C3.ai(US:AI)2024-12-10 00:58Revenue Growth - Total revenue for the three and six months ended October 31, 2024, was $94.3 million and $181.6 million, representing a 29% and 25% increase compared to the same period last year[172]. - Subscription revenue grew to $81.2 million and $154.6 million for the three and six months ended October 31, 2024, representing a 22% and 21% increase compared to the same period last year[172]. - Total revenue for the quarter ended October 31, 2023, was $73.229 million, representing a year-over-year growth of 17%[1]. - Subscription revenue growth year-over-year was 23% for the quarter ended October 31, 2023[1]. - Subscription revenue accounted for 86% of total revenue for the three months ended October 31, 2024, increasing by $14.7 million, or 22%, compared to the same period last year[243]. - Subscription revenue for the six months ended October 31, 2024, was $154.6 million, a 21% increase from $127.8 million in the same period last year[244]. - The increase in subscription revenue was driven by 19% of total subscription revenue coming from new customers for the six months ended October 31, 2024[244]. Market and Product Expansion - C3 AI booked over $1.4 billion in additional contracts and recognized $1.3 billion in revenue from 2019 to 2024[166]. - C3 AI has expanded its product offerings to include over 100 AI production applications across various industries[165]. - The C3 Generative AI launched in early fiscal year 2024 includes 28 domain-specific offerings tailored to various industries[2]. - The company expects to continue attracting new customers through its consumption-based pricing model, which simplifies adoption[2]. - The company is focused on expanding its ecosystem of strategic partners, including notable partners like Baker Hughes, AWS, Microsoft, and GCP, to enhance customer engagement[215]. - A new global alliance agreement with Microsoft has been established, positioning the company as a preferred AI application software provider on Microsoft Azure, which includes joint sales and go-to-market strategies[216]. Financial Performance - Total cost of revenue for the three months ended October 31, 2024, was $36.5 million, a 14% increase from $32.1 million in the same period last year[248]. - Gross profit for the three months ended October 31, 2024, was $57.8 million, representing a 41% increase from $41.1 million in the same period last year[251]. - The subscription gross margin for the three months ended October 31, 2024, was 57%, up from 53% in the same period last year[251]. - Total operating expenses for the three months ended October 31, 2024, were $133.1 million, compared to $120.5 million in the same period last year[251]. - Net loss for the three months ended October 31, 2024, was $66.0 million, compared to a net loss of $69.8 million in the same period last year[243]. - Total operating expenses for the six months ended October 31, 2024, were $257,880 thousand, a 10% increase from $235,151 thousand in the same period last year[254]. Investment and Expenses - Research and development spending is anticipated to remain high as the company introduces new applications and features[2]. - Sales and marketing expenses are expected to increase in absolute dollar amounts as the company invests in brand awareness and programmatic spend to generate demand[229]. - Research and development expenses for the three months ended October 31, 2024, increased to $55,715 thousand, an 11% increase from $50,399 thousand in the same period last year[254]. - Operating expenses are expected to increase as a percentage of total revenue in the near term but are anticipated to stabilize and decline as the business matures[226]. Cash Flow and Financial Position - Free cash flow for the six months ended October 31, 2024, was $(32,390) thousand, an improvement from $(64,035) thousand in the same period last year[268]. - Net cash used in operating activities for the six months ended October 31, 2024, was $(30,651) thousand, compared to $(44,654) thousand in the same period last year[271]. - Cash and cash equivalents as of October 31, 2024, were $121.3 million, down from $167.1 million as of April 30, 2024[269]. - The accumulated deficit as of October 31, 2024, was $1.2 billion, indicating ongoing operating losses[269]. - The company expects to continue incurring operating losses and generating negative cash flows in the upcoming quarters due to planned investments[270]. International Market Presence - Approximately 13% of total revenue for the three months ended October 31, 2024, and 17% for the same period in 2023, was derived from international customers, indicating growth potential in international markets[217]. - The company derived approximately 13% and 16% of total revenue for the six months ended October 31, 2024, and 2023, respectively, from international customers, highlighting ongoing international growth[217]. - The company plans to increase its direct sales team in international markets and supplement efforts with strategic partners to expand market coverage[217]. Economic and Regulatory Factors - The impact of adverse macroeconomic conditions, such as inflation and supply chain disruptions, is being monitored as it may affect customer budgets and consumption[218]. - The company does not believe inflation has had a material effect on its business or financial condition[286]. - A hypothetical 10% change in foreign currency exchange rates may have a material impact on the company's financial statements[285]. - The company has entered into foreign currency forward contracts to hedge a portion of its forecasted foreign currency-denominated expenses[285]. Compliance and Governance - Management concluded that the disclosure controls and procedures were effective at the reasonable assurance level as of the end of the reporting period[288]. - There were no material changes in critical accounting policies and estimates compared to the previous fiscal year[281]. - The company has not used any derivative financial instruments to manage interest rate risk exposure[284].