C3.AI CEO Tom Siebel discussed the company’s strong earnings report, highlighting a 21% year-over-year growth and robust cash reserves, despite a stock decline attributed to subscription revenue guidance. He expressed confidence in achieving profitability as revenue growth outpaces expenses and emphasized the innovative applications of generative AI in sectors like government and defense.
In a recent interview, C3.AI CEO Tom Siebel discussed the company’s earnings report and the factors influencing its stock performance. Despite a solid quarter where C3.AI beat revenue, profit, and cash flow expectations, the company’s shares fell sharply, attributed to a perceived miss in subscription revenue guidance. Siebel emphasized that the subscription revenue was within expected guidelines, and he highlighted the company’s strong cash reserves, which amount to approximately $750 million.
Siebel noted that C3.AI experienced a year-over-year growth rate of 21%, positioning it among the fastest-growing companies in the software sector. He mentioned that the company is transitioning to a subscription pricing model, which has led to accelerating growth. The consensus guidance for the current year anticipates a 23% top-line growth, further solidifying C3.AI’s position in the market.
When asked about profitability, Siebel explained that the company’s gross margins significantly exceed the cost of sales, and as revenue growth continues to outpace expense growth, profitability will naturally follow. He expressed confidence that as C3.AI scales its operations, it will maintain positive cash flow and achieve non-GAAP profitability.
The discussion also touched on the applications of generative AI, particularly in government sectors. Siebel highlighted how C3.AI’s technology is being utilized in public benefit programs like Medicare and Medicaid, allowing for efficient data processing and response generation in multiple languages. He also mentioned the use of generative AI in the Air Force for predictive maintenance and within intelligence agencies, showcasing the diverse applications of the technology.
Overall, Siebel conveyed a positive outlook for C3.AI, emphasizing the company’s strong performance metrics, growth trajectory, and innovative use of generative AI across various sectors. Despite the stock’s recent decline, he remains optimistic about the company’s future and its ability to deliver value to shareholders as it continues to grow and scale its operations.