Q3 26 EPS
$-0.40
MISS 38.26%
Est. $-0.29
Q3 26 Revenue
$53.3M
MISS 29.59%
Est. $75.6M
vs S&P Since Q3 26
+4.9%
BEATING MARKET
AI +13.2% vs S&P +8.3%
Market Reaction
Did AI Beat Earnings? Q3 2026 Results
C3.ai delivered a deeply disappointing fiscal third quarter, missing on both the top and bottom lines as a sweeping business restructuring upended its financial results. Revenue fell 46.1% year-over-year to $53.26 million, coming in 29.59% below the … Read more C3.ai delivered a deeply disappointing fiscal third quarter, missing on both the top and bottom lines as a sweeping business restructuring upended its financial results. Revenue fell 46.1% year-over-year to $53.26 million, coming in 29.59% below the $75.64 million consensus estimate, while the company posted a non-GAAP loss per share of $0.40, missing the $0.29 consensus by 38.26%. The primary culprit was a dramatic deterioration in gross margins, with GAAP gross margin collapsing to 17% from 59% a year ago, driven by surging subscription cost of revenue as CEO Stephen Ehikian, six months into the role, reshapes the company around large-scale enterprise-wide transformation deals. The restructuring also triggered a 26% workforce reduction and an investor fraud investigation, sending shares sharply lower. Investors monitoring the stock's direction got a sobering answer, with management guiding Q4 revenue to just $48.00 to $52.00 million, though the restructuring is expected to generate approximately $135 million in annual operating expense savings as the company works toward profitability.
Key Takeaways
- • Federal, defense and aerospace bookings increased 134% year-over-year, representing 55% of total bookings
- • 44 agreements closed in Q3 including new and expanded deals
- • Subscription revenue constituted 90% of total revenue
- • Subscription and prioritized engineering services combined constituted 97% of total revenue
AI YoY Financials
Q3 2026 vs Q3 2025, source: SEC Filings
AI Revenue by Segment
With YoY comparisons, source: SEC Filings
“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.”
— Stephen Ehikian, Q3 2026 Earnings Press Release
AI Earnings Trends
AI vs Market 30 Day Price Reactions
30-day stock return vs benchmark after each earnings
AI EPS Trend
Earnings per share: estimate vs actual
AI Revenue Trend
Quarterly revenue: estimate vs actual
AI Quarterly Results
5 quarters of earnings data
| Quarter | EPS Est. | EPS Act. | Surprise | Revenue | Rev. Surprise |
|---|---|---|---|---|---|
| Q4 26 BEAT FY | $-0.37 | $-0.33 | +11.46% | $51.6M | +2.73% |
| FY Full Year | $-1.39 | $-1.35 | +2.85% | $250.3M | +0.54% |
| Q3 26 MISS | $-0.29 | $-0.40 | -38.26% | $53.3M | -29.59% |
| Q2 26 BEAT | $-0.33 | $-0.25 | +24.77% | $75.1M | +0.37% |
| Q1 26 MISS | $-0.21 | $-0.37 | -75.27% | $70.3M | -25.16% |
| Q4 25 BEAT FY | $-0.20 | $-0.16 | +20.40% | $108.7M | +0.95% |
| FY Full Year | $-0.44 | $-0.41 | +7.57% | $389.1M | +0.24% |