C3.ai(US:AI)2022-03-11 01:11Summary of C3.ai, Inc. Conference Call Company Overview - Company: C3.ai, Inc. (NYSE:AI) - Industry: Enterprise AI and Predictive Analytics - Conference Date: March 10, 2022 Key Points Company Foundation and Market Position - C3.ai was founded in 2009 after the sale of Siebel Systems to Oracle, focusing on elastic cloud computing, big data, IoT, and predictive analytics [5][6] - The enterprise AI market is projected to reach a $600 billion addressable market by 2025 [7] - C3.ai aims to establish a global market leadership position in enterprise AI, similar to previous successes at Oracle and Siebel Systems [7] Customer Strategy - The company initially focused on large global enterprises, forming strategic "lighthouse accounts" to establish relationships and secure funding [10] - C3.ai's revenue is heavily derived from large customers, with 95% of revenue coming from companies that previously attempted to build their own solutions [12] Platform Characteristics - C3.ai utilizes a model-driven architecture that simplifies the complexity of building AI applications, making it more efficient than traditional methods [13] - The platform allows customers to develop and operate large-scale applications quickly, reducing the time and cost associated with building from scratch [12][13] Customer Journey and Revenue Growth - The typical customer onboarding process starts with small trials, leading to larger enterprise agreements, exemplified by a customer that progressed from a €600,000 trial to a €350 million commitment over several years [18][25] - C3.ai reported a significant increase in revenue from Baker Hughes, with a 700% year-over-year growth [29] Partnerships and Collaborations - C3.ai has established partnerships with major companies like Baker Hughes, Microsoft, and Google, with Google Cloud being highlighted as a promising collaboration [31][32] - The company signed a $500 million contract with the Department of Defense, facilitating easier access to C3 applications for federal agencies [33] Sales Organization and Growth Strategy - Changes in the sales organization led to a 42% year-over-year growth, with a strategic selling model that focuses on engaging teams to solve customer problems [42][40] - C3.ai aims to balance large enterprise deals with a broader customer base, targeting both high-end and low-end markets [44] Future Outlook - The company plans to expand its application offerings significantly, with expectations of increasing the number of turnkey applications from 42 to potentially 150 in the coming years [49] - C3.ai's CRM application is designed to enhance existing systems rather than compete directly with major players like Salesforce, providing predictive capabilities on top of existing investments [50] Financial Metrics - The remaining performance obligation (RPO) for C3.ai is $470 million, up 90% year-over-year, indicating strong future revenue commitments [27] - The company is trading at an enterprise value of 4 times revenue, suggesting potential undervaluation given its growth rate [42] Additional Insights - The company has invested heavily in technology development, with hundreds of millions spent to create its software stack [7] - C3.ai's focus on professional services currently accounts for 15% to 20% of revenue, with plans to enhance customer independence through improved documentation and support [23]