C3.ai (AI.US) 2026财年第三季度业绩电话会
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会议摘要
C3 AI outlines a restructuring plan focusing on cost reduction, sales team reorganization, and AI-driven productivity improvements. Highlights include strong federal market performance and guidance for future quarters, addressing investor concerns on IPD quality and AI model usage.
会议速览
Ci AI's Third Quarter FY26 Earnings Call: Q&A Session to FollowThe host welcomes participants to Ci AI's third quarter earnings call for FY26, informing them of the recording and listen-only status. After the presentation, a Q&A session will be conducted, with instructions on how to ask and withdraw questions.
C3 AI's Q3 Earnings Call Highlights for FY26An earnings call summary for C3 AI's third quarter of fiscal year 26, focusing on non-GAAP financial measures, forward-looking statements, and investor relations insights.
Revamping for Growth: Strategic Cost Reduction and AI-Driven Efficiency in Enterprise AIAcknowledging underperformance, the company embarks on a strategic overhaul, focusing on cost reduction, AI-driven enhancements in productivity, and a streamlined sales approach to deliver measurable economic value to customers, aiming for profitability and operational agility.
Prioritizing High-Impact AI Transformation for Enterprises and Federal SectorsFocus on enterprise-wide AI transformations, reinforcing leadership in key areas like industrial asset performance and supply chain optimization. Emphasize federal market growth with secure, scalable AI platforms, evidenced by significant bookings increases. Restructuring for enhanced focus and execution standards to secure long-term success.
C3 AI's Strategic Reorganization and Expansion in Federal and Global MarketsC3 AI has been chosen by the US Department of Agriculture and Department of Energy to deploy AI solutions, streamlining data analysis and enhancing decision-making. Internationally, NATO and defense organizations like Japan's Ministry of Defense are adopting C3 AI's technologies. In the commercial sector, a major E&P company is expanding its use of C3 AI for reliability and generative AI applications. Amidst a restructuring plan focused on cost reduction, sales reorganization, and prioritizing large-scale transformations, C3 AI aims to leverage its core AI operationalization capabilities to capture a greater market share, emphasizing a commitment to profitability and growth.
Q4 Financials: Revenue, Gross Margin, and Losses DetailedReported total revenue, subscription, and professional services revenue for Q4, highlighting a non-GAAP gross margin of 37% and a net operating loss, with negative free cash flow.
Financial Update and Restructuring Plan for Improved Efficiency and CapitalizationThe company reported strong financial health with $621.9 million in cash and equivalents, outlined a restructuring plan for cost savings and reduced cash burn, and provided revenue and loss guidance for upcoming quarters, emphasizing long-term success strategies.
Evaluating Model Performance and Cost Efficiency for AI ServicesDiscusses criteria for IPD agreements, emphasizing customer value and contract conversion. Highlights flexible, model-agnostic architecture catering to diverse use cases and customer preferences. Evaluates models from various providers based on functionality and cost, aiming for optimal AI service delivery.
Cost Efficiency and AI Adoption in Corporate StrategyDiscusses significant sales and marketing cost reductions across the company, emphasizing a broad approach to efficiency. Highlights evolving customer conversations, focusing on immediate AI adoption for transformational change rather than prolonged testing, with a strong emphasis on revenue generation and operational efficiency in various sectors.
Transforming Supply Chains with Autonomous Site ManagementDiscusses the shift towards autonomous operations in supply chain management, highlighting the role of autonomous site managers and the urgency of adopting multi-use case solutions for transformative change in organizations.
Insight on Recurring Business Model and Future Growth ProjectionsThe dialogue explores the proportion of recurring versus one-time business, emphasizing the importance of this understanding for predicting future growth and guided visibility in fiscal year ED.
Revenue Breakdown: Subscription vs. Professional ServicesThe dialogue details the revenue distribution, highlighting subscription income and professional services, with no non-recurring subscription revenue noted for the quarter.
Addressing Sales Execution Weaknesses in North America and EMEAAcknowledging underperformance in North America and Europe, the focus shifts to improving sales execution through organizational restructuring. Inspired by successful past strategies in federal QA, a flatter organizational model is proposed to enhance efficiency and responsiveness. Full accountability is taken for addressing these challenges, emphasizing a proactive approach to rectifying sales execution issues.
Conference Concludes with Appreciation for Engagement and Upcoming Progress UpdatesThe call concludes with gratitude for participants' questions and engagement, promising future updates on progress for the next quarter.
要点回答
Q：Where can the press release with the third quarter results be accessed?
A：The press release with the third quarter results can be accessed through the Investor relations section of CCA AI's website, as stated in the transcript.
Q：What reconciliations are provided in the press release regarding GAAP and non-GAAP financial measures?
A：A reconciliation of GAAP to non-GAAP financial measures is included in the press release, as mentioned in the transcript.
Q：What were the key issues that led to the company's inadequate performance?
A：The key issues leading to the inadequate performance were the company's cost structure being too high and the company not being organized correctly for the opportunity.
Q：What actions are being taken to address the performance issues?
A：To address the performance issues, the company is rightsizing its cost structure, flattening its sales organization, focusing on areas of market leadership with fast economic value, prioritizing large-scale transformations, and increasing product development velocity.
Q：How are AI tools being leveraged across the company?
A：AI tools are being leveraged to increase productivity, such as generating high-quality sales pipelines, designing and developing websites, and improving coding and AI workflows.
Q：What are the expected expense reductions and headcount changes?
A：The expected expense reductions are $15 million in non GAAP operating expenses, with a 26% reduction in headcount, amounting to $60 million.
Q：How will the restructuring impact the company's operations and service to customers?
A：The restructuring will result in improved quality and speed of execution, increased value delivery, and an empowered workforce to respond more swiftly to customer needs. It will not impact the ability to serve customers but will enhance it.
Q：What is the goal of instilling greater sales discipline?
A：The goal of instilling greater sales discipline is to enable teams to think bigger with a clear value-driven narrative, rigorously qualify leads, demonstrate quick proof of value, and shorten sales cycles.
Q：What is the company's strategy for prioritizing its enterprise-wide transformation opportunities?
A：The company is prioritizing large scale, enterprise-wide transformation opportunities by rapidly demonstrating value through accelerated proofs of concept in AI. This strategy helps the world's leading enterprises master AI at scale.
Q：Which new and expansion agreements were signed in the recent quarter?
A：New and expansion agreements were signed with the US Department of Agriculture, the US Department of Energy, the NATO Communications and Information Agency, the Royal Navy, GSK, Tallis, ExxonMobil, U. S. Steel, C Sp An, and McLaren, among others.
Q：What is the significance of the federal opportunity for the company?
A：The federal opportunity is increasingly large and important for the company, as there is a growing demand for secure, off-the-shelf enterprise scale AI platforms designed to support mission-critical operations.
Q：Which agency selected the company's enterprise scale AI solution and what is the purpose?
A：The US Department of Agriculture selected the company's enterprise scale AI solution to modernize the department's intergovernmental and public engagements by unifying its data environment with the C 3 AI platform.
Q：How is the company's generative AI being applied in the commercial sector?
A：In the commercial sector, the company's generative AI is being applied to automate complex engineering reporting, reducing the time and effort from months and weeks to days.
Q：What is the current state of the AI market and the focus for organizations?
A：The AI market is rapidly accelerating, with AI CapEx approaching $500 billion. The focus is now on demonstrating return on that investment as organizations plan to scale enterprise-wide production.
Q：Why is the company considered uniquely positioned in enterprise AI?
A：The company is uniquely positioned in enterprise AI due to its ability to operationalize AI at the core of the enterprise, unifying data across systems to deliver scalable production-grade systems that drive measurable business outcomes.
Q：What strategic initiatives are outlined in the company's execution plan?
A：The execution plan is centered on five strategic initiatives: reducing the cost structure, restructing the sales organization, concentrating efforts on best-in-class applications, prioritizing large scale transformations, and increasing the velocity of product offerings.
Q：What are the company's financial results for the quarter mentioned?
A：For the quarter, total revenue was $410.9 million, with subscription revenue at $40.2 million. Professional services revenue was $5.1 million, and non-GAAP gross profit was $196 million with a non-GAAP gross margin of 37%.
Q：What is the impact of the restructuring plan on the company's workforce?
A：The reduction in global workforce as part of the restructuring plan is substantially complete and will result in annualized cost savings of approximately $60 million.
Q：What is the company's revenue and loss from operations guidance for fiscal year Quest?
A：The revenue guidance for Qi of fiscal year Quest is between $Ly million and $Lye million dollars. The guidance for non GAAP loss from operations for Qi is between $Ric million and $Rix million dollars. For the full fiscal year 26, the revenue guidance is between $246.7 million and $200.0 million dollars, and the guidance for non GAAP loss from operations is between $19.5 million and $227.5 million.
Q：How does the company's qualification process for IPDs contribute to economic value for customers?
A：The company has implemented a better qualification criteria for IPDs to ensure they generate enough economic value for the customer and have a higher likelihood of converting to protection contracts, thus making the sign-up process more selective.
Q：What is the company's strategy for evaluating AI models from various providers?
A：The company is using a model-agnostic approach in its architecture, which allows it to be driven by customer demands. Depending on the use case and capabilities, customers can select the model they want, providing full flexibility. Internally, the company provides flexibility to its employees to use the model that works best for them across engineering, product marketing, sales, and other departments.
Q：What approach is being taken to reduce sales and marketing expenses, and what is expected in terms of investment in growth versus cost efficiency moving forward?
A：The cost reduction across sales and marketing is comprehensive, covering all locations and functions within the company. It involves being more efficient in cost use by function and location, comparing the cost structure to other comparable companies in the software industry, and focusing on headcount reduction in the sales force and marketing spend. Moving forward, it's expected that the company will continue to balance investment in growth and cost efficiency.
Q：How are customer conversations changing with the adoption of the platform, and what is the focus of these conversations?
A：Customer conversations are shifting towards AI adoption with a focus on transformational change across departments rather than single solutions. This is evident in conversations with leading companies and various industries such as industrial manufacturing and federal governments, where there is a massive transformation underway. The discussions focus on using AI to solve supply chain issues, increase operational autonomy, and drive revenue growth. The customers are looking for a more comprehensive transformation rather than a one-use-case solution.
Q：What is the mix of the business in terms of recurring versus non-recurring revenue, and how should one think about guidance visibility regarding growth in fiscal year ed and you?
A：The company's revenue is predominantly from subscriptions, with no non-recurring subscription revenue reported in the quarter. Professional services also contribute to the revenue, but the focus is mainly on the recurring nature of the business through subscriptions. Moving forward, investors should consider that the business has a significant recurring revenue component, which is a key driver for growth visibility in fiscal year ed and beyond.
Q：What caused the weakness in North America and Europe, and how does the company plan to address this issue?
A：The weakness in North America and Europe is attributed to poor sales execution, which the company plans to fix by flattening the organization. The same approach that worked in the federal space with a sales team reporting to the speaker will be applied to North America and EMEA to improve sales execution.
C3.ai, Inc.
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