Core Insights - C3.ai, Inc. (AI) is set to report its third-quarter fiscal 2026 results on February 25, 2026, after market close [1] - The company reported an adjusted loss per share of 25 cents in the last quarter, which was better than the Zacks Consensus Estimate of a loss of 32 cents but worse than the adjusted loss of six cents from the previous year [1] - Revenues for the last quarter were $75.1 million, remaining flat with the consensus estimate but showing a year-over-year decline of 20.4% [1] Earnings Estimates - The Zacks Consensus Estimate for the upcoming fiscal third quarter indicates a loss per share of 29 cents, unchanged over the past 60 days, and 141.7% wider than the loss of 12 cents reported in the same quarter last year [3] - Revenue estimates for the third quarter are pegged at $75.8 million, reflecting a 23.2% year-over-year decline from $98.8 million [3] Revenue Performance - The expected decline in revenues is attributed to lower contributions from Subscription services (93% of total revenues) and Professional services (7% of total revenues) [4] - The downturn is likely due to weaker recognized revenues despite ongoing deal activity, as many deals are still in early implementation phases, along with a decline in prioritized engineering services [5] Revenue Guidance - C3.ai expects total revenues for the fiscal third quarter to be between $72 million and $80 million, with Subscription revenues estimated at $68 million and Professional services at $7.5 million, indicating year-over-year declines of 20.9% and 42.7%, respectively [6] Margin Expectations - The company's bottom line is expected to decline due to reduced prioritized engineering service projects and increased payroll and contractor costs [7] - Gross margins for Subscription and Professional services are expected to be 49.9% and 74%, respectively, indicating year-over-year contractions of 610 basis points and 600 basis points [9] Earnings Prediction Model - The Zacks model does not predict an earnings beat for C3.ai this time, as the company has an Earnings ESP of -9.40% and a Zacks Rank of 4 (Sell) [10][11]

Core Viewpoint - C3.ai has reported strong performance driven by the increasing demand for enterprise-level AI applications, with revenue projections for fiscal year 2026 exceeding analyst expectations, indicating robust growth in both AI infrastructure and software applications [1][2] Financial Performance - For the fourth fiscal quarter of 2025, C3.ai achieved total revenue of $108.7 million, a 26% year-over-year increase, surpassing analyst expectations of $107.9 million [2] - The company expects fiscal year 2026 revenue to range between $447.5 million and $484.5 million, aligning with analyst forecasts [1] - C3.ai's subscription revenue for the fourth quarter was approximately $87.3 million, a 9% increase from the previous year, accounting for 80% of total revenue [2] - The company anticipates a Non-GAAP operating loss of $23.5 million to $33.5 million for the first quarter of fiscal year 2026, which is better than the analyst average expectation of a $35.2 million loss [2] Product and Market Position - C3.ai is a leader in the enterprise-level AI application market, offering a comprehensive suite of generative AI solutions that enhance operational efficiency across various industries [3][4] - The company has integrated large language models (LLMs) into its AI software products, launching the C3 Generative AI suite [4] - C3.ai has established a strong foothold in high-barrier industries such as energy and defense, benefiting from the growing interest in AI among enterprise customers [3][4] Strategic Partnerships and Growth - C3.ai has expanded its strategic partnership with Baker Hughes, focusing on joint product sales and investment in AI solutions to enhance operational efficiency in the energy sector [6] - The company has secured long-term contracts with major clients, including the U.S. Department of Defense and large energy firms like Shell and ExxonMobil [6] - C3.ai signed 69 agreements in the fourth quarter, including 36 initial production deployment agreements, indicating strong market demand [7] Industry Trends - The AI application software market is expected to experience significant growth, with the AI agent market projected to expand from $7.8 billion in 2025 to approximately $52.6 billion by 2030, reflecting a compound annual growth rate of 46% [9] - The emergence of AI agents is anticipated to transform AI applications from information assistance tools to highly intelligent productivity tools, significantly enhancing operational efficiency [8][9]