C3 AI shares plummet 30% as CEO health issues impact sales

C3 AI shares plummeted 30% after the enterprise AI company reported preliminary quarterly revenue of $70.2-70.4 million, a significant drop from $87.2 million in the same period last year. CEO Thomas Siebel called the sales performance “completely unacceptable” and attributed it to organizational restructuring and his ongoing health challenges, which have prompted the board to begin searching for his replacement.

What you should know: C3 AI’s financial struggles reflect deeper operational challenges beyond typical market fluctuations.

• The company expects to report a GAAP loss from operations between $124.7 million and $124.9 million for the quarter, nearly double the $72.59 million loss from the previous year.
• Siebel announced in July that he was diagnosed with an autoimmune disease earlier this year, resulting in “significant visual impairment.”
• The company has completed a restructuring of its global sales and services organization, which Siebel cited as having a “disruptive effect” on performance.

What they’re saying: Siebel acknowledged his reduced involvement in sales processes due to health issues may have had greater impact than anticipated.

• “Unfortunately, dealing with these health issues prevented me from participating in the sales process as actively as I have in the past,” Siebel said in a statement.
• “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.”
• Despite the challenges, Siebel expressed confidence, stating “I am confident the company is positioned to accelerate going forward.”

Leadership transition: C3 AI’s board and Siebel have initiated a search for the company’s next chief executive.

• Siebel reported that his health has “improved dramatically” except for his vision impairment and that he is “feeling strong and fully engaged.”
• He committed to working quickly to identify “excellent” CEO candidates.
• The company is scheduled to hold a conference call for first quarter results on September 3 at 5 p.m. ET.