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1. Company Snapshot

1.a. Company Description

C3.ai, Inc.operates as an enterprise artificial intelligence (AI) software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally.It provides C3 AI application platform, an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications; C3 AI Ex Machina to for analysis-ready data; C3 AI CRM, an industry specific customer relationship management solution; and C3 AI Data Vision that visualizes, understands, and leverages the relationships between data entities.


It also offers C3 AI applications, including C3 AI Inventory Optimization, a solution to optimize raw material, in-process, and finished goods inventory levels; C3 AI Supply Network Risk, which provides visibility into risks of disruption throughout the supply chain operations; C3 AI Customer Churn Management, which enables account executives and relationship managers to monitor customer satisfaction, as well as to prevent customer churn with AI-based and human-interpretable predictions and warning; C3 AI Production Schedule Optimization, a solution for scheduling production; C3 AI Predictive Maintenance, which provides insight into asset risk to maintenance planners and equipment operators; C3 AI Fraud Detection solution that identify revenue leakage or maintenance and safety issues; and C3 AI Energy Management solution.In addition, it offers integrated turnkey enterprise AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, healthcare, and telecommunications market segments.It has strategic partnerships with Baker Hughes in the areas of oil and gas market; FIS in the areas of financial services market; Raytheon; and AWS, Intel, Google, and Microsoft.


The company was formerly known as C3 IoT, Inc.and changed its name to C3.ai, Inc.in June 2019.


C3.ai, Inc.was incorporated in 2009 and is headquartered in Redwood City, California.

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1.b. Last Insights on AI

C3.ai's recent performance was negatively impacted by disappointing Q1 results, including a wider-than-expected loss and revenue decline to $70.3 million from $87.2 million a year earlier. The company's leadership change, with Stephen Ehikian as the new CEO, and withdrawn guidance due to restructuring efforts have added to investor concerns. Weak execution and competitive pressures in the AI space have raised questions about the company's growth prospects. Additionally, C3.ai's high valuation at 5.5x sales, despite negative growth and non-GAAP losses, has sparked concerns.

1.c. Company Highlights

2. C3.ai's Q1 2026 Earnings: A Challenging Quarter

C3.ai reported revenue of $70.3 million, down 19% year-over-year, with a non-GAAP loss per share of $0.37, slightly better than the estimated loss of $0.38. The company's non-GAAP gross margin was 52%, and the operating loss was $57.8 million. The stock is currently trading at a P/S Ratio of 5.49, which may indicate that the market is pricing in significant growth prospects.

Publication Date: Sep -07

📋 Highlights
  • Revenue Decline: Q1 revenue fell to $70.3M (-19% YoY), driven by $15.9M sequential drop in demonstration licenses and weak sales execution.
  • Subscription Dominance: Subscription revenue ($60.3M, 86% of total) and professional services ($10M) offset declines in demonstration licenses ($17.9M).
  • Financial Strain: Non-GAAP operating loss widened to $57.8M, net loss of $49.8M (-$0.37/share), and free cash flow turned negative (-$34.3M).
  • Strategic Wins: Secured multiyear AI partnerships with Nucor, Comerica, HII, and the U.S. Army, leveraging Agentic AI to address data security and hallucination gaps.

Financial Performance

The company's subscription revenue was $60.3 million, accounting for 86% of total revenue. Professional services revenue was $10 million, and demonstration licenses revenue declined sequentially by $15.9 million to $17.9 million. Free cash flow was negative $34.3 million, and cash reserves stood at $711.9 million.

Operational Highlights

C3.ai secured strategic wins with major customers, including Nucor, Comerica, HII, and the US Army, leveraging its Agentic AI platform. The company is expanding its partnerships with Microsoft, AWS, and GCP, aiming to scale joint sales efforts. According to Tom Siebel, the company has 60 active customer engagements and a $2 trillion addressable market.

Outlook and Valuation

The company guided Q2 revenue to be between $72 million and $80 million and is withdrawing previous guidance. Analysts estimate next year's revenue growth to be -23.1%. The stock's current valuation metrics, including a P/E Ratio of -6.17 and an EV/EBITDA of -5.42, suggest that the market is expecting significant improvement in the company's financial performance.

Management's Perspective

Tom Siebel attributed the revenue decline to sales execution failures and leadership transitions, but expressed confidence in the company's recovery, citing the Oracle analogy. Stephen Ehigian, the new CEO, joined C3.ai for its leadership in enterprise AI and growth potential. The company is undergoing restructuring efforts, including a reorganized sales and service team.

3. NewsRoom

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Why C3.ai Q2 Revenue Beat Impresses Analysts

Dec -04

Source: benzinga.com

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C3.ai Q2 Earnings Beat Estimates, Stock Tumbles on Cautious Q3 View

Dec -04

Source: zacks.com

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What's Going On With C3.ai (AI) Stock Today?

Dec -04

Source: gurufocus.com

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C3.ai CEO talks earnings, business changes, and demand, plus Nvidia CEO Jensen Huang's media tour

Dec -04

Source: youtube.com

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C3.ai Q2 beat driven by strong partner activity and federal business momentum

Dec -04

Source: proactiveinvestors.com

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U.S. Department of Health and Human Services Selects C3 AI as Enterprise AI Platform

Dec -04

Source: businesswire.com

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10 AI Stocks Worth Buying Right Now

Dec -04

Source: fool.com

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C3.ai CEO Stephen Ehikian Admits Fallout From Tom Siebel's Health Crisis, Sales Reorg Chaos: 'There's Work To Be Done...'

Dec -04

Source: feeds.benzinga.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.51%)

6. Segments

Gas & Services

Expected Growth: 8.5%

C3.ai's Gas & Services segment growth of 8.5% is driven by increasing adoption of AI-powered predictive maintenance, remote monitoring, and optimization solutions among oil and gas operators. Additionally, rising demand for digital transformation, IoT integration, and cybersecurity solutions in the energy sector are contributing to the segment's growth.

Global Markets & Technologies

Expected Growth: 40.27%

C3.ai's 40.27% growth in Global Markets & Technologies is driven by increasing adoption of AI and IoT across industries, rising demand for predictive maintenance and energy management solutions, and expansion into new markets. Additionally, strategic partnerships and collaborations with leading companies, such as Baker Hughes and Microsoft, have contributed to the segment's growth.

Engineering & Construction

Expected Growth: 10.27%

C3.ai's Engineering & Construction segment growth of 10.27% is driven by increasing adoption of AI and IoT in infrastructure development, rising demand for digital twins, and growing need for predictive maintenance. Additionally, the segment benefits from government investments in smart cities and infrastructure modernization, as well as the company's strategic partnerships with industry leaders.

7. Detailed Products

C3 AI Suite

An integrated software platform that enables the rapid development and deployment of AI applications

C3 AI Applications

Pre-built AI applications for specific industries and use cases, such as predictive maintenance and supply chain optimization

C3 AI Ex Machina

A no-code AI development environment for data scientists and engineers

C3 AI CRM

An AI-powered customer relationship management system for sales, marketing, and customer service

C3 AI Reliability

An AI-powered predictive maintenance solution for industrial equipment and assets

C3 AI Inventory Optimization

An AI-powered inventory optimization solution for supply chain management

8. C3.ai, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

C3.ai, Inc. has a medium threat of substitutes due to the presence of alternative AI and IoT solutions in the market. However, the company's unique AI-based solutions and strong partnerships with leading companies reduce the threat of substitutes.

Bargaining Power Of Customers

C3.ai, Inc. has a low bargaining power of customers due to its strong brand reputation and the complexity of its AI-based solutions, making it difficult for customers to switch to alternative solutions.

Bargaining Power Of Suppliers

C3.ai, Inc. has a medium bargaining power of suppliers due to its dependence on a few key suppliers for its AI-based solutions. However, the company's strong relationships with its suppliers reduce the bargaining power of suppliers.

Threat Of New Entrants

C3.ai, Inc. has a high threat of new entrants due to the growing demand for AI-based solutions and the increasing availability of AI technologies. New entrants can potentially disrupt the market and pose a threat to C3.ai, Inc.'s market share.

Intensity Of Rivalry

C3.ai, Inc. operates in a highly competitive market with several established players, leading to a high intensity of rivalry. The company needs to continuously innovate and differentiate its solutions to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.09%
Debt Cost 3.95%
Equity Weight 95.91%
Equity Cost 12.62%
WACC 12.27%
Leverage 4.27%

11. Quality Control: C3.ai, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Paymentus

A-Score: 4.3/10

Value: 1.1

Growth: 6.6

Quality: 6.8

Yield: 0.0

Momentum: 8.0

Volatility: 3.7

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Kyndryl

A-Score: 4.3/10

Value: 5.2

Growth: 4.7

Quality: 4.1

Yield: 0.0

Momentum: 7.5

Volatility: 4.3

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EPAM Systems

A-Score: 4.3/10

Value: 3.9

Growth: 6.9

Quality: 7.0

Yield: 0.0

Momentum: 2.5

Volatility: 5.3

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DXC Technology

A-Score: 4.1/10

Value: 9.3

Growth: 4.4

Quality: 4.8

Yield: 0.0

Momentum: 1.0

Volatility: 5.0

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Perficient

A-Score: 3.2/10

Value: 0.6

Growth: 7.2

Quality: 4.6

Yield: 0.0

Momentum: 5.0

Volatility: 1.7

1-Year Total Return ->

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C3.ai

A-Score: 3.1/10

Value: 6.8

Growth: 4.7

Quality: 4.1

Yield: 0.0

Momentum: 1.5

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

15.15$

Current Price

15.15$

Potential

-0.00%

Expected Cash-Flows