(Bloomberg) — C3.ai Inc. soars more than 13% in after-hours trading after reporting sales that suggest customers are responding favorably to the software company’s new artificial intelligence-based app. did.
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Third-quarter sales rose 18% to $78.4 million, beating analysts' average estimate of $76.1 million. C3.ai said in a statement Wednesday that it expects sales for the period ending in April to be between $82 million and $86 million. The average analyst estimate was $84.5 million.
The Redwood City, Calif.-based company went public in 2020 and is known for its data management and analytics software. Last year, the company introduced a product powered by generative AI (software that creates text and images in response to user prompts) and hopes to capitalize on widespread interest in the technology. The company is also moving from subscription-based to consumption-based pricing, where customers essentially pay for what they use. This change caused some disruption to revenue growth.
“Customer engagement increased 80% year over year,” CEO Tom Siebel said in a statement. “Our significant first-mover advantage in enterprise AI creates tailwinds as market interest in AI adoption accelerates.”
Read more: C3.ai criticized for product delays, micromanaged by Tom Siebel
The stock price closed at $29.69 in New York, before rising to a high of $35.69 in extended trading. C3.ai, which has the ticker “AI,” tripled in value in the first few months of 2023 as AI mania took Wall Street by storm. Still, some investors are skeptical the company can live up to the hype, with shares up just 3.4% this year.
Separately, the company announced that Chief Financial Officer Juho Parkkinen, who has held the position since 2022, will step down and become vice president of finance. Parkkinen will be replaced by Hitesh Lath, who joined C3.ai in December as chief accounting officer.
Russ is at least the 10th person to hold the CFO role since 2015. One of the red flags raised by activist investors last year was the high turnover rate in the position. Bloomberg Intelligence analyst Sunil Rajgopal said in an interview that the changes are “likely to raise questions about the underlying reasons why executive turnover is so high,” adding that Rath's accounting background may have contributed to the cost That could mean increased scrutiny, it added.
The company cut its workforce in November and said it needed to cut costs.
(Updates with analyst comment in seventh paragraph.)
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