Summary
C3 AI finished fiscal 2022 with fourth-quarter revenue of $72.3 million, up 38.3% from $52.3 million a year earlier. Full-year revenue was $252.8 million, up 38.0% from $183.2 million. Subscription revenue, which management said accounted for 82% of fiscal 2022 revenue, rose 31% to $56.3 million in the quarter and 31% to $206.9 million for the year. Gross profit for the quarter was $55.0 million, up 35.4% from the prior-year quarter, and full-year gross profit was $189.0 million, up 36.3%. Gross margin dipped to 76.0% in the quarter from 77.6% a year earlier, a decline of 1.6 percentage points. Across the full fiscal year, the company tied a lower subscription margin to higher personnel-related costs and a higher professional services margin to prioritized engineering services.
Profitability went the other direction. The operating loss widened to $56.5 million in the quarter from $23.9 million, and to $196.1 million for the fiscal year from $60.3 million. Net loss was $58.4 million for the quarter, wider than $24.1 million a year earlier, and $192.1 million for the fiscal year, wider than $55.7 million. GAAP diluted net loss per share was $1.84 for the fiscal year. Operating margin fell to -78.2% in the quarter from -45.7%, a drop of 32.4 percentage points. Stock-based compensation explains much of the gap between GAAP and non-GAAP results; it totaled $113.4 million for the fiscal year. Non-GAAP loss from operations was $20.7 million for the quarter.
Backlog and customer metrics look firmer than the income statement. Remaining performance obligations were $477.4 million at April 30, 2022, up 62.5% from $293.8 million a year earlier. The annual report breaks that total into $428.3 million of commitments from non-cancellable contracts plus deferred revenue. Deferred revenue on its own fell 34.7% to $49.1 million from $75.2 million. Customer count reached 223, up from 151, a 48% increase. Non-GAAP RPO, which adds cancellable backlog, rose 50% to $516.8 million from $345.1 million. Cash, cash equivalents, and investments stood at $992.2 million. Operating cash flow was negative $13.2 million for the quarter, up 58.5% from negative $31.7 million a year earlier, while free cash flow was negative $14.8 million compared with negative $32.2 million. Capital expenditures were $1.6 million in the quarter, up 248.1% from $0.5 million.
Management's guidance covers the next quarter and the full fiscal year. For the first quarter of fiscal 2023, the company gave ranges for total revenue and for non-GAAP loss from operations. For the full fiscal year 2023, it gave ranges for the same two measures. The company said a reconciliation of the non-GAAP guidance measures to the corresponding GAAP measures was not available on a forward-looking basis without unreasonable effort. The outlook leans on the federal pipeline and on partner-led selling rather than on the prior-year base of large lighthouse deals.
Risks center on customer concentration and demand. Baker Hughes remains the largest counterparty, with RPO of $2.3 million in deferred revenue and $212.9 million in non-cancellable commitments at April 30, 2022. Under the revised arrangement, Baker Hughes annual commitments beginning in fiscal 2023 will be reduced by revenue C3 AI generates from certain customers. International revenue was 22% of total revenue in fiscal 2022, down from 35% in fiscal 2021. The company also said the pandemic had a significant adverse impact on its conclusion of new and additional business agreements in 2022, 2021 and 2020 and could keep lengthening sales cycles. On the positive side, the U.S. Department of Defense awarded the first two orders under a five-year, $500 million agreement, bookings from oil and gas grew 95% year over year, bookings from non-oil and gas segments grew 116%, and the company finished the year with 42 turnkey enterprise AI applications.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $72.3M | $69.8M | +3.6% | $52.3M | +38.3% |
| Gross profit | $55.0M | $52.4M | +4.8% | $40.6M | +35.4% |
| Gross margin | 76.0% | 75.1% | +0.9 pp | 77.6% | -1.6 pp |
| Research & development | $46.4M | $40.9M | +13.3% | $20.7M | +123.9% |
| Sales & marketing | $47.5M | $43.1M | +10.0% | $32.1M | +47.9% |
| General & administrative | $17.6M | $15.7M | +12.1% | $11.7M | +51.2% |
| Total operating expenses | $111.5M | $99.8M | +11.7% | $64.5M | +72.9% |
| Operating income (loss) | -$56.5M | -$47.4M | -19.2% | -$23.9M | -136.4% |
| Operating margin | -78.2% | -67.9% | -10.2 pp | -45.7% | -32.4 pp |
| Net income (loss) | -$58.4M | -$39.4M | -48.1% | -$24.1M | -142.9% |
| Net margin | -80.8% | -56.5% | -24.2 pp | -46.0% | -34.8 pp |
| Customers | 2,000 | — | — | 2,000 | ±0.0% |
Risks
Net loss widened to $192.1 million for FY2022 from $55.7 million for FY2021, and operating loss widened to $196.1 million from $60.3 million, with an accumulated deficit of $541.4 million as of April 30, 2022. The filing expects net losses to continue and notes operating cash flow year to date decreased 130.2% to negative $86.5 million.
Historically a limited number of customers have accounted for a substantial portion of revenue, and average total subscription contract value is decreasing. The filing warns that the gain or loss of even a single high-value customer contract could cause significant volatility, and metrics such as net dollar-based retention rate are not accurate indicators of future revenue.
Sales cycles are long and unpredictable, approximately five months but can extend over years for large customers, and individual sales often represent a large proportion of overall sales. This makes it difficult to project when deals close, plan cash flows, and adjust costs if quarterly or annual expectations are not met.
The Enterprise AI market is intensely competitive with internal IT organizations, commercial and point solution providers, open source offerings, public cloud providers, system integrators, and larger competitors that can bundle products or sell at zero or negative margins. Competitive pressure could result in fewer orders, reduced revenue, reduced gross margins, and loss of market share.
Baker Hughes is the exclusive channel partner and reseller in oil and gas through April 30, 2025, and the arrangement was revised in October 2021. RPO related to Baker Hughes was $215.2 million as of April 30, 2022, comprising $2.3 million of deferred revenue and $212.9 million of non-cancellable commitments; termination or renegotiation could impair co-branding and oil and gas sales.
In March 2022, the company and certain current and former officers and directors were sued in a putative class action alleging material misstatements or omissions about the Baker Hughes partnership, strategic alliances, market potential, and product uptake. The filing states this could result in substantial costs and diversion of management attention.
Deferred revenue decreased 34.7% to $49.1 million at FY2022 Q4 from $75.2 million at FY2021 Q4. Because subscription revenue is recognized over the contract term, a decline in new or renewed subscriptions may not immediately affect results but will negatively affect revenue in future periods.
The ongoing COVID-19 pandemic had a significant adverse impact on the conclusion of new and additional business agreements in FY2022, FY2021, and FY2020, and may continue to lengthen sales cycles, reduce subscription values or renewals, and affect global IT spending.
Competition for executives, data scientists, engineers, software developers, and sales personnel is intense, and founder and CEO Thomas M. Siebel is critical to overall management, sales strategy, culture, and engineering. Loss of key personnel could make it more difficult to execute the business strategy.
The dual-class structure gives Class B common stock 50 votes per share, and as of April 30, 2022 Mr. Siebel and related entities beneficially owned approximately 58.8% of the voting power of outstanding capital stock. This concentrated control limits other stockholders' ability to influence corporate matters.
The company ceased to be an emerging growth company as of April 30, 2022 and now must comply with the auditor attestation requirement of Section 404 and additional disclosure requirements. This is expected to increase legal, accounting, and financial compliance costs and place strain on personnel and systems.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Non-GAAP RPO
Free Cash Flow
Customer Count
Summary, forecast, risks and KPIs are extracted from C3.ai, Inc.'s SEC filings for Q4 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.