C3.ai slashes 26% of staff as CEO admits failure to deliver and 'burning too much money'

Core Viewpoint - C3.ai has faced significant challenges, leading to a drastic reduction in workforce and a reevaluation of its revenue guidance, indicating a fundamental shift in the company's growth trajectory [1][4]. Financial Performance - The fiscal third quarter revenue was reported at $53.3 million, representing a 50% year-over-year decline and falling short of the $75.9 million expected by analysts [3]. - The adjusted EPS showed a net loss of $0.40 per share, which is wider than the anticipated loss of $0.29 [3]. Workforce and Organizational Changes - The company has reduced its workforce by 26% as part of a strategy to restructure its cost basis and enhance flexibility [1]. - CEO Stephen Ehikian has flattened the organization by removing layers of management, with top sales personnel now reporting directly to him [6]. Revenue Guidance and Market Reaction - C3.ai has cut its full-year revenue guidance from a previous high of $484 million to a range of $246 million to $250 million, indicating a significant reevaluation of its growth prospects [4]. - Following the earnings report, C3.ai's stock dropped nearly 20%, reflecting investor concerns over the revenue miss and the company's departure from previous guidance [2]. Market Conditions and Strategy - The CEO described the commercial sector as being in "pilot purgatory," where companies are interested in AI but hesitant to commit to large-scale deals [7]. - Despite a 134% increase in federal and defense bookings, these wins have not yet translated into the commercial scale necessary to support the company's previous valuation [5].