C3.ai Inc, a leading provider of enterprise AI software, announced upbeat earnings and sales results for its first quarter on Wednesday. The company reported revenue of $87.2 million, representing a 21% increase year-over-year, exceeding analysts’ expectations of $86.9 million. This growth was driven by rising demand for enterprise AI solutions, marking the sixth consecutive quarter of accelerating revenue growth.
Subscription revenue, which comprises 84% of C3.ai’s total revenue, reached $73.5 million in the first quarter, up 20% year-over-year. The company also reported a loss of 5 cents per share, beating analyst estimates of a loss of 13 cents per share.
Looking ahead, C3.ai is optimistic about continued growth. The company projects second-quarter revenue to be in the range of $88.6 million to $93.6 million. For the full fiscal year, C3.ai anticipates revenue to be between $370 million and $395 million.
Despite the positive results, C3.ai shares closed down 1.9% on Wednesday, closing at $23.01. This decline can be attributed to analysts adjusting their price targets following the earnings announcement. Piper Sandler maintained a Neutral rating on C3.ai but lowered its price target from $29 to $24. Morgan Stanley downgraded C3.ai to Underweight and reduced its price target from $23 to $21. Meanwhile, Needham reiterated its Hold rating on the stock.
The strong performance of C3.ai in the first quarter highlights the growing demand for enterprise AI solutions. The company’s optimistic outlook suggests continued growth in the coming quarters. However, investor sentiment remains cautious, as evidenced by the analyst price target adjustments.
