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Shares of C3 AI sank 17% on Thursday, trading at a record low, after the company reported disappointing third-quarter fiscal results and announced cuts to over a quarter of its workforce.
The enterprise artificial intelligence company with the ticker AI reported $53 million in third-quarter revenue, far below LSEG estimates of $76 million.
The company reported a loss of 40 cents per share, while analysts expected a loss of 29 cents per share.
“What I consistently hear is that every CEO is making AI a top strategic priority, and they want to realize measurable economic value from it. That is exactly what our products deliver,” CEO Stephen Ehikian said on the company’s earnings call. “That said, it became clear to me that our cost structure was simply too high, and we were not organized correctly for the opportunity.”
In a regulatory filing, the company said it will eliminate 26% of its global workforce in a restructuring plan led by Ehikian.
The plan is “intended to materially improve its operating efficiency,” and also includes a 30% reduction in non-employee costs.
Ehikian took over C3 AI in September after former CEO Thomas Siebel stepped down due to vision impairment from an autoimmune disease.
C3 AI said it anticipates fourth-quarter revenue to fall between $48 million and $52 million, far below LSEG estimates of $78 million.
Fourth-quarter operating loss is expected to fall between $56 million and $64 million, a wider loss than LSEG’s $48 million loss estimate.
Citizens downgraded the company from market outperform to market perform on Thursday. Patrick Walravens wrote in a note that the firm is “stepping to the sidelines,” citing near-term new business challenges and intensifying competition.
C3 AI went public in December 2020, opening at $100 per share. Shortly after, shares traded around $180. The company is now trading at around $10 per share.
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5-year chart of C3.ai stock.
