C3.ai, Inc.

Good day, and thank you for standing by. Welcome to the C3's AI's first quarter fiscal year 2025 conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press Start11 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker for today. And, Mitt Berry, you may begin.

Good afternoon, and welcome to C3.ai's earnings call for the first quarter of fiscal year 2025, which ended on July 31st, 2024. My name is Amit Berri, and I lead investor relations at C3.ai. With me on the call today are Tom Siebel, Chairman and Chief Executive Officer, Ed Abbo, Executive Vice President and Chief Technology Officer, and Hitesh Latt, Chief Financial Officer. After the market closed today, we issued a press release with details regarding our first quarter results, as well as a supplemental to our results. both of which can be accessed through 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 related 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 with the SEC. All figures will be discussed on a non-GAAP basis unless otherwise noted. Also during 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 remarks, in response to your questions, we may discuss metrics that are incremental to our usual presentation to give greater insight into the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future. And with that, let me turn the call over to Tom.

Thank you, Amit. Good afternoon, everyone, and thank you for joining our call today. We're off to a solid start for fiscal year 25. In Q1, we exceeded all expectations for revenue, cash flow, and profitability. This quarter marked our sixth consecutive quarter of accelerating revenue growth, reflecting our high levels of customer satisfaction and increasing demand for enterprise AI applications. Our year-over-year revenue growth has accelerated from 11% in Q1 24 to 17% in Q2, 18% in Q3, 20% in Q4, and 21% in Q1, year-over-year revenue growth in Q1 of fiscal year 25. Total revenue for the quarter was $87.2 million, exceeding analyst expectations. Subscription revenue was $73.5 million and increased 20% from a year ago. Our non-GAAP gross profit was $60.9 million representing a 70% gross margin. Our GAAP operating loss was $72.6 million. Our non-GAAP operating loss was $16.6 million and substantially better than our guidance for a loss of $22 to $30 million. Our non-GAAP net loss per share was $0.05. Our net cash provided by operating activities was $8 million, and we generated free cash flow of $7.1 million in the quarter, both substantially exceed market expectations. We ended the quarter with over $760 million in cash, cash equivalents, and investments. I'll note that this is the 15th consecutive quarter as a public company in which we have met or exceeded our revenue guidance. In the first quarter, the company closed 71 agreements, including 72 new pilots, marking 117% year-over-year increase in our pilot count. We entered into new agreements with GSK, Electrobras, Valero, Swift, SmithRx, Sanofi, the U.S. Intelligence Community, the U.S. Department of Defense, Dolce & Gabbana, Ingersoll Rand, and others. Additionally, we significantly expanded our footprint across state and local government. In Q1, the company signed 25 agreements with state and local governments with municipal, county, and state agencies in Texas, California, New Jersey, Georgia, Washington, Connecticut, Virginia, Rhode Island, Maine, New Mexico, and Florida. State and local government is a large and underserved market that we're rapidly penetrating. Our solutions increase efficiency while maintaining the highest standards for accuracy, transparency, and security. They drive substantial cost savings and the combined benefits result in improved public services and improved customer experience. In short, C3AI is enabling government agencies to do more with less, ultimately benefiting the public. To quote from the successor of River Starry County, and I quote, we set the bar high for C3AI and they delivered. with over 90% model accuracy in our property valuations. This technology is letting our staff do the mundane tasks faster and easier so they can concentrate on the very complicated properties. And our employees are starting to see the fruits of this effort translating into better customer service. Overall, we are seeing incredible results with C3 AI. End quote. The proven benefits of C3AI and the C3AI state and local government suite combined with our partner supported and concentrated sales strategy resulted in accelerated sales cycle within the sector. The growth was fueled by a highly collaborative joint sales and marketing campaign with C3AI and Google Cloud to promote the C3AI state and local government suite including C3 AI property appraisal and C3 generative AI for public benefits. Through these efforts, we saw high adoption with state and local government closing 24 agreements in the quarter. Let me give you a feel for the speed of these sales cycles. In Q1, we closed an agreement with a county in the northwestern United States. County decision makers got introduced to C3 AI at an industry conference, and within 24 hours, we were in contract negotiations. Just 12 hours later, we were in contract for C3 AI property appraisal. Another example is with a county in the Southeast US. This customer attended our annual users group conference, C3 Transform, in March of 2024. Then, four weeks later, we held an executive briefing for the county leadership, and now, after three months of contract discussion, The county has signed a seven-figure, five-year subscription deal for C3 AI property appraisal. Our state and local business has grown more than 500% year over year, and we are excited about the traction, the potential for expansion, and the customer advocacy for C3 AI. As we now take these public sector solutions to market in Europe, the addressable market more than doubles. Turning to the C3AI federal business, this sector continues to experience sustained momentum, representing over 30% of our bookings for the quarter. We entered into new and expansion agreements with the United States Air Force, the US Navy, the US Marine Corps, and the US Intelligence Community, among others. These agencies trust C3AI to provide secure and innovative applications that help them modernize. The US Marine Corps and C3AI continue their successful collaboration to digitally transform the branch's legacy software systems. The Marine Corps is using the C3AI Defense and Intelligence Suite to improve the efficiency of personnel management systems by accelerating critical processes and time to decision support. This work with C3AI is backed by Manpower IT systems modernization program and aligns with the Marine Corps multiyear roadmap and goals. C3AI's customer base continues to expand both within and across industries while maintaining exceptional levels of customer satisfaction by our continued focus on delivering measurable significant enterprise value. At ElectroVos, the largest power generation transmission company in Latin America, we've partnered to enhance their grid resiliency and availability. Brazil's grid is among the world's most complex due to its diverse generation profile, variability, expansive service territory, and challenging regulatory environment. With C3 AI, ElectroVos can effectively and efficiently process and analyze real-time data servicing low-latency AI insights to mitigate network disturbances. Nucor Corporation is seeing significant success in improving manufacturing outcomes with the C3 AI supply chain suite. This deployment includes three distinct C3 AI applications, C3 AI demand forecasting, C3AI inventory optimization, and C3AI production schedule optimization, working together to support and optimize daily decision-making across multiple facilities. As we enter Q2, we are focused on expanding sales capacity, expanding in North America, expanding in Europe, and expanding in the public sector. Our partner network continues to generate opportunities and opened new deal flow. We had a very active first quarter in alliances, working closely with our partners to close 51 new agreements. Net-net, 72% of our total agreements were closed with and through our partner ecosystem. This was an increase of 155% year-over-year and 82% quarter-over-quarter. Our partner-supported bookings grew 94% year-over-year, and our activity levels with our partners that include AWS, Booz Allen, Google Cloud, and Microsoft continues to increase substantially. In the first quarter, we closed 40 agreements with Google Cloud. This is an increase of 300% year-over-year. This growth was largely driven by the joint campaign between C3.ai and Google Cloud that I just discussed earlier focused on the public sector. C3 AI continues to be an attractive partner for the hyperscalers as our 90 enterprise AI applications rapidly drive substantial workload in their compute and storage clouds while adding immediate value to our joint customers. As you can see from our supplemental deck, our bookings continue to be increasingly diverse Our generative AI business is surprisingly diverse, with many candidly unanticipated use cases across the board in a wide range of industries. In addition, our total non-Baker Hughes revenue grew 37% year-over-year in Q1. Now I'll hand it over to Ed for an update on our products and generative AI. Ed. Thank you, Tom.