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

Shares of C3.ai Inc. rose 14% after the close of trading on Thursday after the enterprise AI software company released an upbeat outlook and cited a “substantial improvement” in market sentiment.

“As we enter the fourth quarter, we see a tailwind with improved business optimism and increased interest in C3.ai AI applications.
+2.80%
solutions to address an ever wider range of challenges in an ever wider range of industries,” CEO Thomas Siebel said during a phone call about the company’s earnings and loss, according to a FactSet transcript. “This is a dramatic change from what we experienced in mid-2022.”

He added that “the market is genuinely optimistic about our decisions and overall business sentiment seems to be improving significantly.”

Sibel noted that this quarter helped confirm C3.ai’s transition to a consumption-based pricing model, noting that the response from “partners and potential customers has been consistently enthusiastic.”

Detailed story on business model change: Should extras be billed as electricity and not a Netflix subscription? That’s where the software is headed.

In the fourth fiscal quarter, C3.ai management expects revenue of between $70 million and $72 million. FactSet consensus was $69.9 million. Executives also expect an adjusted operating loss of $24 million to $28 million.

The company’s shares are up 90% this year on Wall Street’s fervent interest in artificial intelligence, fueled by the popularity of OpenAI ChatGPT, a generative AI chatbot.

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

“The recent surge of innovation and the availability of large language models and generative pre-trained transformers are also immediately compatible with the C3.ai platform, allowing us to increase the utility of our platform and our applications,” Sibel said at the earnings conference. . “We believe that the importance of ongoing developments in generative AI cannot be overemphasized.”

While ChatGPT is a chatbot, Siebel also sees great opportunities in generative AI as it ties into enterprise search.

“The addressable market is huge,” he added in the earnings report. “Business is strong. The clients are happy. Our workforce is highly productive and we have a bright future.”

Siebel said in its earnings report that C3.ai remains on track to be “monetary positive and non-GAAP profitable” by the end of fiscal year 2024.

On Thursday, the company reported a third-quarter net loss of $63.2 million, or 57 cents a share, compared with a loss of $39.5 million, or 38 cents a share, a year earlier. C3.ai adjusted losses of 6 cents per share, while analysts monitored by FactSet had expected an adjusted loss of 22 cents per share.

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

The company reported 236 customers.

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