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/1 Company Overview
C3 AI is a leading enterprise artificial intelligence software provider that enables organizations to simplify and accelerate AI application development, deployment and administration. $AI was founded in 2009 by Tom Siebel - one of the pioneers of CRM
C3 AI is a leading enterprise artificial intelligence software provider that enables organizations to simplify and accelerate AI application development, deployment and administration. $AI was founded in 2009 by Tom Siebel - one of the pioneers of CRM
/2 Company Overview
$AI claims that it has the world’s most extensive Enterprise AI production footprint and that its software makes 1.1 billion predictions/day, w/4.8 million machine-learning models in use, and 622 million sensors generating data that feed into the software.
$AI claims that it has the world’s most extensive Enterprise AI production footprint and that its software makes 1.1 billion predictions/day, w/4.8 million machine-learning models in use, and 622 million sensors generating data that feed into the software.
/3 Company Overview
For the Fiscal year 2020 ending April 30th, $AI generated $157M in revenue up 71% YoY and a net loss of $69M. For six months ending October 31st, 2020, the company generated $82M in revenue, an increase of 11% YoY
For the Fiscal year 2020 ending April 30th, $AI generated $157M in revenue up 71% YoY and a net loss of $69M. For six months ending October 31st, 2020, the company generated $82M in revenue, an increase of 11% YoY
/4 Product Differentiation
So what makes C3 AI unique? well, let say a trucking company X wants to build a route optimization AI application that would reduce delivery time and improve the fuel efficiency of company trucks.
So what makes C3 AI unique? well, let say a trucking company X wants to build a route optimization AI application that would reduce delivery time and improve the fuel efficiency of company trucks.
/5 Product Differentiation
The first step would be to find a cloud vendor that would provide elastic computing and storage capacity. This can easily be provided by AWS, Azure and/or Google Cloud etc
The first step would be to find a cloud vendor that would provide elastic computing and storage capacity. This can easily be provided by AWS, Azure and/or Google Cloud etc
/6
Next, the company would need multiple tools and data services for data aggregation, integration, encryption, queuing, pipeline management, authentication, authorization, cybersecurity, analytics processing, machine learning models, visualization, etc. These include:
Next, the company would need multiple tools and data services for data aggregation, integration, encryption, queuing, pipeline management, authentication, authorization, cybersecurity, analytics processing, machine learning models, visualization, etc. These include:
/7
a) In-house (DIY) Development - invest in a team of developers that would use open source solutions and stitch together various programs, data sources, sensors, machine learning models, development tools and UX paradigms to eventually build a functional application.
a) In-house (DIY) Development - invest in a team of developers that would use open source solutions and stitch together various programs, data sources, sensors, machine learning models, development tools and UX paradigms to eventually build a functional application.
/8
However, this approach is not only complex (as shown in the figure below) but also uneconomical and unscalable
However, this approach is not only complex (as shown in the figure below) but also uneconomical and unscalable
/9
b)Use Cloud Vendor Tools - an alternative to the DIY approach is to assemble the various tools and services offered by the selected cloud vendor (e.g. AWS) and building a working AI platform.
b)Use Cloud Vendor Tools - an alternative to the DIY approach is to assemble the various tools and services offered by the selected cloud vendor (e.g. AWS) and building a working AI platform.
/10
The advantage of this method is that the tools would seamlessly work together since they were developed by the same cloud vendor and on the same platform.
The advantage of this method is that the tools would seamlessly work together since they were developed by the same cloud vendor and on the same platform.
/11
The downside, however, is that the process is exceedingly complex since it requires the writing of a thousand lines of code that's difficult and costly to maintain as well as 100+ person-days to develop and deploy.
The downside, however, is that the process is exceedingly complex since it requires the writing of a thousand lines of code that's difficult and costly to maintain as well as 100+ person-days to develop and deploy.
/12
The resulting App would also run only on that particular platform and if, say, company X wants to migrate to another provider, it would be forced to start building the App from scratch again.
The resulting App would also run only on that particular platform and if, say, company X wants to migrate to another provider, it would be forced to start building the App from scratch again.
/13
c)Use C3 AI Suite - which employs a model-driven architecture that simplifies & accelerates the development & deployment of the application by reducing the amount of code needed to write and maintain by 99% and speeds the development by a factor of 26X traditional approaches.
c)Use C3 AI Suite - which employs a model-driven architecture that simplifies & accelerates the development & deployment of the application by reducing the amount of code needed to write and maintain by 99% and speeds the development by a factor of 26X traditional approaches.
/14
Moreover, Applications developed with the C3 AI Suite can run without modification on any cloud platform.
Moreover, Applications developed with the C3 AI Suite can run without modification on any cloud platform.
/15
This gives C3 AI a competitive advantage and is why large enterprises and entities such as Royal Dutch Shell, US Air Force, AstraZeneca, Raytheon Technologies, Microsoft and Adobe use C3 AI products to deploy artificial intelligence applications and platforms at scale
This gives C3 AI a competitive advantage and is why large enterprises and entities such as Royal Dutch Shell, US Air Force, AstraZeneca, Raytheon Technologies, Microsoft and Adobe use C3 AI products to deploy artificial intelligence applications and platforms at scale
/16 More on the Product & Technology
The company provides 2 primary families of software solutions that enable customers to rapidly develop, deploy, and operate large-scale Enterprise AI applications across any infrastructure. These are:
The company provides 2 primary families of software solutions that enable customers to rapidly develop, deploy, and operate large-scale Enterprise AI applications across any infrastructure. These are:
/17
a) C3 AI Suite -the C3 AI Suite is a model-driven architecture that provides an “abstraction layer,” and allows developers to build enterprise AI applications by using conceptual models of all the elements an application requires, instead of writing lengthy code
a) C3 AI Suite -the C3 AI Suite is a model-driven architecture that provides an “abstraction layer,” and allows developers to build enterprise AI applications by using conceptual models of all the elements an application requires, instead of writing lengthy code
/18
Tis helps in scaling AI across organization rapidly, reducing cost & creating a unified platform that offers data lineage & model governance. $AI claims its Suite is the only end-to-end PAAS allowing customers design, develop, provision, & operate Enterprise AI Apps at scale.
Tis helps in scaling AI across organization rapidly, reducing cost & creating a unified platform that offers data lineage & model governance. $AI claims its Suite is the only end-to-end PAAS allowing customers design, develop, provision, & operate Enterprise AI Apps at scale.
/19
b) C3 AI Applications- pre-built SAAS applications that address a range of mission-critical use cases. These cross-industry, extensible and customizable applications include C3 AI Inventory Optimization, C3 AI Predictive Maintenance, C3 AI Fraud Detection and many more
b) C3 AI Applications- pre-built SAAS applications that address a range of mission-critical use cases. These cross-industry, extensible and customizable applications include C3 AI Inventory Optimization, C3 AI Predictive Maintenance, C3 AI Fraud Detection and many more
/20 Business Model
$AI generates revenue through 2 primary sources namely:
A) Subscription revenue - sale of subscription to the cloud-native software of C3 AI suite and C3 AI Applications. The average contract duration is 3 yrs & are non-cancelable/non-refundable. ~86% of Rev
$AI generates revenue through 2 primary sources namely:
A) Subscription revenue - sale of subscription to the cloud-native software of C3 AI suite and C3 AI Applications. The average contract duration is 3 yrs & are non-cancelable/non-refundable. ~86% of Rev
/21
B) Professional Services revenue - which consists primarily of fees associated with the implementation services for new customer deployments of C3 AI Applications such as training, application design, project management, & data modelling. The segment accounts for ~14% of rev
B) Professional Services revenue - which consists primarily of fees associated with the implementation services for new customer deployments of C3 AI Applications such as training, application design, project management, & data modelling. The segment accounts for ~14% of rev
/22 Revenue Growth rate by Segment (YoY)
Revenue growth has considerably slowed down in recent quarters, suggesting that the customers consider AI platforms as a discretionary investment that should be postponed during a recession
Revenue growth has considerably slowed down in recent quarters, suggesting that the customers consider AI platforms as a discretionary investment that should be postponed during a recession
/23 Key Metric - Remaining Performance Obligations (RPO)
represents the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods.
represents the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods.
/24 $AI Quarterly Revenue
Revenue took a hit in the most recent two quarters as the pandemic-induced recession has severely impacted sectors such as energy, industrials and financials which are the target customers of C3 AI
Revenue took a hit in the most recent two quarters as the pandemic-induced recession has severely impacted sectors such as energy, industrials and financials which are the target customers of C3 AI
/25 $AI Gross Margin and Operating Expenses as % of Revenue
$AI Historical CF
