C3.ai(US:AI) Xin Lang Cai Jing·2025-09-03 23:49Core Viewpoint - C3.ai has appointed Stephen Ehikian as the new CEO amid mixed financial results, highlighting leadership changes and financial challenges faced by the company [1][8]. Financial Performance - The company reported Q1 FY2026 revenue of $70.3 million, down from $87.2 million year-over-year, indicating a significant decline [1][2]. - Cash flow remained strong at $711.9 million, providing sufficient funding for the company's transformation efforts [1]. - Operating losses widened significantly, with free cash flow dropping from a positive $7.1 million in Q1 FY2025 to a negative $34.3 million in Q1 FY2026 [1][2]. Revenue Structure - Subscription revenue accounted for 86% of total revenue, slightly up from 84% in the previous year, but growth was insufficient to cover rising operational costs [2]. - Revenue decreased compared to $108.7 million in Q4 FY2025, reflecting a substantial year-over-year decline [2]. Customer Distribution - The manufacturing sector became the largest industry segment, accounting for 46% of bookings, while federal, defense, and aerospace dropped to 28% from 31% year-over-year [4]. - The company focuses on acquiring large enterprises, with initial deployments primarily from companies with annual revenues between $1 billion and $100 billion [4]. - The highest adoption of generative AI deployments was in the federal, defense, and aerospace sectors at 33.3% [4]. Strategic Partnerships - C3.ai's partner ecosystem remains a strategic focus, achieving 40 agreements and a 54% year-over-year increase in qualified opportunity channels [6]. - The partnership with Microsoft continues to be effective, resulting in 24 agreements this quarter [6]. Future Outlook - For Q2 FY2026, C3.ai expects revenue between $72 million and $80 million, representing a year-over-year decline of 15% to 24% [6]. - The company has withdrawn its previous full-year guidance for FY2026 due to the new CEO's appointment and ongoing restructuring efforts [6]. Leadership Changes - The previous CEO, Thomas Siebel, faced health issues that impacted the company's performance, leading to a significant drop in stock price [8]. - New CEO Stephen Ehikian emphasizes the company's potential in the AI and enterprise software market, aiming to capture a larger market share [8]. Stock Performance - Following the earnings report, C3.ai's stock fell nearly 12%, trading at $14.69 [9].