C3.ai 2026 Q1 Earnings Deeper Losses Amid Leadership Challenges

C3.ai (AI) reported its fiscal 2026 Q1 earnings on Sep 03rd, 2025. The results significantly missed expectations, with both revenue and losses deteriorating year over year. The company withdrew previous guidance and provided a more conservative Q2 outlook, signaling ongoing operational challenges.

C3.ai’s Q1 2026 earnings report highlighted a sharp decline in performance, with revenue dropping 19.4% year over year and losses widening. The company attributed the poor results to leadership changes and internal disruptions. Management outlined restructuring plans but did not specify a clear path to profitability.

Revenue

C3.ai's total revenue for Q1 2026 fell to $70.26 million, a 19.4% decrease from $87.21 million in the same period last year. Subscription revenue accounted for the bulk of the company's income, reaching $60.30 million, while professional services revenue amounted to $9.96 million. The decline was driven by weaker sales execution and internal reorganization.

Earnings/Net Income

C3.ai's losses deepened significantly during the quarter, with a net loss of $116.77 million—up 85.9% from $62.83 million a year ago. On a per-share basis, the company posted a loss of $0.86, compared to $0.50 in Q1 2025, reflecting a 72.0% increase in the loss. This marks one of the company’s worst performances to date. The results represent a clear decline in financial health.

Price Action

The stock price of C3.ai has continued to struggle post-earnings, with a 1.48% drop during the latest trading day, a 1.36% decline during the full week, and a sharp 25.64% drop month-to-date. The downward trend indicates investor disappointment with the company’s current trajectory.

Post Earnings Price Action Review

Following the disappointing earnings release, C3.ai’s shares have seen persistent weakness, with the stock down more than 25% since the start of the month. The poor performance reflects concerns over leadership instability, sales execution, and a lack of a defined path to profitability. The company’s recent restructuring and new leadership have yet to translate into market confidence.

CEO Commentary

Thomas Siebel, Founder, CEO & Chairman of the Board, acknowledged the quarter's performance as “completely unacceptable” and attributed the decline to poor sales execution and resource coordination during mid-quarter leadership changes and his unanticipated health absence. He emphasized the company’s restructuring efforts, including the appointment of experienced leaders across key departments, as a critical step toward growth and customer success. Siebel also highlighted C3.ai’s technical advantages, including its 131 enterprise AI applications and a unique agentic AI platform, expressing confidence in the company’s potential to lead in the $2 trillion AI market. He conveyed an optimistic tone, underscoring the team’s readiness under new CEO Stephen Ehikian to accelerate market penetration and profitability.

Guidance

C3.ai provided Q2 2026 revenue guidance of $72 million to $80 million, with a non-GAAP operating loss expected between $49.5 million and $57.5 million. The company has withdrawn prior guidance and stated it will provide Q3 and full-year 2026 guidance in its next earnings release. CFO Hitesh Lath expressed confidence in Q2 based on August sales activity and new leadership but did not outline a specific timeline for achieving profitability at scale. Analysts estimate full-year revenue between $290 million and $300 million, which management did not dispute.

Additional News

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