AI startup C3.ai's stock plunges 22% after softer revenue guidance

By Jon Swartz

Shares of white-hot Ai startup C3.ai Inc., which had been hurtling toward record highs earlier this week, took an abrupt U-turn Wednesday.

The company's stock (AI) skidded 14% in after-hours trading in the minutes leading up to its quarterly financial results. When C3.ai reported mere minutes before its earnings call at 5 p.m. Eastern, the stock continued its tailspin, ending the extended session down 22% on soft annual revenue guidance.

C3.ai, whose entry in the artificial-intelligence market several years ago presaged the recent land rush, rang up $72.4 million in revenue, a tick up from $72.3 million in the same quarter a year ago.

C3.ai reported a fiscal fourth-quarter net loss of $64.9 million, or 58 cents a share, compared with a net loss of $58.4 million, or 55 cents a share, in the year-ago quarter, for an adjusted loss of 13 cents a share.

Analysts surveyed by FactSet had expected on average a net loss of 17 cents a share on revenue of $71.3 million.

"As we began the fiscal year on May 1, the company has never been better positioned," C3.ai Chief Executive Tom Siebel said in a statement announcing the results. "I believe we now have broad consensus that the addressable market for Enterprise AI is extraordinarily large and rapidly growing."

During a conference call with analysts late Wednesday, Siebel outlined a handful of mega-Department of Defense contracts landed by C3.ai. "This is genuinely a big deal," he said.

However, C3.ai's fiscal 2024 revenue guidance of $295 million to $320 million was on the light side of analysts' estimates of $317 million.

As the AI hype machine has shifted into fifth gear the past several months, shares of C3.ai have catapulted 258% this year, while the broader S&P 500 index has climbed 9%.

-Jon Swartz

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06-01-23 0754ET

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