C3.ai (NYSE:AI) Issues Quarterly Earnings Results, Beats Estimates By $0.06 EPS

C3.ai (NYSE:AI) posted its quarterly earnings data on Wednesday. The company reported ($0.20) earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of ($0.26) by $0.06, FiscalAI reports. The business had revenue of $52.38 million during the quarter, compared to the consensus estimate of $52.06 million. C3.ai had a negative net margin of 192.10% and a negative return on equity of 60.82%. The firm’s quarterly revenue was down 25.4% compared to the same quarter last year. During the same quarter last year, the company posted ($0.37) earnings per share.

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

• Turnaround initiatives showed early progress: Q1 revenue was $52.4 million, above guidance, while bookings grew 73% year over year and the company signed 22 enterprise agreements.
• Federal business was particularly strong, with bookings up 138% year over year. Management cited dissatisfaction with an incumbent provider, increased defense and intelligence spending, and additional greenfield opportunities as drivers of the pipeline.
• Cost reductions materially improved financial performance: non-GAAP expenses fell nearly $40 million year over year, gross margin increased to 50%, and free cash flow turned positive at $2.1 million versus negative $54.8 million in the prior quarter. The company ended the quarter with $651.1 million in cash and marketable securities.
• Management is repositioning around its agentic AI platform and the early-stage C3 Code product, which it says can rapidly build enterprise applications with minimal manual coding. However, C3 Code is only beginning to be marketed, and near-term investment in forward-deployed engineering is expected to reduce gross margin to the mid-40% range next quarter.
• Fiscal 2027 guidance remains consistent with substantial losses, calling for revenue of $210 million to $240 million and a non-GAAP operating loss of $123 million to $155 million. The company said its priority is establishing consistent quarter-over-quarter growth and eventually reaching free-cash-flow and non-GAAP profitability, but it did not provide a specific timeline.

C3.ai Price Performance

NYSE AI opened at $10.94 on Friday. The company’s 50 day simple moving average is $9.52 and its two-hundred day simple moving average is $9.43. C3.ai has a 1 year low of $7.68 and a 1 year high of $20.22. The stock has a market capitalization of $1.70 billion, a PE ratio of -3.55 and a beta of 2.10.

Insider Activity

In related news, CEO Stephen Ehikian sold 50,542 shares of the business’s stock in a transaction dated Wednesday, July 1st. The stock was sold at an average price of $9.45, for a total transaction of $477,621.90. Following the completion of the transaction, the chief executive officer directly owned 651,130 shares in the company, valued at $6,153,178.50. The trade was a 7.20% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Hitesh Lath sold 48,619 shares of the company’s stock in a transaction dated Tuesday, June 30th. The stock was sold at an average price of $8.77, for a total value of $426,388.63. Following the completion of the transaction, the chief financial officer owned 383,106 shares in the company, valued at $3,359,839.62. This represents a 11.26% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 1,258,650 shares of company stock worth $13,258,862 in the last three months. Corporate insiders own 26.50% of the company’s stock.

Institutional Investors Weigh In On C3.ai

Institutional investors and hedge funds have recently bought and sold shares of the stock. Larson Financial Group LLC grew its stake in C3.ai by 683.6% in the 3rd quarter. Larson Financial Group LLC now owns 1,481 shares of the company’s stock worth $26,000 after buying an additional 1,292 shares in the last quarter. Parallel Advisors LLC raised its position in shares of C3.ai by 76.4% during the 3rd quarter. Parallel Advisors LLC now owns 1,849 shares of the company’s stock valued at $32,000 after buying an additional 801 shares in the last quarter. NewEdge Advisors LLC raised its position in shares of C3.ai by 48.7% during the 1st quarter. NewEdge Advisors LLC now owns 2,442 shares of the company’s stock valued at $51,000 after buying an additional 800 shares in the last quarter. Summit Securities Group LLC bought a new stake in shares of C3.ai during the 4th quarter worth $40,000. Finally, Federation des caisses Desjardins du Quebec grew its position in C3.ai by 109.3% in the fourth quarter. Federation des caisses Desjardins du Quebec now owns 4,476 shares of the company’s stock worth $60,000 after acquiring an additional 2,337 shares in the last quarter. 38.96% of the stock is owned by hedge funds and other institutional investors.

More C3.ai News

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

• Positive Sentiment: C3.ai reported a fiscal first-quarter loss of $0.20 per share, beating the expected $0.26 loss, while revenue of $52.38 million slightly exceeded estimates. The company also highlighted a 73% sequential increase in bookings, suggesting that sales-force restructuring and product refocusing may be improving demand. C3.ai Bookings Jumped 73% and Free Cash Flow Turned Positive
• Positive Sentiment: Free cash flow turned positive, and C3.ai ended the quarter with approximately $650 million in cash. The liquidity gives CEO Thomas Siebel additional runway to execute the turnaround and pursue federal-sector opportunities. C3 AI Q1 Fiscal 2027 Bookings Jump 73%
• Positive Sentiment: Seeking Alpha upgraded C3.ai to Buy, citing stronger bookings, renewed customer momentum and Siebel’s return to leadership as early signs that the recovery could be gaining traction. C3.ai Early Turnaround Signals Are Here
• Neutral Sentiment: Siebel sold 16,890 shares worth about $174,000, reducing his direct holdings by 2.24%. The filing said the transaction covered tax withholding tied to vested equity awards, making it less significant as a discretionary bearish signal. C3.ai CEO Thomas Siebel Sells Shares
• Negative Sentiment: Revenue declined 25.4% year over year to $52.38 million, and next-quarter revenue guidance of $51 million to $55 million trails the approximately $56.6 million consensus estimate. Fiscal 2027 revenue guidance of $210 million to $240 million also brackets or falls below analyst expectations, keeping questions about the turnaround unresolved. C3.ai Sales and Guidance
• Negative Sentiment: Analyst sentiment remains cautious: Canaccord reiterated Hold with a $10 price target, while DA Davidson maintained Underperform with a $7 target. The broader consensus is Reduce, with an average target of $8.70. C3.ai Earns Underperform Rating

Analyst Ratings Changes

A number of equities research analysts recently commented on the stock. Weiss Ratings raised shares of C3.ai from a “sell (e+)” rating to a “sell (d-)” rating in a report on Tuesday, August 4th. UBS Group reiterated an “underperform” rating on shares of C3.ai in a research note on Tuesday. Morgan Stanley lifted their price objective on shares of C3.ai from $6.00 to $7.00 and gave the company an “underweight” rating in a research note on Thursday, June 4th. Wedbush reiterated an “outperform” rating and issued a $15.00 price target on shares of C3.ai in a research report on Thursday, June 4th. Finally, Citigroup reiterated a “market perform” rating on shares of C3.ai in a research note on Thursday. One equities research analyst has rated the stock with a Buy rating, four have issued a Hold rating and seven have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company currently has a consensus rating of “Reduce” and a consensus target price of $8.70.

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.