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

All right. I'll keep the train rolling. The next presentation we have, we're super happy to have Stephen Ehikian, new Chief -- I will say new Chief Executive Officer, C3.ai. We're going to look into the opportunity that C3.ai has in front of them. There's been a bit of a turnaround, so we'll get the update on that. Before we kick off the conversation, let me just go through some disclosures. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. Stephen, welcome to the TMT conference. Thank you very much. Awesome. So congrats on the new role. And to start, maybe you can give us a sense of what attracted you to the C3.a opportunity to start with.

Yes. Nice to be here. So right before this, I was leading a government agency, the General Service Administration. I came in to help fight fraud waste and abuse and part of that effort within the GSA, if you don't know it, is really the intersection of all government spend, procurement, common goods and services, IT shared services, real estate portfolio of the government. So it was an incredible opportunity, and we spent first 6 months slimming down the government headcount contracts. And then the next phase was the build back phase. And there I was kind of doing a lot of work investigating like what are the other AI platforms that we want to look at across the government I knew the most common players, but then I saw a demo from C3, and it just jumped off the page. I'm like, what's this? I spent more time understanding the underlying technology and the use case in the federal government, and I saw a huge opportunity. And for me, I'm very mission-driven. And there's a couple of big themes that I was really passionate about. One was driving the AI adoption like we helped draft the AI action plan a big part of winning that race is driving adoption through the federal government and through the major industries. Number two was this reindustrialization of America and have for national security, how do you bring back manufacturing, how do you think about supply chains. And the third big piece was how you -- and this is more existential question, how do we get out of this debt crisis of the government. And I can tell you it's really freaking hard to cut costs in the government, so the only chance we have is to grow productivity. And I think that's going to be AI, automation and robotics. So I wanted to go to a company that can actually affect those big themes and C3 was a perfect fit for that.

Yes. That's a great introduction. So with about 6 months under your belt CEO, what insights can you share about C3 from an organizational standpoint? The technology, the product capabilities, market positioning, how has that shaped your strategic priorities going forward? We'll talk about like the plan in terms of the restructuring and what to focus on. But just in terms of just your customer conversations, what stood out to you?

So I've been here 6 months. And I spent all that time on the road talking to our customers, partners, employees. And what resoundingly I heard across the board was that when we actually focus on the right customers, industrial customers, the federal government, we demonstrate huge economic value. right? This isn't like my last company, we're solving a customer support bot. This is solving major core operations, supply chains, asset reliability for some of the biggest companies in the world, I think managing the contested logistics for the Navy to 10,000 critical infrastructure assets for Shell. These are a massive scale where AI can actually have a huge impact. So I kept on hearing resoundingly, we demonstrate huge economic value, okay? Awesome. Number two, the density of talent at C3. The best I've been -- I've been in start-ups. I've been in government, this is the highest concentration of smart people who actually -- who deeply care. We're in the office 5 days a week. It's an intense culture that deeply focused on like how do we help our customers win in AI. And so those are the general theme. The other theme I heard, there's a lot going on in the market. There's a lot of noise. If I ask everybody in this room, what is an AI agent? What's an LLM? What's AI? What's machine learning. You're going to get all different responses. If you talk to our customers, they're confused. They're like there's so much being thrown at them. They've been piloting for the last 1.5 years. They're in pilot purgatory. They want to move beyond that. So they're looking for trusted partners that have actually done this at scale. So that's a critique on us but also the opportunity that I kind of was going to double down into, which if I can go to the next stage, I've learned all this, but I'm like, cool. We're not performing the way we should be. Like you know this, I know this from North America, EMEA, terrible, like I'm just looking at the performance, not acceptable. Federal has been growing. And I'll tell you what, when I landed, I immediately just plot my butt in D.C. and said, I have probably the best chance of affecting change in D.C. given my background. And so what do I do? I removed layers of management. I had the sales team report directly to me. I'm deeply involved in the deal flows. I'm reducing the cycle times from showing value before it would take months to show value in a sales cycle, I'm like what can get done in a day, in a week. So that's the mentality right now, especially the new technologies we're building, and that's what customers want to see. And so I'm going to take that same playbook that's clearly working in federal and take that to North America and EMEA. And exactly what is that, that is going to be focused on fewer applications. And I think C3 started in the space of enterprise AI. I mean, they started the term the category of enterprise AI, the awesome, a decade ago. but they're not the only players today. You got Databricks. You got Anthropic, you got OpenAI, you got the hyperscalers talking about it. And I think that's validating, but also is going to put pressure on us to say, where do you deserve the right to win? Like you can't be a horizontal solution in this environment. So for me, the big opportunity was I know we've done 130 applications in the past, but we have the right to win in a very few number in the industrial space in the federal space. And so the most obvious thing for a beginner's mind coming in is like double down to where you actually have deserve the right to win, and you have the proof points. So all the actions we've taken are based on that focus.

Yes. No, there's a lot of things that I wanted to unpack there. you unfortunately had to do a 26% headcount reduction just given where the cost structure was. Can you talk to us about the details of the turnaround plan. But more importantly, beyond the details, like -- what do you want C3.ai to look like coming out of this latest restructuring or reorganization?

Again, what led to this restructuring? There's -- I come in 6 months observing, there's a lot of goodness. There's a lot there. The market is changing. The desire of focus is immediate. So okay, what are all the things that are tangential that aren't actually where we're #1 in the market we have to downsize. So immediately, what I said is any product lines that are going to be the -- where we're going to be #1 in the market, we're going to -- we'll maintain it for now, but we're not going continue to invest in that. And then there's associated sales teams associated with those products. But overall, I took a step back, we're burning too much cash. Like I think a big part of my experience with the government and before start-ups, cash is critical. Having a path to profitability is critical. I want that as much as you want that. And so getting the cash burn, restructuring cost was number one. Number two was flatten the organization. I feel like I've come from start-ups, I've seen governments, and we're probably somewhere around here. I want to get closer to the leanness of a start-up and the execution speed because when I saw in federal, removing layers gets me closer to the customer and the reaction time from our engineering team is critical. So the layers reduced was part of that restructuring as well. And the third is the focus, product focus, fewer industrial applications where we solve the deliver AI and automation across the value chain, think manufacturing, oil and gas, energy, public sector. Anything outside of that is not a core focus anymore. So that is how we're going to -- from a product perspective and a go-to-market perspective, the other thing is playing bigger. When federal, we're playing at a secretary level. We're playing bigger transformations for the government because they need it. They don't have an alternative, they can't hire people back. We're going to do the same thing on the commercial side. Instead of just focusing on entry point, getting the door we're going to get in the door with our prebuilt applications but paint a much broader transformation story that the CEOs are asking for, how do I have a 0 back office supply chain. How do I maintain like tens of thousands of critical infrastructure without humans drowning in data? So that's the focus right now. And the biggest thing -- the last thing I would highlight is changing how you build with C3.ai. We have all the components. I can go into details of this, all the components to build a world-class enterprise AI application. How you build this, and this is where the speed of change in the last, I don't know, 6 months, it's probably been more in the last 30 years. how you build these is moving fast, I can highlight that, but I'm extremely excited for the ability to -- for companies to go from a mission-critical idea to a mission-critical app with very little downtime.

Understood. In terms of like the general time line because I know it's hard to pinpoint this. But in terms of, one, getting back to top line growth and then two, that ultimate path to profitability, how are you thinking about those 2 objectives?

Well, we're trying to do as fast as possible. So the headcount reduction was enacted, that's done. We have the cost reduction for non-payroll happening in the next couple of quarters. We'll provide more guidance in 90 days. But the goal for operating margins is to get back to what we've done historically. We'll come back with a time line, 30 days have been -- or 90 days, we haven't given guidance on that yet, but I want what you want. That is immediate. I think we have $620 million in the bank. We have a rock solid balance sheet, no debt. Preserving that is like critical in a time when things are changing and the ability to like double-click into what we do great is going to be the focus.

One of the things that stuck out to me in this period of turbulence, I would say, is just the velocity of the deceleration. And that kind of goes to how like the goal of building more durable recurring revenue streams into the business models. I think as a portion of the revenue that was coming from demo licenses and engineering services, which is great in the quarter, but not necessarily recurring. How are you thinking about building more of a recurring revenue stream in your model?

It's a top priority. Like when I think of what's important to me right now, it is focused on total bookings, RPO growth and revenue. But thinking about long-term durability, like everything I've done, starting a company, even government is like thinking 10 years at a time. And so my mindset is long-term durable growth, getting the right customers on the right journey. But those are the 3 metrics I focus on now.

There's been a -- in terms of like the go-to-market, it's been like the pilots, converting pilots into production customers. Is that still the sort of go-to-market play? Or do you see that changing as well?

I want to meet the customer where they want to start, meaning like we're going to paint and provide a road map for how you can transform your business, whether it's supply chain, asset reliability or contested logistics in the federal government. But I want to also get -- allow them to get started fast if that's a pilot, if that's a 2-day exercise if it had a 6 month, we'll accommodate them. But the key is we're painting a much broader transformation story to the CEO because that's what's being asked for today, us trying to solve for the initial use case only. I think that's something in the past, we get so focused on just trying to get deals through the door. You kind of miss that longer arc for the transformation that I feel like that is what's required today to win.

You mentioned this multiple times already, but a place that I 100% agree with you is that C3 has been objectively doing very well in federal. A couple of quarters ago, I think your bookings grew 89% year-over-year. It's been a big proportion of your total bookings. And the backdrop is positive here. We got commercial off-the-shelf mandates. You mentioned the AI action plan and other sort of initiatives. Maybe high level, talk about what's so appealing -- what is about C3 that makes -- what is about C3 that is still appealing to the federal government? And which of these various initiatives do you see as the most capitalizable opportunity?

What's happened in the backdrop. There's -- obviously, there's a slimming down the government to control spend. There's a build back stage happening right now. There's pressure from the top to drive AI adoption to win this AI race and geopolitically. But there's also a big push to move away from GO solutions to COTS. So there's term commercial off-the-shelf versus government off the shelf. Are you buying a commercial product that's repeatable? Are you asking SI to custom code a product or even building in-house even worse because the government is not a software company. So there's a huge mandate away from that to a commercial off-the-shelf. C3 is one of the unique providers that actually has commercial off-the-shelf applications, right? So this is a big motivation as the government is literally forcing these agencies to adopt this. The other piece is for these contractors, the SIs. Their business was got custom applications. We have a strategic integrator program where they can actually take our platform and build a cost solution on top of that. So that's a huge opportunity right now that we're realizing. And I think just third, the scale of government deploying in some of the most complex environments in the world, on-prem in their environments, on device, the highest security. That's really hard, and that's something we've been doing for years. So I think that's another accelerant for us. But ultimately, to answer your question, I think these are secretary level initiatives now. These aren't just like individual agencies. Secretaries are asking, what are my AI road map they're really putting KPIs in place to drive AI adoption. So it's really -- it's a one place where probably the government is moving faster than commercial to adopt AI. And I think for us, we started in the Defense Department of intelligence. We most recently got pulled into the civilian side. HHS was as an example of that. I see civilian as a huge opportunity to continue to expand. This is my focus, make each one successful. But our success in HHS got us the DOE. DOE got us the USDA. And there's no competition other than ourselves these moments in time, but I got to make them successful. And I think there are opportunities to grow those accounts. I mean you can solve HHS, reduce the cost of health care in the country, how much is that worth as an example.

I mean you guys have also won like, I think $450 million Air Force contract expansion, which it sort of brings to the point that you obviously have a competitor that does really, really well in Palantir and federal. Do you sense a need to -- for the DoD or the Department of War or Fed more broadly to diversify away or not put too many eggs in one basket? And what does that -- what kind of opportunity does that represent for C3?

Yes. I don't see us -- I mean, it's not like the government is asking for that at all. It's not been explicit. But you enter a market where clearly they're doing exceptionally well. Clearly, the demand for the product. Always inherently, you want to see the other players in the market to have optionality. And I think you are seeing that in the government today. I think we are a clear option today and provide the ability to not be overly dependent on any one vendor. Now we can both win, that's fine. But clearly, I think what's been shown is the government wants enterprise AI. They want large-scale transformations using AI, and we have an opportunity to deliver on that.

When we think about government overall, there's also the state and local, which I think also has been an area of strength. Is that still an area of focus of the company? Or is it going to be primarily a fed and industrial opportunity? Do you see a place for state and local as well?

Public sectors -- overall public sector is a focus. And I think a lot of things we're doing in federal directly applies to the state and local level a lot of the work around broad, waste and abuse reduction, health care initiatives we're doing are going to directly apply. And we have a property appraisal application. So yes, very much so.

So talk about the partner ecosystem and the go-to-market strategy. You guys are going into year 2, of the relationship with Microsoft. I think it delivered $130 million in bookings and 100-plus customer agreements. During -- in the first year. Give us the state of the relationship with that Microsoft partnership. And we think about those bookings, what's the time line of those bookings converting into revenue?

So the relationship is incredibly strong, like it's an incredibly strategic relationship for C3. I think where we are complementary ourself,, it's very complementary. Microsoft provides very horizontal services for AI. We provide very vertical-focused applications. That combination in a world that's getting more focused is an accelerant. There -- a majority of our bookings today is through this partnership. In terms of conversion, we provide guidance, we don't break that out, but that will accelerate in the future.

When we think about the partner contributions to bookings. That's been a pretty high percentage. I think a couple of quarters ago, it was like 90% flowing through your partners. How do you balance like driving a lot of partner source revenue versus kind of building the muscle of your own sales team? I think you mentioned here that you're involved in deals, which is great because of your background and the focus in Fed. In terms of building a durable sales motion, what's -- what initiative you have in place to improve like AE performance included in a...

so the partnerships are an accelerant, does not replace the -- to be able to directly sell our product internally. That is the #1 focus right now, organic growth through our sales team. And so how am I doing this, replicating what's doing in federal getting much more involved in executive leadership to the customer, reducing the sales time, reducing the time to demonstrate value or demonstrate insights. This is a fairly new motion we're implementing in Federal, we started doing this in Q2. We can take the same playbook into North America and EMEA, but it's the -- how you take from the first meeting, can we show value within 30 minutes because I think, a year ago, we were having these conversations, what about hallucination risk? Can we trust our data in these models. Those conversations are not happening at all anymore. It's now -- it's not an if, it is how fast we get started. So this is our mindset has got to shift. We did this since federal. We're able to go from literally a first conversation to a closed deal in less than 30 days. How to replicate that in North America and EMEA. So it's a mindset shift, maybe a skill reenablement shift, but that is my 100% focus because the partners will be an accelerator on top of that. But we've got to figure out the actual sales motion at C3.

Yes, makes a ton of sense. Let's talk a little bit, this sort of financial questions, but it's really around getting back to profitability and building a durable business. So gross margins once upon a time used to be in the 70s. Now it's in the mid-50s, which kind of reflects the ramp of initial production deployments and to support some investments. How do we get the gross margins back up to where you want them to be? Because yes, if you have more gross margins, it increases your ability to invest. And so when you think about where you are today on gross margins and where you'd like to be, what's the path?

Yes. growth. You got to drive revenue. So it's some good bookings growth, RPO growth and revenue. How you do this is going to be the focus for the sales, which is larger AI transformations, larger deal sizes. The IPDs motion, how we've done this historically, is still important, but the quality IPD is the most important thing. IPDs initial production deployments. These are almost not proof of concepts, but actually production-grade deployments for the customer. That's incredibly important. But I think before we focus on volume, now to be quality. And then higher quality will convert at a much bigger number. So growth is the only answer to that question. I want to get back to the historical thing means. We haven't provided a guidance for when we do this, but I want -- you want on this.

Yes. But I think you made an important point is that the last couple of years, we've been talking about the number of initial production deployments, the metric that I track in my model and looking at on a year-over-year basis, your point is, is that not all for volume but for quality. And so what's the profile? What is a good IPD and what -- is it a specific type of use case that C3 can only do? Is it a particular industry focused? Is the size of customer? What defines a good IPD?

Yes. So let's take the customer profile. I think that the world is the Fortune 1000 in the public sector, that's defined. It's use cases, we have deserved the right to win, industrial applications, think asset reliability, predictive maintenance, supply chain optimization, core back office for some of the biggest companies in the world, solving value across the business value chain. Think for manufacturing, oil and gas, energy, health care and federal. So if I can just focus, we have clear abilities. We're #1. Now it's just like say no and everything else because there's so much opportunity when you get into a deal cycle, how do you qualify the pipeline just being that size the company, use cases and be able to kind of get started fast. So that's by the IPD, I define as...

Yes, that makes sense. Let's move the conversation to how AI impact C3's businesses. So software analysts in 2026. Every single company that I cover, whether they're a seat-based model or a consumption model or a data platform, all of that's being questioned now given the concerns around potential disintermediation from AI. So when we think about potential competition, whether it's from start-ups or the model providers or the research labs or the hyperscalers, what should investors keep in mind about what C3.ai offers? And what prevents competitors or customers using Agentic solutions from model providers from replicating what C3.ai does the...

The number one thing everyone is looking for is economic value. That is a term you can be hearing more and more, I'm hearing Anthropic talking about it, Databricks talking about it with AI, it's a pricing like pricing hasn't been nailed in terms of it's a seat or usage. But I can concretely say, everyone is saying, what economic value do you deliver? You have proof points to show that, and you can back into the value based on this. So how do you go do this and who can deliver economic value -- because in this valley, in Silicon Valley, there's a belief that you can buy code these solutions that LLMs are going to commoditize enterprise AI. And I think that just fundamentally misunderstates or misunderstands the difference between predicting the next word of a sentence or next line of code and predicting financial and physical outcomes for business. Our LLMs, our competitors, absolutely not. We partner with the LLMs, we're agnostic to them. We actually orchestrate them. And so where I feel like these LLMs, these models are phenomenal describing the world beautifully and the reason beautifully. But they don't actually affect the outcomes, right? We operationalize these models. And so I think that's the biggest thing when I package, what is C3 is taking this beautiful reasoning and world knowledge and applying domain-specific experience with the integrations, with the toolings, with the domain change management to actually transform a global supply chain or manage a critical assets for one large E&P companies or they contested logistics for the Navy. So these are areas where I feel it's very complementary. I think there's a lot of confusion, as I said earlier. I think CEOs are confused, CFOs are confused. They've been doing pilots for a year. You've been hearing about the whole pilot purgatory. But ultimately, if you can show actual economic value, if you have customers that can reference that, that is where you're going to be able to drive growth. And when I think about C3, we have a select area, we have clear lighthouse accounts Shell, Cargill, Dow, federal government. I'm like, leverage that, tell that story and repeat it. It's back to foundational principles.

I mean I 100% agree with you in terms of we're not going to vibe code, a supply chain optimization solution that's really complicated stuff. The other new -- well, actually, guys actually ask in this room, who's bought a Mac mini in the last 30 days. Right, okay. How easy was that to set up?

Not easy -- so there's this perception that you can just over the weekend. By the way, what's happening? You can buy a Mac mini. You download a current model. You have supercomputer-level capabilities in the hands of somebody who's smart to construct this and you can build the conversations.. That's the vision, the pitch. But it's not that easy. And also, you're going to connect this to all your files, your e-mails, as your personal information. There's no security. These are open source models. But you're seeing how fast it's evolving. Now I'm thinking now take that same approach, but if you have the, I don't know, enterprise alignment and guardrails you're going to want that same capability to launch inside the enterprise. But it's going to take somebody who is a trusted partner that actually is able to protect your data, have audibility and do this at scale. That's a really frequent hard problem. So I'm going to say the market is evolving quickly, you're seeing where it's going. But I think it does not discount what it takes to go from a nice proof of concept of a weekend or a pilot to actually production-grade enterprise. It's also a hard one that SaaS providers block access to the APIs.

That's real also can be a roadblock. The angle where it's going is thaat like I think we both agree that the sort of buy coding disruption risk is probably overstated. The nuance angle that I get from a lot of institutional investors like we get that, a lot of systems of records are going away, a lot of software is going to stick around. But the potential proliferation of alternatives more broadly, does that just sort of erode on pricing power and put more pressure on business models. And I think that's kind of where the conversation at least I've had with my companies that sort of evolved to. I'd love to get your perspective on that.

So when I was building a CRM and customer support solutions, there was a big obsession around being the single pane of glass, being the interface where humans sales reps, marketers, service agents are interacting with. That was the power grab, having everything in one place. Now the question is, what is the primary interface. If it's an agent or the primary interface, how important is that single pane of glass. And the question is, if that's being questioned, what's the value of a CRM or an ERP system or an ITSM. And so I think that's all evolving. I think concretely, there's going to be applications in the past have been mapped to departments, CRM for sales. You have marketing automation. Where is the future going? There's going to be much more orchestration of work across departments, right? We have these agents thinking. You have humans definitely on the loop of all this, but there's going to be work done across departments. So I think that's going to question the moat of some of these legacy providers, but also reinforce because they see the same thing. They're going to be installing agents. They're going to be promoting themselves cross-functionally as well. So I think it's going to be a disaggregation in terms of the value I think there's a graph in terms of who can orchestrate work. And I think where our thesis is we want to be the enterprise application layer for specific industrial workflows where we can help orchestrate work across the value chain for specific use cases.

Makes sense. In the last couple of minutes, I wanted to sort of get your perspective on C3 versus some of its closest competitors, whether it's Palantir or Databricks, I mean these companies have proven that they can grow incredibly fast at multibillion-dollar scale in the enterprise AR market. Some of them have also achieved incredible levels of profitability. And so I guess the question is like, what are your competitors doing that C3 is in? But maybe more importantly, when you look at your competitors, what are things that you can you take away from them that you can incorporate into the plan into the operating model that can set you on a similar path?

Yes. So when I see what's -- and the answer is yes. There's -- these companies are successfully, very successfully proven the road map and go do it. For me, it's going to be about focusing on playing bigger, right? What's working in federal, playing at the secretary level of a broad AI transformation story using AI and automation across the value chain. Having a methodology how to go do that, number one. Playing bigger at C-suite conversation. Number 2 is speed of execution. How do you go from an idea of the first conversation to value or insights. That is something -- it doesn't -- it shouldn't take 6 months. What can get done in the first conversation, what can get done in the first day or the first week that's the mindset I'm going to have and bring back to the company, which is the speed of execution and delivery of value. Because again, everyone is looking for economic value. We have the proof points, how do we condense or compress that time window. That's why I feel like our competitors are doing a great job of. I think we have a huge opportunity to do this very similar. But also, let's not lose sight of where do we win. I don't want to be everything to everyone industrial applications, federal government, this is where I think we have a clear opportunity focus. First principle of thinking, folks, focus, all you know this. You know this, I need to execute on this. That's my job.

Awesome. And I totally agree with the focus point. My last question is, given how the share price has reacted to the performance over the last 2 or 3 quarters, how is the team planning to like restore investor confidence? It's obviously going to come through execution of the plan. But maybe just paint us the picture of hopefully, you'll join us this time next year for the TMT conference. In a year from now, like what is the landscape? And what do you hope the conversation around C3.ai will be a year from now?

So a couple of things are happening right now. Yes, we have a lot of work to do. Yes, we reduced headcount by 26%. But what's happening internally? Because I've been here 6 months, and I'm like, for a company in Silicon Valley building AI solutions. The use of AI internally was very limited, honestly. And 3 months ago, we were like, okay, coding agents are real. I've been using these for the last couple of years, wide adoption. So that was the first immediate thing we started doing adopting AI. You talk to developers, even the most seasoned developers who love the craftsmanship of coding, they don't code much anymore. And you say, how much productivity have you gotten? 10x would be the answer, right? I'm like, okay, how do I play that across every department. Marketing, we're trying to launch a new website. That will be 9 to 12 months and millions of bucks. I said, what can get done in 48 hours. And literally the team in between planning for a user conference tomorrow, we had Davos, a couple of weeks ago that literally created a brand-new website, leveraging our brands and our positioning beautifully. So it's just when you think of the productivity, 10 to 100x, that's the achievement I want to get because if we can show how C3.ai is a glean example of how AI fire your business, we can showcase that our customers and can get all of our team understanding, our sales reps to understand the power of it. So that's number one, how we kind of change how we operate. Number two is how our customers are building enterprise applications. That's been a big piece of the next 12 months. it's decreasing the time from this. You have a mission-critical idea and you want to launch this to a mission-critical app. That should be compressed immediately. And how you do that is all this investment we've made over the years, which is our data integration. Our ontology layers, our agentic execution layers, our interaction layer. That is where we spent years building, and that's not throw away. That is all positive in order to actually deliver the future where you have autonomous agents running around the department to automating a supply chain. So that would be the goal is how do you actually provide an autonomous operations for our customers and then how C3 actually produce headcount went faster over 12 months.

Awesome. Well, Stephen, thank you so much for giving us the update on C3. Congrats on becoming the new CEO best of luck on the customer conference and looking forward to seeing better days ahead at C3. Thank you very much. We appreciate it. Thank you.

Great job. Thank you.