C3 AI said its fiscal first quarter sales will be well below expectations and that it has reorganized its sales operations.
The news, announced at 7:30 PT EST on a Friday, lands a few days after C3 said it would look for a successor to CEO Tom Siebel, who is stepping down due to visual impairment due to an autoimmune disease.
In a statement on the sales reorg, Siebel said:
"The good news is we have completely restructured the sales and services organization, including new and highly experienced leadership across the board to ensure a return to accelerating growth and increased customer success at C3 AI. The bad news is that sales results in Q1 were completely unacceptable.
Having given this a lot of thought, I attribute this to two factors. One: It is clear that in the short term, the reorganization with new leadership had a disruptive effect. Two: As we have previously announced, I have had a number of health issues in the past six months including multiple hospitalizations and vision impairment. Unfortunately, dealing with these health issues prevented me from participating in the sales process as actively as I have in the past. With the benefit of hindsight, it is now apparent that my active participation in the sales process may have had a greater impact than I previously thought."
The sales disruption had a big impact on C3 in the first quarter. The company said that it will report first quarter revenue of $70.2 million to $70.4 million with a non-GAAP loss of $57.7 million to $57.9 million. Wall Street was looking for sales of $104.02 million in the first quarter with a non-GAAP loss of 13 cents a share.
In the fourth quarter, C3 delivered revenue of $108.72 million, up 26% from a year ago, and Siebel said partnerships with hyperscale cloud providers were faring well.
That drop-off in sales spurred the sales restructuring, which is now complete. Here's a look at the reorganization, which revolves around executives with years of enterprise sales experience.
- Rob Schilling joined C3 as Chief Commercial Officer, took over June 16. Schilling has held sales leadership roles at Oracle, SAP and Siebel.
- John Kitchingman took over as C3 General Manager for EMEA effective June 30. He had been a sales leader at Dassault Systèmes and IBM Global Services.
- Jeff Cosseboom, another alum of SAP and Oracle as well as Siebel, will be C3's Group Vice President of North America East Sales.
- Lars Färnström joined C3 AI as Group Vice President, Nordics. Färnström had been CEO of Crate.io and is a previous exec at C3 as well as Siebel.
- Alex Amato, Group Vice President of Customer Services at C3, was promoted and now has responsibility for all professional services and customer services operations.
Siebel noted that he is "fully engaged" as CEO and his health "has improved dramatically" except for his vision impairment. The search for a successor is underway, said Siebel.
