C3.ai (AI 4.79%) has benefited significantly from the excitement surrounding artificial intelligence (AI). It provides companies in a wide range of industries with turnkey AI solutions, making it easy for them to deploy next-gen technologies.But despite the promising path ahead for the business with respect to AI, it has been anything but a smooth ride for the stock, which is down big this year. And while the business has been growing, there are plenty of risks involved with investing in it today.C3.ai rece ...

Core Viewpoint - C3.ai has experienced a significant decline in stock value due to a challenging macroeconomic environment and disappointing earnings report, resulting in a 25% loss by the end of the month [1]. Group 1: Company Performance - C3.ai was initially a winner in the AI sector but has struggled to maintain momentum, with its stock price largely stagnant after an early 2023 surge [2]. - The company reported a 26% increase in revenue for the fiscal third quarter, reaching $98.7 million, surpassing analyst expectations of $98.1 million [4]. - Despite revenue growth, C3.ai remains unprofitable, posting an operating loss of $87.6 million on a GAAP basis, although it reported a per-share loss of $0.12, which is an improvement from $0.13 a year ago and better than the consensus estimate of a $0.25 loss [5]. Group 2: Future Outlook - C3.ai's fourth-quarter guidance suggests continued growth, forecasting revenue between $103.6 million and $113.6 million, indicating a 25.5% growth at the midpoint, consistent with previous quarters [7]. - The company's reliance on stock-based compensation is raising concerns, as it dilutes shareholders by nearly 10% year-over-year, which may affect investor confidence regarding its path to profitability [7][8].

Revenue Performance - Total revenue for the three months ended January 31, 2025, was $98.8 million, representing a 26% increase year-over-year[145]. - Subscription revenue grew to $85.7 million for the three months ended January 31, 2025, reflecting a 22% increase compared to the same period last year[145]. - Total revenue for the quarter ended April 30, 2023, was $72.41 million, with a year-over-year growth of 11%[1]. - Total revenue for the nine months ended January 31, 2025, reached $280,333,000, up 25.1% from $223,992,000 in the same period of 2024[202]. - Professional services revenue for the three months ended January 31, 2025, increased by $5.1 million, or 64%, totaling $13.1 million, compared to $8.0 million in the same period last year[206]. Revenue Composition - C3 AI's cloud-native software offerings accounted for 87% of total revenue in the three months ended January 31, 2025[141]. - Subscription revenue accounted for 87% of total revenue for the three months ended January 31, 2025, down from 90% in the same period last year[204]. - Professional services revenue represented 13% of total revenue for the three months ended January 31, 2025[143]. Financial Metrics - Gross profit for the three months ended January 31, 2025, was $58,347,000, compared to $45,287,000 for the same period in 2024, reflecting a gross margin increase[202]. - Operating expenses for the three months ended January 31, 2025, totaled $145,932,000, an increase from $127,833,000 in the same period of 2024[202]. - The net loss for the three months ended January 31, 2025, was $80,201,000, compared to a net loss of $72,631,000 in the same period of 2024[202]. - Net loss for the three months ended January 31, 2025, was 81% of total revenue, compared to a net loss of 93% in the same period last year[204]. Customer Acquisition and Market Strategy - The company aims to attract new customers in under-served verticals such as telecommunications, pharmaceuticals, and healthcare[164]. - The transition to a consumption-based pricing model is expected to increase customer acquisition and accelerate growth[158]. - The company executed 50 pilots and trials during the quarter ended January 31, 2025, compared to 29 in the same quarter of the previous year[160]. Research and Development - Research and development spending is anticipated to remain high as the company continues to innovate and introduce new applications[176]. - Research and development expenses for the three months ended January 31, 2025, increased by 20% to $59.4 million, compared to $49.5 million in the same period last year[213]. - The company expects research and development expenses to increase in absolute dollars as it continues to invest in existing and future product offerings[196]. Cash Flow and Financial Position - As of January 31, 2025, the company had $125.1 million in cash and cash equivalents and $599.2 million in marketable securities[225]. - Free cash flow for the nine months ended January 31, 2025 was $(54,772,000), an improvement from $(109,173,000) in the same period last year[224]. - Net cash used in operating activities for the nine months ended January 31, 2025 was $(52,671,000), compared to $(83,705,000) in the same period last year[228]. - Net cash provided by financing activities for the nine months ended January 31, 2025 was $17,161,000, up from $6,037,000 in the prior year[232]. Foreign Currency and Risk Management - Approximately 4% of sales for the nine months ended January 31, 2025 were denominated in euros, exposing the company to foreign currency exchange risk[241]. - A hypothetical 10% change in foreign currency exchange rates may have a material impact on the company's financial statements[241]. - The company has entered into foreign currency forward contracts to hedge a portion of its forecasted foreign currency-denominated expenses[241]. Internal Controls and Compliance - The company has not identified any changes in internal control over financial reporting that materially affected its financial reporting during the period covered by the report[245]. - The management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of the end of the reporting period[244]. - The company intends to continue monitoring and upgrading its internal controls as necessary, although it cannot assure that improvements will be sufficient[246]. Strategic Partnerships - A new global alliance with Microsoft was announced to accelerate the adoption of Enterprise AI, establishing the company as a preferred AI application software provider on Microsoft Azure[181].

Core Insights - Atrium Mortgage Investment Corporation reported strong financial results for the year ended December 31, 2024, with earnings per share of $1.06, marking the third-best result in its history as a public company [3][5] - The company declared a special dividend of $0.16 per share, exceeding the five-year average of $0.13, and increased the monthly dividend from an annualized rate of $0.90 to $0.93 starting in December 2024 [3][5] - Atrium's mortgage portfolio maintained a low loan-to-value ratio of 61.9%, with a significant reduction in Stage 2 & 3 loans from $129.7 million in Q3 to $79 million in Q4 2024 [3][5][6] Financial Performance - Annual net income for 2024 was $47.9 million, down from $51.5 million in 2023, reflecting a decrease of 7.1% [5][6] - Total revenue for 2024 was $97.3 million, a slight decrease of 1.3% from the previous year [6][8] - Basic and diluted earnings per share decreased by 10.2% compared to 2023, with basic earnings per share at $1.06 and diluted earnings per share at $1.05 [5][6][8] Mortgage Portfolio Analysis - As of December 31, 2024, 96.7% of Atrium's mortgage portfolio consisted of first mortgages, with 95.7% having a loan-to-value ratio of less than 75% [5][6] - The mortgage portfolio totaled $863.2 million, down from $876.7 million at the end of 2023, due to higher repayments and an increased allowance for mortgage losses [7][8] - The weighted average interest rate on the mortgage portfolio decreased to 9.98% from 11.42% in the previous year [7][8] Strategic Initiatives - The company increased its credit facility by $25 million to a total of $340 million, adding Royal Bank to the lending syndicate to enhance funding capacity for future growth [3][6] - Atrium shifted its loan origination strategy towards lower-risk sectors to safeguard shareholder capital amid economic downturns [3][6] - The company anticipates reduced competition from non-bank lenders in 2025, positioning itself for potential growth opportunities [3][6]

Core Insights - The article discusses the investment potential of C3.ai, a company specializing in artificial intelligence solutions [1] Company Analysis - C3.ai is recommended by The Motley Fool, indicating a positive outlook on its stock performance [1] - The author, Parkev Tatevosian, holds no positions in any of the stocks mentioned, suggesting an unbiased perspective [1] Industry Context - The article highlights the growing interest in AI technologies, positioning C3.ai as a key player in this expanding market [1]

Core Viewpoint - C3.ai's stock has faced a significant decline of 35% year-to-date, but the company's fundamentals indicate strong long-term growth potential that the market may not fully recognize [1][2]. Financial Performance - C3.ai reported a 26% year-over-year increase in revenue, reaching nearly $99 million, although this was slightly lower than the 29% growth in the previous quarter [3][4]. - The company is projected to achieve a 25% revenue growth for the current quarter, an improvement over the 20% growth reported in the same quarter last year [5]. - For the entire fiscal year, C3.ai is on track for a 25% top-line growth, surpassing the 16% growth from the previous fiscal year [6]. Customer Engagement and Market Activity - C3.ai closed 66 customer agreements last year, marking a 72% increase from the previous year, with notable clients including Flex, Shell, and the U.S. Department of Defense [7]. - The company is involved in pilot projects with large corporations and government agencies, which could enhance revenue growth in the future [8]. Market Outlook - The AI software market is expected to grow at an annual rate of 30% through 2033, positioning C3.ai to sustain healthy growth levels [9]. Valuation and Investment Opportunity - C3.ai is currently trading at a price-to-sales (P/S) ratio of 8, significantly lower than peers like Palantir Technologies, which has a P/S ratio of 73 [10][11]. - Analysts have set a 12-month price target of $27.50 for C3.ai, indicating a potential 17% increase from current levels, suggesting it may be a good time to invest [12].

Core Viewpoint - C3.ai's stock price declined significantly after reporting its fiscal 2025 third-quarter results, despite showing solid revenue growth. The company faces challenges with subscription growth and the uncertainty surrounding its partnership with Baker Hughes [1][11]. Financial Performance - C3.ai reported a revenue increase of 26% year-over-year to $98.8 million in fiscal Q3 2025, marking its fourth consecutive quarter of over 20% growth [1][2]. - Subscription revenue rose by 22% to $85.7 million, while professional services revenue surged by 64% to $13.1 million [2]. - Excluding revenue from Baker Hughes, C3.ai's revenue would have increased by 43%, up from 41% growth in the previous quarter [3]. - The company's gross margin improved to 59.1%, with an adjusted gross margin of around 69% [7]. - C3.ai reported an adjusted loss of $0.12 per share, a slight improvement from the previous year's loss of $0.13 per share [8]. Partnerships and Collaborations - C3.ai has expanded its partnership with Microsoft, which has led to a 450% increase in closed agreements across various industries [4]. - The company also formed new partnerships with Amazon and McKinsey QuantumBlack to enhance its enterprise AI solutions [5]. - In fiscal Q3, 71% of C3.ai's agreements were made in collaboration with partners, with 66 agreements signed, including 20 generative AI pilots [6]. Guidance and Future Outlook - Management provided guidance for fiscal Q4 revenue between $103.6 million and $113.6 million, indicating a growth rate of 20% to 31% [9]. - The fiscal 2025 revenue guidance was narrowed to a range of $383.9 million to $393.9 million [10]. - The uncertainty regarding the renewal of the Baker Hughes partnership remains a significant concern for the company's future growth [11][12]. Valuation Considerations - C3.ai's forward price-to-sales (P/S) ratio is approximately 6, which is considered reasonable for a software-as-a-service (SaaS) company, although its low gross margins and high stock-based compensation need to be factored in [14].

Artificial intelligence (AI) is a once-in-a-generation investment opportunity. Leading AI stocks have soared over the last few years, as the AI market is projected to grow 27% annually to reach $826 billion by 2030, according to Statista. Here are two stocks that could soar over the long term.1. C3.aiThe cost of building advanced AI models is decreasing, and this could translate to explosive demand for AI software in the coming years. C3.ai (AI -1.80%) is the dark horse in the AI software market right now, ...

Core Viewpoint - Cathie Wood believes that software companies represent the next significant opportunity in the AI sector, predicting a potential revenue generation of $8 for every dollar spent on chips from suppliers like Nvidia [1] Group 1: C3.ai's Business Model and Market Position - C3.ai has developed over 130 ready-made AI applications that can be deployed within three months, serving various industries such as oil and gas, manufacturing, utilities, and financial services [4] - The company has established partnerships with major cloud service providers like Amazon Web Services, Microsoft Azure, and Google Cloud, enhancing its customer reach and enabling broader AI solutions [5][6] - C3.ai's shift to consumption-based pricing has accelerated its growth, allowing for quicker onboarding of new customers compared to the previous subscription model [9] Group 2: Financial Performance - In the fiscal 2025 third quarter, C3.ai reported a record revenue of $98.7 million, reflecting a year-over-year increase of 26%, which is an acceleration from the previous year's growth rate of 18% [8] - The company closed 47 new agreements during the same quarter, marking a 74% increase from the prior year, and is collaborating on a joint sales campaign with Microsoft Azure targeting 621 potential accounts globally [7] - Despite the revenue growth, C3.ai's GAAP net loss increased by 10% year over year to $80.2 million, although the non-GAAP loss was significantly lower at $15.7 million due to the exclusion of stock-based compensation [11] Group 3: Market Valuation and Future Potential - C3.ai's stock is currently trading 85% below its record high of $161, with a more reasonable price-to-sales (P/S) ratio of 9.4, indicating a potential value opportunity [14] - The addressable market for enterprise AI is projected to be worth $1.3 trillion by 2032, suggesting significant growth potential for C3.ai based on its current revenue levels [16] - As companies increasingly adopt AI technologies, many are likely to turn to third-party providers like C3.ai for cost-effective and efficient solutions, reinforcing the long-term value of AI software over hardware [15]

Group 1 - JP Morgan analyst Pinjalim Bora maintained an Underweight rating on C3.ai, Inc with a price target of $27, down from $28 [1] - C3.ai reported a third-quarter revenue of $98.8 million, up 26%, beating the Street consensus estimate of $98.1 million [1] - The company had an adjusted net loss of 12 cents per share, which was better than the street consensus estimate of 25 cents per share [1] Group 2 - C3.ai expects fourth-quarter revenue of $103.6 million to $113.6 million, compared to the consensus estimate of $108.6 million [2] - The price target is based on approximately 7 times EV/calendar 2026E revenue, unchanged relative to infrastructure software companies growing FTM revenue over 20% [2] - The lower price target reflects subpar core growth, adjusted for demo licenses [2] Group 3 - C3.ai is expected to trade at a significant discount to its peers due to its smaller scale and higher unprofitability [3] - While C3.ai is projected to grow FTM revenue at 23%, comparable to the comps' median of 24%, it is 80% smaller than the median scale of the comp group [3] - C3.ai is expected to have a (14%) FTM free cash flow margin, resulting in a growth plus margin profile of 9%, compared to comps at +22% UFCF margin and a growth plus margin of +46% [4] Group 4 - The calendar 2025 adjusted operating margin for C3.ai is projected to be (24%), while comps are expected to have a +15% margin [4] - C3.ai stock is down 6.24% at $25.05 as of the last check [4]