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C3.ai Names New CFO, Tenth to Hold Role In Less Than a Decade

In Business
February 29, 2024

(Bloomberg) — C3.ai Inc. jumped more than 13% in extended trading after reporting sales that suggested customers are responding positively to the software company’s new artificial intelligence-based apps.

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Revenue increased 18% to $78.4 million in the fiscal third quarter, topping analysts’ average estimate of $76.1 million. Sales will be $82 million to $86 million in period ending in April, C3.ai said Wednesday in a statement. Analysts, on average, estimated $84.5 million.

The Redwood City, California-based company, which went public in 2020, is known for its data management and analysis software. It has introduced products over the last year with generative AI, software that creates text and images in response to a user’s prompts, hoping to capitalize on the wide interest in the technology. The company is also transitioning to consumption-based pricing, in which customers essentially pay for what they use, from subscription-based. The change has caused some disruption in revenue growth.

“Customer engagement grew 80% year-over-year,” Chief Executive Officer Tom Siebel said in the statement. “Our significant first mover advantage in Enterprise AI is generating tailwinds as market interest in adopting AI accelerates.”

Read More: C3.ai Criticized for Product Delays, Tom Siebel’s Micromanaging

The shares increased to a high of $35.69 in extended trading after closing at $29.69 in New York. C3.ai, whose ticker is “AI,” tripled in value in the early months of 2023 as AI-mania swept Wall Street. Still, some investors remain skeptical that the company will live up to the hype, and the stock has increased just 3.4% this year.

Separately, the company announced that Chief Financial Officer Juho Parkkinen, who has been in the role since 2022, will step down and become vice president of finance. Hitesh Lath, who had joined C3.ai in December as chief accounting officer, will succeed Parkkinen.

Lath will be at least the 10th person to hold the CFO role since 2015. One point of caution raised by activist investors last year was the high turnover in the post. The change “is likely to draw questions around underlying reasons for high management churn,” Bloomberg Intelligence analyst Sunil Rajgopal said in an interview, adding that Lath’s accounting background may mean higher scrutiny on costs.

In November, the company cut workers and spoke of the need for cost savings.

(Updates with comments from analyst in the seventh paragraph.)

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