REDWOOD CITY, Calif. – March 2, 2022 – C3.ai, Inc. (“C3 AI,” “C3,” or the “Company”) (NYSE: AI), the Enterprise AI software company, today announced financial results for its fiscal third quarter ended January 31, 2022.
“Our third quarter results displayed strength in all aspects of our business, including revenue growth of 42% year over year,” said CEO Thomas M. Siebel. “These results were driven by substantially increased sales momentum due to the successful refocusing of our sales organizations, expanded customer count, increased industry diversification for our AI products and the further recognition of our technology leadership in this industry. We believe C3 AI is on track to establish a global leading market position in Enterprise AI.”
Mr. Siebel added, “We remain confident in our long-term prospects based on our accelerating progress and the magnitude of the addressable enterprise AI market opportunity. Given these trends and our progress to date, we have raised our fiscal year 2022 guidance to reflect revenue growth of 38% over fiscal year 2021.
Fiscal Third Quarter 2022 Financial Highlights
- Revenue: Total revenue for the quarter was $69.8 million, an increase of 42% compared to $49.1 million one year ago.
- Subscription Revenue: Subscription revenue for the quarter was $57.1 million, an increase of 34% compared to $42.7 million one year ago.
- Gross Profit: GAAP gross profit for the quarter was $52.4 million, a 75% gross margin, compared to $36.9 million one year ago. Non-GAAP gross profit for the quarter was $55.8 million, an 80% gross margin, compared to $37.3 million one year ago.
- Remaining Performance Obligations (“RPO”): GAAP RPO increased by 90% to $469.3 million, up from $247.5 million one year ago. Significantly, our GAAP RPO now represents 168% of Q3 annualized sales. Non-GAAP RPO increased by 81% to $536.7 million, up from $295.9 million one year ago.
- Net Loss per Share: GAAP net loss per share was $(0.38), compared to $(0.21) one year ago. Non-GAAP net loss per share was $(0.07), compared to $(0.13) one year ago.
- Raising Guidance: Based on recent results and current outlook, the Company has raised fiscal year 2022 revenue guidance to $252.0 million, a 38% increase over the prior year.
Customer Wins and Expansions
- Shell continues to expand its C3 AI application footprint with over 10,000 devices currently monitored by C3 ML models and 23 large-scale assets in production deployment including Pernis, the largest refinery in Europe, and Nigeria LNG. Shell currently processes 1.3 trillion predictions per month with the C3 AI Suite and applications. Shell again expanded the duration and scale of its contractual relationship with C3 during the quarter.
- The Department of Defense (“DoD”) awarded C3 AI a five-year, $500 million transaction agreement, accelerating the ability for any DoD agency to acquire the Company’s suite of Enterprise AI products and services.
- We achieved a new production deployment with the Defense Counterintelligence and Security Agency; and secured additional business with the U.S. Space Force.
- LyondellBasell, one of the world’s largest plastic and chemical companies, signed a five-year, significantly expanded contract to accelerate the deployment of additional Enterprise AI and machine-learning applications across the company with the C3 AI Suite and C3 AI Reliability Suite.
- Royal Philips, a global leader in health technology, closed a new contract on the C3 AI Supply Chain Suite to enhance resiliency, visibility, and agility for Philips’ supply chains across the company’s North American operations.
- Cargill substantially increased and extended its C3 AI contract to expand its deployment of the C3 AI Supply Chain Suite of applications.
- ENGIE, our energy-services partner, expanded the use and extended the term of its C3 AI contract to deliver a broader range of AI-enabled, end-to-end energy and sustainability (ESG) solutions to serve both the public and private sectors.
- Swift, the global provider of secure financial messaging services, expanded its relationship with C3 AI, leveraging the C3 AI Financial Services Suite.
- Baker Hughes, our business activity with our JV alliance partner BakerHughesC3.ai continues to accelerate globally.
- Customer Count increased substantially year over year.
Other Corporate Highlights
- Sales: In the third fiscal quarter, the Company successfully refocused its sales organizations to its traditional strategic accounts engagement model, delivering immediate and positive results.
- Leadership: C3 AI appointed Lisa A. Davis to its Board of Directors. Ms. Davis is a recognized global leader in the industrial and energy industries, bringing more than 30 years of experience to the Company. She has served in various capacities and leadership positions with several of the world’s largest corporations, including Texaco and Shell, and as CEO of Siemens Gas and Power.
- Federal AI Tailwinds: The FY 2022 National Defense Authorization Act, Section 227, signed into law on December 27, 2021, requires that, “The Secretary of Defense shall ensure that, to the maximum extent practicable, commercial artificial intelligence companies are able to offer platforms, services, applications, and tools to Department of Defense components through processes and under Part 12 of the Federal Acquisitor Regulation.” We believe this represents a secular change in procurement policies for AI solutions for DoD, requiring primacy in the selection and use of commercial off the shelf software solutions from commercial vendors like C3 AI, rather than traditional custom development by custom project-specific developers that have largely proven to be unsuccessful. We believe this will help to accelerate C3 AI’s Federal business in the coming years.
- New AI Application Development Center: C3 AI opened a software development and professional service center in Guadalajara, Mexico. The Company plans to hire as many as 1,000 senior software and service engineers in Mexico over the next few years. C3 AI is making this investment to meet the growing, global demand for Enterprise AI applications and associated services, and because the talent pool in Guadalajara is among the best in the world.
- Cash Reserves: With $1.02 billion in cash, cash equivalents, and investments, C3 AI is well positioned to continue to invest in market leadership through enterprise AI innovation and brand equity and sales expansion.
- Stock Repurchase Program: In December 2021, the Company’s board of directors approved a stock repurchase program for the repurchase of up to $100 million of C3 AI’s outstanding shares of class A common stock for the 18 months following the date it was approved.