Shares of C3.ai surged late Wednesday after the artificial intelligence software company surpassed Wall Street's expectations with its fiscal fourth-quarter earnings and issued solid guidance.
C3.ai sells artificial intelligence software platforms to large enterprises and government agencies, bringing in the vast bulk of its sales via subscription revenue.
Investors have been skeptical that C3.ai can boost revenue in the competitive market of AI enterprise software while cutting costs, as it must to turn a profit. However, the guidance may now be swaying some investors.
C3.ai stock jumped over 2% in after-hours trading after ending regular trading on Wednesday down 4.2% to $10.71.
The company posted a loss of 33 cents a share for the quarter ended April 30, compared with a loss of 16 cents a share a year ago and narrower than Wall Street's expectation of a 37-cents-a-share loss. Revenue sank 53% to $51.6 million, beating the analyst consensus call of $50.3 million, according to FactSet.
Looking ahead, the company expects revenue between $50 million and $54 million in the fiscal 2027 first quarter, with a midpoint above the consensus view of $51.7 million. For the full fiscal year, C3.ai forecasts sales ranging from $210 million to $240 million, with the midpoint once more just above Wall Street's $224.7 million prediction.
"We have a well-defined strategy, a restructured organization, new executive leadership, and a detailed execution plan now in place with the singular focus of increasing shareholder value," CEO Thomas Siebel said in the earnings release.
The stock, which traded in the triple digits after its listing in 2020, has lost 21% this year.
