C3.ai Stock Falls After Company Withdraws Profit Forecast

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C3.ai

Shares of the AI ​​software company were trading lower on Wednesday after posting strong results for the latest quarter, forecasting a bigger-than-expected full-year loss.

The company dropped its previous forecast of non-GAAP profitability by the end of fiscal 2024.

“After careful consideration with our management and marketing partners, we have decided to invest in lead generation, market awareness and customer success related to generative AI solutions,” CEO Thomas Siebel said in a statement. “The market opportunity is immediate, and we intend to seize it. While we still expect to be cash positive in Q4 FY 24 and FY 25, we continue to invest in generative AI solutions and do not expect to be GAAP profitable in Q4 FY 24 at this time.

In the fiscal first quarter ended July 31, C3.ai (symbol: AI) reported revenue of $72.4 million, up 11 percent from the prior quarter. At $71.6 million, slightly ahead of Wall Street’s consensus forecast.

On an adjusted basis, the company lost 17 cents a share, short of the Street consensus forecast of 9 cents a share. According to generally accepted accounting principles, the company lost 56 cents a share.

For the October quarter, C3.ai sees revenue of $72.5 million to $76.5 million, with a non-GAAP loss from operations of $27 million to $40 million. Wall Street estimates call for revenue of $73.8 million and a loss of $26.6 million.

For the April 2024 fiscal year, C3.ai continues to report revenue of $295 million to $320 million, but now sees a non-GAAP loss from operations of $70 million to $100 million, compared to a previous loss of $50 million. Wall Street consensus estimates had called for a loss of $64 million.

“It’s hard to overstate the growing interest we’re seeing globally in enterprise AI adoption,” CEO Thomas Siebel said in a statement. “We are experiencing strong interest in our enterprise AI applications and in particular C3 Generative AI.”

In a separate announcement, the company unveiled 28 domain-specific AI software suites in areas such as aerospace, financial services and healthcare.

C3.ai shares were down 5.8% in after-hours trading.

Write to Eric J. Savitz at [email protected]