C3.ai's new CEO confronts mounting losses and sales chaos with detailed turnaround strategy

How's life after Tom Siebel for C3.ai? Still pretty bad, all told, but there's a plan, according to the new CEO

When we last checked in on enterprise AI veteran, it wasn't a pretty sight. The firm had turned in a quarter that founder Tom Siebel himself pitched as "completely unacceptable in virtually every respect" even as he prepared to vacate the top slot due to ill health. He remains involved in the firm as Chairman to assist his CEO replacement, Stephen Ehikian, but has his successor inherited a poisoned chalice. Yesterday's fresh quarterly numbers didn't make for comfortable reading - total revenue did rise seven percent year-on-year to $75.1 million, but losses also soared from $65.972 million a year ago to a hefty $104.688 million now. But three months into the hot seat, Ehikian reckons he has a handle on what's gone wrong and it begins with "totally unacceptable" levels of poor sales execution, a situation that Siebel's health issues contributed to. But that's all going to change, he pledges: I can say this, being in here for 90 days now, the demand for C3 and enterprise AI is only accelerating. I've been actually surprised coming in here how much bigger the opportunity was than when I first came in. So the market is there, the product itself. I've spent catalyst meetings with customers and prospects and partners. We have a world-class product. OK, but what specifically is going to be different next year? Ehikian explains: I have completed an exhaustive and detailed planning process with the C3.ai leadership team. We have crafted a detailed financial model that precisely allocates every human resource, measures and meters every dollar of expense and details every revenue source by line of business by market. I and the extended management team have written clear and precise operational objectives that fully account for the performance of each business unit and their independencies the execution of which will result in the attainment of our financial plan. These company and departmental business objectives, the attainment of which will be measured weekly, have now been assigned across every department to all managers and employees, each of whom have written and published their own respective objectives in our company performance management system. All performance incentives and compensation opportunities for every employee and management are now tied to the attainment of these objectives. The end result: We have a clear and attainable financial model, a clearly articulated detailed execution plan. Every manager and every employee understands the resources they have available and the obligations for which they are responsible. The market opportunity is huge. The management plan and team is in place, and we are focused on heads down assertive execution with clear accountability. Ehikian came into C3.ai from the lucrative US public sector, where he was responsible for reforming the General Services Administration for Donald Trump, performing the acquisition activities of all the divisions of the Federal Government, and was responsible for implementing the President's AI Action Plan. Government has always been a sweet spot for the company, but recent events under Trump 2.0 have not exactly helped. Ehikian explains: We previously warned that a government shutdown would have an adverse effect on our business. No-one could have predicted that the shutdown would last 43 days. However, challenging we thought it could be ,it was far worse. It created headwinds across our Federal business in both the Department of War and in civilian and also affected related markets, including shipbuilding, health care, manufacturing and industrials. That said, the firm did maintain what he calls "significant traction" in the Federal business, with total bookings across Federal, Defense and Aerospace up by 89% year-on-year to account for 45% of total bookings. New or expansion agreements were signed with the US Department of Health and Human Services, the US Department of War, the US Intelligence Community, the US Army, the Naval Air Warfare Center Aircraft Division, the Naval Sea Systems Command, the US Marine Corps and Los Alamos National Laboratory, among others. In short, the Federal market continues to be a large growth vector, say Ehikian: The opportunity there is huge. Across government, agencies are focused on moving away from bespoke government-built solutions and towards commercial off-the-shelf solutions that can deliver production AI quickly and securely. Virtually every agency is now re-evaluating its technology stack, executing the administration's AI Action Plan and driving the re-vitalization of America's industrial base and technology leadership. He cites the Department of Health and Human Services (HHS) work to establish a unified, secure and scalable data foundation for enterprise AI as a case in point: Across the National Institutes of Health and the Centers for Medicare and Medicaid services, HHS will use the C3 Agentic AI platform to consolidate siloed data environments, improve data quality and governance and enable new research, analytics and applications while enforcing strict privacy and security requirements. The Department will also use C3 Agentic AI to automate complex, labor-intensive administrative workflows. And the Intelligence community is also open for business, he adds: For decades, Fragmentation and Intelligence Systems has limited analysts' ability to form a complete operational picture. Intelligence information required by analysts has been historically accessed through siloed legacy applications, where each application is tied to a unique data type and where the source data is fragmented across disparate systems. This data includes signal intelligence, electronic intelligence, human intelligence, imagery intelligence, open source intelligence and geospatial intelligence. We have the plan in place and the operational rigor to go deliver on this. Well, let's see, eh? One thing of note - Siebel himself was on the post-results analyst call yesterday and didn't say a word throughout. More interestingly, none of the analysts on the call even referred to him, let alone had any questions to put to him. The baton, it seems, has been well and truly passed. That's probably for the best for C3.ai - nobody really wants Banquo's ghost popping up to spoil dinner, do they? - but such has been the sheer force of the man as an enterprise titan over the decades, it felt very strange to have him lurking in the shadows and keeping his own counsel.

C3.ai CEO Stephen Ehikian Admits Fallout From Tom Siebel's Health Crisis, Sales Reorg Chaos: 'There's Work To Be Done...' - C3.ai (NYSE:AI)

On Wednesday, C3.ai Inc.'s (NYSE:AI) CEO, Stephen Ehikian, addressed the company's troubles as he works to stabilize the enterprise AI firm after months of missed targets, leadership turmoil and a disruptive overhaul of its sales organization. C3.ai Beats Expectations But Faces Lingering Strain C3.ai reported second-quarter results that came in ahead of Wall Street estimates, offering a brief reprieve after a rocky stretch, according to Benzinga Pro. The company posted a loss of 25 cents per share, narrower than the 33-cent loss analysts predicted, on revenue of $75.15 million, slightly above expectations. But the better-than-expected quarter followed a bruising first quarter, when C3.ai missed both revenue and earnings forecasts by a wide margin. The company reported $70.26 million in revenue, far short of the nearly $95 million analysts expected and a larger-than-anticipated adjusted loss. See Also: Jeff Bezos, Mark Zuckerberg And Elon Musk Got Richer Since Trump Came To Power, Says Bernie Sanders -- New Data Shows He May Have A Point Leadership Instability, Sales Breakdown Hit Performance Sales execution simply fell off and it was "unacceptable," Ehikian said on Wednesday while answering the question of Patrick Walravens, Citizens JMP Securities. He noted that former CEO Thomas Siebel had already addressed how his health complications contributed to the decline. He added that the reorganization created unexpected disruption and led to missed opportunities. Siebel disclosed earlier this year that he was diagnosed with an autoimmune disease that caused significant vision impairment. In August, the former CEO said the condition, combined with a major restructuring of C3.ai's global sales and services teams, weighed heavily on performance. Ehikian Says Demand Is Strong, Turnaround Plan Underway Despite the setbacks, Ehikian said the demand environment for enterprise AI remains robust and may be stronger than he expected when he joined. He pointed to customer feedback, value delivered in recent deployments and internal talent strength as signs the business can return to growth. "There's work to be done. So I'm not going to say it is easy. But I know the market is there, the technology can deliver. It's purely like I got to drive this business is what you're hearing from me," he said. Analysts pressed him on whether C3.ai can regain profitability. Ehikian said he is confident but focused on driving consistent execution. On Wednesday, C3.ai closed at $15.01, up 4.42% for the day, but slipped 1.73% to $14.75 in after-hours trading. Benzinga's Edge Stock Rankings indicate that C3.ai is showing a downward trend across the short, medium and long term. More performance insights are available here. Read Next: Meta's Ray-Ban Smart Glasses Might Never Have Happened If Not For One Cold Email -- EssilorLuxottica's Rocco Basilico Reveals How It All Started Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Poetra.RH/Shutterstock AIC3.ai Inc$14.75-1.73%OverviewMarket News and Data brought to you by Benzinga APIs