LOS ANGELES--(BUSINESS WIRE)--Law Offices of Frank R. Cruz Encourages C3.ai, Inc. (AI) Investors To Inquire About Securities Fraud Class Action. ...

BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased C3.ai, Inc. ("C3.ai†or the "Company†) (NYSE: AI) securities between February 26, 2025 and August 8, 2025, inclusive (the "Class Period†). C3.ai investors have until October 21, 2025 to file a lead plaintiff motion. IF YOU ARE AN INVESTOR WHO SUFFERED A LOSS IN C3.AI, INC. (AI), CONTACT THE LAW OFFICES OF HOWARD G. SMITH TO PARTICIPATE IN THE O. ...

[Special Note Regarding Forward-looking Statements](index=4&type=section&id=Special%20Note%20Regarding%20Forward-looking%20Statements) This section cautions investors that forward-looking statements in the 10-Q report are subject to risks, and actual results may differ [Forward-looking Statements Disclosure](index=4&type=section&id=Forward-looking%20Statements%20Disclosure) This section details forward-looking statements in the 10-Q report, emphasizing inherent risks and potential for actual results to vary - The report contains forward-looking statements regarding future results, business strategy, and technology, identifiable by words like 'anticipate,' 'expect,' 'will,' or 'would'[10](index=10&type=chunk) - Investors should not rely on these statements as predictions, as actual results may differ materially due to risks and uncertainties outlined in the 'Risk Factors' section[11](index=11&type=chunk) - Key forward-looking statements concern revenue, expenses, profitability, customer acquisition/retention, C3 AI Software usage (including C3 Agentic AI Platform, C3 AI Applications, C3 Generative AI), and market growth rates[12](index=12&type=chunk) [Selected Risks Affecting Our Business](index=6&type=section&id=Selected%20Risks%20Affecting%20Our%20Business) This section summarizes key risks that could materially affect C3.ai's business, including losses, customer dependence, competition, and evolving AI technology [Summary of Key Business Risks](index=6&type=section&id=Summary%20of%20Key%20Business%20Risks) This section outlines selected risks that could materially affect C3.ai's business, encompassing financial, operational, and technological challenges - C3.ai has a history of **losses** and expects operating expenses to increase, making future profitability uncertain[20](index=20&type=chunk)[222](index=222&type=chunk) - A substantial portion of revenue has historically come from a **limited number of customers**, posing a risk if contracts are not renewed or relationships are impaired[20](index=20&type=chunk)[226](index=226&type=chunk) - The company faces intense competition, long and unpredictable sales cycles, and risks related to the market adoption of its C3 AI Software and rapid technological changes[20](index=20&type=chunk)[235](index=235&type=chunk)[242](index=242&type=chunk) - Risks also include macroeconomic uncertainties, stringent data privacy and security regulations, potential compromises of IT systems, and issues arising from the use of AI/ML technologies[20](index=20&type=chunk)[280](index=280&type=chunk)[292](index=292&type=chunk)[317](index=317&type=chunk) [Part I. Financial Information](index=8&type=section&id=Part%20I.%20Financial%20Information) This part presents C3.ai's unaudited condensed consolidated financial statements for the period ended July 31, 2025, with detailed notes on accounting policies and performance [Item 1. Financial Statements (Unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents C3.ai's unaudited condensed consolidated financial statements for Q1 2025, including core statements and detailed notes [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of C3.ai's financial position, detailing assets, liabilities, and equity as of July 31, 2025, and April 30, 2025 Condensed Consolidated Balance Sheets (in thousands) | Metric | July 31, 2025 | April 30, 2025 | | :----------------------------------- | :------------ | :------------- | | Total current assets | $851,113 | $904,252 | | Total assets | $968,739 | $1,025,882 | | Total current liabilities | $111,291 | $131,884 | | Total liabilities | $169,915 | $187,579 | | Total stockholders' equity | $798,824 | $838,303 | | Accumulated deficit | $(1,495,404) | $(1,378,635) | - Total assets decreased from **$1,025,882 thousand** as of April 30, 2025, to **$968,739 thousand** as of July 31, 2025[29](index=29&type=chunk) - Accumulated deficit increased from **$(1,378,635) thousand** to **$(1,495,404) thousand**, reflecting ongoing losses[29](index=29&type=chunk) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents C3.ai's financial performance, detailing revenue, expenses, and net loss for the three months ended July 31, 2025, and 2024 Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Total revenue | $70,261 | $87,213 | | Gross profit | $26,444 | $52,166 | | Loss from operations | $(124,819) | $(72,586) | | Net loss | $(116,769) | $(62,827) | | Net loss per share (basic and diluted) | $(0.86) | $(0.50) | - Total revenue decreased by **19%** from **$87,213 thousand** in Q1 2024 to **$70,261 thousand** in Q1 2025[31](index=31&type=chunk)[184](index=184&type=chunk) - Net loss increased significantly from **$(62,827) thousand** in Q1 2024 to **$(116,769) thousand** in Q1 2025[31](index=31&type=chunk) - Net loss per share (basic and diluted) worsened from **$(0.50)** to **$(0.86)** year-over-year[31](index=31&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section details C3.ai's comprehensive loss, including net loss and other comprehensive income/loss, for the three months ended July 31, 2025, and 2024 Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(116,769) | $(62,827) | | Other comprehensive (loss) income | $(595) | $931 | | Comprehensive loss | $(117,364) | $(61,983) | - Comprehensive loss increased from **$(61,983) thousand** in Q1 2024 to **$(117,364) thousand** in Q1 2025, primarily due to the higher net loss and an unrealized loss on marketable securities[33](index=33&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in C3.ai's stockholders' equity, including additional paid-in capital and accumulated deficit, for the period ended July 31, 2025 Changes in Stockholders' Equity (in thousands) | Metric | April 30, 2025 Balance | July 31, 2025 Balance | | :----------------------------------- | :--------------------- | :-------------------- | | Total Stockholders' Equity | $838,303 | $798,824 | | Additional Paid-In Capital | $2,216,284 | $2,294,166 | | Accumulated Deficit | $(1,378,635) | $(1,495,404) | - Total stockholders' equity decreased from **$838,303 thousand** to **$798,824 thousand**, driven by the net loss of **$(116,769) thousand**, partially offset by stock-based compensation expense of **$54,553 thousand**[35](index=35&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents C3.ai's cash flow activities from operations, investing, and financing for the three months ended July 31, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(33,535) | $8,042 | | Net cash used in investing activities | $(51,171) | $(41,550) | | Net cash provided by financing activities | $1,289 | $182 | | Net decrease in cash, cash equivalents and restricted cash | $(83,417) | $(33,326) | | Cash, cash equivalents and restricted cash at end of period | $93,507 | $146,386 | - Net cash used in operating activities increased to **$(33,535) thousand** in Q1 2025 from **$8,042 thousand** provided in Q1 2024, primarily due to higher payroll and contractor costs and vendor payments[38](index=38&type=chunk)[202](index=202&type=chunk) - Net cash used in investing activities increased to **$(51,171) thousand** in Q1 2025, mainly due to purchases of marketable securities (**$206,492 thousand**) partially offset by maturities and sales (**$156,081 thousand**)[38](index=38&type=chunk)[203](index=203&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies and specific financial items [1. Summary of Business and Significant Accounting Policies](index=13&type=section&id=1.%20Summary%20of%20Business%20and%20Significant%20Accounting%20Policies) This section outlines C3.ai's business model as an enterprise AI software provider and details its significant accounting policies - C3.ai is an enterprise AI software provider offering the C3 Agentic AI Platform, C3 AI Applications, and C3 Generative AI[40](index=40&type=chunk) - The company operates as a **single operating and reportable segment**, with the CEO as the chief operating decision maker[46](index=46&type=chunk) - New accounting standards (ASU 2023-09, ASU 2024-03, ASU 2025-05) are being evaluated for future impact, with adoption required in fiscal years 2026, 2028, and 2027 respectively[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) [2. Revenue](index=14&type=section&id=2.%20Revenue) This section details C3.ai's revenue streams, including geographical distribution and professional services, and highlights customer concentration Revenue by Geographical Region (in thousands) | Region | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | | North America | $64,408 | $77,128 | | Europe, the Middle East and Africa | $5,619 | $9,390 | | Asia Pacific | $21 | $247 | | Rest of World | $213 | $448 | | Total revenue | $70,261 | $87,213 | - The United States accounted for **91%** of revenue in Q1 2025, up from **87%** in Q1 2024, indicating increased domestic concentration[51](index=51&type=chunk) Professional Services Revenue (in thousands) | Service Type | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | | Prioritized engineering services | $8,663 | $10,649 | | Service fees | $1,297 | $3,108 | | Total professional services revenue | $9,960 | $13,757 | - Remaining performance obligations (RPO) were approximately **$223.2 million** as of July 31, 2025, with **$121.3 million** expected to be recognized in the next 12 months[59](index=59&type=chunk) - Customer concentration remains high, with three separate Customer-Entities accounting for **14%**, **13%**, and **11%** of revenue in Q1 2025[60](index=60&type=chunk) [3. Fair Value Measurements](index=16&type=section&id=3.%20Fair%20Value%20Measurements) This section details the fair value measurements of C3.ai's financial instruments, primarily cash equivalents and marketable securities Fair Value of Financial Instruments (in thousands) | Asset Type | July 31, 2025 (Total) | April 30, 2025 (Total) | | :----------------------------------- | :-------------------- | :--------------------- | | Money market funds | $50,155 | $87,872 | | Commercial paper (cash equivalents) | $7,854 | $29,122 | | U.S. treasury securities | $29,776 | $15,482 | | Certificates of deposit | $85,981 | $76,518 | | U.S. government agencies securities | $62,038 | $57,138 | | Commercial paper (marketable securities) | $135,971 | $113,787 | | Corporate debt securities | $317,191 | $315,405 | | Total cash equivalents and available-for-sale marketable securities | $688,966 | $696,339 | - The majority of financial instruments are measured at fair value using **Level 2 inputs**, based on third-party pricing services and observable market data[64](index=64&type=chunk) [4. Cash Equivalents and Marketable Securities](index=17&type=section&id=4.%20Cash%20Equivalents%20and%20Marketable%20Securities) This section provides a detailed breakdown of C3.ai's cash equivalents and available-for-sale marketable securities, including their fair values Cash Equivalents and Available-for-Sale Marketable Securities (in thousands) | Category | Amortized Cost (July 31, 2025) | Estimated Fair Value (July 31, 2025) | | :----------------------------------- | :----------------------------- | :----------------------------------- | | Cash equivalents | $58,009 | $58,009 | | Available-for-sale marketable securities | $631,029 | $630,957 | | Total | $689,038 | $688,966 | - As of July 31, 2025, the company held **$630.9 million** in available-for-sale marketable securities, with **$481.4 million** maturing within one year[67](index=67&type=chunk) - The company had **146 marketable securities** in an unrealized loss position as of July 31, 2025, totaling **$(330) thousand** in unrealized losses, but these were not deemed other-than-temporarily impaired[69](index=69&type=chunk) [5. Balance Sheet Details](index=18&type=section&id=5.%20Balance%20Sheet%20Details) This section provides detailed breakdowns of specific balance sheet accounts, including property and equipment, and accrued compensation Property and Equipment, Net (in thousands) | Category | July 31, 2025 | April 30, 2025 | | :----------------------------------- | :------------ | :------------- | | Property and equipment, gross | $105,703 | $105,055 | | Less: accumulated depreciation and amortization | $(29,103) | $(25,757) | | Property and equipment, net | $76,600 | $79,298 | Accrued Compensation and Employee Benefits (in thousands) | Category | July 31, 2025 | April 30, 2025 | | :----------------------------------- | :------------ | :------------- | | Accrued bonus | $25,277 | $37,468 | | Accrued vacation | $5,211 | $4,950 | | Accrued payroll taxes and benefits | $3,631 | $2,033 | | Accrued commissions | $6,529 | $7,244 | | ESPP contributions | $4,106 | $1,593 | | Other | $642 | $580 | | Total | $45,396 | $53,868 | - Accrued compensation and employee benefits decreased by **$8.5 million**, primarily due to a reduction in accrued bonus[74](index=74&type=chunk) [6. Commitments and Contingencies](index=20&type=section&id=6.%20Commitments%20and%20Contingencies) This section outlines C3.ai's significant contractual commitments and ongoing legal proceedings, including class action lawsuits and a trade secret dispute - As of July 31, 2025, C3.ai had non-cancellable purchase commitments of **$409.6 million** for cloud hosting and **$96.9 million** for professional services, due over the next one to five years[76](index=76&type=chunk) - The company is involved in multiple securities class action and shareholder derivative lawsuits, with new complaints filed in August 2025 related to alleged misstatements about the Executive Chairman's health and its impact on business[78](index=78&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - C3.ai filed a lawsuit against Enel in Italy seeking **€2.1 billion** in compensatory damages for misappropriation of trade secrets and breach of contract, with a pretrial conference scheduled for September 18, 2025[84](index=84&type=chunk) [7. Stockholders' Equity](index=22&type=section&id=7.%20Stockholders'%20Equity) This section details C3.ai's authorized common stock, including Class A and Class B shares, and their respective voting rights and conversion terms - The company has authorized **1,000,000,000 shares** of Class A common stock (one vote per share) and **3,500,000 shares** of Class B common stock (50 votes per share)[87](index=87&type=chunk) - Class B common stock can be converted to Class A at the stockholder's option or automatically upon certain events, such as six months after Mr. Siebel's death/incapacity or departure from service, or December 11, 2040[89](index=89&type=chunk) [8. Stock-Based Compensation](index=23&type=section&id=8.%20Stock-Based%20Compensation) This section details C3.ai's stock option and RSU activity, including outstanding options, unvested balances, and total stock-based compensation expense Stock Option Activity (in thousands, except per share data) | Metric | As of April 30, 2025 | As of July 31, 2025 | | :----------------------------------- | :------------------- | :------------------ | | Options Outstanding | 28,477 | 28,216 | | Weighted Average Exercise Price | $15.13 | $15.21 | | Aggregate Intrinsic Value | $195,923 | $235,602 | - Unrecognized compensation cost for stock options was **$48.0 million** as of July 31, 2025, to be recognized over an estimated weighted-average period of **2.0 years**[91](index=91&type=chunk) RSU Activity (in thousands, except per share data) | Metric | As of April 30, 2025 | As of July 31, 2025 | | :----------------------------------- | :------------------- | :------------------ | | Unvested Balance | 23,774 | 27,692 | | Weighted Average Grant Date Fair Value Per Share | $25.99 | $25.39 | - Unrecognized stock-based compensation expense for RSUs was **$651.6 million** as of July 31, 2025, to be recognized over a weighted-average period of **3.9 years**[100](index=100&type=chunk) Total Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Cost of subscription | $8,622 | $7,694 | | Cost of professional services | $668 | $714 | | Sales and marketing | $24,181 | $18,833 | | Research and development | $19,323 | $18,431 | | General and administrative | $11,981 | $9,011 | | Total stock-based compensation expense | $64,775 | $54,683 | [9. Income Taxes](index=26&type=section&id=9.%20Income%20Taxes) This section details C3.ai's income tax expense, primarily from foreign jurisdictions, and the maintenance of a full valuation allowance on U.S. deferred tax assets - Income tax expense was **$0.3 million** for both Q1 2025 and Q1 2024, primarily from foreign jurisdictions[106](index=106&type=chunk) - A full valuation allowance is maintained on substantially all U.S. deferred tax assets due to a history of losses[106](index=106&type=chunk) [10. Net Loss Per Share Attributable to Common Stockholders](index=26&type=section&id=10.%20Net%20Loss%20Per%20Share%20Attributable%20to%20Common%20Stockholders) This section presents the calculation of C3.ai's net loss per share, basic and diluted, for the three months ended July 31, 2025, and 2024 Net Loss Per Share (in thousands, except per share data) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net loss attributable to common stockholders | $(116,769) | $(62,827) | | Weighted-average shares (basic and diluted) | 135,375 | 124,979 | | Basic and diluted net loss per share | $(0.86) | $(0.50) | - Basic and diluted net loss per share are the same due to the company being in a net loss position[107](index=107&type=chunk) - Potential common stock equivalents (stock options, RSUs, ESPP) were excluded from diluted EPS calculation as they were anti-dilutive[107](index=107&type=chunk)[108](index=108&type=chunk) [11. Related Party Transactions](index=27&type=section&id=11.%20Related%20Party%20Transactions) This section discloses C3.ai's related party transactions, specifically a sublease agreement with First Virtual Group, Inc., involving the Executive Chairman - C3.ai has a sublease agreement with First Virtual Group, Inc., where Thomas M. Siebel (Executive Chairman) serves as Chairman of the subtenant[109](index=109&type=chunk) - The monthly base rent for the sublease was approximately **$8,608** through September 30, 2023, increasing annually thereafter[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on C3.ai's financial condition and results for Q1 2025, covering business, strategy, performance factors, and liquidity [Overview](index=28&type=section&id=Overview) This section provides a high-level overview of C3.ai's business as an Enterprise AI application software company and its core offerings - C3 AI is an Enterprise AI application software company, offering the C3 Agentic AI Platform, C3 AI Applications, and C3 Generative AI[112](index=112&type=chunk)[115](index=115&type=chunk) - These solutions aim to simplify and accelerate Enterprise AI application development, deployment, and administration through a patented model-driven architecture[113](index=113&type=chunk) [How We Generate Revenue](index=28&type=section&id=How%20We%20Generate%20Revenue) This section explains C3.ai's revenue generation model, primarily through subscription sales and professional services, including a consumption-based pricing model - Revenue is primarily generated from **subscription sales (86% of total revenue in Q1 2025)**, recognized ratably or on a usage basis[114](index=114&type=chunk)[116](index=116&type=chunk) - Professional services, including prioritized engineering and service fees, accounted for **14% of total revenue** in Q1 2025[117](index=117&type=chunk) - A consumption-based pricing model was introduced in Q1 2023, allowing customers to pay based on monthly vCPU and vGPU hours after an initial production deployment phase[116](index=116&type=chunk) [Remaining Performance Obligations](index=29&type=section&id=Remaining%20Performance%20Obligations) This section details C3.ai's remaining performance obligations (RPO), including non-cancellable commitments and expected recognition timelines - Remaining performance obligations (RPO) were **$223.2 million** as of July 31, 2025, down from **$235.1 million** as of April 30, 2025[121](index=121&type=chunk) - RPO includes **$67.4 million** of non-cancellable commitments where product selection is yet to be determined[121](index=121&type=chunk) - Approximately **$121.3 million** of RPO is expected to be recognized over the next 12 months[59](index=59&type=chunk) [Go-to-Market Strategy](index=30&type=section&id=Go-to-Market%20Strategy) This section outlines C3.ai's go-to-market strategy, focusing on large customers, consumption-based pricing, and leveraging industry and cloud partners - The strategy focuses on large 'lighthouse customers' in industries like oil & gas, utilities, and aerospace, serving as proof points for broader adoption[124](index=124&type=chunk) - A consumption-based pricing model was introduced in Q1 2023 to attract new customers with smaller initial contract sizes and accelerate growth[125](index=125&type=chunk)[129](index=129&type=chunk) - The company leverages industry partners (e.g., Baker Hughes, Booz Allen Hamilton), hyperscale cloud providers (Microsoft Azure, AWS, Google Cloud), and consulting firms to expand market reach[130](index=130&type=chunk) [Key Business Metric](index=30&type=section&id=Key%20Business%20Metric) This section identifies Initial Production Deployment count as a key business metric, reflecting market penetration and customer acquisition trends - Initial Production Deployment count is a key business metric, reflecting market penetration and customer acquisition trends[132](index=132&type=chunk) - The company executed **28 initial production deployment agreements** in Q1 2025, a decrease from **52** in Q1 2024[132](index=132&type=chunk) [Factors Affecting Our Performance](index=31&type=section&id=Factors%20Affecting%20Our%20Performance) This section discusses various internal and external factors influencing C3.ai's financial performance, including customer dynamics, organizational changes, and macroeconomic conditions [Customer Acquisition, Retention, and Expansion](index=31&type=section&id=Customer%20Acquisition,%20Retention,%20and%20Expansion) This section focuses on C3.ai's strategies for growing its customer base, retaining existing clients, and expanding software usage through new applications - Focus on growing customer base, retaining existing customers, and expanding usage of C3 AI Software through new use cases and increased runtime[134](index=134&type=chunk) - The average total subscription contract value and revenue from 'lighthouse customers' as a percentage of total revenue are decreasing due to sales organization restructuring and market-partner ecosystem expansion[137](index=137&type=chunk) [Restructuring of Sales and Services Organization](index=32&type=section&id=Restructuring%20of%20Sales%20and%20Services%20Organization) This section addresses the disruptive impact of the sales and services organization restructuring and the Executive Chairman's health issues on financial performance - A restructuring of the sales and services organization in Q1 2026 had a disruptive effect on financial performance[139](index=139&type=chunk) - The Executive Chairman's unanticipated health issues also negatively impacted sales results in Q1 2026[139](index=139&type=chunk) [Appointment of Chief Executive Officer and CEO Transition](index=32&type=section&id=Appointment%20of%20Chief%20Executive%20Officer%20and%20CEO%20Transition) This section details the appointment of Stephen Ehikian as CEO, succeeding Mr. Siebel, and highlights the importance of a successful leadership transition - Stephen Ehikian was appointed CEO, succeeding Mr. Siebel (who remains Executive Chairman), effective September 1, 2025[140](index=140&type=chunk) - Successful transition and integration of the new CEO are critical for executing the business strategy[140](index=140&type=chunk) [C3 Generative AI](index=32&type=section&id=C3%20Generative%20AI) This section highlights C3 Generative AI's role in diversifying the customer base, its foundational patent, and new functionalities for enterprise AI solutions - C3 Generative AI, launched in early fiscal year 2024, offers **28 domain-specific generative AI solutions**, diversifying the customer base and market reach[142](index=142&type=chunk)[143](index=143&type=chunk) - The company was awarded a foundational U.S. patent (No. **12,111,859**) in October 2024 for its generative AI agentic technology, detailing an AI Orchestrator, autonomy, multimodal model integration, natural language summarization, traceability, and security[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) - New functionalities include Omni-Modal Parsing at Scale, Dynamic Planning Agent with Multi-Agent Collaboration, Easy Agent and Tool Authoring, and On-the-Fly Custom Visualizations[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) [Technology Innovation](index=33&type=section&id=Technology%20Innovation) This section emphasizes C3.ai's continued investment in R&D to enhance its software, expand accounts, and attract new customers, with expected long-term spending trends - Continued investment in R&D is expected to extend C3 AI Software, expand existing accounts, and attract new customers[155](index=155&type=chunk) - Research and development spending is anticipated to remain high in the coming years but decline as a percentage of total revenue over the longer term[156](index=156&type=chunk) [Brand Awareness](index=34&type=section&id=Brand%20Awareness) This section outlines planned investments in brand awareness, market education, and thought leadership, particularly for generative AI, with anticipated long-term marketing spend trends - Significant investments in brand awareness, market education, strategic paid media, and thought leadership are planned, especially for generative AI[157](index=157&type=chunk) - Marketing spend is expected to decline as a percentage of total revenue in the long term as the brand and reputation are established[158](index=158&type=chunk) [Grow Our Go-to-Market and Partnership Ecosystem](index=34&type=section&id=Grow%20Our%20Go-to-Market%20and%20Partnership%20Ecosystem) This section highlights the expansion of strategic partnerships with major cloud providers and consulting firms to enhance market reach and accelerate Enterprise AI adoption - Expansion of strategic partners, including Microsoft, Baker Hughes, AWS, and Google, is crucial for attracting new customers and global reach[159](index=159&type=chunk) - New global alliance agreements were formed with Microsoft (September 2024) and McKinsey & Company (January 2025) to accelerate Enterprise AI adoption and transformation[160](index=160&type=chunk)[161](index=161&type=chunk) [International Expansion](index=34&type=section&id=International%20Expansion) This section details C3.ai's plans for international expansion through direct sales and strategic partners, noting the current contribution of international customers to total revenue - The company plans to continue investing in international expansion by increasing direct sales teams and leveraging strategic partners[162](index=162&type=chunk) - International customers accounted for **9% of total revenue** in Q1 2025, down from **13%** in Q1 2024[162](index=162&type=chunk) [Impact of Macroeconomic Conditions](index=35&type=section&id=Impact%20of%20Macroeconomic%20Conditions) This section addresses the adverse impact of macroeconomic conditions and geopolitical instability on C3.ai's business, potentially leading to budget rationalization and operational disruptions - Adverse macroeconomic conditions (labor shortages, inflation, high interest rates) have impacted and may continue to impact the business, leading customers to optimize consumption and rationalize budgets[163](index=163&type=chunk) - Geopolitical instability, potential government shutdowns, and trade tensions could also negatively affect operations and performance[164](index=164&type=chunk) [Components of Results of Operations](index=35&type=section&id=Components%20of%20Results%20of%20Operations) This section breaks down the various components contributing to C3.ai's results of operations, including revenue, cost of revenue, gross profit, and operating expenses [Revenue (Components)](index=35&type=section&id=Revenue%20(Components)) This section defines C3.ai's revenue components, including subscription revenue from software licenses and SaaS, and professional services revenue from consulting and engineering - Subscription revenue includes software licenses, SaaS offerings, COE support, initial production deployments, and hosting charges, with revenue recognized ratably or on a usage basis[166](index=166&type=chunk) - Professional services revenue includes consulting, training, paid implementation, and prioritized engineering services, typically recognized over time as services are performed[167](index=167&type=chunk) [Cost of Revenue (Components)](index=35&type=section&id=Cost%20of%20Revenue%20(Components)) This section details the components of C3.ai's cost of revenue, encompassing costs for subscription services and professional services, primarily payroll and third-party resources - Cost of subscription revenue primarily consists of compensation for production/support staff, third-party system integration partners, and hosting costs[168](index=168&type=chunk) - Cost of professional services revenue includes compensation for professional service and prioritized engineering personnel, and third-party system integration partners[169](index=169&type=chunk) [Gross Profit and Gross Margin (Components)](index=36&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20(Components)) This section defines gross profit and gross margin, explaining how they are calculated and the factors that can cause their fluctuations - Gross profit is total revenue minus total cost of revenue; gross margin is gross profit as a percentage of total revenue[170](index=170&type=chunk) - Gross margin can fluctuate based on product mix, customer size, industry, geography, and the use of internal vs. third-party resources for professional services[170](index=170&type=chunk) [Operating Expenses (Components)](index=36&type=section&id=Operating%20Expenses%20(Components)) This section outlines C3.ai's operating expenses, including sales and marketing, R&D, and G&A, and their expected trends relative to business growth and revenue - Operating expenses include sales and marketing, research and development, and general and administrative expenses, all expected to increase with business growth[171](index=171&type=chunk) - Sales and marketing expenses are expected to remain high in the near-term due to hiring, but decline as a percentage of revenue over time[173](index=173&type=chunk) - R&D investments will continue for product innovation, with spending as a percentage of revenue anticipated to decline over a longer horizon[175](index=175&type=chunk) - General and administrative expenses are expected to increase in absolute dollars but decline as a percentage of revenue long-term due to economies of scale[177](index=177&type=chunk) [Interest Income (Components)](index=37&type=section&id=Interest%20Income%20(Components)) This section describes C3.ai's interest income, primarily derived from cash, cash equivalents, and marketable securities, and its sensitivity to market interest rates - Interest income is primarily from cash, cash equivalents, and marketable securities, fluctuating with balances and market interest rates[178](index=178&type=chunk) [Other Income (Expense), Net (Components)](index=37&type=section&id=Other%20Income%20(Expense),%20Net%20(Components)) This section details C3.ai's other income (expense), net, including foreign currency exchange gains/losses and realized gains/losses on marketable securities - Other income (expense), net, includes foreign currency exchange gains/losses and realized gains/losses on marketable securities, expected to fluctuate with exchange rates[179](index=179&type=chunk) [Provision for Income Taxes (Components)](index=37&type=section&id=Provision%20for%20Income%20Taxes%20(Components)) This section explains C3.ai's income tax provision, an estimate based on various tax rates, credits, and deductions, and the impact of a full valuation allowance - Income tax provision is an estimate based on federal, state, and foreign tax rates, adjusted for credits, deductions, and valuation allowances[180](index=180&type=chunk) - A full valuation allowance is maintained on U.S. deferred tax assets due to a history of losses[180](index=180&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of C3.ai's financial performance for the three months ended July 31, 2025, versus the prior year, across key operational metrics [Revenue (Comparison)](index=39&type=section&id=Revenue%20(Comparison)) This section compares C3.ai's subscription and professional services revenue for Q1 2025 and Q1 2024, highlighting year-over-year changes and customer contributions Revenue Comparison (in thousands) | Category | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | $ Change | % Change | | :------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Subscription | $60,301 | $73,456 | $(13,155) | (18)% | | Professional services | $9,960 | $13,757 | $(3,797) | (28)% | | Total revenue | $70,261 | $87,213 | $(16,952) | (19)% | - Subscription revenue decreased by **18% YoY**, with new customers contributing **32%** of subscription revenue in Q1 2025 (vs. **19%** in Q1 2024)[184](index=184&type=chunk) - Professional services revenue decreased by **28% YoY**, mainly due to a **$2.0 million** decrease in prioritized engineering services and a **$1.8 million** decrease in other professional services[185](index=185&type=chunk) [Cost of Revenue (Comparison)](index=39&type=section&id=Cost%20of%20Revenue%20(Comparison)) This section compares C3.ai's cost of subscription and professional services revenue for Q1 2025 and Q1 2024, detailing the primary drivers of change Cost of Revenue Comparison (in thousands) | Category | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | $ Change | % Change | | :------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Subscription | $41,481 | $33,292 | $8,189 | 25% | | Professional services | $2,336 | $1,755 | $581 | 33% | | Total cost of revenue | $43,817 | $35,047 | $8,770 | 25% | - Cost of subscription revenue increased by **25% YoY**, primarily due to higher payroll and contractor costs (**$7.1 million**) and data center costs (**$0.3 million**)[186](index=186&type=chunk) - Cost of professional services revenue increased by **33% YoY**, mainly due to higher payroll and contractor costs (**$0.5 million**)[187](index=187&type=chunk) [Gross Profit and Gross Margin (Comparison)](index=39&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20(Comparison)) This section compares C3.ai's gross profit and gross margin for Q1 2025 and Q1 2024, analyzing the factors contributing to the year-over-year decline Gross Profit and Gross Margin Comparison (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | $ Change | % Change | | :------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Gross profit | $26,444 | $52,166 | $(25,722) | (49)% | | Subscription margin | 31% | 55% | -24% | | | Professional services margin | 77% | 87% | -10% | | | Total gross margin | 38% | 60% | -22% | | - Total gross profit decreased by **49% YoY**, and total gross margin declined from **60%** to **38%**[188](index=188&type=chunk) - Subscription margin decreased due to lower subscription revenue and higher payroll/contractor costs for initial production deployment projects[189](index=189&type=chunk) - Professional services margin decreased due to a decline in prioritized engineering service projects[190](index=190&type=chunk) [Operating Expenses (Comparison)](index=41&type=section&id=Operating%20Expenses%20(Comparison)) This section compares C3.ai's sales and marketing, R&D, and G&A expenses for Q1 2025 and Q1 2024, identifying the key drivers of their year-over-year changes Operating Expenses Comparison (in thousands) | Category | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | $ Change | % Change | | :------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Sales and marketing | $62,513 | $52,125 | $10,388 | 20% | | Research and development | $64,651 | $52,927 | $11,724 | 22% | | General and administrative | $24,099 | $19,700 | $4,399 | 22% | | Total operating expenses | $151,263 | $124,752 | $26,511 | 21% | - Sales and marketing expenses increased by **20% YoY**, driven by higher payroll costs (**$15.1 million**) and increased stock-based compensation, partially offset by lower advertising (**$6.0 million**)[191](index=191&type=chunk) - Research and development expenses increased by **22% YoY**, primarily due to higher payroll and contractor costs (**$9.4 million**) and data center costs (**$1.4 million**)[192](index=192&type=chunk) - General and administrative expenses increased by **22% YoY**, mainly due to higher payroll costs (**$4.0 million**), increased stock-based compensation, and higher professional services costs (**$0.7 million**)[193](index=193&type=chunk) [Interest Income (Comparison)](index=41&type=section&id=Interest%20Income%20(Comparison)) This section compares C3.ai's interest income for Q1 2025 and Q1 2024, attributing the year-over-year decrease to prevailing interest rates and investment volume Interest Income Comparison (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | $ Change | % Change | | :------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Interest income | $8,218 | $10,003 | $(1,785) | (18)% | - Interest income decreased by **18% YoY**, primarily due to higher prevailing interest rates on marketable securities and higher investment volume in the prior year[194](index=194&type=chunk) [Other Income (Expense), Net (Comparison)](index=41&type=section&id=Other%20Income%20(Expense),%20Net%20(Comparison)) This section compares C3.ai's other income (expense), net, for Q1 2025 and Q1 2024, highlighting the significant increase driven by foreign currency gains Other Income (Expense), Net Comparison (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | $ Change | % Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Other income (expense), net | $132 | $28 | $104 | 371% | - Other income (expense), net, increased significantly by **371% YoY**, mainly due to higher foreign currency gains on Euro-denominated balances[195](index=195&type=chunk) [Provision for Income Taxes (Comparison)](index=42&type=section&id=Provision%20for%20Income%20Taxes%20(Comparison)) This section compares C3.ai's provision for income taxes for Q1 2025 and Q1 2024, noting the slight increase primarily from foreign and state tax expense Provision for Income Taxes Comparison (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | $ Change | % Change | | :------------------- | :------------------------------- | :------------------------------- | :------- | :------- | | Provision for income taxes | $300 | $272 | $28 | 10% | - The provision for income taxes slightly increased by **10% YoY**, primarily related to foreign and state tax expense[196](index=196&type=chunk) [Non-GAAP Financial Measure](index=42&type=section&id=Non-GAAP%20Financial%20Measure) This section presents free cash flow as a non-GAAP measure, providing a reconciliation and evaluating C3.ai's liquidity and ability to fund future operations - Free cash flow is presented as a non-GAAP measure to evaluate liquidity and ability to fund future operations[197](index=197&type=chunk) Free Cash Flow Reconciliation (in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(33,535) | $8,042 | | Less: Purchases of property and equipment | $(760) | $(924) | | Free cash flow | $(34,295) | $7,118 | - Free cash flow decreased significantly from **$7,118 thousand** provided in Q1 2024 to **$(34,295) thousand** used in Q1 2025[198](index=198&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses C3.ai's liquidity position, including cash, cash equivalents, and marketable securities, and discusses its ability to fund operations despite accumulated deficits - As of July 31, 2025, cash and cash equivalents were **$80.9 million**, and marketable securities were **$631.0 million**[199](index=199&type=chunk) - The company had an accumulated deficit of **$1.5 billion** as of July 31, 2025, and expects continued operating losses and negative cash flows in the near future[199](index=199&type=chunk) - Existing cash, cash equivalents, and marketable securities are believed to be sufficient for at least the next 12 months, but additional financing may be required for strategic initiatives[200](index=200&type=chunk) Cash Flow Summary (in thousands) | Category | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash (used in) provided by operating activities | $(33,535) | $8,042 | | Net cash used in investing activities | $(51,171) | $(41,550) | | Net cash provided by financing activities | $1,289 | $182 | | Net decrease in cash, cash equivalents, and restricted cash | $(83,417) | $(33,326) | [Contractual Obligations and Commitments](index=44&type=section&id=Contractual%20Obligations%20and%20Commitments) This section outlines C3.ai's contractual obligations, primarily operating lease commitments and non-cancellable purchase commitments for cloud hosting and professional services - Contractual obligations primarily include operating lease commitments and non-cancellable purchase commitments for cloud hosting and professional services[206](index=206&type=chunk) - No material changes in contractual obligations and commitments since April 30, 2025, other than in the ordinary course of business[207](index=207&type=chunk) [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses the critical accounting policies and estimates that require significant judgment in preparing C3.ai's financial statements - The preparation of financial statements requires significant estimates and assumptions, which could differ from actual results[208](index=208&type=chunk) - No material changes to critical accounting policies and estimates compared to the Annual Report on Form 10-K for fiscal year ended April 30, 2025[209](index=209&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses C3.ai's exposure to market risks, primarily from foreign currency and interest rate fluctuations, and addresses inflation risk [Interest Rate Risk](index=46&type=section&id=Interest%20Rate%20Risk) This section assesses C3.ai's exposure to interest rate risk on its cash, cash equivalents, and marketable securities portfolio - As of July 31, 2025, cash, cash equivalents, and marketable securities totaled **$711.9 million**[212](index=212&type=chunk) - A hypothetical **10% change** in interest rates would not have a material impact on the value of the company's cash equivalents or marketable securities portfolio[212](index=212&type=chunk) [Foreign Currency Exchange Risk](index=46&type=section&id=Foreign%20Currency%20Exchange%20Risk) This section discusses C3.ai's exposure to foreign currency exchange risk, particularly from Euro-denominated sales, and the potential impact of rate changes - Approximately **5% of sales** in Q1 2025 and **8%** in Q1 2024 were denominated in euros, exposing the company to foreign currency risk[213](index=213&type=chunk) - A hypothetical **10% change** in foreign currency exchange rates could have a material impact on the unaudited condensed financial statements[213](index=213&type=chunk) [Inflation Risk](index=46&type=section&id=Inflation%20Risk) This section addresses C3.ai's exposure to inflation risk, noting no material effect to date but potential future harm if cost increases cannot be offset - Inflation has not had a material effect on the business, results of operations, or financial condition to date[214](index=214&type=chunk) - Inability to offset higher costs from significant inflationary pressures through price increases could harm the business[214](index=214&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of C3.ai's disclosure controls and internal control over financial reporting, concluding their effectiveness as of July 31, 2025 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective at the reasonable assurance level as of July 31, 2025[215](index=215&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the period[216](index=216&type=chunk) - The effectiveness of internal controls is subject to inherent limitations, including judgment, human error, and the inability to eliminate misconduct completely[217](index=217&type=chunk) [Part II. Other Information](index=48&type=section&id=Part%20II.%20Other%20Information) This part provides additional information not covered in the financial statements, including legal proceedings, risk factors, and other disclosures [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to legal proceedings detailed in Note 6, confirming no other material litigation that would adversely affect C3.ai's business - Legal proceedings are detailed in Note 6, including securities class actions and shareholder derivative lawsuits[220](index=220&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - The company does not believe it is probable that these cases will result in an unfavorable outcome, but a material adverse impact is possible if an unfavorable outcome occurs[83](index=83&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This comprehensive section outlines various risks and uncertainties that could materially and adversely affect C3.ai's business, categorized by operational, international, tax, IP, and stock ownership [Risks Related to Our Business and Our Industry](index=48&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Our%20Industry) This section details risks inherent to C3.ai's business and industry, including financial performance, customer dependence, competition, and technological changes - C3.ai has a history of **losses** and expects increased operating expenses, making future profitability uncertain[222](index=222&type=chunk) - Dependence on a **limited number of customers** means non-renewal or impairment of relationships could significantly impact revenue and remaining performance obligations[226](index=226&type=chunk) - The company faces intense competition, long and unpredictable sales cycles, and risks if the market for C3 AI Software fails to grow as expected or if technological changes are not addressed[235](index=235&type=chunk)[242](index=242&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk) - Restructuring of the sales organization and the CEO transition, along with macroeconomic uncertainties, have had and could continue to have adverse impacts[139](index=139&type=chunk)[140](index=140&type=chunk)[163](index=163&type=chunk)[259](index=259&type=chunk)[262](index=262&type=chunk)[278](index=278&type=chunk) - Stringent and evolving data privacy and security laws (e.g., GDPR, CCPA, EU AI Act) and potential security incidents pose significant compliance burdens, litigation risks, and reputational harm[280](index=280&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk)[289](index=289&type=chunk)[292](index=292&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[298](index=298&type=chunk) - Issues with AI/ML use, including flawed algorithms, biased datasets, or inaccurate outputs, could lead to reputational harm, liability, and increased regulatory scrutiny[317](index=317&type=chunk)[300](index=300&type=chunk) [Risks Related to Our International Operations](index=73&type=section&id=Risks%20Related%20to%20Our%20International%20Operations) This section outlines risks associated with C3.ai's international operations, including compliance challenges, geopolitical instability, and trade controls - International expansion subjects the company to increased business and economic risks, including challenges in recruiting, compliance with diverse laws (privacy, data protection, anti-corruption), and intellectual property protection[322](index=322&type=chunk)[326](index=326&type=chunk) - Geopolitical instability, trade protection policies, and export/import controls (e.g., U.S. export control and economic sanctions laws) could impair international competitiveness or lead to liability[323](index=323&type=chunk)[327](index=327&type=chunk)[329](index=329&type=chunk)[331](index=331&type=chunk) - Non-compliance with anti-corruption laws like the FCPA can lead to criminal/civil liability, fines, and reputational harm, especially with increased international sales and public sector engagement[332](index=332&type=chunk)[333](index=333&type=chunk)[335](index=335&type=chunk) [Risks Related to Taxes](index=76&type=section&id=Risks%20Related%20to%20Taxes) This section details tax-related risks, including potential liabilities for past sales taxes, changes in tax laws, and limitations on using net operating losses - The company may be subject to liabilities for past sales taxes, surcharges, and fees if taxing authorities challenge its nexus or product classification[336](index=336&type=chunk)[337](index=337&type=chunk) - Changes in accounting principles, tax laws (e.g., OBBBA), or administrative interpretations could increase tax liabilities[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk) - The ability to use net operating losses (NOLs) and other tax attributes to offset future taxable income may be limited by Section 382 of the Code or state-level suspensions[342](index=342&type=chunk) [Risks Related to Our Intellectual Property](index=77&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section addresses risks concerning C3.ai's intellectual property, including infringement claims, indemnity provisions, protection failures, and open-source software use - The company is subject to intellectual property rights claims and other litigation, which can be costly, time-consuming, and divert management attention[343](index=343&type=chunk) - Indemnity provisions in agreements expose the company to substantial liability for intellectual property infringement and other losses[344](index=344&type=chunk) - Failure to protect intellectual property rights (patents, trade secrets, trademarks) could diminish brand value and allow competitors to replicate C3 AI Software[345](index=345&type=chunk) - Use of third-party open source software could lead to litigation, requirements to disclose proprietary code, or increased security risks[347](index=347&type=chunk)[348](index=348&type=chunk) [Risks Related to Ownership of Our Class A Common Stock](index=80&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock) This section discusses risks related to C3.ai's Class A common stock, including price volatility, concentrated voting control, potential future sales, and anti-takeover provisions - The trading price of Class A common stock is volatile due to various factors, including market fluctuations, company performance, analyst coverage, and short seller reports[353](index=353&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk) - The dual-class common stock structure concentrates voting control with Class B holders (primarily Mr. Siebel), limiting other stockholders' influence on corporate matters[358](index=358&type=chunk)[359](index=359&type=chunk) - Substantial future sales of Class A and Class B common stock by existing holders could depress the market price[361](index=361&type=chunk) - Provisions in constituent documents and Delaware law may prevent or frustrate attempts to change management or acquire a controlling interest, potentially lowering the stock price[364](index=364&type=chunk)[365](index=365&type=chunk) [General Risks](index=85&type=section&id=General%20Risks) This section covers general risks, including the failure to maintain effective internal controls, costs of legal proceedings, and potential disruptions from catastrophic events - Failure to maintain effective disclosure controls and internal control over financial reporting could impair the ability to produce timely and accurate financial statements and comply with regulations[372](index=372&type=chunk)[375](index=375&type=chunk) - Involvement in legal proceedings can result in substantial costs, divert management attention, and may not be fully covered by insurance[377](index=377&type=chunk) - Catastrophic events (natural disasters, cyberattacks, war) could disrupt business operations, impair service delivery, or lead to critical data loss[378](index=378&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=87&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[379](index=379&type=chunk) [Item 3. Defaults Upon Senior Securities](index=87&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults upon senior securities to report - Not applicable; no defaults upon senior securities[380](index=380&type=chunk) [Item 4. Mine Safety Disclosures](index=87&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Not applicable; no mine safety disclosures[381](index=381&type=chunk) [Item 5. Other Information](index=87&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading arrangements adopted by directors and officers for company securities during Q1 2025 Rule 10b5-1 Trading Arrangements Adopted by Directors and Officers | Name and Position | Action | Date | Rule 10b5-1* | Total Shares of Common Stock to be Sold | Expiration Date | | :----------------------------------- | :----- | :----------- | :----------- | :-------------------------------------- | :-------------- | | Hitesh Lath, SVP and CFO | Adoption | June 11, 2025 | X | 159,031 | March 31, 2026 | | Robert Schilling, EVP and CCO | Adoption | June 18, 2025 | X | *** | March 31, 2026 | | Richard C. Levin, Director | Adoption | June 18, 2025 | X | 72,000 | June 30, 2026 | - The number of shares for Robert Schilling's plan is not yet determinable, as it covers shares released upon vesting of restricted stock unit awards[385](index=385&type=chunk) [Item 6. Exhibits](index=88&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate documents, certifications, and XBRL data - Exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, an Offer Letter for Robert Schilling, CEO/CFO certifications (302 and 906), and XBRL interactive data files[389](index=389&type=chunk) - Certifications under 18 U.S.C. Section 1350 (Exhibits 32.1 and 32.2) are not deemed filed with the SEC[387](index=387&type=chunk)

Core Viewpoint - A class action securities lawsuit has been filed against C3.ai, Inc. due to alleged securities fraud impacting investors between February 26, 2025, and August 8, 2025 [1][2] Company Performance - The lawsuit claims that C3.ai's management made misleading statements about the company's growth while concealing adverse facts, particularly regarding the health of its CEO, which affected the company's ability to close deals [2] - On August 8, 2025, C3.ai announced disappointing preliminary financial results for Q1 of fiscal 2026 and reduced its revenue guidance for the full fiscal year 2026, attributing the poor performance to "the reorganization with new leadership" and the CEO's health issues [2] - Following the announcement, C3.ai's stock price dropped from $22.13 per share on August 8, 2025, to $16.47 per share on August 11, 2025, marking a decline of approximately 25.58% in just one day [2] Legal Proceedings - Investors who suffered losses during the specified timeframe have until October 21, 2025, to request to be appointed as lead plaintiff in the lawsuit [3] - Class members may be entitled to compensation without any out-of-pocket costs or fees [3] Firm Background - Levi & Korsinsky, LLP has a strong track record in securities litigation, having secured hundreds of millions of dollars for shareholders over the past 20 years [4] - The firm has been recognized in ISS Securities Class Action Services' Top 50 Report for seven consecutive years as one of the leading securities litigation firms in the United States [4]

BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces an investigation on behalf of C3.ai, Inc. ("C3.ai†or the "Company†) (NYSE: AI) investors concerning the Company's possible violations of federal securities laws. IF YOU ARE AN INVESTOR WHO SUFFERED A LOSS IN C3.AI, INC. (AI), CONTACT THE LAW OFFICES OF HOWARD G. SMITH ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS. Contact the Law Offices of Howard G. Smith to discuss your legal rights by email at howardsmith@howa. ...

NEW YORK , Sept. 8, 2025 /PRNewswire/ -- The Gross Law Firm issues the following notice to shareholders of C3.ai, Inc. (NYSE: AI). ...

SAN DIEGO, Sept. 08, 2025 (GLOBE NEWSWIRE) -- Robbins Geller Rudman & Dowd LLP announces that the C3.ai class action lawsuit – captioned Liggett v. C3.ai, Inc., No. 25-cv-07129, and pending in the Northern District of California – seeks to represent purchasers or acquirers of C3.ai, Inc. (NYSE: AI) securities and charges C3.ai as well as certain of C3.ai’s top executives with violations of the Securities Exchange Act of 1934. If you suffered substantial losses and wish to serve as lead plaintiff of the C3.a ...

Core Viewpoint - C3.ai is facing significant disruptions leading to uncertainty, with a recent leadership change and disappointing financial results impacting investor sentiment [1][3][12]. Company Overview - Founded in 2009 by Thomas Siebel, C3.ai is a pioneer in enterprise AI, offering over 130 applications across 19 industries to facilitate AI adoption [1][2]. - The company provides customizable AI solutions that are increasingly popular among businesses lacking the resources to develop in-house software [5]. Recent Developments - Thomas Siebel stepped down as CEO due to health reasons, which has affected the sales process and deal closures [2][10]. - C3.ai reported $70.3 million in revenue for Q1 of fiscal 2026, significantly below the forecast of $100 million to $109 million, marking a 19% year-over-year decline [8]. - The company experienced a net loss of $116.7 million, an 85% increase compared to the previous year, due to an inability to cut costs quickly enough to match revenue declines [9]. Sales and Restructuring - The company underwent a complete restructuring of its sales department, which disrupted deal closures during the quarter [10]. - Management anticipates a potential revenue decline of up to 24% year-over-year for the current second quarter [11]. Leadership Transition - Stephen Ehikian has been appointed as the new CEO, bringing extensive experience from previous leadership roles and successful AI startups [12]. - Thomas Siebel will assist in the transition, particularly in sales processes, to minimize further disruptions [12]. Investment Considerations - C3.ai's stock is currently trading at a price-to-sales ratio of approximately 5.1, near a three-year low, suggesting a potentially attractive valuation [13]. - However, continued revenue decline may lead to further stock price decreases, and necessary cost-cutting measures could hinder growth [15].

Core Insights - C3.ai's shares fell 28.2% in August due to reduced guidance and the replacement of its CEO [1] - The company pre-announced fiscal first-quarter revenue of approximately $70.3 million, missing initial guidance of about $104.5 million by 30% [2] - Adjusted operating losses were reported at roughly negative $57.8 million, significantly worse than the initial guidance of negative $28.5 million [2] Management Changes - Former CEO Thomas Siebel cited health issues that affected his presence at sales meetings, impacting deal closures [3] - C3.ai announced a revamp of its sales organization, including four new hires and one promotion [4] - Stephen Ehikian was appointed as the new CEO, while Siebel remains as executive chairman [4] Financial Performance - C3.ai's stock is down 55% year-to-date, reflecting investor concerns following the significant revenue miss and leadership change [6] - The company maintains a strong balance sheet with $711 million in cash and no debt [6] - Despite the challenges, the new CEO has a background in successfully selling AI-focused software companies [6][7] Market Outlook - Investors face uncertainty regarding C3.ai's prospects due to ongoing operating losses and the recent leadership transition [7] - The rise of generative AI presents potential opportunities, but current performance has been disappointing [7]

Core Viewpoint - A class action lawsuit has been filed against C3.ai, Inc. concerning allegations of securities fraud and unlawful business practices [2][4]. Group 1: Lawsuit Details - The class action lawsuit involves claims that C3 and certain officers and/or directors engaged in securities fraud or other unlawful business practices [2]. - Investors who purchased C3 securities during the Class Period have until October 21, 2025, to request to be appointed as Lead Plaintiff [2]. Group 2: Financial Performance - On August 8, 2025, C3 announced disappointing preliminary financial results for Q1 of fiscal 2026 and reduced its revenue guidance for the full fiscal year 2026 [4]. - The poor sales results and lowered guidance were attributed to "the reorganization with new leadership" and health issues of the Chief Executive Officer [4]. - Following this announcement, C3's stock price fell by $5.66 per share, or 25.58%, closing at $16.47 per share on August 11, 2025 [4].