C3.ai shares soar as CEO Siebel praises ‘dramatic change’ in sentiment amid AI hype

The shares of C3.ai Inc. rose 14% in after-hours action on Thursday after the software company, which trades in artificial intelligence for enterprises, issued an optimistic forecast and market sentiment “improved significantly”.

“As we enter our fourth quarter, we see tailwinds from improved business optimism and increased interest in adopting C3.ai AI,
solutions to address an increasing range of applications in an ever-expanding array of industries,” Chief Executive Thomas Siebel said on the company’s earnings call, according to a FactSet transcript. “This is a dramatic change from what we experienced in mid-2022.”

He added that “there is genuine optimism in the market about our solutions, and overall business sentiment appears to be improving significantly.”

Siebel noted that the quarter helped validate C3.ai’s transition to a consumption-based pricing model, noting that the response “from partners and prospects has been uniformly enthusiastic.”

In-depth story on the business model change: should more services be charged as a utility bill than a Netflix subscription? That’s where software is going.

For the fiscal fourth quarter, C3.ai management expects revenue of $70 million to $72 million. The FactSet consensus was $69.9 million. Executives also expect an adjusted loss of $24 million to $28 million from operations.

Shares of the company are up 90% year-to-date amid heated Wall Street interest in artificial intelligence fueled by the popularity of OpenAI’s ChatGPT chatbot, which falls into the generative AI category.

Read: Tech execs can’t stop talking about AI after ChatGPT’s success

“The recent explosion of innovation and availability of large language models and in generative pre-trained transformers are also immediately compatible with the C3.ai platform, allowing us to increase the utility of our platform and applications,” Siebel said on the earnings call. “We believe the importance of the ongoing advancements in generative AI is hard to overestimate.”

While ChatGPT is a chatbot, Siebel also sees great opportunities in generative AI related to enterprise search.

“The addressable market is huge,” he added on the earnings call. “Business is strong. Customers are happy. Our staff is very productive and the future looks bright.”

Siebel said in the press release that C3.ai remains on track to become “cash positive and non-GAAP profitable” by the end of fiscal 2024.

The company on Thursday reported a third-quarter fiscal net loss of $63.2 million, or 57 cents per share, compared to a loss of $39.5 million, or 38 cents per share, in the same period last year. On an adjusted basis, C3.ai lost 6 cents per share, while analysts tracked by FactSet expected an adjusted loss of 22 cents per share.

C3.ai’s revenue fell from $69.8 million to $66.7 million, but surpassed the consensus view of $64.2 million.

The company recorded a customer number of 236.

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