What happened

Shares of artificial intelligence-for-business stock C3.ai (AI 0.12%) are down 8.5% as of 10:40 a.m. EDT Thursday after beating analyst projections for fiscal first-quarter 2022 revenue last night -- but missing badly on earnings.

Wall Street had forecast that C3.ai would lose $0.28 per share on sales of $51.2 million in Q1. As it turned out, the company lost $0.37 per share on sales of $52.4 million.  

White arrow declining sharply atop a stock tickertape display bathed in red

Image source: Getty Images.

So what

Nevertheless, C3.ai CEO Thomas Siebel termed the numbers "strong," highlighting the sales beat -- and sales growth of 29% year over year, most of which was subscription-based, recurring revenue -- and the company's 31% improvement in gross profits.  

Now what

Investors right now seem more concerned by the fact that C3.ai went from break-even profits a year ago to losing $0.37 per share in Q1, but management is trying to keep them focused on sales growth.

In new guidance for the coming quarter and year, C3.ai said it expects revenue to grow to $56 million to $58 million in the second quarter, which would be slightly ahead of analyst targets. For the full year, however, C3.ai projects sales of only $243 million to $247 million -- slightly below analyst targets.

My guess: In addition to the earnings miss, it's the fact that even management's promises for sales growth seem to fall short that is weighing on C3.ai shares today.