C3.ai (NYSE:AI) reported fiscal second quarter 2026 results that modestly beat Wall Street estimates, signalling early stabilization under new CEO Stephen Ehikian and strong momentum in its federal business.
For the quarter ended October 31, 2025, total revenue was $75.15 million, above analysts’ estimate of $74.9 million but below the midpoint of the company’s guidance range of $72 million to $80 million. Revenue declined 20.3% year-over-year but increased 7% sequentially.
Subscription revenue accounted for $70.2 million, or 93% of total revenue.
Adjusted earnings per share (EPS) came in at a loss per share of $0.25, above the forecasted loss per share of $0.33.
Net loss widened to $104.7 million, reflecting ongoing investment and operational expenses. On a non-GAAP basis, operating loss was $42.2 million, above the company’s guidance range of $49.5 million to $57.5 million, due in part to reduced personnel, cloud infrastructure, and sales and marketing costs.
C3.ai’s partner ecosystem, including Microsoft and AWS, contributed to 89% of total bookings. The company closed 38 agreements in the quarter, including 17 deals exceeding $1 million and six deals over $5 million.
Federal, aerospace, and defense bookings grew 89% year-over-year despite a prolonged government shutdown.
Wedbush analysts noted that the results “represent a step in the right direction as the company looks to balance consistent execution with operational discipline to expand enterprise-wide deployments.”
They added that while C3.ai has a “new sales engine and leader at the helm,” it still “needs to show consistency and discipline with its execution before regaining the Street's confidence back after the weak start to the year.”
“With a new sales engine and leader at the helm, we believe the company has the right plan in place to capitalize on the AI opportunity ahead, but we need to see consistency and discipline with its execution before regaining the Street's confidence back after the weak start to the year,” Wedbush concluded.
The analysts maintained an ‘Outperform’ rating and $20 price target. C3.ai shares traded hands at $15 on Thursday.