C3.ai (AI) Q3 2026 earnings summary

Executive summary

• Fiscal Q3 2026 revenue was $53.3 million, with 90% from subscriptions and 97% from subscriptions plus prioritized engineering services.

• Net loss for the quarter was $133.4 million, with non-GAAP net loss at $56.4 million ($0.40 per share).

• Gross margin dropped to 17% GAAP and 37% non-GAAP, impacted by lower revenue and higher costs.

• Major restructuring plan launched, including a 26% workforce reduction and $135 million in annualized cost savings.

• CEO transition occurred in September 2025, with Stephen Ehikian appointed CEO and Thomas Siebel as Executive Chairman.

Financial highlights

• Subscription revenue was $48.2 million; professional services revenue was $5.1 million for the quarter.

• Operating expenses totaled $149.6 million, leading to a GAAP operating loss of $140.4 million; non-GAAP operating loss was $63.4 million.

• Free cash flow for the quarter was negative $56.2 million; cash, equivalents, and marketable securities totaled $621.9 million at quarter end.

• For the nine months ended January 31, 2026, total revenue was $198.7 million and net loss was $354.8 million.

• Weighted-average shares outstanding for the quarter were 141.97 million.

Outlook and guidance

• Q4 2026 revenue guidance: $48–$52 million; full-year fiscal 2026 revenue guidance: $246.7–$250.7 million.

• Q4 non-GAAP operating loss guidance: $56–$64 million; full-year non-GAAP operating loss: $219.5–$227.5 million, excluding $10–$12 million in pre-tax restructuring expenses.

• Full-year cost savings of $135 million expected, with full realization in the second half of FY27.

• Management expects continued operating losses and negative cash flows as restructuring continues.

• Liquidity is expected to be sufficient for at least the next 12 months.