C3.ai, Inc. (AI) — Agentic Tribune

ITEM 1. BUSINESS

Overview

C3 AI is the Enterprise AI application software company. C3 AI delivers a family of fully integrated products including the C3 Agentic AI Platform, an end-to-end platform for developing, deploying, and operating Enterprise AI applications; C3 AI Applications, a portfolio of industry-specific Enterprise AI applications that enable the digital transformation of organizations globally; and C3 Generative AI, a library of agentic AI applications to retrieve data, analyze information, surface insights, and orchestrate workflows to drive business value.

The C3 Agentic AI Platform and C3 AI Applications — built with our patented model-driven architecture — enable organizations to simplify and accelerate Enterprise AI application development, deployment, and administration. Our C3 AI software platform also enables developers to rapidly build applications without having to write complex, lengthy, structured programming code to define, control, and integrate the many requisite data and microservices components to work together; we significantly reduce the effort and complexity of the Enterprise AI software engineering problem.

Powered by C3 AI’s patented agent orchestration technology, C3 Generative AI enables autonomous agents to reflect, collaborate, and execute complex workflows — retrieving data, analyzing information, and delivering precise, actionable insights for high-value enterprise use cases across industries. C3 Generative AI delivers high-accuracy, domain-specific insights, and advanced reasoning across disparate enterprise and external data sources. C3 Generative AI is built natively into the C3 Agentic AI Platform and available with every C3 AI Application.

Enterprise AI Software Solutions

We have built a solution that enables our customers to rapidly develop, deploy, and operate large-scale Enterprise AI applications. Customers can deploy C3 AI software on major public cloud infrastructures, private cloud or hybrid environments, or directly on their servers and processors. We provide our customers and partners with an antidote to AI vendor lock-in.

We have five core product areas, which we collectively refer to as our “C3 AI Software”:

•The C3 Agentic AI Platform, our core technology, is a comprehensive, end-to-end application development and runtime environment that is designed to allow our customers to rapidly design, develop, and deploy Enterprise AI applications. The C3 Agentic AI Platform enables the creation of enterprise-grade AI agents that can autonomously perceive data, reason over complex systems, and take action to achieve defined business goals. These agents operate within secure, governed workflows and integrate seamlessly across the enterprise, delivering trusted, high-impact outcomes at scale.

•C3 AI Studio, is the integrated development environment in the C3 Agentic AI Platform that enables engineers, data scientists, and increasingly business analysts, to design, build, test, and deploy AI applications.

•C3 AI Applications, built using the C3 Agentic AI Platform, is a portfolio of pre-built, extensible, industry-specific and application-specific SaaS Enterprise AI applications that can be rapidly installed and deployed.

•C3 Generative AI, combines the utility of LLMs, agentic AI, generative AI, reinforcement learning, natural language processing, and the C3 Agentic AI Platform to reflect, collaborate, and execute complex workflows.

•C3 Code, enables users to build, configure, and deploy a complete, production-grade Enterprise AI applications automatically — including data pipelines, AI models, business logic, security controls, and user interfaces — using natural language instructions. C3 Code orchestrates multiple AI agents working in parallel against an organization's enterprise data, designed to significantly reduce the time and specialized resources required to develop and deploy enterprise AI applications.

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How the Products Work Together

•The C3 Agentic AI Platform is the infrastructure layer; all other products run on it and inherit its security, scalability, and data integration.

•C3 AI Studio is the creation layer where engineers and analysts build, customize, and maintain applications.

•C3 Code is the acceleration layer that replaces large amounts of manual work in Studio with automatically generated applications.

•C3 AI Applications are the ready-made solutions layer, encoding C3.ai's accumulated 15 years of domain knowledge.

•C3 Generative AI is the access layer — protected by our awarded AI Agents patent — letting any employee extract value from all the layers.

Together, these five layers represent C3.ai's answer to the central challenge of Enterprise AI: how a large organization moves from raw data to reliable, governed, scalable AI applications that improve business outcomes — quickly, safely, and without building from scratch.

C3 Agentic AI Platform

C3 Agentic AI Platform is the core technology on which every C3 AI product runs — a Platform-as-a-Service analogous to the operating system of a smartphone: every application depends on it, but most users never see it directly. Its central innovation is the patented C3 AI Type System, a model-driven architecture. Rather than writing custom code to connect each enterprise data source, a developer describes the business objects they care about — an Asset, an Alert, a Work Order — and the platform generates all the integration plumbing automatically. We measure this to reduce application development time by roughly 25× versus building from scratch.

The C3 Agentic AI Platform uses a patented model-driven architecture to accelerate delivery and reduce the complexities of developing Enterprise AI applications. The C3 AI model-driven architecture provides an “abstraction layer,” that allows developers to build Enterprise AI applications by using conceptual models of all the elements an application requires, instead of writing lengthy code. We believe this provides significant benefits, including:

Scale AI Across the Business. Customers can use AI applications and models that optimize processes for every product, asset, customer, or transaction across all regions and businesses;

Deliver Results Faster. Customers can deploy AI applications and see results within two quarters and rapidly roll out additional applications and new capabilities;

Generate Meaningful Value. Customers can unlock sustained value, up to hundreds of millions to billions of dollars per year, from reduced costs, increased revenue, and higher margins; and

Govern AI with Confidence. Customers can ensure systematic, enterprise-wide governance of AI with our unified platform that offers data lineage and model governance.

The C3 Agentic AI Platform enables us and our customers to develop Enterprise AI applications by using conceptual models of all the elements required by the application — including data objects (e.g., customer, order, contract), computing resources (e.g., database, storage, messaging), data processing services (e.g., stream processing, batch processing), AI and ML services (e.g., model training, model pipeline management) — instead of having to write complex, lengthy code. This approach vastly reduces technical complexity for developers and the amount of code they need to write. The C3 Agentic AI Platform provides comprehensive capabilities to rapidly develop, deploy, and operate Enterprise AI applications at scale, including:

•Data unification across hundreds of enterprise systems and industrial sensors simultaneously.

•AI/ML lifecycle management for training, testing, deploying, monitoring, and retraining models at industrial scale.

•Agentic AI orchestration coordinating multiple autonomous software agents through multi-step workflows.

•Cloud-agnostic deployment on Azure, AWS, GCP, or on-premises FedRAMP-authorized government clouds.

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•Enterprise-grade governance with role-based access, audit trails, and model explainability for regulated industries.

C3 AI Studio

C3 AI Studio is the integrated development environment engineers, data scientists, and increasingly business analysts use to design, build, test, and deploy applications on the platform. It is the equivalent of Microsoft Word for writing documents, except here the document is an enterprise AI application. By enabling less-technical staff to build applications, and by embedding a generative AI assistant for professional developers, Studio compresses time from business problem to deployed solution - a key driver of customer satisfaction and renewal rates. Key components of C3 AI Studio include:

Visual Studio Code Extension. A dedicated Visual Studio Code extension that enables developers and data scientists to work within a familiar integrated development environment (IDE), enriched with C3.ai-specific tooling and autocomplete.

Application Canvas. Low-code drag-and-drop design surface allowing non-engineers to build applications.

C3 Generative AI. Generative AI capabilities that allow users to describe desired application behaviors in natural language.

Data Studio and Auto Machine Learning (ML). Integrated data profiling, cleansing, and connectivity tools, together with automated machine learning capabilities designed to accelerate the development and deployment of predictive models.

C3 AI Applications

C3 AI Applications are pre-packaged, industry-specific AI products that customers license and deploy without building AI capabilities from scratch — analogous to buying a professionally designed home rather than building from raw materials. Every application runs on the platform and is maintained in Studio, so platform improvements automatically flow to all applications and new generative AI capabilities can be added rapidly.

Asset Performance

C3 AI applications for asset performance improve asset reliability, reduce downtime, and increase process efficiency. C3 AI customers use these applications to identify and predict asset performance risks, intervene before downtime occurs, and maximize asset performance.

These application offer a flexible and scalable AI approach with better precision than alternatives. C3 AI’s value proposition within reliability emphasizes its (1) complementary approach to existing asset management and data historian systems, (2) detailed asset hierarchy modeling, including asset templates and failure mode libraries, (3) flexible AI pipelines that leverage best-in-class ML frameworks with AI explainability, and (4) comprehensive user workflows to action AI recommendations, with bidirectional integrations to work management and operations systems.

C3 AI offers five discrete applications for asset performance:

•C3 AI Reliability increases operations, process, and equipment uptime by anticipating equipment risks and failures.

•C3 AI Process Optimization improves production rate and product quality with AI-optimized process control parameters in complex batch, semi-batch, or process manufacturing.

•C3 AI Energy Management helps operations teams achieve targets for energy cost, GHG emissions, water consumption, and waste reduction. The application models energy efficiency and emissions at every level of industrial processes from the individual equipment up to the facility as well as SKU-level product carbon footprints.

•C3 AI Asset Connect enables industrial and manufacturing teams to rapidly create digital representations of physical assets and contextualize data to build scalable AI foundation.

•C3 AI Field Services helps field teams to restore and maintain critical assets safely and efficiently in complex industrial environments in a mobile-first AI module.

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Supply Chain

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-K filed 2026-06-24 (period ending 2026-04-30).

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K. You should review the disclosure under the heading “Risk Factors” under Part I, Item 1A in this Annual Report on Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Unless the context otherwise requires, all references in this report to “C3.ai,” “C3 AI,” the “Company”, “we,” “our,” “us,” or similar terms refer to C3.ai, Inc. and its subsidiaries.

Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years ended April 30 and the associated quarters, months and periods of those fiscal years.

A discussion regarding our financial condition and results of operations for the fiscal year ended April 30, 2026 compared to the fiscal year ended April 30, 2025 is presented below. A discussion regarding our financial condition and results of operations for the fiscal year ended April 30, 2025 compared to the fiscal year ended April 30, 2024 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended April 30, 2025, filed with the Securities and Exchange Commission, or SEC, on June 23, 2025.

Overview

C3 AI is an Enterprise AI application software company.

We have built a family of software applications that enable our customers to rapidly develop, deploy, and operate large-scale Enterprise AI applications. Customers can deploy C3 AI solutions on major public cloud infrastructures, private cloud or hybrid environments, or directly on their servers and processors. We have five core product areas, which we collectively refer to as our “C3 AI Software”:

•C3 Agentic AI Platform, our core technology, is a comprehensive, end-to-end application development and runtime environment that is designed to allow our customers to rapidly design, develop, and deploy Enterprise AI applications. The C3 Agentic AI Platform enables the creation of enterprise-grade AI agents that can autonomously perceive data, reason over complex systems, and take action to achieve defined business goals. These agents operate within secure, governed workflows and integrate seamlessly across the enterprise, delivering trusted, high-impact outcomes at scale.

These solutions, and our patented model-driven architecture, enable organizations to simplify and accelerate Enterprise AI application development, deployment, and administration. We significantly reduce the effort and complexity of the AI software engineering problem.

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How We Generate Revenue

We generate revenue primarily from the sale of subscriptions, which accounted for 91%, 84% and 90% of our total revenue in the fiscal years ended April 30, 2026, 2025 and 2024, respectively. Our cloud-native software offerings allow us to manage, update, and monitor the software regardless of whether the software is deployed in our public cloud environment, in our customers’ self-managed private or public cloud environments, or in a hybrid environment.

We primarily recognize revenue from subscriptions on a ratable basis over the contract term or on a usage basis for consumption-based arrangements. We also recognize revenue upon delivery to the customer for software licenses that do not require maintenance and support services. In addition, customers typically pay a usage-based runtime fee for production use of our C3 AI Software for specified levels of capacity. Customers who choose to run the software in our cloud environment pay the hosting costs charged by our cloud providers. We deploy a consumption-based pricing model, beginning with an initial production deployment phase which may include access to the C3 Agentic AI Platform, one or more C3 AI Applications or C3 Generative AI, and C3 AI Center of Excellence, or COE support services. Following the initial production deployment period, customers either pay a monthly fee and consumption charges using virtual Central Processing Unit or vCPU and virtual Graphics Processing Unit or vGPU hours as the metric to calculate payment or enter into a time-certain multi-period commitment that may include consumption charges. Our subscriptions also include our maintenance and support services. Additionally, we offer premium stand-ready support services through our C3 AI COE which is included as part of the subscription when purchased.

We also generate revenue from professional services, which primarily include prioritized engineering services and services fees. Professional services revenue represented 9%, 16% and 10% of our total revenue for the fiscal years ended April 30, 2026, 2025 and 2024, respectively.

Prioritized engineering services are undertaken when a customer requests that we accelerate the design, development, and delivery of software features and functions that are planned in our future product roadmap. When we agree to this, we negotiate an agreed upon fee to accelerate the development of the software as well as other terms, such as relevant specifications. When the software feature is delivered, it becomes integrated to our core product offering, is available to all subscribers of the underlying software product in the subsequent general release, and enhances the operation of that product going forward. Such prioritized engineering services result in production-level computer software-compiled code that enhances the functionality of our production products — which is available for our customers to use over the life of their software licenses. Prioritized engineering services revenue is recognized as professional services over the period in which the software development is completed. Prioritized engineering services accounted for 78%, 70% and 80% of total professional services revenue for the fiscal years ended April 30, 2026, 2025 and 2024, respectively.

Service fees include revenue from services such as consulting, training, and paid implementation services. For service fees, revenue is typically recognized over time as the services are performed.

Our total revenue was $250.3 million for the fiscal year ended April 30, 2026, representing a 35.7% decrease compared to the prior fiscal year. Our subscription revenue was $227.1 million for the fiscal year ended April 30, 2026, representing a 31% decrease compared to the prior fiscal year. Our professional services revenue was $23.2 million for the fiscal year ended April 30, 2026, representing 62% decrease compared to the prior fiscal year.

Go-to-Market Strategy

Our go-to-market strategy has been historically focused on large organizations recognized as leaders in their respective industries or public sectors that are attempting to solve complicated business problems by digitally transforming their operations. These large organizations, or lighthouse customers, include companies and public agencies within the oil and gas, power and utilities, aerospace and defense, industrial products, life sciences, and financial services industries, among others. This has resulted in C3 AI powering some of the largest and most complex Enterprise AI applications. These lighthouse customers serve as proof points for other potential customers in their respective industries. As a result, we have a customer base of a relatively small number of large organizations that generate high average total subscription contract value, but we expect that, over time, as more customers adopt our technology based on the proof points provided by these lighthouse customers, the revenue represented by these lighthouse customers will decrease as a percentage of total revenue. As our C3 Agentic AI Platform and much of our other C3 AI software are industry agnostic, we also expect to expand into other industries.

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Our go-to-market strategy includes a way for new customers to subscribe to our products at smaller initial contract sizes and pay for services based on their monthly consumption of vCPU and vGPU hours or at fixed rates. Customers generally begin with a short proof of value or one to two-quarter-long initial production deployment agreements which includes the necessary resources required to deploy the C3 Agentic AI Platform and/or C3 AI Applications and receive necessary training to operate and maintain the software in production use. Following the initial production deployment period, customers either pay a monthly fee and consumption charges using vCPU and vGPU hours utilized as the metric to calculate payment or enter into a time-certain multi-period commitment that may include consumption charges.

Acquiring new customers and expanding our business with our existing customers is the purpose of our go-to-market effort and drives our growth. Making new and existing customers successful is critical to our long-term success. After we help our customers solve their initial use cases, they frequently identify incremental opportunities within their operations and expand their use of our products. The increased engagement is measured by a combination of increased vCPU/vGPU usage, increased C3 AI Software subscriptions and subscriptions to the C3 Agentic AI Platform for in-house AI application development.

The size and sophistication of our customers’ businesses demonstrate the flexibility, speed, and scale of our products, and maximize the potential value to our customers. To be a credible partner to our customers, who often are industry leaders, we deploy an experienced and highly educated team of C3 AI personnel and partners. We also complement and supplement our sales force with a number of go-to-market partners.

•Industry Partners. We have developed an alliance program to partner with recognized leaders in their respective industries, such as Baker Hughes and, Booz Allen Hamilton; to develop, market, and sell solutions that are natively built on or tightly integrated with the C3 Agentic AI Platform.

•Hyperscale Cloud and Infrastructure. We have formed global strategic go-to-market alliances with hyperscale cloud providers including Microsoft Azure, Amazon Web Services, or AWS, and Google Cloud.

•Consulting and Services Partners. We partner with a number of consulting firms and system integrators specializing in Enterprise AI implementation, including McKinsey & Company, PwC, Fractal, and Cathexis (formerly Paradyme).

•Independent Software Vendors. We partner with independent software vendors who develop, market, and sell application solutions that are natively built on or tightly integrated with the C3 Agentic AI Platform.

Key Business Metric

Remaining Performance Obligations

Remaining Performance Obligations (“RPO”) represents the amount of our contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancellable contracted amounts that will be invoiced and recognized as revenue in future periods. Some contracts allow customers to cancel the contracts without a significant penalty, and the cancellable amount is not included in the remaining performance obligations.

RPO was $203.1 million and $235.1 million as of April 30, 2026 and April 30, 2025, respectively.

RPO as of April 30, 2026 is comprised of $36.4 million related to deferred revenue and $166.7 million of commitments from non-cancellable contracts. Our RPO as of April 30, 2025 is comprised of $36.6 million related to deferred revenue and $198.5 million of commitments from non-cancellable contracts.

RPO excludes amounts related to monthly usage-based runtime and hosting charges. While RPO provides insight into committed revenue, it may not accurately reflect future revenue growth, particularly for pay-as-you go consumption pricing agreements and due to factors such as timing of renewals, the timing of conversion of an initial production deployment into a recurring subscription contract, purchases of additional capacity, average contract terms, and seasonality. As a result, it is important to review RPO in conjunction with revenue and other financial metrics disclosed elsewhere in this Annual Report on Form 10-K.

Initial Production Deployment

C3 AI generally engages customers through an “Initial Production Deployment” agreement, or IPD, (formerly known as “Pilot”), delivering pre-configured, industry-specific production-grade Enterprise AI application within weeks.

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An IPD agreement may include developer access to the C3 Agentic AI Platform, one C3 AI Application or C3 Generative AI and COE support services. Following the initial production deployment period, customers either pay a monthly fee and consumption charges using vCPU and vGPU hours as the metric to calculate payment or enter into a time-certain multi-period commitment that may include consumption charges.

We consider the initial production deployment count as a key business metric, as it reflects trends in market penetration and customer acquisition.

We count an agreement as an initial production deployment agreement when an agreement meeting the characteristics of initial production deployment as described above is executed with the customer.

As compared to fiscal year 2025, we have executed a lower number of IPD agreements during the fiscal year 2026, reflecting our strategic focus on engagements with a higher probability of delivering targeted economic value to customers and a greater likelihood of conversion into production contracts.

We executed 71, 174 and 123 initial production deployment agreements in the fiscal years ended April 30, 2026, 2025 and 2024, respectively.

Factors Affecting Our Performance

We believe that our future success and financial performance depend on a number of factors that present significant opportunities for our business but also pose risks and challenges, including those discussed below and in the section of this Annual Report on Form 10-K in Part I, Item 1A titled “Risk Factors”, that we must successfully address to sustain our growth, improve our results of operations, and establish and maintain profitability.

Customer Acquisition, Retention, and Expansion

We are focused on continuing to grow our customer base, retaining existing customers and expanding customers’ usage of our C3 AI Software by addressing new use cases across multiple departments and divisions, adding users, and developing and deploying additional applications. All of these factors increase the adoption and relevance of our C3 AI Software to our customers’ business and, as an outcome, increases their runtime usage.

We have built a high-performance, customer-focused culture and have implemented proactive programs and processes designed to drive customer success. These include a robust customer support and success function. For example, as part of our subscription offerings, we provide our customers with the ability to establish a COE, which utilizes our experienced and specialized resources in key technical areas like application development, data integration, and data science to accelerate and ensure our customers’ success developing applications on our C3 Agentic AI Platform. We closely monitor the health and status of every customer account through multiple activities, daily and weekly reports to management, as well as quarterly reviews with our customers.

We are focused on expanding our customer base across diverse sectors, with significant momentum in the federal, defense, and aerospace markets driven by new federal agreements and increased international adoption.

Historically, we have had a relatively small number of customers with large total subscription contract values. As a result, our revenue can vary significantly based on the timing of customer acquisition, changes in product mix, and contract durations, renewals, or terminations. We expect the number of customers to increase compared to prior fiscal years as organizations address the importance of digital transformation. The average total subscription contract value as well as the revenue represented by our lighthouse customers as a percentage of total revenue is decreasing and we expect them to continue to decrease as we have restructured our sales organization as described below and expanded our market-partner ecosystem to effectively address small, medium, and large enterprise sales opportunities.

We expect that we will continue to attract new customers who prefer to subscribe to the C3 Agentic AI Platform and C3 AI Applications with our consumption-based pricing model. For further discussion, see the section titled “Overview - Go-to-Market Strategy” included in Part II, Item 7 of this Annual Report on Form 10-K.

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Restructuring of Sales and Services Organization

During the three months ended July 31, 2025, we restructured our sales and services organization to provide a more seamless, high-touch customer experience with a consistent focus on realizing significant economic benefit rapidly from each C3 AI customer engagement. However, the restructuring has had a disruptive effect on our financial performance. This disruptive effect, together with leadership transitions may have a negative effect on our sales results. Our future success and financial performance depend on the ability of our restructured sales and services organization to achieve desired productivity levels in a reasonable period of time. See “The failure to effectively develop and invest in our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our C3 AI Software.” included in Part I, Item 1A of this Annual Report on Form 10-K.

Restructuring Plan and Strategic Initiatives

On February 24, 2026, our Board of Directors approved a comprehensive restructuring plan (the “Plan”) designed to fundamentally improve our operating efficiency and long-term financial position. This Plan is the foundation of five key strategic initiatives currently being executed by management:

•Operational Right-Sizing: We are reducing our cash burn through reduction in our global workforce and in annualized non-employee costs. We expect to complete the implementation of the Plan by the second quarter of fiscal year 2027.

•Organizational Flattening: We have restructured our sales organization to eliminate layers of management, realigning proven personnel directly under the Chief Executive Officer to increase accountability and speed in sales execution.

•Product Prioritization: R&D resources are now concentrated on high-growth AI and automation solutions within asset performance, supply chain, and procurement, specifically for the energy, manufacturing, healthcare, and public sectors, including defense, intelligence and government services.

•Transformation-Led Sales: We are pivoting our sales motion to prioritize large-scale enterprise-wide transformations, aiming to accelerate “proof of value” and drive growth in Bookings and RPO.

•Engineering Velocity: We have reengineered our product design and delivery framework to increase development speed and enhance our competitive positioning.

During the quarter ended April 30, 2026, we incurred restructuring charges of $10.8 million in connection with the Plan.

Appointment of Chief Executive Officer

On May 12, 2026, we announced that our board of directors unanimously appointed Thomas M. Siebel as C3 AI’s Chief Executive Officer and Chairman of the Board, effective May 8, 2026. Stephen Ehikian, who had been serving as C3 AI’s Chief Executive Officer since September 2025, will serve as C3 AI’s President effective as of May 8, 2026.

Technology Innovation

We intend to continue to invest in our research and development capabilities to extend our C3 AI Software, to expand within existing accounts, and to gain new customers. Our investments in research and development drive core technology innovation and bring new products to market. Our model-driven architecture and generative AI agents framework enables us and our customers to rapidly address new use cases by building new applications and extending and enhancing the features and functionality of current C3 AI Software. By investing to make it easier to develop applications on our C3 Agentic AI Platform, our customers have become active developers. With our support, our customers have developed and deployed almost two-thirds of the applications currently in production and running on the C3 Agentic AI Platform. Research and development spending has fueled enhancements to our existing C3 Agentic AI Platform.

We expect to maintain high levels of investment in product innovation as we continue to introduce new applications which address new industry use cases, and new features and functionality for the C3 AI Software. As our business scales over a longer-term horizon, we anticipate research and development spend as a percent of total revenue to decline.

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Brand Awareness

We believe we are in the nascent stages of a large and expanding market for AI enabled digital transformation. We intend to focus our marketing investment on targeted brand awareness, market education, and thought leadership, particularly as it relates to agentic and generative AI. In connection with our restructuring, we have substantially reduced advertising and other discretionary marketing costs and have concentrated our remaining efforts to focus on cost-efficient, higher-return channels, principally digital programs, virtual and physical events, including our C3 Transform annual user conference and C3 AI Webinars, a series of events featuring C3 AI customers, partners, and experts in AI, machine learning, or ML, and data science.

We anticipate continuing to make investments in marketing over the next few years. Over the long term, we expect marketing spend to decline as a percent of total revenue as we make ongoing progress establishing C3 AI’s brand and reputation and as our business scales.

Grow Our Go-to-Market and Partnership Ecosystem

In addition to the activities of our field sales organization, our success in attracting new customers will depend on our ability to expand our ecosystem of strategic partners and the number of industry verticals that they serve. Our strategic go-to-market alliances vastly extend our reach globally. Some of our most notable partners include Microsoft, Baker Hughes, AWS, and Google. Each strategic partner is a leader in its industry, with a substantial installed customer base and extensive marketing, sales, and services resources that we can leverage to engage and serve customers anywhere in the world. Using our C3 Agentic AI Platform as the development suite, we leverage our model-driven architecture to efficiently build new cross-industry and industry-specific applications based on identifying requirements across our customer base of industry leaders and through our industry partners. Our strategy with strategic partners is to establish a significant use case and prove the value of our C3 Agentic AI Platform, C3 AI Applications, and C3 Generative AI with a flagship customer in each industry in which we participate. We have done this with our strategic vertical industry partner in oil and gas, Baker Hughes, as well as with our iconic global customers, some of whom are deploying C3 AI technology to optimize thousands of critical assets globally across their upstream, midstream, and downstream operations. We establish formal sales and marketing plans with each partner, including specific sales goals and dedicated budgets, and we work closely with these partners to identify specific target accounts. We intend to grow the business we do with each partner and to add more partners as we expand the vertical markets we serve. We also offer revenue generating initial production deployments of our applications as part of our customer acquisition strategy.

Our global alliance agreement with Microsoft is focused on sales, marketing, and solution delivery across all geographies and all industries to accelerate the adoption of Enterprise AI. The agreement establishes us as a preferred AI application software provider on Microsoft Azure. The collaboration includes joint sales, joint go-to-market strategies, and availability of all C3 Enterprise AI solutions through Azure sales channels, including the Microsoft Commercial Cloud, technical integration, and aligned product development. We continue to invest aggressively to support this distribution channel.

We also maintain a strategic alliance with McKinsey & Company, a global management consulting firm, to help clients and prospects across industries and geographies accelerate Enterprise AI transformations at scale. The alliance combines the deep technical expertise of McKinsey’s AI practice, QuantumBlack, and its track record of deploying and scaling AI solutions across industries with our cutting-edge Enterprise AI software applications to help clients unlock the power of Enterprise AI and agentic AI to realize significant operational improvements and unlock new growth opportunities.

International Expansion

The international market opportunity for Enterprise AI software is large and growing, and we believe there is a significant opportunity to continue to grow our international customer base. We believe that the demand for our C3 AI Software will continue growing as international awareness of the benefits of digital transformation and Enterprise AI software grows. We plan to continue to make selective investments to expand geographically by investing in our direct sales teams in international markets and supplementing the direct sales effort with strategic partners to significantly expand our reach and market coverage. We derived approximately 11%, 14% and 14% of our total revenue for the fiscal years ended April 30, 2026, 2025 and 2024, respectively, from international customers.

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Impact of Macroeconomic Conditions

Our business and financial condition have been, and may continue to be, impacted by adverse macroeconomic conditions and uncertainties, including U.S. federal government shutdowns, labor shortages, supply chain disruptions, inflation, higher interest rates, and fluctuations or volatility in capital markets, which are causing customers to optimize consumption, rationalize budgets, and prioritize cash flow management.

Our business and financial results may be adversely affected by other macroeconomic conditions, including geopolitical instability, potential future U.S. federal government shutdowns, delays in budget approvals, or increased tariffs or global trade tensions. These and other market risks could have unforeseen and negative impacts on our operations and performance.

We will continue to evaluate the nature and extent of the impact of general macroeconomic conditions on our business. For further discussion, see the section titled “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K.

Components of Results of Operations

Revenue

Subscription Revenue. Our subscription revenue is primarily comprised of software licenses, software-as-a-service offerings, stand-ready COE support services, initial production deployments of our C3 AI Applications or Generative AI, and hosting charges. Sales of our software licenses grant our customers the right to use our software, either on their own cloud instances or their internal hardware infrastructures, during the contractual term. We also offer a premium stand ready service through our COE. Sales of our software-as-a-service offerings include a right to use our software during the contract term. In addition, customers pay a usage-based runtime fee for our C3 AI Software for specified levels of guaranteed minimum consumption. Our subscriptions also include our maintenance and support services, which include critical and continuous updates to the software that are integral to maintaining the intended utility of the software over the contractual term. For a significant majority of our offerings, our software subscriptions and maintenance and support services are highly interdependent and interrelated and represent a single distinct performance obligation within the context of the contract. We also sell software licenses that do not require maintenance and support services. We currently have a small number of customers that license our offerings under a perpetual license model, and we expect that may continue for the foreseeable future for certain customers due to their specific contracting requirements.

Professional Services Revenue. Our professional services revenue primarily includes consulting, training, paid implementation services and prioritized engineering services. We offer a complete range of professional service support both onsite and remotely, including training, application design, project management, system design, data modeling, data integration, development support, data science, and application and C3 AI Software administration support. Professional services fees are based on the level of effort required to perform the specified tasks and are typically a fixed-fee engagement with defined deliverables and a duration of less than 12 months. In certain cases, customers seeking increased utility from their C3 Agentic AI Platform or C3 AI Application subscriptions can procure prioritized engineering services to develop and modify software features, which are typically part of our product roadmap, but on an accelerated basis.

Cost of Revenue

Cost of Subscription Revenue. Cost of subscription revenue consists primarily of costs related to compensation, including salaries, bonuses, benefits, stock-based compensation and other related expenses for the production environment, support and COE staff, third-party system integration partners, hosting of our C3 AI Software, including payments to outside cloud service providers, and allocated overhead and depreciation for facilities.

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Cost of Professional Services Revenue. Cost of professional services revenue consists primarily of compensation, including salaries, bonuses, benefits, stock-based compensation and other related costs associated with our professional service personnel, prioritized engineering personnel, third-party system integration partners, and allocated overhead and depreciation for facilities.

Gross Profit and Gross Margin

Gross profit is total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of total revenue. Our gross margin has fluctuated historically and may continue to fluctuate from period to period based on a number of factors, including the timing and mix of the product offerings we sell, size or nature of customer, size of contract, industry, and the geographies into which we sell, in any given period. Our subscription gross margin may experience variability over time as we continue to invest and continue to scale our business. Our professional services gross margin may also experience variability from period to period due to the use of our own resources and third-party system integration partners in connection with the performance of our fixed price agreements.

Operating Expenses

Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Following the restructuring plan described above, we expect our fiscal 2027 total operating expenses to decline as compared to total operating expenses for fiscal year 2026. Over the longer term, we may invest selectively in areas we believe will drive durable growth, which may cause operating expenses to increase.

Sales and Marketing. Sales and marketing expenses consist of expenditures related to advertising, media, marketing, promotional events, brand awareness activities, business development, customer success and corporate partnerships. Sales and marketing expenses also include employee-related costs, including salaries, bonuses, benefits, stock-based compensation, and commissions for our employees engaged in sales and marketing activities, and allocated overhead and depreciation for facilities.

Research and Development. Our research and development efforts are aimed at continuing to develop and refine our solutions, including adding new features and modules, increasing functionality and speed, and enhancing the usability of C3 AI Software. Research and development expenses consist primarily of employee-related costs, including salaries, bonuses, benefits, and stock-based compensation for our employees associated with research and development related activities. Research and development expenses also include cloud infrastructure costs related to our research and development efforts, third-party system integration partners and allocated overhead and depreciation for facilities. Research and development costs are expensed as incurred.

General and Administrative. General and administrative expenses consists primarily of employee-related costs, including salaries, bonuses, benefits, stock-based compensation and other related costs associated with administrative services such as executive management and administration, legal, human resources, accounting, and finance. General and administrative expense also includes facilities costs, such as depreciation and rent expense, professional fees, and other general corporate costs, including allocated overhead and depreciation for facilities.

We have incurred, and expect to continue to incur expenses as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as expenses for general and director and officer insurance, investor relations, and professional services.

Interest Income

Interest income consists primarily of interest income earned on our cash, cash equivalents, and available-for-sale marketable securities. It also includes amortization of premiums and accretion of discount related to our available-for-sale marketable securities. Interest income varies each reporting period based on our average balance of cash, cash equivalents, and available-for-sale marketable securities during the fiscal year and market interest rates.

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Other Income (Expense), Net

Other income (expense), net consists primarily of foreign currency exchange gains and losses, losses from impairment of marketable securities, and realized gains and losses on sales of available-for-sale marketable securities. Our foreign currency exchange gains and losses relate to transactions and asset and liability balances denominated in currencies other than the U.S. dollar. We expect our foreign currency gains and losses to continue to fluctuate in the future due to changes in foreign currency exchange rates.

Restructuring Charges

During the fiscal year ended April 30, 2026, we incurred restructuring charges in connection with the restructuring plan approved by our Board of Directors on February 24, 2026. Restructuring expenses consist of severance, employee-related termination benefits, stock-based compensation expense and write-off of property and equipment.

Provision for Income Taxes

Our income tax provision consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.

Results of Operations

The following tables set forth our consolidated statements of operations for the periods presented:

	Fiscal Year Ended April 30,
	2026		2025		2024
	(in thousands)
Revenue
Subscription	$	227,090	$	327,630	$	278,104
Professional services	23,178		61,426		32,478
Total revenue	250,268		389,056		310,582
Cost of revenue
Subscription(1)	166,291		143,841		128,469
Professional services(1)	6,595		9,352		3,553
Total cost of revenue	172,886		153,193		132,022
Gross profit	77,382		235,863		178,560
Operating expenses
Sales and marketing(1)	237,369		239,659		214,167
Research and development(1)	229,087		226,391		201,365
General and administrative(1)	98,596		94,237		81,370
Restructuring(1)	10,828		—		—
Total operating expenses	575,880		560,287		496,902
Loss from operations	(498,498)		(324,424)		(318,342)
Interest income	28,447		36,189		40,079
Other income (expense), net	504		509		(641)
Loss before provision for income taxes	(469,547)		(287,726)		(278,904)
Provision for income taxes	822		976		792
Net loss	$	(470,369)	$	(288,702)	$	(279,696)

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__________________

(1)Includes stock-based compensation expense as follows:

	Fiscal Year Ended April 30,
	2026		2025		2024
	(in thousands)
Cost of subscription	$	35,616	$	30,480	$	34,032
Cost of professional services	1,897		3,180		1,288
Sales and marketing	95,531		83,960		71,751
Research and development	79,221		71,629		72,036
General and administrative	51,450		41,739		36,654
Restructuring	4,817		—		—
Total stock-based compensation expense	$	268,532	$	230,988	$	215,761

The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated:

	Fiscal Year Ended April 30,
	2026		2025		2024
Revenue
Subscription	91	%	84	%	90	%
Professional services	9		16		10
Total revenue	100		100		100
Cost of revenue
Subscription	66		37		41
Professional services	3		2		1
Total cost of revenue	69		39		43
Gross profit	31		61		57
Operating expenses
Sales and marketing	95		62		69
Research and development	92		58		65
General and administrative	39		24		26
Restructuring	4		—		—
Total operating expenses	230		144		160
Loss from operations	(199)		(83)		(102)
Interest income	11		9		13
Other income (expense), net	—		—		—
Loss before provision for income taxes	(188)		(74)		(90)
Provision for income taxes	—		—		—
Net loss	(188)	%	(74)	%	(90)	%

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Comparison of the Fiscal Years Ended April 30, 2026 and 2025

Revenue

	Fiscal Year Ended April 30,				$ Change		% Change
	2026		2025
	(in thousands)
Revenue
Subscription	$	227,090	$	327,630	$	(100,540)	(31)	%
Professional services	23,178		61,426		(38,248)		(62)	%
Total revenue	$	250,268	$	389,056	$	(138,788)	(36)	%

Subscription revenue accounted for 91% and 84% of our total revenue for the fiscal years ended April 30, 2026 and 2025, respectively. Subscription revenue decreased by $100.5 million, or 31%, for the fiscal year ended April 30, 2026, compared to the prior fiscal year. Approximately 24% and 16%, respectively, of the total subscription revenue for the fiscal year ended April 30, 2026 and 2025, respectively, was attributable to revenue from new customers, and the remaining 76% and 84%, respectively, was attributable to revenue from existing customers. Existing customers are those from whom revenue was recognized during the fiscal year ended April 30, 2025.

Professional services revenue decreased by $38.2 million, or 62%, for the fiscal year ended April 30, 2026, compared to the prior fiscal year, predominantly due to a decrease in prioritized engineering services of $25.0 million and a decrease in other professional services of $13.3 million.

Cost of Revenue

	Fiscal Year Ended April 30,				$ Change		% Change
	2026		2025
	(in thousands)
Cost of revenue
Subscription	$	166,291	$	143,841	$	22,450	16	%
Professional services	6,595		9,352		(2,757)		(29)	%
Total cost of revenue	$	172,886	$	153,193	$	19,693	13	%

The increase in cost of subscription revenue for the fiscal year ended April 30, 2026 compared to the prior fiscal year was primarily due to higher payroll and contractor costs of $22.0 million, higher overhead costs of $1.1 million, higher depreciation costs of $0.7 million, partially offset by lower data center costs of $2.4 million.

The decrease in cost of professional services revenue for the fiscal year ended April 30, 2026 compared to the prior fiscal year was primarily due to lower personnel related costs of $2.5 million.

Gross Profit and Gross Margin

	Fiscal Year Ended April 30,						$ Change		% Change
	2026			2025
	(in thousands)
Gross profit	$	77,382		$	235,863		$	(158,481)	(67)	%
Gross margin
Subscription	27		%	56		%
Professional services	72		%	85		%
Total gross margin	31		%	61		%

The decrease in total gross margin in the fiscal year ended April 30, 2026 was primarily driven by a decline in both subscription margin and professional services margin.

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The subscription margin for the fiscal year ended April 30, 2026 decreased primarily due to the decline in subscription revenue and higher payroll and contractor costs compared to the prior fiscal year.

The professional services margin for the fiscal year ended April 30, 2026 decreased primarily due to decline in prioritized engineering service projects compared to the prior fiscal year.

Operating Expenses

	Fiscal Year Ended April 30,				$ Change		% Change
	2026		2025
	(in thousands)
Operating expenses
Sales and marketing	$	237,369	$	239,659	$	(2,290)	(1)	%
Research and development	229,087		226,391		2,696

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Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 12 transactions across 4 insiders. Net: -1,599,644 shares, -$15,063,073.

Date	Insider	Role	Action	Shares	Price	Value
2026-06-16	Lath Hitesh	CHIEF FINANCIAL OFFICER	Sell	-34,210	$10.95	-$374,600
2026-06-15	SIEBEL THOMAS M	CEO and Chairman of the Board	Sell	-472,005	$11.11	-$5,243,976
2026-06-12	SIEBEL THOMAS M	CEO and Chairman of the Board	Sell	-23,570	$10.92	-$257,384
2026-06-02	SIEBEL THOMAS M	CEO and Chairman of the Board	Sell	-17,350	$11.32	-$196,402
2026-05-18	SIEBEL THOMAS M	CEO and Chairman of the Board	Sell	-112,014	$8.65	-$968,921
2026-05-15	SIEBEL THOMAS M	CEO and Chairman of the Board	Sell	-369,624	$8.72	-$3,223,121
2026-05-04	SIEBEL THOMAS M	Executive Chairman	Sell	-27,210	$9.27	-$252,237
2026-04-14	SIEBEL THOMAS M	Executive Chairman	Sell	-165,278	$8.49	-$1,403,210
2026-04-13	SIEBEL THOMAS M	Executive Chairman	Sell	-326,189	$8.31	-$2,710,631
2026-03-31	Ehikian Stephen Bradley	Chief Executive Officer	Sell	-52,194	$8.22	-$429,092
2026-03-27	Snabe Jim H.	Director	Buy	+10,000	$7.73	$77,300
2026-03-27	Snabe Jim H.	Director	Sell	-10,000	$8.08	-$80,800

Source: SEC Form 4 filings.

Next expected filings

~2026-09-13 10-Q expected by 2026-09-16 (in 80 days)
~2026-12-13 10-Q expected by 2026-12-16 (in 171 days)
~2027-03-15 10-Q expected by 2027-03-18 (in 263 days)
~2027-06-23 10-K expected by 2027-06-29 (in 363 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-06-24 10-K Annual Report
2026-06-24 S-8 Employee Benefit Plan Registration
2026-06-16 8-K Officer/Director Change
2026-06-03 8-K Earnings Release; Financial Statements and Exhibits
2026-05-12 8-K Earnings Release; Officer/Director Change; Financial Statements and Exhibits
2026-03-25 8-K Other Events
2026-03-11 10-Q Quarterly Report
2026-02-25 8-K Earnings Release; Costs Associated with Exit; Financial Statements and Exhibits
2025-12-09 10-Q Quarterly Report
2025-12-03 8-K Earnings Release; Financial Statements and Exhibits
2025-11-13 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
2025-09-18 8-K Officer/Director Change
2025-09-09 10-Q Quarterly Report
2025-09-05 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
2025-09-03 8-K Earnings Release; Financial Statements and Exhibits

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