Market Overview - US stock index futures rose before the market opened, with Dow futures up 0.39%, S&P 500 futures up 0.88%, and Nasdaq futures up 1.34% [1] - European indices also showed positive movement, with Germany's DAX up 0.13%, UK's FTSE 100 up 0.05%, France's CAC40 up 0.63%, and the Euro Stoxx 50 up 0.50% [2][3] Commodity Prices - WTI crude oil increased by 0.40% to $62.09 per barrel, while Brent crude oil rose by 0.26% to $64.49 per barrel [3][4] Corporate News - Nvidia (NVDA.US) reported Q1 revenue of $44.1 billion, a 69% year-over-year increase, with data center revenue at $39.1 billion, up 73% year-over-year [11] - Salesforce (CRM.US) exceeded Q1 expectations with revenue growth of 8% to $9.8 billion and raised its revenue guidance for FY2026 [12] - C3.ai (AI.US) reported a 26% increase in revenue to $10.87 million for Q4 FY2025, with a positive outlook for FY2026 [13] - HP (HPQ.US) lowered its full-year earnings forecast due to tariff costs and economic weakness, with Q2 revenue of $13.2 billion, exceeding expectations but EPS falling short [14] - Li Auto (LI.US) reported a net profit of 647 million RMB for Q1 2025, a 9.4% increase year-over-year, with total vehicle deliveries of 92,864 units [15] - Futu Holdings (FUTU.US) saw Q1 revenue grow by 81.1% to 4.695 billion HKD (approximately $603 million), with net profit increasing by 97.7% [16] Economic Data and Events - Upcoming economic data includes the revision of the US Q1 GDP annualized rate and initial jobless claims for the week ending May 24 [17]

Core Viewpoint - C3.ai has reported strong performance driven by the increasing demand for enterprise-level AI applications, with revenue projections for fiscal year 2026 exceeding analyst expectations, indicating robust growth in both AI infrastructure and software applications [1][2] Financial Performance - For the fourth fiscal quarter of 2025, C3.ai achieved total revenue of $108.7 million, a 26% year-over-year increase, surpassing analyst expectations of $107.9 million [2] - The company expects fiscal year 2026 revenue to range between $447.5 million and $484.5 million, aligning with analyst forecasts [1] - C3.ai's subscription revenue for the fourth quarter was approximately $87.3 million, a 9% increase from the previous year, accounting for 80% of total revenue [2] - The company anticipates a Non-GAAP operating loss of $23.5 million to $33.5 million for the first quarter of fiscal year 2026, which is better than the analyst average expectation of a $35.2 million loss [2] Product and Market Position - C3.ai is a leader in the enterprise-level AI application market, offering a comprehensive suite of generative AI solutions that enhance operational efficiency across various industries [3][4] - The company has integrated large language models (LLMs) into its AI software products, launching the C3 Generative AI suite [4] - C3.ai has established a strong foothold in high-barrier industries such as energy and defense, benefiting from the growing interest in AI among enterprise customers [3][4] Strategic Partnerships and Growth - C3.ai has expanded its strategic partnership with Baker Hughes, focusing on joint product sales and investment in AI solutions to enhance operational efficiency in the energy sector [6] - The company has secured long-term contracts with major clients, including the U.S. Department of Defense and large energy firms like Shell and ExxonMobil [6] - C3.ai signed 69 agreements in the fourth quarter, including 36 initial production deployment agreements, indicating strong market demand [7] Industry Trends - The AI application software market is expected to experience significant growth, with the AI agent market projected to expand from $7.8 billion in 2025 to approximately $52.6 billion by 2030, reflecting a compound annual growth rate of 46% [9] - The emergence of AI agents is anticipated to transform AI applications from information assistance tools to highly intelligent productivity tools, significantly enhancing operational efficiency [8][9]

Financial Data and Key Metrics Changes - Total revenue for Q4 reached $108.7 million, reflecting a 26% increase compared to $86.6 million in the same quarter of the prior year [41] - Subscription revenue for the quarter was $87.3 million, up 9% from $79.9 million a year ago [41] - For the full fiscal year 2025, total revenue was $389.1 million, a 25% increase compared to $310.6 million in fiscal 2024 [42] - Non-GAAP gross profit for Q4 was $75.2 million, equating to a gross margin of approximately 69% [41] - The company closed Q4 with $742.7 million in cash, cash equivalents, and investments, remaining largely unchanged from a year ago [41][68] Business Line Data and Key Metrics Changes - Revenue from the sale of software licenses that are demonstration versions of C3AI applications was $33.8 million during the quarter [64] - Professional services revenue was $21.4 million, with prioritized engineering services accounting for $17 million [65] - Non-Baker Hughes revenue grew by 37% year over year during the quarter and by 40% during the year [65] Market Data and Key Metrics Changes - Non-oil and gas revenue increased by 48% year over year, reflecting successful expansion into 19 different industries [44] - Revenue in state and local government grew over 100% in fiscal 2025, with 71 agreements closed across organizations in 24 states [45] - The life sciences and healthcare sector is emerging as a strength, with traction from customers like GSK and Quest Diagnostics [46] Company Strategy and Development Direction - The company is focused on building a robust partner ecosystem, with 73% of agreements delivered in collaboration with partners [48] - The renewed partnership with Baker Hughes is expected to drive innovation and opportunity in the energy sector [44] - The company aims to capitalize on the growing market for generative AI and Agentic AI, with over 100 solutions deployed [30][59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving non-GAAP profitability during the second half of fiscal 2027, with expectations of being free cash flow positive in Q4 of fiscal 2026 [71] - The company highlighted the importance of geopolitical stability for its revenue guidance, acknowledging potential risks [71] - Management emphasized the unique position of C3AI as the only enterprise AI application pure play, with a focus on delivering turnkey solutions [60] Other Important Information - The company has delivered over 130 applications to date, with a focus on addressing real-world business challenges [60] - The partnership with PwC targets key industries such as financial services and manufacturing, enhancing AI-driven transformation [50] - The company has a strong cash position, maintaining approximately $750 million in cash over the past year [35][68] Q&A Session Summary Question: How does the company activate Azure sales reps to deliver C3AI? - The company is charting its salespeople to partner with Azure sales reps, focusing on joint sales calls and providing necessary tools for effective demonstrations [73][75] Question: Can you provide details on the economics of the new Baker Hughes deal? - Specifics are covered under NDA, but the partnership has broadened significantly, continuing to develop solutions together [82] Question: How did the company construct its revenue guidance for FY26? - The guidance reflects awareness of geopolitical risks and the need for stability, with expectations of revenue growth exceeding expense growth [85][87]

Financial Data and Key Metrics Changes - Total revenue for Q4 reached $108.7 million, reflecting a 26% increase compared to $86.6 million in the same quarter of the prior year [41] - Subscription revenue for the quarter was $87.3 million, up 9% from $79.9 million a year ago [41] - For the full fiscal year 2025, total revenue was $389.1 million, a 25% increase compared to $310.6 million in fiscal 2024 [42] - Non-GAAP gross profit for Q4 was $75.2 million, equating to a gross margin of approximately 69% [41] - Non-GAAP operating loss was $31.2 million, which was within the guidance range of $30 million to $40 million [41] - Free cash flow for Q4 was $10.3 million, with cash, cash equivalents, and investments totaling $742.7 million at the end of the quarter [41][68] Business Line Data and Key Metrics Changes - Revenue from the sale of software licenses that are demonstration versions of C3AI applications was $33.8 million during the quarter [64] - Professional services revenue was $21.4 million, with prioritized engineering services accounting for $17 million [65] - Non-Baker Hughes revenue grew by 37% year over year during the quarter and by 40% during the year [65] Market Data and Key Metrics Changes - Non-oil and gas revenue increased by 48% year over year, reflecting successful expansion into 19 different industries [44] - Revenue in state and local government grew over 100% in fiscal 2025, with 71 agreements closed across organizations in 24 states [45] - The life sciences and healthcare sector is emerging as a strength, with traction from customers like GSK and Quest Diagnostics [46] Company Strategy and Development Direction - The company has focused on building a robust partner ecosystem, with 73% of agreements delivered in collaboration with partners [48] - Strategic partnerships with Microsoft, AWS, and Google Cloud are pivotal for expanding market reach and enhancing execution [49] - The renewed partnership with Baker Hughes is expected to drive innovation and opportunity in the energy sector [44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, expecting revenue growth to continue exceeding expense growth [71] - The company anticipates crossing into non-GAAP profitability during the second half of fiscal 2027 and expects to be free cash flow positive in Q4 of fiscal 2026 [71] - The enterprise AI market is described as a vast and growing opportunity, with a focus on delivering secure, scalable, and production-grade solutions [59] Other Important Information - The company has delivered over 130 applications to date, positioning itself uniquely in the AI landscape [60] - The C3 generative AI revenue grew more than 100% in FY 2025, with significant deployments across various industries [56] - The company holds a patent for Agentic AI, which is expected to capitalize on a rapidly growing market [29] Q&A Session Summary Question: How does the company activate Azure sales reps to deliver C3AI? - The company is focusing on engaging Azure sales reps through joint sales calls and providing them with the necessary tools to demonstrate solutions effectively [73][75] Question: Can you provide details on the economics of the new Baker Hughes deal? - Specifics are under NDA, but the partnership has broadened significantly, continuing to provide solutions and enabling Baker Hughes to develop derivative works [82] Question: How did the company construct its revenue guidance for FY26? - The guidance reflects awareness of geopolitical risks and the need for stability, with expectations that revenue growth will continue to exceed expense growth [85]

Financial Data and Key Metrics Changes - Total revenue for Q4 reached $108.7 million, reflecting a 26% increase compared to $86.6 million in the same quarter of the prior year [42] - Subscription revenue for the quarter was $87.3 million, up 9% from $79.9 million a year ago [42] - For the full fiscal year 2025, total revenue was $389.1 million, a 25% increase compared to $310.6 million in fiscal 2024 [43] - Non-GAAP operating loss was $31.2 million, which was within the guidance range of $30 million to $40 million [42][67] - Free cash flow for the quarter was $10.3 million, and the company closed Q4 with $742.7 million in cash, cash equivalents, and investments [42][68] Business Line Data and Key Metrics Changes - Subscription and prioritized engineering services revenue totaled $104.4 million, representing 96% of total revenue and a 22% increase from $85.7 million in Q4 of the previous year [42][66] - Revenue from the sale of demonstration software licenses was $33.8 million during the quarter [64] - Non-Baker Hughes revenue grew by 37% year over year during the quarter and by 40% during the year [65] Market Data and Key Metrics Changes - Non-oil and gas revenue increased by 48% year over year, reflecting successful expansion into 19 different industries [45] - Revenue in state and local government grew over 100% in fiscal 2025, with 71 agreements closed across organizations in 24 states [46] - The life sciences and healthcare sector is emerging as a strength, with traction from customers like GSK and Quest Diagnostics [47] Company Strategy and Development Direction - The company has focused on building a robust partner ecosystem, with 73% of agreements delivered in collaboration with partners, resulting in a 68% increase in agreements closed through this network [49] - The renewed partnership with Baker Hughes is expected to drive innovation and opportunity in the energy sector, generating over $5 billion in revenue from this vertical [44] - The company is strategically positioned to capitalize on the growing market for AI applications, with a focus on delivering secure, scalable, and production-grade solutions [60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in crossing into non-GAAP profitability during the second half of fiscal 2027, with expectations of free cash flow positivity in the fourth quarter of fiscal 2026 [71] - The company anticipates continued revenue growth exceeding expense growth, driven by a robust suite of enterprise AI applications and an expanding partner ecosystem [71] - Management highlighted the importance of geopolitical stability for achieving revenue guidance, acknowledging risks in Europe and global trade [71] Other Important Information - The company has delivered over 130 applications to date, with 95% of bookings in fiscal 2025 driven by AI applications [61] - The company holds a patent for Agentic AI, positioning it uniquely in the market as the only enterprise AI application pure play [30] Q&A Session Summary Question: How does the company activate Azure sales reps to deliver C3 AI? - The company is focusing on engaging Azure sales reps through joint sales calls and providing them with the necessary tools to demonstrate solutions effectively [73][75] Question: Can you provide insights on the new Baker Hughes deal? - The specifics are under NDA, but the partnership has broadened significantly, continuing to provide solutions and enabling Baker Hughes to develop derivative works [82] Question: How was the revenue guidance for FY26 constructed? - The guidance reflects awareness of geopolitical risks and the need for stability, with a larger range due to potential market fluctuations [85]

Financial Highlights - C3 AI's FY25-Q4 revenue reached $108.7 million[22], representing a 26% growth compared to FY24-Q4[5, 8] - Subscription revenue for FY25-Q4 was $87.3 million[22] - The company's cash balance stands at $742.7 million[5] - For FY25, total revenue was $389.1 million, a 25% year-over-year increase[6, 23] - Subscription revenue accounted for 84% of the total revenue in FY25[6] - Non-GAAP gross margin for FY25 was 69.6%[6, 23] Partner Ecosystem - C3 AI closed 193 agreements through its partner network in FY25, a 68% year-over-year increase, accounting for 73% of total agreements[12] - Partner-supported bookings grew by 419% year-over-year in Q4[12] Guidance - C3 AI projects FY26-Q1 total revenue to be between $100.0 million and $109.0 million, representing a 15%-25% year-over-year growth[19] - The company anticipates FY26 total revenue to be between $447.5 million and $484.5 million, also a 15%-25% year-over-year growth[19]

Core Insights - C3.ai projects revenue between $447.5 million and $484.5 million for 2026, with analyst expectations at $465.5 million [1] Group 1 - The company's revenue forecast for 2026 indicates a significant growth potential in the AI sector [1]

Revenue Growth - Total revenue for Q4 2025 was $108.7 million, a 26% increase from $86.6 million in Q4 2024[5] - Subscription revenue for Q4 2025 was $87.3 million, up 9% from $79.9 million in Q4 2024, constituting 80% of total revenue[5] - For the full fiscal year 2025, total revenue reached $389.1 million, a 25% increase compared to $310.6 million in fiscal year 2024[5] - Total revenue for the three months ended April 30, 2025, was $108,723,000, representing a 25.5% increase from $86,590,000 in the same period of 2024[29] - Subscription revenue for the fiscal year ended April 30, 2025, reached $327,630,000, up 17.8% from $278,104,000 in 2024[29] Agreements and Partnerships - The company closed 264 agreements in FY25, marking a 38% increase year-over-year, including 174 initial production deployment agreements, up 41%[8] - The partnership with Baker Hughes was renewed and expanded through June 2028, focusing on enterprise-scale AI solutions in the energy sector[8] - The U.S. Air Force increased its contract ceiling with C3 AI to $450 million for the PANDA predictive maintenance platform, expanding its deployment across the fleet[8] Profitability and Loss - C3 AI's gross profit for Q4 2025 was $67.5 million, representing a 62% gross margin, while for the full year it was $235.9 million with a 61% gross margin[5] - The net loss for the fiscal year ended April 30, 2025, was $288,702,000, compared to a net loss of $279,696,000 in 2024[34] - Total operating expenses for the fiscal year ended April 30, 2025, were $560,287,000, an increase from $496,902,000 in 2024[29] - The company reported a gross profit of $235,863,000 for the fiscal year ended April 30, 2025, compared to $178,560,000 in 2024[29] Future Expectations - The company expects total revenue for Q1 FY26 to be between $100.0 million and $109.0 million, and for the full year FY26 between $447.5 million and $484.5 million[16] - C3.ai continues to focus on enhancing its product offerings, including the C3 Generative AI and C3 Agentic AI Platform, to drive future growth[25] - The company anticipates benefits from its partnerships and aims to improve its market leadership position in the enterprise AI sector[25] Cash Flow and Expenses - Cash and cash equivalents as of April 30, 2025, were $164,358,000, slightly down from $167,146,000 as of April 30, 2024[32] - Free cash flow for Q2 2025 was $10,326 million, down from $18,805 million in Q2 2024, a decrease of 45.8%[39] - Net cash provided by operating activities for Q2 2025 was $11,264 million, compared to $21,343 million in Q2 2024, a decline of 47.3%[39] - Total stock-based compensation expense for Q2 2025 was $56,615 million, slightly down from $56,729 million in Q2 2024[38] Performance Metrics - C3 Generative AI revenue grew over 100% in FY25, indicating strong demand for its differentiated offerings[11] - Professional services revenue for the three months ended April 30, 2025, was $21,390,000, a significant increase of 220.5% compared to $6,687,000 in the same period of 2024[24] - GAAP gross profit for Q2 2025 was $67,510 million, up from $51,611 million in Q2 2024, representing a 30.8% increase[37] - Non-GAAP gross profit for the fiscal year 2025 reached $270,635 million, compared to $215,616 million in fiscal year 2024, reflecting a 25.5% growth[37] - GAAP net loss for Q2 2025 was $79,702 million, compared to a net loss of $72,927 million in Q2 2024, indicating a 3.5% increase in losses[37] - Non-GAAP net loss per share for Q2 2025 was $0.16, an increase from $0.11 in Q2 2024, representing a 45.5% rise in losses per share[37] - The weighted-average shares used in computing net loss per share for the fiscal year ended April 30, 2025, were 129,089,000, compared to 119,362,000 in 2024[29] - The weighted-average shares used in computing net loss per share increased to 133,233 million in Q2 2025 from 122,676 million in Q2 2024[37]

Core Viewpoint - C3.ai is set to report its fiscal Q4 2025 results, with expectations of strong revenue growth but continued operational losses due to strategic investments in sales and development [1][11]. Financial Performance - In the last reported quarter, C3.ai's revenue increased by 26% year-over-year to $98.8 million, with subscription revenue rising 22% to $85.7 million [2][3]. - The company signed 50 new pilot programs, bringing the total to 245, indicating a strong pipeline for future revenue conversion [2]. - The Zacks Consensus Estimate for fiscal Q4 revenue is $108.3 million, reflecting a 25% year-over-year growth [5]. Strategic Alliances - Partnerships with Microsoft Azure, Amazon AWS, and McKinsey QuantumBlack significantly boosted deal flow, with Microsoft-related agreements increasing by 460% quarter-over-quarter [3]. - The company anticipates that its growing sales pipeline, supported by these strategic alliances, will facilitate sequential top-line growth [10]. Earnings Estimates - The consensus estimate for the fiscal fourth-quarter bottom line is a loss of $0.20 per share, wider than the previous year's loss of $0.11 per share [5][7]. - For fiscal 2025, C3.ai is projected to achieve a revenue growth of 29.6% compared to 2024 [6]. Operational Insights - C3.ai expects a non-GAAP operating loss of $30 million to $40 million for the quarter, which is wider than the previous quarter's loss of $23.1 million [11]. - The company aims to achieve positive free cash flow in fiscal Q4, driven by disciplined cost management and operational efficiency improvements [12]. Share Price Performance - C3.ai's shares have declined by 4.8% over the past three months, trading at a 49.6% discount from its 52-week high of $45.08 [13]. - The stock is currently at a premium relative to its sector but at a discount to historical metrics, with a forward 12-month Price/Sales ratio of 6.24X compared to the sector's 6.07X [17]. Investment Considerations - Despite strong revenue growth, ongoing operational losses and limited earnings visibility raise concerns about the sustainability of revenue generation [19]. - The anticipated widening operating loss due to increased spending in sales and development suggests prolonged margin pressure [20].

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