AI

MKT CAP $36.6MP/E —DIV YIELD —FCF YIELD -524.82%REV TTM $250.3M −35.7%NET INCOME −$470.4MNET CASH —52W 7.76 – 19.66SEC XBRL · TTM TO Invalid Date

How AI rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

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Risks Related to Our Business and Our Industry We have a history of losses, we anticipate our operating expenses will continue to increase, and we may not be able to achieve or maintain profitability in the future.
We generated net losses of approximately $470.4 million, $288.7 million, and $279.7 million for the fiscal years ended April 30, 2026, 2025, and 2024 respectively.
As a result, we had an accumulated deficit of $1.8 billion as of April 30, 2026.
We do not know whether or when we will generate sufficient revenue to achieve or maintain profitability in the future.
We also expect our costs and expenses to increase in future periods, which could negatively affect our future results of operations if our revenue does not increase or declines.
In particular, we intend to continue to expend significant funds to further develop our C3 AI Software and business, including: • investments in our research and development team and in the development of new features and enhancements of our C3 AI Software, including the hiring of additional development staff, and fees paid to third parties for related enhancements; • investments in sales, marketing, and services, including investments in our sales force and our customer service team, increasing our customer base, increasing market awareness of our C3 AI Software, and development of new technologies; • investments in our operations and infrastructure; and • hiring additional employees.
We also face increased compliance costs associated with growth, the expansion of our customer base, and being a public company.
Our efforts to grow our business may be costlier than we expect, our revenue may continue to decline or growth may be slower than we expect, and we may not be able to increase our revenue enough to offset our increased operating expenses.
Further, in future periods, our revenue may be adversely impacted due to a number of factors, including a reduction in demand for our C3 AI Software, reduction in consumption of our C3 AI Software, increased competition, contraction of our overall market, our inability to accurately forecast demand for our C3 AI Software, or our failure, for any reason, to capitalize on growth opportunities.
We experienced a decline in revenue and an increase in operating losses in the fiscal year 2026 as compared to the prior fiscal year.
The results were attributed, in part, to disruption from a comprehensive restructuring of our global sales and services organizations, our Chief Executive Officer (“CEO”) and Chairman’s unanticipated health limitations and unsatisfactory execution by our global sales and services organizations.
In addition, our future success depends on our ability to sell additional subscriptions for our C3 AI Software to our existing customers.
Similarly, after completing an initial production deployment or trial customers do not have an obligation to continue to license our products, and we may not be able to convert initial production deployment customers into customers purchasing ongoing subscriptions or continue with a monthly consumption-based fee.
Sales to government entities and highly regulated organizations are subject to a number of challenges and risks, including U.S. federal government shutdowns.
Government demand and payment for our products and services have been and may be impacted by public sector budgetary cycles and funding reductions or delays, such as an extended federal government shutdown, which have and may adversely affect public sector demand for our products and services and the timing of payment of our products and services.
Our use of artificial intelligence, or AI, and machine learning, or ML, technologies, collectively, AI/ML technologies, may also subject us or our customers to certain privacy and data security laws, as well as increasing regulation and scrutiny.
These obligations may increase the cost of research and development in AI/ML, make it harder for us to conduct our business using AI/ML, lead to regulatory fines or penalties, require us retrain our AI/ML, or prevent or limit our use of AI/ML.
With the rise of agentic AI, there is an increased risk that use of this form of AI technology could result in violations of data privacy laws to the extent an AI agent processes personal data autonomously without providing appropriate notice or obtaining requisite consent or in circumstances where data privacy laws impose restrictions on or disclosures related to the use of AI tools or automated decision-making tools that are unable to be met based on how the AI agent operates.
There is also a risk that agentic AI’s interaction with systems, data, external websites, APIs and platforms may violate restrictions on access, privacy regulations, computer fraud and abuse laws, third-party contracts and terms of service.
Agentic AI tools may also make decisions or take actions that may lead to the disclosure of personal data in violation of data privacy laws.
Furthermore, there is increasing regulation and scrutiny over the outputs of AI/ML tools and their potential impacts on end-users.
In particular, California Senate Bill 243 requires operators of companion chatbots to take certain measures to bolster transparency and user safety, including ensuring end-users know that the companion chatbot is artificially generated and not human and maintaining a protocol for preventing the production of suicidal ideation, suicide, or self-harm content to the user.
Even to the extent such laws may not be directly applicable to us, they may be applicable to our customers, and we may in turn face contractual obligations that require us to take measures to ensure our AI/ML tools are capable of complying with requirements under the laws.
These obligations could increase the cost of research and development in AI/ML, make it harder for us to conduct our business using AI/ML, or require us retrain our AI/ML.
Our main sources of current and potential competition fall into several categories: • internal IT organizations that develop internal solutions and provide self‑support for their enterprises; • commercial enterprise and point solution software providers; • companies that are developing their own AI features and technologies, including AI features and technologies that may be similar or superior to our technologies or more cost-effective to develop and deploy; • open-source software providers with data management, ML, and analytics offerings; • public cloud providers offering discrete tools and micro-services with data management, ML, and analytics functionality; • system integrators that develop and provide custom software solutions; • legacy data management product providers; and • strategic and technology partners who may also offer our competitors’ technology or otherwise partner with them, including our strategic partners who may offer a substantially similar solution based on a competitor’s technology or internally developed technology that is competitive with ours.
Moreover, new innovative start‑up companies, and larger companies that are making significant investments in research and development, have and may continue to introduce products that have greater performance or functionality, are easier to implement or use, or incorporate technological advances that we have not yet developed or implemented, or have and may continue to invent similar or superior technologies that compete with ours.
Our current and potential competitors have also established and may establish new cooperative relationships among themselves or with third parties that may further enhance their resources.
Our results of operations may fluctuate, in part, because of the complexity of customer problems that our C3 AI Software addresses, the resource‑intensive nature of our sales efforts, the length and variability of the sales cycle for our C3 AI Software, and the difficulty in making short‑term adjustments to our operating expenses.
Our revenue depends in part on the success of our strategic relationships with third parties, including channel partners, and if we are unable to establish and maintain successful relationships with them, our business, operating results, and financial condition could be adversely affected.
This arrangement was most recently revised in January 2023 and again in April 2025.
We also have strategic relationships with Microsoft, AWS, McKinsey & Company, Google Cloud, and Raytheon.
In addition, customer satisfaction with services and other support from our strategic partners may be less than anticipated, negatively impacting anticipated revenue and results of operations.
Our ability to retain key members of our senior management may impact the successful execution of our business strategy.
In particular, our founder and current CEO and Chairman, Thomas M.
All of our executive officers are at-will employees, and we do not maintain any key person life insurance policies.
The loss of any member of our senior management team, whether in connection with the CEO transition, possible health setbacks or otherwise, could make it more difficult to execute our business strategy and, therefore, harm our business.
We may not successfully execute or achieve the expected benefits of our restructuring plan and other measures we may take in the future, and our efforts may adversely affect our business.
On February 24, 2026, the Company’s board of directors approved a restructuring plan (the “Plan”), intended to fundamentally improve our operating efficiency and reposition our company for long term success.
In connection with the Plan, we have restructured our sales organization, realigned proved personnel directly under our Chief Executive Officer to increase accountability and execution, and reengineered our product design and delivery framework to increase development speed and enhance our competitive positioning.
These measures are intended to address our short and long-term objectives and are based on our current estimates, assumptions, and forecasts, which are subject to known and unknown risks and uncertainties.

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Gone since FY2025

Risks Related to Our Business and Our Industry We have a history of losses, we anticipate our operating expenses will continue to increase in the future, and we may not be able to achieve or maintain profitability in the future.
We generated net losses of approximately $288.7 million, $279.7 million, and $268.8 million for the fiscal years ended April 30, 2025, 2024, and 2023 respectively.
As a result, we had an accumulated deficit of $1.4 billion as of April 30, 2025.
While we have experienced revenue growth in recent periods, we do not know whether or when we will generate sufficient revenue to sustain or increase our growth or achieve or maintain profitability in the future.
We also expect our costs and expenses to increase in future periods, which could negatively affect our future results of operations if our revenue does not increase.
In particular, we intend to continue to expend significant funds to further develop our C3 AI Software and business, including: • investments in our research and development team and in the development of new features and enhancements of our C3 AI Software, including the hiring of additional development staff, and fees paid to third parties for related enhancements; • investments in sales, marketing, and services, including expanding our sales force and our customer service team, increasing our customer base, increasing market awareness of our C3 AI Software, and development of new technologies; • expanding our operations and infrastructure; and • hiring additional employees.
We will also face increased compliance costs associated with growth, the expansion of our customer base, and being a public company.
Our efforts to grow our business may be costlier than we expect, our revenue growth may be slower than we expect, and we may not be able to increase our revenue enough to offset our increased operating expenses.
Further, in future periods, our revenue growth may be adversely impacted due to a number of factors, including a reduction in demand for our C3 AI Software, reduction in consumption of our C3 AI Software, increased competition, contraction of our overall market, our inability to accurately forecast demand for our C3 AI Software, or our failure, for any reason, to capitalize on growth opportunities.
In addition, our future success depends on our ability to sell additional subscriptions for our C3 AI Software to our existing customers, and our customers renewing their subscriptions when the contract term expires.
Similarly, after completing an initial production deployment, customers do not have an obligation to continue to license our products, and we may not be able to convert initial production deployment customers into customers purchasing ongoing subscriptions or continue with a monthly consumption-based fee.
Our main sources of current and potential competition fall into several categories: • internal IT organizations that develop internal solutions and provide self‑support for their enterprises; • commercial enterprise and point solution software providers; • open source software providers with data management, ML, and analytics offerings; • public cloud providers offering discrete tools and micro-services with data management, ML, and analytics functionality; • system integrators that develop and provide custom software solutions; • legacy data management product providers; and • strategic and technology partners who may also offer our competitors’ technology or otherwise partner with them, including our strategic partners who may offer a substantially similar solution based on a competitor’s technology or internally developed technology that is competitive with ours.
Moreover, new innovative start‑up companies, and larger companies that are making significant investments in research and development, may introduce products that have greater performance or functionality, are easier to implement or use, or incorporate technological advances that we have not yet developed or implemented, or may invent similar or superior technologies that compete with ours.
Our current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their resources.
Our results of operations may fluctuate, in part, because of the complexity of customer problems that our C3 AI Software address, the resource‑intensive nature of our sales efforts, the length and variability of the sales cycle for our C3 AI Software, and the difficulty in making short‑term adjustments to our operating expenses.
Certain revenue metrics such as net dollar-based retention rate or annual recurring revenue may not be accurate indicators of our future financial results.
Other subscription-based software companies often report on metrics such as net dollar-based revenue retention rate, annual recurring revenue or other revenue metrics, and investors and analysts sometimes look to these metrics as indicators of business activity in a period for businesses such as ours.
However, due to our dependence on a small number of high-value customer contracts, these metrics are not accurate indicators of future revenue for any given period of time because the gain or loss of even a single high-value customer contract could cause significant volatility in these metrics.
If investors and analysts view our business through these metrics, the trading price of our Class A common stock may be adversely affected.
This risk may increase as more customers move to the consumption-based model.
Our revenue growth depends in part on the success of our strategic relationships with third parties, including channel partners, and if we are unable to establish and maintain successful relationships with them, our business, operating results, and financial condition could be adversely affected.
This arrangement was most recently revised in January 2023 and again in April 30, 2025.
We also have strategic relationships with AWS, FIS, Google Cloud, Microsoft, and Raytheon.
In addition, customer satisfaction with services and other support from our strategic partners may be less than anticipated, negatively impacting anticipated revenue growth and results of operations.
If we were to lose the services of our CEO or other members of our senior management team, we may not be able to execute our business strategy.
In particular, our founder and CEO, Thomas M.
Siebel informed the Company that he had contracted an autoimmune disease and was experiencing significant vision impairment.
Siebel also stated that this health setback was not impacting his ability to manage the business in a hands-on manner, and that Jim H.
Snabe, a member of our Board of Directors, had assumed the interim role of Special Advisor to the CEO to assist where and as needed.
In addition, all of our executive officers are at-will employees, and we do not maintain any key person life insurance policies.
The loss of any member of our senior management team could make it more difficult to execute our business strategy and, therefore, harm our business.
The failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our C3 AI Software.
Our ability to expand our customer base and achieve broader market acceptance of our C3 AI Software depends to a significant extent on our ability to continue to expand our marketing and sales operations and the ultimate effectiveness of those operations.
We plan to continue expanding our sales force and strategic partners, both domestically and internationally.
Identifying and recruiting qualified sales representatives and training them is time consuming and resource intensive, and they may not be fully trained and productive for a significant amount of time.
Our C3 AI Software is complicated and, as such, our sales force and operations require significant time and investment for proper recruitment, onboarding, and training in order for our sales operations to be productive.
In addition, as we enter into new markets, expand the capabilities of our C3 AI Software and offer new C3 AI Software, we may need to identify and recruit additional sales and marketing efforts specific to such strategic expansion.
Our efforts to do so may be increasingly resource intensive, time consuming, and ultimately unsuccessful.
We also dedicate significant resources to sales and marketing programs, including internet and other online advertising.
As more customers take advantage of our consumption-based pricing options, once a new customer begins using our C3 AI Software, our sales team will need to continue to focus on expanding consumption with that customer.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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