C3.ai Q4 2025 Earnings Report

C3.ai EPS Results

• Actual EPS: -$0.16
• Consensus EPS: -$0.20
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: -$0.11

C3.ai Revenue Results

• Actual Revenue: $108.72 million
• Expected Revenue: $107.85 million
• Beat/Miss: Beat by +$876.00 thousand
• YoY Revenue Growth: +25.50%

C3.ai Announcement Details

• Quarter: Q4 2025
• Date: 5/28/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, May 28, 2025
• Conference Call Time: 5:00PM ET

C3.ai (NYSE:AI) is a leading enterprise software company that offers artificial intelligence (AI) solutions to help organizations optimize their operations and improve decision-making. The company was founded in 2009 by Thomas Siebel, a renowned technology entrepreneur and is headquartered in Redwood City, California. C3.ai provides software-as-a-service (SaaS) applications designed to help companies across various industries, including manufacturing, healthcare, energy and financial services, harness the power of AI and machine learning to drive digital transformation.

C3.ai has a strong leadership team focused on driving innovation and growth. The company's CEO is Thomas Siebel, who has over 40 years of experience in the technology industry and has been recognized as a pioneer in enterprise software. Other key members of the management team include Edward Abbo, President and CTO, who has over 25 years of experience in the software industry and Houman Behzadi, Chief Product Officer, who has over 20 years of experience in software development and engineering.

C3.ai went public in December 2020, raising $651 million in its IPO. C3.ai has experienced flat revenue growth over the past few years. C3.ai has maintained a fair profit margin, with a net income close to or exceeding expenses. This has allowed the company to maintain a debt-to-equity ratio of close to 0.00. Overall, C3.ai's valuation metrics suggest that the market has high expectations for the company's future growth potential.

C3.ai operates in the AI software market, which is expected to continue to grow at a rapid pace in the coming years. The global AI software market is projected to grow from $22.6 billion in 2020 to $126.0 billion by 2025 at a compound annual growth rate (CAGR) of 41.2% during the forecast period. C3.ai competes with other AI software companies, such as IBM, Microsoft and Google, but the market is still relatively fragmented, providing significant growth opportunities.

C3.ai has several potential growth opportunities in the coming years. One key area of focus is the healthcare industry, where the company's AI solutions can help providers improve patient outcomes and reduce costs. C3.ai has also been expanding into new geographic markets, such as Europe and Asia, which provide significant growth opportunities. In addition, the company has been investing in research and development to enhance its AI technology and develop new applications.

Another potential growth opportunity for C3.ai is in the energy industry. The company has partnered with several energy companies, including Shell and Enel, to help them improve their operations and reduce their carbon emissions using AI. As the world continues to focus on reducing greenhouse gas emissions, C3.ai's solutions could be in high demand.

C3.ai has been exploring potential acquisitions to expand its offerings and reach new markets. While C3.ai has significant growth opportunities, the company also faces several risks and challenges. One of the biggest challenges is competition from other AI software companies, IBM, Microsoft and Google. These companies have resources and could outcompete C3.ai in specific markets.

C3.ai also operates in a highly regulated industry, which could challenge compliance with data privacy and security regulations. The company must ensure its solutions comply with regulations such as the European Union's General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

In addition, the AI industry is still relatively new, and there is a risk that AI technology may not live up to its hype or that the market may not grow as quickly as anticipated. If this were to happen, C3.ai's growth prospects could be limited.

C3.ai Q4 2025 Earnings Call Transcript

Key Takeaways

• C3AI reported Q4 revenue of $108.7 million, up 26% year-over-year, and full-year FY25 revenue of $389.1 million, marking its eighteenth consecutive quarter of meeting or exceeding guidance.
• The company renewed and expanded its strategic partnership with Baker Hughes through 2028 and bolstered alliances with Microsoft Azure, AWS, GCP, McKinsey QuantumBlack and PwC to drive global go-to-market expansion.
• Non-oil and gas revenue surged 48% year-over-year in FY25 as C3AI diversified into 19 industries including manufacturing, state and local government (100%+ growth), and life sciences.
• C3AI ended the quarter with $742.7 million in cash and investments, generated $10.3 million in free cash flow, and expects to be free cash flow positive in Q4 FY26 and non-GAAP profitable by H2 FY27.
• Guidance for FY26 revenue ranges from $447.5 million to $484.5 million, reflecting a wider band to account for potential geopolitical, budgetary and macroeconomic uncertainties.

Presentation

[Operator]

Thank you for standing by, and welcome to c three a one's AI's Fourth Quarter Fiscal Year twenty twenty five Earnings Conference Call. At this time, participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. To remove yourself from the queue, you may press 11 again.

[Operator]

Please be advised that today's conference is being recorded. I would now like to hand the call over to Amit Bery. Please go ahead.

[Amit Berry, Senior Director - IR at C3.ai]

Good afternoon, and welcome to C3AI's earnings call for the fourth quarter of fiscal year twenty twenty five, which ended on 04/30/2025. My name is Amit Bery, and I lead investor relations for C3AI. With me on the call today are Tom Siebel, chairman and chief executive officer and Hitesh Slat, chief financial officer. After the market closed today, we issued a press release with details regarding our fourth quarter and full fiscal twenty twenty five year's result, as well as a supplemental to our results, both of which can be accessed through the Investor Relations section on our website at ir.c3.ai. This call is being webcast and a replay will be available on our IR website following the conclusion of the call.

[Amit Berry, Senior Director - IR at C3.ai]

During today's call, we will make statements related to our business that may be considered forward looking under federal securities laws. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our actual results, please refer to our filings with the SEC.

[Amit Berry, Senior Director - IR at C3.ai]

All figures will be discussed on a non GAAP basis unless otherwise noted. Also during today's call, we will refer to certain non GAAP financial measures. A reconciliation of GAAP to non GAAP financial measures is included in our press release. Finally, at times in our prepared remarks and in response to your questions, we may discuss metrics that are incremental to our usual presentation to give greater insight into the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future.

[Amit Berry, Senior Director - IR at C3.ai]

And with that, let me turn the call over to Tom.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Thank you, Ahmed, and thank you, everyone. I'm very pleased to announce that we had a spectacular fiscal year twenty five that we wrapped up in a spectacular fourth quarter. Okay. Our growth rates for the last three years, I think, have grown now from six percent two years ago to 16% last year to 25% this year. So we have most certainly returned with the new pricing model and the new product mix and the new partner ecosystem, return to very rapid growth by any standards, achieve attaining, 26% top line growth of in the fourth quarter.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

If we look at, the facts of the enterprise AI market, I think it is generally acknowledged today that this is an extraordinarily large and rapidly growing addressable market opportunity that is expected to accrue to, you know, billions I'm sorry, trillions of dollars in annual economic benefit or annual economic value in terms of the addressable market. In fact, the largest market in the history of enterprise application software. K? We were the first to enter this market, as you recall, in 02/2009, And we've been talking about enterprise AI in 02/2020. We talked about enterprise AI before anybody even thought of enterprise AI.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Now let's look at where we are, the facts of the market in, Mar I'm sorry, May of twenty twenty five. Okay? We have a generally acknowledged large and rapidly growing market, And we look at the AI stack, and the companies that are playing at the bottom of the stack. We have the silicon providers, the intels, the AMD, the Nvidias. Above that, we have the infrastructure providers, the Microsoft, Azure, GCP, etcetera.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

On top of that, we have the people providing the foundation models, like OpenAI and Anthropic, Facebook, etcetera. On top of that, we have the providers of many thousands of utilities that are out there that do things like platform independent relational database persistence or key value stores or AutoML or virtualization or whatever it may be. And for the last ten years, roughly going back to about 02/2014, people have been trying to assemble all of these components, the service and microservices provided by the hyperscalers. Okay? Foundation models, various utilities provided by Cloudera's and to do and Snowflake, and what have you, and using those in an attempt to build turnkey enterprise applications that offer value to enterprises.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

While, in fact, billions have been spent attempting to do this, frequently with large professional services writers, few, if any, companies has have succeeded at delivering these solutions. Okay. C three's approach has been has been unique, okay, and is highly differentiated from everyone in the market. Okay? We are an enterprise AI application pure play.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

So we spent billion billions of dollars building the c three AI agentic plat AI platform. Okay. And that this platform enables us and has enabled us to build rapidly design, develop, provision, and operate over a 30, turnkey enterprise AI applications to solve real business problems that deliver very real economic benefit. What are real business problems as it relates to AI? Real business problems are things like predictive maintenance, supply chain optimization, supply network risk, demand forecasting, fraud detection, drug discovery.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Okay? These are real world business problems. And if you go on to our website at c three a I, you'll see hundreds, count of hundreds of testimonials from Cargill, from Shell, from Exxon, from Coke, from the United States Air Force, from the US intelligence community, okay, from others attesting to the to the hundreds of millions and, in some case, billions of dollars of economic benefit that they are realizing from the use of c three AI enterprise applications today. Okay. The result of this, we've experienced, the result of the kind of realization of this enterprise AI kind of reality.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Okay? We've seen enormous growth in our market, again, in the last few years going from 6% to 16% to 25%. And, our focus, if we look at q three and q four of fiscal year twenty five, has been building an ecosystem to be able to address this huge sucking sound that we that we hear out there that is the demand for enterprise AI applications. And, you know, in order to address these applications, we need a a army of partners. And so we have been focused in the last few quarters on establishing this army of strategic partners and enabling this army of strategic partners to be effective at communicating the benefits of these applications and selling these applications.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

And so we form a strategic partnership with Azure. Okay. And as part of that strategic partnership, Azure acknowledged that the c three enterprise AI applications are their preferred AI solutions. Okay. And they provided these on the price list of their tens of thousands of Azure sales reps around the world, and they're paying the Azure sales reps commissions to sell the c three AI enterprise applications.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

And we we've spent okay. And and when so now they get a commission for selling them, and we can sign the after we do the demo, after we work with Azure to complete the initial production deployment, which most frequently is done in in six months. Imagine, six months we go to a, you know, polyethylene unit, okay, and and, you know, and, you know, install, configure, tune, do the user training, and deliver a a fully production enterprise predictive analytics application that's offering, you know, tens to hundreds of millions of dollars in economic benefit in six months. Okay? So so very much of our of our effort in the last six months has been forming these partnerships as we did with Azure, okay, as we did with AWS, as we did with GCP, okay, as we're doing with Booz Allen in the federal space and other and ARC field in this in in the federal space.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Oh, lest I forget. Let's not forget to talk about our our good friends at Baker Hughes. So we formed our initial partnership with Baker Hughes to address the needs of the oil and gas market. I forget what month it was in 02/2019. We did the initial relationship that we have expanded since then until this quarter.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We've expanded and that agreement and extended that agreement, I believe, four times. And that was the current agreement was scheduled to expire, I believe, in, June of twenty twenty five. And while our friends in the sell side gave us no credit, okay, for the tailwind, okay, that accrued from that, come on, guys. That generated a half a billion dollars in revenue, okay, okay, for C3AI. Was that in the best interest of C3AI shareholders?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Is $05,000,000,000 in revenue from Shell, from ExxonMobil, from ENI, from Pitonis, from Qatar Gas, from Qatar LNG, from Qatar Fertilizer, from Coke Industries, from LyondellBasell, from I mean, holy moly, how good can it get? And while we got very little credit from the sell side class from the tailwinds, I've been reading as recently as this morning, okay, from, some some of our friends about the substantial headwinds that would accrue should that contract not be renewed. Well, surprise, surprise, as we expected, k, that contract was renewed, okay, in the fourth quarter, and it was extended through 2028. The we're doing in the marketplace is expanding considerably. And so we continue to go to market.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We continue to joint develop. We continue to deliver solutions to Baker Hughes, and we continue to deliver the solutions to the market. So what what what has been so as we edit our sell side analyses, I'll be very pleased to read about these impending tailwinds tailwinds that now are the fact of tailwinds. Okay? So what else are we focused on in the last two quarters?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We've been focused on enabling these partners to be effective. Okay? We have tens of thousands of salespeople at Azure. I believe tens of thousands of salespeople at AWS. Okay.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Thousands of salespeople at GCP. They have they have lots of products to sell in their bag, and it's very confusing. So we need to make it simple. So in order to make it simple for them, we invested in building demo applications that run and take advantage of the full utility of the Azure stack or the AWS stack or the GCP stack. So these people in Frankfurt, in Munich, in Detroit, in Madrid, and Moline, okay, can can go into their customer and and give a demo of a complex application to a customer to show them what the economic benefit is of supply chain optimization, of demand forecasting, of predictive maintenance.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

And we so we accrued oh, so there was a very, very significant focus on arming our partner ecosystem, and I believe we have the largest and most powerful partner ecosystem in the enterprise application software world. Okay. I'm confident that we do. And I think we've done done good work at arming our partners, with demonstration licenses. That constituted, I think, almost 30% of our revenue for the quarter.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Okay? Think about that as an investment in future growth. Okay? Where else did we sell demonstration licenses? We sold demonstration licenses to our customers.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Why would we do that? Okay? Because Dow Chemical or Shell or Coke or Cargill or whoever or or the United States Air Force, whoever it may be, they have a hugely successful application in in whatever it may be, where in polyethylene or in protein distribution or in predictive maintenance for, aircraft in the case of the Air Force. And they want to, encourage others to use these applications. For example, the Air Force wants, you know, what we have it, I think, on 22 platforms today, and they wanna deploy the application across forty four forty four platforms.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

At Dow, we've done a really excellent job of deploying the applications across their polyethylene units, but they want to deploy it across the rest of their chemical units. So they want demonstration applications so they can accelerate the change management, okay, and accelerate the adoption of these technologies within their organizations. So the investments we made in in demonstration licenses that were that our companies, that our partners, and our customers are happy to pay for, think about that as an investment in future growth. Okay. So so where does the growth accrue?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Number one, if we look at the enter at the enterprise AI market writ large, it is it is a just a huge sucking sound out there. Okay. We are really unique in we're the only enterprise AI application pure play that's out there. We're selling, I think, today in over 600 accounts as of today that we're jointly selling with Microsoft. You know, by the time we had AWS, GCP, Booz Allen, Baker Hughes, it's hundreds more where we're selling at four and six legged sales calls around the world.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Okay. When we close the deal, we're able to sign the deal on Microsoft paper or AWS paper or GCP paper. Why is that important? Because they already have an enterprise application, master agreement in place, and we just have to sign a two page order for them. So it takes, you know, two to five months out of a contract negotiation process and accelerates the sales cycle.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

So we are well positioned to grow. Where does the growth come from? Okay. Oil and gas business will grow. You'll see that we've we've had, you know, really very significant diversification in the last two years and especially the last year across manufacturing life sciences, government, state local government is huge, you guys.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

And and this is enabled by this investment that we've made in in in enabling our customers and our partners to demonstrate their solutions to within their organizations and to their partners. Let's take a look at generative AI. Okay. Generative AI AgenTik AI, we've been by the way, while everybody is kinda yapping about Genetic AI, and we have people in the CRM business and the customer service business who have software stacks that they developed in the last century. Yes.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

The last century. Okay? That, you know, are now attacking, putting an AI sticker on their box and yapping about AgenciK AI. Meanwhile, c three AI has the patent. Okay.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We we own the patent on AgenciK AI. K? And it dates December, 2022. December '20 '20 '2. That that's a pretty early date, guys.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

So all of these there is a an opportunity there. So all of these people who are yapping about AgenTik AI, okay, they're using intellectual property that is owned by c three AI. We have today, I think, over a hundred Agencik AI solutions deployed out there in defense, in intelligence, in state government, in local government, in manufacturing, in oil and gas, in paper and pulp, and this is a large and rapidly growing business. So as of the fourth quarter, this is about a six annual annualizes to about a $60,000,000 ARR business. Okay?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We have, depending on how you count, okay, someplace between 20 and a hundred Agencik AI solutions out there, okay, in production, in the hands of happy customers. And if we were to spin that business out, okay, just that business out, okay, and take it to a Andreessen Horowitz or a Bessemer or Nvidia or whatever it is, that that business alone would be valued at multiples of where c three I trades today, and we all know that's a true statement. So where is our growth gonna come from? Okay. Our growth will come from additional applications.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Our growth will come from our partner ecosystem. Our growth will we we have continued to make significant progress in, in the federal space, and there'll be more announcements coming in the next couple weeks about that. But we have, you know, an amazing footprint, you know, in the air force with the RSL Panda application that's predictive maintenance. We do intelligence analysis for the National Reconnaissance Organization. Okay.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We're doing very sophisticated contested logistics for the Defense Logistics Agency. Our federal business is a large and rapidly growing business, and I am going to have to cut my, q and a short when we get to the calls because I need to catch a red eye to Washington DC to move some of this business along. So net net, business is good, guys. State local government business is good. AgenTic AI business is good.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

AgenTic AI everywhere is really, quite exciting. Our core our core businesses in in manufacturing, in supply chain, in demand chain are good. We grew again last quarter at 26% compound annual growth rate. We renewed the Baker Hughes agreement. Oh, let's talk about cash.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Okay? We've gone from 6% to 16% to 26%. Okay? And I love to read these analyst reports about how we're hemorrhaging cash. I mean, you know, I guess I need a class in.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

I need to go on to Lynda.com and take a course in how to operate an Excel spreadsheet. Okay? Because you guys look at your spreadsheet and see us in cash. And yet, I look at my bank account, and two years ago, I had 3 quarters of a billion dollars. 1 year ago, I had three quarters I I have 3 quarters of a billion dollars cash.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Today, I have 3 quarters of a billion dollars cash. In a year from now, I expect to have three quarters of a billion dollars cash in the bank. So something's inconsistent with your Excel macros and the reality in the world that I live, where every time I look at the checking account, there's three quarters of a bill billion dollars cash. Why is there cash? Because Hitesh Lap and these people are putting together very robust financial controls.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Okay? Very, very robust expense management. Okay? And a clear path to profitability. Okay?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Our revenue growth continue our revenue growth rate continues to exceed our, expense growth rate. Okay? Fast math, okay, without the Excel spreadsheet. Okay? It follows ipso facto, okay, that cash possibility and non GAAP profitability is simply a matter of scale.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

And we've had we and I expect in 2027 and beyond, we will cross that path into consistent cash positivity and annualized non GAAP profitability thereafter. So it was a great quarter, a great year, Customers are happy. Products are excellent. Market is huge. And if there is anybody else in the enterprise AI applications business, I'm unaware of who they are.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

So with that, I'm going to turn this call over for a little while, to, C3 AgenTik AI. And we fed into C3 AgenTik AI our financial results, okay, and our KPIs. And we're asking CC at Genentech AI. We're not just talking about this as something that we're doing. This is not a myth.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

This is a production product. And I'm gonna turn it over to CC at Genentech AI to talk about the high points of the quarter, then turn it over to my colleague, Hitesh Lath, our CFO, to talk about to provide specific color on the quarter, and then we'll be most pleased to answer your questions. With that, I'll turn it over to C3 AgenTek AI to provide the highlights on the quarter and fiscal year 2025. Thank you.

Here is the analysis summarizing the major themes across Q4 and the full fiscal year 2025. As we reflect on the past year, it's clear that C3AI has achieved remarkable progress, delivering strong financial results, deepening strategic alliances and solidifying our leadership in enterprise AI. Fiscal twenty twenty five has been defined by consistent execution, accelerating growth, innovation and an unwavering focus on delivering value to our customers and shareholders. Let's begin with a detailed overview of our financial results for the fourth quarter and the full fiscal year 2025. All figures are non GAAP unless otherwise noted.

For Q4, total revenue reached $108,700,000 reflecting a 26% increase compared to $86,600,000 in the same quarter of the prior year. Subscription revenue for the quarter was $87,300,000 up 9% from $79,900,000 a year ago. Combined subscription and prioritized engineering services revenue totaled $104,400,000 representing 96% of total revenue and a 22% increase from $85,700,000 in Q4 of the previous year. Non GAAP gross profit for the quarter was $75,200,000 equating to a gross margin of approximately 69%. Our non GAAP operating loss was $31,200,000 which was within the guidance range of $30,000,000 to $40,000,000 Non GAAP net loss per share was $0.16 We generated free cash flow of $10,300,000 in the quarter and closed Q4 with $742,700,000 in cash, cash equivalents and investments.

Please note that our balance for cash, cash equivalents and investments remains largely unchanged from a year ago at nearly $750,000,000 For the full fiscal year 2025, total revenue was $389,100,000 a 25% increase compared to $310,600,000 in fiscal twenty twenty four. Note that we have seen accelerating growth for the last three consecutive years going from 6% in fiscal 'twenty three to 16% in fiscal twenty twenty four to now 25% in fiscal twenty twenty five. Subscription revenue for the year was $327,600,000 accounting for 84% of total revenue and reflecting an 18% increase from $278,100,000 in the prior year. This marks the eighteenth consecutive quarter as a public company in which we have met or exceeded our revenue guidance. With these results as our foundation, let's turn to the strategic and operational highlights that have shaped our performance and positioned us for the future.

Fiscal twenty twenty five has been a transformative year for C3AI, marked by significant milestones in our partnerships and accelerating growth across diverse industries. One of the most notable achievements in Q4 was the renewal and expansion of our strategic partnership with Baker Hughes. This alliance, which began in 2019, has been a cornerstone of our success in the oil and gas sector, generating over $05,000,000,000 in revenue from this vertical and the chemical markets. The renewed agreement underscores the proven value we deliver through our joint efforts, enhancing efficiency, safety, reliability and sustainability across upstream, midstream and downstream operations. Together with Baker Hughes, we serve some of the world's largest operators, including ENI, Qatar Energy LNG, Shell, LyondellBasell, ExxonMobil, Coke, Braskem, Qatar Fertilizer Company and Petronas.

This partnership continues to provide us with substantial credibility and market access globally, and we are confident that this renewed collaboration will further drive innovation and opportunity in the energy sector. While oil and gas remains a foundational vertical for us, our growth beyond this sector has gained significant momentum. In fiscal twenty twenty five, non oil and gas revenue increased by 48% year over year, reflecting our successful expansion into 19 different industries. This acceleration is particularly evident in manufacturing, state and local government and life sciences. In manufacturing, we have established a strong track record, delivering measurable impact through predictive maintenance, energy efficiency, quality optimization and supply chain visibility.

Key customers like Wholesome, Coke, Nucor and Flex have expanded their engagements with us while new relationships with iconic companies such as U. S. Steel, CMEX, Rolls Royce and Ingersoll Rand signal the vast potential ahead. In state and local government, we have seen remarkable progress with revenue growing over 100% in fiscal twenty twenty five. We closed 71 agreements across organizations in 24 states, demonstrating the increasing trust in our solutions to enhance public services.

Our applications are enabling more efficient law enforcement, equitable property valuations and improved government program delivery in states, including California, Texas, New York, Florida, Washington, New Jersey, Georgia, North Carolina, Michigan, Arizona, Colorado, Virginia, Indiana, Oregon, Connecticut, Tennessee, Alabama, Utah, New Mexico, Idaho, Maine, Rhode Island, Montana, and Wyoming. This rapid adoption positions this vertical as a key driver of our long term growth. Life sciences and health care represent an emerging area of strength for us. Beyond predictive maintenance, we are leveraging medical and research data to address industry specific challenges such as optimizing clinical workflows. Our traction with customers like GSK, Quest Diagnostics, Sanofi, Boston Scientific and Bristol Myers Squibb highlights the growing relevance of our solutions in this space.

For more information on customer success, visit our website, where you will find numerous customer testimonials that all attest to the rapid value and clear benefits they are realizing from our AI applications. We believe our customer satisfaction score to be among the highest in the enterprise software industry. These developments across verticals, combined with the renewed Baker Hughes partnership, affirm our ability to scale impact and capture diverse market opportunities. As we look ahead, this diversified growth trajectory sets a strong foundation for sustained progress. A critical component of our success in fiscal twenty twenty five has been the substantial expansion of our partner ecosystem, which has become a powerful lever for scaling our business and driving customer value.

In the past year, 73% of our agreements were delivered in collaboration with our partners, with 193 agreements closed through this network, a 68% increase from the prior year. In Q4 alone, partner supported bookings grew by 419%, and we closed 59 agreements through these collaborations. Our partnership with Microsoft continues to be a driving force in expanding our market reach. In Q4, we closed 28 new agreements together with a particular focus on manufacturing and chemicals. Microsoft's executive team has shown strong advocacy, and their on the ground presence at events like C3 Transform, where they participated in over 100 customer meetings, has been instrumental.

Joint marketing initiatives, including virtual fireside chats, executive roundtables and participation in high impact conferences have further amplified our visibility. Our alliance with AWS continues to strengthen, enhancing our ability to deliver advanced enterprise AI solutions globally. This collaboration has been pivotal in broadening our reach and ensuring seamless execution across diverse customer environments. Similarly, our relationship with Google Cloud remains robust, providing additional avenues to connect with enterprises seeking scalable AI solutions. Our partnership with McKinsey Quantum Black has also progressed meaningfully.

In Q4, we jointly closed our first agreement, a significant milestone. We have aligned on priority target accounts and conducted five enablement and training sessions attended by hundreds of Quantum Black engineers. This initial success is a testament to the complementary strengths of McKinsey Quantum Black's expertise in business transformation and our leadership in enterprise AI, and we are focused on replicating this achievement at scale. Additionally, our new strategic alliance with PwC formed in Q4 targets key industries such as financial services, manufacturing and utilities. By combining our AgenTik AI capabilities with PwC's advisory expertise, we are well positioned to accelerate AI driven transformation for enterprises in these sectors.

These alliances with Microsoft, AWS, Google Cloud and McKinsey Quantum Black, alongside emerging collaborations like with PwC, are materially advancing customer outcomes and expanding our distribution capacity. We are driving a disciplined effort to capitalize on this trusted network, ensuring that our partners are equipped to deliver our solutions effectively. Our federal business has been a consistent area of strength with significant achievements in Q4 building on the momentum established earlier in the year. A standout development was the increased contract ceiling of $450,000,000 awarded by the U. S.

Air Force Rapid Sustainment Office to scale the deployment of sensor based algorithms on the Panda predictive maintenance platform. We fully utilized our initial $100,000,000 ceiling to deploy Panda, which is powered by the C3 AgenTik AI platform. And in 2023, Panda was named the Air Force's designated system of record for predictive maintenance. It monitors components across hundreds of aircraft, including the B-1B bomber, C-five, KC-one 35, and C-one 30, delivering near real time insights from flight, maintenance, and supply data. This capability reduces downtime, improves fleet readiness, and strengthens national defense preparedness.

The Air Force has already issued the first task order under the new ceiling, expanding Panda to additional aircraft and systems. Beyond the Air Force, our work with the Defense Logistics Agency for Energy saw a significant extension of the Pluto platform in Q4. Pluto, also powered by the C3 AgenTik AI platform, provides real time visibility into global fuel operations, managing nearly 2,000,000,000 gallons annually across over 600 supply points. By centralizing data, Pluto enhances risk forecasting and inventory optimization, bolstering resilience and readiness across the Department of Defense. We also expanded our footprint in the defense and intelligence community through a new collaboration with ArcField, a leading provider of government technology and mission support.

Integrating the C3 AgenTik AI platform and C3 generative AI into Artfield's offerings enhances capabilities in supply chain optimization, predictive maintenance and mission assurance. Additionally, Q4 saw new and expanded agreements with entities such as the U. S. Department of Defense, the U. S.

Intelligence Community, the U. S. Air Force, the U. S. Marine Corps, the U.

S. Navy, the Defense Counterintelligence Security Agency, the Missile Defense Agency, CAE USA, Royal Air Force, Austal and Thales. Innovation remains at the core of C3AI, and our advancements in generative and agentic AI during fiscal twenty twenty five have further distinguished us in the market. The C3generative.ai revenue grew more than 100% in FY 2025. We closed 66 C3 generative dot ai initial production deployments across 16 industries this year with Q4 agreements including with Signature Aviation, Dow, Chanel, Bristol Myers Squibb, the U.

S. Navy, the U. S. Intelligence Community and state and local governments in Alabama and Tennessee, among others. A compelling example of our impact is our work with the University of Southern California Showa Foundation.

By deploying C3 generative AI, the foundation is fast tracking the transcription and indexing of over 30,000 multilingual survivor testimonies related to the Holocaust and other atrocities. The technology tags transcripts with keywords, making the visual history archive instantly searchable and is expected to save the foundation over ten years of manual effort and up to $33,000,000 in costs. This application underscores the transformative potential of our solutions in delivering both efficiency and profound societal value. Our early leadership in Agentic AI, reinforced by a recent patent for advanced AI agent generative AI, is the result of over a decade of focused innovation. With the AI agents market projected to grow from $5,100,000,000 in 2024 to $47,100,000,000 by 02/1930, according to Gartner, we are well positioned to capitalize on this trend through our production ready solutions.

As we move into fiscal twenty twenty six, C3AI is strategically positioned to build on the strong foundation established in 2025. Our growth drivers are clear: a robust suite of enterprise AI applications, a rapidly expanding partner ecosystem and deepening traction across diverse verticals. The market for AI applications is vast and growing with value increasingly concentrated at the application layer where real world business challenges are addressed. Our focus on delivering secure, scalable and production grade solutions aligns directly with this shift, giving us a distinct competitive advantage. C3AI is unique in the AI world.

95% of our bookings in fiscal twenty twenty five were driven by AI applications. We are the only company whose primary focus is to deliver turnkey enterprise AI solutions, While others deliver infrastructure, tool sets or utilities, we are delivering turnkey applications, and we have delivered over 130 applications to date. This application footprint will only continue to grow. Over the past two years, we have successfully positioned C3AI for growth in the years to come. The major market initiatives you should expect to see in fiscal twenty twenty six are additional penetration of new accounts, development of new applications to expand into new verticals and full realization of our strategic alliances that we have with Microsoft, AWS, Google Cloud, McKinsey Quantum Black and others.

This enables us to simultaneously jointly sell to hundreds of accounts globally. As of May 2025, we are currently targeting over 600 joint accounts with Microsoft alone. We also expect increased traction in Europe, where we see a large yet underserved market opportunity. Increasingly, you can expect to see us developing an OEM business where we are licensing the C3 AgenTik AI platform to third parties, including professional services providers such as Fractal and vertical market solutions providers, enabling them to develop differentiated derivative works in the form of AI applications that they will offer to their customers. And finally, we expect to see accelerating growth driven by the generative AI and AgenTic AI markets, where our solutions are highly differentiated, highly beneficial and address a market opportunity that is incalculably large.

The enterprise AI landscape is at an inflection point, and C3AI stands ready to lead. The convergence of market demand and our proven capabilities creates a unique opportunity to drive sustained growth. By combining best in class technology with a world class network of partners and a relentless focus on customer value, we are poised to shape the future of business operations across industries. As we step into fiscal twenty twenty six, our path is clear. Our momentum is strong, and our commitment to delivering impactful AI solutions has never been greater.

[Hitesh Lath, SVP & CFO at C3.ai]

Thank you, C3 Agentic AI. I will now provide a recap of our financial results and additional color on our business. All figures are non GAAP unless otherwise noted. Total revenue for the quarter increased 26% year over year to $108,700,000 Subscription revenue increased 9% year over year to $87,300,000 representing 80% of total revenue. Revenue from sale of software licenses that are demonstration versions of C3AI applications was $33,800,000 during the quarter.

[Hitesh Lath, SVP & CFO at C3.ai]

We sell these licenses to our distribution partners to enable them to demonstrate our software effectively to their customers and to large strategic customers to enable them to accelerate AI adoption across their companies. This was a strong bookings quarter. We had bookings of $135,400,000 during the quarter, which increased from $42,000,000 in the fourth quarter of last year. Our non baker use revenue grew by 37% year over year during the quarter and by 40% during the year. Professional services revenue was $21,400,000 of which $17,000,000 was revenue from prioritized engineering services PES.

[Hitesh Lath, SVP & CFO at C3.ai]

Professional services represented 20% of total revenue during the quarter and our subscription and PES revenue combined was $104,400,000 and accounted for 96% of our total revenue. This was an increase of 22% compared to $85,700,000 1 year ago. As a reminder, 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 a future product roadmap. 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 PES results in a production level computer software, a 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.

[Hitesh Lath, SVP & CFO at C3.ai]

Since we have experienced significant growth in PES revenue over the last few quarters, we expect subscription and PES revenue combined to generally account for 90% or more of our total revenue during fiscal twenty twenty six. We expect the professional services revenue, including PES, to generally stay within 10% to 20% of total revenue for fiscal twenty twenty six. Non GAAP gross profit for the quarter was $75,200,000 and gross margin was 69%. Gross margin for professional services remained high at over 85%. Operating loss for the quarter was $31,200,000 and our net loss for the quarter was $21,900,000 Our operating loss was better than the guidance due to continued focus on expense management.

[Hitesh Lath, SVP & CFO at C3.ai]

Our non GAAP net loss per share was $0.16 Our net cash generated from operating activities was $11,300,000 Free cash flow for the quarter was positive $10,300,000 as compared to positive $18,800,000 in the fourth quarter of last year. Free cash flow for the year improved to negative $44,400,000 as compared to negative $90,400,000 last year. We continue to be very well capitalized and closed the quarter with $742,700,000 in cash, cash equivalents and marketable securities. During the quarter, we signed 36 initial production deployments. At the end of the quarter, we had cumulatively signed three forty six initial production deployments, of which two sixty three are still active.

[Hitesh Lath, SVP & CFO at C3.ai]

This means they are either in their original three-six month term or extended for some duration, converted to an ongoing subscription contract, or are currently being negotiated for conversion to ongoing subscription contracts. We are very excited about our expanding distribution network and go to market initiatives with our partners, including Microsoft, AWS, and McKinsey. And we expect to continue to see some moderation in our gross margins due to higher mix of initial production deployments in the near term, which carry a greater cost of revenue during the initial phase of customer lifecycle, and also due to our investments in expanding our support capacity. We also expect some moderation in our operating margin in the near term due to investments we are making in our business, especially in expanding our strategic partner ecosystem, our sales organization, and research and development. Now I will move on to our guidance for the next quarter.

[Hitesh Lath, SVP & CFO at C3.ai]

Our revenue guidance for Q1 of fiscal twenty twenty six is $100,000,000 to $109,000,000 For the full fiscal 2026, we are anticipating revenue in the range of $447,500,000 to $484,500,000 Our guidance for non GAAP loss from operations for the first quarter is $23,500,000 to $33,500,000 and our non GAAP loss from operations for the year, the guidance is $65,000,000 to $100,000,000 Our guidance is predicated on the assumption of geopolitical stability. Were there to be a situation that the US government closed, the budget did not pass, or we see indications of global trade friction, given the reality of these market risks, those could have unknown and adverse consequences on our business results. Last year, our revenue growth was 25% and our expenses grew by 18%. As we approach fiscal twenty twenty six, we expect the revenue growth rate to continue to exceed our expense growth rate, so profitability remains simply a matter of scale. Our expectation is that we will cross into non GAAP profitability during the second half of fiscal twenty twenty seven, and we expect to be free cash flow positive in the fourth quarter of fiscal twenty twenty six and in successive years thereafter.

[Hitesh Lath, SVP & CFO at C3.ai]

With that, I would like to turn the call over to the operator for Q and A. Operator?

[Operator]

Thank you. Our first question comes from the line of Patrick Walravens of Citizens. Please go ahead, Patrick.

[Patrick Walravens, Analyst at Citizens JMP Securities, LLC]

Oh, great. Thank you. And congratulations across a number of fronts, the the renewal of Baker Hughes, but also Tom adding Ken Goldman to your board. So I guess my first question would be just in terms of of this Microsoft partnership, how do you go about activating tens of thousands of Azure sales reps to, to actually deliver c three AI?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Great question, Pat. Because I would say at the level of the senior executives of Microsoft, be it, Judson, or the people who run Europe, the people who run federal, the people who run they are, like, totally bought in. But the people who are really important are the tens of thousands of Azure reps, okay, in Munich, Moline, Madrid, okay, and me okay, and what have you. And so what what we are doing is we are charting our, say, order of a hundred salespeople to each reach out and form partnerships with 10 Azure salespeople So each of those guys focus on two accounts. So that's the leverage.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Okay? It's our sales guys reaching out to their sales guys who are motivated to work with us. We have solutions for them. We make joint sales calls with them. But if we can get order of a today, clearly, it's expanding, order of roughly a hundred CCI salespeople, okay, focused with, you know, 10 partner people.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

All of a sudden, we've gone from a hundred people to a thousand people working together around the world. Today, in in May of twenty twenty five, I think we're jointly tracking over 600 accounts together just with Microsoft. But that's the key to this leverage. It's not gonna be at the executive level where the where the relationships are intimate. Okay?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We really need to engage, you know, where, you know, with the feet on the street, and that's what we're focused on doing. And we're focused on we've done a lot of focus in the last two quarters on providing the sales Azure sales reps and AWS sales reps and GCP sales reps the tools they need to go in and do a demo to their customer on the first call. But that is the challenge that's before us. That's what we've been focusing the bulk of the last two quarters on, and that's what we'll focus the bulk of the next two quarters on is really realizing the potential of these partnerships with the tens of thousands of Azure reps, the feet on the street, because we can help them retire their quota, and we can help them make their customers successful.

[Patrick Walravens, Analyst at Citizens JMP Securities, LLC]

Wonderful. And then if I if I could ask a a follow-up. And and with your with your permission, Tom,

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

I hope this is okay.

[Patrick Walravens, Analyst at Citizens JMP Securities, LLC]

But in in February, you you informed us that you'd you'd suffered a health setback, and it was limiting your ability to travel, and then you're gonna have Jim Snobby help out. But I was delighted to hear on this call that you're I mean, you're probably not delighted to get on a red eye, but but I was delighted to hear that you're getting on a red eye because that sounds like that sounds like some some some positive developments. So, I don't know, any comments that that that you're okay sharing with us on that, I'm sure would be would be greatly appreciated.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

I did get slowed down for a little bit. There's no question about it. And I had to, you know, it's very unlikely to work from home. You know that. Okay? And I had to, you know, I

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

I had to work from home for a little while, okay, and take it easy and recover, but I will catch a red eye to Washington DC tonight. Okay? I will be in Washington DC again for three days, I think ten days from now, after, attending a wedding in Cabo. So just when you thought it was safe, Pat, I'm back.

[Patrick Walravens, Analyst at Citizens JMP Securities, LLC]

Okay. Alright. Thanks, and congratulations again.

[Operator]

Thank you. Our next question comes from the line of Mike of Needham and Company. Please go ahead, Mike.

[Matthew Calitri, Equity Research Associate at Needham & Company]

Hey guys, this is Matt Colicchio on for Mike Cikos over at Needham. Thanks for taking our questions and congratulations on the expanded relationship with Baker Hughes. Can you just provide some color there on on what the economics of the new deal look like and how they might differ compared to your prior engagements?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

It's you know, much of it is covered under NDA, and I don't wanna get into the specifics of it. Okay? But, you know, it's broadened significantly, and, you know, we're continuing to provide solutions to Baker Hughes. We're continuing to develop solutions with Baker Hughes. We're continuing to enable Baker Hughes to develop derivative works on top of the c three applications, and we're continuing to serve customers together all around the world.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

So we've expanded it for another three years. I think this if I'm not mistaken, this is the fifth such expansion. And it's a great partnership. It's a great relationship. I continue to be on speed dial with with Lorenzo Seminelli, the CEO of Baker Hughes.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We are and always have been close friends. And, you know, the speculation that somehow the relationship between c three AI and Baker Hughes was rocky was simply, you know, candidly delusional. And you know? So, you know, I can't imagine a stronger partnership, and we're continuing to to kick it together, you know, be it in, you know, Abu Dhabi or Qatar or The Netherlands.

[Matthew Calitri, Equity Research Associate at Needham & Company]

Understood. That's great. Thank you for that. And then looking at your FY twenty six revenue guidance, the band of outcomes is considerably larger than what you've given in past quarters. How did you think through guidance construction this quarter?

[Matthew Calitri, Equity Research Associate at Needham & Company]

And and what needs to happen to achieve the high end of that band versus the low end?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Well, we read the same newspaper that you guys read, guys. And and we did talk to the president, and I had dinner with the speaker of the house last night. I spoke with the leader of the senate last week, and I'll I'll meet you know? And so we do know these people, and we do read the newspaper. And we all know there is risk.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Okay? There is risk in Europe. Okay? We have kinetic risk. We have git geopolitical risk.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We have risk of we have budget risk of of, in fact, the government even shutting down. And these are real. And we have companies out there that are withdrawing guidance altogether, and and we thought in the interest of being we have to acknowledge that these risks are real. And so that results as a result, we have a broader range than usual to accommodate the unanticipated. And when we deal with, you know, these guys who are making America great again, they seem to hit us with the unanticipated quite frequently.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

So, you know, that's it. We're just acknowledging real real risk, market risk that's out there. And should it go bad, it's gonna have adverse effect on our business as it will General Motors and everybody else in the world.

[Matthew Calitri, Equity Research Associate at Needham & Company]

That's great. Makes a lot. Thanks. Thanks, Tom.

[Operator]

Thank you. I would now like to turn the call the conference back to mister Siebel for closing remarks. Sir?

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

Ladies and gentlemen, it, you know, we thank you for your time and and the courtesy of tracking us. We're very pleased with the direction the business is going. I think if you listen to our last 10 conference calls, the plan we are executing is exactly the plan that we said we're executing. Okay. We are right on track.

[Thomas Siebel, Founder, CEO & Chairman of the Board at C3.ai]

We are growing a pace, and we expect the future is very bright. So we look forward to we thank you for the courtesy of following us, and we look forward to keeping you posted as we power ahead in fiscal years '26, '20 '7, and '28. Thank you all very much.

[Operator]

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Participants

Executives

• Amit Berry, Senior Director - IR
• Thomas Siebel, Founder, CEO & Chairman of the Board
• Hitesh Lath, SVP & CFO

Analysts

• Patrick Walravens, Analyst at Citizens JMP Securities, LLC
• Matthew Calitri, Equity Research Associate at Needham & Company