Breaking Down C3.ai, Inc. (AI) Financial Health: Key Insights for Investors

Considering an investment in C3.ai (AI)? Are you wondering if its financial performance aligns with the hype surrounding Enterprise AI? In the fiscal year 2024, the company's total revenue reached $310.6 million, marking a 16% increase from the previous year's $266.8 million. Subscription revenue, a significant portion of their earnings, stood at $278.1 million, representing 90% of the total revenue. But what about profitability and future growth? Dive in to explore a detailed breakdown of C3.ai's financial health, key insights, and expert analyses to help you make informed decisions.

C3.ai, Inc. (AI) Revenue Analysis

Understanding C3.ai, Inc.'s revenue streams involves examining its primary sources, growth rates, and segment contributions. Here’s a detailed breakdown:

C3.ai, Inc. primarily generates revenue through:

• Subscription revenue: This constitutes the majority of their income, derived from their software platform and applications.
• Professional services: Revenue is also generated from providing services related to the deployment and maintenance of their AI solutions.

Analyzing C3.ai, Inc.'s financial performance reveals key insights into its revenue dynamics. For the fiscal year 2024, C3.ai, Inc. reported a total revenue of $310.8 million, marking a 16% increase compared to the previous year. Subscription revenue accounted for $267.2 million, representing an 18% increase year-over-year, while professional services revenue reached $43.6 million.

A closer look at the company's revenue streams reveals:

• Subscription revenue, the main driver, grew by 18%, indicating strong demand for its AI platform.
• Professional services revenue remained relatively stable, suggesting a consistent need for deployment and maintenance support.

Here is a table summarizing C3.ai, Inc.'s revenue streams for the fiscal year 2024:

For additional insights, you might find this resource helpful: Breaking Down C3.ai, Inc. (AI) Financial Health: Key Insights for Investors

C3.ai, Inc. (AI) Profitability Metrics

Assessing the profitability of C3.ai, Inc. (AI) requires a detailed look into its financial performance. This analysis covers gross profit, operating profit, and net profit margins, as well as trends in profitability over time, comparisons with industry averages, and an examination of operational efficiency.

As of the fiscal year 2024, C3.ai, Inc. (AI) reported a gross profit of $192.9 million. However, the company experienced an operating loss of $267.4 million and a net loss of $268.3 million. These figures highlight the challenges C3.ai faces in achieving profitability despite a significant gross profit. The Mission Statement, Vision, & Core Values of C3.ai, Inc. (AI).

Here's a summary of C3.ai's profitability metrics based on the latest fiscal year 2024 data:

• Gross Profit: $192.9 million
• Operating Loss: $267.4 million
• Net Loss: $268.3 million

The trends in C3.ai's profitability over recent years provide crucial context. While gross profit has generally increased, the company has consistently reported operating and net losses. This suggests that C3.ai's expenses, particularly in research and development and sales and marketing, have outpaced its revenue growth.

Comparing C3.ai's profitability ratios with industry averages is challenging due to the company's unique business model and focus on AI solutions across various sectors. However, when compared to other software and technology companies, C3.ai's negative operating and net profit margins indicate that it is underperforming in terms of profitability.

A critical aspect of C3.ai's profitability is its operational efficiency, particularly its cost management and gross margin trends. The company's gross margin has been relatively strong, but its high operating expenses have prevented it from achieving overall profitability. Effective cost management and improvements in operational efficiency are essential for C3.ai to improve its financial health.

The following table summarizes key financial data for C3.ai, Inc. (AI) from the fiscal year 2024:

Analyzing these metrics provides a comprehensive view of C3.ai's current financial state and the areas it needs to address to achieve sustainable profitability.

C3.ai, Inc. (AI) Debt vs. Equity Structure

Understanding how C3.ai, Inc. (AI) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, debt-to-equity ratio, and its strategies for balancing debt and equity financing.

C3.ai, Inc. (AI) has a mix of debt, including both short-term and long-term liabilities. According to their most recent financial data, the company's debt structure includes:

• Short-term debt: As of January 31, 2024, the current portion of long-term debt and finance leases was approximately $2.4 million.
• Long-term debt: The long-term debt and finance lease obligations totaled around $14.9 million.

The debt-to-equity ratio is a key metric to assess the financial leverage of C3.ai, Inc. (AI). It indicates the proportion of debt and equity used to finance the company's assets. As of January 31, 2024, C3.ai, Inc. (AI) reported total stockholders' equity of $724.1 million. With a total debt of $17.3 million (short-term plus long-term debt), the debt-to-equity ratio can be calculated as follows:

Debt-to-Equity Ratio = Total Debt / Total Equity = $17.3 million / $724.1 million ≈ 0.024

This ratio of approximately 0.024 indicates that C3.ai, Inc. (AI) relies more on equity than debt to finance its assets. Compared to industry standards, this ratio is relatively low, suggesting a conservative approach to leverage.

Below is a summary of C3.ai, Inc. (AI)'s debt and equity composition as of January 31, 2024:

Balancing debt and equity is crucial for C3.ai, Inc. (AI)'s financial strategy. While debt can provide leverage and potentially increase returns on equity, it also introduces financial risk. Equity financing, on the other hand, reduces financial risk but can dilute ownership and potentially lower earnings per share.

For further insights into C3.ai, Inc. (AI)'s financial health, check out: Breaking Down C3.ai, Inc. (AI) Financial Health: Key Insights for Investors

C3.ai, Inc. (AI) Liquidity and Solvency

Assessing the financial health of C3.ai, Inc. (AI) requires a close look at its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations. Here's an overview of key aspects:

Assessing C3.ai, Inc.'s Liquidity:

• Current and Quick Ratios:
• As of the most recent quarter, C3.ai, Inc.'s quick ratio is 6.55.
• For the trailing 12 months (TTM) ending October 31, 2024, the quick ratio is 8.14, reflecting a 7.72% year-over-year change.
• The current ratio, a broader measure of liquidity, stands at 6.74 as of the most recent quarter.
• Analysis of Working Capital Trends:
• C3 Ai Inc's Working Capital is currently at 802.06 M.
• In Q3 2024, C3 Ai Inc 's Current Assets grew by 1.43 % sequentially, while Current Liabilities decreased, leading to improvement in C3 Ai Inc 's Working Capital.
• Working capital, which is the difference between current assets and current liabilities, is a key indicator of a firm's ability to continue its normal operations without additional debt.
• Cash Flow Statements Overview:
• Operating Cash Flow: The operating cash flow for the trailing twelve months is -31.33M.
• Fiscal Year 2024: Cash flows from operating activities showed a net loss of $(279,696) compared to $(268,839) in 2023.
• Investing Cash Flow: The cash flow from investing activities for the trailing twelve months is 19.44M.
• Financing Cash Flow: Levered free cash flow for the trailing twelve months is 63.77M.
• Cash Reserves:
• As of the most recent reports, C3.ai, Inc. has substantial cash reserves.
• The company's cash and cash equivalents totaled $730.4 million.

Potential Liquidity Concerns or Strengths:

While C3.ai, Inc. maintains a strong cash position, it is important to note the company's history of net losses. For fiscal year 2024, the net loss was $(279,696). However, the company has positive free cash flow of $18.8 million.

Here is a summary of C3.ai's cash flow activities based on the condensed consolidated statements of cash flows (in thousands):

For more insights into C3.ai, Inc. (AI) and its investors, check out: Exploring C3.ai, Inc. (AI) Investor Profile: Who’s Buying and Why?

C3.ai, Inc. (AI) Valuation Analysis

Determining whether C3.ai, Inc. (AI) is overvalued or undervalued requires a multifaceted approach, incorporating various financial ratios, stock performance analysis, and analyst ratings. Let's delve into these key aspects to provide a clearer picture for investors. For a broader view, you might find further insights in: Breaking Down C3.ai, Inc. (AI) Financial Health: Key Insights for Investors.

Here's a breakdown of essential valuation metrics:

• Price-to-Earnings (P/E) Ratio: As C3.ai, Inc. (AI) does not currently have positive earnings, the P/E ratio is not applicable. This is common for growth-oriented companies that are investing heavily in expansion rather than focusing on immediate profits.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. As of the latest data, C3.ai's Price to Book ratio is approximately 3.97. This indicates how much investors are willing to pay for each dollar of the company's net assets.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the company's enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). As of the latest reports, C3.ai's EV/EBITDA ratio is approximately -31.58. A negative EV/EBITDA ratio suggests that the company's EBITDA is negative, which can occur when a company is not yet profitable or is experiencing financial difficulties.

Analyzing C3.ai, Inc. (AI)'s stock price trends over the past year provides context on market sentiment and investor confidence:

Over the last 12 months, C3.ai (AI) has shown significant stock price volatility. As of April 18, 2025, the stock closed at $27.53. The 52-week range provides additional context:

• 52 Week High: $41.43
• 52 Week Low: $18.53

C3.ai, Inc. (AI) does not currently offer a dividend, as the company is focused on reinvesting earnings to fuel growth.

Analyst consensus is crucial in gauging market sentiment. Recent ratings indicate:

• The consensus rating from analysts is a 'Hold'.
• Ratings range from 'Sell' to 'Buy,' reflecting varied perspectives on the stock's potential.

For a detailed overview, consider the following table summarizing key valuation metrics for C3.ai, Inc. (AI):

C3.ai, Inc. (AI) Risk Factors

Several internal and external factors could significantly impact C3.ai, Inc.'s (AI) financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges detailed in their filings.

Here's a breakdown of key risks:

• Intense Competition: The market for AI and IoT platforms is intensely competitive and characterized by rapid changes. C3.ai, Inc. (AI) faces competition from large, well-established companies with substantially greater resources, as well as smaller, specialized firms. This competition could lead to pricing pressures, reduced sales, and loss of market share.
• Reliance on Key Customers: C3.ai, Inc. (AI) relies on a limited number of customers for a significant portion of its revenue. For example, in fiscal year 2024, a small number of customers accounted for a significant portion of revenue. The loss of any of these key customers could materially and adversely affect the company’s financial results.
• Long Sales Cycles: The sales cycle for C3.ai, Inc.'s (AI) platform and applications is long and variable, requiring significant investment of time and resources. Delays in customer purchasing decisions or the failure to close sales could negatively impact revenue and cash flow.
• Market Adoption of AI: The market for AI solutions is still developing, and the adoption rate is uncertain. If businesses do not widely adopt AI technologies, or if C3.ai, Inc. (AI) fails to convince potential customers of the value of its offerings, the company’s growth prospects could be limited.
• Technological Obsolescence: The AI and IoT markets are subject to rapid technological change. C3.ai, Inc. (AI) must continuously innovate and adapt to new technologies and industry standards to remain competitive. Failure to do so could render its platform and applications obsolete.
• Dependence on Third-Party Technologies: C3.ai, Inc.'s (AI) platform relies on third-party hardware, software, and cloud infrastructure. Any disruptions in the availability or performance of these technologies could adversely affect the company’s operations and ability to serve customers.
• Data Security and Privacy: C3.ai, Inc. (AI) handles large amounts of sensitive data, making it a target for cyberattacks and data breaches. A security incident could result in reputational damage, legal liabilities, and disruptions to operations. Compliance with data privacy regulations, such as GDPR and CCPA, also adds complexity and cost.
• Global Operations: C3.ai, Inc. (AI) operates globally, which exposes it to various risks, including currency fluctuations, political instability, and trade restrictions. These factors could negatively impact the company’s financial performance and ability to conduct business in certain regions.

Mitigation strategies often involve diversifying the customer base, investing in research and development to stay ahead of technological changes, strengthening cybersecurity measures, and closely monitoring global economic and political conditions.

For example, the 10-K filing for the fiscal year ended April 30, 2024, highlights several key risk factors that could affect their business, financial condition, and future results. These risks include:

• The company's limited operating history in an evolving industry makes it difficult to evaluate its current business and future prospects.
• C3.ai, Inc. (AI) has a history of net losses and may not achieve or sustain profitability in the future.
• The unpredictable and lengthy sales cycles for the company's solutions can result in significant fluctuations in revenue and cash flow.
• The company faces intense competition in the AI and IoT platform market, which could lead to pricing pressure and loss of market share.

These are only some of the risks that C3.ai, Inc. (AI) faces. Investors should carefully consider all of the information in C3.ai, Inc.'s (AI) filings with the Securities and Exchange Commission before making an investment decision.

To gain a deeper understanding of C3.ai, Inc.'s (AI) mission, vision, and core values, check out: Mission Statement, Vision, & Core Values of C3.ai, Inc. (AI).

C3.ai, Inc. (AI) Growth Opportunities

C3.ai, Inc. (AI) is focusing on expanding its market presence and technological capabilities to drive future growth. These efforts include product innovation, strategic partnerships, and market expansion within the enterprise AI landscape. The company's ability to capitalize on these opportunities will be critical for sustaining growth and improving financial performance. For more insights, check out: Breaking Down C3.ai, Inc. (AI) Financial Health: Key Insights for Investors.

Analysis of key growth drivers for C3.ai, Inc. (AI) includes:

• Product Innovations: C3.ai, Inc. (AI) is investing in developing new AI applications and enhancing its existing suite of products. This includes improving the functionality and scalability of its C3 AI Platform and creating industry-specific AI solutions.
• Market Expansions: The company is targeting key sectors such as oil and gas, manufacturing, and government, where AI solutions can drive significant operational efficiencies and cost savings. Expanding into new geographic regions and industries is also a key strategy.
• Strategic Acquisitions: While not always a primary strategy, C3.ai, Inc. (AI) may consider strategic acquisitions to acquire new technologies, talent, or market access that complements its existing offerings.

Future revenue growth projections and earnings estimates for C3.ai, Inc. (AI) are subject to various market conditions and the company's execution of its growth strategies. According to the latest financial data, C3.ai, Inc. (AI) reported total revenue of $306.9 million for fiscal year 2024, representing a 16% increase year-over-year. The company projects its total revenue for fiscal year 2025 to be in the range of $330 million to $335 million.

Strategic initiatives and partnerships that may drive future growth for C3.ai, Inc. (AI) include:

• Partnerships with Technology Providers: Collaborations with major cloud service providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud enable C3.ai, Inc. (AI) to leverage their infrastructure and expand its reach to a broader customer base.
• Industry-Specific Alliances: Partnering with industry experts and consulting firms allows C3.ai, Inc. (AI) to tailor its AI solutions to meet the specific needs of different sectors, enhancing its value proposition.

Competitive advantages that position C3.ai, Inc. (AI) for growth include:

• Comprehensive AI Platform: The C3 AI Platform offers a full suite of tools and services for developing, deploying, and scaling AI applications, providing a competitive edge over companies offering point solutions.
• Strong Industry Expertise: C3.ai, Inc. (AI)'s deep understanding of various industries allows it to create AI solutions that address specific business challenges, differentiating it from more general AI providers.
• Established Customer Base: The company has built a strong base of enterprise customers, providing a foundation for recurring revenue and future growth opportunities.

The following table summarizes key financial projections and strategic initiatives that are expected to drive C3.ai, Inc. (AI)'s growth: