C3.ai (AI) Q2 Earnings Report Preview: What To Look For

Radek Strnad /
2022/12/06 5:21 am EST

Artificial intelligence (AI) software company C3.ai (NYSE:AI) will be reporting results tomorrow after the bell. Here's what to look for.

Last quarter C3.ai reported revenues of $65.3 million, up 24.6% year on year, missing analyst expectations by 1.08%. It was a weak quarter for the company, with revenue guidance for both the next quarter and full year missing analysts' expectations.

Is C3.ai buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting C3.ai's revenue to grow 4.37% year on year to $60.8 million, slowing down from the 40.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.16 per share.

C3.ai Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.28%.

Looking at C3.ai's peers in the data and analytics software segment, some of them have already reported Q2 earnings results, giving us a hint what we can expect. Confluent delivered top-line growth of 47.9% year on year, beating analyst estimates by 4.76% and Elastic reported revenues up 28.3% year on year, exceeding estimates by 1.05%. Confluent traded up 16.2% on the results, Elastic was down 16.9%. Read our full analysis of Confluent's results here and Elastic's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 9.63% over the last month. C3.ai is up 1.28% during the same time, and is heading into the earnings with analyst price target of $15.4, compared to share price of $12.59.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.