Summary
C3.ai closed fiscal 2026 with a severe contraction in revenue and a much wider loss. Fourth-quarter revenue was $51.6 million, down 52.5% from the prior-year quarter. Full-year revenue was $250.3 million, down 35.7%. The pressure ran straight through the income statement. Gross profit fell to $11.3 million in the quarter, down 83.2%, and to $77.4 million for the full year, down 67.2%. Gross margin was 21.9% in the quarter, down 40.1 percentage points, and 30.9% for the full year, down 29.7 percentage points. Management tied the full-year gross margin decline to both lower subscription margin and lower professional services margin, with subscription margin hurt by falling subscription revenue and higher payroll and contractor costs.
Operating loss was $121.2 million for the quarter, wider than the prior-year quarter, and $498.5 million for the full year, also wider. Operating margin was -234.8% in the quarter, down 153.0 percentage points, and -199.2% for the full year, down 115.8 percentage points. Net loss widened to $115.6 million in the quarter and to $470.4 million for the full year. Diluted EPS for the full year was -$3.35, a deeper loss than the prior fiscal year.
Cash generation turned sharply negative. Operating cash flow was -$54.4 million in the fourth quarter, down 583.3% from the prior-year quarter, and -$190.2 million for the full year, down 359.4%. Capital expenditures were $0.32 million in the quarter, down 65.6%, and $1.91 million for the full year, down 37.2%. Backlog shrank as well. Remaining performance obligations were $203.1 million at April 30, 2026, down 13.6% from a year earlier, and deferred revenue was $36.4 million, down 0.5%.
Bookings were light. C3.ai signed 28 agreements in the quarter, including nine new initial production deployments and seven IPD conversions. The company executed 71 IPD agreements in fiscal 2026, down from 174 in fiscal 2025 and 123 in fiscal 2024. Management said the lower IPD count reflects a deliberate focus on engagements with a higher probability of delivering targeted economic value and converting into production contracts. The restructuring plan approved by the board on February 24, 2026 is designed to deliver roughly $135 million in annualized non-GAAP cost savings and to cut cash burn by about the same amount. Restructuring charges of $10.8 million hit the quarter. Workforce actions are substantially complete, while non-employee expense reductions are expected to be substantially realized starting in the second half of fiscal 2027. On May 8, 2026, Thomas M. Siebel resumed the CEO role, and Stephen Ehikian continues as President.
Guidance context cuts two ways. The quarterly revenue result landed inside the range the company had set, and so did the full-year revenue result. Non-GAAP loss from operations was better than the company's guidance range for both the quarter and the full year, helped by the early benefit of the fourth-quarter cost actions. Those non-GAAP figures exclude restructuring expenses. All of the numbers are unaudited, preliminary estimates, and the completed results for the quarter and fiscal year ended April 30, 2026 are due on June 3, 2026.
Risks are piling up. The restructuring has disrupted the sales and services organization, and leadership transitions may weigh on sales results. Revenue, gross profit and gross margin all fell hard, and both RPO and deferred revenue declined. The company expects to keep incurring operating losses and negative cash flows from operations in the next few quarters and may need additional capital. Macroeconomic conditions, U.S. federal government shutdowns, delays in budget approvals, tariffs and global trade tensions could pressure customer spending. RPO is also sensitive to the timing of renewals, the conversion of initial production deployments into recurring subscriptions and average contract terms. The revenue mix has shifted as well, with subscription revenue at 91% of total revenue in fiscal 2026 and professional services at 9%.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2026 | Q3 FY2026 | QoQ | Q4 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $51.6M | $53.3M | -3.1% | $108.7M | -52.5% |
| Gross profit | $11.3M | $9.2M | +22.6% | $67.5M | -83.2% |
| Gross margin | 21.9% | 17.3% | +4.6 pp | 62.1% | -40.2 pp |
| Research & development | $47.3M | $58.8M | -19.7% | $58.4M | -19.1% |
| Sales & marketing | $49.3M | $67.2M | -26.5% | $70.7M | -30.2% |
| General & administrative | $25.1M | $23.6M | +6.0% | $27.4M | -8.5% |
| Total operating expenses | $132.5M | $149.6M | -11.5% | $156.5M | -15.3% |
| Operating income (loss) | -$121.2M | -$140.4M | +13.7% | -$89.0M | -36.2% |
| Operating margin | -234.8% | -263.6% | +28.8 pp | -81.8% | -153.0 pp |
| Net income (loss) | -$115.6M | -$133.4M | +13.3% | -$79.7M | -45.0% |
| Net margin | -224.0% | -250.4% | +26.4 pp | -73.3% | -150.7 pp |
| Diluted EPS | -$0.82 | -$0.94 | +$0.12 | -$0.62 | -$0.20 |
Risks
The February 24, 2026 restructuring plan and prior global sales and services reorganization have disrupted financial performance. FY2026 revenue was $250.27M, down 35.7% year to date, and the company incurred $10.8M of restructuring charges in the quarter ended April 30, 2026; management expects implementation to complete by Q2 FY2027 and warns expected benefits may not be achieved.
Execution issues in the restructured global sales and services organization, including lower initial production deployment agreements (71 in FY2026 versus 174 in FY2025), may lengthen sales cycles and impair conversion into recurring subscriptions. FY2026 Q4 revenue fell 52.5% and FY2026 year-to-date revenue fell 35.7%.
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 shifts toward smaller customers. RPO was $203.1M at April 30, 2026, down 13.6% from $235.1M at April 30, 2025.
Success depends heavily on founder and CEO Thomas M. Siebel, and the filing cites his unanticipated health limitations and CEO transition. On May 8, 2026, Siebel was reappointed CEO after Stephen Ehikian served since September 2025, creating key-person and execution risk.
The Enterprise AI market is intensely competitive, with larger rivals able to bundle products, sell at zero or negative margins, and invest more in AI features. Revenue declines and the pivot to transformation-led sales increase the risk of losing market share.
The company has a history of losses and expects continued net losses; FY2026 net loss widened to $470.37M and operating loss widened to $498.50M. Gross margin fell to 30.9% year to date, down 29.7 pp, driven by lower subscription revenue and higher payroll and contractor costs.
FY2026 operating cash flow was negative $190.23M, down 359.4% year to date, and cash and cash equivalents were $66.2M at April 30, 2026. The company may require additional capital and could be unable to raise it on acceptable terms.
Increasing regulation of AI and ML, including the EU AI Act becoming fully applicable on August 2, 2026 with potential fines up to 35 million Euros or 7% of worldwide annual turnover, could delay deployments and raise compliance costs. Agentic AI adds data privacy and access law risks.
Adverse macroeconomic conditions, U.S. federal government shutdowns, budget delays, and tariff or trade tensions may cause customers to optimize consumption and rationalize budgets. Government contracts also carry termination for convenience and audit risks.
Consumption-based pricing gives less visibility into timing of revenue recognition, and customers may consume the platform more slowly than expected. This could cause actual results to differ from forecasts and increase stock volatility.
Growth depends on channel partners such as Baker Hughes, Microsoft, AWS, McKinsey, and Google Cloud, but Baker Hughes is no longer exclusive and partners may prioritize competing or internally developed products. Failure to maintain these relationships could reduce distribution and revenue.
The company and certain current and former officers and directors were sued in putative class actions in March 2022 and August 2025 alleging federal securities law violations. Litigation costs and management distraction could harm results, and short seller reports may increase volatility.
Competition for executives, data scientists, engineers, and sales personnel is intense, and the restructuring could result in attrition beyond planned headcount reductions and lower morale. Failure to attract or retain key personnel could harm execution.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Summary, forecast, risks and KPIs are extracted from C3.ai, Inc.'s SEC filings for Q4 FY2026 (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.