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Reflecting On Data Infrastructure Stocks’ Q2 Earnings: C3.ai (NYSE:AI)

StockStory - Wed Oct 4, 2023

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As Q2 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the data infrastructure stocks, including C3.ai (NYSE:AI) and its peers.

Generating insights from system level data is an increasing priority for most businesses, but to do so requires connecting and analyzing piles of data stored and siloed in separate databases. This is the demand driver for cloud based data infrastructure software providers, who can more readily integrate, distribute and process information vs. legacy on-premise software providers.

The 4 data infrastructure stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 2.98%, while on average next quarter revenue guidance was 0.52% above consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows and while some of the data infrastructure stocks have fared somewhat better than others, they have not been spared, with share prices declining 6.38% since the previous earnings results, on average.

Weakest Q2: C3.ai (NYSE:AI)

Founded in 2009 by enterprise software veteran Tom Seibel, C3.ai (NYSE:AI) provides software that makes it easy for organizations to add artificial intelligence technology to their applications.

C3.ai reported revenues of $72.4 million, up 10.8% year on year, beating analyst expectations by 1.07%. It was a mixed quarter for the company, with its full-year revenue guidance coming in higher than Wall Street's estimates. However, the outlook for the full year operating loss is larger (meaning the company expects to lose more money for the full year than its outlook, which was given about three months ago).

“It is difficult to describe the scale of the increasing interest that we are seeing globally in enterprise AI adoption,” said Thomas M. Siebel, C3 AI CEO.

C3.ai Total Revenue

C3.ai delivered the weakest performance against analyst estimates of the whole group. The stock is down 24.4% since the results and currently trades at $23.77.

Is now the time to buy C3.ai? Access our full analysis of the earnings results here, it's free.

Best Q2: Confluent (NASDAQ:CFLT)

Started in 2014 by the team of engineers at LinkedIn who originally built it as an internal tool, Confluent (NASDAQ:CFLT) provides infrastructure software for organizations that makes it easy and fast to collect and move large amounts of data between different systems.

Confluent reported revenues of $189.3 million, up 35.8% year on year, beating analyst expectations by 3.75%. It was a decent quarter for the company, with a beat on quarterly revenue as well as RPO (remaining performance obligations, a leading indicator of revenue). Forward guidance was also bullish, with next quarter and the full year non-GAAP operating profit guidance particularly impressive vs. Wall Street expectations.

Confluent Total Revenue

Confluent pulled off the fastest revenue growth and highest full year guidance raise among its peers. The company added 69 enterprise customers paying more than $100,000 annually to a total of 1,144. The stock is down 7.8% since the results and currently trades at $28.6.

Is now the time to buy Confluent? Access our full analysis of the earnings results here, it's free.

Elastic (NYSE:ESTC)

Started by Shay Banon as a search engine for his wife's growing list of recipes at Le Cordon Bleu cooking school in Paris, Elastic (NYSE:ESTC) helps companies integrate search into their products and monitor their cloud infrastructure.

Elastic reported revenues of $293.8 million, up 17.5% year on year, beating analyst expectations by 3.26%. It was a decent quarter, with revenue and non-GAAP operating profit exceeding expectations. Next quarter's guidance was largely ahead, and the full year outlook was raised as well. On the other hand, its net revenue retention fell.

Elastic had the weakest full year guidance update in the group. The company added 30 enterprise customers paying more than $100,000 annually to a total of 1,190. The stock is up 27.5% since the results and currently trades at $78.88.

Read our full analysis of Elastic's results here.

Teradata (NYSE:TDC)

Part of point-of-sale and ATM company NCR from 1991 to 2007, Teradata (NYSE:TDC) offers a software-as-service platform that helps organizations manage their data across multiple storages and analyze it.

Teradata reported revenues of $462 million, up 7.44% year on year, beating analyst expectations by 3.85%. It was a decent quarter for the company, with revenue and ARR (annual recurring revenue) surpassing Wall Street's expectations. Next quarter's non-GAAP EPS guidance was in line, and the company largely maintained its full year guidance. On the other hand, its deteriorating gross margin was a negative.

Teradata delivered the strongest analyst estimates beat but had the slowest revenue growth among the peers. The stock is down 20.7% since the results and currently trades at $43.99.

Read our full, actionable report on Teradata here, it's free.

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The author has no position in any of the stocks mentioned