C3.ai(US:AI) ZACKS·2026-02-26 14:35Core Insights - C3.ai, Inc. reported disappointing third-quarter results for fiscal 2026, with earnings and revenues falling short of expectations, leading to a 21.7% drop in stock price during after-market trading [1][4]. Financial Performance - The company experienced a significant year-over-year decline in total revenues, primarily due to reduced contributions from Subscription and Professional Services [2]. - Adjusted loss per share was 40 cents, worse than the expected loss of 29 cents, and revenues were $53.26 million, missing the consensus estimate by 29.8% and down 46.1% year over year [4][10]. - Subscription revenues fell to $48.2 million from $85.7 million in the previous year, while Professional Services revenues dropped 61.1% to $5.1 million [5]. - Adjusted gross profit decreased to $19.6 million from $68.2 million, with gross margins contracting to 37% from 69% [6]. Operational Highlights - The Federal segment showed strength, with bookings in Federal, Defense, and Aerospace increasing by 134% year over year, accounting for 55% of total bookings [3][10]. - The company is undertaking restructuring actions to enhance operational efficiency and reduce cash burn, aiming for a return to growth and non-GAAP profitability [3]. Cash Flow and Balance Sheet - As of the end of the fiscal third quarter, C3.ai had cash and cash equivalents of $88.8 million, down from $164.4 million at the end of fiscal 2025 [7]. - Net cash used in operating activities was $135.8 million for the first nine months of fiscal 2026, compared to $52.7 million in the same period last year [8]. Future Guidance - For the fourth quarter of fiscal 2026, the company expects revenues between $48 million and $52 million, a significant decrease from $108.7 million reported in the same quarter last year [9]. - Full-year revenue guidance for fiscal 2026 has been lowered to between $246.7 million and $250.7 million, down from previous expectations of $289.5 million to $309.5 million [11].