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Thank you for standing by and welcome to C3.ai's Second Quarter Fiscal Year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, today's conference is being recorded. I would now like to hand the call over to Amit Berry. Please go ahead.

Good afternoon, and welcome to C3.ai's earnings call for the second quarter of fiscal year 2025 which ended on October 31st, 2024. My name is Amit Berry and I lead Investor Relations at C3.ai. With me on the call today are Tom Siebel, Chairman and Chief Executive Officer; and Hitesh Lath, Chief Financial Officer. After the market closed today, we issued a press release with details regarding our second quarter results, as well as a supplemental to our results, both of which can be accessed through 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 related to the 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. All figures will be discussed on a non-GAAP basis unless otherwise noted. Also during 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 remarks, in response to your questions, we may discuss metrics that are incremental to our usual presentation to give greater insight into the dynamics of our business, or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future. And with that, let me turn the call over to Tom.

Thank you, Amit. Good afternoon, everyone, and thank you for joining our call today. We had another outstanding quarter with strong top and bottom-line performance. This quarter marked our seventh consecutive quarter of accelerating revenue growth. Our year-over-year revenue growth has accelerated from 11% in Q1 '24 to 17% in Q2 '24 to 18% in Q3 '24, 20% in Q4, 21% in Q1 '25, and Q -- first quarter of '25, and now 29% in the second quarter of fiscal year '25. Total revenue for the quarter was $94.3 million, exceeding the high-end of our revenue guidance. Subscription revenue was $81.2 million and increased 22% from a year ago. Subscription and Prioritized Engineering Services revenue combined was $90.8 million and accounted for 96% of total revenue, an increase of 27%, compared to $71.3 million one year ago. I will also note that our non-BakerHughes revenue grew by 41% year-over-year. Our non-GAAP gross profit was $66.3 million, representing approximately a 70% gross margin. Our non-GAAP operating loss was $17.2 million and substantially better than our guidance for a loss of $26.7 million to $34.7 million. Our non-GAAP net loss per share was $0.06. We ended the quarter with over $730 million in cash, cash equivalents, and investments. I'll note this is -- that this is the 16th consecutive quarter as a public company in which we have met or exceeded our revenue guidance. While I would describe our performance as generally on track with the plan we provided, there is no question that our new Microsoft alliance provided a tailwind. Our growth continues to gain traction, with increasing revenue momentum quarter after quarter. A significant driver of this success is our expanding partner ecosystem, which plays a critical role in driving our leadership in the market. Our partner market ecosystem today includes Google, AWS, Microsoft, Peraton, Fractal, Paradyme, Booz Allen, RTX, ECS, Capgemini, and Baker Hughes. Our partnering activity with the hyperscalers in the quarter remained brisk, with 62% of our agreements being closed with or through Google Cloud, AWS, and Azure. Looking at our current installed base as measured by customer logos as of October 24, 51% of our contracts were on Google Cloud, 21% were on Azure, and 24% were on AWS, and 5% were on-prem. The most significant event of the quarter and perhaps the most significant event in the Company's history was most certainly the substantial expansion of our strategic alliance with Microsoft Azure. On September 30th, 2024, Microsoft and C3 AI entered into a new and expanded strategic alliance for an initial 5.5 year term ending March of 2030. I believe this will constitute an inflection point in the Enterprise AI industry. Under the terms of the Microsoft C3 AI Strategic Alliance Agreement, all C3 AI Enterprise -- all C3 Enterprise AI and C3 Generative AI solutions are now available on the Azure price list. All C3 Enterprise AI and Generative AI solutions are now orderable on the Microsoft -- on the Azure, marketplace. All C3 AI solutions are sellable by the entire Azure sales organization globally. Azure sales personnel will receive commissions, quota credit, and special bonuses on Azure C3 AI sales. Azure salespeople will receive design win credits for each Azure C3 AI sale. Importantly, all C3 AI products are now orderable on Microsoft paper, incorporating the Microsoft enterprise licensing agreement that Microsoft has in place with, I believe, over 95% of the Fortune 500. This will dramatically shorten C3 AI sales cycles. And finally, Microsoft will subsidize C3 AI pilots and C3 AI production deployments on Azure over the term of this agreement. There are a large number of joint sales and marketing activities that we have agreed to in the alliance agreement. The two firms will jointly build a pipeline of customer accounts based on a joint business plan with mutual sales leadership sponsors, joint customer acquisition targets, a robust governance structure, and executive meeting cadence, global system integrator alliance, a deal registration process, sales and technical support resources, publicity and press releases, marketing initiatives, and joint solutions offerings. C3 AI and Microsoft will create joint webinars and sales collateral to train the Microsoft and C3 AI sales forces on our joint offering, solutions, and value propositions. Microsoft will list all C3 AI software solutions on the Microsoft commercial cloud portal, transactable on Microsoft paper. A joint marketing fund will be established for cooperative marketing and promotion of the integrated solutions, and such other activities as C3 being a platinum sponsor at Microsoft conferences and participation in Microsoft Azure industry days and AI innovation summits. C3 AI and Microsoft will schedule and attend industry solution roadmap review meetings on a quarterly basis. The executive sponsors of the alliance are for C3 AI, Tom Siebel, the CEO and Chairman. And for Microsoft, Judson Altoff, the Chief Customer Officer of Microsoft. Importantly, for all of the Microsoft-funded projects, C3 AI will position the Microsoft Azure Cloud as its preferred cloud provider. And Microsoft will designate C3 AI as its preferred Enterprise AI application provider. C3 AI has been pioneering Enterprise AI now for 15 years. We invented Enterprise AI. We've built over 100 Enterprise AI applications that deliver measurable value to our customers around the world. And now, Microsoft is fully on board and leaning in. It is difficult to overestimate the impact of this agreement upon C3 AI and upon the Enterprise AI market writ large. As a direct result -- direct and immediate result of this alliance, the effective number of C3 AI sellers will grow from order of hundreds of sales professionals at C3 -- order of 100 sales professionals at C3 AI as of October 1st, 2024, to potentially order of 10,000 sales professionals operating in every geography in every vertical market. Microsoft is the largest software company in the world. We believe that over 95% of the Fortune 500 companies use Microsoft products. They're an established brand with the largest sales channel in the cloud. Partnering with Microsoft allows C3 AI to leverage its unparalleled reach, robust cloud capabilities, and trusted reputation in the market. Together, Microsoft and C3 AI share a bold vision to redefine how businesses transform. This partnership will accelerate the adoption of Enterprise AI on Azure and enable us to tackle some of the most complex business challenges of the 21st century for organizations across every industry. We are going to market with industry-centric turnkey AI solutions that address the value chains of federal, defense and intelligence, manufacturing, pharmaceutical, chemicals, oil and gas, utilities, and others. By combining C3 AI's proven Enterprise AI applications with Microsoft's superior cloud infrastructure and global reach, we are exceptionally well-equipped to help organizations achieve higher levels of efficiency, innovation, sustainability, and rapid economic return. The momentum that we've generated this quarter is undeniable, and we are energized by what lies ahead. Now, let's look back at the quarter and shift to customer success. In the second quarter, C3 AI closed 58 agreements, including 36 pilots. We entered new and expanded agreements with Exxon Mobil, Coke, Dow, Wholesome, Shell, Duke Energy, Boston Scientific, Rolls-Royce, Cameco, Mars, ESAB, Flex, and Worley, among others. Additionally, we continued to expand our footprint across state and local government, closing nine agreements in California, Texas, Michigan, Idaho, New Mexico, Washington, and Florida. In our federal business, we have strong execution across the board and secured key wins and expansions with multiple agencies. We entered into new and expanded agreements with the U.S. Department of Defense, the U.S. Air Force, the U.S. Navy, the U.S. Army, the U.S. Marine Corps, the Defense Logistics Agency, and the Chief Digital Artificial Intelligence Office, among others. The U.S. Army's program manager for intelligence and system analytics selected C3 AI and ECS Federal to transform its intelligence collection with C3 AI Decision Advantage. Delivered under a $23 million award, this AI application unifies data from multiple systems to streamline tasking and collection, including digitizing scheduling workflows. These modernization efforts make it easier for the Army workforce to quickly provide real-time predictive intelligence to leaders for enhanced, accelerated decision-making. The United States Air Force Rapid Sustainment Office continued the expansion of its sensitive-based algorithms with C3 AI with a new contract. The PANDA application, which is the designated U.S. Air Force system of record for all CBM-plus and predictive maintenance, will expand to include new systems on two monitored aircraft, the KC-46 and the KC-135. The Defense Logistics Agency, a cornerstone of the US Department of Defense's supply chain, expanded its use of C3 AI-contested logistics applications to drive efficiency and productivity across its workforce, ensuring supply network resilience and availability in contested environments. DLA uses C3 AI-contested logistics to streamline workflows and decision-making for risk management, sustainment, scenario-based planning, proactive readiness, and predictive maintenance across the Department of Defense. Together, C3 AI continues to support DLA to enhance warfare readiness, drive operational efficiency, and improve mission effectiveness across the globe. C3 AI is most certainly a trusted partner for these agencies, providing innovative and secure solutions, empowering modernization and agility. I suspect there will be a question about Baker Hughes, so let me address that upfront. Now, 5.5 years into the Baker Hughes agreement, there is no question that this has been and continues to be in the best interest of our shareholders. That being said, the relative importance of Baker Hughes in our overall business mix is diminishing. In fiscal year '23, Baker Hughes accounted for 35% of our revenue. In fiscal year '24, Baker Hughes accounted for 27% of our revenue. In last quarter, Baker Hughes accounted for 18% of our revenue. Revenue ex-Baker Hughes increased by 41% year-over-year in Q2 fiscal year '25. Our oil services exclusive marketing agreement with Baker Hughes is scheduled to expire in June of 2025 unless we renew or extend it, as we have done three times previously. Now, as I sit here today, I think it's much more likely than not that this agreement will be extended, okay, and will be renewed. But as we consider our renewal options going forward, particularly in light of the new Microsoft agreement and the many direct customer relationships that we have successfully established in the oil and gas market, we need to consider carefully whether it is in the best interest of our shareholders to partner exclusively with Baker Hughes in the oil and gas market or whether we are better off partnering with all of the oil and gas service providers. Any of these outcomes will not impact our guidance, and at this point, it is not particularly significant to our outlook as we have successfully diversified our revenue mix. Let's put this into perspective. Our relationship with Baker Hughes is great. They're a great company. They're an order of, I think, a $24 billion business, okay? Now, what is the big story today? The big story is Microsoft. Microsoft, if I'm not mistaken, is an order of a $250 billion business. And so, this by far overshadows anything that we've done. And we value our relationship with Baker Hughes. As I sit here today, I think it'll be extended, but whether it's extended or not, it has no impact on our outlook or guidance. Talk a minute about generative AI. This is -- clearly this generative AI issue represents a pivotal moment in enterprise technology, and the significance of generative AI just cannot be overstated. C3 AI is at the forefront of this revolution with a highly differentiated product offering, providing customers with safe, secure, fast, reliable information from across the enterprise. While many other companies are still making a lot of noise and experimenting with prototypes, C3 AI has already deployed generative AI in production, in hardened, real-world, highly secure enterprise environments. In Q2, we closed 15 new generative AI agreements with organizations including Boston Scientific, Koch, Rolls-Royce, the U.S. Navy, the National Science Foundation, and several government agencies in Texas, Washington, and New Mexico. Additionally, we converted pilots into production agreements at Dow, Cargill, Norfolk Iron and Metal, and Florida Crystals, demonstrating our ability to deliver results at scale in manners that are safe, secure, hallucination-free, and kind of avoid all the hobgoblins that you read about associated with generative AI. Enterprises select C3 generative AI for its proven ability to drive measurable business outcomes in a way that is safe, secure, traceable, and doesn't cause data exfiltration problems. To jumpstart these outcomes and better serve our customers, this quarter we introduced the C3 Generative AI Accelerator program. We kicked off this program by hosting multiple Fortune 500 companies at our headquarters in Redwood City for an immersive hands-on three-day workshop. Participants work with experts to tailor generative AI solutions that meet their business needs and leave with production-ready AI applications. The feedback has been extremely positive, and we will be doing many, many more of these around the globe in the months and quarters ahead. It's still early days for generative AI adoption, but the trajectory is clear. According to Gartner, by 2028, 33% of Enterprise AI software applications will include agentic AI, up from less than 1% today. This will be a massive shift, and C3 AI is uniquely positioned to lead the way. A major highlight of the quarter, and it is difficult to overestimate the importance of this, is the award to C3 AI of US patent number 12111859, covering agentic AI, which strengthens our market position dramatically. This patent products a sophisticated system and method for orchestrating multiple AI agents using multimodal foundation models. This patent technology is integrated into the C3 generative AI architecture, enabling independent AI agents to retrieve information across structured -- restructured data, reason, take actions, and actionable insights. You're listening to all the results. There is no enterprise software company that is not yapping, okay, about agentic AI and the importance of generative -- these AI agents to their future. Newsflash, all that is covered by a C3 AI patent dated January 2023. That is our intellectual property people, and that is an important milestone in the history of Enterprise AI. This is a transformative time for C3 AI. We continue to report strong and accelerating growth. We continue to expand our thriving partner ecosystem, and we continue generating meaningful economic returns for our customers, resulting in exceptional customer satisfaction levels. C3 AI has a significant first-mover advantage and a strong and proven technology foundation. The C3 AI platform is widely recognized as the leading AI/ML platform, and powers all of the C3 AI Enterprise applications that are now tried, tested, and proven in the market. C3 AI has never been better positioned to capitalize on this market opportunity. Last year, we made well-considered investments to strengthen the business that resulted in the increased growth that you are seeing. With those investments in lead generation and customer success, we are now supporting considering more pilots every quarter and accelerating top-line growth. In Q2, we supported 70% more pilots than we did a year ago, and now with the Microsoft partnership, we're expecting to further accelerate this growth. Given the magnitude and the great potential of the new Microsoft alliance, we are going to invest in the Microsoft partnership in a big way. To not do so would be non-rational. We will hire more salespeople. We will hire more customer support people. We will engage in more marketing activity, and we will do that to support a more rapidly growing customer base. The result will be increased sales, increased revenue growth, and increased market share. Given this investment decision, we are no longer targeting to be cash flow positive for the full year of fiscal year '25. We have more than sufficient cash, and we will continue to plan to be cash-positive -- cash flow positive in the fourth quarter of this year. C3 AI is a structurally profitable business, and by that I mean that our revenue exceeds our cost of goods sold and plus cost of selling. We are well capitalized with $730 million in cash and cash equivalents in hand. We have delivered rapid, sustained growth for seven consecutive quarters, and they are generating massive value for our customers. Our partner network is expanding, and we are broadening our footprint across critical industries. Our revenue growth continues to exceed our expense growth -- our revenue growth rate continues to exceed our expense growth rate and as we expected that to be generally true going forward, continuing that trend, profitability is a mathematical certainty with scale. It's important to understand, I want to talk about modeling a little bit, about modeling the business. It's important to understand that the AI computing world is dramatically more complex than the conventional computing world, and as a result, it is more difficult to model. The root of that is because it's simply not possible to apply conventional computing analytic models to the AI computing world. It's not simply a matter of computing pilots, determining the conversion rates, and then multiplying virtual CPU hours by the vCPU price. The fact is that in the reality of this new AI world that we're entering, the complexities and permutations of the offerings required by the market and the number of applicable accounting treatments in any given agreement can be unwieldy. Taken over the union of all C3 AI agreements, it is unfathomable. Think about it. C3 AI sells over 150 unique software and service solutions, many with multiple components, many with unique pricing that require per GAAP a multiplicity of accounting treatments. Pilots and trials are recognized over terms that may vary from 10 days to six months. Enterprise AI solutions with continuing performance obligations are recognized radically over the term of the agreement. Some customers prefer subscription licensing that is recognized radically over time. Other customers prefer consumption pricing that varies monthly based upon utilization. Demonstration licenses that we provide to our partners and customers to make them more effective, proselytizing our solutions, do not have continuing performance obligations and are therefore recognized as licenses in the period they're delivered. Prioritized Engineering Services, working software, machine learning models, data ontologies, etc., that have utility over the term of the underlying subscription agreement are properly recognized as professional services in the period delivered. Conventional professional services are recognized as they're delivered. The dizzying array of products and services that we offer to meet the needs of the rapidly developing AI world results in a combination of unique product and service offerings and associated accounting treatment combinations that is order of 100 factorial. There are not enough rows in your spreadsheet to model this business. C3 AI has been a public company for 16 quarters. In each of those quarters, our revenue results have met or exceeded our guidance. In preparing our guidance each quarter, we work very hard to capture all the complexities I just described. Our guidance is likely to produce a more reliable forecast than your conventional spreadsheet model. C3 AI leads with AI applications that drive customer results. We're turning these results into adoption and we're going to turn the adoption into market leadership. The opportunity in Enterprise AI is enormous and we are investing to build a cash-generating, profitable, market-leading Enterprise AI software company. Revenue guidance. Our revenue guidance for Q3 fiscal year '25 is $95.5 million to $100.5 million. We are raising our revenue guidance for fiscal 2025 to $378 million to $398 million. Our guidance for non-GAAP loss for operations in Q3 is $38.6 million to $46.6 million and we are updating our previous guidance to -- our previous loss guidance to $105 million to $135 million for fiscal year '25. I will now turn it over to Hitesh to cover the financials. Hitesh?

Thank you, Tom. I will now provide a recap of our financial results and additional color on our business. All figures are non-GAAP unless otherwise noted. As Tom mentioned, total revenue for the quarter increased 29% year-over-year to $94.3 million. Subscription revenue increased 22% year-over-year to $81.2 million, representing 86% of total revenue. Professional Services revenue was $13.2 million. This represents 14% of total revenue in the second quarter of fiscal '25. As we've said in prior quarters, we expect the Professional Services revenue, which includes Prioritized Engineering Services revenue, to generally stay within 10% to 20% of total revenue for fiscal '25. As a reminder, our Professional Services revenue includes service fees and Prioritized Engineering Services. Service fees include revenue from services such as consulting, training, and paid implementation services. Prioritized Engineering Services, or PES, are undertaken when a customer requests that we accelerate the design, development, and delivery of software features and functions that are planned in our future product roadmap. We negotiate an agreed-upon fee to accelerate the development of the software, and when the software feature is delivered, it becomes integrated to our core product offering, is available to all subscribers of the underlying software product, and enhances the operation of that product going forward. Such PES results in production-level computer software, compiled code that enhances the functionality of our production products, which is available for our customers to use over the life of their software licenses. Our Subscription and Prioritized Engineering Services revenue combined was $90.8 million and accounted for 96% of our total revenue, an increase of 27% compared to $71.3 million one year ago. Gross profit for the quarter was $66.3 million, and gross margin was 70%. Gross margin for Professional Services remained high at over 90%. Operating loss for the quarter was $17.2 million, and our net loss for the quarter was $7.8 million. Our operating loss was better than guidance due to continued focus on expense management, and certain sales and marketing and R&D expenses that were pushed to the third and fourth quarters. Our net cash used in operating activities was $38.7 million. Free cash flow for the quarter was negative $39.5 million, as compared to negative $55.1 million in the second quarter of last year. We continue to be very well capitalized and close the quarter with $730.4 million in cash, cash equivalents, and marketable security. At the end of second quarter, our accounts receivable balance was $160 million, including unbilled receivables of $97.5 million. Total allowance for bad debt remains at less than $0.5 million, and we do not have concerns regarding collections. The general health of our accounts receivables remains strong. During the second quarter, we signed 36 pilots. At quarter end, we had cumulatively signed 260 pilots, of which 210 are still active. This means they are either in their original three to six-month term, or extended for some duration, or converted to a subscription or consumption contract, or are currently being negotiated for conversion to subscription or consumption contract. We are excited about our partnership with Microsoft and the joint go-to-market initiatives. As Tom said, and I'd like to underscore that we are investing aggressively in this partnership. We expect some moderation on our gross margins due to higher mix of pilots in the near term, which carry a greater cost of revenue during the pilot phase of the customer life cycle. We also expect some moderation in our operating margin in the near term due to additional investments we are making in our business, including in our sales force, customer support, research and development, and marketing. As we continue to make significant investments in the business, we expect to be free cash flow negative for the third quarter, but remain on track to be free cash flow positive for Q4. With that, I'd like to turn the call over to the operator to begin the Q&A session. Operator?

[Operator Instructions] Our first question comes from the line of Patrick Walravens of Citizens JMP. Your question please, Patrick.

Okay. Great. Thank you, and congratulations. Tom, I think two questions for me, if I may. I would love to hear the history of the relationship with Microsoft and how you got it to this point. Did you work with Judson at some point at Oracle? And then secondly, just your thoughts on how federal spending might change under the new administration.

I -- Judson and I did not overlap at Oracle, but he was at Oracle, and he ran alliances at Oracle at the time that Oracle acquired Siebel Systems in January of 2006, and many of the Siebel people went to work for him. I did -- our relationship between Microsoft and C3 has pretty much always been driven between, well, Judson and I. And this agreement was put together with Judson and I, and he and I are coordinating this very closely. Federal. I just came from the Reagan Defense Forum in Simi Valley, where all the defense contractors there, all the software companies are there, Secretaries of Defense are there, Army, Navy, Air Force, Marines, all the military leaders and acquisition professionals. And whereas in former years, the subjects were about submarines and carriers and space and aircraft, Pat, there was one subject on every panel, okay? And one subject at every speech, and that was AI applications, AI applications, AI applications, AI applications, and then cyber. That's what went on for two days. And so I think we're going to see a dramatic acceleration of AI adoption in the federal government, certainly with Elon and company, across all lines of all aspects of operating the business, whether it's CMS, HHS, Treasury, wherever, Department of Justice, but most certainly in the defense and intelligence community. And I think they're going to dramatically change the way that they acquire these technologies, where they acquire the bulk of their -- in the defense department, but as you're aware, they acquire almost everything from six vendors. I think those days are over. And I think the beltway bandit heads are going to be spinning as the private enterprise moves in to support the defense and intelligence companies in the current administration.

Great. Thank you very much and congratulations again.

Thank you.

Thank you. Our next question comes from the line of Timothy Horan of Oppenheimer. Your question please, Timothy.

Thanks, guys. Can you discuss maybe what was unique about what you can do that Microsoft couldn't do in a little bit more detail? And then, who else are you kind of competing with in these kind of contracts, or who else maybe is Microsoft partnering with, if anybody? And then secondly, does this meet the enterprise contract commitments in terms of volume, the enterprise agreements for commitments and dollars spent over the next couple of years as they bundle together services? Thanks.

Okay, happy -- first, happy birthday, Tim. Let's ask the last question first. So, yes, as it relates, these sales do apply against customer commitments to Microsoft. So, where they've made these large hundreds of millions, and in some case, I suspect billions of dollars commitments to buy Microsoft software services in the years to come, the C3 AI sales do burn down those commitments. What is the difference between what Microsoft -- I mean, how does this differ from what Microsoft sells? Microsoft sells a vast array of services in Azure. A lot of them AI services like AI Studio and whatnot that allow us to, persistence technologies, machine learning model technologies, all of which we take advantage of in building turnkey applications. And so rather than providing services that you can use to build applications, we're using those services to provide the turnkey application that does things like supply chain optimization, demand chain optimization, okay, forecasting, customer churn, fraud, what have you. So, we're entirely complimentary with the Azure AI services. We use all of the Azure AI services, but we deliver those services packaged in a turnkey application that offer economic benefit in a very short period of time.

Thanks for the well wishes, Tom. And so, I mean, it's a pretty big statement that you're going to be their preferred AI application partner. Is that -- I mean, is that correct?

That, I read that from the agreement. Yes, that is the agreement, Tim. So, as all these, where we're going to market together in this alliance, which is all around the world, where we're going to market together and we partner together, okay, we're going into that customer positioning Azure as our preferred cloud provider and Microsoft is going into the customer positioning C3 AI is their preferred Enterprise AI solution. Yes, that is a big statement. And yes, that is a big day for C3 AI.

And lastly, when do you think this will start contributing to revenue and maybe can give us some color how meaningful it could be to overall revenue growth? I mean, you're already growing at 30%. Can this accelerate that at some point?

It already has contributed to revenue growth. The agreement was signed on September 30th. It already has contributed to our revenue growth. And I think while the extent to which this might contribute is unknowable, we have gone from order of 100 salespeople around the world to potentially order of 10,000. And so I don't think there's any question that this provides a tailwind in the years ahead that could be quite substantial and offers us a substantial differentiator from anybody else in the enterprise who either is in the Enterprise AI application business or purports to be in the Enterprise AI application business.

Thank you. Congratulations.

Thank you.

Thank you. Our next question comes from the line of Mike Cikos of Needham. Your question please, Mike.

Great. Thanks for taking the question too, guys. Totally understand on the investment that you guys are making behind partnerships and in this opportunity here. Just wanted to get a better understanding with the pre-cash flow pushout that we had previously anticipated for fiscal '25, should we now expect that the Company can turn free cash flow positive in fiscal '26 or how far out is that timeline been pushed now?

Well, how far has it been pushed out? I mean, Mike, to not invest in this is like kind of crazy, right? I mean, we did raise this money in a public, in December 2020 for exactly this purpose, to invest in market share and invest in growth. We have been using those resources very carefully. I think we raised $1 billion and we have, what, $730 million in the bank. So, I realized, I love to read from sell-side analysts' reports about how we're hammering it in cash. And seems like every time I have a quarterly customer call, I still have like three-quarters of $1 billion cash left. So, I can't quite resolve those two issues. I think if you look out into fiscal '26, we should be crossing -- at some point there, we should cross over into being cash-positive. But right now we're investing in market share. We're investing in leadership. And I have the largest software sales organization in the world, okay, selling with me and for me, and we're going to take advantage of it.

Understood. Thanks, Tom. And maybe just one follow-up, if I could. I know that you guys are obviously discussing the Subscription revenue tied into the Professional Engineering Services in that pro-serv line. With the discussion that we have today, is this relationship with the Professional Engineering Services, can you help explain, does that in any way have a linkage to the unbilled receivables on the balance sheet?

No. No. Professional engineering, basically, these Prioritized Engineering Services, the way -- this is a -- when somebody wants us a Dow, a Cargill, a Baker Hughes, a Shell, wants to take something that we have planned in our roadmap to do it now, to accelerate it, and we agree to do it, we write the spec, we write the code, we do the quality assurance, we do the performance testing, and we deliver them object code that they use over the life term of the agreement, looks like software, smells like software, is incredibly high-margin business, okay, but under the current accounting guidance of ASE 606, it has to be recognized, it's called a Professional Service. I don't know, that's just the language they use, but it looks like software, is like software, smells like software, is in fact software, and I think something like 96% of our revenue consists of Subscription revenue and Professional Engineering Services, so we will be doing more of it going forward, is in the best interest of our shareholders, it's great business, and there's nothing that isn't good about it.

Thank you very much.

Thanks, Mike.

Thank you.

Thank you. I would now like to turn the conference back to Mr. Siebel for closing remarks. Sir?

Ladies and gentlemen, thank you for joining our call today. Thank you for tracking the progress of C3 AI. We -- there is no question, the Company has never been positioned in a better position than it is today. There is no question, I think in anybody's mind on this call, that the market for Enterprise AI is larger than it ever has been today, and growing at a faster rate than any of us anticipated. I think that we are extraordinarily well-positioned with our many partnerships, including Microsoft to seize this opportunity. I mean, let's net this out, okay, guys. There's two stories to the quarter. Okay, 29% top-line growth, okay? Okay, and a very close strategic partnership with the largest software company on the planet Earth. That's the beginning, that's the end, and we're going to take it from here and see what we can do with it. Ladies and gentlemen, thank you very much for your time.