Good afternoon, and thank you for attending today's C3.ai Third Quarter Fiscal Earnings Call. My name is Amber, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. It's now my pleasure to hand the conference over to our host, Paul Phillips with C3.ai. Paul, please proceed.
Good afternoon and welcome to C3.ai's earnings call for the Third Quarter of Fiscal Year 2022, which ended January 31st, 2022. My name is Paul Phillips, and I'm the Vice President of Investor Relations. With me on the call today is Thomas Siebel, Chairman and Chief Executive Officer. After the market closed today, we issued a press release with details regarding our third quarter results as well as a 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 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. With that, let me turn the call over to Tom for his prepared remarks. Tom.
Thank you, Paul, and hi, everybody. Thank you for joining us today. I'm very pleased to give you a briefing on the results of the quarter that we recently concluded. It was a great quarter. Our third quarter results displayed strength in all aspects of our business, including revenue growth of 42% year-over-year. New business activity was exceptionally strong.
Our results were driven by substantially increased sales momentum due to the successful refocusing of our sales organization, continually expanding customer count, the continual expansions of the C3 application footprints within existing customers, and increased industry diversification for our AI products and sales. Highlights of the third quarter include, you know, revenue. Total revenue of the quarter was $69.8 million, an increase of 42% year-over-year.
Subscription revenue for the quarter was $57.1 million, an increase of 34%. Customer count increased 82% year over year to 218. Non-GAAP gross profits for the quarter was $55.8 million, an 80% gross margin. Significantly, our GAAP RPO now represents 168% of Q3 annualized sales. Let me touch on customer wins and expansions. Business from contracts executed in the quarter showed substantially increased industry diversification. 32% were from was from Utilities. 30% of our business was from Chemical industry, 20% from Agribusiness, 12% from Financial services.
I've spoken in the past about our emphasis to increase our business with small and medium customers, and I'm pleased to report that we made excellent progress in that regard.
During the quarter, we executed 12 agreements less than $1 million, 3 contracts between $1 million and $5 million, 2 transactions between $5 million and $10 million, and 3 agreements in the range of $10 million-$50 million. Shell, which is one of our largest customers, continues to expand its C3 application footprint with over 10,000 devices currently monitored by C3.ai Machine learning models and 23 large-scale assets in production deployment, including Pernis, the largest refinery in Europe, and Nigeria LNG.
Understand, so by asset, we're not talking about a pump or a valve. By asset, we're talking about Pernis. Pernis, for those who don't know, this is the largest refinery in Europe.
I think they process 0.5 billion bbls of oil a day, and this would be an asset the size of, say, order of magnitude of, say, 10 aircraft carriers. That's what they call an asset, and they have 23 assets that size currently in production. Shell currently processes 1.3 trillion predictions per month. With the C3.ai suite, Shell expanded both the duration and the scale of its contractual relationship with C3.ai during the quarter.
The Department of Defense awarded C3.ai a five-year, $500 million transaction agreement, accelerating the ability for any DoD agency to acquire the company's suite of enterprise AI application products and services, basically without an RFP and without competitive bidding. We achieved a new production deployment with the Defense Counterintelligence and Security Agency and secured additional business with the U.S. Space Force.
LyondellBasell, one of the world's largest plastic and chemical companies, signed a five-year significantly expanded contract to accelerate the deployment of additional enterprise AI and machine learning applications across the company. Royal Philips, a global leader in health technology, closed a new and expanded contract with C3 to enhance resiliency, visibility, and agility for Philips' supply chains across the company's North American operations. Cargill substantially increased and extended its C3.ai Contract to expand its deployment of C3.ai Supply Chain Suite applications.
ENGIE, our energy services partner, expanded the use and extended the term of its C3.ai Contract to deliver a broader range of AI-enabled end-to-end energy and sustainability, think ESG solutions, to serve both the public and private sectors. SWIFT, the global provider of secure financial messaging services, expanded its relationship with C3.ai , leveraging the C3.ai Financial Services Suite.
Our business activity with our joint venture alliance partner, Baker Hughes C3.ai, continues to accelerate globally. I'll talk more about that later. Our customer accounts increased substantially year-over-year. I'll touch upon a few other corporate highlights. Sales. In the third fiscal quarter, the company successfully refocused its sales organizations to its traditional strategic accounts engagement model, delivering immediate and positive results. Leadership. C3.ai appointed Lisa Davis to its board of directors.
Lisa is a recognized global leader in industrial and energy industries, bringing more than 30 years of experience to the company. She has served in various capacities and leadership positions with several of the world's largest corporations, including Texaco and Shell, and as CEO of Siemens Energy.
We received some very significant AI tailwinds in the federal sector when the President signed into law in December the fiscal year 2022 National Defense Authorization Act. In that act, Section 227 requires that, and I quote, "The Secretary of Defense shall ensure that to the maximum extent practicable, commercial artificial intelligence companies are able to offer platforms, services, and applications and tools to the Department of Defense components through processes under Part 12 of the Federal Acquisition Regulation."
We believe this represents a secular change in procurement policies for AI solutions for DoD, requiring primacy in the selection and use of commercial off-the-shelf software solutions from commercial vendors like C3.ai, rather than traditional custom development by custom project-specific developers that have been largely proven to be unsuccessful.
We believe this will help to continue to accelerate C3.ai's federal business in the coming years. Importantly, C3.ai opened a new software development and professional services center in Guadalajara, Mexico. We plan to hire as many as 1,000 senior software and service engineers in Mexico over the next few years. C3.ai is making this investment to meet the growing global demand for enterprise AI applications and associated services, and because the talent pool in Guadalajara is amongst the best in the world.
Comment on cash reserves. With $1.02 billion in cash equivalents, and investments, C3.ai is well-positioned to continue to invest in market leadership through enterprise AI innovation and brand equity and sales expansion. Let me talk for a minute about go-to-market partners. Our most significant go-to-market partners are Microsoft, AWS, Google Cloud, and Baker Hughes.
We have closed over $250 million in business with Microsoft to date. As I speak, we are currently engaged in over 50 active joint customer discussions. Our qualified joint pipeline that we're working together globally is massive. AWS. Year to date, we've closed over $70 million in booking business with AWS, and our AWS joint selling activity has increased substantially in the public sector. Google Cloud, a relatively new partnership. We have 42 joint prospects in active engagement today. Google has assigned a team of 11 full-time professionals to coordinate sales activities with C3.ai.
We meet literally daily to coordinate sales activities. Google is a platinum sponsor at C3 Transform, our international user group conference, that will take place in March in Miami. Thomas Kurian, the Google Cloud CEO, will be delivering a plenary keynote address at that conference.
Baker Hughes remains our most strategic partner. They are also a platinum sponsor of C3 Transform. They will also be delivering a plenary keynote. As you know, in Q3, they expanded their partnership agreement with C3 to substantially increase both the term and the amount of their commitment to us. In the third quarter, 32% of our business was closed through the Baker Hughes-C3.ai partnership. That's up from 17% or 18% a year ago, and in dollar value, that represents a 700% growth year-over-year.
To be clear, all of the business in the partnership in Q3 from the Baker Hughes partnership came from third-party users. None of the growth in RPO came from Baker Hughes. Baker Hughes currently has 60 full-time professionals coordinating selling with us.
Our pipeline and joint sales activities with which we are engaged remains quite healthy. Let's talk about the addressable market. We are looking at a huge addressable market. Recent data from IDC suggests that the total addressable market for enterprise AI software is exceptionally large, to the tune of $365 billion this year, and expected to exceed $590 billion in 2025. We believe that C3.ai is, if not the largest, certainly one of the largest participants in this rapidly growing market segment.
We continue to be focused on establishing and maintaining market leadership, and we believe the company is on track to achieve that objective. Bottom line, it was a great quarter. Sales, growth, partnering, technology leadership, and the company is back on track.
I wanted to inform you also that last Friday, the company accepted the resignation of Adeel Manzoor, our CFO of 12 weeks, who resigned for entirely personal reasons. Due to the sensitivity of the personal issues involved, we will have no further comment on this matter. That being said, I am pleased to inform you that Juho Parkkinen, our highly experienced controller and Chief Accounting Officer, has been promoted to the role of acting CFO, effective immediately. You'll find that Juho has exceptional expertise and experience in all matters accounting as it relates to C3.ai. With that, I am pleased to turn that over to my colleague, Juho, to provide additional color on the quarter. Juho.
Thanks, Tom. I'll start with a review of our third quarter results, and following that, I'll provide our outlook for the fourth quarter and full fiscal year 2022, then we'll be happy to take your questions. First, let's start with the third quarter results. Total revenue for the quarter was $69.8 million, up 42% year-over-year and above our guidance range of $66-$68 million. Subscription revenue was $57.1 million, up 34% year-over-year. Subscription revenue was approximately 82% of total revenue in the third quarter compared to 87% a year ago. Professional services revenue was $12.7 million.
As Tom mentioned earlier, for the third quarter, remaining performance obligations or GAAP RPO increased by 90% on a year-over-year basis to $469.3 million, up from $247.5 million last year, of which $171.6 million is expected to be recognized over the next 12 months and the remainder thereafter. Non-GAAP RPO increased by 81% to $536.7 million, up from $295.9 million last year. The RPO growth reflects a healthy industry mix, as Tom mentioned in his earlier remarks.
Baker Hughes-related RPO growth to third-party companies contributed 32% of total growth in RPO compared to 18% a year ago period. As of Q3 FY 2022, customer count increased to 218, up 82% year- over- year.
We believe this reflects the success of our go-to-market strategy of entering into large enterprise agreements with our customer entities and expanding within those customer entities. During the quarter, we performed an analysis of our customer entity usage and found that our previous customer count did not capture all the distinct divisions, departments, business units or groups within customer entities that are using our software or services. As part of the earnings release under section Other Metrics, we have provided the apples-to-apples comparison of customer count using the appropriate calculation.
You will see that we have previously undercounted our customers. We will present the revised calculation of customer on a go-forward basis as we believe this provides more clarity and accuracy. Moving down the income statement, I will be discussing all metrics on a non-GAAP basis unless otherwise noted.
As a reminder, our non-GAAP amounts exclude 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 profit was $55.8 million in the third quarter, an increase of 50% from a year ago, primarily driven by revenue growth from new and existing contracts.
Gross margin was 80% compared to 76% a year ago. This improvement reflects the inherent leverage in our operating model as our business continues to scale. Subscription gross margin in the quarter was 83%, in line with 84% one year ago, and professional services gross margin was 66% compared to 21% a year ago.
Operating expenses were $71.5 million, up 45% from a year ago, reflecting our continuous and planned investments in research and development, brand awareness, and sales and marketing. We expect to continue to invest aggressively in sales and marketing and R&D to expand our market share and increase our presence in target industry verticals and geographic markets, while continuing to extend our technology leadership position as the deep enterprise AI software company.
All of these initiatives will drive growth in our business. Total operating loss was $15.7 million in the third quarter. Turning to our balance sheet and cash flows, we ended the quarter with $1.02 billion in cash equivalents, and investments with no debt.
Operating cash flow for the quarter was an outflow of $55.4 million, and after capital expenditures of $0.8 million, free cash outflow was $56.2 million. At quarter end, deferred revenue was $59.4 million compared to $62.3 million in the prior year. We are well positioned to continue to invest in our growth and execute on our growth strategy.
Turning to our guidance for the fourth quarter and full year of fiscal 2022. Our growing and diversified customer base and increased sales momentum reinforces our confidence as we look forward. For the fourth quarter, we expect total revenue in the range of $71 million-$72 million, representing a growth of 36%-38% from a year ago.
We expect to continue to invest in R&D and sales and marketing that will drive the future growth of our business and anticipate a non-GAAP operating loss between $30 million and $34 million. For the full year of fiscal 2022, we are increasing our revenue guidance to the range of $251 million-$252 million, representing a growth of 37%-38%. We anticipate a non-GAAP operating loss in the range of $90 million-$94 million, an improvement from our prior guidance.
In addition, the early indicators for Q1 fiscal 2023 have us expect a similar total revenue as for Q4 fiscal 2022. For the full year fiscal 2023, the analyst consensus is in line with our growth expectations. In summary, we're pleased to report third quarter results that were ahead of our guidance ranges.
We are excited about our current sales momentum and customer growth, as well as diversification, all of which supports our outlook for the remainder of fiscal 2022 and beyond. With that, I'll turn the call over to the operator for questions. Operator?
Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, that's star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. Our first question comes from Pat Walravens with JMP Securities. Pat, your line is now open.
Thank you. It's JMP, not JP Morgan. Mr. Parkkinen, congratulations on the promotion. If you don't mind, I'd like to start with a question for you, and then I'll do one for Tom. Also thank you, by the way, for giving us a rough idea of what next year should look like. That's very helpful. You know, the third CFO in a very short period of time. The question everyone is going to have is, are you comfortable that there are no accounting or financial reporting issues at C3.ai?
Hi. Yes. Thank you for that question. Yes. I've been here for a little over a year. I joined as the Vice President of Accounting, very quickly assumed the role of a controller. In December, I was promoted to be Chief Accounting Officer, and I've been intimately involved with all the financial statements ever since I joined. I have no concerns whatsoever that all of our financials are top-notch and in line with generally accepted accounting principles. I'd like to also add that, you know, we have a very qualified accounting team.
Just in the past year, we've enhanced the capabilities internally significantly, including multiple CPAs, lots of Big Four background, lots of master's degrees, as well as we use external providers to help us in various technical accounting topics. Overall, I think our accounting is in top shape and the financial statements are in top shape.
Okay, great. That's very helpful. Thank you. Then Tom, you know, given the just tragic situation that's unfolding in Ukraine, it seems to me the biggest opportunity and the place that C3.ai can possibly do the most good is by helping our Department of Defense and maybe that of our allies. If you could, you know, to the extent you can, discuss the opportunity there, I think that would be interesting.
Great question, Pat. I think that, you know, the business activity that we're seeing in the U.S. federal area in the defense intelligence community is very significant. This change in federal procurement policy is very significant, basically, you know, mandating that the Secretary of Defense put in procedures in place to ensure that commercial off-the-shelf software is considered first. Right now, the DoD has 600 build it yourself projects.
This affects all 600 of those projects. We are very actively engaged with the Department of the Army, the Department of the Air Force, and with some of the intelligence agencies in some very large projects.
We just received, as you know, a $0.5 billion transaction authorization, making it very easy for these departments to opt to procure with us. We are expanding that business in a very substantial way. General Ed Cardon joining as the Head of Federal Systems, H.R. McMaster recently joining our advisory board, Condoleezza Rice on the board. I think you'll see some additional significant additions to the federal advisory team, and I think we're going to be very, very well positioned to help serve the United States Federal Government and the Department of Defense.
To the extent that we have the opportunity to do so, we consider it a privilege. Yeah, I think that looks like a big opportunity and we are very focused on it.
Okay. Thank you.
Thank you, Pat. Our next question comes from Jamie Shelton with Deutsche Bank. Jamie, your line is now open.
Hi, guys. Can you hear me, okay?
You're loud and clear, Jamie.
Brilliant. Thank you. I'm on for Patrick Colville. Just a quick one for me. I noticed customer entities ticked down by 3 sequentially. If possible, could you provide any additional color there, if there is any?
Hi, Jamie, this is Juho . The customer entities numbers, our starting premise is that we only count as a customer entity or a customer any such entity that had revenue in the period. As in our life cycle of a customer, there can be trials in a given quarter that would be included in the customer entity count for that quarter. At the following quarter, the customer may not yet be ready to convert to an application or a platform purchase, so they could show up one quarter after again on the customer count.
You would be expected to see these type of up and downs in individual quarters. Overall, the customer entity trend should be going up and to the right.
Brilliant. Very clear. Sorry, just one more. Sorry, if I may. Could you quickly unpack your expectations for subscription versus services growth? Because I mean, one's clearly outperforming the other. I mean, how do you, kind of look at that going forwards?
I think, Jamie, you can expect, you know, we've been pretty consistent in that. I mean, you're going to expect to see that services are going to be in the, you know, 15%-20% range from quarter to quarter. We clearly are a computer software company. We are not a services company. We're focused on staying a computer software company.
You know, we continue to outsource, you know, a lot of the services business we do rather than take that revenue ourselves. You know, that will be the strategy. You know, you can. It's going to kind of bounce around the 15%-20% range from quarter to quarter as it has.
Brilliant. Thank you. Good luck, guys.
Thank you, Jamie. There are no further questions in queue. As a reminder, it's star one on your telephone keypad to ask a question. Our next question comes from Sanjit Singh with Morgan Stanley. Sanjit, your line is now open.
Appreciate it. Thank you for squeezing me in. Tom, I had a question. I really appreciated the detail on some of the deal sizes. I think you talked about you know, a dozen or so deals under $1 million, which is pretty unusual for C3.ai, but something you guys were pointing that direction to. For those customers or for those deals, what are those customers buying? Is that sort of Ex Machina driving those deals? Is it kind of the you know, starting off with a single app? Any sort of context on composable?
Yeah. I think the majority of them, you know, we tend to do paid trials, and they're normally in $400,000-$600,000 range for a paid trial. Sometimes for a simple trial proof of concept, it'll be $250,000. That fits into there. The idea that we would do a trial and the idea of the trial being successful, that will then convert to a larger enterprise license agreement one or two or three quarters down after the termination of the trial.
Then the second category is going to be certainly less than $1 million would be most Ex Machina transactions. You know, that's really the bulk of it. I mean, sometimes somebody wants to buy.
Yep.
You know, a little bit of professional services work or something like that, but really, those first two really do cover it, we'd expect to see that segment-
Got it.
Of the mix increase going forward.
Right. My follow-up question, Tom, is, now that we've sort of gone back to that, you know, traditional strategic account model, and you have sort of new business, working again, if I take a pretty simplistic framework and say, federal business, DOD, federal government, that opportunity, and then the enterprise opportunity. It seems to me that the enterprise opportunity is fragmented, right? There's tons of players there, and the sort of direction in terms of how buyers want to sort of consume AI still being sort of fleshed out.
The spirit of the question is, that when you think about kind of the near-term opportunity for growth over the next, say, 12-24 months, should we expect C3.ai to really double down on federal being the primary driver of growth?
Do you expect that to continue to be sort of a continued balance between both the government business and the non-government business?
A great question. Thank you for asking. The answer is absolutely not. Okay. We do not see ourselves as a federal contractor, okay? To the extent that we're very active, okay, in discussions with the federal government to the extent that we have the opportunity to serve, we're very pleased to do so. Think that, you know, federal is going to be, you know, 15% of our business, okay? In a steady state in the long run, U.S. federal, okay?
The balance will be APAC, EMEA, and, you know, think, you know, of the balance, think 40% North America, 40% EMEA and 20% APAC, ex-China, where we don't do business. Those are-
Sure. Okay.
Absolutely, we are not becoming a federal contractor.
Understood. I really appreciate your thoughts, Tom. Thank you.
Thank you, Sanjit. Our next question comes from Mark Murphy with JP Morgan. Mark, your line is now open.
Thank you very much. Tom, we've had just now Snowflake, and we've had a number of other data and analytics and infrastructure companies that are mentioning a slowdown in consumption trend over the holidays and into January. There's been a bit of this passing through lower CPU pricing from Amazon and some of the other cloud platforms that's impacting some of these companies.
I'm just curious, based on the pretty good strength of your guidance, what should we assume that you did not see any type of slowdown either on the consumption side? I realize it might not impact you directly, but or with more users taking longer vacations, anything along those lines?
Well, it's 42%. I think you can assume that we exceeded any guidance that we gave and way above any consensus guidance. We might not have been above yours, Mark, because I know you always give us a high number. We're quite pleased with 42% growth. I mean, that's way into the upper decile of rapidly growing software companies.
I think that, you know, right now, as we look at what next year looks like, we're comfortable with the consensus guidance that's out there that I think is about 33%. That's kind of where we are. I don't think we're not seeing a noticeable slowdown. No, sir.
Yeah. Just to clarify, yeah, it's all above my numbers, which were probably pretty in line.
Your numbers? I didn't know that was possible.
Oh, yeah. That happened. Yeah, I just wanted to try to clarify or kind of draw that contrast that it didn't seem like you saw that this problem was running around.
I think our growth rate. We should be in the upper decile next year of rapidly growing software companies.
Yep. Okay. My other question is,
By the way, as it will be this year.
Yeah. Okay. My other question is, I like to ask you this from time to time, but the commodity price for oil and gas, right, has just gone vertical, I think in a way that we haven't seen in quite a long time. Since you have the exposure there, is there anything worth mentioning in terms of the pipeline? Does that feel like it's tangibly flowing through into, you know, more ability to spend for those oil and gas customers?
Yes. I mean, you know, that's an absolute yes, okay, with the exception of oil and gas companies in Russia, okay? You know, honestly, if we look at Q4 and Q1, okay, we were expecting. We have been working some time on some business that we expected to see close in Russia, and I think that at this point, the last time I checked on CNBC, the probability of that closing was pretty low.
Like, I think we can put a zero on that. And so that is kind of, you know, that's what kind of moderates our, you know, it moderates Q4 and Q1 a little bit. You know, there's three deals in Russia that, you know, are not going to happen in our lifetimes now.
The rest of oil and gas business, I assume it doesn't happen in our lifetime. The rest of the oil and gas business, I mean, these people, I think we can expect to see them invest at a greater rate.
Is it safe to assume that nets out positively if it's three deals that won't happen and the rest is in good shape?
Yes.
Okay. Understood. Thank you.
Thank you, Mark. Our next question comes from Jamie Shelton with Deutsche Bank. Jamie, your line is now open.
Apologies, guys. I had no question. I'm all good here. Thank you.
Thanks, Jamie.
Our next question comes from Mike Cikos of Needham & Company. Mike, your line is now open.
Hi, team. Thanks for getting me on here with the Q&A. I apologize if this had been discussed previously, but I've been jumping back and forth between a few earnings calls tonight. Wanted to ask about the sales reorganization and the refocusing. I know that you guys have talked about the realignment. Is there anything that you could point to to help us better or from a data point perspective to help us contemplate improvements in either sales activity or improved productivity from the sales reorg that you guys had discussed in the previous quarter?
Thanks for the question, Mike. First, to be clear, there was no sales reorganization. We got the same organization in place, but we did change the sales methodology to our traditional strategic kind of selling really. Same sales org just different traditional means of selling. I think what's the biggest indication that we can give of the success is change in RPO. Okay. Help me out here Juho. What was the change in RPO?
I think, Mike, the best way to think about this is the diversity in RPO. If we go sequentially, I know Tom mentioned in the last earnings call-
Let's talk about diversity. Diversity in the increase in RPO would have been 32% from Utilities, 30% from Chemicals, 20% from Agribusiness, 11% from Financial services, 2.6% Oil and Gas, and the rest across Life Sciences, Manufacturing and the other. It was highly diverse. It was a large number of agreements. What else would you comment that would answer Mike's question, ?
I think in general, Mike, the overall activity was just significantly improved in Q3 versus Q2.
Very helpful. Thank you for clarifying on that. Again, I'll apologize as I am coming in a little bit late, but I know, or one of the things that I did want to ask you guys about, can you provide any commentary on the either adoption or pipeline building that you're seeing around CRM, and what has been the reception to Data Vision? Anything on either of those would be incremental.
Well, we're doing a major release, that's called C3.ai Version 8 that we'll release in March. That represents a rewrite of almost the entire stack. We'll release that at something called C3 Transform, which is our international users group, which will be in March in Miami. C3.ai Data Vision will be integrated, deeply integrated, almost all of our products. C3.ai CRM is now kind of just being released into the marketplace. There's a lot of interest.
I think there's a lot of potential. The CRM market, as you know, this year is a $120 billion software and services business. There seems to be a lot of interest in making these CRM implementations predictive.
By the way, this is what we're doing is not a rip and replace. We're not going in and proposing to take out Salesforce, Siebel, Dynamics, Veeva, Velocify, or whatever they might have. We just sit on top of that, okay, and make it instantly predictive. For AI-based, you know, AI-enabled revenue forecasting, predictive relationship modeling, next best product, next best offer. I think there's a high level of interest there, and I think that honestly, a year from now, it'd be a pretty big business. It takes a little while to build it.
Thanks. Yeah. I just building on that, I think on the previous earnings call as well, as it relates to CRM, you had spoken to substantial interest coming from the global SIs for that product. Exactly what you said, not the rip and replace so much as the standing up C3 on top of that to drive at that AI that you guys are delivering. Thank you very much. I appreciate you taking the time for the questions.
Thank you. Just in regards to that is continuing. I think when you get to for those of you who are at our users conference, we'll have participation from Accenture, PwC, EY, and others. I think there is a big opportunity with the SIs.
Thank you very much.
Thank you, Mike. There are no additional questions waiting at this time, so I will pass the conference back over to the management team for closing remarks.
Thank you all very much for your time. We're very pleased to announce, I mean, it was an exceptional quarter. We exceeded our expectations. We exceeded the market expectations. I think we got the sales organization back on track. Our customers continue to accelerate their implementations at a very substantial rate. I think that as we enter Q4 of this fiscal year, the company is exactly on track, doing exactly what we said we would be doing when we took this company public. We're kind of feeling quite optimistic.
Thank you for your time, and we look forward to continuing this discussion with you. Have a great day, everybody.
That concludes the C3.ai Third Quarter 2022 Fiscal Year Earnings Call. Thank you for your participation. You may now disconnect your line.