Needham reiterated a hold rating on C3.ai (NYSE: AI) after the AI software provider reported a 25% year-over-year revenue decline to $52.4 million in fiscal Q1 2027. The company’s trailing twelve-month revenue fell 36% to $250.3 million, though it remained within the guidance range of $50.0 million to $54.0 million. Analysts had projected revenue of $52.1 million, according to market consensus.
C3.ai posted a non-GAAP operating loss of $36.2 million, narrowing from the prior year’s $44.2 million loss but exceeding the consensus estimate of $44.2 million. The company’s guidance for the full fiscal year 2027 remains unchanged, with revenue expected between $210.0 million and $240.0 million. Gross margins are projected to decline to the mid-40% range for the remainder of the year as investments in client-embedded engineers ramp up.
Bookings growth accelerated by 73% quarter-over-quarter, a positive sign for future revenue potential. Gross margin for the quarter stood at 49.8%, reflecting operational efficiency despite the revenue decline. In the prior fiscal year’s first quarter, C3.ai reported revenue of $52.37 million, slightly above the $52.30 million forecast, though down 26% year-over-year and up 2% quarter-over-quarter.
Analysts remain divided on the stock’s outlook. Needham maintained its hold rating, while JMP Securities recently downgraded the company citing concerns over revenue guidance. Citizens analyst Patrick Walravens kept a market perform rating, though InvestingPro analysts do not expect profitability this year and view the stock as trading above fair value.
