C3.ai and Generative AI for Business: How Is It Unique?

Who They Are:

Executive Team:Thomas Siebel – Founder and CEOEdward Abbo - President and CTOHouman Behzadi - Executive VPHitesh Lath - Senior VP and CFONikhil Krishnan - Senior VP and CTO, Data ScienceAdi Bhashyam - Senior VP, Global SalesAdrian Rami - Group VP, Products and EngineeringMerel Witteveen - Group VP, AlliancesAlex Amato - VP, Customer Services Team Analysis:

Thomas Siebel leads the team as an industry veteran who sold Seibel Systems to Oracle in 2005. Edward Abbo previously worked as CTO at Siebel Systems from 1994-2006 and holds engineering degrees from Princeton and M.I.T.  Houman Behzadi also worked previously at Seibel Systems in leadership roles.Hitesh Lal is also a Silicon Valley veteran and holds a MBA from The Wharton School. Overall, the team seems very solid and capable in the space. What They Do:C3 AI is an Enterprise AI application software company which has built a family of software applications that enable customers to rapidly develop, deploy, and operate large-scale Enterprise AI applications. The main product lines are:

C3 AI Platform:An end-to-end platform for developing, deploying, and operating Enterprise AI Applications.

C3 AI Applications:A portfolio of industry-specific SaaS Enterprise AI applications that enable digital transformation.

C3 Generative AI:A unified knowledge source that combines the power of foundational large language models (LLMs), retrieval models, and the C3 AI Platform, to enable enterprise users to rapidly locate, retrieve, reason, and act on enterprise data and insights through an intuitive search and chat interface.

Fundamental Analysis:

Total Revenues for Q4 was $86.6m which was a 20% increased YoY growth. Subscription revenues have recovered since a dip in 2023, and now showing steady expansion again by increasing 41% year-over-year. The company has a strong balance sheet with positive free cash flow and continues to trend in the right direction. The company closed 191 agreements (a 52% increase year-over-year) including 123 pilots(151% year-over-year). It should be noted that despite this, RPO's have been in steady decline since 2022 which may put into focus continued future growth in upcoming quarters. Technical Analysis:

C3 AI earnings report is August 5 and a notable move is anticipated. Enterprise AI sector as a whole is performing extremely well.  AI price is trading above its 500dma and buy interest is picking up.  The key level here to watch is the 25-26 level as there is demand there.   On Q2 earnings beat, the upside targets would be 35.50 - 39.50.  That is where new value could be established on a good report.

Highlights and Overall Conclusion:

It is anticipated that C3ai will be a notable player in the AI space. The team appears very capable and has good, relevant experience. Recent quarterly earnings were better than expected and the financials are solid. The technical chart is strong and upside targets may be acheived in the weeks following the earnings report on August 5.