Closing Bell - Closing Bell Overtime: Rough Ride on Wall Street, Salesforce earnings & C3.AI's CEO 2/28/24

Episode Date: February 28, 2024

The major averages falling again as the Dow extends its losing streak to a third day and the small-cap Russell 2000 snaps a 4-day win streak. Salesforce headlinING a huge hour of after the bell earnings. The company under pressure after issuing weaker than expected full year revenue guidance. Clear Bridge's Hilary Frisch and Third Bridge's Charlie Miner discuss how investors should trade the stock. And C3.ai CEO Tom Siebel discusses his company's revenue beat before she speaks with analysts on the earnings call. 

Well, the Dow extending its losing streak to a third day. Stocks in general taking a bit of a breather here ahead of that key PCE inflation data that we get tomorrow morning. That is the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. Yeah, the Russell 2000 snapping a four-day win streak. Communication services, health care, and tech, the biggest drags there today. Now get ready for another barrage of overtime earnings. We're going to break down results from Salesforce, Snowflake, Okta, C3.ai, HP, Nutanix, AMC, Paramount, Pure Storage as soon as they're released.

Barrage is a good word for it. Plus, we will speak exclusively with C3.ai CEO Tom Siebel about the quarter before he jumps on the earnings call with Wall Street analysts. As we await those earnings, though, let's begin with our market panel. Joining us now is BD Capital Partners CEO Barbara Duran, NCNBC Markets Commentator Mike Santoli. Barbara, I'll start with you. I'll call it a middling day for the markets today. Just given what we're seeing here ahead of that PCE data tomorrow, ISM on Friday, which do seem to be like the key catalysts for this week. The S&P finishing fractionally lower, 50-69. But if you look at an equal weighted version of the S&P, it actually has fared better. What does that tell us?

Well, I think it's telling there's a little bit of fatigue. I mean, it's been four months with only one week down for the S&P of just up markets. And we've had a big run in the technology. Somewhere in here, there's a rest possible. And if you look what's happened in the last month in terms of the sectors that have really performed even a little bit better than tech, it's been consumer discretionary, it's industrials, materials, you know, and others are participating as well, the financials and health care. So I think what we're starting to see, you know, is a broadening out, which we may have been distracted by all the hubbub last week. The video and everybody racing to find the A.I. plays, which is understandable because that growth is real and I think sustainable.

But I think now you are starting to see a broadening out in the market. Yeah, of course, we're poised for a four month win streak here with all of the major averages as we come close to closing out February. Paramount Global earnings are out. Julia Borson has those numbers. Julia. Morgan, Paramount Global's revenues missing the company reporting seven point six four billion in revenues versus the seven 7.85 billion that was estimated. But beating on the bottom line reported an adjusted earnings of four cents per share. Analysts had been expecting a loss of one cent per share. Now, to dig into the direct to consumer division, because this is really seen as a key area of focus here, the losses for the division were less than expected. Losses of 490 million in the quarter versus the 564 million losses that were anticipated. And subscribers coming in just a hair above expectations at 67.5 million versus the 67.3 million estimated.

A keynote here, the company announcing that it now expects Paramount Plus to hit domestic profitability in 2025. They say that their DTC revenues here were driven by subscriber growth and pricing increases. They note that ad revenue grew in the DTC division, though it fell 15 percent in TV media due to what they call softness in the global ad market. Shares now down about two and a half percent. Back to you. All right. Thank you, Julie. I want to note Okta results are out. That stock is soaring after hours here in overtime. It's up 20-plus percent. We're going to get you those numbers in just a moment.

But first, Salesforce is out. Kate Rooney has those numbers. That stock is down about six. Kate? Hey, John. So the big headline here from Salesforce is announcing a 40-cent dividend. There are now very few non-dividend players in the Dow. Salesforce is a Dow component, but it was a beat for Q4,

at least on the top and bottom line. EPS, $2.29. That was a $0.03 beat. That's the adjusted number. Revenue was up 11% year-over-year, coming in at $9.29 billion. We're still going through the numbers, but that's the top and bottom line. And again, a $0.40 dividend for Salesforce.

Stock down more than 5% here, though. Yeah, at the moment, but it's still early and you don't want to miss Jim Cramer's exclusive interview with Salesforce CEO Mark Benioff that 6 p.m. on Mad Money. Yeah, we're getting a lot of buybacks, too. $10 billion buyback here. Okta earnings, as John just mentioned, those are out. Kate Rogers has those numbers for us. Kate.

Yeah, Morgan, and that stock was higher by nearly 20%. So Okta beating on all measures and also issuing some strong guidance here. EPS better than expected at 63 cents adjusted, higher than the 51 cents estimated. Revenue is also a beat for the quarter, 605 million higher than the 588 million estimated. The company sees Q1 revenues in a range of 603 million to 605 million. That's much higher than the $585 million estimated. Q1 adjusted EPS, $54 to $55 cents, also higher than the $0.42 estimate here. Full year revenues, higher than previously estimated as well, $2.49 billion to $2.50 billion, higher than the $2.47 billion

estimated. Also saying here, full year EPS in a range of $2.24 to $2.29. Again, much higher than the $1.98 estimated there. And as you can see, the stock is higher by more than 15% now, guys. Back over to you. All right. We're going to get back to our panel now. Mike Santoli. I mean, this is a very heavy hour for enterprise tech earnings. We just started to get them. We're expecting more, including Snowflake, including C3 AI. But what does this tell us about, this wave of earnings? What does this tell us about the state of that area of spending when it comes to business to business, which we know has been soft and is now potentially poised for recovery?

Yeah, I mean, I think everyone is very intent on trying to figure out, Morgan, whether the heavy and urgent investment into anything AI related on the hardware side is pulling from anywhere else. And I don't think we've been able to generalize about that yet. But in terms of full year revenue guidance, it looks like maybe, you know, Salesforce is getting some scrutiny as to whether that was a little bit light. So we'll see if that, you know, plays into how these numbers are accepted. I think at this stage of earnings season, when you're getting a lot of the sort of January fiscal year companies and things like that, investors eyes have become pretty big. You have pretty aggressive beat rates. And so, you know, maybe there's going to be a slightly higher hurdle just on the immediate reaction. All right, Barb, you own Salesforce. Want to get your thoughts on the results that we've gotten so far,

including the fact that we've got a 40 cent dividend. We've got another 10 billion share repurchase. And it looks like full year fiscal 25 revenue guidance up eight to nine percent here and a couple other numbers as well that are that are similar, including subscription and support revenue growth guidance up about 10 percent year on year as well. Yeah, well, I think it's really nice news that they're doing a dividend and a share buyback because it obviously reflects management's confidence in the ongoing business earnings free cash flow. But I think going into this, they've had the last, you know, seven, eight quarters where they have really focused on margin improvement, cost efficiency. They had a number of activist investors in there and they've done a fantastic job. But going into this, people really want to see what is the ongoing sales growth, because the

margin cost efficiency story is pretty much played out. There can be room for some improvement, but really what's going on in sales. And I think that's what we need to see and hear from management, because the revenue growth sounds good, but it's not spectacular. So we have to see the AI products are going to be contributing more in the second half of this year. We want to know about the ramp in that and really what they see for future growth, because this is is not as high as I think investors would like to see. Yeah, Barb, hold on. Speaking of artificial intelligence, C3 AI earnings are out. That stock spiking more than 10% here in overtime. They got a revenue beat.

Revenue came in at $78.4 million versus 76.1 expected. The EPS loss, 13 cents versus a loss of 28 cents expected. And the guide, the midpoint of the guide, just about bang on, but the range higher than expected. A range of 82 to 86 million. It's 84 at the midpoint. The street was looking for 83.9 guide for Q4. We've, of course, got the CEO of C3 AI, as you mentioned, coming up. I've also got Nutanix numbers. Can we do those or do we need to hold on?

We've also got Nutanix numbers out. Those are a beat. That stock is moving higher in overtime as well. At least it was. It's now just about flat to slightly lower. Those are beats across the board. A beat on the top line, beat on the bottom line, beat on the guide. We're going to hear from the CEO of Nutanix, Rajiv Ramaswamy, in just a bit. But let's see, do we have Snowflake as well? Okay, not yet, but that is coming. You're a triple threat today, John. There's a lot going on. I'm not doing Snowflake, but there's a lot going on in the data space that we want to get you. We do have Snowflake ready. Kate Rogers has that. Kate? Hey, John. As you can see, the stock is moving lower here on this report. EPS a beat, 35 cents adjusted, higher than the 18 cents estimated. Snowflakes revenue also a beat, $775 million for the quarter versus estimates of $759 million. An executive change here. Frank

Slootman has decided to retire as CEO. Sridhar Ramaswamy has been named as chief executive officer. More comments here on guidance. He's Q1 product revenues in a range of $745 to $750 million. That's a little bit lower than the $759 million that had been estimated by Street Account. And as you can see, the stock falling by about 24% now. Back over to you. Wow. Okay.

Thank you for that, Kate. This is huge because Frank Slootman has taken three companies public successfully. Sridhar Ramaswamy, we know well, is the CEO of Neva, former Google search leader who had tried to take on Google in search with Neva. Snowflake just bought that company. So for him to be the new leader there brought in to help bolster Snowflake's AI stance is definitely interesting. We'll be reaching out to him for sure. This could be also what's bringing down Nutanix after hours is what I wonder about, because it's in this data space and Snowflake is down so huge. Nutanix's results are actually very strong.

So this is going to be an interesting one to dive into a little bit more in just a couple moments. Okay. We're looking forward to that. In the meantime, Snowflake CEO Frank Slootman will break down those results and those succession plans on Mad Money tonight at 6 p.m. Eastern. Barb, I'll go to you because we just ran through a whole list of names, and I guess we'll start with Snowflake, whether it's the results themselves or whether it's succession plans when you're talking about a heavyweight within the tech space that's now retiring. I think Snowflake has yet to really live up to its long term potential. I mean, it's you we know it's scalable, it's flexible.

It's really seems to be the technology of the future in that space. But they have not been at top ticking in terms of their growth. And so even today, I owned a little bit in portfolios and I sold it. You know, I sold, it was only held in five accounts, but I sold it because just reading and getting updated on the flow and the macro uncertainty and their clients and where they are with AI, I thought there's really too much out there. And the stock has had a big run this year and also last year. And it's not cheap. At 243 times forward earnings, I said there is no room for error here.

So I think that's actually a big problem, is that it just is not living quite up to the expectations, which I think is probably why Nutanix is down. I mean, that also, you know, I think the expectations there were great. And the stock is up almost 23% year to date, over 100 percent in the last year. So I think that's also a little bit of a victim of high expectations. Yeah. But once we get to those numbers, we might see that those expectations have been met. Pure storage, I want to mention, we're not going to give you those numbers right now, but it is up 9 percent after hours. We're going to hear from the CEO, Charlie Giancarlo, on the other side of the next break.

Mike Santoli, this is a strong showing from some enterprise names across hardware and software. We're talking about pure storage. We're talking about the actual results, if not the move from Nutanix, from C3 AI. Snowflake, perhaps the exception, but there's a story building here post-NVIDIA. It does seem as if that's the case. And the market in general has kind of been on pause since the initial pop following NVIDIA's numbers. I keep talking about that this morning. We've gone sideways for a week, and that's okay, kind of digesting it. This is the tail end of the important earnings. So I do think that this is going to round out the picture of a not just better than expected, but an earnings trajectory that is probably outperforming what you might have expected.

And it solidifies the idea that we did have a real inflection in the third quarter of last year. That's big picture stuff right now in terms of what you're talking about, in terms of the willingness of investors to put those old big multiples on some of the software names. That remains to be seen. OK, Mike, stay close. We've got a news alert on Electronic Arts now. Steve Kovach has the details. Hey there, Morgan. Yeah, Electronic Arts is cutting about 5% of its employees. This is just coming out now. I'm looking at a letter sent by CEO Andrew Wilson to employees announcing the reductions. 5% would be over 600 employees as a whole number based on their last published employee count.

Also saying here they are going to be canceling some games that were previously in development from what they're calling licensed IP, not saying which games they were. They're probably unannounced games that they were working on. And instead having some team members focus away from those games onto what they're calling their most engaging games, i.e. the games that make the most money. You can read into that as the sports games, the Madden NFL game, the upcoming NCAA football game, and also, of course, their soccer game, EA Football Club is another one. Also going to be shutting down some office space, it looks like here.

But this is the third major video game layoff news that we've gotten, guys, in recent weeks. Yesterday, we had Sony Interactive Entertainment. That's the PlayStation company, of course, laying off $900. And then a couple weeks ago, Microsoft's gaming division, after the Activision acquisition, laid off about 1,900 people. So lots of job losses here in the game industry. And you see shares here. Looks like unchanged right now, guys.

All right. Quick question for you. I mean, at a time where we saw so much belt-tightening in the past, we'll call it, year among the tech companies, I mean, the gaming companies are like the other bucket of gaming companies. Is it just that they've been late to this party or does it speak to other industry dynamics that are afoot, whether it is the Microsoft acquisition or something else? It's a little different. I mean, you've also got to keep in mind that these gaming companies saw huge growth during the pandemic. And kind of like we saw during not saying this is necessarily what happened at all the gaming companies, but kind of realizing and readjusting those costs.

Also, just gaming habits are changing. So much focus goes on to these giant online games that we're seeing what Electronic Arts is talking about here. They're really just refocusing those efforts to where the customers are going and playing. And that includes these big online games, these sporting games. In EA's case, Sony PlayStation yesterday was a little bit different.

And, of course, it was a little bit different on the Xbox side, just kind of rationalizing a lot of stuff with the Activision. So it's not a perfect answer either way, but that's what we're looking at, Morgan. Steve Kovach, thank you. Bob Garan, I want to get back to you, and specifically on Nutanix. We're going to have more from the CEO in just a moment. This stock has been moving around like crazy after hours. It's now down fractionally close to 1%. But what wasn't clear to me, I had to search for this in the release,

the EPS, non-GAAP EPS beat is actually quite large. They turned in $0.46 versus $0.29 expected. They also beat on the top line with $565.2 million versus versus 551.3 million expected. You know, you talked about expectations here, and we're about to hear from the CEO about market share that he's taking from VMware. How are you playing, if at all, the shifts that are happening in enterprise in the data center around who's got advantage as companies prepare for AI? Well, I think you do have to keep up on all the changes that's happening so rapidly. And for instance, you know, this company, it was a real question about VMware, you know, who just got

acquired there in somewhat disrupted and Nutanix, sorry, had just done a deal with Cisco to do a joint venture in their channel together. And the word is the bookings have been great. So there's big growth coming and all that. The hybrid cloud model where people don't want to just put everything in the public cloud, they want to keep some on premise is what this company caters to. And there seems to be big customer acceptance. So this is, you know, and this means that if their earnings were better, their revenues better, there's clearly getting a lot of traction with customers and there's probably a very long runway for growth. We have to see more, you know, in the in the call. OK, we got a lot to dig into here through the rest of the era.

Barbara Duran and our own Mike Santoli, thanks for kicking it off with us. We're going to see we've got HP earnings actually now and we're going to go back to Steve Kovac for those. Steve. Hey, Morgan. Yeah, pretty much in line here. We got our earnings per share here for HP right in line. Eighty one cents versus the 81 cents adjusted the street was looking for. Revenue is just a slight miss here. Thirteen point one nine billion versus the 13.56 billion the street is looking for and the guide here for both q2 eps and the full year eps all within the range the street is looking for still you're seeing shares drop about six percent here on these results i'll keep digging through report see what else we can

find guys mike santoli with pure storage up uh eight plus. Now, granted, this is HP Inc., not HPE. But you've got the consumer side of, you know, those pieces of HP not doing as strong in a market where we've had some inventory questions and some demand questions around the consumer. Yeah, I mean, just from a broad perspective, it's kind of priced to be a no growth business and it mostly lives down to that. Definitely a little bit of a to be a no growth business and it mostly lives down to that. Definitely a little bit of a miss and a disappointment because the stock had brightened for a little bit. I know that it's tough to generalize about what the PC cycle means. And of course, with the accessory products that, you know, HPQ does specialize in. I do think,

though, that they almost operate in a different realm of super cheap legacy tech as opposed to where you're looking for the incremental investment dollar in the industry to be flowing. Yeah, be interesting to hear what they have to say in terms of commentary around PCs, too, with all the speculation that we could be starting to see a recovery. Mike Santoli, we're going to see a little bit later in the show. Thanks for being with us. Much more on this wild hour of earnings still to come. Up next, analyst reaction to the results from Salesforce and Snowflake, which is the big mover today. Well, yeah, and not the only one, though. C3 AI shares are up, what, around 13% last time I looked. And the CEO, Tom Siebel,

is going to break down that report right here on O on overtime before he speaks to analysts on the call. Overtime's back in two. We have got a pair of beats and raises in enterprise tech to get to Nutanix and Pure Storage. Let me give you Pure's numbers first. You can see that stock is, let's see, up by about 9% right now in overtime. Revenue was a beat. It came in at $789.8 million versus $784.3 expected. Subscription services revenue came bang on. Product was actually stronger than expected. Earnings per share came in at 50 cents versus 44 expected.

And the guide for Q1 was to 680 million in revenue versus 669.6 roughly expected. I spoke with CEO Charlie Giancarlo this afternoon about how AI is driving demand. Of course, the market is gone crazy over the opportunities around AI. And a lot of the focus has been on large language models, on Gen AI. And as everyone knows, creating the large language models, creating the models that form the basis of Gen AI requires a lot of GPUs, a lot of processing power. It also requires, on our part, the ability to be able to stream data into those GPU farms at incredible rates. And that drives the high end of our product,

which has been very healthy. We announced this quarter an eight figure win at a major GPU cloud provider. So we're very pleased with that. Of course, in the past, we've supplied AI infrastructure to companies like Meta. He said he's even more excited on a dollar basis about how the inference wave in AI is going to drive demand for his more mainstream storage systems. Now, back to Nutanix. Big beat over there. That stock was lower in overtime for a bit,

about 7 percent. Now it's higher by about a percent and a half. Get you some numbers there. The revenue is $565.2 million, again, versus $551 expected. The EPS, $0.46 versus $29 expected. The guidance to revenue of midpoint, $515 million versus $510 expected. Also, the full year revenues are a beat, got into a range of $2.12 to $2.15 billion versus $2.12 billion expected. I also spoke with Nutanix CEO Rajiv Ramaswamy this afternoon about what drove a particularly strong bottom line beat

and how he's taking advantage of Broadcom's purchase of VMware. There is the renewals business, which is providing a solid foundation with high gross revenue retention rates that gives us a lot of cushion, right? And then on top of that, we add the new business that we are winning every quarter. VMware, historically, I worked there, great technology company. But this acquisition changes the relationship with customers. Broadcom's model is, of course, to maximize the value of these assets in the next few years. And customers are feeling it now with the actions that they see after the acquisition is closed.

Pricing changes, partners are feeling it, much smaller number of partners. So there's a fair amount of disruption that customers and partners are both seeing. Common theme here with these two companies, enterprise buying overall has stabilized. Some players seem to be grabbing share if their tech helps more with the on-ramp to AI. Makes sense. Yeah. I mean, that seems to be the bottom line now. Now, Salesforce and Snowflake, meanwhile, both seeing their stocks fall in overtime after they reported just moments ago. And joining us now to discuss those results, Hillary Frisch, who is Senior Research Analyst at ClearBridge, and Charlie Miner, Sector Analyst at ThirdBridge. A lot of bridges, right? To understanding, I hope. Welcome to both of you. Hillary, you're here with us on set. Thank you. I want to talk about Snowflake first. This is a huge

drop for them. Frank Slootman, who's been so visible on his way out the door. But we've got, you know, Sridhar Ramaswamy coming in, a known quantity from Google, from Neva. What do you do with a stock like this at this level when data is so important to this transformation that's happening? Great question, John. Thanks for having me. Good to see you, Morgan. Yes, I think that's precisely it. Data is so important. The CEO transition is a bit of a shock to Wall Street. But honestly, I think something like this has been in the works for a while. Sridhar is a tremendous technologist.

He's extremely well respected. He is especially well expected in the arena of Gen AI. And I think he's going to bring a lot of tremendous things to Snowflake. I also see they posted a good quarter, generally speaking, in a hair light of the whisper, but very good on product revenues, a few points better than expected, and very good on aggregate bookings. And I think this guide probably reflects the fact that all of these consumption cloud names are being pretty conservative. And also, they probably want to set a more conservative bar for the incoming CEO. All right. From ClearBridge now to ThirdBridge, let's talk about, you know, Salesforce as well. The stock is down a little

bit more than 4 percent right now in overtime. Is this a buying opportunity or have we finally run out of some of that goodwill around the cost cuts here, Charlie? Yeah, you know, it was a really strong Q4 report. Analysts and investors wanted to see top line momentum heading into 2025, indicating that AI had this opportunity to be a growth catalyst for the business. They obviously came in below on revenue for the year, which is driving the stock down right now. We know that people are going to use AI. We know companies are going to sign up for these betas. The question is, though, at the end of 2024, into 2025, are they going to start to sign the large deals, these multimillion dollar contracts that are going to be the growth catalyst that we're all hoping

it's ultimately going to be? Yeah. I mean, just sticking with Salesforce right now, it really seems like the stock is under pressure because of the guidance and the fact that you're looking at high single digit guidance in terms of revenue looking forward. I mean, they did recently just launch this Einstein AI platform. How much do we think that's even baked into that guidance? Or again, you know, to use the word conservative, is that something where we're going to have to wait for the call to get a little bit more context? And it could be something that actually provides upside risk this year. Thanks. So, yes, it, it's really the question.

But what's interesting is current bookings, bookings to flow through to revenues over the next 12 months were actually 12 percent. They were higher than that last quarter, but they've generally been in an acceleration trend. And that's without any of the benefit of Gen AI, something called the data cloud, which Salesforce has introduced, which is essentially a precursor to Gen AI adoption at scale. And they also have price increases flowing through. So in terms of conservatism, ConsenSys had the same growth and the guidances for just below that this year than what Salesforce did last year. But they have all these catalysts, a few points from product growth, perhaps a point or two from data cloud growth, and toward the very end of the year, but they have all these catalysts, a few points from product growth, perhaps a point or two from data cloud growth, and toward the very end of the year, we'll start to get Gen AI

contribution, minimally, but we'll start to see it. So I think this is a good conservative guide allowing for the environment to get a little worse if they need it to, and comp Cs. Yeah. Charlie, I mean, whether it's Salesforce, whether it's some of the other names that you follow so closely, I mean, what is the read-through that we are getting and the setup for 2024 at a time where there is all this focus on enterprise tech spending, whether we're seeing in the midst of what's been an uncertain macro environment, we've heard about this for the past year, where we've seen Gen AI and any kind of applications, any kind of investments, opportunities that are going to fulfill Gen AI seem to be the area that are getting dollars. Is that a trend that's going to continue? Is it going to accelerate? Is a name like Salesforce going to benefit from it this year?

Yeah, you know, despite Salesforce's run over the last 12 months bringing it up, almost 80% might drop a little bit below that now after hours. But the macro headwinds continue for Salesforce. I mean, these large-scale digital transformations, those are not really happening right now. Most of this growth is coming from cross-sell. Now, as we get into 2025, are we going to see companies re-evaluating their vendor spend? More than likely, yes. This is a once-in-a-decade opportunity as companies roll out these AI tools to actually go out and take share in some of these different CRM service types of categories where historically the products are very sticky. So

looking at someone like a Microsoft Dynamics, they've never really had a win opportunity against Salesforce. It's really hard to take that share. Could AI be that catalyst to start driving some wins for them, for other players in this space, certainly. So AI being looked at as an opportunity as well as a threat for Salesforce. In terms of other catalysts, the service cloud continues to be performing very well for the Salesforce business. That's an area where we expect earlier AI adoption. So that'll be an important guide over the next couple of quarters. But certainly a lot of momentum here for the business as a whole. They'll just need to continue to find ways to drive that cross-selling growth until macro headwinds likely subside later in 2024 into 2025.

OK, Charlie Miner and Hilary Frisch, thank you for joining us with shares of Snowflake down 22 percent and Salesforce, which we know is a Dow component as well, down 4 percent. It's going to be one to watch across the major averages tomorrow. Well, do Americans still have an appetite for dining out? Up next, we're going to get the dish on what restaurant earnings are saying about the state of consumer spending. And Bitcoin's boom just keeps rolling, crossing over 61,000 today. But that's not translating into good news for Bitcoin miners. They were all under pressure. Overtime, we will be right back.

Well, this next earnings report is going to be a hoot. Duolingo is out. I'll toss it over to Pippa Stevens with that stock up 21% in overtime. Pippa? Yeah, John. Shares are surging here after Duolingo beat on the top and bottom line in the fourth quarter, earning 26 cents per share. That was nine cents ahead of estimates. Revenue coming in at 151 million ahead of the 148 million expected. The company also gave strong Q1 and full year revenue guidance and said that during the fourth quarter,

its daily active users were up 65 percent year over year, with the monthly active users up 46 percent. The stock now rising at 21 percent. Morgan. All right. Big move there. But, Stephen, thank you. It's not just retail results. Restaurant earnings are offering key insights on the consumer as well. Dine brands reported a beat and expect sales to keep rising this year across its two main brands, IHOP and Applebee's. CEO John Payton telling me just earlier he's been surprised by the resilience of customers. Our guests look like America, right, because we're in 3600 markets across the U.S., all 50 states, families, you know,

retirees, all sorts, you know, everyone in America. And so what we see is that they are resilient and they're dining out once or twice less a quarter than they might have in the past. But when they do dine out, Morgan, they want to have an experience. So whether Applebee's or IHOP, he says guests have been increasingly gravitating towards value. Think limited time offers. So Dine expects that promotion-driven environment to continue. It's leaning in on it. Food costs as well. So Dyn expects that promotion driven environment to continue. It's leaning in on it. Food costs as well. Those continue to come down. That's playing out across the industry. Case in point, Portillo's, which reported better than expected results yesterday

with CEO Michael Sandler telling me they may be done with menu price hikes. We think that inflation for us in our food basket peaks in the second quarter and then comes down in the third and fourth quarter. Our hope and expectation is that we exit 24 with inflation, you know, honestly, low single digits. So consumers may be pulling back on goods, but services, including dining out, well, that's still benefiting from consumers spending. That's something we've been seeing in the macro data as well. It's a theme with Dine. It's a theme with Portillo's, but also Kava with sales up double digits, Domino's, even Wingstop, which saw shares surge after earnings just a few days ago. If you want to watch the full interviews with Portillo's and Dine brands, you can check them out on our LinkedIn page,

CNBC Overtime, where we get into all kinds of details, both about the companies and also the macro insights and what it says about the economy and the consumer writ large. John? There's a lot there. Well, C3 AI shares continue to surge in overtime after a revenue beat. You can see them there up 14%. Up next, the CEO, Tom Siebel, is going to break down those numbers before he dials into the earnings call when overtime returns. Welcome back to Overtime.

C3.ai shares are surging here in overtime, up 13% after the company's earnings results beat. Joining us now exclusively to discuss is the founder, chairman, and CEO, Tom Siebel. Tom, good to see you. Big quarter for you guys, especially in the federal business, which doubled year over year. Bookings up 85%. What's driving that? Well, I think, John, it was a great quarter, consistent with,

it was pretty much consistent with what we expected, just a little bit better than that. Federal sales were great. State and local sales were great. And, you know, the momentum behind what's going on in AI right now globally is huge. And we spent the last 15 years preparing for this market opportunity. So the world is kind of coming our way. You mentioned Gen AI. You've got 17 Gen AI pilots that are happening right now. You and I talked about this when you were first starting to roll it out. I think you were sitting in London somewhere and we were talking about that. You're converting some of those to production. From a revenue standpoint, from a share of wallet standpoint, what does adding Gen AI to some of these customer engagements you have do for you? Well, with a consumption-based pricing model,

generative AI is huge because these language models, whether we're training them, whether we're doing inference, are using massive amounts of the GPU and CPU resources. So given the consumption pricing model, this foretells kind of substantial increase in top-line growth going forward. And we're seeing the application of generative AI, just defense, intelligence, manufacturing, supply chain, professional services, law firms, medical applications. I mean, this is I mean, this is really huge. Just going back to the federal business for a second with revenue up over 100 percent year over year, bookings up 85 percent. The breakdown, the mix between government business and commercial business. What does that look like? Is it that we're seeing government,

which doesn't, I feel like typically historically happen, but are they first adopters with the technology? I guess, how do you think about that runway versus the opportunities in commercial and what that business mix longer term is going to look like? I would say that the defense and intelligence community was really kind of slow to adopt enterprise AI going back to, say, 2012, 2013, 2014. And they had, you know, 600 projects in DoD alone to attempt to build these AI platforms themselves. Well, after some years and, you know, many hundreds of millions of dollars, I expect billions of dollars invested in these projects. They've now decided to adopt best of breed commercial technologies to solve these problems, be it contested logistics,

be it predicted maintenance readiness, stochastic optimization of the supply chain. So the government is kind of really woken up and is now adopting the technologies from the private sector in a huge way so they can innovate rapidly and meet the security needs of the free world. Tom, a detail here that I'm hoping you can elaborate on, and that's San Mateo County, where you've got C3AI law enforcement that they're going to be using to investigate things like retail theft this seems like one of those real world examples a lot of people can relate to on how what they i might be deployed to make things more effective what what are they going to be able to do in to adjust retail theft

in san mateo county with your software well this is not always san mateo. It's every police department within San Mateo County, Burlington, Atherton, Palo Alto, excuse me, not Palo Alto, Burlington, Atherton, Daly City, South San Francisco, what have you. And they're coordinating their resources. And this enables them to really fuse the multiplicity of data sources they have, whether this is body cams, whether this is jail records, whether this is social media, whether this is jail visit records, whether this is criminal records, what have you, to fuse all these data together so they can rapidly investigate and solve crimes. And we have a very significant retail theft problem

in California, and everybody knows about the crime issues in San Francisco. Well, now, San Francisco County, San Mateo County, Santa Clara County, Riverside County, L.A. County, goodness, even Cook County, I mean, everybody is getting kind of very serious about crime. The pendulum is swinging the other way. And we've developed a solution there that allows them to really accelerate crime investigation and solve crime very quickly and prevent future crimes. So this is a very exciting development. Actually, there's actually no AI involved in this application. It's a data fusion problem, but it's highly efficacious. Yeah. Well, I guess eventually perhaps there can be AI applied to that as well.

Tom Siebel, CEO of C3 AI. Thank you. Thank you, Janet. Up next, Mike Santoli looks at how earnings expectations have been holding up so far this quarter. And speaking of earnings, we're not done with them yet. Coming up, we're going to run through some more stocks that are making big moves. You can see Snowflake. You can see Okta Pure Storage in overtime. We'll be right back. Welcome back to Overtime.

Mike Santoli returns with a look at the path of 2024 earnings and the S&P's valuation. Mike, we've been talking about this a lot. What you got? Yeah, Morgan, actually, things have been holding up better than is typically the case at this stage. So this looks at the path of 2024 consensus S&P 500 earnings from dating back to the middle of last year. Now, it's almost always the case that the year ahead analyst consensus is a bit too high. It gets revised down. Companies beat. We know the whole story. So the current path that you see is really outperforming what is the norm based on

UBS's calculations here. And as you get closer to that full year being in the books, obviously, the revisions start to abate. So that's the good news. Now, the question is what the market's willing to pay for this amount of earnings, even if it comes through forate. So that's the good news. Now the question is what the market's willing to pay for this amount of earnings, even if it comes through for 2024. And it's getting a little bit aggressive based on the long-term look at the P.E. based on forward earnings of the S&P 500.

You've got to go back 20 years to find when the market routinely traded above 20 times forward earnings at these levels. Now during the pandemic, we really did have a period where it was no problem for the market to trade above 20. You had a big earnings comeback on the way the market got ahead of that. Now, there has been a lot of work. B of A today, Citi earlier this week, Goldman Sachs, RBC saying, yes, nominal valuations are high, but there might be

justifications for it because of the direction of earnings and the higher quality nature of the index itself. Also, rates being friendly maybe later in the year. So keep it in mind. Maybe we're not priced for wonderful forward returns, but we can hang with these valuations perhaps for a little while longer, John. All right. It gives us some macro perspective on the micro we've been seeing. Mike, thanks. Now, women have long been underrepresented in tech, but up next, we're going to look at some female changemakers who are on the cutting edge of AI innovation. And as we head to break, here's another check on some of these big overtime earnings movers, including Salesforce, Snowflake, Okta. As we count down to more analyst calls, we'll be right back.

Welcome back to Overtime. CNBC's inaugural Changemakers List is highlighting 50 women who are transforming the worlds of business and philanthropy. Julia Boorstin joins us for a look at the women who are leading the charge in AI innovation. Julia, congratulations on this list and this project. Thanks so much, Morgan. It's so exciting to look at the inspiring women on the Changemakers list. And women may be underrepresented in tech and in AI in general, but there are a number of women on this year's Changemakers's Einstein AI platform and added generative AI search capabilities to Slack. While CloudFlare's co-founder and CEO, Michelle Zaitlin, brought cybersecurity protection to vulnerable institutions from K-12 schools to local elections, while leading CloudFlare to its first $1 billion year. Kristen Peck is CEO of animal care company Zoetis. She's deploying AI

in drug development, diagnostic tools, and using AI to reduce testing wait times. We're also seeing AI accelerate biotech innovation. Element Biosciences CEO Molly He is pioneering the use of AI to make gene sequencing cheaper and faster. John and Morgan, you can find the whole list on CNBC.com slash Changemakers. You can also learn more about our Changemakers event that's coming up in New York on April 18th. Don? Yeah, Julia, looking forward to that for sure. And hey, QR code.

Got to get that. Up next, we're going to round up all of the earnings movers that need to be on your radar. And there are a lot of them. As the analyst calls from Salesforce and Snowflake get set to kick off. Overtime, we'll be right back. Been a ton of big movers this hour. Here's one we haven't hit yet. W.W., formerly known as Weight Watchers. The stock is very small market cap around 300 million dollars and it's getting smaller. It's down more than 20 percent right now. Well, it looks like around 25, 24, 25 on news that Oprah Winfrey is leaving the board of directors.

That's a position she's held since 2015. Morgan, that's big news for that company. It almost reminds me like when Warren Buffett decides to sell out of a bank stock, for example. That's kind of how I would compare this move for this particular company. Yeah, big, big exits of leadership in this hour, including Frank Slootman from Snowflake has that stock down more than 20 percent as well. Yeah, going to all eyes on PCE tomorrow. That's expected to be a little bit hotter. It's expected to take some of those annualized rates up above 2% again, which is above the Fed's target. But we'll see what happens. There's been so much resetting in terms of Fed

tightening or Fed loosening, I should say, expectations that it may not have a big profound impact on the bond and stock markets. But we will see. Yeah. Crazy hour. Nutanix was down seven at one point. Now it's up about four. AI. It's all about AI. That does it for us here at Overtime. Fast money starts now.