How did C3.ai's revenue and expenses trend in Q3 2025?

**C3.ai's revenue and expenses in Q3 2025 showed a positive revenue growth trajectory with significant expenses.**

1. **Revenue Growth**:
- C3.ai's total revenue for Q3 2025 was $98.8 million, marking a 26% increase year-over-year.
- Subscription revenue, which constitutes a significant portion of the total revenue, grew by 22% year-over-year, reaching $85.7 million.
- The combination of subscription and prioritized engineering services revenue amounted to $91.4 million, accounting for 93% of the total revenue, and showed an 18% increase compared to the previous year.
2. **Operating Expenses**:
- Despite the revenue growth, C3.ai reported a non-GAAP operating loss of $23.1 million for the quarter. This loss was better than the guidance provided, which ranged from $38.6 million to $46.6 million.
- The company's gross profit for the quarter was $68.2 million, indicating a strong profitability in terms of the revenue generated. The gross margin was 69%, reflecting efficient cost management.
- C3.ai's net loss for the quarter was $15.8 million. The non-GAAP net loss per share was $0.12.
- The company's free cash flow was negative $22.4 million, an improvement from the negative $45.1 million in the same quarter of the previous year.
3. **Expense Management**:
- C3.ai's focus on expense management was evident, as the company reduced marketing spend and opted for cost-effective strategies like expanding the sales organization and enhancing the strategic partner ecosystem.
- The company's operating loss was substantially better than expected due to continued focus on expense management, including reducing marketing spend.
4. **Financial Position**:
- At the end of Q3 2025, C3.ai had $724.3 million in cash, cash equivalents, and marketable securities.
- The company's accounts receivable balance was $180.4 million, including unbilled receivables of $89.8 million.

In conclusion, C3.ai demonstrated robust revenue growth in Q3 2025, driven by strong subscription revenue and strategic partnerships. However, the company reported an operating loss, which was better than expected, and maintained a negative free cash flow. The company's financial position remained strong with substantial cash reserves.