Executive Summary
Executive Overview: C3.ai delivered a solid QQ4 2025 performance, underscored by accelerating top-line growth and a diversified application footprint. Total revenue reached $108.7 million, up 26% year over year, with subscription revenue of $87.3 million (up 9%). The quarter showcased a high mix of recurring revenue, as subscription and prioritized engineering services (PES) combined to $104.4 million, or 96% of revenue, up 22% year over year. Non-GAAP gross profit was $75.2 million (gross margin ~69%), while the non-GAAP operating loss was $31.2 million, within the guided range. Free cash flow was $10.3 million, and the company closed QQ4 with $742.7 million in cash, cash equivalents, and investments. For the full year 2025, total revenue was $389.1 million, up 25% year over year, with subscription revenue of $327.6 million (84% of total revenue), up 18% year over year, marking the eighteenth consecutive quarter with revenue guidance met or exceeded. Management emphasized the ongoing expansion of the partner ecosystem (Microsoft, AWS, Google Cloud, McKinsey Quantum Black, PwC), the Baker Hughes renewal through 2028, and a substantial traction across manufacturing, state and local government, and life sciences. Looking ahead, QQ4 2025 commentary reinforces a strategy centered on scale through partnerships and a growing Agentic AI and Generative AI franchise. The company provided 2026 guidance reflecting a broader range to account for geopolitical and macro risks, with Q1 2026 revenue guidance of $100–$109 million and full-year 2026 guidance of $447.5–$484.5 million; non-GAAP operating loss is expected to widen in the near term as investments persist, with non-GAAP profitability anticipated in the second half of 2027 and free cash flow positive in Q4 2026. Investors should monitor the pace of partner-driven bookings, the maturation of initial production deployments, and the progression toward sustained profitability as the company ramps its AI applications portfolio.
Key Performance Indicators
Key Insights
Revenue: QQ4 2025 revenue of $108.7M, up 26% YoY; QoQ growth ~10% vs QQ3 2025. Gross profit: QQ4 2025 non-GAAP gross profit of $75.2M, gross margin ~69% (vs prior year 69%); QoQ margin stable. Operating income: QQ4 2025 non-GAAP operating loss of $31.2M; QoQ decline limited (-1.58% on a reported metric). Net income: QQ4 2025 non-GAAP net loss per share of $0.16; GAAP net income (loss) reported around the mid-$70s to $80M loss range for the quarter in the data reconciliation, with management emph...
Financial Highlights
Revenue: QQ4 2025 revenue of $108.7M, up 26% YoY; QoQ growth ~10% vs QQ3 2025. Gross profit: QQ4 2025 non-GAAP gross profit of $75.2M, gross margin ~69% (vs prior year 69%); QoQ margin stable. Operating income: QQ4 2025 non-GAAP operating loss of $31.2M; QoQ decline limited (-1.58% on a reported metric). Net income: QQ4 2025 non-GAAP net loss per share of $0.16; GAAP net income (loss) reported around the mid-$70s to $80M loss range for the quarter in the data reconciliation, with management emphasizing non-GAAP framing. EPS: QQ4 2025 non-GAAP EPS -$0.16; QoQ change +3.23%. Cash flow: Free cash flow of $10.3M in QQ4; operating cash flow $11.3M; cash balance ~$742.7M at quarter-end. Balance sheet: Total assets $1,025.9M; total liabilities $187.6M; total stockholders’ equity $838.3M; cash and short-term investments $742.7M; net debt negative $164.4M. ARR/recurring mix: Subscription revenue comprised 84% of annual revenue; Agentic AI and Generative AI initiatives are rapidly scaling, with Generative AI revenue growing >100% in FY2025 and initial deployments totaling 66 for C3 Generative AI in FY2025. Bookings: QQ4 bookings $135.4M; cumulative initial production deployments 346, with 263 active. Customer/partner momentum: 73% of agreements delivered with partners in the last year; 193 partner-closed agreements (up 68% YoY); 28 new Microsoft-aligned agreements in Q4; Microsoft active engagement across 600+ joint accounts targeted by May 2025. Guidance: Q1 2026 revenue guidance of $100–$109M; full-year 2026 revenue guidance of $447.5–$484.5M; non-GAAP loss from operations guidance of $23.5–$33.5M for Q1; full-year non-GAAP loss from operations guidance of $65–$100M. Cash runway: strong liquidity with ~$742.7M cash/equivalents/investments; long-term plan calls for cash positivity and non-GAAP profitability in the second half of 2027, with free cash flow positive in Q4 2026 and beyond.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
108.72M |
25.56% |
10.06% |
| Gross Profit |
67.51M |
30.81% |
15.70% |
| Operating Income |
-88.97M |
-8.09% |
-1.58% |
| Net Income |
-79.70M |
-9.29% |
0.62% |
| EPS |
-0.60 |
-1.69% |
3.23% |
Management Commentary
Key themes from management discussion and Q&A: 1) Strategy and partnerships: Management emphasizes the Azure alliance as a core go-to-market engine, with a plan to activate hundreds of on-the-ground Azure reps through a targeted model (100 C3.ai reps engaging with 10 Azure reps, each focusing on two accounts) to unlock broad adoption; joint demos and acceleration of sales cycles are central to scale. 2) Baker Hughes renewal: The Baker Hughes partnership, renewed through 2028, is highlighted as a durable tailwind, with the business contributing more than a half-billion dollars in revenue historically and continuing to expand globally across upstream, midstream, and downstream operations. 3) Agentic AI and Generative AI: Management underscores leadership in Agentic AI (patented technology since 2022) with over 100 Agentic AI solutions deployed and an ARR around $60M; Generative AI revenue grew >100% in FY2025 with 66 initial deployments across 16 industries. 4) Federal and vertical diversification: Notable expansions in defense and intelligence (ARC Field, DLA energy, USAF Panda program) and broader expansion into life sciences, manufacturing, and state/local government. 5) Financial trajectory and profitability: Despite a sizeable GAAP net loss in QQ4 2025, the company reiterates a path to non-GAAP profitability driven by scale, with expectations of profitability in the back half of 2027 and positive free cash flow in late 2026, supported by strong cash position and a growing recurring revenue base.
We renewed the Baker Hughes agreement and extended it through 2028; it has been a cornerstone partnership and a durable tailwind as we expand into new geographies and additional oil-and-gas and chemical applications.
— Tom Siebel
We own the patent on Agentic AI, and it dates to December of 2022. There is an opportunity there to monetize and expand a production-ready Agentic AI platform with over 100 deployments totaling roughly $60 million ARR today.
— C3 Agentic AI
Forward Guidance
Management provided a conservative-but-constructive outlook reflecting macro and geopolitical risk. QQ4 2025 guidance includes Q1 2026 revenue of $100–$109 million and full-year 2026 revenue of $447.5–$484.5 million, with non-GAAP loss from operations of $23.5–$33.5 million in Q1 and $65–$100 million for the full year. They expect revenue growth to continue to outpace expense growth, signaling a scale-driven path to profitability. The company targets free cash flow positivity in Q4 2026 and into subsequent years, aided by a robust balance sheet (~$743 million in cash and equivalents/investments) and a growing installed base of initial deployments transitioning to recurring subscriptions. Key risks highlighted include geopolitical and budgetary uncertainties, Europe risk, and global trade frictions, which could affect guidance ranges and bookings cadence. Investors should monitor: (1) pace of partner-driven bookings and joint account activity (Microsoft, AWS, Google Cloud, McKinsey Quantum Black, PwC); (2) the conversion rate of initial deployments to ongoing subscriptions; (3) the evolution of the Agentic AI and Generative AI revenue mix; (4) the sustainability of the Baker Hughes renewal and expansion; and (5) macro risks that could impact enterprise customer capex and IT budgets.