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  "docSlug": "72469199073c",
  "documentTitle": "C3.ai, Inc. (AI)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-02-16 00:00:00",
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      "kind": "callout",
      "text": "C3's sales commission expense recognition policies do not appear to match the underlying economics of its contracts. The Company states that commercial customers (a majority of its customers) have a weighted average duration of under 3 years. It generally expenses sales commissions over a 5 year period. It recently paid a significant portion of a sales commission to BH in the first 6 months, yet is amortizing costs over 3 years. We believe this illustrates the accounting vs. cash disconnect.",
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      "kind": "callout",
      "text": "C3's sales commission expense recognition policies do not appear to match the underlying economics of its contracts.",
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      "kind": "quote",
      "text": "The duration of our contracts vary by customer. The weighted average contract duration for commercial Entities in the year ended April 30, 2020 was 35 months, while the weighted average contract duration for federal agency Entities was 11 months. — C3 Prospectus",
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      "text": "Source: C3 Prospectus; Q1 and Q2 2022 10-Q",
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      "text": "Contract Duration: 35 months vs 11 months; Recognition Period: 5 years; Real Example: $8.3M commission amortized over 5 years vs paid over 3 years with $3.4M in 6 months.",
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      "kind": "title",
      "text": "We Believe C3's Accounting For Sales Commissions Are Not Reflective Of Cash And Contract Reality",
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      "evidence": "Contrasts company statements with actual financial data to expose accounting manipulation.",
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      "evidence": "The document presents a detailed critique of C3.ai's financials, business dealings, and corporate governance.",
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