Summary
C3.ai finished fiscal 2024 with a fifth consecutive quarter of accelerating top-line growth and another wider GAAP loss. Fourth quarter revenue rose 19.6% to $86.6 million from $72.4 million a year earlier. Full year revenue reached $310.6 million, up 16.4% from $266.8 million. The company sells enterprise AI applications, and management said the offerings have been adopted across 19 industries.
Profitability remains the pressure point. Fourth quarter GAAP gross profit was $51.6 million, up 8.7% from $47.5 million, but gross margin fell to 59.6% from 65.6% as subscription delivery costs grew faster than revenue. Full year gross profit slipped 1.1% to $178.6 million from $180.5 million, and gross margin dropped to 57.5% from 67.6%. The quarterly operating loss widened to $82.3 million from $73.3 million, and the quarterly net loss widened to $72.9 million from $65.0 million. Full year operating loss was $318.3 million against $290.5 million, and full year net loss was $279.7 million against $268.8 million. One offset: operating margin improved to -95.1% in the quarter from -101.2%, and to -102.5% from -108.9% for the year. Full year diluted loss per share narrowed to $2.34 from $2.45. Stock-based compensation remains the largest gap between GAAP and non-GAAP results.
Cash trends improved across the full year. Operating cash flow was $21.3 million in the quarter, down from $27.1 million a year ago, while the full year outflow narrowed to $62.4 million from $115.7 million. Capital expenditures fell 76.4% in the quarter to $2.5 million from $10.8 million, and dropped to $25.3 million from $70.5 million for the full year. Free cash flow, a non-GAAP measure the company defines as operating cash flow less property and equipment purchases and capitalized software development costs, was positive at $18.8 million in the quarter. Management expects to keep investing in growth and expects operating losses and negative operating cash flow for the next few quarters.
Demand is concentrated in federal work and generative AI. C3.ai closed 191 agreements in fiscal 2024, up 52%, including 123 pilots, up 151%. Federal, defense and aerospace accounted for 49.5% of fourth quarter bookings, followed by oil and gas at 15.2% and state and local government at 10.8%. Federal revenue more than doubled for the year, and the company closed 65 federal agreements, up 48%. Partner-supported bookings grew 76% in the quarter, and the joint 12-month qualified opportunity pipeline with partners increased 63% year over year. Customer Engagement, the activity-based customer metric, reached 487 at April 30, 2024, up from 287 a year earlier. In the fourth quarter the company closed 13 generative AI pilots, part of 58 such pilots across 15 industries for the year.
Backlog keeps shrinking as the pricing model changes. Deferred revenue was $39.0 million at April 30, 2024, down 18.6% from $47.9 million a year earlier. Remaining performance obligations fell 35.9% to $244.3 million from $381.4 million. Management attributes both declines to the shift toward consumption-based pricing, which lowers average selling price and often avoids multi-period commitments, and it expects RPO to keep falling. Guidance for the first quarter of fiscal 2025 calls for a non-GAAP operating loss of $22.0 million to $30.0 million. For the full fiscal year 2025, the company projects a non-GAAP operating loss of $95.0 million to $125.0 million and points to revenue growth of approximately 23%. Named risks include a history of losses, dependence on a limited number of large customers, long and unpredictable sales cycles, and macroeconomic pressure that pushes customers to rationalize budgets.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $86.6M | $78.4M | +10.4% | $72.4M | +19.6% |
| Gross profit | $51.6M | $45.3M | +14.0% | $47.5M | +8.7% |
| Gross margin | 59.6% | 57.8% | +1.8 pp | 65.6% | -6.0 pp |
| Research & development | $50.6M | $49.5M | +2.3% | $49.7M | +1.9% |
| Sales & marketing | $63.2M | $57.1M | +10.7% | $51.7M | +22.3% |
| General & administrative | $20.1M | $21.2M | -5.5% | $19.4M | +3.4% |
| Total operating expenses | $133.9M | $127.8M | +4.8% | $120.8M | +10.9% |
| Operating income (loss) | -$82.3M | -$82.5M | +0.3% | -$73.3M | -12.3% |
| Operating margin | -95.0% | -105.3% | +10.2 pp | -101.2% | +6.2 pp |
| Net income (loss) | -$72.9M | -$72.6M | -0.4% | -$65.0M | -12.3% |
| Net margin | -84.2% | -92.6% | +8.4 pp | -89.7% | +5.5 pp |
| Diluted EPS | -$0.61 | -$0.60 | -$0.01 | — | — |
Risks
The transition from subscription-based to consumption-based pricing has negatively affected revenue growth, with average selling price and RPO generally decreasing. RPO declined 35.9% to $244.3 million as of April 30, 2024 compared to $381.4 million as of April 30, 2023, and the company expects RPO to continue to decline.
A limited number of customers have historically accounted for a substantial portion of revenue, and certain customers have reduced spend or decided not to renew. Average total subscription contract value is decreasing, and the company expects it to continue decreasing as it expands to smaller customers.
Sales cycles can be long and unpredictable, particularly for large subscriptions, and individual sales may represent a large proportion of overall sales in a period. The company may spend substantial time and money on sales efforts without assurance of sales, and its results can fluctuate based on the timing of large deals.
Future success depends on existing customers renewing and expanding subscriptions and on converting pilots and trials into paying customers. The company has limited experience with customer renewals of its AI products, and customers have no obligation to renew after contract expiry.
The market for Enterprise AI is intensely competitive, and many competitors have greater name recognition, larger sales and marketing budgets, and broader product lines. Competitors may bundle offerings, sell at zero or negative margins, or offer closed platforms, which could reduce demand for C3 AI Software.
Gross margin declined to 57.5% for fiscal year 2024 from 67.6% for fiscal year 2023, and subscription margin decreased due to higher personnel-related costs and stock-based compensation. Continued investments in growth may further pressure margins.
The company depends heavily on founder and CEO Thomas M. Siebel, who is critical to overall management, sales strategy, culture, and engineering. The loss of Mr. Siebel or other senior management could make it difficult to execute the business strategy.
A short seller report published on April 4, 2023 contained allegations against the company. Any inquiry or formal investigation from a governmental organization, including the SEC or the U.S. Department of Justice, could result in a material diversion of management's time and adversely affect the business.
The company expects to continue to incur operating losses and generate negative cash flows from operations in the next few quarters, and may require additional capital to execute on strategic initiatives. If unable to raise additional capital on acceptable terms, it may not be able to compete successfully.
The company incurred net losses of $279.7 million for fiscal year 2024 and $268.8 million for fiscal year 2023, and expects to continue to incur net losses for the foreseeable future. It also expects operating expenses to increase in future periods.
Adverse macroeconomic conditions, including inflation, higher interest rates, and capital markets volatility, are causing customers to optimize consumption, rationalize budgets, and prioritize cash flow management, which may continue to impact the business and financial condition.
The company expects to invest heavily in generative AI, but new applications and features may fail to engage customers or may suffer from performance and quality issues. If new offerings do not achieve market acceptance, the company may not realize a return on its investments.
SaaS KPIs
All quarters →RPO
Customer Engagement
Summary, forecast, risks and KPIs are extracted from C3.ai, Inc.'s SEC filings for Q4 FY2024 (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.