C3.ai Stock Surges on Earnings Beat, Baker Hughes Renewal, and Strong AI Demand

C3.ai reported fourth-quarter fiscal 2025 results that offered a modest beat on earnings and met expectations on revenue, helping calm investor concerns around its path to profitability. Shares jumped more than 13% in after-hours trading following the results, buoyed by guidance that met or exceeded Street expectations, progress on key metrics like cash flow, and a critical renewal of its partnership with Baker Hughes. CEO Thomas Siebel characterized fiscal 2025 as a “spectacular year,” citing accelerating growth and expanding demand for enterprise AI solutions across a growing number of verticals.

For the fourth quarter, C3.ai posted an adjusted loss of $0.16 per share, beating consensus estimates of a $0.20 loss. Revenue rose 26% year-over-year to $108.7 million, slightly ahead of Street forecasts. That top-line growth included a 9% rise in subscription revenue to $87.3 million and a significant contribution from prioritized engineering services (PES), bringing total subscription and PES revenue to $104.4 million. Gross margin remained healthy at 69%, while free cash flow improved to $10.3 million, although it fell short of analyst targets.

The company closed the year with $742.7 million in cash, underscoring Siebel’s assertion that C3.ai remains financially sound. "We’ve had $750 million in the bank for two years, and we expect to have $750 million a year from now", he quipped, responding to critics focused on ongoing operating losses. For FY25, total revenue reached $389.1 million, up 25% from the prior year, while the operating loss narrowed as expenses grew at a slower pace than revenue. It was C3.ai’s third straight year of accelerating growth, after rising 6% in FY23 and 16% in FY24.

Guidance for FY26 reinforced the company’s steady execution. Revenue is expected to grow between 15% and 22% year-over-year, coming in between $447.5 million and $484.5 million, essentially in line with the $465.5 million consensus. C3.ai guided for an annual non-GAAP operating loss between $65 million and $100 million, modestly better than expectations at the midpoint. Management reiterated its target for non-GAAP profitability in the second half of FY27 and positive free cash flow in Q4 FY26.

Among the more bullish developments, the company extended its longstanding joint venture with Baker Hughes through June 2028. Baker Hughes represents roughly 20% of C3.ai’s revenue and has helped cement C3.ai’s presence in the energy vertical, where customers include Shell, ExxonMobil, QatarEnergy, and LyondellBasell. Siebel noted the Baker Hughes JV has generated over $500 million in revenue since inception, adding that the renewal should now be seen as a structural tailwind rather than a looming risk.

Beyond energy, growth in other verticals has accelerated. Non-oil and gas revenue rose 48% in FY25, and C3.ai now counts more than 19 industries among its addressable market. Manufacturing, state and local government, and life sciences were all called out as high-growth verticals, with notable clients including GSK, Quest Diagnostics, US Steel, and various U.S. defense and intelligence agencies. In the government space alone, the company signed 71 agreements across 24 states and expanded deployment of its PANDA and Pluto platforms within the Department of Defense.

Key to C3.ai’s go-to-market strategy is a growing ecosystem of strategic partners. In Q4, 73% of all agreements were signed through partners like Microsoft, Amazon Web Services, Google Cloud, and McKinsey QuantumBlack. The company closed 28 joint deals with Microsoft alone, which now considers C3.ai its preferred enterprise AI application partner. Demonstration licenses—used to enable partners and customers to showcase product capabilities—accounted for $33.8 million of quarterly revenue and were described by Siebel as “investments in future growth.”

Investors will also want to track the company’s continued push into Generative AI and agentic AI. Revenue from C3 Generative AI more than doubled in FY25, and the company claims to have over 100 production deployments of agentic AI solutions across government, defense, and commercial verticals. Siebel highlighted the recently awarded patent for its agentic AI platform as a differentiator, arguing that the enterprise AI application layer—where C3.ai operates—is increasingly where value is being captureAlso notable is the firm’s intention to expand in Europe and grow an OEM licensing business by offering its Agentic AI platform to third-party developers.

Despite ongoing losses, C3.ai appears to be making tangible progress toward scale and profitability, supported by strong partnerships, differentiated AI offerings, and increasing customer demand. The quarter helped ease concerns around growth durability and cash burn, and with multiple vectors for expansion in place, the company enters FY26 with renewed momentum.