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1. Company Snapshot

1.a. Company Description

C3.ai, Inc.operates as an enterprise artificial intelligence (AI) software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally.It provides C3 AI application platform, an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications; C3 AI Ex Machina to for analysis-ready data; C3 AI CRM, an industry specific customer relationship management solution; and C3 AI Data Vision that visualizes, understands, and leverages the relationships between data entities.


It also offers C3 AI applications, including C3 AI Inventory Optimization, a solution to optimize raw material, in-process, and finished goods inventory levels; C3 AI Supply Network Risk, which provides visibility into risks of disruption throughout the supply chain operations; C3 AI Customer Churn Management, which enables account executives and relationship managers to monitor customer satisfaction, as well as to prevent customer churn with AI-based and human-interpretable predictions and warning; C3 AI Production Schedule Optimization, a solution for scheduling production; C3 AI Predictive Maintenance, which provides insight into asset risk to maintenance planners and equipment operators; C3 AI Fraud Detection solution that identify revenue leakage or maintenance and safety issues; and C3 AI Energy Management solution.In addition, it offers integrated turnkey enterprise AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, healthcare, and telecommunications market segments.It has strategic partnerships with Baker Hughes in the areas of oil and gas market; FIS in the areas of financial services market; Raytheon; and AWS, Intel, Google, and Microsoft.


The company was formerly known as C3 IoT, Inc.and changed its name to C3.ai, Inc.in June 2019.


C3.ai, Inc.was incorporated in 2009 and is headquartered in Redwood City, California.

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1.b. Last Insights on AI

C3.ai faces challenges, including declining revenue, margin pressure, and a cascade of issues that have eroded investor confidence. The company's sales missteps and shutdown impacts have contributed to its struggles. A CEO change and dramatically lower revenue guidance have also bode poorly. Despite improving sales execution, lingering revenue pressure and margin strain keep investor expectations cautious. Merger talks with Automation Anywhere have sparked short-term optimism, but a takeover is unlikely to rescue the company. C3.ai's Q2 earnings beat estimates, but its stock tumbled on a cautious Q3 view.

1.c. Company Highlights

2. C3.ai's Q2 Results: Strong Bookings Growth and Expanding Partnerships

C3.ai, Inc. reported revenue of $75.1 million for Q2, representing a 7% sequential increase, with non-GAAP gross profit of $40.9 million and a non-GAAP gross margin of 54%. The non-GAAP net loss was $34.8 million, with an EPS loss of $0.25, beating estimates of $0.32 loss. Free cash flow was negative $46.9 million, and the company ended the quarter with $675 million in cash, cash equivalents, and marketable securities.

Publication Date: Dec -07

📋 Highlights
  • 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.

3. NewsRoom

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Why SanDisk Stock Skyrocketed: 5 Key Questions Answered

Feb -04

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Alger Weatherbie Specialized Growth Fund Q4 2025 Winners And Laggards

Feb -03

Source: seekingalpha.com

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2 Struggling Stocks That Aren't Worth Buying on the Dip

Jan -30

Source: fool.com

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C3.ai, Inc. (AI) Declines More Than Market: Some Information for Investors

Jan -29

Source: zacks.com

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Tesla's 2025 Transition: From EV Maker to AI and Robotics Leader

Jan -29

Source: gurufocus.com

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Stock Market Today, Jan. 28: Fed Holds Rates Steady As Megacap Earnings Begin

Jan -29

Source: fool.com

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Why C3.ai Stock Popped Today

Jan -28

Source: fool.com

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C3.ai stock soars on merger news but a takeover is unlikely to rescue it

Jan -28

Source: invezz.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.51%)

6. Segments

Gas & Services

Expected Growth: 8.5%

C3.ai's Gas & Services segment growth of 8.5% is driven by increasing adoption of AI-powered predictive maintenance, remote monitoring, and optimization solutions among oil and gas operators. Additionally, rising demand for digital transformation, IoT integration, and cybersecurity solutions in the energy sector are contributing to the segment's growth.

Global Markets & Technologies

Expected Growth: 40.27%

C3.ai's 40.27% growth in Global Markets & Technologies is driven by increasing adoption of AI and IoT across industries, rising demand for predictive maintenance and energy management solutions, and expansion into new markets. Additionally, strategic partnerships and collaborations with leading companies, such as Baker Hughes and Microsoft, have contributed to the segment's growth.

Engineering & Construction

Expected Growth: 10.27%

C3.ai's Engineering & Construction segment growth of 10.27% is driven by increasing adoption of AI and IoT in infrastructure development, rising demand for digital twins, and growing need for predictive maintenance. Additionally, the segment benefits from government investments in smart cities and infrastructure modernization, as well as the company's strategic partnerships with industry leaders.

7. Detailed Products

C3 AI Suite

An integrated software platform that enables the rapid development and deployment of AI applications

C3 AI Applications

Pre-built AI applications for specific industries and use cases, such as predictive maintenance and supply chain optimization

C3 AI Ex Machina

A no-code AI development environment for data scientists and engineers

C3 AI CRM

An AI-powered customer relationship management system for sales, marketing, and customer service

C3 AI Reliability

An AI-powered predictive maintenance solution for industrial equipment and assets

C3 AI Inventory Optimization

An AI-powered inventory optimization solution for supply chain management

8. C3.ai, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

C3.ai, Inc. has a medium threat of substitutes due to the presence of alternative AI and IoT solutions in the market. However, the company's unique AI-based solutions and strong partnerships with leading companies reduce the threat of substitutes.

Bargaining Power Of Customers

C3.ai, Inc. has a low bargaining power of customers due to its strong brand reputation and the complexity of its AI-based solutions, making it difficult for customers to switch to alternative solutions.

Bargaining Power Of Suppliers

C3.ai, Inc. has a medium bargaining power of suppliers due to its dependence on a few key suppliers for its AI-based solutions. However, the company's strong relationships with its suppliers reduce the bargaining power of suppliers.

Threat Of New Entrants

C3.ai, Inc. has a high threat of new entrants due to the growing demand for AI-based solutions and the increasing availability of AI technologies. New entrants can potentially disrupt the market and pose a threat to C3.ai, Inc.'s market share.

Intensity Of Rivalry

C3.ai, Inc. operates in a highly competitive market with several established players, leading to a high intensity of rivalry. The company needs to continuously innovate and differentiate its solutions to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.09%
Debt Cost 3.95%
Equity Weight 95.91%
Equity Cost 12.62%
WACC 12.27%
Leverage 4.27%

11. Quality Control: C3.ai, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
EPAM Systems

A-Score: 4.4/10

Value: 3.6

Growth: 6.9

Quality: 6.9

Yield: 0.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

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Perficient

A-Score: 4.1/10

Value: 3.2

Growth: 7.2

Quality: 6.7

Yield: 0.0

Momentum: 6.0

Volatility: 1.7

1-Year Total Return ->

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DXC Technology

A-Score: 4.0/10

Value: 9.5

Growth: 4.3

Quality: 4.2

Yield: 0.0

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

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Kyndryl

A-Score: 3.8/10

Value: 6.3

Growth: 4.7

Quality: 4.3

Yield: 0.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

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Paymentus

A-Score: 3.7/10

Value: 1.4

Growth: 6.6

Quality: 6.8

Yield: 0.0

Momentum: 5.0

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
C3.ai

A-Score: 3.0/10

Value: 7.1

Growth: 4.7

Quality: 3.6

Yield: 0.0

Momentum: 1.0

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.65$

Current Price

11.65$

Potential

-0.00%

Expected Cash-Flows