AI - Earnings call transcript Q2 2022

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Operator

Good evening. Thank you for attending today’s C3 AI Second Quarter Fiscal Year 2022 Earnings Call. My name is Tania, and I will be your moderator for today’s call. All lines will be muted during the presentation portion of the call with an opportunity for ask questions and answers at the end. [Operator Instructions] I would now like to pass the conference over to our host, Paul Phillips, with C3 AI. ahead. go Please

Paul Phillips

as with today, Investor be welcome a Chairman will second well is and the October following AI’s call David issued replay Relations today Financial be President a earnings XXXX. results me Chief conclusion AI. press website Good the Barter, regarding closed call the Chief both accessed can on ir.cX.ai. of to Executive webcast, our at fiscal market the call website of Vice Phillips, Investor quarter is as Tom the ended After of release of to which year details for CX available results, we the This With our Siebel, section on supplement of afternoon and are Paul CX IR Relations and call. being XXXX This our a Officer. XX, and which of on our Officer;

make to any of today that These We date. of any any relating actual results a disclaim our cause outlook. our from could our as statements not forward-looking These During today’s federal only forward-looking risks statements materially or laws. considered representative to statements be obligation may should expectations. to call, subsequent subject uncertainties are update variety and of business differ to as be statements views securities reflect views under considered and will of we that

A our of measures GAAP of we of our non-GAAP SEC. our refer is discussion the today’s risks further filings factors release. affect to course financial to included certain actual during non-GAAP will a For refer could other call, the in measures. to Also the please press reconciliation material and important results, that with

to into discuss times in insight incremental his Tom provide that not this to we that, that are business metrics our turn may your and to at we give the Tom? future. usual to or dynamics greater remarks. With or our our me additional be Please the let for of results. presentations to Finally, in prepared questions, our response may over comments quarterly detail continue may advised call the prepared

Tom Siebel

Good Paul. on everyone. guidance the almost and to published XX% over line of QX year. business. Company the to a all We Company results on second QX analyst you at give state QX increase $XX.X an of update a was provide the our quite and all ended for quarter the strong, expectations. year-over-year. XX% end an Top exceeds quarter guidance XXX, XX% feel increased This prior from RPO sell-side of you, expectations Thank pleased of up and afternoon, $XXX.X the I’m fronts. increase revenue XX, million, count at for finished GAAP year. last a million, analyst over Customer exceeding increase

to continue cash $X.XX cash for fiscal the year six Our QX enabling and some finished to $XX.X -- and with of We burn and capital, the was brand us increased for in investments, reflecting equivalents for months ‘XX investments equity. marketing billion months first human in cash growth in time. invest six million,

rate and a in increased our year for rate $XX QX, -- growth fiscal us XX% revenue the to million (sic) ‘XX. [$XX to million guidance for entered and ‘XX, XX% improved we a up growth XX% for year-over-year, raise million] to As sales revenue processes from million lead $XX QX year fiscal $XXX million representing visibility to to $XXX

this extending time five first two years. CX additional of next to now again revenue we Hughes partnership October, a million strategic This million agreement extended expanded to $XX extended the term to $XXX with $XXX million increased Let’s importantly for address value the the second by In customer our revenue million. the guaranteeing and years, the and and the time in from commitments from X.X and over agreement cash extended $XXX Baker time. an by quarter the six CX increasing the we minimum for We contract June its of of Baker last years to momentum. by XXXX, for

to Now, selling traditional a and AI acquire revenue SAP like an as and in unit be high-touch a those has structures, historically, proved along of retain at model and white-glove selling an scalability relied customers. reorganized service, CX sales we adoption, IPF. customer kind hierarchically of upon strategic regimented to mistake. place XXXX to in July In accelerate independent attempt further That

the in that month function selling model and is know be early we classic effective molded now performance the quarter attainment I to revenue sales new second a and The overall restructuring the sales team the have as spent machine. management in process sales While positive. organization complete, indicators past was the are unacceptable. the quarter strong, in of the the global activity traditional quite and strategic That high-touch specifically was the

positive with substantially and life Our Liberty Johnson visibility production company; energy existing diverse revenue Public Controls, with X a with and with customer our CNHI, increased, has and and a additional new revenue increased. as QX Shell, Sector expanded a life increased We a note, we contract of now our business us FIS, PTT insurance, Cargill, top and Mosaic including the new enterprise forecast. new Cargill manufacturing, Chemical. sciences customers, On intelligence Force in Mutual, signed of deployments in Global we and industries, services, closed of end Sector Missile QX, of Public gives Space business additional gas, November high including footprint defense amount QX Defense agricultural Agency. our In Force, energy XX% enterprise very oil agriculture, revenue U.S. grew in our and AI the Air year-over-year. with with sales new new U.S. business the the business at production And deployments business implements, sciences number levels at of has the have our that confidence financial

of two that We substantially ‘XX. to growth fiscal sector increase this in expect the rate year in quarters last

little talk our partner ecosystem. a Let bit about me

to joint and joint sales off with strong significant with partnership our are new making progress We product start pipeline. Cloud, roadmaps strategic a Google on

sales joint significantly Our half contributes in Cloud the in confidence to our year. increased growth of pipeline Google this second growing with

our today, think, together as that XX we’re transactions, identified totaling the second $XX the million of for we working year. of Cloud over working pipeline business is we’re with Google currently this team I in half that

Our significant partnership with Microsoft continues apace.

and multiple our hotel than that. deployments I the at a QX. global ENGIE, date, growing million emissions a increase think major group in partnership we’re industries ESG I an closed Microsoft joint over business we’re in look leader, we $XXX services $XXX working our I in to position and leader, to like the sites. all XX,XXX the of if year, manage something currently in this forecast shop or AI energy -- the with we’ve packaging that with continue sustainability in QX that with half pipeline But consumption across working energy and like CX and transactions that roughly that we’re coffee advanced And million at Through course these business pipelines of total at with brand will looks XXX GHG of where tracking. Microsoft that second multinational helping more think iconic we’re energy and is

AI new in offering. interest huge CRM service in $XXX billion and software CRM represents CX the We seeing XXXX. are market

trillion. installed of total the CRM that $X is to exceed guess base has best Our

their installations their have they have not customized highly companies invested systems of hundreds Many returns millions of integration dollars CRM that are been in seeing those investments. partners, Okay? by and from

complementary top predictive experience as a in are optimization, opportunity Now, user making a for existing simple, AI. AI precise maintenance CX and service, systems on predictive CRM CRM interrelationship AI-enabled very we adjunct top and product, to CRM interest AI huge investments including next cetera. retention, the large growth installed CX a best their they will CRM precise best their adding existing intuitive existing and management, modern customer of service modifications integrators customer a from This substantial AI systems leveraging systems, and be are forecasting, on seeing next made, market revenue of CRM the AI-based and product their et predictive, customers’ have larger forecasting, customizations they instantly offer, so

product Let innovation. me a little bit about talk

well of service as industries adjudicated. in agriculture year initiatives governments CX continue local CX two to to interactive, company. ‘XX Vision. production believe will rather introduced CX complete countries and a should paradigm look growing Data CX mortgage growth shift launch to the at model, experience. institutions package AI diversity. metaphor We manufacturing, services. agricultural exciting. AI the lending from opportunity basically time In This in our Go needs healthcare, CRM, fundamental highly in quarter dramatically broad serve including tax ago, and notable support be AI to of last website. the We industry state to a enterprise that user and our diversification industries for as showed Ex life The the Property a accurate, graph enterprise appraisal a basically This along year and have announced new CX nationally today’s at accelerates with further represents county efforts a advance related AI clunky new in QX, defensible XX financial AI Vision financial to table-based CX revenue other CX Data in We take applications Appraisal sciences, appraisal applicability a Property significant with product Machina AI to evidence AI. quarter, visual, CX Commercial Residential and AI generate experience expanded increase and AI that applications highly It’s represents of the instruments. leadership forms now a property highly application’s engaged dynamic CX and assessors. really services, Appraisal X compared QX AI application fiscal expansions marketed to to it the think in be AI this knowledge and

and President rich Business Officer. CFO location-based be Telenav, He that, the HPE. Hoover at Unit Stanford I’m addition Prior retiring we Unit Let the Gulf significantly CX General from federal President this AI States of Central Chief Company, disappointed Freedom, Board. roles also will in the of many served Officer Company Manzoor me Adeel and leadership later Big did reasons served the CFO Converged our contributions the of Financial quarter. role unit Command address role and Senior Enterprise. U.S. December Chief XXXX. as as and is Compute Operation the Army for a at the Barter Vice so served War company to United of to veteran Effective information senior history to Administrative business the Vice and Graduate David David strengthened of to has announce business announce and Data will a has multiple graduate substantial in will McMaster, Xrd, Infrastructure also the of as to this serving at at pleased Value and has a corporation. fellow lecturer Iraqi States team of that the Operation the Packard in has formerly the Lieutenant at missed. United assume Advisory Freedom, Enduring General Advisor at as And Business McMaster also A business U.S. CX I’m in personal the a Vice month. effective CX made of be Adeel retired, President and National joined leadership. with wireless technology, held AI. XXXX that services H.R. Academy Business. CFO He our of Lieutenant Military School Storage, he from most AI the Security a he Institution the Adeel and success to We Hewlett

a relations, is Let of because I university CX think me bit this touch strength particular a AI. for little about area

continue Berkeley the advanced Lawrence powerful AI, for university and partnership Carnegie is CX National UC Labs, We CX that public-private KTH Digital to Institute. consists University Illinois-Urbana, Transformation Center develop support precision the for climate of ecosystem advanced Mellon, AI sponsors digital Supercomputing a AI AI about I’ll Applications, This of through MIT, our the Berkeley, and Stanford, Microsoft, Princeton, significant and industry techniques funding medicine, touch colloquia, human awarded in sponsors transformation, and DTI Sweden research bit energy primary in AI CX research mitigation has COVID, a capital. pandemic little security. in to The

employment talent continue over of We The the or ended attract it course XX,XXX to year-over-year. employees, QX. the Company. We XXX full-time in an with exceptional not, quarter the believe received, of company increase XX% applications to

is CX staggering, market position The software at have addressable AI on and AI We’ve we enterprise what summary, story, are in $XXX high-growth the So, a is attainment. promising by a established in opportunity laser-focused in nascent a growth market. billion stage substantial AI XXXX. to the of we market enterprise leadership exceed

is clear. Our purpose

highest capital, leadership, leadership here technology global to We and clear clear technology retain foundation global in a thought enterprise a operate attract human satisfaction, and levels establish AI, leadership AI. establish ethical the high-performance continue enterprise, maintain to importantly believe market establish maintain our and and product to customer in the is highest of I compare. to without position, to are to to quality

is Our exceptional. human capital

is rapidly large growing. equity positive, market is and brand increasingly Our enterprise the AI

technology, the the position and been today, and greater a that than never have have have has global to what never facing and I intend in establish have the AI opportunity is capital, We has we leadership, is we been better we position, it market Company to attain. we growth market believe have capital, CX the we huge the the a human market opportunity. a

over conclude down the to my into financial David? with that, will details. I turn comments David colleague, and further Barter, So, it to my drill

David Barter

Tom. for our our in our guidance, that continue revenue our million. increase represented proportion the full was revenue income. mix time, quarter, the and delivered million, XX% increased visibility second operating which Professional revenue a is million, target with was for it range. XX% high above and We our revenue us of subscription to end backlog of to again services ranges you, same the provides revenue second the outlook $XX.X $XX.X year. the in At guidance Thank our results we Revenue year. quarter strong helps prior the of XX% notable in Within subscription and from revenue, improve high services up Despite professional confidence revenue increase year the from an higher ago. in $XX.X exceeded

to gas QX. the growth across led & industry well Revenue quarter. services way revenue contributed and verticals oil in continues of industry our revenue over be each Our geographies. and XX% diversified Five this from financial verticals

revenue federal of represented growth of also are our We’re value up revenue also Tom excited diversified. from amendment second agencies, remarks, the vertical RPO new now easier of contracted extended and JV included term and an the further increase ago is Total several the with government with particularly we XX% meaningfully generated half improvements. visibility. increase a being continues the JV The and million; the makes well last of and about up in growth sales Revenue we expect to Hughes sales in related quarter. a Baker XX% this GAAP Since in from model by of half Geographically, to the to $XXX.X second in by current GAAP well of perform customers Hughes, XX% XX% quarter. our the and $XXX.X the our revenue this includes the was year. increased the in Baker EMEA software. noteworthy $XX XX% year; majority RPO. in million, in APAC at first is from from CX it the from and and referenced revenue AI the RPO amendment it One, was which year revenue. With mind, future JV XX% by agreement his our for Baker three, quarter. Hughes a enhances now contract end The of year two, backlog it one ago total APAC second from to to last quarter, pricing million, future accelerate committed,

which historically non-GAAP backlog, from raise metrics very and is million, We converted $XXX.X further which the a an RPO quarter. in to year our backlog to healthy from Combining XX% included our confidence a up GAAP and has visibility. $XX.X these believe XX% cancelable not RPO ago of leads are to GAAP cancelable prior meaningful was Our million. revenue, RPO additional but a

transactions as with a As related the JV revenue consists produced second Baker from related end for the or their CX in end Baker sell-through own but revenue revenue revenue our contracted reminder, this of gas. to oil million. Nonrelated in party Hughes second from revenue with Hughes customers the of million. directly quarter $XX.X with $X.X & quarter. party was million directly their In associated AI was party by JV The in $XX.X Baker Hughes derived contracted use customer assisted the total,

executed forward. With due less we party model in quarter, be the to the the sales Baker expect relevant to Hughes JV change in a second disclosure amendment related going

Subscription to be provided I continues margin business our in as a Turning a Gross to quarter ago. earnings and second consistent as to to will from excludes to of in the was million, than to compensation ago, tax profitability, we And a second XX.X% growth. basis quarter leverage $XX.X focus to model of reflecting expenses planned executing margin transaction. press portion was XX.X%, the metrics, XX%, stock-based our employer quarter, were was the loss XX% non-GAAP from in drive referring is $XX scale. professional the of to investments and XX% Operating expenses our gross release. million GAAP operating compared ago. non-GAAP payroll with guidance to Operating on gross was year A year up in $XX.X year continue year with services million. XXX a related up loss stock million which expense $XX points our reconciliation our better strategic long-term expense margin last

expenditures million of million. million compared year. prior free $X.X Deferred with Turning million balance $XX.X outflow in cash to cash $X.XX flow and revenue $XX billion capital end quarter our Operating flows, cash cash at million, and the of of sheet to $XX.X was the was an ended And was the equivalents in quarter $XX.X in cash, quarter. we the outflow second after investments. the

full guidance to our and for quarter Turning the the year. third

our million In of the to XX% a we from XX% total growth representing QX, year forward. Baker of agreement look reinforces $XX range Hughes we confidence $XX amended million, expect JV revenue ago. Our in to as

We loss of a the drive million expect operating that range and continued thoughtfully anticipate invest to in initiatives million. our $XX $XX and in will headcount non-GAAP growth to

we’re For range We XXXX, $XXX we $XXX are $XXX full XX% to a that guidance improvement deliver of to In the of operating quarter to guidance. representing represents our prior which XX%. range increasing $XXX million, an million the year to our summary, second now our of million ranges. fiscal results non-GAAP loss also guidance exceeded revenue growth anticipate in from to million, pleased

momentum the marketplace, fiscal about We outlook are year in our the are generating further for optimistic we supports XXXX. which

has to the a part team. to privilege AI a like to add it appreciative have for that very I’d Tom been and the been I’m support. provided Finally, me all his of CX opportunity of

to We forward and finance and team, thoughtful a and accounting strong have Adeel with I’m looking supporting a and Tom smooth transition.

for the words. a our Adeel? like say Financial invite Chief Officer, Before to I’d to opening up call new questions, few Adeel Manzoor,

Adeel Manzoor

Tom forward team all. Thanks, team. such you realize and drive excited to the CX you the for Dave, position and that, have to With call goals. Company Tom be strong the and working off to turn is start. part to also any growth Operator? The with for I’m warm I’m working may the for strategic to operator the AI. has that I’ll forward a to Company us. I’m looking and of incredibly welcome established with looking questions a over great to

Operator

The Instructions] line Morgan question Singh [Operator from Stanley. of is Sanjit first the with

Sanjit Singh

taking Thank you the for questions.

bit It the time that to in your Baker made extend life Best the first the of of David. of the see to terms endeavors was the into sort of around the in with talk from in But the bookings ex a like What all right quarter, just of around then, Hughes, was seems I’m Tom, of characterize you Baker restructuring to about force. Because how our the I trying together by contract, luck restructuring Baker RPO? the sort and restructure go, QX. motivation of the good quarter? Hughes in a your if business would pandemic. of with how if go sorry you of the Hughes of seemed sort if of the this some sales motivations in little in bookings you the it. and the bookings expectations a our could performance wonder pieces sort future. -- the middle sense it to contribution contract, look new of And of lot smack you sort sort And pretty relative the of hinted you then, exclude sort like evolve these put numbers. that understand at in from at it we did

Tom Siebel

questions of there. Well, there’s a number

Let me realign to real this tease Baker apart. sales behind of motivation see if the restructuring structure. was basically Hughes can kind The I

in we Hughes central the energy those do four roughly and And are going with relationships billion $XX in I petrochemical outside Hughes AI, Baker it, CX business, was world to of Hughes, kind industries are a real -- close deep, together from they four Hughes basically these process that put When first business and with units. Baker unit those formed organizations. So, CX units. a they years of business to their their have And deep think back Ai universe everybody has of Gazprom masters I sat And in Baker oil they is okay. of new with kind called to the the Baker run that relationship I XX relationship that. Rosneft gas, unbelievably now of the chemicals they to and expertise business. relationships mean the you Shell, that Chevron, think and with business Aramco name expertise,

okay, and okay? Hughes, really the that That whether they is we people talking really a the a weren’t this quota they the people quotas, operating people KMG, so it that’s the was with in That’s sales way pricing the relationships it to in restructuring. them in and it consistent units it deep increased Shell, price relationships, really was Ecopetrols, manner we Be the quota the petrochemicals. are. of we’re expertise. the about nature the Qatargases, put they be operating we water, where the that -- all the so be what so that’s a did And we the resources restructured of in flexibility, also the LNG, units. Baker the the And But And that with with business deep gave it with here way with be and the the and industry of weren’t the weren’t did segment? and [ph] renewables, in people kind

we flexibility gave they them -- what flexibility, the nonrefundable commitment. what them irrevocable consideration, to us in So they given for us was gave that revenue

hard becomes that So RPO.

I million, mistaken. if think $XXX I’m not

David Barter

million next $XXX the X.X years. over

Tom Siebel

next XXX years. X.X over the

So, million build that’s pretty from, that a $XXX could roughly a significant, year baseline that we of. we top start on

So, I’m of the that’s best interest in the shareholders CX. confident of

win-win So, their relationship. them oil it’s good a And & recovers. business allows gas accelerate a to thing. It as the it’s industry

then was your it kind highly of sales have a SAP, like the attempt at have let kind traditional, business unit relates sales together run idea did Oracle. we early, theoretically they it that organization and I the scale is, the was independent highly to sales used And to As business like think of candidly, at you organization, they greater too IBM, like independently at you the rate. organization, have hierarchical, to put like they regimented, and a at

model different many office it of I too care the teams forward take from Company. answer early. did really we whatever product sales you we’re I kind all we engineering, do in from well, the the And performance from using. candidly, people a think the have the of sales always how to took organization many asked, was many the how Because of the CEO, That’s it’s sales used engineering, from unacceptable. And the in organization. of people in always have we customer. together that’s Now, people was we than the know to the of And put marketing, because

watched it. apparent needs forward. we of We going it Company it the to became going that meet was it, It carefully. And we growth the watched so, watched very not

and read we a basically, tested, Robert by XXXX to old selling good pretty technique proven -- in with. our old a which in Heiman companies Miller book model, book familiar selling that you a called many if It was Strategic strategic tried, developed haven’t are reverted Stephen So Selling, it. is

people they back surround took to gone a account, customer, we engineering to make successful, of successful. X And we’ve the account; best the the product a finance, their is or just the deployments be to X, from production together organization, is now, did from first of team that from successful, since trial has who are X handle so sales put from CEO, we’ve is the are been organization done to they in actually basically customer, partnership with their all It develop place. that all the people the us of weeks about It place strategic sure deal. implementation or every in that two put what is Company the we done. in their be or this quarter. day marketing, before think office for we this And It’s X what a

And seeing to it was thing the the We’re right off about do. races. we’re absolutely based now, to what

accept and was QX We back pipeline going a made track. have extent we’ve for that to guess that. a I’m a lot to CEO, of I and responsibility the course we’re correction, to for But a have model visibility large QX. the into And I so mistake, on hierarchal

Sanjit Singh

might, color That’s that. I appreciate on if is go to super all One helpful. and sort of the more market. I only partnerships this

you a with Cloud, some us or the that other perked the think Microsoft. partnership? color would out the of If did? them, a that give be whole it lot of Is one I of around it sort of the Is collaboration specific ears guys driving momentum driving Google even app and or the apps apps? you go-to-market host that’s Microsoft What’s my but or helpful. is can one was a approximately, called CRM particular behind that sort the it Cloud Google platform the of you that number really broader momentum So, of and between

Tom Siebel

really the how understand They how you people to and between between and different is similar. at done I a that It how sales everybody look the highly get hugely organization CX the been hugely, professional succeed. satisfaction out very customer they’re if successful and Justin approach And the are Satya and address That Ed together These to else, sales but the customer make it’s directly enterprise the relationship. really and very Well, perspective. has we Azure, deal that DNA -- would motivation actually organization, together. and They just different of levels. say to how Now, very, relationship. Google at the from us experienced -- it’s is to two. to shorthand And a sales at in the highest figure and kind a okay? professionals. look accounts talk Microsoft opportunities together, approached between to very we their is drive successful

Thomas and So, about and experienced now salespeople. the SAP I okay? he been he hyperscaler Most market. are had very them clear competitive from they’ve kind salesmen got he He’s market the approach all gone, took I hyperscaler other And X,XXX companies. and enterprise women over wanted of a that from suspect decided to of He to when Kurian different approach edge. think salespeople. they’re Google, about XXX

telecommunications, approach deliver applications better of services, application than defense compete CPU for approach than rather arguably aerospace, for financial with -- sciences, for upon it packaged hours So, for with seconds storage he and consumer layer wanted and life and and architecture, intelligence. for goods, a the to family manufacturing, based AWS rather through a and Azure for and

top the approach deliver customer. the of that applications, it proven, Google Cloud enterprise by AI So, run delivering he tried, on to solutions tested, applications wanted rapidly to that

defensible pretty creative Now, and strategy. differentiating and market think that’s I interesting a

there is it the hours. Now, the to a quicker. of net it CPU accelerates seconds storage gets It effect just you sale of lot

energy, argue XX, the market financial cetera, right chains would Google utilities, of the on, door turnkey gas, you with in of of & that knock actually manufacturing, on that in value services, manufacturing, top had run one healthcare, could address XX, the were you XX front that’s and et And I okay? building. is applications XX, door this on world if they enterprise wanted Cloud, that partner that somebody to you the the So, oil the this

really on, interesting these the and put relationship And to globally. productive So and door jointly a selling relationship. knock that’s now the applications together, we’re it’s that’s we

Sanjit Singh

all I detail, Tom. appreciate the you. Thank

Operator

Thank next of you, Canaccord. line Hynes David question the is from Mr. Singh. with The

Luke Morison

for Luke DJ. is This taking guys. on the questions. for Hey, Thanks

the remarks just drove that So, prepared significant called services discuss else Is there large relationships ramping, anything or in of out a there? is uptick in in Could you professional new reflection dynamic? just and out call your you revenue customer that fairly to quarter. what the there expand

David Barter

really question. a It’s to call nothing out. There’s great

deliveries. Our XX%, has any or projects this do given -- X has around subscription in quarter of it’s to just moved revenue quarter. and points X timing with over but time And averaged

than more nothing and execution. timing to just So, that

Tom Siebel

XX% So, you -- range services of to targeted. to expect kind we have in that where professional stay XX% can revenue perpetuity. will the it stay that’s in And of

Luke Morison

then sort helpful. maybe another That’s there. it. And just on out the Got of opportunity government

forward? with to of in that new you there’s big a signing there, or opportunity fruit out. had had characterize would Thanks. called feel obviously You Do terms you those contract quarter be agencies value three going how like you

Tom Siebel

And now Cardon I joined of has in huge. joined as is Ed think capacity McMaster McMaster, us that think H.R. the Chairman Federal opportunity of General we’ve -- us. Systems. had General I a

to expect significant at is our second you business announcements particularly confident going defense going I quite can forward. rate a intel, grow half substantially in increased we’re think some this And and of the year. in federal, that

Operator

question the with Needham. Andrews next line from Jack The is of

Jack Andrews

about sales high-touch need a talked for of continued sort this approach. you Tom,

feels AI wondering general. it so, like, the here. around And mean, there’s could maybe was if state market in overall just tie that into so noise, of I you I the much

So, the activity, to of need of understand you value concept time still can us. your mean, evangelizing of or cases, pipeline there could healthy to out frame given really and spend the you use just everything enterprise do sort AI does the proposition you do all the I for maybe deliver customers? everyone customers, that

Tom Siebel

qualified Great opportunities going half that four what of the the second working this next pipeline for in $X.X question. million. if pipeline as about working at Right half year quarters, about we okay. billion, you The second we’re out now, see is that $XXX look we’re it’s the

is a We time people out. spending in the to figure And lot is enterprise of evangelizing. not inning, -- are really first in market we’re looking a first at of it just the half AI. this are that okay, starting And

this don’t it to basically, it, spent build Enel tried billion. That of expensive. to not kind relates I’m It $X think, it to there’s to tried never has of build as We’re build -- it’s I yet. tried like fight. it, AI. two Shell it. I would -- long, schools thought and And schools mean get of customers works. spelling It’s three and everyone Air themselves. confused GE, One, segment fight don’t to how Bangalore segment, largest going the States platform people to build this we times every next going myself, Force, okay? tried I’m it. build no that to they’ve in tried XX,XXX build be -- one God I’m well, knows There’s many The is, I really take virtually, and And okay? our Coke to completely of United

they’re when point so they’ve advantage of AI, talk out where that they then, they’re to the qualifying deciding and get let going not want go -- build we not to through to it once people the that to of decided that’s going that And around themselves. to issue. enterprise So, they that’s first of building kind they themselves, point take it first -- we’re going stay them the gotten

convince AI stay to around why going not is good. We’re to them

$XXX we’re stupid, time finding spending not evangelizing. way We’re find sector, When And of it -- that at I’m mostly committed market. one, going that. because has It’s build the customer, -- that a themselves It that. we will easily to -- is and third are with no that’s that’s to that the okay? an problem in just qualifying, is market be before we’ll the in confident business organization a quite customer -- looking we over, number go evolution we’re and transform be not billion have all it’s just no through, everybody that we has addressable decided, of we’re to

Jack Andrews

follow-up you’ve and me. of plans That’s given really year balance hiring sales the changes the Got for for sort of helpful in priorities that update color. just us as for question, the it. Thanks a Maybe just here? of terms the fiscal made, the could your maybe you

Tom Siebel

job Well, we last the had applicants XX,XXX quarter. in

-- mean XX,XXX, -- I looked time for okay? the we think -- very the now, right we’re just we’re XX,XXX, XX,XXX last fast think some at I annualizes -- I last what, had And to okay? But are reason, last the we I -- So, year, math.

to And so, in science, data come we in people to have want of who sales, in work product here marketing. lots

about expect and skill have type we both of can of something in hire, that very terms I of It’s set, huge selective XX% people You degrees, that, in think personality Jack. -- like we’re right a terms advanced will we who our number. about

years. in can numbers every deem have XX% I -- in of we right of sorry, the that who one quarters next qualified, person numbers, I’m front have X me XX% give advanced our of to can the the don’t okay? or in way we it’s will me, and couple X those be PhDs. so or think these a other you of our Rough hire succeed But people next guys. me. -- excuse you that have we I on people points expect degrees, think here

for we are so, business. And open

We’re hiring.

at hiring Guadalajara. We’re

in the And in in hiring and Rome, City, New hiring. here We’re York, Chicago. in New UK, we’re right Redwood in Atlanta, York, Paris,

fortunate the -- retain. and to it’s people about that very we So, attract feel and we’re able

Jack Andrews

the hear great for That’s Thanks to update.

Operator

is line next Michael of KeyBanc. The Turits the question with from

Unidentified Analyst

Michael Michael Turits. is This Berg [ph] on for

into and if APAC. in EMEA? I compare to a that you that was You And called in dive then you’re Thanks. wondering strength what little out bit, seeing could

David Barter

Sure.

we shared the what APAC think was up call that on is XX%. I

last the quarters, strength, certainly just deals it’s about if APAC services. of I think I in and think been that had the thinking financial about the couple we’ve

think gas, seen we’ve I chemicals. and some oil some

seen of it in APAC. So industry verticals number I a hits think we’ve is what

Unidentified Analyst

you’d just a timing Is Thanks. that? if follow-up. anything strange quick could billings get seasonality I any there sequential on the just comment change, around or then, -- And

David Barter

so. don’t I think

I think of noteworthy XXX% back things to if the very XX% in think kind keep to is the you most to element over were overall go sequential. have billings, about if going sequentially, QX, back strong been -- to going you mind probably just that

about when coming think sequentially of a So, off were of I we it, think you higher period. kind

going there’s be mind just how to through P&L. movement in So, keep that percolates that’s I that continue invoicing the just to around -- some and

Operator

The America. the next question Sills line of with is Bank from of Brad

Brad Sills

color What that Thank perhaps going I on with, industries? look wanted the IT services. some manufacturing, other kind applications ask of and of verticals? expand potentially sciences, newer pipelines you you what seeing life about that to pilots are of Did traction you’re those Any in industries after: you. like vertical early kind some these you’re into seeing there?

Tom Siebel

I huge, telco. to into going Brad. have by not, Financial it have sheet you front of now big or I don’t believe That’s that Hi the Brad. to at? moving go I service wish in pipelines is look be I one. insurance, that a had I all mean, going this me. a agricultural agriculture, I we’re do mean, Jack, is done. everywhere. vertical implements,

consumer I goods will good. be think packaged

we haven’t It the that We’re big, not made be not precision medicine. largest, largest. way we’re No yet. to -- could largest there The be be. traction has will won’t where unquestionably the a be it not lot yet, of

markets a it’s I of develop. matter just these will mean, So,

Chinese when gas have to they remember door the course know of these Because For some had utilities complete in the you out -- you I everybody IoT, very talk as I mean to -- big defense the intelligence reason second how services pipeline spending the of in the and all surprise. many kind Defense three financial are guys when and used how Oh half who scores through this. knows why will then to about of came defense in large the I And God that gift large. mean is the market the be? that my sensors person poor Hughes. develop. these utilities, first was guys a a and the God! the with in I horse to there. of the intelligence. Oil very came are Chinese. year. in up used and intel, walked billions Telecommunications mean, keep these Baker on is have -- of guys

the work solution. you’ll will to be and of it part so, And some find I have do, think they

mandate, of kind how pragmatic, fashion. or as happens in aerospace he it in verticals you the after walks and very the That’s going with check and Boeing we’re -- coin-operated a the door And CEO business. the run just to we’re works. a So,

Unidentified Analyst

of could about I then ask some Great. ENGIE. partnerships, also, FIS, these vertical Thanks. And if

seeing traction If resources, go-to-market would helpful. again. any you Thanks could a really elaborate on little commitment you’re those there, be just partnerships in the bit

Tom Siebel

carbon State using will pretty is And ENGIE like on remain and number to large energy mature, our technology others. and a provide. reduction utility, Ohio stepping where of almost one of decade service role of traction. where the they’re guaranteeing candidly, what a the university of are unnamed seeing of energy okay, basically is of the that at kind we’re them or a footprint their our retailers they they’re and to University where lot provide in as that using heart doing over organizations software they’re they that’s next years. services in coffee systems XX And that Large they’re the

hugely growing, FIS relatively is successful. mature, that So is new.

put couple was quarters in As I you’re ago. of it aware, a think place

we I’m a but of now, generated there. lot guys not is seeing steady yet touch about -- business. We’re who it, there. progress have slow with I results am right but That optimistic the the run regularly

over that’s going the succeed we’ll two to whether quarters, next not. know think, or I

defense of defense will. the kind levels commitment of And business the it regular definitely is think are intelligence person morning -- their the I who and I at partner increasing. I in spent runs have the our communication community. Raytheon, with who

in large projects will those of We’re to involved have them. some projects we’ve second mentioned that some very half the with growth I that David in year. the expect can and contribute mentioned this you And of -- see that

one. a is good Raytheon that So,

Operator

final The with Mark JPM. from question Murphy is

Mark Murphy

to efficient? Is is and belt, you applications way a the working your few or on by own quarters the letting what route weaponizing with companies what and Microsoft and more models, it direct or look older market, Adobe back application are their and it with build Infor was is Tom, other is When AI you and learning vendors? under So, I it more preferred your curious. selling machine

Tom Siebel

Defense just systems say go make I’d say readiness, lot really the in [ph] in weaponize here, Build Shell, be you, and the successful. Agency, or I Coke, account, And existing and the will tell think, half. years Mark, take we is, Enel, Great XX it or it us, to question. okay? account a it it’s say, It Missile I example half for must in live March. live, an have there for think take second first applications say them

certain, And because It’s easiest, the you situation. have control so, highly preferred. It’s okay. over that’s

directly dealing You’re with the customer.

because say, reason somebody the at believe can predict impossible. price build price either big next sophisticated, can that we stock of of gold price I in and -- could to One You second think would next Google is the that you could influence wants project, month, right A, projects of month. do a if me People companies at explained we if applications, succeeding what is can lot And and Well, set AI the predict next business, be that software yesterday. would me. then these first projects they’re of fail actually try that, price these the month. much to are, of their do we to predict okay? going expectations, picking of you not the Like And let’s were we the like obviously to as pork, only bellies we, know. application predict pork was do the and The could these an do if you to third. about this very AI

to are are people that So, people applications value. that applications low or of impossible choose either choose

them and is when directly, on an you them tool. Now you’re can with appropriate them AI where high-value applications keep push dealing

establish being through much that okay? Baker you leadership market about your you and going like a Microsoft, to market to like maintain scale. The own you is through, through distribution know like scale, And as Hughes. is think we you’re advantage need position, leverage, like if a said, Google, Now, going want you’re when this partners FIS, do, larger

Microsoft. I don’t that. Hughes, like have what but I XX,XXX it’s Google, X,XXX number at people some staggering think know is with people number at the XX,XXX We people Baker

So, harder. the good news is there, you have leverage. It’s

sophisticated you’re be more about You it. the much doing way need to

people make to You be to need allow willing to mistakes.

You’re and goal market time, and if leverage. do partner failure. of you do same the going a have higher At rates market through you establish is it if to have maintain you -- leadership, to the need ecosystem. clear a to And

to as much the it would to easy it’s achieve going I way, as objective. So, not desired do prefer the

Sorry to it really go good full was circle on it, but question. a mean I

Jack Andrews

Yes.

what just other Okay. appreciate Yes. I year-over-year. observing the has into that But with up question insight so my prices. happened And commodity much Thank you, they’re strategies. Tom. is

end very more And Would oil creating in benefiting rapidly. make You curious, head gas and has there was commitment for have stronger business just utilities, of although guess, them you? commodity you’re more diversifying chunk you to the kind budget of that’s confidence & if Is price this that into market? that to given I I this Hughes, Baker XXXX?

Tom Siebel

When easier slash mean negative relates off, fast Well, lot barrel, people they can all as that I shock. above business question these lay of they companies a it is a that about I can budgets. are to were think there’s $XX in no our to all They oil segment prices how market, right, how there prices it’s fast thinking do were like when and were oil zero.

oil today. where I is -- know don’t with Now

future. hydrocarbon They’re the really Interestingly Certainly Shell I $XXX is. significantly enough, they’re certainly investment it’s on do. dependent agreement are they Aramco did. say, are investing. operating all check I of When their probably to and it’s And talk companies. becoming themselves. on significant billion one there’s looking and investing. investing and reasons that’s Hughes I in entirely is, suspect a transformation. business, are -- non-zero, reinventing is them $XX be restructure You there something way But like know. no up. Baker the question, a it’s a entirely they pretty but investing about of they’re don’t you the to it. barrel, suspect I I that they don’t now, But non-hydrocarbon all mean, most reinventing, budgets that But energy, this And to in clean all motivated

Mark Murphy

appreciate very I Okay, understood. you Thank I it. much.

Operator

additional remarks. time. any this turn Tom to at I waiting for are back no There Mr. over closing you, Murphy. the will conference Thank now questions

Tom Siebel

what the Okay, of position posted so and we ladies attention. on be you a attention, and AI. I on business, clear the suspect And successful globally and more enterprise and your look pretty that. we leadership to in to gentlemen, mission and market is courtesy that here. much touch. successful And for will establish time, do - time appreciate your you this we’re that, thank maintain make all than is we company here our staying keeping to and And Thank much. forward very If we progress forward look you in very

Operator

the Quarter for Thank your concludes Conference Second CX AI Fiscal XXXX participation. Year you That Call. Earnings

You your disconnect may now lines.

C3.ai (AI) 2 Dec 212022 Q2 Earnings call transcript