Summary
C3 AI closed fiscal 2025 with strong revenue growth but a wider loss. Fourth-quarter revenue rose 25.6% to $108.7 million, and full-year revenue rose 25.3% to $389.1 million. Gross profit increased 30.8% to $67.5 million in the quarter and 32.1% to $235.9 million for the year. The quarterly gross margin improved to 62.1%, up 2.5 percentage points, while the full-year gross margin rose to 60.6%, up 3.1 percentage points. Those gains did not reach the bottom line. The operating loss widened to $88.96 million in the quarter and to $324.42 million for the year. The net loss widened to $79.70 million in the quarter and to $288.70 million for the year. The operating margin was negative 81.8% in the quarter, up 13.2 percentage points, and negative 83.4% for the year, up 19.1 percentage points.
Cash generation remains uneven. Operating cash flow was $11.26 million in the fourth quarter, down 47.2% year over year. For the full year, operating cash flow was negative $41.41 million, up 33.6% year over year. Capital expenditures were $0.94 million in the quarter, down 63.0%, and $3.04 million for the year, down 88.0%. The non-GAAP free cash flow was $10.33 million in the quarter and negative $44.45 million for the year. Deferred revenue was $36.60 million, down 6.2% year over year, and remaining performance obligations were $235.10 million, down 3.8%. The company also reported a non-GAAP net loss per share of $(0.16) for the quarter and $(0.41) for the year. GAAP net loss per share was $(2.24) for the full year, up $0.10 per share from the prior fiscal year.
Business activity was busy. C3 AI closed 264 agreements in fiscal 2025, up 38%, including 174 initial production deployment agreements, up 41%. In the fourth quarter, it closed 69 agreements, including 36 initial production deployment agreements. Partner-led activity expanded sharply. The company closed 193 agreements through its partner network in fiscal 2025, up 68%, representing 73% of total agreements. In the fourth quarter, partner-supported bookings grew 419% year over year, and the company closed 59 agreements through its partner network. C3 AI and Microsoft closed 28 agreements jointly in the quarter. Federal momentum was notable. The U.S. Air Force Rapid Sustainment Office raised the contract ceiling for the Predictive Analytics and Decision Assistant platform to $450 million through October 2029, adding $350 million in available scope after the initial $100 million ceiling was fully utilized over five years. In fiscal 2025, the company closed 51 agreements across the Federal sector, accounting for 20% of total bookings. C3 AI and Baker Hughes renewed and expanded their strategic alliance through June 2028. State and local government revenue grew more than 100% in fiscal 2025, and C3 Generative AI revenue also grew more than 100% in fiscal 2025. The company closed 66 initial production deployment agreements for C3 Generative AI across 16 industries.
Guidance covers the first quarter of fiscal 2026 and the full fiscal year 2026. First-quarter fiscal 2026 total revenue is guided to $100.0 million to $109.0 million. Full-year fiscal 2026 total revenue is guided to $447.5 million to $484.5 million. The company guides to a non-GAAP loss from operations of $(23.5) million to $(33.5) million in the first quarter of fiscal 2026 and $(65.0) million to $(100.0) million for the full year. Management said it will focus on new accounts, new verticals, alliance partners, and leadership in generative and agentic AI. The risks remain familiar. C3 AI has a history of losses and has incurred an accumulated deficit. It depends on a limited number of existing customers for a substantial portion of revenue. Its sales cycles are long and unpredictable. Market awareness and acceptance of enterprise AI solutions remain uncertain. Macroeconomic conditions, geopolitical instability, a potential U.S. government shutdown, delays in budget approvals, and increased tariffs or global trade tensions could pressure results. Deferred revenue and RPO both declined year over year, which adds caution to the growth story.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $108.7M | $98.8M | +10.1% | $86.6M | +25.6% |
| Gross profit | $67.5M | $58.3M | +15.7% | $51.6M | +30.8% |
| Gross margin | 62.1% | 59.1% | +3.0 pp | 59.6% | +2.5 pp |
| Research & development | $58.4M | $59.4M | -1.6% | $50.6M | +15.4% |
| Sales & marketing | $70.7M | $61.2M | +15.5% | $63.2M | +11.8% |
| General & administrative | $27.4M | $25.4M | +7.9% | $20.1M | +36.6% |
| Total operating expenses | $156.5M | $145.9M | +7.2% | $133.9M | +16.8% |
| Operating income (loss) | -$89.0M | -$87.6M | -1.6% | -$82.3M | -8.1% |
| Operating margin | -81.8% | -88.7% | +6.8 pp | -95.0% | +13.2 pp |
| Net income (loss) | -$79.7M | -$80.2M | +0.6% | -$72.9M | -9.3% |
| Net margin | -73.3% | -81.2% | +7.9 pp | -84.2% | +10.9 pp |
| Diluted EPS | -$0.62 | -$0.62 | ±$0.00 | -$0.61 | -$0.01 |
Risks
The company incurred a net loss of $288.7 million for the fiscal year ended April 30, 2025 (loss widened 3.2% year to date versus the prior year), with an accumulated deficit of $1.4 billion as of April 30, 2025. Management states it expects to continue to incur operating losses and generate negative cash flows from operations in the next few quarters, and may require additional capital.
Historically a limited number of customers have accounted for a substantial portion of revenue, and average total subscription contract value is decreasing as the company expands to smaller customers. RPO declined 3.8% to $235.1 million and deferred revenue declined 6.2% to $36.6 million in the quarter ended April 30, 2025 versus the prior-year quarter, so the loss of any high-value customer contract could cause significant volatility.
Founder and CEO Thomas M. Siebel disclosed on February 18, 2025 that he had contracted an autoimmune disease with significant vision impairment, and board member Jim H. Snabe assumed the interim role of Special Advisor to the CEO. Mr. Siebel also beneficially owns approximately 52.4% of voting power, and Class B shares convert six months after his death or incapacity, concentrating both management and control risk.
Sales cycles for large subscriptions are long, unpredictable, and can extend over a number of years, with customers often undertaking prolonged evaluations and negotiations. Individual sales can represent a large proportion of overall sales in any given period, making it difficult to project when a deal will close and to adjust the largely fixed cost structure in time.
The market is intensely competitive, with rivals including internal IT organizations, commercial and point solution vendors, open source providers, public cloud providers, system integrators, and strategic partners. Larger competitors can bundle competing functionality at zero or negative margins or leverage broader product lines and relationships, potentially reducing demand, pricing, and gross margins for the C3 AI Software.
The shift to a consumption-based pricing model using vCPU and vGPU hours means customers have flexibility in the timing of their consumption, giving the company less visibility into revenue recognition timing than with subscription-based customers. There is a risk that customers consume the platform more slowly than expected, and this risk may increase as more customers move to the consumption model.
The strategic collaboration with Baker Hughes was revised on April 30, 2025, and Baker Hughes is no longer the exclusive reseller of the C3 AI Software, while some strategic partners also offer competing platforms or work with competitors. If partners do not prioritize the company's products or the relationships cannot be maintained on comparable terms, revenue growth and results of operations could be adversely affected.
Macroeconomic uncertainties including inflation, interest rate fluctuations, tariffs, global trade tensions, a potential U.S. government shutdown, and delays in budget approvals may cause customers to optimize consumption, rationalize budgets, and lengthen sales cycles. These conditions are also cited in the MD&A as potentially adversely affecting financial results.
Competition for executives, data scientists, engineers, software developers, and sales personnel is intense, and the company notes its selective hiring process and the potential for equity award value to be perceived less favorably than at other employers. Failure to attract or retain key personnel could impair execution of the business strategy.
The company is subject to stringent and evolving U.S. and foreign laws and regulations regarding data privacy and security, and actual or perceived noncompliance could lead to regulatory investigations, litigation including class claims, fines, loss of customers, and reputational harm.
The company has limited historical experience supporting or selling to smaller, non-enterprise customers and intends to grow by offering products with a lower entry price point. If these smaller customers do not renew, renew on less favorable terms, or consume less than expected, revenue may grow more slowly than expected or decline.
A putative securities class action was filed in March 2022 alleging material misstatements or omissions regarding the Baker Hughes partnership and other strategic alliances, and the company may face additional short seller reports, regulatory inquiries, or litigation that could result in substantial costs and diversion of management attention.
SaaS KPIs
All quarters →RPO
Non-GAAP Gross Margin
Free Cash Flow
Agreements Closed
Summary, forecast, risks and KPIs are extracted from C3.ai, Inc.'s SEC filings for Q4 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.