What To Expect From C3.ai’s (AI) Q2 Earnings

Petr Huřťák /
2023/12/05 2:01 am EST

Artificial intelligence (AI) software company C3.ai (NYSE:AI) will be reporting earnings tomorrow afternoon. Here's what to look for.

Last quarter C3.ai reported revenues of $72.36 million, up 10.8% year on year, beating analyst revenue expectations by 1.1%. It was a mixed quarter for the company, with revenue narrowly topping analysts' expectations. However, gross margin missed and has generally been on a downward trend. Looking ahead, its full-year revenue guidance came in higher than Wall Street's estimates. However, the outlook for the full year operating loss is larger.

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 19.1% year on year to $74.33 million, improving on the 7.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.18 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 1.9%.

Looking at C3.ai's peers in the data infrastructure segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Teradata delivered top-line growth of 5% year on year, beating analyst estimates by 0.4% and Elastic reported revenues up 17.5% year on year, exceeding estimates by 2.2%. Teradata traded up 1.1% on the results, and Elastic traded up 15.8%.

Read our full analysis of Teradata's results here and Elastic's results here.

There has been positive sentiment among investors in the data infrastructure segment, with the stocks up on average 14.7% over the last month. C3.ai is up 12.5% during the same time, and is heading into the earnings with analyst price target of $27.3, compared to share price of $30.3.

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.

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