C3.ai Reports Strong Q2 Results as Partnership with Microsoft Takes Off

Redwood City, California – December 9, 2024

C3.ai, Inc. (NYSE: AI), a leading enterprise AI application software company, recently unveiled its financial performance for the fiscal second quarter ending October 31, 2024. The company celebrated its seventh consecutive quarter of accelerating revenue growth, showcasing impressive numbers and a significant boost from its strategic alliance with Microsoft.

“Here at C3 AI, we had an outstanding quarter with robust top- and bottom-line performance,” said Thomas M. Siebel, Chairman and CEO. “The potential of our partnership with Microsoft cannot be overstated. By positioning C3 AI as a preferred AI application provider on Azure, we’re simplifying the process for businesses to adopt and deploy our applications. This marks a pivotal moment for Enterprise AI and paves the way for substantial growth.”

Financial Highlights: Record Revenue Growth

• Total Revenue: $94.3 million, a remarkable 29% increase from $73.2 million year-over-year.
• Subscription Revenue: $81.2 million, making up 86% of total revenue and reflecting a 22% growth since last year.
• Combined Subscription and Engineering Services Revenue: $90.8 million (96% of total revenue), a 27% increase from $71.3 million year-over-year.
• Gross Profit: GAAP gross profit was $57.8 million, translating to a 61% gross margin, while non-GAAP gross profit reached $66.3 million with a 70% margin.
• Net Loss: A GAAP net loss per share reported at $(0.52) and a non-GAAP loss per share at $(0.06).
• Cash Reserves: The company ended the quarter with $730.4 million in cash, cash equivalents, and marketable securities.

Strategic Alliances Fuelling Growth

C3 AI’s strategic partnerships have been instrumental in driving its success. In the second quarter, 62% of total agreements were closed through its partner network.

• Microsoft Partnership: Aligning with Microsoft Azure underlines C3 AI’s commitment to enhancing the Enterprise AI landscape. This strategic collaboration aims to establish a comprehensive go-to-market engine, making it seamless for companies to leverage C3 AI applications on a larger scale.
• Capgemini Partnership: C3 AI and Capgemini have extended their partnership, establishing a global C3 AI practice to deliver tailored AI solutions to clients across various sectors.
• Google Cloud Collaboration: The synergy between C3 AI and Google Cloud saw a staggering 180% year-over-year increase in agreements, underscoring the growing demand for AI applications.

A Bright Future in Government Contracts

C3 AI’s success extends to government contracts. During the quarter, the company secured 58 agreements, including agreements with the U.S. Department of Defense, the U.S. Air Force, and other prominent federal agencies. Notably, the U.S. Army selected C3 AI to enhance its intelligence processes, awarded under a $23 million contract. This initiative aims to streamline real-time predictive intelligence through advanced data integration.

Additionally, the U.S. Air Force is expanding its use of C3 AI’s predictive maintenance solutions, and the Defense Logistics Agency is utilizing C3 AI technologies to bolster supply chain operations.

Advancements in Generative AI

C3 AI is not only making waves with its enterprise applications but also in the arena of generative AI. The organization closed 15 pilots with notable clients like Boston Scientific and the U.S. Navy, further solidifying its market position. Additionally, C3 AI recently launched the C3 Generative AI Accelerator Program, designed to help organizations swiftly implement generative AI solutions.

“Participating in the C3 Generative AI Accelerator Program allowed my team to develop a prototype in just three days,” remarked Ben Dubois, Director of Data Analytics at Norfolk Iron & Metal. “The hands-on experience and training have been invaluable.”

C3 AI was also awarded a foundational U.S. patent for several cutting-edge generative AI technologies, which include AI orchestration, autonomy, multimodal model integration, and comprehensive data traceability – all pivotal for enhancing decision-making across industries.

Looking Ahead

C3 AI provided guidance for future performance, forecasting revenue between $95.5 million and $100.5 million for Q3, and for the full fiscal year 2025, total revenue is anticipated between $378 million and $398 million.

“We maintain a strong outlook despite challenges that lie ahead in the rapidly evolving AI landscape,” stated Siebel, optimistically.

As C3.ai continues breaking new ground in AI technology and partnerships, the possibilities for businesses to transform through AI have never been more promising.

The AI Buzz Hub team is excited to see where these breakthroughs take us. Want to stay in the loop on all things AI? Subscribe to our newsletter or share this article with your fellow enthusiasts.