C3.ai, Inc.

Good day and thank you for standing by and welcome to the C3AI four-quarter fiscal year 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today. Paul Phillips, please go ahead.

Good afternoon and welcome to C3AI's earnings call for the fourth quarter and full year fiscal 2021, which ended April 30th, 2021. This is Paul Phillips, VP of investor relations of C3AI. With me on the call today are Tom Siebel, chairman and chief executive officer, and David Varner, chief financial officer. After the market closed today, we issued a press release with details regarding our fourth quarter and full-year fiscal results, as well as a supplement to our results, both of which can be accessed on the investor relations section of our website at ir.c3.ai. This call is being webcast, and a replay will be available on our IR website following the conclusion of the call. During today's call, we will make statements relating to our business that may be considered forward-looking under federal securities laws. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our actual results, please refer to our filings at the SEC. Also during the course of today's call, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our press release. Finally, at times in our prepared comments or response to your questions, we may discuss metrics that are incremental to our usual presentation to provide greater insight into the dynamics of our business or our annual results. Please be advised that we may or may not continue to provide this additional detail in the future. With that, let me turn the call over to Tom for his prepared remarks.

Tom? Well, thank you, Paul, and good afternoon, everyone. I am very pleased to give you an update on the state of the business. Bottom line, Q4 was a great quarter, and fiscal year 21 was a great year. I'm pleased to report that C3 AI is well positioned to substantially accelerate growth and continue to gain market share in the coming year. Let's talk about our fourth quarter results. We exceeded our guidance for both revenue and non-GAAP operating income. Our bookings grew, believe it or not, over 500% in Q4 compared to the quarter a year earlier. Our bookings grew 179% quarter to quarter. Revenue in the fourth quarter was $52.3 million, an increase of 26% year over year. Subscription revenue for the quarter was $43.1 million, up from $36.8 million a year ago, an increase of 17% year over year. Gross profit for the quarter was $40.6 million, a 78% gross margin, compared to $32.1 million gross profit a year ago, an increase in gross profit of 26% year-over-year. Our remaining performance obligations were $293.8 million compared to $239.7 million a year earlier, an increase of 23% year-over-year. including cancelable orders, our non-GAAP RPO was $345.1 million compared to $246.9 million a year ago, an increase of 40% year over year. Our total enterprise AI customer count at the end of the year was 89, representing an 82% growth rate year over year. Now, let's take a look at fiscal year 21 in entirety. Total revenue for the year was $183.2 million, up from $156.7 million a year ago, an increase of 17% year over year. Subscription revenue for the year was $157.4 million, up from $135.4 million a year earlier, an increase of 16% year over year. Subscription revenue, importantly, subscription revenue as a percentage of total revenue remained 86% constant year over year. Gross profit for the year was $138.7 million, a 76% gross margin, compared to $117.9 million gross profit a year ago, an increase of 18% year over year. Most importantly, Our average contract value for the year continued to decrease from $16.2 million in fiscal year 19 to $12.1 million in fiscal year 20 to $7.2 million in fiscal year 21, providing smoothing growth in bookings and greater revenue visibility going forward. We experienced continued customer momentum in the course of the year accelerating in the half of the year specifically in the fourth quarter we expanded our enterprise ai footprint in defense and intelligence financial services manufacturing oil and gas utilities and energy sustainability We had a number of new enterprise production application deployments at the United States Air Force, Bank of America, Standard Chartered Bank, Koch Industries, Meg Energy, Duke Energy, and Engie. C3 AI also initiated new enterprise AI projects with 3M, Con Ed, FIS, Infor, Koch Industries, New York Power Authority, and Shell. and signed new contracts with Commonwealth Bank, George Washington University School of Medicine and Health Sciences, NCS, One Medical, San Mateo County, Stanford Healthcare, Swift, and Yokogawa Electric Corporation in Japan. We enjoyed substantially expanded business agreements with existing customers, including the United States Air Force, the U.S. Military Rapid Sustain Office, and the F-35 Joint Program Office. Importantly, Shell executed a very significant expansion that spans slightly in excess of five years to significantly accelerate the deployment of C3 AI and ML applications across Shell global assets. This represents significant a major expansion of the partnership that C3 AI and Shell have forged over the past several years. Again, importantly, the total number of C3 AI customers at the end of the year was 89, up from 49 at the end of the previous year, an 82% increase year over year. We continue to expand our partner ecosystem to extend our global distribution and service capabilities. During the quarter, C3 expanded its relationship with strategic partner and financial technology leader FIS to launch joint solutions for the financial services industry, including FIS credit intelligence powered by C3 AI. And this builds upon the previously announced launch of FIS AML, or Anti-Money Laundering Compliance, powered by C3 AI. The company saw continued success in its partnership with Baker Hughes, exceeding its fiscal year 21 revenue target for the alliance. The company formed a wide-ranging strategic alliance with Infor, an ERP technology cloud leader, to jointly expand enterprise-class AI solutions across industries and extend Infor's native machine learning capabilities. Let's talk a little bit about product and technology. It is difficult to overstate the significance of the rate of innovation in product engineering at C3 AI. As of the end of Q4, we have released 20 enterprise AI applications into general availability across five vertical markets. This in addition to the C3 AI suite itself. In the course of the fourth quarter alone, we released 40 updates and upgrades to these applications. And to give you a feel for the complexity of some of these deployments, we update one of our larger deployments in excess of 320 million times per day. Operating at now massive scale, as of the end of the year, the C3 AI suite and applications were integrated with more than 800 unique enterprise and enterprise data sources and sensor constellations. We managed more than 4.8 million concurrent production AI models We process more than 1.5 billion AI predictions per day, and we evaluate over 30 billion machine learning features daily. Our service levels remain superlative, offering our customers 99.99% product availability with exceptional performance characteristics for the C3 AI suite over the course of the year. Ladies and gentlemen, this would constitute the gold standard in the software industry. The production release of Ex Machina, serving the needs of the citizen data scientist, opens a new, large, and rapidly growing marketing opportunity for C3, previously served by Alteryx. For those of you interested, I encourage you to go to our website and sign up for a free trial of Ex Machina. If you like it, buy it. I am most enthusiastic about the advancements we are making in C3 AICRM. AICRM represents the next generation of the now $80 billion addressable CRM market. I'm a market segment that I'm confident we will lead. Keep your eye on this space. You can expect a number of exciting announcements and product releases from C3 in the coming year. With Shell and Microsoft, C3 AI expanded the OpenAI Energy Initiative, an open marketplace for C3 AI applications. Announced in February, the OpenAI Initiative accelerates the deployment and availability of enterprise AI solutions to the energy industry. by providing a framework for energy operators, service providers, equipment providers, and independent software vendors to offer interoperable solutions powered by the C3 AI Suite and Microsoft Azure. Fiscal year 21 was a great year for C3 AI. The enterprise AI software market is rapidly growing. and we see accelerating interest in enterprise AI solutions across industries, geographies, and market segments. We are aggressively investing to extend our product and technology leadership, to expand our market partner ecosystem and associated distribution capacity. As we continue to execute on delivering high-value outcomes for our customers, we are increasingly well-positioned to establish a global leadership position in enterprise AI application software. Bottom line, performance was strong across the board, and we're planning for accelerating growth in the coming year. And with that, I'll turn it over to our CFO, David Barter, for more complete color on the quarter and the year. David.