C3.ai (AI) Q3 2026 earnings summary

Executive summary

• Fiscal Q3 2026 revenue was $53.3 million, down 46% year-over-year, with 90% from subscriptions and 97% from subscriptions plus prioritized engineering services.

• Net loss widened to $133.4 million for the quarter, with GAAP net loss per share at $(0.94) and non-GAAP net loss per share at $(0.40).

• Gross margin fell to 17% GAAP (down from 59% year-over-year), while non-GAAP gross margin was 37%.

• A comprehensive restructuring plan was initiated, including a 26% workforce reduction, 30% cut in annualized non-employee costs, and $135 million in annual non-GAAP operating expense reductions.

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

Financial highlights

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

• Non-GAAP gross profit was $19.6 million (37% margin); GAAP gross profit was $9.2 million (17% margin).

• Non-GAAP operating loss was $63.4 million; GAAP operating loss was $140.4 million; non-GAAP net loss was $56.4 million.

• Free cash flow for the quarter was negative $56.2 million; for the nine months ended January 31, 2026, it was negative $137.4 million.

• Cash, cash equivalents, and marketable securities totaled $621.9 million at quarter end.

Outlook and guidance

• Q4 FY26 revenue guidance: $48 million–$52 million; full-year FY26 revenue guidance: $246.7 million–$250.7 million.

• Q4 non-GAAP operating loss guidance: $56 million–$64 million; full-year non-GAAP operating loss: $219.5 million–$227.5 million.

• Guidance excludes $10–12 million in pre-tax restructuring expenses expected in Q4 FY26.

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

• Management expects continued operating losses and negative cash flows in the coming quarters as restructuring continues.