C3.ai, Inc. (AI) Earnings Call Transcript & Summary

Good day, and thank you for standing by, and welcome to the C3 AI Fourth Quarter Fiscal Year 2021 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Paul Phillips. Please go ahead.

Good afternoon, and welcome to C3 AI's Earnings Call for the Fourth Quarter and Full Year Fiscal 2021, which ended April 30, 2021. This is Paul Phillips, VP of Investor Relations of C3 AI. With me on the call today are Tom Siebel, Chairman and Chief Executive Officer; and David Barter, Chief Financial Officer. After the market closed today, we issued a press release with details regarding our fourth quarter and full year fiscal results as well as the 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 or in response to your questions, we may discuss metrics that are incremental to our usual presentation to provide greater insight into the dynamics of our business or our annual 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?

Well, thank you, Paul, and good afternoon, everyone. I am very pleased to give you an update on the state of the business. Bottom line, Q4 was a great quarter and fiscal year '21 was a great year. I'm pleased to report that C3 AI is well positioned to substantially accelerate growth and continue to gain market share in the coming year. Let's talk about our fourth quarter results. We exceeded our guidance for both revenue and non-GAAP operating income. Our bookings grew, believe it or not, over 500% in Q4 compared to the quarter a year earlier. Our bookings grew 179% quarter-to-quarter. Revenue in the fourth quarter was $52.3 million, an increase of 26% year-over-year. Subscription revenue for the quarter was $43.1 million, up from $36.8 million a year ago, an increase of 17% year-over-year. Gross profit for the quarter was $40.6 million, a 78% gross margin, compared to $32.1 million gross profit a year ago, an increase in gross profit of 26% year-over-year. Our remaining performance obligations were $293.8 million compared to $239.7 million a year earlier, an increase of 23% year-over-year. Including cancelable orders, our non-GAAP RPO was $345.1 million compared to $246.9 million a year ago, an increase of 40% year-over-year. Our total enterprise AI customer count at the end of the year was 89, representing an 82% growth rate year-over-year. Now let's take a look at fiscal year '21 in entirety. Total revenue for the year was $183.2 million, up from $156.7 million a year ago, an increase of 17% year-over-year. Subscription revenue for the year was $157.4 million, up from $135.4 million a year earlier, an increase of 16% year-over-year. Subscription revenue -- importantly, subscription revenue as a percentage of total revenue remained 86%, constant year-over-year. Gross profit for the year was $138.7 million, a 76% gross margin, compared to $117.9 million gross profit a year ago, an increase of 18% year-over-year. Most importantly, our average contract value for the year continued to decrease from $16.2 million in fiscal year '19 to $12.1 million in fiscal year '20 to $7.2 million in fiscal year '21, providing smoothing growth in bookings and greater revenue visibility going forward. We experienced continued customer momentum in the course of the year, accelerating in the half of the year. Specifically in the fourth quarter, we expanded our enterprise AI footprint in defense and intelligence, financial services, manufacturing, oil and gas, utilities and energy sustainability. We had a number of new enterprise production application deployments at the United States Air Force, Bank of America, Standard Chartered Bank, Koch Industries, MEG Energy, Duke Energy and ENGIE. C3 AI also initiated new enterprise AI projects with 3M, ConEd, FIS, Infor, Koch Industries, New York Power Authority and Shell, and signed new contracts with Commonwealth Bank, George Washington University School of Medicine and Health Sciences, NCS, One Medical, San Mateo County, Stanford Healthcare, SWIFT, and Yokogawa Electric Corporation in Japan. We enjoyed substantially expanded business agreements with existing customers, including the United States Air Force, the U.S. Military Rapid Sustainment Office and the F-35 Joint Program Office. Importantly, Shell executed a very significant expansion that spans over -- slightly in excess of 5 years to significantly accelerate the deployment of C3 AI and ML applications across Shell global assets. This represents a major expansion of the partnership that C3 AI and Shell have forged over the past several years. Again, importantly, the total number of C3 AI customers at the end of the year was 89, up from 49 at the end of the previous year, an 82% increase year-over-year. We continue to expand our partner market -- our market-partner ecosystem to extend our global distribution and service capabilities. During the quarter, C3 expanded its relationship with strategic partner and financial technology leader, FIS, to launch joint solutions for the financial services industry, including FIS Credit Intelligence powered by C3 AI. And this builds upon the previously announced launch of FIS AML or anti-money laundering compliance powered by C3 AI. The company saw continued success in its partnership with Baker Hughes, exceeding its fiscal year '21 revenue target for the alliance. The company formed a wide-ranging strategic alliance with Infor, an ERP technology cloud leader, to jointly expand enterprise-class AI solutions across industries and extend Infor's native machine learning capabilities. Let's talk a little bit about product and technology. It is difficult to overstate the significance of the rate of innovation in product engineering at C3 AI. As of the end of Q4, we have released 20 enterprise AI applications into general availability across 5 vertical markets. This, in addition to the C3 AI Suite itself. In the course of the fourth quarter alone, we released 40 updates and upgrades to these applications. And to give you a feel for the complexity of some of these deployments, we update one of our larger deployments in excess of 320 million times per day. Operating at now massive scale as of the end of the year, the C3 AI Suite and Applications were integrated with more than 800 unique enterprise and extraprise data sources and sensor constellations. We manage more than of 4.8 million concurrent production AI models. We process more than 1.5 billion AI predictions per day. And we evaluate over 30 billion machine learning features daily. Our service levels remain superlative, offering our customers 99.99% product availability with exceptional performance characteristics for the C3 AI Suite over the course of the year. Ladies and gentlemen, this would constitute a gold standard in the software industry. The production release of Ex Machina, serving the needs of the citizen data scientists opens a new, large and rapidly growing market opportunity for C3 previously served by Alteryx. For those of you interested, I encourage you to go to our website and sign up for a free trial of Ex Machina. If you like it, buy it. I am most enthusiastic about the advancements we are making in C3 AI CRM. AI CRM represents the next generation of the now $80 billion addressable CRM market, a market segment that I'm confident we will lead. Keep your eye on this space. You can expect a number of exciting announcements and product releases from C3 in the coming year. With Shell and Microsoft, C3 AI expanded the Open AI Energy Initiative, an open marketplace for C3 AI Applications. Announced in February, the open AI initiative accelerates the deployment and availability of enterprise AI solutions to the energy industry by providing a framework for energy operators, service providers, equipment providers and independent software vendors to offer interoperable solutions powered by the C3 AI suite and Microsoft Azure. Fiscal year '21 was a great year for C3 AI. The enterprise AI software market is rapidly growing, and we see accelerating interest in enterprise AI solutions across industries, geographies and market segments. We are aggressively investing to extend our product and technology leadership to expand our market partner ecosystem and associated distribution capacity. As we continue to execute on delivering high-value outcomes for our customers, we are increasingly well positioned to establish a global leadership position in enterprise AI application software. Bottom line, performance was strong across the board, and we are planning for accelerating growth in the coming year. And with that, I'll turn it over to our CFO, David Barter, for a more complete color on the quarter and the year. David?

Thank you, Tom. We've exceeded our guidance for both revenue and profitability in the fourth quarter while also building significant backlog that will help drive future growth in fiscal year 2022 and beyond. Revenue in the fourth quarter was $52.3 million, up 26% from a year ago due to increasing demand for our enterprise AI applications, with particularly strong deal volume late in the quarter as reflected in our accounts receivable, deferred revenue, calculated billings and remaining performance obligations. Our fourth quarter revenue growth is a meaningful improvement over the 19% growth in Q3 and the 11% growth in the first half of the fiscal year, which reflected the impact COVID had on our business. Subscription revenue increased to $43.1 million in the fourth quarter, while professional services revenue grew to $9.2 million, reflecting strong customer implementation activity and engagement with Baker Hughes that will make our virtual data lake and reliability applications even more compelling for oil and gas customers. In Q4, 82% of our revenue was from subscriptions and 18% was from professional services. On a full year basis, 86% of our revenue was from subscriptions and 14% was from professional services, consistent with our revenue mix in fiscal year 2020. We continued to anticipate subscription revenue mix in the upper 80% range on a trended basis. However, there may be some variation in the revenue mix quarter-to-quarter. Our revenue growth was highlighted by contributions from 8 different industry verticals, including some newer verticals such as high tech, life sciences, financial services and telco. Over the course of fiscal year 2021, these newer verticals contributed 17% of revenue compared to 8% in fiscal year 2020. Geographically, our revenue diversification also increased as activity in EMEA and APAC continue to expand. On a full year basis, EMEA and APAC drove 34% of our revenue compared to 22% in the prior year. Our sales execution in Q4 also drove a meaningful increase in our contracted backlog. Total remaining performance obligation, or RPO, at the end of the quarter was $293.8 million, an increase of 23% from a year ago and a 19% sequential increase from the third quarter. Current RPO, which we expect to recognize in the next 12 months, was $145.2 million, an increase of 11% from the prior quarter. In addition, we had $51.3 million of additional contracted backlog from contracts with the cancellation rights. When combined with our GAAP RPO, this produces a non-GAAP RPO of $345.1 million. Our non-GAAP RPO grew 40% from a year ago, and this represents a sequential increase of 17% from the third quarter. It's important to note that our non-GAAP RPO does not include any backlog associated with Baker Hughes that does not have an existing customer contract. This commitment at the end of the fourth quarter was $219.3 million, and it leads to an adjusted RPO of $564.4 million, an increase of 31% year-over-year. Before moving on, I'd like to provide a brief update on our performance in oil and gas. Our revenue related to the Baker Hughes market partner relationship was $55.9 million, and it exceeded its revenue commitment of $55.3 million. Baker Hughes partnership revenue increased 20% compared to $46.7 million of revenue generated in fiscal year 2020. In our financials, a portion of the Baker Hughes partner revenue is reported as related party revenue as it is contracted directly with Baker Hughes. And the balance of the revenue reflects situations where C3 AI has the contractual relationship with the end customer, but Baker Hughes assisted with the sales process. In the fourth quarter, the related party revenue was $13.8 million and the nonrelated party component was $8.7 million. For full fiscal year 2021, related party revenue was $35.4 million and the nonrelated party revenue was $20.5 million. Turning to expenses and profitability. I will be referring to non-GAAP metrics, which excludes 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 margin in the fourth quarter was 78.3%, up from 77.5% a year ago. For full fiscal year 2021, our gross margin was 76.4%, up from 75.6%. The margin expansion over the year was driven by subscription gross margin, which increased to 80.6%, up from 77% in the prior year. Our operating loss was $15.4 million in the fourth quarter and favorable to our guidance of a loss of $28 million to $27 million. In the fourth quarter, headcount increased by 56, an 11% sequential increase compared to the third quarter. For the full fiscal year, headcount increased by 134, a year-over-year increase of 30%. We thoughtfully invested throughout the year, and we will continue to invest with focus on expanding our market leadership position as we scale our business. Shifting to our balance sheet and cash flows. We ended the year with $1.09 billion in cash and cash equivalents and investments compared to $1.12 billion at the end of the third quarter. We had an operating cash outflow of $31.7 million in the fourth quarter. Including capital expenditures of $462,000, free cash flow was an outflow of $32.2 million in the fourth quarter. For full fiscal year 2021, operating cash flow was an outflow of $37.6 million and free cash flow was an outflow of $39.2 million. Reflecting on the deal activity in the fourth quarter, accounts receivable increased to $65.5 million, up 112% over the fourth quarter in the prior year. Deferred revenue grew to $75.2 million, a healthy 25% increase from the end of fiscal year 2020 as well as a 21% sequential increase from the third quarter. Now turning to our guidance for fiscal year 2022 and the first quarter. We're beginning the year with a healthy contracted backlog. As I mentioned earlier, current RPO increased sequentially 11% last quarter, and our non-GAAP RPO increased 17% sequentially. This level of growth provides us with meaningful revenue coverage. In Q1, we expect subscription revenue will continue to expand and our subscription revenue mix will climb back to prior year levels. We also expect approximately $2 million less of professional services revenue in Q1 when compared to the prior quarter. On a full year basis, we expect our subscription revenue mix increase slightly year-over-year given our focus as a software company. Gross margin will continue to expand. It's important to keep in mind that C3 AI has been designed to be a structurally profitable business. We expect gross margin to expand by another point in the coming year, driven by the growth of our subscriptions. And finally, it is worth noting that we will invest thoughtfully to expand our leadership position in the market. Investment will be higher in Q1 and then it will be more balanced for the remaining quarters of the year. With that in mind, for full fiscal year 2022, we anticipate revenue to be in the range of $243 million to $247 million, non-GAAP operating loss in the range of $119 million to $107 million. For the first quarter of fiscal year '22, we expect revenue in the range of $50 million to $52 million and non-GAAP operating loss in the range of $35 million to $28 million. In summary, we exceeded our guidance for revenue and operating income in the fourth quarter. With our growth initiatives well underway and the increasing demand for our technology, we believe we are in a strong position to deliver an even better performance in fiscal year 2022. Thank you for joining today's call. Now I'll turn the call over to the operator for questions. Operator?

[Operator Instructions] We have our first question coming from the line of Daniel Ives with Wedbush.

Can you talk just about success that you're having, vertically speaking, when I think about utilities and oil and gas versus financials? Are you starting to see just more and more penetration across verticals from a customer base?

Well, yes. I mean we began -- we had a huge concentration in utilities, as you'll recall. And then a couple of years ago we went into the oil and gas business, and now that's a pretty big chunk of our business. We're seeing initial success that's quite significant in financial services with Bank of America and Standard Chartered Bank. And now with the relationship with FIS and a number of discussions we have going on in the world, we expect to see substantial expansion in financial services as our products are used for anti-money laundering, customer churn, cash management, Volcker Rule compliance, margin lending. Manufacturing remains a big business for us, particularly as it relates to stochastic optimization of the supply chain, production optimization. So I mean we're clearly diversifying across a wide range of industries, and I think we'll see increasing diversification, both in terms of additional industry segments and a wider range, instead of only doing very, very large deals like we did 3 and 4 years ago, and now we have a mix of large deals, medium deals and small deals that is resulting in a substantial reduction in our average contract value. So as this plays out just like the relational database business did and the mini computer market did and CRM did, I think that enterprise AI will be adopted across all sectors, precision health, travel/transportation, aerospace, you name it. And we expect to play in all those sectors.

Great. And just a quick follow-up. Can you just talk about -- from a conversation with -- that you're having with customers, when you're talking to CIOs, CEOs, how it's changed in terms of where C3 stands today versus even 6 months ago or a year ago? I mean is it -- has it really gone from -- to just more strategic and it's almost more of a pull versus push? Can you just compare and contrast, especially just given what you've seen in the last 30, 40 years?

Well, I think we really hit an inflection point after -- I mean the first 2 quarters of this calendar year were -- excuse me, of calendar year '20, okay, were tough, right? And we were doing these large enterprise transactions and then COVID hit, Paris closed, Rome closed, London closed, New York closed, Chicago closed. And so that did slow us down. Now when we get into May, June, July of last year, we saw dramatic acceleration. And this mandate towards digital transformation seems to have made it at the top of everybody's agenda. And digital transformation is very much about the application of enterprise AI to make stuff more efficiently, plan stuff more efficiently, deliver higher-quality products into the hands of more satisfied customers at lower cost. We are clearly more credible today in the market than we ever have been. I think that -- I think we're doing a pretty good job of demonstrating thought leadership in AI, the work that we're doing with major research institutions like Illinois, Carnegie Mellon, Princeton, MIT, Stanford, Berkeley, KTH is kind of really helping us at the high end. But now we have production use cases in -- all over the place in utilities, all over the place in manufacturing, in financial services, in aerospace. And so the pipeline has never been larger, okay, and the sales cycles are shorter than they have ever been. So we're -- right now we're pretty optimistic about what the next coming 2 years look like.

We have our next question coming from the line of Brad Sills with Bank of America.

I wanted to ask one just about the general environment for AI and the sales audience. Are you seeing a change where now your deals are sponsored more by a data scientist owner, if you will? Or is it still very much a CIO sales as a line of business, as AI becomes more at the forefront of critical capabilities for these companies? Is the sales audience changing? And are you seeing that more pervasively through these organizations?

Well, I mean, it's a good question, Brad. And I think it is changing. If you see, like, the uptake on Ex Machina, they were selling to basically individual data scientists and citizen data scientists to all these organizations, like, $500 at a time or something. And the uptake there is pretty substantial. But I would say it varies from organization to organization. Some places, it's starting in divisions. At other places like Bank of America, it's hard to get to the very top or at or near the top. So it -- whether we start at the bottom or we start at the middle, we seem to make it to the top sooner or later. And at Bank of America or Standard Chartered Bank or Koch, it's -- this is a rapidly growing hot market with a lot of people really interested. And they've been -- I think they're a little bit frustrated with what they've been attempting to accomplish in the last 3, 4, 5 years but haven't been able to accomplish. So we present the prospect of being able to fix that and business is good.

That's great. And then one more, if I may, please. As you've pivoted towards these smaller deals, smaller land deals, what does that mean for the expansion opportunity? How is that different from some of these larger deals where you land bigger? Should we see a greater velocity of expand deals than some of these early wins that perhaps are smaller in footprint?

I think that's a really good question. And the answer is yes. I mean as you get into selling to small and medium businesses, selling CRM, selling Ex Machina, I mean, there you're selling $500, [ 1,000 ] at a time, and it becomes a NRR game. NRR has been really less important as a metric for us historically because we're landing contracts that were so long in duration and so large. I mean you can remember in fiscal year '18 and '19, you were here when we were doing $30 million, $40 million, $50 million deals all the time. And that's clearly changing now. So I think it's a healthy mix of large deals, medium deals and de minimis transactions. I would say, $500 a month, by our standards, is certainly de minimis. But it certainly looks good in the long run in terms of evening out, getting the lumpiness out of bookings so we don't have to deal with that anymore.

We have our next question coming from the line of Michael Turits with KeyBanc.

Tom, can you just give us a little bit more on the Shell deal? Is it an expansion? How does it impact, if it does, revenue going forward?

Well, it is revenue, and it's more revenue, and it's more revenue. So I think the existing contract that we had in place with Shell, Michael, and I could be wrong on this, I think it was the second or third contract, okay? And it was about 4 years in duration. Originally, we did a couple of production trials with them, I forget what year, and those were successful, and then they expanded to kind of a small enterprise deal, then they expanded to a larger enterprise deal, which was 3 or 4 years in duration. Now Shell is very much reinventing itself around all aspects of its business with this initiative they call Shell.ai, which is a combination of basically C3 AI sitting on top of Azure and then a number of very, very bright people who are applying AI to basically all aspects of Shell's business, upstream, downstream, midstream and, really importantly, renewables. I think by 2050, I'm not really privy to all of Shell's company, but -- all of Shell's strategy, but looks to me like it might become an electricity business. Anyhow, they were deploying many, many successful applications. They decided to renew their application a year before it expired. And so they entered into a new 5-year relationship with us to kind of dramatically expand the number of assets, to which they can apply the C3 applications and the C3 stack. We work with them independently of that to develop this Open AI Initiative, which you can think of as a marketplace that's being sponsored by Shell, C3 and Microsoft. And it's a marketplace in which all the energy providers can basically put their C3 applications, and they can trade them to one another. So Shell is a -- it's a strategic deal. It's 5-plus years. And it is irrevocable, nonrefundable commitment. And it's a very substantial and important transaction that we think will serve at something of a bell cow in the oil and gas industry because Shell is perceived of as a technology leader in that space. And so we think that will help fuel our oil and gas business, which is already quite healthy. And I know a lot of people think oil and gas is kind of yucky, but these guys are all reinventing themselves as renewable energy companies, and we're very pleased to be able to play a role in that.

Thanks, Tom. And David, if you could, could you talk to us a little bit about the move down market from a couple of aspects, one, in terms of Ex Machina, in terms of the progress there and how much might be built into the guide and then maybe what your TCV was like in the quarter if it's really moving down?

Michael, I couldn't quite hear the second part of your question. Could you repeat it, please?

So again -- I'm sorry about that. So all about the move down market and maybe you could approach it from a couple of angles. First of all, how much traction with Ex Machina, how much is built into the guide for next year from Ex Machina? And on TCV, what was it, not just in the year, but in the quarter? And how effectively are you moving that down?

Great questions. Michael, in terms of planning, the way we planned our business, we think about our subscription revenue accelerating over the course of the year. And as you can see in our guide, we're looking at a midpoint of 26 going up to 34, and Ex Machina certainly features in that. So we have thought about it in terms of our go-to-market teams, and we planned at a detailed level as we thought about the outlook for the year and how to continue to accelerate our growth. So that's in terms of Ex Machina. And then in terms of TCV in the quarter, we were at about $7.5 million of TCV in the quarter.

We have our next question coming from the line of Patrick Colville with Deutsche Bank.

The presentation was fascinating, and I was really interested to kind of hear how you see the market evolving. Just help me understand though, just this quarter, and I guess implicit in your guide, it doesn't seem like the -- this is translating into dollars just yet. Subscription revenue is kind of basically flat sequentially and, implicit in the guide, it's kind of flat again in the first quarter. So just help me understand just the kind of puts and takes between this fantastic long-term potential that you've articulated that we can see versus the kind of near term this translating into kind of dollars now.

I think it was kind of flat last year, Q4 to Q1, wasn't it, Patrick, if my memory serves me correct? And I think that the growth projections that you and others had for us, correct me if I'm wrong, the amount for this year was about 9%, and I think we came in at about 17%. The -- we're seeing -- part of what's going on in Q1 is, we -- the growth -- the year is going to be a very healthy year. Q1 will be a very healthy quarter. We are raising guidance for Q1 over what the consensus was. Part of what's going on in Q1, however, is an artifact. You have to go back and look at bookings, which I'm not going to disclose, okay, for like Q1 and Q2 of fiscal year '20, okay? And if you look at '19 and '20, we're kind of thrashing around quarter-to-quarter in bookings. And there's kind of an artifact there. It has some downward pressure on -- everything -- as these -- as the revenue kind of -- from bookings waterfalls out over, say, 36 months. And there was a quarter back there that wasn't very big, and the term of the revenue was not very long in the quarter. And there's a little bit downward pressure in Q1. The Q1 is going to be -- it will be a fine quarter, and the year is going to be a great year.

Great. That's very helpful. And then I guess, as we kind of think beyond fiscal first quarter into kind of fiscal second, third and fourth of next year, I mean, just sticking to the numbers here. Again, the guide suggests quite a material re-acceleration. I mean I remember at the time of the IPO, we were talking about a number of factors, including the exit from coronavirus. We were talking about kind of lapsing of the Baker Hughes contract reset. Are they still the kind of key reasons for this re-acceleration in subscription revenue in the second half of fiscal '22? Or are there other factors that we should be aware of?

Well, I think what we saw was a re-acceleration of bookings in the second half of fiscal year '21 really, okay? And as we -- I mean we came into fiscal year '21 blowing and going, I think. Wasn't the growth rate in fiscal year '20 like 91% growth or something?

71%.

71%. Okay. Sorry. It was a big number.

It was a big number.

It was significantly not 0, okay? It was big and then we got kicked in the teeth with COVID, okay? And the -- and I think what you're seeing is just -- what we saw in the second half of the year is just a re-acceleration of business. And COVID is clearly over, and our digital transformation is -- the interest in that is more acute than it ever has been, okay? The interest in enterprise AI is more significant than it ever has been, okay? And we're perceived of as a kind of more substantial, more reliable provider than we ever have been. So I think what we're just seeing is acceleration of business. It's a good thing.

We have our next question coming from the line of Jack Andrews with Needham.

Tom, I was wondering if you could speak to just the hiring environment. It's historically been difficult for applicants to secure opportunities at C3. And so could you just speak to, are you able to scale the organization the way you want to in terms of finding the right types of people to build out the organization these days?

I reviewed those data today, Jack. Great question. Last quarter, I think we had 12,000 applicants, okay, job applicants from all over the world to C3 AI. [ Count them ], 12,000, okay? And this annualizes to roughly 50,000. And we're in the heart of Silicon Valley. This is supposed to be a very challenging hiring environment. Of the -- of those 12,000, I think, we had interviews in one form or another with almost 3,000, and we hired a net of, like, 56. So we have really the brightest and most -- highly trained and experienced data scientists in the world and application engineers and salespeople and sales leadership, okay, and marketing leadership who want to join us. And so we're very, very fortunate in that respect. We kind of need to figure what's going on and battle this as we go forward. But the rate of interest in people coming to work at C3 has not slowed down, okay? And our rate of interest in hiring people has definitely not slowed down. And if you go -- and I encourage anybody who's interested to -- you get a pretty good feel for what the culture is like and what the morale is like if you go look us up on Glassdoor.com. But yes, it was, I think, 12,050 people -- or 12,500 people who have applied for jobs here in the last quarter. It's really rewarding.

That's great. Thanks for the color around that. And just as a follow-up question. I think in your prepared remarks, you referenced strong deal volume late in the quarter. I was wondering if you could provide some more context around that. Was that something that just happened organically within your customer base? Or is that the result of maybe some of your partnerships really coalescing? Any further clarity would be appreciated.

Jack, I don't think I said anything like that.

I think, Jack, you may have heard it in one of my paragraphs.