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- **Revenue Growth**: Q2 revenue up 7% QoQ to $75.1M, with subscription at 93%. Bookings surged 49% QoQ to $86M, driven by 17+ million-dollar deals.
- **Federal Dominance**: Federal bookings rose 89% YoY, accounting for 45% of total, despite a 43-day government shutdown.
- **Product Innovation**: Launch of C3 AI Agentic Automation targets RPA market, recognized as top industrial AI platform.
- **Partnership Momentum**: Microsoft and AWS contributed $130M in bookings, with joint pipeline up 146% YoY.
- **Financial Focus**: Operating loss $42.2M, with $10.7M QoQ expense reduction. FY26 revenue guidance $289.5-309.5M, reflecting sales and marketing investment.

**【Management Opening Remarks】**
- Amit Berry welcomed participants and outlined the call structure, emphasizing non-GAAP financial measures and forward-looking statements. The press release and supplemental materials were available online.

**【CEO Commentary】**
- **Q2 Results**: Revenue grew 7% sequentially to $75.1 million, with subscription revenue at 93% of total. Bookings surged 49% QoQ to $86 million, driven by 17+ million-dollar deals and 6 over $5 million.
- **Federal Growth**: Despite a 43-day government shutdown, federal bookings rose 89% YoY, accounting for 45% of total. Wins included U.S. Department of Health and Human Services, Department of War, and intelligence community contracts.
- **Private Sector Expansion**: New clients like AMD, GSK, and Signature Aviation highlighted AI adoption across finance, production, and supply chain. GSK expanded enterprise-wide after seeing 20% demand forecasting accuracy improvement.
- **Partnerships**: Microsoft and AWS contributed $130 million in bookings, with joint pipeline growing 146% YoY. 89% of Q2 bookings came through the partner ecosystem.
- **Product Innovation**: Launch of C3 AI Agentic Automation enables autonomous AI agents for RPA, expanding addressable market. Recognized as top industrial AI platform by Verdantix.
- **Execution Plan**: Focused on disciplined sales execution, IPD conversions, and product leadership in AI-native applications. 394 IPDs signed, 269 active, with many converting to subscriptions.

**【CFO Financial Commentary】**
- **Revenue Breakdown**: Subscription ($70.2M, 16.5% QoQ), PES ($3.8M), and demo licenses ($21.9M). Gross margin 54%, down due to IPD costs. Operating loss $42.2M, net loss $34.8M.
- **Expense Management**: $10.7M QoQ expense reduction through cost control. Free cash flow negative $46.9M, with $675M cash on hand.
- **Guidance**: Q3 revenue $72-80M, FY26 $289.5-309.5M. Non-GAAP loss $180.5-210.5M, reflecting increased sales and marketing spend.

**【Q&A Highlights】**
- **Business Decline**: Stephen attributed prior quarter's poor performance to sales execution issues, but highlighted strong demand and a renewed focus on IPD rigor and customer value delivery.
- **Federal Outlook**: Federal market growth driven by COTS adoption, AI Action Plan, and industrial base revitalization. 89% YoY federal bookings growth expected to continue.
- **Accountability**: Metrics like bookings growth, IPD conversions, and subscription expansion will track progress. Q3 bookings and FY26 revenue targets reflect this focus.

C3.ai, Inc.(AI)-20251204-2026 Q2 Earnings call transcript

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