Summary of Key Points from the Conference Call Company Overview - The company discussed its unique position in the software industry, particularly in the context of the transition from on-premises software to cloud-based solutions and SaaS models [1][2] - The company has seen significant growth in its user base, increasing from 46 million contracted users to 75 million over the past five years [4] AI and Software Growth - The company highlighted the expanding opportunities in AI, stating that 75% of existing customers are using AI features, and 75% of new customers are purchasing AI as their first product [6] - AI-related annual contract value (ACV) has grown from over $250 million to more than $450 million, representing a 50% year-over-year increase [7] - The company emphasized that AI is integral to its product offerings and is driving growth, contributing approximately 1.5 percentage points to overall annual recurring revenue (ARR) growth [8] Talent Acquisition and Leadership - The company has made significant hires in leadership positions to drive growth, including a new GM for the medium enterprise segment and a former Google executive to lead the platform business [12][13] - The collaboration between new and existing talent is noted as a key strength for future growth [12] Financial Performance and Projections - The company expects to achieve over $8.8 billion in revenue for the current year, up from just under $6 billion in 2023 [37] - Non-GAAP operating margins are projected to increase from just over 20% in FY2023 to 29% by the end of the current year [41] - The company has set a target for subscription revenue CAGR through FY2028 to range from 12% to 15% [54] Capital Allocation and Share Buybacks - The company announced a $5 billion share buyback program through FY2027, emphasizing its commitment to returning capital to shareholders [59][62] - The focus remains on organic investment, particularly in AI, while also considering M&A opportunities that align with its strategic goals [66][67] Market Expansion and New Offerings - The company is focusing on expanding its presence in the medium enterprise market and has launched Workday Go to cater to this segment [33][90] - A new consumption-based pricing model called flex credits was introduced, allowing customers to pay based on usage, which is expected to enhance customer value and capture revenue [88] Data Integrity and AI Differentiation - The company is investing in improving data integrity and context, which is crucial for effective AI implementation in enterprise settings [93][96] - The unique architecture of Workday allows for the integration of AI into business processes, enhancing operational efficiency and effectiveness [84][96] Conclusion - The company is optimistic about its future, citing strong customer loyalty, innovative capabilities, and a robust growth strategy [15][16] - The leadership team is committed to driving durable growth while expanding operating margins, positioning the company for long-term success in the evolving software landscape [15][41]

Group 1 - Salesforce, Inc. is facing a pivotal moment in 2025 due to slowing growth in its core Sales and Service Clouds, alongside activist pressure for higher margins and disciplined capital allocation [2] - The company commands over 20% of the mature CRM market, but its legacy products are experiencing high-single-digit growth, prompting a shift towards AI with the new Agentforce platform [2] - The Data Cloud and AI segment has achieved over $1 billion in Annual Recurring Revenue (ARR), reflecting a year-over-year growth of over 120% [2] Group 2 - Salesforce has engaged in strategic mergers and acquisitions, including Informatica, Regrello, Waii, and Convergence.ai, to build a robust AI platform that addresses enterprise data fragmentation [3] - The company has generated over $6 billion in free cash flow, allowing for investments in acquisitions while returning $3.1 billion to shareholders through buybacks and dividends in Q1 FY2026 [3] - The investment thesis highlights the potential for high rewards if Salesforce successfully integrates its acquisitions and scales Agentforce, but also acknowledges substantial execution risks [4] Group 3 - The stock of Salesforce has depreciated approximately 2% since a previous bullish thesis in April 2025, which emphasized the company's resilience amid macro volatility and strong subscription model [5] - The current bullish thesis by Darius Dark Investing aligns with previous views but places greater emphasis on the AI-driven Agentforce pivot and strategic M&A [5]

Core Insights - The article highlights the rapid commercialization of enterprise-level AI, particularly through the success of Youyou Network, which achieved over 320 million yuan in AI-related contract signings in the first half of 2025, indicating a significant market opportunity [2][3][6]. Group 1: Market Dynamics - The enterprise AI application market is experiencing explosive growth, with a reported daily usage of 10.2 trillion tokens in China's enterprise-level market, a 363% increase from the second half of 2024 [3]. - The demand for enterprise AI is driven by the urgent need for intelligent operations as companies undergo digital transformation [3][7]. - The competitive landscape is shifting towards the ability to implement AI applications effectively, moving from exploratory phases to large-scale applications [3][7]. Group 2: Company Strategy - Youyou Network's strategy focuses on "scenario-based implementation and full-process integration," which allows their AI solutions to evolve from traditional tools to intelligent partners for businesses [4]. - The company has successfully signed AI projects with major enterprises across various sectors, including finance, human resources, and supply chain management, demonstrating its commercial viability [5][6]. Group 3: Competitive Advantage - Youyou Network's long-term investment in R&D and deep understanding of customer needs have positioned it as a leader in the commercialization of enterprise AI [7][8]. - The company has developed a robust "Know-how" system that enables it to accurately identify key business scenarios for AI implementation, avoiding pitfalls associated with a purely technology-driven approach [9][10]. Group 4: Industry Outlook - The article suggests that Chinese software companies, led by Youyou Network, are rapidly catching up to international giants in the enterprise software market, achieving significant growth in both domestic and international markets [11][13]. - Youyou Network's overseas business revenue grew by 24.9% year-on-year, indicating strong market potential despite its smaller revenue share [13]. - The company is poised to leverage its first-mover advantage in enterprise AI as the market accelerates towards large-scale implementation, driven by policy support and market demand [14].

AI Adoption Challenges - 行业数据显示，95% 的企业 AI 项目未能投入生产 [1] Success Factors - MIT 2025 年的报告揭示了剩余 5% 成功 AI 项目的差异化因素 [1]

Group 1 - Snowflake Inc. is positioned at the intersection of enterprise data and AI adoption, which is transforming business operations [1] - Companies are beginning to recognize that their data infrastructure is a critical asset [1]

Core Insights - The Browser Company, the parent company of AI browser Dia, was acquired by Atlassian for $610 million, despite having minimal revenue and users, indicating a strong market interest in AI technologies [1] - You.com raised $100 million in Series C funding, reaching a valuation of $1.5 billion, and is shifting its focus from consumer to enterprise-level AI solutions, emphasizing the need for AI agents to access deep, contextual information [1][2] - Exa, another AI search engine, completed a $85 million funding round, increasing its valuation from $70 million to $700 million in just one year, focusing on building search engines for AI agents rather than humans [5][10] Group 1: You.com - You.com processes over 1 billion queries monthly for various companies, transitioning from consumer-focused AI search to enterprise-level AI solutions [2][4] - The company aims to provide customized, secure, and efficient AI solutions, addressing the growing demand from enterprises for tailored AI tools [4] - You.com's annual recurring revenue (ARR) reached $50 million, with a significant growth rate of 40 times in 2024, indicating strong market traction [4] Group 2: Exa - Exa's valuation skyrocketed to $700 million after raising $85 million, with a focus on serving enterprise clients, including several Fortune 500 companies [5][10] - The company aims to create a search engine that allows AI to control web searches in ways that traditional search engines cannot, targeting "geek" users who seek high-quality knowledge [5][9] - Exa's long-term goal is to organize global knowledge comprehensively, fulfilling a mission that Google has not completed [10] Group 3: Market Trends - The AI search engine landscape is evolving, with a clear shift towards solutions that cater to AI agents rather than human users, highlighting a significant change in search engine design and functionality [9][10] - The demand for AI infrastructure is growing, as companies recognize the need for reliable and efficient AI tools to enhance productivity and decision-making [4][5]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $70.3 million, a decrease of 19% year over year [4] - Subscription revenue was $60.3 million, representing 86% of total revenue [4] - Non-GAAP gross profit was $36.3 million, with a non-GAAP gross margin of 52% [8] - Non-GAAP operating loss for the quarter was $57.8 million, and non-GAAP net loss was $49.8 million, translating to a net loss per share of $0.37 [9] - Free cash flow for the quarter was negative $34.3 million, with cash, cash equivalents, and marketable securities totaling $711.9 million at the end of the quarter [9] Business Line Data and Key Metrics Changes - Revenue from software licenses was $17.9 million, sequentially lower by $15.9 million [5] - Professional services revenue was $10 million, with $8.7 million from Prioritized Engineering Services (PES), accounting for 14% of total revenue [5] - Combined subscription and PES revenue was $69 million, representing 98% of total revenue [5] Market Data and Key Metrics Changes - The company signed 28 initial production deployments (IPDs) during the quarter, with a cumulative total of 374 IPDs, of which 266 are still active [9] - The company is involved in approximately 60 large-scale customer engagements across various sectors, including government and manufacturing [18] Company Strategy and Development Direction - The company aims to establish a market leadership position in enterprise AI applications, focusing on the C3 AI platform and expanding its application footprint [20][21] - A strategic integrator program was introduced to license the C3 AgenTeq AI platform to others, enabling them to develop industry-specific applications [17] - The company has restructured its sales and service organizations globally, bringing in new leadership to drive growth and customer satisfaction [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the financial results for the first quarter were unacceptable, attributing the underperformance to poor sales execution and resource coordination [12][13] - The new CEO, Steven Ehikian, is expected to drive growth and market penetration, with a focus on leveraging existing technology and customer relationships [23] - Management remains committed to achieving non-GAAP profitability and free cash flow, despite the challenges faced in Q1 [30] Other Important Information - The company plans to provide updated guidance for fiscal 2026 when announcing future financial results [10] - The addressable market opportunity is estimated to approach $2 trillion annually, indicating significant growth potential [21] Q&A Session Summary Question: How involved will Tom Siebel be in the sales process going forward? - Tom Siebel stated he will do everything possible to ensure the new CEO's success and will continue to monitor and assist in the sales process as necessary [26] Question: What gives confidence in the Q2 guidance? - Hitesh Lath mentioned that Q2 guidance is based on sales activity observed in August and the review of the sales pipeline with new leadership [28] Question: How do you see the mix of partner-led versus direct sales evolving? - Tom Siebel indicated that 90% of the business closed this quarter was with partners, and there will be significant investment in these partnerships going forward [33] Question: How would you weight the underperformance this quarter between sales disruption and Tom's impact? - Tom Siebel estimated it was a combination of both, with 70% attributed to sales disruption and 30% to his reduced involvement [41] Question: What execution steps are being taken regarding pilots and contracts? - Tom Siebel noted that there were many new people and leadership involved, which caused some confusion in the sales process [42]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $70.3 million, a decrease of 19% year over year [4] - Subscription revenue accounted for $60.3 million, representing 86% of total revenue [4] - Non-GAAP gross profit was $36.3 million, with a gross margin of 52% [7] - Non-GAAP operating loss was $57.8 million, and non-GAAP net loss was $49.8 million, translating to a net loss per share of $0.37 [8] - Cash, cash equivalents, and marketable securities at the end of the quarter totaled $711.9 million [9] Business Line Data and Key Metrics Changes - Revenue from software licenses for demonstration versions was $17.9 million, down sequentially by $15.9 million [5] - Professional services revenue was $10 million, with $8.7 million from Prioritized Engineering Services (PES), making up 14% of total revenue [5] - Combined subscription and PES revenue was $69 million, accounting for 98% of total revenue [5] Market Data and Key Metrics Changes - The company signed 28 initial production deployments (IPDs) during the quarter, with a cumulative total of 374 IPDs, of which 266 are still active [9] - Non-GAAP gross margin declined due to a higher mix of IPD-related costs and lower economies of scale [10] Company Strategy and Development Direction - The company aims to establish a market leadership position in enterprise AI applications, focusing on the C3 AgenTeq AI platform and expanding its application footprint [20][21] - A strategic integrator program was introduced to license the C3 AgenTeq AI platform to others, targeting OEMs and systems integrators [17] - The company plans to ramp up sales and service capacity globally, leveraging partnerships with major players like Azure, AWS, and GCP [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the first quarter's financial results were unacceptable, attributing the underperformance to poor sales execution and resource coordination [12][13] - The new CEO, Steven Ahitian, is expected to drive growth and customer satisfaction, with a restructured sales and service organization in place [14][22] - Management remains optimistic about achieving non-GAAP profitability and free cash flow in the future, despite the challenges faced in Q1 [28] Other Important Information - The company is involved in approximately 60 large-scale customer engagements across various sectors, including government and manufacturing [18] - The introduction of generative AI capabilities is expected to enhance project success rates, addressing common challenges in AI deployments [19] Q&A Session Summary Question: How involved will Tom be in the sales process going forward? - Tom stated he will do everything possible to ensure Steven's success and will continue to monitor and assist in the sales process as necessary [25] Question: What gives confidence in the Q2 guidance? - The Q2 guidance is based on sales activity observed in August and the review of the sales pipeline with new leadership [27] Question: How do you see the mix of partner-led versus direct sales evolving? - Tom indicated that 90% of the business closed this quarter was with partners, and there will be significant investment in these partnerships going forward [31][32] Question: How would you weight the underperformance this quarter? - Tom estimated that 70% of the underperformance was due to sales disruption and 30% due to his reduced involvement [39] Question: What execution steps are being taken regarding pilots and contracts? - Tom mentioned that new leadership and confusion in the sales process contributed to the challenges faced, but they are committed to improving execution [41]

three AI shares falling in overtime after reporting results uh at the top of the hour off the lows but still down um considerably about 10% in overtime. The company had pre-announced these results on August 11th. The stock fell 25% on that news.Uh C3AI also announcing now it has found a new CEO uh to replace Tom Seel uh Steven Ahikian. And joining us now is C3AI executive chairman Tom Seiull and the new CEO Stephen Ahikian. Uh gentlemen, welcome.Um can't wait to talk to both of you. So let me dive right in. ...

FY26-Q1 Financial Highlights - Revenue reached $70.3 million[7] - Subscription revenue accounted for $60.3 million[18], while subscription and prioritized engineering services revenue combined totaled $69.0 million[18] - Non-GAAP gross profit was $36.3 million, resulting in a non-GAAP gross margin of 52%[18] - The company's cash balance stood at $711.9 million[7] Partner Ecosystem - 40 agreements were closed through the partner network in Q1[11] - The joint 12-month qualified opportunity pipeline with partners increased by 54% year-over-year[11] - C3 AI and Microsoft jointly closed 24 agreements[11] Bookings and Deployments - Manufacturing accounted for 46% of total bookings in FY26-Q1[24], a significant increase compared to 5.2% in FY25-Q1[23] - Federal, Defense and Aerospace represented 28% of total bookings in FY26-Q1[24], down from 31% in FY25-Q1[23] - Federal, Defense and Aerospace accounted for 32.1% of initial production deployments in FY26-Q1[27], while Manufacturing accounted for 28.6%[27] - Federal, Defense and Aerospace accounted for 33.3% of Generative AI initial production deployments in FY26-Q1[30], with Construction, Manufacturing, Oil and Gas, and Telecommunications each accounting for 16.7%[30] Guidance - The company expects total revenue between $72.0 million and $80.0 million for FY26-Q2, representing a year-over-year growth between -15% and -24%[14] - Non-GAAP loss from operations is projected to be between $(49.5) million and $(57.5) million for FY26-Q2[14] - The company withdrew its previous full-year fiscal 2026 guidance due to the appointment of a new CEO and restructuring of sales and services organizations[15]