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Software company C3.ai issues disappointing outlook, stock falls

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Yahoo Finance Live anchors discuss fourth-quarter earnings for software company C3.ai.

Video Transcript

BRAD SMITH: From the Chewy quarter to AI, C3.AI--

BRIAN SOZZI: Good stock here, Brad.

BRAD SMITH: Yeah, shares of software company, C3.AI, under pressure following disappointing guidance. The CEO noting current economic and political uncertainty, along with pervasive market pacifism, lends to the company's inclination to set the expectations a little bit lower here. And so, I think for this company and C3.AI, particularly here, they're going to call out things like subscription revenue for the quarter, increase of 31%, the increase of 38% on their overall revenue for the quarter as well, $72.3 million compared to the $52.3 million one year ago.

But again, it's going forward from here, where does the company actually see some of that sustained growth? And I think the investors are hardly digesting, or digesting and very hardly, I would say, some of that growth and where it's going to come from at this point in time, when you had seen so many of the pandemic plays, and C3 and anything having to do with the cloud or artificial intelligence, or any of the apps that would be directly leaning on some of the C3 solutions and applications, those opportunities, it's now gone fully organic. And if you haven't invested in that organic growth, it's really a question of, all right, where are those opportunities going to come from?

BRIAN SOZZI: I do like their logo. It's a very nice logo. A couple-- yeah, a couple of things worth noting here as well. Friend of the show, Dan Ives over at Wedbush, noting, this is another debacle quarter and guidance. The disappointment continues. He's-- Ives is really-- was a neutral rating on C3.AI, really taking this company to task, and now saying the company's, quote, "credibility in the eyes of the Street have been damaged," really disappointing consistently in terms of results since they went public.

But what bothered me, another thing bothering me among many things this morning, Thomas Siebel, a longtime tech executive, on the earnings call last night, said they are seeing customers push orders back. When you see a veteran tech executive like Thomas Siebel step up on its earnings call and say, hey, customers are a little cautious right now because of the economic environment, that is another one of those. You draw a box on your thing, and you check it, because that's a red flag, too.

BRAD SMITH: Yeah, absolutely. Let's say--