C3.ai, Inc. · NYSE:AI

C3.ai — Q1 2023 Earnings Presentation

51 slides from C3.ai's earnings presentation, Aug 31, 2022

  1. Slide 1: C3.ai

    Ss C3.al

  2. Slide 2: Investor Supplemental FY23-Q1

    Investor Supplemental FY23-Q1 August 31, 2022

  3. Slide 3: Disclaimer

    Disclaimer This presentation contains forward-looking statements within the meaning of the Private This presentation also contains estimates and other statistical data made by independent Securities Litigation Reform Act of 1995. All statements contained in this presentation other parties and by us

  4. Slide 4: © 2022 C3.ai Inc. All Rights Reserved.

    4 © 2022 C3.ai Inc. All Rights Reserved.

  5. Slide 5: FY23-Q1 Highlights

    FY23-Q1 Highlights Solid Top-Line Highly Visible Rapid Customer Robust Attractive Growth Business Model Growth RPO Margins 25% 87% 27% 58% 81% YoY1 Growth Subscription YoY Customer RPO Growth Non-GAAP Revenue Growth YoY Gross Margin (1) FY23-Q1YTD vs FY22-Q1 YTD (2) Percentages are rounded for prese

  6. Slide 6: C3 AI Platform – Version 8

    C3 AI Platform – Version 8 • New no code, low code, deep code developer tools • New data science tools • 40x – 1000x performance and scalability improvements • New data integrations • New AI/ML Tools • New on-line remote learning library • On-line context-sensitive documentation • In-line help and d

  7. Slide 7: C3 AI Enterprise AI Platform – Version 8

    C3 AI Enterprise AI Platform – Version 8 C 3 AI AP P L I C A T I O N S C U S TO M E R AP P L I C A T I O N S SaaS Reliability Supply Chain Sustainability Defense and Financial Public Data AI CRM Customer Custom Application Suite Suite Suite Intelligence Suite Services Suite Sector Suite Vision Suite

  8. Slide 8: C3 AI's Leadership in Enterprise AI

    C3 AI’s Leadership in Enterprise AI C3 AI "...could become the de facto AI platform standard for the world’s most complex industries” 8 © 2022 C3.ai Inc. All Rights Reserved.

  9. Slide 9: The Forrester Wave

    The Forrester Wave Leader in AI and Machine Learning Platforms #1 in Strategy #1 in Product Vision #1 in Applications Tools #1 in Application Accelerators #1 in Market Approach #1 in Architecture Run-time #1 in Architecture Security #1 in Data Features #1 in Partner Ecosystem #1 in Performance 9 © 2

  10. Slide 10: C3 AI CRM

    C3 AI CRM 10 © 2022 C3.ai Inc. All Rights Reserved.

  11. Slide 11: C3 AI ESG

    C3 AI ESG 11 © 2022 C3.ai Inc. All Rights Reserved.

  12. Slide 12: C3 AI Property Appraisal

    C3 AI Property Appraisal 12 © 2022 C3.ai Inc. All Rights Reserved.

  13. Slide 13: C3 AI Law Enforcement

    C3 AI Law Enforcement 13 © 2022 C3.ai Inc. All Rights Reserved.

  14. Slide 14: C3 AI Ex Machina

    C3 AI Ex Machina 14 © 2022 C3.ai Inc. All Rights Reserved.

  15. Slide 15: View C3 AI Product Videos

    C3 AI C3 AI C3 AI Property CRM ESG Appraisal View C3 AI Product Videos on C3 AI Law C3 AI Enforcement Ex Machina https://c3.ai/applications 15 © 2022 C3.ai Inc. All Rights Reserved.

  16. Slide 16: Join Us for the C3 AI Live Demo Series

    C3 AI Reliability C3 AI Property Appraisal September 13, 2022 October 6, 2022 C3 AI CRM C3 AI Anti-Money Laundering Join Us for September 15, 2022 C3 AI Energy Management October 11, 2022 C3 AI Version 8 the C3 AI Live September 20, 2022 C3 AI Ex Machina October 13, 2022 C3 AI Production Scheduling

  17. Slide 17: © 2022 C3.ai Inc. All Rights Reserved.

    17 © 2022 C3.ai Inc. All Rights Reserved.

  18. Slide 18: © 2022 C3.ai Inc. All Rights Reserved.

    18 © 2022 C3.ai Inc. All Rights Reserved.

  19. Slide 19: © 2022 C3.ai Inc. All Rights Reserved.

    19 © 2022 C3.ai Inc. All Rights Reserved.

  20. Slide 20: AI / ML Can Unlock Significant Value for the DoD

    AI / ML Can Unlock Significant Value for the DoD B-1B 45 in-service1 18 Effective aircraft2 Aircraft Equivalent Gained with AI + 3 aircraft to +5 aircraft Budget Equivalent Gained3 +$950M to +$1,600M 1. AFGSC wraps up divestiture of 17 B-1 aircraft, moving toward B-21,Air Force Global Strike Command

  21. Slide 21: Enhanced Partner Model

    Enhanced Partner Model 21 © 2022 C3.ai Inc. All Rights Reserved.

  22. Slide 22: Market Conditions

    Market Conditions Macroeconomic uncertainty Taking decisive action 1. Reducing non-essential spending 2. Adjusting go-to-market model 3. Accelerating path to profitability 22 © 2022 C3.ai Inc. All Rights Reserved.

  23. Slide 23: Clear Path to Profitability – Non-GAAP Operating Margin

    Clear Path to Profitability – Non-GAAP Operating Margin Current Operating Margin -29% Cost of Revenue Initial Target Operating 21% Margin 2% Marketing Cost Economies of Scale 29% 21% Reduced Brand Investments Sales Cost of Revenue 11% 23% Continuous Investment in Sales Capacity Marketing 26% Sales R

  24. Slide 24: Accelerated Path to Profitability – Non-GAAP Operating Margin

    Accelerated Path to Profitability – Non-GAAP Operating Margin Current Operating Margin -29% Cost of Revenue Initial Target Operating Initial Target Operating 21% Margin Margin 2% 2% Marketing Cost Economies of Scale 29% 20% 21% Reduced Brand Investments Sales 11% Cost of Revenue 11% 23% Continuous I

  25. Slide 25: New Sales Force

    New Sales Force Strategic Solutions Sales Directors 1,029 520 51 Applications Candidates Strategic Solutions Interviewed Sales Directors Hired 25 © 2022 C3.ai Inc. All Rights Reserved.

  26. Slide 26: Consumption Base Pricing

    Consumption Base Pricing 26 © 2022 C3.ai Inc. All Rights Reserved.

  27. Slide 27: Large Integrated Energy Company

    Large Integrated Energy Company Cumulative Purchase € Million 140 120 > € 120 € 90 € 91 100 400x 80 60 € 54 40 € 35 € 36 20 € 0.3 €4 0 Initial Y2 Y3 Y4 Y5 Y6 Y7 Y8 Contract TCV 27 © 2022 C3.ai Inc. All Rights Reserved.

  28. Slide 28: Revenue Transition

    Revenue Transition Consumption Revenue Model Subscription Revenue Model 1 2 3 4 5 6 7 8 9 10 11 12 13 Quarters 28 © 2022 C3.ai Inc. All Rights Reserved.

  29. Slide 29: Revenue Transition

    Revenue Transition Consumption Revenue Model Subscription Revenue Model 1 2 3 4 5 6 7 8 9 10 11 12 13 Quarters 29 © 2022 C3.ai Inc. All Rights Reserved.

  30. Slide 30: Modeling C3 AI Consumption Based Pricing

    Modeling C3 AI Consumption Based Pricing vCPU Usage over time Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarter 8 Quarter 9 Quarter 10 vCPU Hours (in thousands) 382 509 618 727 863 991 1,127 1,255 1,410 1,546 • Typical Consumption Business Model • 2 quarter Pilot for a to

  31. Slide 31: Margin and Revenue Neutral over Ten Quarters

    Margin and Revenue Neutral over Ten Quarters Current Model vs Consumption Model $210 million in bookings Cumulative Revenue 27 transactions $0.55 per vCPU Hour Cumulative Subscription Revenue Cumulative Consumption Revenue 1 2 3 4 5 6 7 8 9 10 31 © 2022 C3.ai Inc. All Rights Reserved.

  32. Slide 32: Revenue Transition

    Revenue Transition Consumption Revenue Model Subscription Revenue Model 1 2 3 4 5 6 7 8 9 10 11 12 13 Quarters 32 © 2022 C3.ai Inc. All Rights Reserved.

  33. Slide 33: Guidance

    Guidance FY23-Q2 FY23 FY24 Total Revenue $60 – $62 million $255 – $270 million ~$340+ YoY Growth % 3% – 6% 1% – 7% ~30%+ Non-GAAP Loss from Operations ($20) – ($15) million ($98) – ($90) million Our guidance includes GAAP and non-GAAP financial measures. A reconciliation of non-GAAP guidance measure

  34. Slide 34: Finance Update

    Finance Update 34 © 2022 C3.ai Inc. All Rights Reserved.

  35. Slide 35: FY23-Q1 Summary Financial Results

    FY23-Q1 Summary Financial Results FY23-Q1 % Change Y/Y Revenue $65.3 million +25% Subscription Revenue $57.0 million +24% Non-GAAP Gross Profit $52.6 million +29% Remaining Performance Obligations (“RPO”) $458.2 million +58% Non-GAAP RPO $496.8 million +39% Non-GAAP Gross Margin 81% +2.6pts Free Cas

  36. Slide 36: Quarterly Total Revenue: FY21-Q3 to FY23-Q1

    Quarterly Total Revenue: FY21-Q3 to FY23-Q1 25% YoY Growth $ in Millions $72 $70 $65 $58 $52 $52 $49 FY21-Q3 FY21-Q4 FY22-Q1 FY22-Q2 FY22-Q3 FY22-Q4 FY23-Q1 Note: Fiscal year ends April 30. Numbers and percentages are rounded for presentation purposes. 36 © 2022 C3.ai Inc. All Rights Reserved.

  37. Slide 37: Total Revenue Mix

    Total Revenue Mix $ in Millions $65.3 25% $52.4 YoY % of Total Revenue $57.0 87% % of 24% YoY Total Revenue Subscription $46.1 Revenue 88% 32% YoY $8.3 13% Professional Services 12% $6.3 Revenue FY22-Q1 FY23-Q1 Note: Numbers and percentages are rounded for presentation purposes. 37 © 2022 C3.ai Inc.

  38. Slide 38: Non-GAAP Gross Margin

    Non-GAAP Gross Margin Non-GAAP Total Gross Margin Non-GAAP Subscription Gross Margin 81% 82% 83% 78% FY22-Q1 FY23-Q1 FY22-Q1 FY23-Q1 Note: Non-GAAP subscription and total gross margin are non-GAAP financial measures. Refer to the Appendix for a reconciliation of these non-GAAP financial measures to

  39. Slide 39: Non-GAAP Operating Income and Margin

    Non-GAAP Operating Income and Margin Non-GAAP Operating Income Non-GAAP Operating Margin FY22-Q1 FY23-Q1 FY22-Q1 FY23-Q1 $ in Millions -$14.5 -22% -$21.8 -42% Note: Non-GAAP operating income and non-GAAP operating margin, are non-GAAP financial measures. Refer to the Appendix for reconciliations of

  40. Slide 40: Deal Bands

    Deal Bands $ in Millions FY22-Q1 FY23-Q1 16 23 6 7 1 1 1 0 <$1M $1M - $5M $5M - $10M $10M + <$1M $1M - $5M $5M - $10M $10M + Average TCV $1.9 M $1.4 M Note: Fiscal year ends April 30. Numbers are rounded for presentation purposes. 40 © 2022 C3.ai Inc. All Rights Reserved.

  41. Slide 41: C3 AI Investment Thesis

    C3 AI Investment Thesis Huge Addressable Market of $596 Billion by 20251 First-mover Advantage Patented Enterprise AI Application Platform Substantial Market Partner Ecosystem Recognized AI Market Leadership Proven Track Record of Success Veteran Disciplined Management Team High-Performance Corporat

  42. Slide 42: Questions

    Questions 42 © 2022 C3.ai Inc. All Rights Reserved.

  43. Slide 43: © 2022 C3.ai Inc. All Rights Reserved.

    43 © 2022 C3.ai Inc. All Rights Reserved.

  44. Slide 44: Appendix

    Appendix 44 © 2022 C3.ai Inc. All Rights Reserved.

  45. Slide 45: Income Statement

    Income Statement 45 © 2022 C3.ai Inc. All Rights Reserved.

  46. Slide 46: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations 46 © 2022 C3.ai Inc. All Rights Reserved.

  47. Slide 47: Other Metrics

    Other Metrics We count as a Customer each distinct division, department, business unit, or group within a Customer-Entity that uses our product(s). In situations where our Customer (or Customer-Entity) has developed software using our C3 AI Application Platform or developed derivative works of our C

  48. Slide 48: Current RPO and BH related RPO

    Current RPO and BH related RPO ➢ Revenue expected to be recognized from remaining performance obligations was approximately $458.2 million as of July 31, 2022 of which $173.5 million is expected to be recognized over the next 12 months and the remainder thereafter. ➢ Our RPO related to Baker Hughes,

  49. Slide 49: Booking Diversity by Industry

    Booking Diversity by Industry Federal, Aerospace Agriculture & Forestry Life Science & Defense 3% Oil & Gas 6% Energy & Utilities 6% Energy & Utilities 10% 2% 6% Financial Services Manufacturing 2% 9% Chemicals Manufacturing 1% Computer 19% Software 1% Food Processing 1% Federal, Aerospace & FY22-Q1

  50. Slide 50: Booking Diversity by Industry (excluding Oil and Gas)

    Booking Diversity by Industry (excluding Oil and Gas) Agriculture & Forestry Energy & Utilities Lifescience 4% 3% Energy & Utilities 6% Financial Services 6% Federal, Aerospace Manufacturing & Defense 3% 10% Chemicals 15% Computer 1% Software 1% Food Processing 1% FY22-Q1 FY23-Q1 Federal, Aerospace

  51. Slide 51: C3.ai

    Ss C3.al

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