C3.AI 2Q25:Preliminary Results Analysis: A True Turning Point Hinges on a New CEO

At the beginning of August, the company pre-announced what can only be described as a “disastrous” preview of FY26Q1 results. CEO Tom Siebel called Q1 sales performance “completely unacceptable,” attributing the weakness to short-term disruption from organizational restructuring and his personal health and vision issues, which limited his ability to focus on sales. Siebel noted that his health has since improved (with the exception of vision problems) and projected an acceleration in Q2.

Industry experts we spoke with offered deeper insights into the drivers of this significant miss. Fundamentally, C3 AI has been overly dependent on Siebel’s micromanagement style. When his health deteriorated, he was unable to remain deeply engaged in sales and operations, leading to weakened organizational execution. The company has announced it is seeking a new CEO, after which Siebel will retire.

Overall, a real inflection point for the company will only occur once a new CEO arrives, rebuilds the business model and sales organization beyond Siebel’s framework, and establishes a sustainable operating cadence.

“I think it will take them one to two quarters after they hire a new CEO. The new CEO will need to align with the cultural values that Tom has built from day one. They want to take their time to hire the right person, but once that happens, you can expect to see results within one to two quarters. As of now, they haven’t announced who the new CEO will be, right?”

Key Drivers Behind the Q1 Miss

Large Contract Slippage