# C3 AI (AI) Q1 2026 Financial Results Summary
C3.ai, Inc. (“C3 AI” or the “Company”) (NYSE: AI) announced its financial results for the fiscal first quarter ended July 31, 2025, on September 3, 2025. The report highlights several critical metrics, including revenue trends, customer engagements, and organizational changes.
## Fiscal First Quarter 2026 Financial Highlights
– **Total Revenue**: $70.3 million, a **downward shift of 19%** from $87.2 million in Q1 2025.
– **Subscription Revenue**: $60.3 million, accounting for **86%** of total revenue, and down **18%** from $73.5 million in Q1 2025.
– **Subscription + Prioritized Engineering Services Revenue**: Combined revenue of $69.0 million, contributing **98%** of total revenue.
– **GAAP Gross Profit**: $26.4 million, reflecting a **38% gross margin**, compared to **60%** in Q1 2025.
– **Non-GAAP Gross Profit**: $36.3 million, resulting in a **52% non-GAAP gross margin**, down from **70%**.
– **Net Loss per Share**:
– GAAP: $(0.86), compared to $(0.50) in Q1 2025.
– Non-GAAP: $(0.37), down from $(0.05) in Q1 2025.
– **Cash Balance**: $711.9 million in cash, cash equivalents, and marketable securities.
## Organizational Changes
– **CEO Appointment**: Stephen Ehikian was appointed as the new CEO effective September 1, 2025, succeeding founder Thomas M. Siebel, who transitioned to Executive Chairman.
– **Restructured Sales and Services**: The company’s global sales and services organization underwent significant restructuring, introducing new leadership across various business units.
## Business Highlights
– **Customer Agreements**:
– Closed **46 agreements** in Q1, which included **28 initial production deployment agreements**.
– Notable collaborations established with various organizations, including HII, Newport News Shipbuilding, and the U.S. Army.
– **Government Clientele Expansion**: Secured **eight agreements** across multiple U.S. states state governments.
## C3 AI Strategic Integrator Program
– Launched a new OEM initiative enabling partners to license the C3 Agentic AI Platform, garnering positive feedback from system integrators and U.S. Federal service providers.
## Partner Network
– Closed **40 agreements** through its partner network, with a **54% increase in the joint 12-month qualified opportunity pipeline** year-over-year.
## Collaboration Success
– Joint initiatives with Microsoft resulted in **24 agreements**, demonstrating strong traction with significant **140% year-over-year increase** in the qualified pipeline.
– Partnerships with McKinsey & Company advanced through new strategic agreements and educational sessions.
## Customer Success Stories
– Partnerships with Nucor Corporation and Qemetica illustrate how C3 AI’s platforms are being deployed to enhance efficiency and productivity across multiple sectors.
## Financial Outlook
– For Q2 Fiscal 2026, C3 AI projects total revenue of **$72.0 – $80.0 million**.
– Non-GAAP loss from operations is expected between **$(49.5) – $(57.5) million**.
– Full-year fiscal guidance has been withdrawn due to management changes.
## Dividends and Share Repurchases
– As of this report, no quarterly dividend has been declared nor any share repurchase program mentioned.
## Summary of Financial Performance vs. Previous Year (Q1 2025)
– **Total Revenue**: Decreased by **19%**.
– **Subscription Revenue**: Declined by **18%**.
– **GAAP Gross Margin**: Down to **38%** from **60%**.
– **Non-GAAP Gross Margin**: Reduced to **52%**, dropping from **70%**.
– **Net Loss per Share (GAAP)**: Increased loss attributed to higher operational costs and sales campaign disruptions.
This quarter reflects C3 AI’s ongoing challenges, yet it remains steadfast in recalibrating its market strategy through new leadership and product initiatives.
| Revenue | 2025 | 2024 |
|---|---|---|
| Subscription | $ 60,301 | $ 73,456 |
| Professional services | $ 9,960 | $ 13,757 |
| Total revenue | $ 70,261 | $ 87,213 |
| Cost of revenue | ||
| Subscription | $ 41,481 | $ 33,292 |
| Professional services | $ 2,336 | $ 1,755 |
| Total cost of revenue | $ 43,817 | $ 35,047 |
| Gross profit | $ 26,444 | $ 52,166 |
| Operating expenses | ||
| Sales and marketing | $ 62,513 | $ 52,125 |
| Research and development | $ 64,651 | $ 52,927 |
| General and administrative | $ 24,099 | $ 19,700 |
| Total operating expenses | $ 151,263 | $ 124,752 |
| Loss from operations | $(124,819) | $(72,586) |
| Interest income | $ 8,218 | $ 10,003 |
| Other income (expense), net | $ 132 | $ 28 |
| Loss before provision for income taxes | $(116,469) | $(62,555) |
| Provision for income taxes | $ 300 | $ 272 |
| Net loss | $(116,769) | $(62,827) |
| Net loss per share attributable to Class | ||
| A and Class B common stockholders, basic | $(0.86) | $(0.50) |
| and diluted | ||
| Weighted-average shares used in | ||
| computing net loss per share | 135,375 | 124,979 |
| attributable to Class A and Class B | ||
| common stockholders, basic and diluted |
| July 31, 2025 | April 30, 2025 | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 80,941 | $ 164,358 |
| Marketable securities | $ 630,957 | $ 578,330 |
| Accounts receivable, net of allowance of | ||
| $877 and $877 as of July 31, 2025 and | $ 113,925 | $ 137,226 |
| April 30, 2025, respectively | ||
| Prepaid expenses and other current | ||
| assets | $ 25,290 | $ 24,338 |
| Total current assets | $ 851,113 | $ 904,252 |
| Property and equipment, net | $ 76,600 | $ 79,298 |
| Goodwill | $ 625 | $ 625 |
| Other assets, non-current | $ 40,401 | $ 41,707 |
| Total assets | $ 968,739 | $ 1,025,882 |
| Liabilities and stockholders’ equity | ||
| Current liabilities | ||
| Accounts payable | $ 12,084 | $ 15,160 |
| Accrued compensation and employee | ||
| benefits | $ 45,396 | $ 53,868 |
| Deferred revenue, current | $ 28,948 | $ 36,561 |
| Accrued and other current liabilities | $ 24,863 | $ 26,295 |
| Total current liabilities | $ 111,291 | $ 131,884 |
| Deferred revenue, non-current | $ 985 | $ — |
| Other long-term liabilities | $ 57,639 | $ 55,695 |
| Total liabilities | $ 169,915 | $ 187,579 |
| Commitments and contingencies | ||
| Stockholders’ equity | ||
| Class A common stock | $ 133 | $ 130 |
| Class B common stock | $ 3 | $ 3 |
| Additional paid-in capital | $ 2,294,166 | $ 2,216,284 |
| Accumulated other comprehensive (loss) | $ (74) | $ 521 |
| income | ||
| Accumulated deficit | $ (1,495,404) | $ (1,378,635) |
| Total stockholders’ equity | $ 798,824 | $ 838,303 |
| Total liabilities and stockholders’ | ||
| equity | $ 968,739 | $ 1,025,882 |
