C3.ai (NYSE:AI) Posts Quarterly Earnings Results, Misses Estimates By $0.11 EPS

C3.ai (NYSE:AI) released its quarterly earnings results on Wednesday. The company reported ($0.40) earnings per share for the quarter, missing analysts’ consensus estimates of ($0.29) by ($0.11), FiscalAI reports. C3.ai had a negative net margin of 141.35% and a negative return on equity of 53.96%. The firm had revenue of $53.26 million for the quarter, compared to analyst estimates of $75.91 million. During the same period in the previous year, the business posted ($0.12) earnings per share. C3.ai’s revenue for the quarter was down 46.1% on a year-over-year basis.

Here are the key takeaways from C3.ai’s conference call:

• Company called the quarter “inadequate,” reporting Q3 revenue of $53.3M, a non-GAAP operating loss of $63.4M and negative free cash flow of $56.2M, with management citing missed deal closures in North America and Europe.
• Management announced a restructuring to deliver approximately $135 million in annual non‑GAAP expense reductions, including ~26% workforce cuts (~280 employees) and targeted non‑employee savings, aiming to materially reduce cash burn and return to non‑GAAP profitability.
• Leadership is refocusing the company on fewer, high‑value applications (asset performance, supply chain, procurement) and has flattened the sales org while embedding agentic AI internally to boost productivity and accelerate proofs of value and deal conversion.
• Federal, defense and aerospace demand was a clear strength—bookings in that segment rose 134% year‑over‑year and made up 55% of total bookings, with notable wins (USDA, DOE, NATO, Royal Navy) that management plans to lean into.
• The business remains highly recurring (90% subscription; subscription+PES = 97%) and signed 14 IPDs this quarter, but bookings were $46.9M and Q4 revenue guidance is $48M–$52M while management works to fix sales execution in NA/EMEA.

C3.ai Stock Performance

Shares of NYSE AI traded down $0.30 during trading on Friday, reaching $8.10. The stock had a trading volume of 1,676,811 shares, compared to its average volume of 7,377,558. C3.ai has a one year low of $7.73 and a one year high of $30.24. The stock has a market cap of $1.14 billion, a PE ratio of -2.57 and a beta of 1.98. The firm’s 50 day moving average price is $12.36 and its two-hundred day moving average price is $15.10.

Key C3.ai News

Here are the key news stories impacting C3.ai this week:

• Positive Sentiment: Strong federal bookings noted in coverage, which could support a portion of near‑term revenue stream. Zacks: Q3 recap
• Positive Sentiment: Some brokers (e.g., Wedbush) still maintain bullish ratings/sizeable upside targets despite cuts, giving a potential recovery path if execution improves. Benzinga: analyst notes
• Neutral Sentiment: New CEO Stephen Ehikian is pursuing a restructuring to reduce costs and reposition the company for AI scale; management argues the cost base was “too high” and is targeting savings from the cuts. Reuters: restructuring
• Negative Sentiment: Q3 earnings missed expectations — EPS of ($0.40) vs. ($0.29) est and revenue $53.3M vs. $75.9M est; revenue fell ~46% YoY. This shortfall is the primary catalyst for the selloff. MarketBeat: earnings recap
• Negative Sentiment: Company cut workforce by 26% and lowered guidance sharply — Q4 revenue guidance $48–52M vs. street ~$77.6M; FY revenue guidance $246.7–250.7M vs. ~$298.7M consensus. Those guidance revisions drive downgrade pressure. MarketWatch: layoffs & guidance
• Negative Sentiment: Multiple analysts cut price targets and downgraded the stock (JPMorgan, Canaccord, KeyCorp, Citizens/JMP among others), increasing near‑term selling pressure. Benzinga: analyst actions
• Negative Sentiment: Ademi LLP launched an investigation into potential securities‑fraud claims tied to C3.ai’s public statements, adding legal and reputational risk. PR Newswire: investigation
• Negative Sentiment: Market reaction: shares plunged after hours/premarket and traded sharply lower on Thursday as investors re‑priced the company for slower growth and execution risk. Coverage pieces question whether the business can convert pilots into durable contracts. CNBC: market reaction

Insider Buying and Selling

In other news, Chairman Thomas M. Siebel sold 511,732 shares of the firm’s stock in a transaction dated Tuesday, February 10th. The shares were sold at an average price of $11.66, for a total value of $5,966,795.12. Following the transaction, the chairman directly owned 722,362 shares in the company, valued at approximately $8,422,740.92. This trade represents a 41.47% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, CFO Hitesh Lath sold 15,042 shares of C3.ai stock in a transaction dated Tuesday, December 16th. The shares were sold at an average price of $14.38, for a total transaction of $216,303.96. Following the completion of the transaction, the chief financial officer directly owned 223,120 shares of the company’s stock, valued at $3,208,465.60. This trade represents a 6.32% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 1,884,304 shares of company stock worth $24,970,674 over the last ninety days. 26.50% of the stock is owned by insiders.

Hedge Funds Weigh In On C3.ai

Hedge funds and other institutional investors have recently modified their holdings of the company. Morgan Stanley boosted its stake in C3.ai by 1.9% during the 4th quarter. Morgan Stanley now owns 4,824,499 shares of the company’s stock valued at $65,034,000 after purchasing an additional 91,802 shares during the period. State Street Corp increased its stake in shares of C3.ai by 3.3% in the fourth quarter. State Street Corp now owns 2,976,389 shares of the company’s stock valued at $40,122,000 after purchasing an additional 94,086 shares during the period. Geode Capital Management LLC raised its holdings in shares of C3.ai by 0.8% during the fourth quarter. Geode Capital Management LLC now owns 2,868,578 shares of the company’s stock valued at $38,675,000 after buying an additional 21,451 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its position in shares of C3.ai by 9.6% during the third quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 2,425,976 shares of the company’s stock worth $42,066,000 after buying an additional 211,786 shares during the period. Finally, Dimensional Fund Advisors LP grew its holdings in C3.ai by 77.1% in the 3rd quarter. Dimensional Fund Advisors LP now owns 1,804,188 shares of the company’s stock worth $31,284,000 after buying an additional 785,508 shares in the last quarter. Institutional investors and hedge funds own 38.96% of the company’s stock.

Analyst Ratings Changes

A number of brokerages have recently issued reports on AI. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of C3.ai in a research report on Wednesday, January 21st. Citizens Jmp lowered C3.ai from an “outperform” rating to a “market perform” rating in a research note on Thursday. Wedbush dropped their price objective on C3.ai from $20.00 to $15.00 and set an “outperform” rating on the stock in a report on Thursday. JPMorgan Chase & Co. cut their target price on C3.ai from $10.00 to $7.00 and set an “underweight” rating on the stock in a research report on Thursday. Finally, DA Davidson decreased their price target on shares of C3.ai from $13.00 to $7.00 and set an “underperform” rating for the company in a research report on Thursday. One research analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating, seven have issued a Hold rating and six have issued a Sell rating to the company. According to data from MarketBeat, C3.ai currently has an average rating of “Reduce” and an average price target of $15.87.

C3.ai Company Profile

C3.ai, Inc is a leading enterprise software provider focused on delivering scalable artificial intelligence (AI) and Internet of Things (IoT) solutions to large organizations. The company’s core offering, the C3 AI Suite, is a comprehensive, model-driven platform that unifies data ingestion, model development, and application deployment. Through its suite of tools, C3.ai enables customers to accelerate digital transformation initiatives by applying advanced machine learning, predictive analytics, and AI-driven insights across a broad range of business functions.

The C3 AI Suite provides a low-code environment for data scientists and application developers to rapidly design, test, and deploy enterprise-scale AI applications.