C3 AI Announces Fiscal Third Quarter 2026 Results

REDWOOD CITY, Calif.--( BUSINESS WIRE)-- C3.ai, Inc. (“C3 AI,” “C3,” or the “Company”) (NYSE: AI), the Enterprise AI application software company, today announced financial results for its fiscal third quarter ended January 31, 2026.

Fiscal Third Quarter 2026 Financial Highlights:

“I joined C3 AI six months ago and I did so with a clear conviction: this company is uniquely positioned to win in Enterprise AI. That conviction has been reinforced through extensive engagement with customers, prospects, partners, and investors. However, it was clear to me that we were not organized appropriately. We’ve reduced our cost structure and cash burn. We’ve restructured and flattened the sales organization. We’ve focused efforts on our best-in-class applications. We’ve shifted our go-to-market toward large-scale, enterprise-wide transformations. We’ve accelerated how we build and deliver product. And we are infusing our AI across every function at C3 AI. Those changes are substantially complete and C3 AI is now a more agile, more disciplined, and more accountable organization. Moving forward, our entire focus is on executing our return to growth and building C3 AI into a profitable, cash-positive business,” said Stephen Ehikian, CEO, C3 AI.

Business Highlights

Federal, Defense & Aerospace

C3 AI’s Federal business, together with the defense and aerospace segment, gained traction, driven by new U.S. Federal government agreements and growing international adoption.

Commercial

C3 AI continued to drive customer expansion across asset-intensive operations and complex supply chain environments.

C3 Generative AI

C3 Transform 2026

Restructuring

Financial Outlook:

The Company’s guidance includes GAAP and non-GAAP financial measures.

The following table summarizes C3 AI’s guidance for the fourth quarter of fiscal 2026 and full-year fiscal 2026:

(in millions)

Fourth Quarter Fiscal 2026 Guidance

Full Year Fiscal 2026 Guidance

Total revenue

$48.0 - $52.0

$246.7 - $250.7

Non-GAAP loss from operations

$(56.0) - $(64.0)

$(219.5) - $(227.5)

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. Our guidance for non-GAAP loss from operations for fourth quarter fiscal 2026 and full-year fiscal 2026 excludes pre-tax restructuring expenses of approximately $10.0 million - 12.0 million. Stock-based compensation expense-related charges, including employer payroll tax-related items on employee stock transactions, are impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP results included in this press release. Our fiscal year ends April 30, and numbers are rounded for presentation purposes.

Conference Call Details

What:

C3 AI Third Quarter Fiscal Year 2026 Financial Results Conference Call

When:

Wednesday, February 25, 2026

Time:

2:00 p.m. PT / 5:00 p.m. ET

Participant Registration:

https://register-conf.media-server.com/register/BIaf593930cc1b47e08460193eb48fb3fc (live)

Webcast:

https:// edge.media-server.com/mmc/p/hzgor4v4/ (live and replay)

Investor Presentation Details

An investor presentation providing additional information and analysis can be found at our investor relations page at ir.c3.ai.

Statement Regarding Use of Non-GAAP Financial Measures

The Company reports the following non-GAAP financial measures, which have not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

We use these non-GAAP financial measures internally for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP to non-GAAP financial measures.

Other Information

Professional Services Revenue

Our professional services revenue includes service fees and prioritized engineering services. Service fees include revenue from services such as consulting, training, and paid implementation services.

Prioritized engineering services are undertaken when a customer requests that we accelerate the design, development, and delivery of software features and functions that are planned in our future product roadmap. When we agree to this, we negotiate an agreed upon fee to accelerate the development of the software. When the software feature is delivered, it becomes integrated to our core product offering, is available to all subscribers of the underlying software product, and enhances the operation of that product going forward. Such prioritized engineering services result in production-level computer software – compiled code that enhances the functionality of our production products – which is available for our customers to use over the life of their software licenses. Per Accounting Standards Codification (ASC) 606, Prioritized engineering services revenue is recognized as professional services over the period in which the software development is completed.

Total professional services revenue consists of:

Three Months Ended January 31,

Nine Months Ended January 31,

2026

2025

2026

2025

(in thousands)

Prioritized engineering services

3,289

5,698

15,893

26,008

Service fees

1,808

7,405

4,069

14,028

Total professional services revenue

5,097

13,103

19,962

40,036

Use of Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Forward-looking statements in this press release include, but are not limited to, statements regarding our restructuring plan, our market leadership position, anticipated benefits from our partnerships, our financial outlook for the fourth quarter of fiscal 2026 and full 2026 fiscal year, our ability to accelerate going forward, our ability to return to growth and to achieve cash generation and non-GAAP profitability, our sales and customer opportunity pipeline, including continued growth in the Federal market, the expected benefits of our offerings, and our business strategies, plans, and objectives for future operations. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including our history of losses and ability to achieve and maintain profitability in the future, our historic dependence on a limited number of existing customers that account for a substantial portion of our revenue, our ability to attract new customers and retain existing customers, the ability of our restructured global sales and services organization to achieve desired productivity levels in a reasonable period of time, the impact of the transition of our Chief Executive Officer role, the continued involvement of our Executive Chairman and our ability to retain key members of our senior management, market awareness and acceptance of enterprise AI solutions in general and our products in particular, the length and unpredictability of our sales cycles and the time and expense required for our sales efforts. Some of these risks are described in greater detail in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2025, our Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2025, October 31, 2025, and other filings and reports we make with the Securities and Exchange Commission from time to time, including, when available, our Quarterly Report on Form 10-Q that will be filed for the fiscal quarter ended January 31, 2026, although new and unanticipated risks may arise. The future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur. Except to the extent required by law, we do not undertake to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations.

About C3.ai, Inc.

C3.ai, Inc. (NYSE:AI) is the Enterprise AI application software company. C3 AI delivers a family of fully integrated products including the C3 Agentic AI Platform, an end-to-end platform for developing, deploying, and operating enterprise AI applications, C3 AI applications, a portfolio of industry-specific SaaS enterprise AI applications that enable the digital transformation of organizations globally, and C3 Generative AI, a suite of domain-specific generative AI offerings for the enterprise.

Source: C3.ai, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended January 31,

Nine Months Ended January 31,

2026

2025

2026

2025

Revenue

Subscription

48,163

85,679

178,706

240,297

Professional services

5,097

13,103

19,962

40,036

Total revenue

53,260

98,782

198,668

280,333

Cost of revenue

Subscription

42,703

37,799

127,129

106,129

Professional services

1,322

2,636

5,480

5,851

Total cost of revenue

44,025

40,435

132,609

111,980

Gross profit

9,235

58,347

66,059

168,353

Operating expenses

Sales and marketing

67,177

61,201

188,027

168,969

Research and development

58,823

59,356

181,826

167,998

General and administrative

23,643

25,375

73,546

66,845

Total operating expenses

149,643

145,932

443,399

403,812

Loss from operations

(140,408

)

(87,585

)

(377,340

)

(235,459

)

Interest income

6,700

8,677

22,457

28,240

Other income (expense), net

519

(957

)

794

(916

)

Loss before provision for income taxes

(133,189

)

(79,865

)

(354,089

)

(208,135

)

Provision for income taxes

174

336

711

865

Net loss

(133,363

)

(80,201

)

(354,800

)

(209,000

)

Net loss per share attributable to Class A and Class B common stockholders, basic and diluted

(0.94

)

(0.62

)

(2.56

)

(1.64

)

Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted

141,969

130,382

138,671

127,752

C3.AI, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

(Unaudited)

January 31, 2026

April 30, 2025

Assets

Current assets

Cash and cash equivalents

88,847

164,358

Marketable securities

533,076

578,330

Accounts receivable, net of allowance of $1,066 and $877 as of January 31, 2026 and April 30, 2025, respectively

123,570

137,226

Prepaid expenses and other current assets

37,202

24,338

Total current assets

782,695

904,252

Property and equipment, net

70,798

79,298

Goodwill

625

Other assets, non-current

41,658

41,707

Total assets

895,776

1,025,882

Liabilities and stockholders’ equity

Current liabilities

Accounts payable

18,152

15,160

Accrued compensation and employee benefits

46,123

53,868

Deferred revenue, current

37,496

36,561

Accrued and other current liabilities

17,164

26,295

Total current liabilities

118,935

131,884

Deferred revenue, non-current

2,491

—

Other long-term liabilities

54,877

55,695

Total liabilities

176,303

187,579

Commitments and contingencies

Stockholders’ equity

Class A common stock

141

130

Class B common stock

Additional paid-in capital

2,451,881

2,216,284

Accumulated other comprehensive income

883

521

Accumulated deficit

(1,733,435

)

(1,378,635

)

Total stockholders’ equity

719,473

838,303

Total liabilities and stockholders’ equity

895,776

1,025,882

C3.AI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine Months Ended January 31,

2026

2025

Cash flows from operating activities:

Net loss

(354,800

)

(209,000

)

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization

10,214

9,215

Non-cash operating lease cost

249

270

Stock-based compensation expense

209,528

174,373

Accretion of discounts on marketable securities

(7,125

)

(10,715

)

Other

518

2,158

Changes in operating assets and liabilities

Accounts receivable

13,467

(52,017

)

Prepaid expenses, other current assets and other assets

(9,405

)

587

Accounts payable

2,958

16,916

Accrued compensation and employee benefits

4,880

7,648

Operating lease liabilities

(171

)

1,439

Other liabilities

(9,528

)

12,462

Deferred revenue

3,427

(6,007

)

Net cash used in operating activities

(135,788

)

(52,671

)

Cash flows from investing activities:

Purchases of property and equipment

(1,585

)

(2,101

)

Purchases of marketable securities

(443,393

)

(518,806

)

Maturities and sales of marketable securities

496,134

514,365

Net cash provided by (used in) investing activities

51,156

(6,542

)

Cash flows from financing activities:

Taxes paid related to net share settlement of equity awards

—

(7,496

)

Proceeds from exercise of Class A common stock options

4,143

19,648

Proceeds from issuance of Class A common stock under employee stock purchase plan

4,978

5,009

Net cash provided by financing activities

9,121

17,161

Net decrease in cash, cash equivalents and restricted cash

(75,511

)

(42,052

)

Cash, cash equivalents and restricted cash at beginning of period

176,924

179,712

Cash, cash equivalents and restricted cash at end of period

101,413

137,660

Cash and cash equivalents

88,847

125,094

Restricted cash included in other assets, non-current

12,566

Total cash, cash equivalents and restricted cash

101,413

137,660

Supplemental disclosure of cash flow information—cash paid for income taxes

849

743

Supplemental disclosures of non-cash investing and financing activities:

Purchases of property and equipment included in accounts payable and accrued liabilities

269

527

Right-of-use assets obtained in exchange for lease obligations (including remeasurement of right-of-use assets and lease liabilities due to changes in the timing of receipt of lease incentives)

(166

)

1,016

Vesting of early exercised stock options

251

C3.AI, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except percentages)

(Unaudited)

Three Months Ended January 31,

Nine Months Ended January 31,

2026

2025

2026

2025

Reconciliation of GAAP gross profit to non-GAAP gross profit:

Gross profit on a GAAP basis

9,235

58,347

66,059

168,353

Stock-based compensation expense (1)

10,193

9,504

29,882

26,223

Employer payroll tax expense related to employee stock-based compensation (2)

216

356

970

883

Gross profit on a non-GAAP basis

19,644

68,207

96,911

195,459

Gross margin on a GAAP basis

Gross margin on a non-GAAP basis

Reconciliation of GAAP loss from operations to non-GAAP loss from operations:

Loss from operations on a GAAP basis

(140,408

)

(87,585

)

(377,340

)

(235,459

)

Stock-based compensation expense (1)

75,900

62,652

209,528

174,373

Employer payroll tax expense related to employee stock-based compensation (2)

1,104

1,789

4,360

4,151

Loss from operations on a non-GAAP basis

(63,404

)

(23,144

)

(163,452

)

(56,935

)

Reconciliation of GAAP net loss per share to non-GAAP net loss per share:

Net loss on a GAAP basis

(133,363

)

(80,201

)

(354,800

)

(209,000

)

Stock-based compensation expense (1)

75,900

62,652

209,528

174,373

Employer payroll tax expense related to employee stock-based compensation (2)

1,104

1,789

4,360

4,151

Net loss on a non-GAAP basis

(56,359

)

(15,760

)

(140,912

)

(30,476

)

GAAP net loss per share attributable to Class A and Class B common shareholders, basic and diluted

(0.94

)

(0.62

)

(2.56

)

(1.64

)

Non-GAAP net loss per share attributable to Class A and Class B common shareholders, basic and diluted

(0.40

)

(0.12

)

(1.02

)

(0.24

)

Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted

141,969

130,382

138,671

127,752

(1)

Stock-based compensation expense for gross profit and gross margin includes costs of subscription and cost of professional services as follows. Stock-based compensation expense for loss from operations includes total stock-based compensation expense as follows:

Three Months Ended January 31,

Nine Months Ended January 31,

2026

2025

2026

2025

Cost of subscription

9,790

8,563

28,372

24,084

Cost of professional services

403

941

1,510

2,139

Sales and marketing

30,710

21,860

80,578

61,495

Research and development

21,548

19,896

60,955

56,326

General and administrative

13,449

11,392

38,113

30,329

Total stock-based compensation expense

75,900

62,652

209,528

174,373

(2)

Employer payroll tax expense related to employee stock-based compensation for gross profit and gross margin includes costs of subscription and cost of professional services as follows. Employer payroll tax expense related to employee stock-based compensation for loss from operations includes total employer payroll tax expense related to employee stock-based compensation as follows:

Three Months Ended January 31,

Nine Months Ended January 31,

2026

2025

2026

2025

Cost of subscription

208

329

922

818

Cost of professional services

Sales and marketing

447

614

1,588

1,536

Research and development

310

578

1,311

1,173

General and administrative

131

241

491

559

Total employer payroll tax expense

1,104

1,789

4,360

4,151

Reconciliation of free cash flow to the GAAP measure of net cash used in operating activities:

The following table below provides a reconciliation of free cash flow to the GAAP measure of net cash used in operating activities for the periods presented:

Three Months Ended January 31,

Nine Months Ended January 31,

2026

2025

2026

2025

Net cash used in operating activities

(55,757

)

(22,020

)

(135,788

)

(52,671

)

Less:

Purchases of property and equipment

(439

)

(362

)

(1,585

)

(2,101

)

Free cash flow

(56,196

)

(22,382

)

(137,373

)

(54,772

)

Net cash provided by (used in) investing activities

40,239

12,373

51,156

(6,542

)

Net cash provided by financing activities

1,160

13,467

9,121

17,161