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]