Earnings call transcript Q4 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the C3 AI’s Earnings Call for the Fourth Quarter Fiscal Year 2023, which ended on April 30 2023. My name is Amit Berry and I lead Investor Relations at C3.ai.

With me on the call today is Tom Siebel, Chairman and Chief Executive Officer and Juho Parkkinen, Chief Financial Officer.

After market close today, we issued a press release with details regarding our fourth quarter results, as well as the supplemental of our results, both of which can be accessed through the Investor Relations section of our website at ir.c3.ai. This call is being webcast, and a replay will be available on our IR website following the conclusion of the call.

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

non-GAAP the risks GAAP we refer and financial call, basis our For in our non-GAAP noted. unless other factors certain a the measures, otherwise included a further And release. to SEC. affect course please discussion of non-GAAP press to that refer be during a measures the today's of actual with material reconciliation results, will discussed is will our to of filings could figures important All on

Finally, your to Please our are to that in may dynamics into may at questions, metrics or the be we prepared to the provide we give our in times that remarks to future. quarterly results. the detail presentation or our in continue additional usual insight incremental discuss response this advised our greater business not may of

the And me to let turn over with that, Tom. call

Tom Siebel

appears call finished that the and overall everyone, you and Thank Good larger expert that agreed most greater analysts generally year believe is substantially you, now rate is and a the Amit. much predicate. afternoon, looks market the strong coming enterprise for today. joining and thank growing quarter our than We fourth stronger. AI at I for

sector AI, operational establish to assisting leadership AI to enterprise improve thought in working enterprises been XXXX apply since and have product to We private and popular processes. leadership develop

over enterprise AI the been has market for decade. Vanguard at CX.ai of a enterprise the of AI

AI. learning, over to now the developed AI that the AI NLP, rapidly take supervised XX XX-years, the applications learning, learning, of developed has platform and from our supervised business platform their to and under with improve offer developed advantage CX.ai have customers and its deep market enhanced reinforcement processes. now In that IoT learning, past to generative routine As we enterprise allow

a now We become believe enter be And discussions, a we in imperatives theme -- reports, market defense decade of the that have become would government for for imperatives. technology media has quite in AI dominant dominant summer communicating technology AI enterprise or theme and has the as government large. business government solutions been that discussions, intelligence and over we XXXX and a discussions,

I who very advent the the there to no did not no business thinking to being leader, is of chipmakers there. government to real daily. about of are And that's by and AI demand believe accelerating all that production like is that it's an keep up AI. out this Nvidia try generative accelerated no say leader technology leader, overstatement is not AI with

AI The interest to is and inquiries business greater. is has growing, pipeline is CX.ai in AI and demand processes serve are in with well our increasing, increasing government to opportunity been applying our and footprint, processes tried, global greater than substantially coming seen. is, The is many now ever applying global our in large in ways, applications, business our us. we to The platform, AI interest proven AI ecosystem. and And that positioned demand the increasing. Business have tested world to never

In the we total with our cash $XX.X especially work federal strong ended business. we growth the the quarter, equivalents. million base, fourth revenue our was million, cash $XX.X free in cash expanded our quarter, and $XXX with customer million quarter in In over and clients existing flow and fourth our our increased was saw

year. of non-GAAP profitable sustainably be the by a have fiscal this we cash Importantly, to and end well-defined plan positive

Subscription revenue X.X% For total XXXX, revenue increase an of $XXX.X million, ’XX, was year. an $XXX.X okay, over increase year the fiscal was million, okay. representing fiscal prior I'm XXXX, year over fiscal sorry, XX.X% for the year

bit little AI a market. about talk applications Let's the

fiscal bookings that our were for application the our by by that It indicates bookings our enterprise thesis of developed. market tools. the XX$ bulk has is applications of rather than development AI demand an the bookings for year evaluation the that of turnkey This is as supported platform. were the past of Now appears enterprise sales, by increasingly XX% AI for driven sales the of driven CX.ai

in seeing the Importantly, are industries increasing we diversity we serve.

XX%; processing includes: oil energy year X%. X%; XX%; fiscal defense, tech of up For and manufacturing XX%, X%; sciences an utilities life other X%; analysis was food made chemicals federal, was industries X.X% aerospace and ‘XX, bookings remaining was and our gas high-tech, XX%; the

An closed in important approximately made more up trial at each also and X% XX%; comprised bookings. agreements look our almost aerospace increasing and we indicator When local, pilot high-tech industry Oil XX%; ag, energy, up of than our is QX. XX%%. the than diversity manufacturing and and approximately up up financial by services leading defense and gas made XX%. Federal, of made more chemicals, made evidenced state,

targeted than pilots closure to in in our of year. our sales increased we result the and agreements, has a XXX% including consumption helped pipeline in opportunities XX more in number by enterprise for past The demand the As are shorter of the cycles. initiated QX, In within seeing pricing, transition closed based a were qualified opportunities sales AI, XX quarter. for that we enterprise increased by substantial XX-months increase

the of up The account and An account pilot an signed less was annual accounts our XX new billion the $XXX billion these of in accounts consumption fiscal pricing. billion to in is between QX, accounts there seven average year were year. greater closed Of revenue, pilot XX were X.X opportunity than and and cycle sales from the composition examination and growth were we prior billion as previous of accounts convert suggests XXX months $XX in for accounts profile in between down $XXX significant months in five billion the from for four revenue, deals million $XXX agreements, was QX seven than year. expansion During ‘XX, $XX revenue. one $X in

customers, at the Rapid York Baker Defense application United Defense Edison, Office, number Hughes, the Engie. year Con including The Agency, footprint Authority, New Innovation Duke ‘XX, Roche, Counterintelligence Sustainment Force our Industries, ExxonMobil, of In we Unit, a Security ATB and and Canada, PwC, Air States Cargill, Power Ball, Koch our expanded in Shell, Energy, fiscal

of DoD; We also Owens-Illinois; Stark of in Hexagon; with City; established ExxonMobil; Common County, many Pantaleon; engagements office; the Defense, Department including AI Ohio; Nucor, Defense Many Daly the also Department expanded their and TRANSCOM; Riverside DOW; Department us of County, Defense new of Flex; Telus; relationships the course year, SOCOM; during of California; AI these the year. California; ESAB.

doors CX.ai Cloud, with fiscal partners, Microsoft, address partner ‘XX, provide CX.ai the we network. who opening service. the the with fiscal Allen. qualified its Google fiscal including with qualified year at pipeline highest year of XX% our joint year AWS AWS, closed Let's XX CX.ai partner opportunities XXX% at partner at end prospects, XXX effective and of increased state With Booz local the quality over our Cloud, pipeline able assurance increasingly quarter, Baker to the by success Hughes, in XX-month with XX through In end ‘XX to ‘XX, and is our opportunities opportunity and government. grew agreements The of on from particular a with and ecosystem are increase. Google the focus -- new network, fourth

AI And Hughes, Generative In closed our released ADNOC, in and CX importantly, Baker market. solution the we we oil XX ENI, ExxonMobil, with others. accounts the accounts strategic the gas QX new year including partner with and to

distinguished is open Excel, enterprise several Our to CRM, source platform generative data and other in ways. text, leverages solutions sensor market the all their it AI ERP, capabilities solution and SCADA, the the one, allows from enterprises of data, GPT/LLM Number [Indiscernible]. data PDFs, PowerPoint, CX.ai in access

provides consistent Secondly, answers. importantly, it deterministic traceable

are information it is security controls no free. in Fourthly., of the Thirdly, by it language exfiltration has importantly, large data it that model. or caused corporate And risk enforces hallucination IP place. currently and access the protocols

system application. U.S. doesn't the enterprises, the After Defense Agency. rapidly March, quarter for an Pacific, or generative So Department know in doesn't and Flint releasing Defense unacceptable commercial which product it, Hills including closed Georgia of answer, serious the if in applications it any Missile with government is the Resources AI clearly three fabricate we large

during We applications current live to expect be quarter. this these

estimate With currently working are We marketplace on be Corporations. The Cloud large both is additional Opportunities now size generative of marketplace. is CXCandida available the but Large AI these market quite appears CX to corporations. AI to up opportunities with AI available solutions, today difficult addressable generative of substantial generative the pipeline extraordinarily as for AWS application the -- large. it CX.ai It The and Google

business. The our fiscal federal and to momentum fourth XX% of We it quarter the in represented with significant our ’XX federal year last bookings saw and U.S. strength. lot show of sector in year continues a U.S.

Air predictive assistant, Air of Rapid decision designation States This Force Our also United analytics really has as services. years good pretty U.S. other important predictive Sustainment assets, and virtually States for solution, known for record in And was used substantially selected system Air the the and Office. been the Force all for as quarter, United production maintenance Force in all expands okay? at opportunity several our it last maintenance PANDA,

not are since to we that at guidance. set and we've record guidance we every expectations public, pod coming are side of in meeting talk general, And solid the have we on we with feel or to consistent year track inclined not analysts at the time. comfortable this CX.ai table the are expectations time, as Let's for the In sell guidance. has a quarter change exceeding okay? we have and this those been regarding inclined about done

million QX to we range fiscal revenue fiscal in the ‘XX, see million. For of year for $XX.X $XX

full-year we $XXX expect revenue and the For between million million. year to be the in range of fiscal $XXX XXXX,

to expect million $XX relates between non-GAAP we year. the and to $XX from $XX operations, As fall it QX million to in $XX for million loss million,

has is and the of environment center CX.ai leaders. As strong, and is we CEOs been large ‘XX, addressable for business and AI CX.ai year overall enterprise the begin market expanding, government is positioned. better never and fiscal The in minds front

and sheet are equivalents, $XXX expand a with in over to in cash balance cash share. is great market we million Our strong, and position

are thought appropriate it June Investor XXth. to As enterprise rapidly, market on the we City so York a host AI New Day in the developing dynamics mid-quarter of

and webcast. update, team, investors Day time, roadmap, provide ecosystem, we that you partner a updates would either that demonstrations, access and will view to live, hope event product additional developing Investor We about online, okay, AI for the all news, be provide, CX.ai in-person We generative via on product demonstrations, online or okay. company company CX.ai information direct at CX.ai, can investors CX to available additional attend will our our executive

for additional results. Officer this regarding I Financial turn call our will Parkkinen, now financial details my colleague, to Juho over Chief Juho?

Juho Parkkinen

you, and some our color our fiscal with a three conclude on Thank I basis financial provide will detail of discussed revenue will additional add first color recap this on I our financials, quarters now will noted. full-year drivers XXXX provide quarter the guidance, related of results, Tom. introduced the on non-GAAP and some figures to ago. All otherwise we consumption to a be model more based

business higher Overall, have activity than is the we ever seen.

there more more Our interest on and our engaged they're are sales from working more they're prospects. reps opportunities are

year. During throughout the QX, this to ability fiscal consistent was close prior to quarter, more agreements our quarters compared

We million fourth of subscription XX.X%. $XX.X revenue total which revenue was the with ended a quarter of

coming with within mix. our As XX% discussed XX% would at services actual professional XX.X% in be range of expected last the we our we to services quarter, professional historical

our XX.X%. in flow free cash Gross million We margin in quarter profit and generated positive fourth flow and $XX.X gross the for $XX.X cash $XX.X million was operating for quarter. million the was

pressure $XX.X improved carry was production higher we expense short-term the a loss during due more to pilots, of due Operating a a updates, higher of prior gross deployment. of revenue rigorous to As on which management. mentioned cost have margins, our mix than million

sequential that increase support events, As was transform host loss QX, conference. successful a fourth event. quarter driven in of as margin ramped we annual by up our CX.ai the our was though, execution our where the expenses to Operating XX.X% such, is reminder when the customer marketing

our an full X.X% million, revenue $XXX.X the XXXX. fiscal XXXX of was from fiscal year With increase

operations Non-GAAP $XX.X loss million was flow was free and cash negative from $XXX million.

was XX%, was year margin total of gross ‘XX. compared the for to XX% fiscal revenue XX% revenue, subscription in our Our

$XX.X including in the quarter investments. $XXX.X with million, million. ‘XX accounts million end was Unbilled fiscal Baker and million ended receivable to of was receivables of cash $XX.X Hughes. our We At related QX, unbilled receivables at inclusive end $XXX.X

past were the due. our million. than receivables During we receivable from nearly current quarter, of collected of XX% our health The Hughes, is excellent, $XX less Baker or XX-days accounts general

entirety of FY debt $XXX,XXX. the For our ‘XX, was expense approximately bad our

turning Now to and RPO bookings.

pick of a RPO important the RPO year X.X% of RPO sequential is go-to-market basis. GAAP performance. less to million, based year, last indicator from $XXX.X pricing. which consumption reported based a to XX% up, is GAAP result Trade million, from last future down end We is on of as consumption of up As $XXX.X continues expected up model X.X% and transition

pilots We during different see bookings industries pilot of positive range sold we broad continue to have to nine trends diversity in the as a quarter.

for ‘XX, our to fiscal $XX.X $XX Regarding QX outlook million range regarding revenue to between million.

million. XXXX, expect the between For $XXX $XXX full-year range we to million revenue and

acceleration portion consumption relates meaningful our finished a as third model, model, somewhat as in a [Indiscernible] during consumption pricing of the an to our expect quarter of revenue. decline it the transition transition we to in-quarter have under and full-year, starts As revenue flatness with we the of the

second-half FY have the the ’XX to a expect growth sequential we than higher such, of basis on first-half. As rates

our operations for $XX expect $XX we non-GAAP million from loss $XX non-GAAP loss million. $XX QX range between expect fiscal between full for to million ‘XX We million and from and operations and

reminder, ‘XX, and for beyond, to are full -- loss the it and a as CX a applications. to made in for we through we to AI fiscal we operating QX guiding generative range expect be due As investments non-GAAP potential ’XX to profitable relates

investments ‘XX. to at during at and cash around fiscal our $XXX expect its We lowest be million

of we and customer count a a products to customer the for proxy estimate quarterly Turning as Historically, metrics. provided have solutions. adoption our

the resellers, convey from of methodology, and believe current of on current methodology comps and apologies. we our contractual we pricing from counts our However, Customer the structures due fully based and products quarter-to-quarter of based customer comparing and involvement on complexity acceptance the to -- adoption does solutions. our our not quarter-to-quarter

be we current with to systematic address external and update retained best consistent, help consistent Four our an to Big count consulting To methodology this, customer auditable. firm practices

contracted result ‘XX our a a is comparing engagement. understanding believe as metric As XXX, increased that meaningful that demonstrates of QX engagement more review, to recommendations, solutions product to we adoption from QX our provide would using XXX that are This defined solve customer customers and the The of of to reduction. those cases customer use a ‘XX.

is count metric period. XXX on available detail customer supplement, our from to same traditional for Our went included additional will XXX website. There be the in the which

this for expect have QX QX go with have budgets starting consistent track ‘XX our basis. to entire for on on the are profitability is planned We executive our The detailed forward a for ‘XX and plan positive managing cash profitability. quarter team to business on

aggressively are We the to is which in reflected AI generative income first-half expecting initiatives guidance. during the year, invest operating the to of

model. we quarters our business ‘XX. it pricing, that preliminary as model FY that very for we of to As analysis are on our ago start actual we the provided the three consumption about based results suggest relates Overall, the excited we're assumptions momentum

focus of pilots the fees are started production during to As KPIs to quarter we the conversion performance, good go those number to a finally, and the pilots the consumption our KPI the forward actual vCPU assess investing for believe generated. community of

I this up With like Operator? questions. would to that, for open

Operator

you. Thank you. [Operator Thank Instructions]

Our of from first Crane Canaccord. Kingsley comes line of question the

Your open. line is

Kingsley Crane

Hi, the thanks taking question. for

this in Tom, is you last Why So general from How due due the is? consumption the entirely And you model? sales to were productivity? to sales much excitement that down even X.X potentially five this cycles think around Is said of do the months that months force increase to potential year. space?

Tom Siebel

thanks No, think I Kingsley. --

one years two $XX now to the model it the live all ago months technology. makes adopt on easier know, business think $X with and application I AI old we million that consumption million, days, that. $XX made we'll our was you do everybody's $XX it's transaction much, million, open the million, million. is door. $X.X us pricing to or pretty And in to the the six it much clearly, based in We I mind, of is mean, have bring

it with. CPU to easy hours we're $X.XX If to be it, business you hour, keep so pretty and like CPU per do pay

so we'd of And increased number transactions we're the expect. as dramatically seeing

contracting with of us. The ease

sales our we organizations. is know, other productive have sales largely reconstituted and X.X much candidly more that a sales you in the team than years to last As the organization effective

think activity which are of pipeline, to I increased increased optimistic. we're So all those business, increased business contributing quite by

Kingsley Crane

for helpful. When Thanks, then of Tom. That's timing I one really Juho. And about think the the transition.

the consumption -- consumption are about So mix? consumption it contribution the of I revenue model, the we as the increases think of is case if majority think could half? migrating to should vast the that particularly that accelerate customers necessarily in over back Because not you time and in said existing how

Juho Parkkinen

Kingsley, Yes, that question. thanks for

So pilots in. then quarters long, initiate more pilots are and sign revenue consumption kick start and generally you to The that's we quarter. the as within exactly the see two

the pilots quarter, as finished we well. a we good with pilots with As pilots quarter last had in XX increase XX

You revenue can on to start fiscal seeing by QX those and this QX year. the of layer

the we remain existing Now would see down RPO to structures, on to to will trickle phase, agreement a you large as enterprise enter renewal renewals, but pickup to then and of about expect do expect they our customers into types point the these agreements renew. as with continue we see your contracts those

Kingsley Crane

Okay. Very Thank helpful. you.

Operator

Our the from JMP of line Walravens question [Operator comes next of Pat Securities. you. Thank Instructions]

line is open. Your

Pat Walravens

about you prevent some Department also, And it really generative of more Oh, on great. and that, doing you Thank think would could that comment AI is? hallucinate, maybe more I interesting? be from if little doesn't a how that what about a you. hallucinating thought Defense? of version Thank you. I Security Tom, said something can interesting with then the And National you you talk opportunity the was

Tom Siebel

we're once DoD associated. the that kind United billion Secretary we for the a and for F-XX, to KC-XXX, were vehicles two we're take were States times and into DoD, Air in that the $X.X operate the in Force rapid application proposal which have the doing et the the that are of $XXX we once Air authorities It predictive maintenance basically for what at to is F-XX, well, made Force, aircraft contract -- production F-XX, Pat, to office be that many to X,XXX. applicable you Force cetera. And Air F-XX, could about million was doing the full sustainment what RSO, all of asked

Air I availability billion. $X And I have think increased XX%. maintenance decrease Force proposal by the and of their would readiness about by the for aircraft cost think

did that into a Brown, considered own Staff, the for on way as asking Chief went his and he General So you they months, answers go questions, their start chamber off do. of was and was were guys these of selection the they all and their have while Force, the -- didn't we predicted few only Force Air out came -- a they the for for assets. in the not States okay, United the for AI-based in with as not aircraft United of maintenance system as States standard the record, Air all all but What CX

a genuinely okay. deal, big is this So

opportunity item Now this the the make to line we in have budget. a

to -- So Army and it the Air talk describe National services and can Navy hard do the you. Force, now in like the Marines overestimate impact the other impact only to And have of the Guard, over then this the have it's is we not the what this. of we and

So this big is a one.

generative has do one with to second AI. The

these kind you're If the answer. of, you -- and of one the of large models sometimes question people sources with get number the you is ask interact the text, typically different an get, you the use different can limited model problems random have and the with two get problems answer. large of And a data. directly AI time you question, one is language will data code. language Every with answers. is the But a is HTML So generative to that

where And they came one answer, the you know what -- hallucination. okay? It no if makes is up. call traceability. doesn't the it it there's And from tell doesn't answer This finally, the

of know kind it it answer. just an wings So makes it doesn't up

aggregating entire think, we data, the the data, you, deep happen platform. image. a are language -- very So we those large federated we're by into that you, read unified database data, as to code, a using sensor extra we're model images, firewall is between a we they I learning all incorporate data that text, CX enterprise a we've the know, that leveraged model. what that price vector do we be And -- of at have have good a in When stored and kind do and that, way

it be uses Now our along hard, comes Home, any whatever it customer whatever be be it next. language ChatGPT, [Indiscernible] want, may model they it -- it X, be

the language model Now, and a the within built but data. we large firewall

-- time the ask -- every So question, same answer. give it you will every I -- what's the you will mean really it time

people two the Okay, every they same if and question answer authority, ask get the the same will have time. they both

from, provides Associated their where that traceability see a okay? very find is see on with where on published they the exfiltration, see data Samsung risk the if for out cost answer, you all And no data of they it, click the proprietary Internet, it can exactly okay? information come LLM not you there's to of can importantly, details

And than doesn't cost know of hallucination. the know answer making finally, up. LLM no tells it there's one risk answer, rather don't the It

commercial this you reasons generative of table is one or something these, and CX be that stakes, interest. that for government very large of of stakes kind distinguishes for the they high and we're any think offering. levels would are installation, And table So seeing the really

Pat Walravens

you. Thank Great.

Operator

of Morgan Thank Again, our Stanley. the you. question of from [Operator Instructions] Singh of line Stanley. from next the Singh of Sanjit Our Sanjit next comes line Morgan question comes

Your open. line is

Sanjit Singh

partners world is Marketplace. of Amazon at mentioned, Appreciate it marketplace motion look sort like AI going permeating kind self-service look me sales you going you AI the boardroom, flywheel the this revenue. a about like? CX into forward going a sort the versus type enterprise of value? helping squeezing the what when of way. available C-suite converting pretty these me much generative press is you earlier And suite question. working large of, ultimately And the being consumption-based is AI deliver week, customers, deals the thinking had this to announced in generative actually guys As guys more in generative interest of with How you deals we of to release about navigate got and Tom, for substantial as get consultants and to be the this in sort

Tom Siebel

Great question, Sanjit.

first three are our We're engagements on billion not So application the our that be and so the now have have XX the we'll revenue, in in evolved like $XXX -- greater -- and or weeks. of we it's people order in straightforward. bring project, live okay, is will organization doing it pretty -- three

Now from, we to is, can customers key the XXX The issue go from customers to of the that, how We straightforward. customers, XX it's of six going terms customers okay? XX off to real okay, say, do doors thing, X,XXX. six customers blowing to this to know in pretty

where So be today. to they're to for Google product the of leverage available marketplace we is terms needs iPhone. now in like usability, today, have X,XXX, these Apple available with But the marketplace channels the the it where AWS

You open take the it cellphone it and the box, off, works. turn you on you

turn the generation really like it kind you up, product -- now it relates work now okay, the product, an it of, and on next the so it open we're -- works. And we're on that and that product, design, serious development -- you doing to Apple next making really

so that's us. before challenge And the that's

note, on your hold that think okay? to to up I if stock. hit we're to And able we're it,

Sanjit Singh

reorg, year? And Maybe XX%. for like sort understand, well. midpoint initial you're think types guys what's past grew sort you more to guidance to for at growth of generative color, a I the is really function mid-teens 'XX, coming is ‘XX. as sort of a a the the it driving a And Tom for really of contextualize grew year that XX%, year, sales trying XX% fiscal where coming Because for difficult, I'm And you the north you calls of like spending we're is online those you're versus maybe guys one at year, high-end. environment this seeing of next Juho the sort and acceleration And fiscal Tom. appreciate I of guidance XX%, coming I mid-single-digits. in relates off full-year. things had year the guidance The then off year the follow-up. want AI to this tougher

so And is sort the pilots those attribute coming of two seeing any in things that of field? versus out can, year you're of, in there demand off a sort way the you between tougher

Tom Siebel

okay? we address bring tougher the year. about premise, me Before our Let all year, hands tougher year, tougher

I got the in X times that in audience. all think the we for call

let's impact was $XX out. on to very clear how dampen deals is Okay, to growth. million revenue negative okay, the we If million, pricing, who revenue to growth. transition deals, $X.X a it actually use million, figure mess. that can $XX made the Anybody okay? remember, are this a It's short-term we're knows to spreadsheet now revenue effect $XX consumption-based we closing million instead on this of going When and million, have short mid-term, okay, $XX million, $XX a

not so I'm that's certain tough. So

set. exactly actually we're getting basically we is the that Okay, plan that

is thing exactly this So track. on

we -- return, you spreadsheet it the and Now I year can carriage this three extra and okay, But a the on with made few a few plan years out did. do you -- exactly run think when out math and what you a I'm the so we're you know there, not We you little investment. run hit what model quarters happens.

investment. yield decision. I ‘XX to that going was from It returns think in ‘XX, was now a fiscal year a and we're good it And the investment. great

Sanjit Singh

Appreciate Great. that. for

Operator

from John Our question Wedbush. Instructions] comes line [Operator Katsingris you. of Thank next of the

line open. Your is

John Katsingris

And I in see Hi, industries the served, cases use future? how thanks for Thank you taking guess, diversity my out how have playing questions. John develop? on them increased for given Dan across Ives, the seen these do seen, you you. so

Tom Siebel

okay. inning terms first John. to enterprise that, guys Right in the mean, of now, applying question, AI I Great we're and the of first-half in first

is biggest embryotic an mean, seeing uptake the market. So where we're this I media.

huge First, IoT remotely the the all make they devices okay, constellation. to in upgraded invested it because the was SmartGrid globally $X SmartGrid, SmartGrid, a machine the infrastructure okay. in had addressable, trillion, Why

that's So first. saw where we it

next past in what predictive in we're market AI -- largest The large is maintenance. the reliability, basically the year, seeing

or move call called sector, average can military, the they So they okay, readiness, Par reliability. they in the

this the So AI-based today. okay, to either. processes, chain will forecasting, How the it's all AI risk supply predictive largest optimization, demand mean, evolve? business segment stochastic optimization, we I will supply chain production CRM, maintenance is be clear applying

there not use no and business aspect research of -- the think entertainment will or that medicine, of be not okay, and is that I accelerated AI. literature, and will the by and operations science be

we're along where So we're just it balls we're rocket this few on in -- and a and the the our ride goes going going next but to it ship. feet as for stay the is to to develops, of have years see

John Katsingris

you, Thank Tom.

Operator

next of Thank you. Cikos from [Operator line question Instructions] Needham of Our & Mike the Company. comes

Your open. line is

Mike Cikos

Hey, the first for taking going would be here. to Thanks Juho. Maybe the questions guys.

model? cited those you And many of how for us? quarter, are XX the like old this under So guys pricing that I for that the this. pilots know or using But have coming maybe those Can in are of are closed XX consumption-based pilots maybe refine that the pilots. purely just we're names you deals further you classifications versus it's still

Juho Parkkinen

These model are the old at the all are all. these these consumption-based -- would all not approach. Mike, new under follow

Mike Cikos

Okay.

are with the production? is have deals and what guys feel in so quarters. closed follow-up XX move converted is that that Do and previous a many pilots have of do consumption guess the that now a quarter we've have initiated -- those you on I'm I the we how sorry, to guys have into for base we deals they for vCPU that that I have based, gauge that pulled are decided And this a for or consumption production? once other that these pilots pilots And you I the know consumption XX

Juho Parkkinen

That's a great question.

first obviously, So Michael, which end on announced of months have the that, towards get been quarter, the this would take we we from QX. QX, you six

very the So in we early are in conversions. that

late was of in model is, the say at would those ago that first QX deal. standing into it are as will consumptions, seeing But whatever arrangements. by since entered each pilot this consumption pilot we convert i.e., provided quarter the we a we I into three original We that where it XX% start follow-on likelihood expected assumptions, before quarters more quarter is with to really

Mike Cikos

Understood. potentially I see, a I know quick Understood to add follow-up, services about. still XX% the you federal these appropriate thinking customers? the typical maybe is guys how to over we Or XX% pro-serve we talking XX% is range think guys as revenue in generation thinking the if do versus to just tick Like through? higher next wanted pilots maybe more we've one them? handholding just that. And for could. the engage handholding higher it's But the about professional just I you that. I Thanks be XX% year? just wanted sector to should are And QX there it about is on revenue. versus range of for you Or then been on what in

Juho Parkkinen

and want, go-forward projects I our basis. that it's think go-forward these on to XX% a to we believe in XX% XX% be XX% in but of a the range. forecast to a specific a we is to always customers on to types revenue, expect go-forward appropriate There's going difficult be basis,

Mike Cikos

turn back that. you my to time. it I’ll colleagues. the for Thank Appreciate

Operator

question [Operator Bank of of of line you. next Sills Brad Thank Our Instructions] from America. comes the

open. is line Your

Brad Sills

This Bergere is Thank you. great. Hey, on Sills. Brad for Adam

coming current cases pretty well market, positioned you're in given AI focus. So just the use into are

it's for kind your R&D all? changed investments So cadence of at curious if

Tom Siebel

applications. in think the want I And Tom. over are I is the in clearly, XX made investments that's we've applications. the mean, but have years the we're world, this we the XX for in only that people applications paying off, company last Well, okay, and

think AI. is mean I is to CX response made that -- I change we're little a we're But little the by bit shocked by we generative that big recent we've I had bit opportunity. think a a that the -- overwhelmed only that. that that's

so to and that extraordinarily invest plane decided in mean estimate it's a And came it's in to a we but product large. way, big now because market, difficult really just just off we category that

Adam Bergere

But in the of cases kind guess, first Yes. expect uptake certain you. on see over verticals use solutions uptick thus is within first Fair then any AI or your outsized any take Thank others the and do view? I far, generative And for it. outsized you enough. your

Tom Siebel

or the sales who want this. at person and to the in or of get that like am or It interested actually they the Google for -- question. Central good CEO of in operates kind the open DoD, what is seems answers the have operate Chiefs, Defense of level everybody a quadrants the It's manufacturing those question XX-ish in to we interface They their problems of they question got can less Right our but Staff about Where answers. Joint Chair to takes okay, where I'm people Europe. a any the their call what him like initiatives they of that's Secretary seconds. basically week where in a Google-like mean a the I browser Chiefs the web okay? levels, for can interface provide Joint ask If the now, business, it want chain? they I supply to of Chair and most to person ready

of be don't technology. it's any this taking I know that quite So amazing. not industry use really will It's

Adam Bergere

perspective, you. I the Alright. appreciate Tom. Thank

Operator

the Our Instructions] comes from next question Mike [Operator of you. line Thank of Company. Needham Cikos

open. line is Your

Mike Cikos

below a help CX achieving if pull that Can street think ‘XX with maybe Hey, getting follow-up. non-GAAP let's I earlier, back us And to you what guys to just below for on quick rather you back have had had guidance the we issuing the you ago, Thanks taking is profitability? is initially looking levers asked fiscal Juho. obviously, a profitability which the target go are did But building and at look additional you but of guys. question than different about ensure a revenue, on its exit for one have flagged quarter and now, guys that talk Sanjit second. maybe for

Tom Siebel

Mike. it, poke answer want okay. a the bit, I premise to we Before little at do

in expectations outliers. I are think outlier with Street pretty line our two the is what one take guidance much like out you or once

current in what Street confident with in the pretty is has. line that. I'm guidance our So

get are going question how other Now to profitability? you're to Juho related the you to sure

Juho Parkkinen

Right.

on the about can would I those. from generative the pretty things we revenue our prepared towards think that was vendor of one reason, of AI we're the Mike, control But the which the for had expenses, year, occur combine bullish remarks end opportunity. not the expected spending that and if So planned whatever I generative investments into

Mike Cikos

Got very much. it. you, Thank

Tom Siebel

purity big Said, zero, to be don't okay? you that's generally, you to been have operate a still to business Let QX. we in detailed plan QX, the me. it could to the AI generative And AI cash stuff. very, run have They be need going we're to management all expect Well, in going for know be positive profitable non-GAAP a generative and profitable the in very can cash hard and They [Indiscernible] team. all that's budgets. members pro-business business

Mike Cikos

right. That’s

Operator

moment, One Thank please. you.

Tom Siebel

One more question?

Operator

Thank you.

Securities. Our comes line Harman next Noah from the JMP question of of

Your open. line is

Noah Harman

ticked And average think sales months It think, that basically for is you one, down, where year? of agreements about sustainable great by year-over-year. three rest to thinking sales the driving What's concludes a cycles about do see the this cycle I really maybe that?

Tom Siebel

to AI live months think it's is be costs production enterprise to the in I in terms Well, millions an somebody We're or things, mean going one Accenture do. in bring to try scores that's the that's six guys I pretty to an driving model consumption-based going these nothing or pricing dollars it for of large-scale years. million. of IBM in not $X.X to in application easy it to a where of what bring of have

shorter So it's a pretty easy sale. It's sales cycle. a

our move channels like marketplace, onto and other up, more this. not it but AWS where as I'm into the so ends Google the leverage sure we more products, And marketplace of

So it get we'd see expect shorter. to

Noah Harman

you. Thank Great.

Tom Siebel

Thank you.

Operator

this At Siebel turn closing you. any to call I’m back time Mr. the for going over remarks. Thank to

Tom Siebel

Thank you mark you so Ladies calendars for June tuning and your gentlemen, you for attention your in. for I thank much today. we encourage to XX.

about time us we developments that Conference talk for at I to and exchange. interesting Investor think at you'll have hope our join some you'll time, that find that we'll

very today, So all you and we wish night. thank a much good you time for your

Operator

and Thank conclude participating. you this all Thank you. for does Ladies gentlemen, today's conference.

You may day. great now disconnect. a Have

C3.ai (AI) 31 May 232023 Q4 Earnings call transcript