercise of such options were nil and nil during the three months ended July 31, 2022 and 2021, respectively. The liability is reclassified into equity on a ratable basis as the stock options vest. Unvested Class A common stock of 300,046 and 373,790 shares as of July 31, 2022 and April 30, 2022, respectively, were subject to such repurchase right and are legally issued and outstanding as of each period presented. See Note 8. Stock-Based Compensation for more information.
Stock Repurchase Program
In December 2021, the Company's board of directors approved a stock repurchase program for the repurchase of up to $100.0 million of the Company’s outstanding shares of Class A common stock for the 18 months following the date of such approval. Under the program, the Company may purchase stock in the open market or through privately negotiated transactions in accordance with applicable securities laws. The timing and actual amount of the stock repurchases will depend on several factors including price, capital availability, regulatory requirements, alternative investment opportunities and other market conditions.
In March 2022, the Company repurchased and immediately retired 0.7 million shares of its Class A common stock for an aggregate amount of $15.0 million. During the three months ended July 31, 2022, the Company has not repurchased any shares of its Class A common stock. As of July 31, 2022, $85.0 million remained available for future repurchases under the program.
8.    Stock-Based Compensation
On November 27, 2020, the Company’s board of directors adopted, and its stockholders approved, the 2020 Incentive Plan, which became effective in connection with the IPO. The 2020 Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, performance awards and other equity awards. The number of shares of Class A common stock reserved for issuance under the 2020 Incentive Plan is subject to automatic evergreen increases annually through (and including) May 1, 2030 pursuant to the terms of the 2020 Incentive Plan. There was an automatic annual increase on May 1, 2022 in the number of shares reserved for future issuance pursuant to the 2020 Incentive Plan in an amount equal to five percent (5%) of the total number of shares of the Company’s Class A common stock and Class B common stock outstanding on April 30, 2022.
19

Table of Contents
C3.AI, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On November 27, 2020, the Company’s board of directors also adopted, and its stockholders also approved, the 2020 Employee Stock Purchase Plan (the “2020 ESPP”), which became effective immediately prior to the IPO. The 2020 ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. A total of 3,000,000 shares of Class A common stock were initially reserved for future issuance under the 2020 ESPP. The number of shares of Class A common stock reserved for issuance under the 2020 ESPP is subject to automatic evergreen increases annually through (and including) May 1, 2030 pursuant to the terms of the 2020 ESPP. There was an automatic annual increase on May 1, 2022 in the number of shares reserved for future issuance pursuant to the 2020 ESPP in an amount equal to one percent (1%) of the total number of shares of the Company’s Class A common stock and Class B common stock outstanding on April 30, 2022. The 2020 ESPP permits participants to purchase shares of Class A common stock in an amount not exceeding 15% of their earnings during the relevant offering period. The offering dates and purchase dates for the 2020 ESPP are determined at the discretion of the Company’s board of directors. As of July 31, 2022, the Company had not yet launched its 2020 ESPP.
Stock Options to Acquire Class A Common Stock
Stock options generally expire 10 years from the date of grant, or earlier if services are terminated. Generally, each stock option for common stock is subject to a vesting schedule such that one fifth of the award vests after the first-year anniversary and one-sixtieth of the award vests each month thereafter over the remaining four years, subject to continuous service.
A summary of the Company’s option activity during the three months ended July 31, 2022 is as follows:
Options Outstanding
Number of
Stock Options
Outstanding
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life (years)
Aggregate
Intrinsic
Value
(in thousands)(in thousands)
Balance as of April 30, 202236,338 $12.44 7.34$165,436 
Options granted40 16.74 
Options exercised(287)18.88 
Options cancelled(222)13.47 
Balance as of July 31, 202235,869 $12.50 7.12$211,987 
Vested and exercisable as of July 31, 202217,698