C3.ai (AI) Q1 2025 earnings summary

Executive summary

• Q1 FY25 revenue grew 21% year-over-year to $87.2 million, with subscription revenue at $73.5 million (84–85% of total) and professional services up 25%.

• Closed 71 agreements, including 52 new pilots, with 72% through the partner network and 40 deals via Google Cloud, up 300% year-over-year.

• Expanded presence in state and local government, signing 25 agreements and growing public sector business over 500% year-over-year.

• Federal sector represented over 30% of bookings, with new and expansion agreements across multiple U.S. defense and intelligence agencies.

• Customer engagement increased to 551 from 334 a year ago, reflecting growth in pilots and trials.

Financial highlights

• Non-GAAP gross profit was $60.9 million (70% margin); GAAP gross profit was $52.2 million (60% margin), both up year-over-year.

• Non-GAAP operating loss was $16.6 million, better than guidance; non-GAAP net loss per share was $0.05; GAAP net loss per share was $0.50.

• Net cash from operating activities was $8 million; free cash flow was $7.1 million.

• Ended Q1 with $762.5 million in cash, cash equivalents, and marketable securities.

• Professional services revenue was $13.7–$13.8 million, 16% of total revenue, with services gross margin over 90%.

Outlook and guidance

• Q2 FY25 revenue guidance: $88.6–$93.6 million; FY25 revenue guidance: $370–$395 million, implying 19%–27% year-over-year growth.

• Non-GAAP operating loss guidance for Q2: $26.7–$34.7 million; FY25: $95.0–$125.0 million.

• Expect to be free cash flow negative in Q2 and Q3, but positive in Q4 and for the full year.

• Management believes existing cash and marketable securities are sufficient to support operations for at least the next 12 months.

• Transition to a consumption-based pricing model is expected to continue impacting average selling price and remaining performance obligations.