Companies /Technology

C3.ai Inc - Class A

NYSE: AI Software - Infrastructure
$10.33
â–² $0.63 (+6.49%) today
Markets closed · 9:57pm ET

Q3 2026 Earnings

Reported Feb 25, 2026, 4:10pm ET · SEC source
$-0.40
Miss −38.26%
EPS · est. $-0.29
$53.3M
Miss −29.59%
Revenue · est. $75.6M
+1.1%
Beating market
AI vs S&P since report
1 quarter
Consecutive EPS beats

Market Reaction

% change · around the report
−10%0+10%+20%Feb 25Feb 26report 4:10pm ETearnings−1.0%−1.5%
−10%0+10%+20%Feb 25Feb 26earnings−1.0%−1.5%
AI −1.5%S&P 500 −1.0%
−10%0+10%+20%Feb 25Feb 26report 4:10pm ETearnings−1.6%−1.5%
−10%0+10%+20%Feb 25Feb 26earnings−1.6%−1.5%
AI −1.5%NASDAQ −1.6%
0+10%+20%Feb 24Mar 5report 4:10pm ETearnings−2.1%+13.7%
0+10%+20%Feb 24Mar 5earnings−2.1%+13.7%
AI +13.7%S&P 500 −2.1%
0+10%+20%Feb 24Mar 5report 4:10pm ETearnings−1.7%+13.7%
0+10%+20%Feb 24Mar 5earnings−1.7%+13.7%
AI +13.7%NASDAQ −1.7%
−18.53%
Day of report
−5.36%
Next session
+11.79%
One week
−7.26%
30 days

S&P 500 over the same 30 days: −8.32%.

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 $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. <a href="https://247wallst.com/investing/2026/02/25/live-will-c3-ai-ai-gain-momentum-after-earnings-tonight/">Investors monitoring the stock's direction</a> 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

“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.”

C3.ai CEO, on the earnings call

Forward Guidance & Outlook

For Q4 fiscal 2026, C3 AI guided total revenue of $48.0–$52.0 million and non-GAAP loss from operations of $(56.0)–$(64.0) million. Full-year fiscal 2026 guidance calls for total revenue of $246.7–$250.7 million and non-GAAP loss from operations of $(219.5)–$(227.5) million. The guidance excludes pre-tax restructuring expenses of approximately $10.0–$12.0 million. Management is focused on executing a return to growth and building toward a profitable, cash-positive business, with the restructuring expected to yield approximately $135 million in annual non-GAAP operating expense savings.

AI YoY Financials

Q3 2026 vs Q3 2025 · SEC filings Q3 2025 Q3 2026
$-400,000,000$-200,000,000$0$98.8M$53.3MRevenue$58.3M$9.2MGross Profit$-353,761,653$-140,408,000Operating Income$-395,618,511$-133,363,000Net Income
$-400,000,000$-200,000,000$0RevenueGross ProfitOperating IncomeNet Income

AI Revenue by Segment

Subscription$48.2M
Professional Services$5.1M
Prioritized Engineering Services
Service Fees

Figures from SEC filings and company reports. Not investment advice.