- Revenue & Bookings Growth: Revenue rose 7% sequentially to $75.1M, with bookings surging 49% to $86.4M.
- Federal Market Expansion: Federal, defense, and aerospace bookings jumped 89% YoY, driven by agencies like HHS and the Department of War.
- Microsoft Partnership Scale: Over $130M in C3.ai bookings generated via Microsoft in the past year, with 89% of Q2 bookings closed through partners.
- Financial Performance: Non-GAAP gross margin at 54%, but non-GAAP net loss of $34.8M and negative free cash flow of $46.9M.
- 2026 Guidance: Projects $289.5M–$309.5M in revenue and $180.5M–$210.5M non-GAAP operating loss, showing ongoing investment in growth.
Bookings and Revenue Mix
The company saw strong bookings growth, with total bookings increasing 49% to $86.4 million, driven by 17 agreements over $1 million and six agreements over $5 million. The revenue mix between subscription and professional services changed significantly, but the long-term outlook remains for professional services to stay between 10% to 20% of revenue. The public sector showed strong bookings growth, driven by a push to adopt commercial off-the-shelf solutions and AI adoption.
Partnerships and Product Developments
The Microsoft partnership is scaling rapidly, with over $130 million in C3.ai, Inc. bookings generated in the past year, and 89% of bookings in Q2 were closed with and through partners. The company launched C3.ai, Inc. Genetic Cross Automation, which enables enterprises to run operations with autonomous AI agents. The C3 Agentic AI platform was recognized as the leading AI software platform in industrial AI by Verdantex.
Guidance and Outlook
Guidance for Q3 is $72 million to $80 million in revenue, and for fiscal year 2026 is $289.5 million to $309.5 million in revenue. The company is focused on driving sales execution, delivering economic value to customers, and doubling down on products and industries where it has demonstrable leadership. The CEO expressed confidence in the opportunity ahead, citing a strong team and a focus on delivering value to customers.
Valuation and Growth Prospects
With a P/S Ratio of 5.74 and an EV/EBITDA of -4.82, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at -22.8%. Given the company's strong bookings growth and expanding partnerships, it remains to be seen if the company can meet these expectations. The current valuation multiples suggest that the market is expecting a turnaround in the company's growth trajectory.