C3.ai Inc (NYSE: AI) opened more than 20% up on Friday after reporting strong results for its third financial quarter on emerging trends in artificial intelligence.
The California-based company says it’s committed to adjusted profitability and turning cash positive by the end of fiscal 2024.
For its current financial quarter, C3.ai is now calling for $70 million to $72 million in revenue – slightly above $69.9 million that analysts had anticipated.
Adjusted loss is expected in the range of $24 million and $28 million in Q4. On CNBC’s “Closing Bell: Overtime”, CEO Tom Siebel said:
Generally, we had a great quarter in every respect. AI has all of a sudden become king and so, all of a sudden, we seem to be the name of the game.
Net loss printed at $63.16 million versus the year-ago $39.44 million
Per-share loss also increased significantly from 38 cents to 57 cents
Adjusted loss came in at 6 cents a share as per the press release
Revenue slipped nearly 5.0% year-on-year to $66.67 million
Consensus was 22 cents of adjusted loss on $63.9 million in revenue
C3.ai also confirmed that it’s converted the majority of its customers to a subscription-based business model.
At $57 million, subscription revenue made up 85% of the company’s overall revenue this quarter. The chief executive added:
We’re using generative AI in a very unusual way. Our architecture enables us to take immediate advantage of all innovation that’s going on at OpenAI, Microsoft, Google, AWS and others.
Wall Street currently has a consensus “hold” rating on C3.ai stock.
Other notable figures in the earnings report include adjusted gross margin of 76%. Remaining performance obligations sat at $403.2 million at the end of the third quarter.
The stock market news arrives shortly after Spruce Point Capital Management announced its strong sell research opinion on C3.ai stock. Responding to it, CEO Siebel said:
C3 has a history of exceeding its revenue guidance, a long history of satisfied customers. [Spruce] is under investigation by the SEC for stock manipulation where they go short and then go on TV and say things like that.
C3.ai stock has more than doubled year-to-date.
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