Artificial intelligence (AI) software company C3.ai (NYSE:AI) announced better-than-expected revenue in Q1 CY2025, with sales up 25.6% year on year to $108.7 million. The company expects next quarter’s revenue to be around $104.5 million, close to analysts’ estimates. Its non-GAAP loss of $0.60 per share was significantly below analysts’ consensus estimates.
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Revenue: $108.7 million vs analyst estimates of $107.9 million (25.6% year-on-year growth, 0.8% beat)
Adjusted EPS: -$0.60 vs analyst estimates of -$0.20 (significant miss)
Adjusted Operating Income: -$31.17 million vs analyst estimates of -$35.18 million (-28.7% margin, 11.4% beat)
Revenue Guidance for Q2 CY2025 is $104.5 million at the midpoint, roughly in line with what analysts were expecting
Adjusted Operating Loss Guidance for Q2 CY2025 is -$28.5 million at the midpoint, better than expectations of -$35.2 million
Operating Margin: -81.8%, up from -95.1% in the same quarter last year
Free Cash Flow was $10.33 million, up from -$22.38 million in the previous quarter
Market Capitalization: $3.18 billion
Founded in 2009 by enterprise software veteran Tom Seibel, C3.ai (NYSE:AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications.
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, C3.ai grew its sales at a 15.5% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the software sector, which enjoys a number of secular tailwinds.
This quarter, C3.ai reported robust year-on-year revenue growth of 25.6%, and its $108.7 million of revenue topped Wall Street estimates by 0.8%. Company management is currently guiding for a 19.8% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 17.9% over the next 12 months, an acceleration versus the last three years. This projection is admirable and implies its newer products and services will spur better top-line performance.
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