AI C3.ai, Inc. - 8-K

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ex991-fy26xq4earnings.htm
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C3 AI Announces Fiscal Fourth Quarter and Full Fiscal Year 2026 Results

Thomas M. Siebel Resumes Role of Chief Executive Officer

REDWOOD CITY, Calif . — June 3, 2026 — C3.ai, Inc. (“C3 AI,” “C3,” or the “Company”) (NYSE: AI), the Enterprise AI application software company, today announced financial results for its fiscal fourth quarter and full fiscal year ended April 30, 2026.

“We have a well-defined strategy, a restructured organization, new executive leadership, and a detailed execution plan now in place with the singular focus of increasing shareholder value through topline revenue growth, cash generation, and non-GAAP profitability. Game on,” said Thomas M. Siebel, Chairman and Chief Executive Officer, C3 AI.

Fiscal Fourth Quarter 2026 Financial Highlights:

• Total Revenue was $51.6 million.

• Subscription Revenue was $48.4 million. Subscription revenue constituted 94% of total revenue.

• Subscription and Prioritized Engineering Services Revenue Combined was $50.5 million, constituting 98% of total revenue.

• GAAP gross profit was $11.3 million, representing a 22% gross margin. Non-GAAP gross profit was $19.3 million, representing a 37% non-GAAP gross margin.

• GAAP net loss per share was $(0.79). Non-GAAP net loss per share was $(0.33).

• Cash, cash equivalents, and marketable securities was $575.4 million.

Full Fiscal Year 2026 Financial Highlights:

• Total Revenue was $250.3 million.

• Subscription Revenue was $227.1 million. Subscription revenue constituted 91% of total revenue.

• Subscription and Prioritized Engineering Services Revenue Combined was $245.1 million, constituting 98% of total revenue.

• Gross Profit: GAAP gross profit was $77.4 million, representing 31% gross margin. Non-GAAP gross profit was $116.2 million, representing a 46% non-GAAP gross margin.

• Net Loss per Share: GAAP net loss per share was $(3.35). Non-GAAP net loss per share was $(1.35).

“The sales performance over recent quarters has been entirely unacceptable, to the point of surreal,” Siebel continued. “We are here to fix it.”

Cash Balance

The Company also announced that its cash, cash equivalents, and marketable securities balance as of June 3, 2026 was $673 million. This includes the proceeds from Mr. Siebel’s purchase of 6.17 million shares of C3 AI stock at a price of $11.16 per share.

Financial Outlook:

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

The following table summarizes C3 AI’s guidance for the first quarter of fiscal 2027 and full-year fiscal 2027:

(in millions)

First Quarter Fiscal 2027

Guidance

Full Year Fiscal 2027 Guidance

Total revenue

$50.0 - $54.0

$210.0 - $240.0

Non-GAAP loss from operations

$(40.5) - $(48.5)

$(128.0) - $(160.0)

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. 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 Fiscal Fourth Quarter and Fiscal Year 2026 Earnings Call

When:

Wednesday, June 3, 2026

Time:

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

Participant Registration:

https://register-conf.media-server.com/register/BI0e0b9c57fb3c40dfadcec96101df5606 (live)

Webcast:

https://edge.media-server.com/mmc/p/5jvywhah/ (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.

• Non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, and non-GAAP net loss per share. Our non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, and non-GAAP net loss per share exclude the effect of restructuring expenses, stock-based compensation expense-related charges and employer payroll tax expense related to employee stock-based compensation. We believe the presentation of operating results that exclude these non-cash items provides useful supplemental information to investors and facilitates the analysis of our operating results and comparison of operating results across reporting periods.

• Free cash flow . We believe free cash flow, a non-GAAP financial measure, is useful in evaluating liquidity and provides information to management and investors about our ability to fund future operating needs and strategic initiatives. We calculate free cash flow as net cash used in operating activities less purchases of property and equipment and capitalized software development costs. This non-GAAP financial measure may be different than similarly titled measures used by other companies. Additionally, the utility of free cash flow is further limited as it does not represent the total increase or decrease in our cash balances for a given period.

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 April 30,

Fiscal Year Ended April 30,

2026

2025

2026

2025

(in thousands)

(in thousands)

Prioritized engineering services

$

2,141

$

17,024

$

18,034

$

43,032

Service fees

1,075

4,366

5,144

18,394

Total professional services revenue

$

3,216

$

21,390

$

23,178

$

61,426

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,” “plan,” “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, execution plan, and anticipated cost savings in connection therewith, our financial outlook for the first quarter of fiscal 2027 and full 2027 fiscal year, our ability to accelerate going forward, our ability to increase shareholder value through topline revenue growth, cash generation, and non-GAAP profitability, our sales and customer opportunity pipeline, the impact of our adoption of agentic artificial intelligence tools, the return of Tom Siebel as our Chief Executive Officer, 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 return of Tom Siebel as our Chief Executive Officer 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 quarters ended July 31, 2025, October 31, 2025, January 31, 2026, and other filings and reports we make with the Securities and Exchange Commission from time to time, including, when available, our Annual Report on Form 10-K that will be filed for the fiscal year ended April 30, 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.

Investor Contact

[email protected]

C3 AI Public Relations

Axicom

Mindy Nelson

830-214-4823

[email protected]

C3.AI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended April 30,

Fiscal Year Ended April 30,

2026

2025

2026

2025

Revenue

Subscription

$

48,384

$

87,333

$

227,090

$

327,630

Professional services

3,216

21,390

23,178

61,426

Total revenue

51,600

108,723

250,268

389,056

Cost of revenue

Subscription

39,162

37,712

166,291

143,841

Professional services

1,115

3,501

6,595

9,352

Total cost of revenue

40,277

41,213

172,886

153,193

Gross profit

11,323

67,510

77,382

235,863

Operating expenses

Sales and marketing

49,342

70,690

237,369

239,659

Research and development

47,261

58,393

229,087

226,391

General and administrative

25,050

27,392

98,596

94,237

Restructuring

10,828

—

10,828

—

Total operating expenses

132,481

156,475

575,880

560,287

Loss from operations

(121,158)

(88,965)

(498,498)

(324,424)

Interest income

5,989

7,949

28,447

36,189

Other (expense) income, net

(290)

1,425

504

509

Loss before provision for income taxes

(115,459)

(79,591)

(469,547)

(287,726)

Provision for income taxes

111

111

822

976

Net loss

$

(115,570)

$

(79,702)

$

(470,369)

$

(288,702)

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

$

(0.79)

$

(0.60)

$

(3.35)

$

(2.24)

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

146,224

133,233

140,513

129,089

C3.AI, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

April 30, 2026

April 30, 2025

Assets

Current assets

Cash and cash equivalents

$

66,197

$

164,358

Marketable securities

509,252

578,330

Accounts receivable, net of allowance of $1,065 and $877 as of April 30, 2026 and April 30, 2025, respectively

100,548

137,226

Prepaid expenses and other current assets

31,965

24,338

Total current assets

707,962

904,252

Property and equipment, net

66,904

79,298

Goodwill

625

625

Other assets, non-current

40,782

41,707

Total assets

$

816,273

$

1,025,882

Liabilities and stockholders’ equity

Current liabilities

Accounts payable

$

5,509

$

15,160

Accrued compensation and employee benefits

48,560

53,868

Deferred revenue, current

34,861

36,561

Accrued and other current liabilities

17,641

26,295

Total current liabilities

106,571

131,884

Deferred revenue, non-current

1,560

—

Other long-term liabilities

54,391

55,695

Total liabilities

162,522

187,579

Commitments and contingencies

Stockholders’ equity

Class A common stock

145

130

Class B common stock

3

3

Additional paid-in capital

2,502,657

2,216,284

Accumulated other comprehensive (loss) income

(50)

521

Accumulated deficit

(1,849,004)

(1,378,635)

Total stockholders’ equity

653,751

838,303

Total liabilities and stockholders’ equity

$

816,273

$

1,025,882

C3.AI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Fiscal Year Ended April 30,

2026

2025

Cash flows from operating activities:

Net loss

$

(470,369)

$

(288,702)

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

Depreciation and amortization

13,554

12,607

Non-cash operating lease cost

370

358

Stock-based compensation expense

263,715

230,988

Non-cash restructuring expense

5,636

—

Accretion of discounts on marketable securities

(8,484)

(13,459)

Other

520

2,800

Changes in operating assets and liabilities

Accounts receivable

36,490

(9,120)

Prepaid expenses, other current assets and other assets

(7,799)

1,909

Accounts payable

(9,443)

3,635

Accrued compensation and employee benefits

(4,444)

8,705

Operating lease liabilities

(1,443)

450

Other liabilities

(8,391)

10,823

Deferred revenue

(140)

(2,401)

Net cash used in operating activities

(190,228)

(41,407)

Cash flows from investing activities:

Purchases of property and equipment

(1,908)

(3,039)

Purchases of marketable securities

(540,640)

(647,015)

Maturities and sales of marketable securities

617,632

666,450

Net cash provided by investing activities

75,084

16,396

Cash flows from financing activities:

Taxes paid related to net share settlement of equity awards

—

(9,079)

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

9,290

10,879

Proceeds from exercise of Class A common stock options

7,693

20,423

Net cash provided by financing activities

16,983

22,223

Net decrease in cash, cash equivalents and restricted cash

(98,161)

(2,788)

Cash, cash equivalents and restricted cash at beginning of period

176,924

179,712

Cash, cash equivalents and restricted cash at end of period

$

78,763

$

176,924

Cash and cash equivalents

$

66,197

$

164,358

Restricted cash included in other assets, non-current

12,566

12,566

Total cash, cash equivalents and restricted cash

$

78,763

$

176,924

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

$

985

$

920

Supplemental disclosures of non-cash investing and financing activities:

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

$

153

$

311

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

$

6

$

195

C3.AI, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except percentages)

(Unaudited)

Three Months Ended April 30,

Fiscal Year Ended April 30,

2026

2025

2026

2025

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

Gross profit on a GAAP basis

$

11,323

$

67,510

$

77,382

$

235,863

Stock-based compensation expense (1)

7,631

7,437

37,513

33,660

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

313

228

1,283

1,111

Gross profit on a non-GAAP basis

$

19,267

$

75,175

$

116,178

$

270,634

Gross margin on a GAAP basis

22%

62%

31%

61%

Gross margin on a non-GAAP basis

37%

69%

46%

70%

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

Loss from operations on a GAAP basis

$

(121,158)

$

(88,965)

$

(498,498)

$

(324,424)

Stock-based compensation expense (1)

54,187

56,615

263,715

230,988

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

1,785

1,185

6,145

5,336

Restructuring (3)

10,828

—

10,828

—

Loss from operations on a non-GAAP basis

$

(54,358)

$

(31,165)

$

(217,810)

$

(88,100)

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

Net loss on a GAAP basis

$

(115,570)

$

(79,702)

$

(470,369)

$

(288,702)

Stock-based compensation expense (1)

54,187

56,615

263,715

230,988

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

1,785

1,185

6,145

5,336

Restructuring (3)

10,828

—

10,828

—

Net loss on a non-GAAP basis

$

(48,770)

$

(21,902)

$

(189,681)

$

(52,378)

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

$

(0.79)

$

(0.60)

$

(3.35)

$

(2.24)

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

$

(0.33)

$

(0.16)

$

(1.35)

$

(0.41)

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

146,224

133,233

140,513

129,089

(1) Stock-based compensation expense for gross profits 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 April 30,

Fiscal Year Ended April 30,

2026

2025

2026

2025

Cost of subscription

$

7,244

$

6,396

$

35,616

$

30,480

Cost of professional services

387

1,041

1,897

3,180

Sales and marketing

14,953

22,465

95,531

83,960

Research and development

18,266

15,303

79,221

71,629

General and administrative

13,337

11,410

51,450

41,739

Total stock-based compensation expense

$

54,187

$

56,615

$

263,715

$

230,988

(2)    Employer payroll tax expense related to employee stock-based compensation for gross profits 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 April 30,

Fiscal Year Ended April 30,

2026

2025

2026

2025

Cost of subscription

$

300

$

202

$

1,222

$

1,020

Cost of professional services

13

26

61

91

Sales and marketing

660

410

2,248

1,946

Research and development

530

375

1,841

1,548

General and administrative

282

172

773

731

Total employer payroll tax expense

$

1,785

$

1,185

$

6,145

$

5,336

(3)    Non-GAAP Loss from Operations exclude approximately $10.8 million of pre-tax restructuring expenses related to the restructuring plan announced last quarter. Restructuring expenses primarily include $5.2 million of severance and related employee terminations costs, payments under the Worker Adjustment and Retraining Notification (“WARN”) Act, and other benefits for terminated employees, and $4.8 million of stock-based compensation expense.

Reconciliation of free cash flow to the GAAP measure of net cash (used in) provided by operating activities:

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

Three Months Ended April 30,

Fiscal Year Ended April 30,

2026

2025

2026

2025

Net cash (used in) provided by operating activities

$

(54,440)

$

11,264

$

(190,228)

$

(41,407)

Less:

Purchases of property and equipment

(323)

(938)

(1,908)

(3,039)

Free cash flow

$

(54,763)

$

10,326

$

(192,136)

$

(44,446)

Net cash provided by investing activities

$

23,928

$

22,938

$

75,084

$

16,396

Net cash provided by financing activities

$

7,862

$

5,062

$

16,983

$

22,223