C3.ai Posts $92.8M Loss Despite Tom Siebel's Aggressive Restructuring to Reverse Revenue Decline

How's that C3.ai turnaround going? Some signs of life in the old dog yet...

It's three months now since Tom Siebel returned from his sick leave to try to rescue c3.ai, the enterprise AI which he started way back in 2009, but which has badly lost its way in recent times. So, how's that turnaround coming along? There are signs of life, it seems. For the firm's latest quarter, net losses were still $92.8 million, but that was down on $116.8 million this time last year. But revenue of $52.4 million also took a sharp tumble from last year's comparable $70.3 million. Professional services revenue dropped to $3.2 million from $10.0 million year over year, driven by lower prioritized engineering services. But free cash flow was $2.1 million, compared with negative free cash flow a year earlier, and bookings increased 73% quarter over quarter, with 22 closed agreements across commercial and government customers, including Heidelberg Materials, Johnson & Johnson, Ford Motor Company, Seaspan, Holcim, the Department of War, the Defense Logistics Agency, and the US Department of Agriculture. So Siebel feels able to declare boldly: Three months ago, I returned as Chief Executive Officer with a mandate to turn this company around. I returned as CEO because the company was candidly underperforming despite every advantage. The product offerings are exceptional. The market is huge and rapidly growing, and the balance sheet is rock solid. None of that was the problem. The problem was execution. In the past three months, we have restored fundamental management discipline to this business. We completely restructured the company. We re-structured sales. We re-structured products. We restructured services. We re-set the cost structure, driving massive costs out of the business and implemented rigorous cost controls. We re-instated the fundamental management practices necessary to run a serious business: clear ownership, hard deadlines, weekly reviews. We re-built the selling motion around disciplined account management and pipeline development rather than heroics. We now have experienced executives in charge of every aspect of the business in sales, in products, in services, in finance and legal. This is the leadership team that will execute the turnaround. We re-focused the product offerings on our Agentic AI stack, our greatest technical strength, and the largest and most rapidly growing segment of the market. Phew! No-one can fault him for not trying! Growth As ever, Federal business remains a sweet spot for C3.ai, with bookings growing 138% year-on-year. Of the competitive landscape here, Siebel says, with uncharacteristic coyness: I would say there's an incumbent there that has a large market share with very high levels of dis-satisfaction, both with their product and their business practices. A lot of that dis-satisfaction is spinning off now in opportunities for us. In addition, the Government's spending a lot of money on these types of technologies, particularly in the intelligence and the defense sectors. I think the defense budget's about to go from $1 trillion to $1.5 trillion so there's a lot of spending there, and we're getting a lot of traction. Coming up Looking ahead, it seems there will be a lot riding on the company's C3 Code agentic AI application builder offering. This is pitched as turning a natural language prompt into a working enterprise AI application in minutes to hours. Siebel explains: C3 Code will be at the vanguard of our growth engine going forward. This product is absolutely remarkable, and I encourage you to go onto the web, take a look at it, and take it for a try. As an example of the power of C3 Code, you can take an RFP or you can take a 6-inch-thick product specification. You can provide it to C3 Code. It assembles the data, it does the data aggregation, it autonomously builds the ontology, it develops the pipeline, it builds machine learning models, it designs the user interface, and it autonomously delivers a working enterprise AI application without writing one line of manual code. This is really remarkable and you have to see it to believe it. It's early days, he admits, but reports positive feedback to date: The initial customers who are using it just love it. I used it here to replace a pretty substantial piece of enterprise software that we have in place that will remain un-named. We pay a lot of money for this application - it's in the HR management space - and these guys built an application in a day, that replaces an enterprise application -in a day. I mean, it's unbelievable. My take One quarter into the turnaround, I believe the company is on track. That may be an audacious claim to stake at this stage, but it is very Siebel in its certainty of tone. In reality it's far too early to declare that the firm is out of the woods yet, but there has been progress made in a very short space of time. Last word, as ever, to Siebel: Keep your eye on the ball. We're very focused here. All of [our] executives have their eye on the ball. I think if they continue to execute their plans as they have been, this will bode well for C3 investors, and that's the game we're playing.

C3.ai earnings on deck: Can CEO Siebel reverse revenue slide? By Investing.com

C3.ai Inc. reports fiscal first-quarter earnings Wednesday after the close, marking a pivotal test for founder Tom Siebel, who recently returned as chief executive after a brief leadership transition. The enterprise AI software provider faces significant challenges with projected losses and declining revenues as it seeks to demonstrate that management changes can stabilize its business. Analysts expect C3.ai to report a loss of 25 cents per share on revenue of $52.3 million for the quarter ended July 31. While the loss would represent a 32% improvement from the same period last year, revenue is projected to decline 26% year-over-year, continuing a streak of negative growth that has weighed on investor sentiment. The expected results would show modest sequential improvement from the prior quarter, when C3.ai posted a loss of 33 cents per share on revenue of $51.6 million. The company beat analyst expectations in that report, though the underlying revenue trajectory remained pressured. Analyst sentiment remains cautious. The stock carries a neutral consensus rating from 14 analysts, with just one buy recommendation compared to seven holds and six sells. The mean price target of $8.82 implies 15% downside from the current share price of $10.34, underscoring Wall Street's skepticism about the company's near-term prospects. Estimate momentum has been notably absent, with both EPS estimates and revenue estimates remaining flat over the past week and two months. The lack of revision activity suggests analysts are waiting for concrete evidence of a turnaround before adjusting their models. What Investors Are Watching The primary focus will be on whether Siebel's return to the CEO role translates into improved sales execution. DA Davidson analyst Lucky Schreiner noted this marks "Tom Siebel's first quarter back as CEO which lends itself towards better sales execution", though the firm maintains an underperform rating with a $7 price target. The composition of revenue will be scrutinized, particularly the balance between subscription and professional services. Analysts see potential upside from professional services in the quarter, but the larger question is whether C3.ai can demonstrate stable, durable subscription revenue growth -- the metric most critical for valuing software-as-a-service businesses. Finally, investors will look for updated commentary on the company's positioning in the rapidly evolving enterprise AI market, where competition has intensified and customers are increasingly rethinking pricing models. C3.ai has struggled with a challenging business transition over the past year, with total revenue of $250.3 million in fiscal 2026 representing a 36% decline from the prior year. The company maintains a gross profit margin of 31% but continues to generate significant operating losses. Wednesday's report will test whether new leadership can chart a path toward stabilization, or whether the company's difficulties reflect deeper competitive and market challenges in the enterprise AI space. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.