Shares of C3.ai (AI) soared in after-hours trading after the software company reported earnings for its second quarter of Fiscal Year 2025. Earnings per share came in at -$0.06, which beat analysts’ consensus estimate of -$0.16 per share. Sales increased by 28.8% year-over-year, with revenue hitting $94.3 million. This also beat analysts’ expectations of $91.02 million.
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The solid results were driven by artificial intelligence-related spending that remained strong during the quarter. This also led to a 22% rise in subscription revenue to $81.2 million and a 94% increase in professional services revenue to $13.2 million.
Furthermore, CEO Thomas M. Siebel said that he sees significant potential in the firm’s strategic alliance with Microsoft (MSFT), as it will position C3ai as a preferred artificial intelligence application provider on Azure and streamline the use of C3 AI applications. Indeed, Siebel views this collaboration as a pivotal moment for driving growth in the Enterprise AI sector.
C3.ai Provides Guidance
Looking forward, management has provided the following guidance for the rest of 2025:
- Q3 revenue between $95.5 million and $100.5 million versus estimates of $97.567 million
- Q3 loss from operations of -$38.6 million to -$46.6 million compared to expectations of -$30.2 million
- FY25 revenue between $378 million and $398 million versus estimates of $382.6 million
- FY25 loss from operations of -$105 million to -$135 million compared to expectations of -$107.3 million
As you can see, guidance was more of a mixed bag than a solid beat. However, investors seem to be focusing on the fact that full-year revenue guidance came in better-than-expected at the midpoint, which sent shares soaring in after-hours trading despite the fact that C3.ai stock rallied heading into earnings. This suggests that the hype surrounding artificial intelligence stocks remains strong.
What Is the Price Target for AI?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on C3.ai stock based on one Buy and one Hold assigned in the past three months. After a 48% rally in its share price over the past year, the average C3.ai price target of $37.50 per share implies 10% downside risk. However, it’s worth noting that estimates will likely change following today’s earnings report.
