C3.ai Stock Dips as Earnings Outlook Falls Short of Expectations

C3.ai shares tumbled in late trading Wednesday after the company's April 2024 financial outlook failed to meet analysts' expectations.

In late trading on Wednesday, C3.ai shares experienced a significant decline following the company’s financial outlook for the April 2024 fiscal year, which fell short of Wall Street estimates. The popular AI software provider’s stock falls short 9% during regular trading and an additional 14% in late trading. The company’s fourth-quarter results aligned with its projections from two weeks ago, with revenue ranging from $72.1 million to $72.4 million, a non-GAAP loss from operations ranging from $23.7 million to $23.9 million, and free cash flow ranging from $18 million to $19.4 million. Investors expressed disappointment with the outlook, leading to a sharp decline in stock price.

C3.ai Forecasts Q3 Revenue in Line with Market Expectations

C3.ai, a leader in enterprise AI, posted $72.4 million in revenue and a non-GAAP operating loss of $25.3 million. However, the company’s free cash flow was slightly lower than anticipated at $16.3 million. C3.ai sees the enterprise AI market as larger and faster-growing than anticipated, positioning them as a market leader. We have observed an increased interest in the application of AI to business processes. Nevertheless, the market’s response to C3.ai’s outlook was negative.

The top enterprise AI software provider expects Q3 revenue of $70 million to $72.5 million, meeting market expectations. C3.ai forecasts full-year revenue of $295-320 million, reflecting a 15% growth compared to the previous year. They also anticipate a full-year non-GAAP operating loss ranging from $50 million to $75 million. C3.ai expands enterprise AI solutions, helping businesses harness AI to improve their operations.

C3.ai Aims for Non-GAAP Profitability by 2024

The prominent enterprise AI software provider, announced its intention to achieve non-GAAP profitability by the end of fiscal year 2024. The company highlighted its success in the oil and gas sector, emphasizing its strong partnership with Baker Hughes, as well as its accomplishments in the Federal, Defense, and Aerospace sector.

C3.ai’s AI software is designed to accelerate digital transformation, improving efficiency, resilience, and agility for organizations. Notably, major organizations like Chevron, Lockheed Martin, and the US Department of Defense utilize C3.ai’s solutions. The company aims to become a leader in the enterprise AI software market, unlocking AI’s potential for organizations.

C3.ai Reports Strong Q4 2021 Revenue Growth and New Agreements

In its Q4 2021 financial results announcement, C3.ai, a leading enterprise AI company, reported substantial revenue growth and the signing of three C3 Generative AI application agreements with large enterprises, including Georgia Pacific, Flint Hills Resources, and the U.S. Department of Defense Missile Defense Agency. CEO Tom Siebel is confident in C3.ai’s growth, market share, profitability, and position in enterprise AI. C3.ai is positioned for a successful FY 2024 as it expands its AI capabilities and services.

C3.ai’s stock price has surged over 200% this year, despite a recent selloff in the market. The company pre-announced its earnings and concluded an investigation into allegations made by two short sellers, Spruce Point Capital Management and Kerrisdale Capital Management, finding no factual support for the allegations. The stock has attracted investors due to its meme-like price swings, offering an exciting investment opportunity.

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Chris Griffin
Chris has had a career as an advisor to the tech industry, incubating start-ups in the tech industry. Welcoming Chris to contribute his expertise covering the latest things he sees in blockchain