C3.ai, Inc. (AI) Q3 2022 Earnings Report, Transcript and Summary

Good afternoon, and thank you for attending today's C3 AI Third Quarter Fiscal Earnings Call. My name is Amber, and I will be your moderator for today's call. [Operator Instructions] It's now my pleasure to hand the conference over to our host, Paul Phillips with C3 AI. Paul, please proceed.

Good afternoon, and welcome to C3 AI's earnings call for the third quarter of fiscal year 2022, which ended January 31, '22. My name is Paul Phillips, and I'm the Vice President of Investor Relations. With me on the call today is Tom Siebel, Chairman and Chief Executive Officer. After the market closed today, we issued a press release with details regarding our third quarter results as well as a supplement to our results both of which can be accessed on the Investor Relations section of our website at ir.c3.ai. This call is being webcast, and a replay will be available on our IR website following the conclusion of the call. During today's call, we will make statements relating to our business that may be considered forward-looking under federal securities laws. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our actual results, please refer to our filings with the SEC. Also, during the course of today's call, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our press release. Finally, at times in our prepared comments and response to your questions, we may discuss metrics that are incremental to our usual presentation to give greater insight into the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future. With that, let me turn the call over to Tom for his prepared remarks. Tom?

Thank you, Paul. And hi, everybody. Thank you for joining us today. I'm very pleased to give you a briefing on the results of the quarter that we recently concluded. It was a great quarter. Our third quarter results displayed strength in all aspects of our business, including revenue growth of 42% year-over-year. New business activity was exceptionally strong. Our results were driven by substantially increased sales momentum, due to the successful refocusing of our sales organization, continually expanding customer count, the continual expansions of the C3 application footprints within existing customers, and increased industry diversification for our AI products and sales. Highlights of the third quarter include revenue. Total revenue for the quarter was $69.8 million, an increase of 42% year-over-year. Subscription revenue for the quarter was $57.1 million, an increase of 34%. Customer count increased 82% year-over-year to 218. Non-GAAP gross profit for the quarter was $55.8 million and 80% gross margin. And significantly, our GAAP RPO now represents 168% of Q3 annualized sales. Let me touch on customer wins and expansions. Business from contracts executed in the quarter showed substantially increased industry diversification. 32% was from utilities, 30% of our business was from chemical industry, 20% from agribusiness, 12% from financial services. I've spoken in the past about our emphasis to increase our business with small and medium customers, and I'm pleased to report that we made excellent progress in that regard. During the quarter, we executed 12 agreements of less than $1 million; 3 contracts between $1 million and $5 million; 2 transactions between $5 million and $10 million and 3 agreements in the range of $10 million to $50 million. Shell, which is one of our largest customers, continues to expand its C3 application footprint with over 10,000 devices currently monitored by C3 AI machine learning models and 23 large-scale assets in production deployment, including Pernis, the largest refinery in Europe and Nigeria LNG. Understand it's an asset, we're not talking about here by a pump or we're not talking about a valve. By asset we're talking about Pernis. Pernis, for those who you know, this is the largest refinery in Europe. I think they process 0.5 billion barrels of oil a day, and this would be an asset the size of, say, order of magnitude of, say, 10 aircraft carriers. So that's what they call an asset. And there are 23 assets that size currently in production. Shell currently processes 1.3 trillion predictions per month with the C3 AI Suite. And Shell expanded both the duration and the scale of its contractual relationship with C3 during the quarter. The Department of Defense awarded C3 AI a 5-year $500 million transaction agreement, accelerating the ability for any DoD agency to acquire the company's suite of enterprise AI application products and services basically without an RFP and without competitive bidding. We achieved a new production deployment with the Defense Counterintelligence and Security Agency and secured additional business with the U.S. Space Force. LyondellBasell, one of the world's largest plastics and chemical company, signed a 5-year significantly expanded contract to accelerate the deployment of additional enterprise AI and machine learning applications across the company. Royal Philips, a global leader in health technology, closed a new and expanded contract with C3 to enhance resiliency, visibility and agility for Philips supply chains across the company's North American operations. Cargill substantially increased and extended its C3 AI contract to expand its deployment of C3 AI Supply Chain Suite applications. ENGIE, our energy services partner, expanded the use and extended the term of its C3 AI contract to deliver a broader range of AI-enabled end-to-end energy and sustainability think ESG solutions to serve both the public and private sectors. Swift, the global provider of secured financial messaging services, expanded its relationship with C3 AI, leveraging the C3 AI Financial Services Suite. Our business activity with our joint venture alliance partner, BakerHughesC3.ai continues to accelerate globally. I'll talk more about that later, and our customer count increased substantially year-over-year. Touch upon a few other corporate highlights. Sales in the third fiscal quarter, the company successfully refocused its sales organizations to its traditional strategic accounts engagement model, delivering immediate and positive results. Leadership, C3 AI appointed Lisa Davis to its Board of Directors. Lisa is a recognized global leader in industrial and energy industry, bringing more 30 years' experience to the company. She has served in various capacities and leadership positions with several of the world's largest corporations, including Texaco and Shell and as CEO of Siemens Gas and Power. We received some very significant AI tailwinds in the federal sector when the President signed into law in December, the fiscal year 2022 National Defense Authorization Act. And in that act, Section 227 requires that "the Secretary of Defense shall ensure that to the maximum extent practicable, commercial artificial intelligence companies are able to offer platform, services and applications and tools to the Department of Defense components through processes under Part 12 of the Federal Acquisition Regulations." We believe this represents a secular change in procurement policies for AI solutions for DoD requiring primacy in the selection and use of commercial off-the-shelf software solutions from commercial vendors like C3 AI rather than traditional custom development by custom project-specific developers that have been largely proven to be unsuccessful. We believe this will help to continue to accelerate C3 AI's federal business in the coming years. Importantly, C3 AI opened a new software development and professional services center in Guadalajara, Mexico. We plan to hire as many as 1,000 senior software and service engineers in Mexico over the next few years. C3 AI is making this investment to meet the growing global demand for enterprise AI applications and associated services and because the talent pool in Guadalajara is amongst the best in the world. Comment on cash reserves. With $1.02 billion in cash, cash equivalents and investments, C3 AI is well positioned to continue to invest in market leadership through enterprise AI innovation and brand equity and sales expansion. Let me talk for a minute about go-to-market partners. Our most significant go-to-market partners are Microsoft, AWS, Google Cloud and Baker Hughes. Microsoft, we have closed over $250 million in business with Microsoft to date. As I speak, we are currently engaged in over 50 active joint customer discussions. Our qualified joint pipeline that we're ordering together globally is massive. AWS, year-to-date, we've closed over $70 million volume business with AWS, and our AWS joint selling activity has increased substantially in the public sector. Google Cloud, a relatively new partnership. We have 42 joint prospects in active engagement today. Google has assigned a team of 11 full-time professionals to coordinate sales activities with C3. We may literally daily to coordinate sales activities. Google is a platinum sponsor at C3 Transform, our International Users Group conference that will take place in March in Miami. And Thomas Kurian, the Google GCP CEO will be delivering a plenary keynote address at that conference. Baker Hughes remains our most strategic partner. They are also a platinum sponsor of C3 Transform. They will also be delivering a plenary keynote. As you know, in Q3, they expanded their partnership agreement with C3 to substantially increase both the term and the amount of their commitment to us. In the third quarter, 32% of our business was closed through the BakerHughesC3.ai partnership. That's up from 17% or 18% a year ago, and in dollar value, that represents a 700% growth year-over-year. To be clear, all of the business in the partnership in Q3 from the Baker Hughes partnership came from third-party users. None of the business came -- none of the growth in RPO came from Baker Hughes. Baker Hughes currently have 60 full-time professionals coordinating selling with us. Our pipeline and joint sales activities with which we are gauged remains quite healthy. Let me address one more time the -- I'll talk about the addressable market. We are looking at a huge addressable market. Recent data from IDC suggests that the total addressable market for enterprise AI software is exceptionally large to the tune of $365 billion this year and expected to exceed $590 billion in 2025. We believe that C3 AI is, if not the largest, certainly one of the largest participants in this rapidly growing market segment. We continue to be focused on establishing and maintaining market leadership and we believe the company is on track to achieve that objective. Bottom line, it was a great quarter. Sales, growth, partnering, technology leadership and the company is back on track. I wanted to inform you also that last Friday, the company accepted the resignation of Adeel Manzoor, our CFO of 12 weeks, who resigned for entirely personal reasons. Due to the sensitivity of the personal issues involved, we will have no further comment on this matter. That being said, I am pleased to inform you that Juho Parkkinen, our highly experienced Controller and Chief Accounting Officer, has been promoted to the role of acting CFO effective immediately. You'll find that Juho has exceptional expertise and experience in all matters accounting as it relates to C3 AI. And with that, I am pleased to turn that over to my colleague, Juho, to provide additional color on the quarter. Juho?

Thanks, Tom. I'll start with a review of our third quarter results. And following that, I'll provide our outlook for the fourth quarter and full fiscal year '22, then we'll be happy to take your questions. First, let's start with the third quarter results. Total revenue for the quarter was $69.8 million, up 42% year-over-year and above our guidance range of $66 million to $68 million. Subscription revenue was $57.1 million, up 34% year-over-year. Subscription revenue was approximately 82% of total revenue in the third quarter compared to 87% a year ago. Professional services revenue was $12.7 million. As Tom mentioned earlier, for the third quarter, remaining performance obligations or GAAP RPO, increased by 90% on a year-over-year basis to $469.3 million, up from $247.5 million last year, of which $171.6 million is expected to be recognized over the next 12 months and the remainder thereafter. Non-GAAP RPO increased by 81% to $536.7 million, up from $295.9 million last year. The RPO growth reflects a healthy industry mix as Tom mentioned in his earlier remarks. Baker Hughes-related RPO growth to third-party companies contributed 32% of total growth in RPO compared to 18% a year ago period. As of Q3 FY '22, customer count increased to 218, up 82% year-over-year. We believe this reflects the success of our go-to-market strategy of entering into large enterprise agreements with our customer entities and expanding within those customer entities. During the quarter, we performed an analysis of our customer entity usage and found that our previous customer count did not capture all the distinct divisions, departments, business units or groups within customer entities that are using our software or services. As part of the earnings release under section Other Metrics, we have provided the apples-to-apples comparison of customer count using the appropriate calculation. You will see that we have previously undercounted our customers. We will present the revised calculation of customer on a go-forward basis as we believe this provides more clarity and accuracy. Moving down the income statement. I will be discussing all metrics on a non-GAAP basis unless otherwise noted. As a reminder, our non-GAAP amounts exclude stock-based compensation expense and the employer portion of payroll tax expense related to stock transactions. A GAAP to non-GAAP reconciliation is provided with our earnings press release. Gross profit was $55.8 million in the third quarter, an increase of 50% from a year ago, primarily driven by revenue growth from new and existing contracts. Gross margin was 80% compared to 76% a year ago. This improvement reflects the inherent leverage in our operating model as our business continues to scale. Subscription gross margin in the quarter was 83%, in line with 84% one year ago, and professional services gross margin was 66% compared to 21% a year ago. Operating expenses were $71.5 million, up 45% from a year ago, reflecting our continuous and planned investments in research and development, brand awareness and sales and marketing. We expect to continue to invest aggressively in sales and marketing and R&D to expand our market share and increase our presence in target industry verticals and geographic markets while continuing to extend our technology leadership position as the enterprise AI software company. All of these initiatives will drive growth in our business. Total operating loss was $15.7 million in the third quarter. Turning to our balance sheet and cash flows. We ended the quarter with $1.02 billion in cash, cash equivalents and investments with no debt. Operating cash flow for the quarter was an outflow of $55.4 million and after capital expenditures of $0.8 million, free cash outflow was $56.2 million. At quarter-end, deferred revenue was $59.4 million compared to $62.3 million in the prior year. We are well positioned to continue to invest in our growth and execute on our growth strategy. Turning to our guidance for the fourth quarter and full year of fiscal '22. Our growing diversified customer base and increased sales momentum reinforces our confidence as we look forward. For the fourth quarter, we expect total revenue in the range of $71 million to $72 million, representing a growth of 36% to 38% from a year ago. We expect to continue to invest in R&D and sales and marketing that will drive the future growth of our business and anticipate a non-GAAP operating loss between $34 million and $30 million. For the full year of fiscal '22, we are increasing our revenue guidance to the range of $251 million to $252 million, representing a growth of 37% to 38%. We anticipate a non-GAAP operating loss in the range of $94 million to $90 million, an improvement from our prior guidance. In addition, the early indicators for Q1 fiscal '23 have us expect a similar total revenue as for Q4 fiscal '22 and for the full year fiscal '23, the analyst consensus is in line with our growth expectations. In summary, we're pleased to report third quarter results that were ahead of our guidance ranges. We are excited about our current sales momentum and customer growth as well as diversification, all of which supports our outlook for the remainder of fiscal '22 and beyond. With that, I'll turn the call over to the operator for questions. Operator?

[Operator Instructions]. Our first question comes from Pat Walravens with JPMorgan.

It's JMP, it's not JPMorgan. But -- so Mr. Parkkinen, congratulations on the promotion. If you don't mind, I'd like to start with a question for you, and then I'll do one for Tom. And also, thank you, by the way, for giving us a rough idea of what next year should look like. It's very helpful. But the third CFO in a very short period of time. So the question everyone is going to have is are you comfortable that there are no accounting or financial reporting issues at C3?

Yes, thank you for that question. Yes, I've been here for a little over a year. I joined as the Vice President of Accounting, very quickly assumed the role of a Controller. In December, I was promoted to be Chief Accounting Officer. And I've been intimately involved with all the financial statements ever since I joined. I have no concerns whatsoever that all of our financials are top-notch and in line with generally accepted accounting principles. I'd like to also add that we have a very, very qualified accounting team. Just in the past year, we've enhanced the capabilities internally significantly, including multiple CPAs, lots of big fore background, lots of master's degrees as well as we use external providers to help us in various technical accounting topics. So overall, I think our accounting is in top shape, and the financial statements are in top shape.

Okay. Great. That's very helpful. And then Tom, given the just tragic situation that's unfolding in the Ukraine, it seems to me the biggest opportunity in the place that C3 can possibly do the most good is by helping our Department of Defense and maybe that of our allies. So if you could -- to the extent you can, if you can discuss the opportunity there, I think that would be interesting.

Great question, Pat. I think that business activity that we're seeing in the U.S. federal area in the defense intelligence community is very significant. This change in federal procurement policy is very significant, basically mandating the Secretary of Defense put in procedures in place to ensure that commercial software is considered first. And right now, the DoD has 600 build-it-yourself projects. So this affects all 600 of those projects. We are very actively engaged with the Department of the Army, the Department of the Air Force and with some of the intelligence agencies in some very large projects. We just received, as you know, $0.5 billion transaction authorization, making it very easy for these departments to opt to procure with us. So we are expanding that business in a very substantial way. General Ed. Cardon joining us, the Head of Federal Systems, H.R. McMaster recently joining our Advisory Board, Condi Rice on the Board. I think you'll see some additional significant additions to the Federal Advisory team. And I think we're going to be very, very well positioned to help serve the United States federal government and the Department of Defense. And to the extent that we have the opportunity to do so, we consider it a privilege. So I think that looks like a big opportunity, and we are very focused on it.

Our next question comes from Jamie Shelton with Deutsche Bank.

Can you hear me okay?

You're loud and clear, Jamie.

Brilliant. I'm on for Patrick Colville. Just a quick one for me. I noticed customer entities ticked down by 3 sequentially. If possible could you provide any additional color there, if there is any.

Jamie, this is Juho. So the customer entities numbers, our starting premise is that we only count as a customer entity or a customer, any such entity that had revenue in the period. So as in our life cycle of a customer, there can be trials in a given quarter that would be included in the customer into the account for that quarter. And at the following quarter, the customer may not yet be ready to convert to an application or a platform purchase. So it could -- they could show up 1 quarter after again on the customer count. So you would be expected to see this type of ups and downs in individual quarters. But overall, the customer entity trend should be going up into the right.

Brilliant. Very clear. And sorry, just one more, if I may. Could you quickly unpack your expectations for subscription versus services growth? Because one is clearly outperforming the other? I mean, how do you kind of look at that going forward?

I think Jamie, you can expect, and we've been pretty consistent in that. I mean, you're going to expect to see that services are going to be in the 15% to 20% range from quarter-to-quarter. And we clearly are a computer software company. We are not a services company. We are focused on staying a computer software company. And we continue to outsource a lot of the services business we do rather than take that revenue ourselves. So that will be the strategy. But you can it's going to kind of bounce around the 15% to 20% range from quarter-to-quarter as it has.

There are no further questions in queue. [Operator Instructions] Our next question comes from Sanjit Singh with Morgan Stanley.

Tom, I had a question. I really appreciate the detail on some of the deal sizes. And I think you talked to a dozen or so deals under $1 million, which is pretty unusual for C3, but something you guys were pointing in that direction, too. For those customers or for those deals, what are those customers buying? Is that sort of Ex Machina driving those deals? Is it kind of the -- starting off with a single app? Any sort of context on what those sub $1 million deals as that sort of composed with.

I think there are 3 categories of them, Sanjit. The biggest second there is going to be trials, okay? So we're -- we tend to do paid trials. And they're normally in $400,000 to $600,000 range for a paid trial. Sometimes for a simple trial of proof-of-concept, they will pay $250,000, but that fits in there. And the idea that we would do a trial and the trial being successful that will then convert to a larger enterprise license agreement 1 or 2 or 3 quarters down after the termination of the trial. And then the second category is going to be certainly less than $1 million would be most Ex Machina transactions. And that's really the bulk of it. I mean, sometimes, somebody wants to buy a little bit of professional services work or something like that. But really those first 2 really do cover it. And we'd expect to see that segment, the mix increase going forward.

Right. And so my follow-up question, Tom, is now that you've -- now that we've sort of gone back to that traditional strategic account model and you have sort of new business working again, if I take a pretty simplistic framework and say, federal business, DoD, federal government, that opportunity and then the enterprise opportunity. It seems to me that the enterprise opportunity is fragmented, right? There's tons of players there. And the sort of direction on terms of how buyers want to sort of consume AI still being sort of pushed out. And so the spirit of the question is that when you think about kind of the near term opportunity for growth over the next say 12 to 24 months, should we expect C3 to really double down on federal being the primary driver of growth? Or do you expect that to continue to be sort of a continued balance between both the government business and the nongovernment business?

Great question. Thank you for asking, and the answer is absolutely not, okay? We do not see ourselves as a federal contractor, okay? Because to the extent that we're very active again in discussions with the federal government to the extent that we have the opportunity to say, we're very pleased to do so. I think that federal is going to be 15% of our business, okay, in a steady state in the long run, U.S. Federal, okay? And the balance will be APAC, EMEA and think -- of the balance, I think, 40% North America, 40% EMEA and 20% APAC, ex China, where we don't do business. And so those are absolutely, we are not becoming a federal contractor.

Our next question comes from Mark Murphy with JPMorgan.

Tom, we've had just now Snowflake, and we've had a number of other data and analytics and infrastructure companies that are mentioning a slowdown in consumption trend over the holidays and into January. And there's been a bit of this passing through lower CPU pricing from Amazon and some of the other cloud platforms that's impacting some of these companies. So I'm just curious, based on the pretty good strength of your guidance, should we assume that you did not see any type of slowdown either on the consumption side, I realize it might not impact you directly, but -- or with more users taking longer vacations, anything along those lines?

Well, 42%, I think you can assume that we exceeded any guidance that we gave and any guidance and way above any consensus guidance we might not have been above yours Mark because I know you always give us a high number. We're quite pleased with 42% growth. I mean that's way into the upper decile of rapidly growing software companies. And I think that right now, as it looks -- as we look at what next year looks like, we're comfortable with the consensus guidance that's out there that I think is about 33%. And that's kind of where we are. And so we're -- so I don't think -- we're not seeing a noticeable slowdown. No, sir.

Yes. And just to clarify, yes, it's all above my numbers, which were probably pretty in line.

Even your numbers, I didn't know that was possible, okay.

Yes, that happened. But yes, I just wanted to try to clarify or to kind of draw that contrast, but it didn't seem like you saw that this probably running around.

I think our growth rate, we should be in the upper decile next year of rapidly growing software companies.

Yes, yes. Okay. My other question is...

By the way as it will be this year.

Yes. Okay. My other question is the -- I'd like to ask this from time to time, but the commodity price for oil and gas, right, has just gone vertical, I think, in a way that we haven't seen in quite a long time. And so since you have the exposure there, is there anything worth mentioning in terms of the pipeline? Is that -- does that feel like it's tangibly flowing through into more ability to spend for those oil and gas customers?

I mean that's absolute yes, okay, with the exception of oil and gas companies in Russia, okay? So honestly, if we look at Q4 and Q1, okay, we were expecting -- we have been working some time in some business that we expected to see a close in Russia. And I think that at this point, the last time I checked on CNBC, the probability of that closing was pretty low, like I think we can put a 0 on that. And so that is kind of -- so that's what's kind of moderates our, moderates Q4 and Q1 a little bit, but -- so there's 3 deals that are in Russia that are not going to happen in our lifetimes now. But the rest of the oil and gas business -- I assume it doesn't happen in our lifetime. The -- but the rest of the oil and gas business, I mean, these people, I think we can expect to see them invest at a greater rate.

Okay. Is it safe to assume that, that nets out positively, if it's 3 deals that won't happen and the rest is in good shape?

Yes.

Our next question comes from Jamie Shelton with Deutsche Bank.

Apologies, guys. I had no question. All good here.

Our next question comes from Mike Cikos of Needham & Company.

Thanks for getting me on here with the Q&A. I apologize if this has been discussed previously, but I've been jumping back and forth between a few earnings calls tonight. I wanted to ask about the sales reorganization and the refocusing. I know that you guys have talked about the realignment. Is there anything that you could point to, to help us better -- from a data point perspective, to help us contemplate improvements in either sales activity or improved productivity from the sales reorg that you guys had discussed in the previous quarter?

Yes. First, let me -- thanks for the question, Mike, first. To be clear, there was no sales reorganization. So we've got the same organization in place, but we did change the sales methodology to our traditional strategic kind of selling, okay? So same sales org just different -- traditional means of selling. I think what's the biggest indication that we can give it the success is change in RPO, okay? Help me out, Juho, what was the change in RPO?

So I think, Mike, the best way to think about this is to aid the diversity in RPO. If we go sequentially, I know Tom mentioned in the last earnings call.

Let's talk about diversity. So diversity in the increase in RPO would have been 32% from utilities, 30% for chemicals, 20% from agri business, 11% from financial services, 2.6% oil and gas and the rest across life sciences, manufacturing and the other. So it was highly diverse. It was a large number of agreements. What else would you comment that what -- to answer Mike's question, Juho?

I think in general, Mike, that the overall activity was just significantly improved in Q3 versus Q2.

Very helpful. Thank you for clarifying on that. And again, I'll apologize because I am coming in a little bit late, but I know -- or one of the things that I want to ask you guys about can you provide any commentary on the either adoption or pipeline building that you're seeing around CRM? And what has been the reception to Data Vision, anything on either of those would be incremental?

Well, we're doing a major release it's called C3 AI Version 8 that we'll release in March that represents a rewrite of almost the entire stack. And then we'll release that at something called C3 Transform, which is our International Users Group, which will be in March in Miami. And Data Vision will be integrated, deeply integrated almost all of our products. CRM is now kind of just being released into the marketplace. There's a lot of interest. I think it's a lot of potential. The CRM market, as you know, this year is $120 billion software -- as you may know, is a $120 billion software and services business. And there seems to be a lot of interest in making these CRM implementations predictive. And by the way, this is what we're doing is not a rip and replace. So we're not going in and proposing to take out Salesforce, Siebel, Dynamics, Veeva, Vlocity or whatever they might have. We just sit on top of that, okay, and make it instantly predictive. So for AI-based, AI-enabled revenue forecasting, predictive relationship modeling, next best product, next best software. So I think there's a high level of sort of interest there. And I think that, honestly, a year from now, it will be a pretty big business, and it takes a little while to build it.

Just building on that, I think on the previous earnings call as well, as it relates to CRM, you had spoken to substantial interest coming from the global SIs for that product and exactly what you said, not the rip and replace so much is the standing up C3 on top of that to drive at that AI that you guys are delivering. So thank you very much. I appreciate you taking the time for the questions.

Thank you. And just recast, that is continuing. And so I mean I think when you get to -- for those of you who at our users conference will participation from Accenture, PwC and others. And so I think there is a big opportunity with the SIs.

There are no additional questions waiting at this time, so I will pass the conference back over to the management team for closing remarks.

Thank you all very much for your time. We're very pleased to announce I mean it was an exceptional quarter. We exceeded our expectations. We exceeded the market expectations. I think we got the sales organization back on track. The companies -- our customers continue to accelerate their implementations at a very substantial rate. And I think that as we enter Q4 of this fiscal year, the company is exactly on track, doing exactly what we said we would be doing when we took this company public. So we're kind of feeling quite optimistic. And thank you for your time, and we look forward to continuing this discussion with you. Have a great day, everybody.

That concludes the C3 AI Third Quarter 2022 Fiscal Year Earnings Call. Thank you for your participation. You may now disconnect your lines.