Investment Thesis
C3.ai demonstrates severe fundamental deterioration with massive operating losses (-189.9% margin) and negative free cash flow (-$137.4M) despite 25.3% revenue growth, indicating the company is burning cash unsustainably. The widening gap between gross profit and operating expenses, combined with negative returns on equity and assets, suggests the business model cannot support current cost structure. While balance sheet liquidity remains adequate, the trajectory of losses without path to profitability presents substantial downside risk.
AI Strengths
- Revenue growth of 25.3% year-over-year demonstrates market demand for AI/enterprise software services
- Strong liquidity position with 6.58x current ratio and $88.8M cash provides runway for operations
- Healthy gross margin of 33.3% indicates underlying product economics are viable at production level
- No long-term debt constrains financial flexibility
AI Risks
- Operating margin of -189.9% with -$354.8M net loss shows operating expenses far exceed revenue generation capacity
- Negative free cash flow of -$137.4M annually is unsustainable and will deplete cash reserves within 1 year
- ROE of -49.3% and ROA of -39.6% demonstrate the business destroys shareholder value with current cost structure
- Widening losses despite revenue growth suggests scaling is increasing costs faster than revenue, indicating broken unit economics
Key Metrics to Watch
- Operating cash flow trend and path to break-even
- Operating expense ratio relative to revenue growth
- Quarterly cash burn rate and months of runway remaining
- Gross margin sustainability and customer acquisition costs
- Operating leverage improvements or continued deterioration
AI Financial Metrics
AI Profitability Ratios
AI Balance Sheet & Liquidity
AI 5-Year Financial Trend
5-Year Trend Summary: C3.ai, Inc.'s revenue has grown significantly by 112% over the 5-year period, indicating strong business expansion. The most recent EPS of $-2.45 indicates the company is currently unprofitable.
AI Growth Metrics (YoY)
AI Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $53.3M | -$80.2M | $-0.62 |
| Q2 2026 | $75.1M | -$66.0M | $-0.52 |
| Q1 2026 | $70.3M | -$62.8M | $-0.50 |
| Q3 2025 | $78.4M | -$72.6M | $-0.60 |
| Q2 2025 | $73.2M | -$66.0M | $-0.52 |
| Q1 2025 | $72.4M | -$62.8M | $-0.50 |
| Q3 2024 | $66.7M | -$63.2M | $-0.57 |
| Q2 2024 | $62.4M | -$68.9M | $-0.59 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
AI Capital Allocation
AI SEC Filings
Access official SEC EDGAR filings for C3.ai, Inc. (CIK: 0001577526)