Enterprise artificial intelligence software company C3.ai reported third-quarter financial results and fourth-quarter guidance that fell significantly short of market expectations. The company also announced plans to reduce its workforce by approximately 26%.
For the third fiscal quarter ended January 31, 2026, C3.ai's revenue was $53.3 million, a 46% decrease compared to the prior year. This result was 30% below the analyst consensus estimate of $75.91 million. Subscription revenue amounted to $48.2 million, accounting for 90% of total revenue. The company's adjusted loss per share was $0.40, worse than the analyst consensus forecast of a $0.29 loss.
During the quarter, C3.ai entered into 44 agreements, which included deals with the U.S. Department of Agriculture, the U.S. Department of Energy, the NATO Communications and Information Agency, and ExxonMobil. Orders from the federal government, defense, and aerospace sectors grew 134% year-over-year and represented 55% of the total bookings.
The company's performance outlook also disappointed investors. C3.ai anticipates fourth-quarter revenue to be between $48 million and $52 million, with a midpoint of $50 million that is substantially lower than the analyst consensus estimate of $77.7 million. For the full 2026 fiscal year, the company now expects revenue in the range of $246.7 million to $250.7 million, down from its previous forecast of $289.5 million to $309.5 million.
Concurrently, C3.ai announced a significant restructuring plan under new Chief Executive Officer Stephen Ehikian, which includes reducing its global workforce by 26%. As of April 30, 2025, the company had approximately 1,181 full-time employees. C3.ai expects to incur restructuring charges of approximately $10 million to $12 million in the current quarter and aims to reduce non-wage related costs by about 30% by the end of 2027.
This restructuring initiative is projected to generate annual cost savings of approximately $135 million and lower the cash burn reflected in adjusted operating expenses. Ehikian stated, "I joined C3.ai six months ago with a strong conviction that this company is uniquely positioned in the enterprise AI landscape. We have lowered our cost structure and cash burn, and have reorganized and streamlined our sales team. These changes are largely complete, and C3.ai is now a more agile, disciplined, and accountable company."
Following the announcement, C3.ai's stock price plummeted more than 22% in after-hours trading on Wednesday.
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