Shares of C3.ai plunged in late trading Wednesday after the company announced financial guidance for its April 2024 fiscal year that fell short of Wall Street expectations.
AI software hotspot surged 33% on Tuesday, but fell 9% in normal trading today and dropped another 14% in late trading.
The fourth quarter results came as little surprise.
About two weeks ago, the company had forecast revenue of $72.1 million to $72.4 million, a non-GAAP operating loss of $23.7 million to $23.9 million, and free cash flow of $18 million to $19.4 million. .
Actual results were broadly in line with that announcement, with revenue of $72.4 million and a non-GAAP operating loss of $25.3 million, while free cash flow of $16.3 million was slightly below expectations.
Ads – scroll to continue
“It is generally agreed today that the market for enterprise AI applications is much larger than experts expected and is growing at a higher rate,” the company said in its earnings release. We believe it is,” he said in an earnings release. “C3 AI has been at the forefront of the enterprise AI market for over a decade, and the interest in applying AI to business processes has never been more active.”
However, the outlook provided by C3.ai was not well received.
The company expects revenue for the July quarter to be between $70 million and $72.5 million. At the midpoint, this is roughly in line with Wall Street’s forecast of $71.6 million. C3.ai expects non-GAAP operating loss for the quarter to range from $25 million to $30 million
Ads – scroll to continue
For the full year ending April 2024, C3.ai’s revenue is expected to be between $295 million and $320 million. At the midpoint, it’s up about 15% year-over-year, but just below the Wall Street consensus forecast of $317 million. The company expects a non-GAAP operating loss for the full year of $50 million to $75 million.
C3.ai said it is on track to reach its previously stated goal of becoming a profitable non-GAAP business by the end of fiscal 2024.
C3.ai’s unusually long press release comes just minutes before the company’s earnings call, and spends a lot of time explaining the markets in which the company has been successful. His one-third of the company’s revenue comes from the oil and gas sector, which reflects the company’s strong, longstanding relationship with Baker Hughes.
,
A further 29% are from “Federal, Defense and Aerospace.”
The company also announced that it had signed three C3 Generative AI application contracts with large companies in the same quarter, including Georgia Pacific, Flint Hills Resources, and the US Department of Defense Missile Defense Agency.
CEO Tom Siebel said in a statement that the company is committed to “accelerate growth, capture market share, achieve sustainable non-GAAP profitability, and establish a global market-leading position in enterprise AI. We are in a favorable position,” he said. 2024 is going to be an exciting one. ”
Ads – scroll to continue
It’s already an exciting situation from an investor’s perspective. C3.ai trades like a volatile memetic stock with significant interest from short sellers. On the same day that the company pre-announced its results in May, C3.ai also completed an investigation into allegations by two short sellers, Spruce Point Capital Management and Kerrisdale Capital Management, and concluded, “What It was announced that it was found that there was no. Allegations or allusions of wrongdoing by Spruce Point or Kerrisdale were supported by facts. ”
Despite today’s plunge, the stock is still up more than 200% since the beginning of the year.
Email Eric J. Savitz (eric.savitz@barrons.com).
