"In Q4 FY2025, C3.ai posted $108.7M in revenue, up 25.5% year-over-year. That looked like the inflection investors had been waiting for. Then the wheels came off. Q1 FY2026 revenue came in at $70.26 million, and Q2 revenue was $75.1M - a 20.4% decline versus the same quarter a year earlier. Profit didn't just slip, it collapsed."
"The company is spending nearly $2 for every $1 it earns. Total operating expenses ran at 189.6% of revenue last quarter. That's not a growth company in investment mode. That's a company that needs to show the investment is working."
"C3.ai has a habit of winning the narrative battle while losing the revenue war. The company closed 46 agreements last quarter, with companies including AMD, GSK and U.S. Steel. Federal bookings grew 89% year-over-year and now represent 45% of total bookings. The partner pipeline is up 108% year-over-year."
C3.ai faces a critical test with its Q3 revenue guidance of $72M to $80M after disappointing financial results. Following a strong Q4 FY2025 with $108.7M in revenue, the company posted consecutive quarterly declines: Q1 FY2026 at $70.26M and Q2 at $75.1M, representing a 20.4% year-over-year drop. Operating losses have been severe, with Q2 showing a $105M net loss and operating expenses at 189.6% of revenue. While C3.ai has achieved narrative wins through increased deal closures, federal bookings growth, and pipeline expansion, these leading indicators have not translated into revenue growth. The company must now demonstrate that its investments and strategic initiatives are producing tangible financial results.
Read at 24/7 Wall St.
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