C3.ai Q4 FY25 slides: Revenue surges 26%, stock jumps 12% after hours

Enterprise artificial intelligence company C3.ai, Inc. (NYSE:AI) reported strong fourth-quarter fiscal year 2025 results on May 28, sending shares soaring more than 12% in after-hours trading.

Quarterly Performance Highlights

C3.ai delivered robust revenue growth of 26% year-over-year in the fourth quarter, reaching $108.7 million. Subscription revenue grew 9% to $87.3 million, while the company maintained a healthy non-GAAP gross margin of 69.1%.

As shown in the following chart of quarterly revenue highlights:

For the full fiscal year 2025, C3.ai reported total revenue of $389.1 million, representing 25% year-over-year growth. The company closed 264 agreements during the year, a 38% increase from the previous year, while maintaining a 70% non-GAAP gross margin.

The company’s annual performance metrics demonstrate consistent growth:

Despite the strong revenue growth, C3.ai continues to operate at a loss. The company reported a non-GAAP operating loss of $31.2 million for Q4 and $88.1 million for the full fiscal year. However, the company generated positive free cash flow of $10.3 million in Q4, though it remained negative at ($44.4) million for the full year.

The detailed quarterly financial results show:

Strategic Partnership Expansion

A key driver of C3.ai’s growth has been its partner ecosystem. In FY25, the company closed 193 agreements through its partner network, representing a 68% year-over-year increase and accounting for 73% of total agreements. Partner-supported bookings grew by an impressive 419% year-over-year in Q4.

The company’s partnership with Microsoft (NASDAQ:MSFT) has been particularly productive, with 28 joint agreements closed, over 100 customer meetings held, and 16 co-hosted events during the period. C3.ai also formed new strategic alliances with McKinsey & Company and PwC.

The following slide illustrates the company’s partner model success:

Business Model Evolution

C3.ai’s revenue mix has evolved significantly over the past year. Subscription revenue decreased from 92% of total revenue in FY24-Q4 to 80% in FY25-Q4, while Prioritized Engineering Services revenue increased from 7% to 16%, and Service Fees revenue grew from 1% to 4%.

This shift in revenue composition reflects the company’s evolving business model:

The company’s customer base continues to diversify across industries. In FY25, Federal, Defense & Aerospace represented 26.2% of bookings, followed by Oil & Gas at 18.8%, and Manufacturing at 12.2%. Initial production deployments were particularly strong in Manufacturing (27.8%) and State and Local Government (30.6%) sectors.

Forward-Looking Guidance

For the first quarter of fiscal year 2026, C3.ai expects total revenue between $100.0 million and $109.0 million, representing 15-25% year-over-year growth. For the full fiscal year 2026, the company projects revenue of $447.5 million to $484.5 million, also reflecting 15-25% growth.

The company also anticipates continued operating losses, with non-GAAP loss from operations projected at ($23.5) to ($33.5) million for Q1 FY26 and ($65.0) to ($100.0) million for the full year.

The detailed guidance is presented in the following slide:

Investment Thesis

C3.ai positions itself as a leader in the enterprise AI market with several competitive advantages, including first-mover advantage, a patented enterprise AI application platform, and a substantial market partner ecosystem. The company emphasizes its veteran management team and high-performance corporate culture as key factors in its continued execution.

The company’s investment thesis is summarized as follows:

Corporate Governance Update

In a notable governance development, C3.ai announced that Ken Goldman has joined its Board of Directors. Goldman brings extensive experience from his previous roles at Hillspire, Yahoo!, Fortinet (NASDAQ:FTNT), and Siebel Systems, and currently serves on the boards of Fortinet and RingCentral (NYSE:RNG).

Market Reaction

The market responded positively to C3.ai’s results, with the stock jumping 12.29% to $25.85 in after-hours trading, following a 3.76% decline during the regular session. The stock has traded between $17.03 and $45.08 over the past 52 weeks.

As C3.ai continues its growth trajectory in the competitive enterprise AI market, investors appear encouraged by the company’s revenue growth and expanding partner ecosystem, despite ongoing operating losses. The company’s ability to convert its growing revenue into sustainable profitability will likely remain a key focus for investors in the coming quarters.

Full presentation:

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