C3.ai targets up to $484.5M fiscal 2026 revenue as partner ecosystem and AI application demand accelerate
May 28, 2025 8:58 PM ET
AI-Generated Earnings Calls Insights
Earnings Call Insights: C3.ai (AI) Q4 2025
Management View- Tom Siebel, Chairman and CEO, opened by stating, "I'm very pleased to announce that we had a spectacular fiscal year '25 that we wrapped up in a spectacular fourth quarter." He highlighted a return to rapid growth, with 26% top line growth in the fourth quarter and a three-year progression from 6% to 16% to 25% annual growth rates.
- Siebel emphasized C3.ai's unique position as "an enterprise AI application pure play," noting the company's billions of dollars invested in the C3 AI Agentic platform, and more than 130 turnkey enterprise AI applications now in production.
- Siebel announced the renewal and extension of the Baker Hughes partnership through 2028, calling it "a substantial tailwind" and referencing over $0.5 billion in revenue from this relationship.
- Strategic partnerships with Azure, AWS, GCP, Booz Allen, and Arcfield were highlighted as drivers for market expansion, with a particular focus on enabling a vast partner ecosystem, including tens of thousands of sales reps at major hyperscalers.
- Siebel described demonstration licenses as "almost 30% of our revenue for the quarter," positioning them as investments for future growth.
- The CEO stressed non-oil and gas vertical expansion, citing manufacturing, life sciences, and state/local government as significant growth contributors.
- Regarding cash, Siebel said, “every time I look at the checking account, there's $0.75 billion cash,” attributing this to strong expense management and forecasting consistent cash levels going forward.
- Hitesh Lath, CFO, stated, “Total revenue for the quarter increased 26% year-over-year to $108.7 million. Subscription revenue increased 9% year-over-year to $87.3 million, representing 80% of total revenue.” Lath also highlighted $33.8 million in demonstration license revenue, $135.4 million in bookings, and free cash flow of $10.3 million for the quarter.
Outlook- Lath provided guidance for Q1 fiscal 2026: “Our revenue guidance for Q1 of fiscal '26 is $100 million to $109 million. For the full fiscal 2016, we are anticipating revenue in the range of $447.5 million to $484.5 million.”
- Lath added, “Our guidance for non-GAAP loss from operations for the first quarter is $23.5 million to $33.5 million. And our non-GAAP loss from operations for the year, the guidance is $65 million to $100 million.”
- The guidance assumes geopolitical stability, with management explicitly noting risks related to government shutdowns or global trade friction.
- Lath stated, “profitability remains simply a matter of scale. Our expectation is that we will cross into non-GAAP profitability during the second half of fiscal 2017, and we expect to be free cash flow positive in the fourth quarter of fiscal '26 and in successive years thereafter.”
Financial Results- Total revenue for Q4 was $108.7 million, with subscription revenue at $87.3 million.
- Non-GAAP gross profit was $75.2 million, for a gross margin of 69%.
- Non-GAAP operating loss was $31.2 million, and non-GAAP net loss per share was $0.16.
- Free cash flow for the quarter was $10.3 million; cash and equivalents stood at $742.7 million.
- Non-oil and gas revenue grew 48% year-over-year in fiscal 2025; partner-supported bookings in Q4 grew by 419%, with 59 agreements closed through collaborations.
- Federal business saw a new $450 million contract ceiling from the US Air Force Rapid Sustainment Office.
Q&A- Patrick Walravens, Citizens: Questioned the activation of Azure sales reps and the CEO’s health. Siebel explained the strategy of pairing C3 salespeople with Azure reps to multiply reach, and confirmed his return to travel, saying, “just when you thought it was safe, Pat, I'm back.”
- Matt Calitri, Needham & Company: Asked about the new Baker Hughes deal economics and the wider fiscal 2026 guidance range. Siebel declined specifics under NDA, but confirmed the partnership’s expansion and described close ties with Baker Hughes leadership. On guidance, Siebel cited broader market and geopolitical risks as justification for the wider range.
Sentiment Analysis- Analysts showed a positive-to-neutral tone, focusing on partnership execution and leadership stability, and congratulating management on contract renewals and health improvements.
- Management’s tone was confident during prepared remarks, with Siebel making assertive statements such as “business is good guys” and “the future is very bright,” while also directly addressing risks and uncertainties. During Q&A, Siebel remained candid and upbeat, especially regarding his health and partnership strategies.
- Compared to the previous quarter, both analysts and management maintained a similarly constructive and optimistic tone, with slightly more focus on risk factors in the current quarter.
Quarter-over-Quarter Comparison- Revenue grew from $98.8 million in Q3 to $108.7 million in Q4.
- Subscription revenue increased, but at a slower rate (9% year-over-year in Q4 vs. 22% in Q3).
- Demonstration license revenue rose from $28.6 million in Q3 to $33.8 million in Q4.
- Non-Baker Hughes revenue growth rate and total bookings both accelerated, and partner-supported bookings showed a significant jump.
- Management’s tone remained confident, with increased emphasis on execution and partnerships. The analyst focus shifted slightly toward clarifying partnership economics, revenue mix, and guidance range, reflecting heightened attention to execution and risk management.
Risks and Concerns- Management repeatedly referenced geopolitical risks, including US government shutdown and global trade friction.
- Lath stated, “Our guidance is predicated on the assumption of geopolitical stability.”
- Analysts sought clarity on partnership activation, Baker Hughes contract stability, and guidance construction, highlighting external uncertainties and the importance of execution.
Final Takeaway
C3.ai management highlighted a year of strong revenue growth, renewed and expanded key partnerships, and significant advances in both federal and commercial verticals. Strategic alliances with hyperscalers, a growing demonstration license business, and a robust cash position underpin expectations for continued expansion. Management projects fiscal 2026 revenue between $447.5 million and $484.5 million, with profitability dependent on scaling. The company remains focused on partner ecosystem leverage and innovation across agentic and generative AI, while remaining attentive to geopolitical and market risks that could impact the trajectory in the coming year.
Read the full Earnings Call Transcript |
