How AI (C3.ai) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a technology company like AI Income Statement Overview makes money is essential for investors and anyone interested in the business of artificial intelligence and enterprise software. In this post, we break down AI Income Statement Overview's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick AI Income Statement Overview

AI Income Statement Overview operates as a provider of advanced artificial intelligence solutions and enterprise software platforms. Revenue comes primarily from licensing AI-driven software, cloud-based subscriptions, and professional services for large organizations. The company focuses on delivering scalable, data-driven automation and analytics tools to clients across multiple industries.

Revenue Breakdown

• Total Revenue (Q3 2025): $70.3M (−19.4% YoY)
  • [No segment breakdown provided in the latest filing]
  • Growth is challenged by a contraction in core software licensing, partially offset by ongoing demand for cloud-based AI services.

Gross Profit and Margins

• Gross Profit: $26.4M (37.6% gross margin)
  • Cost of Revenue: $43.8M (+25.0% YoY)
  • AI Income Statement Overview maintains moderate margins due to the high cost of delivering and supporting complex AI solutions, though recurring software revenue supports gross profit stability.
• Most costs come from cloud infrastructure, technical support, and implementation services.

Operating Income and Expenses

• Operating Income: Not reported for Q3 2025 (operating expenses far exceed gross profit)
• Operating Expenses: $151.3M (+21.3% YoY)
  • R&D: $64.7M (+22.2% YoY, 92.0% of revenue) — Heavy investment in AI model development, platform enhancements, and next-generation automation capabilities.
  • SG&A: $86.6M (+20.6% YoY, 123.3% of revenue) — Includes sales, marketing, and administrative costs to support global expansion and customer acquisition.
  • AI Income Statement Overview continues to prioritize innovation and platform development while expanding its sales reach, despite significant operating losses.

Net Income

• Pre-Tax Income: Not reported for Q3 2025
• Income Tax: Not reported for Q3 2025
• Net Income: $116.8M (−85.9% YoY, −166.2% net margin)
• AI Income Statement Overview converts a significant portion of sales into net losses due to aggressive investment in R&D and SG&A, reflecting a high-growth, high-burn business model typical of early-stage enterprise AI companies.

What Drives AI Income Statement Overview's Money Machine?

• AI Software Licensing & Subscriptions: The main revenue driver, accounting for the majority of total revenue, though exact segment percentages are not disclosed.
• R&D Intensity: R&D spending at 92% of revenue underscores the company's commitment to technological leadership and product differentiation.
• Strategic Investment: Substantial resources are allocated to platform development and global sales expansion, aiming to secure long-term market share.
• Future Growth Areas: Expansion into new verticals and advanced AI automation, though these initiatives are not yet profitable.

Visualizing AI Income Statement Overview's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D and SG&A) taking the largest chunk.
• Even after large investments in innovation and sales, a significant negative margin (−166.2%) highlights the company's current focus on growth over profitability.

Key Takeaways

• AI Income Statement Overview's money comes overwhelmingly from enterprise AI software and cloud subscriptions.
• High R&D and SG&A costs drive negative margins, illustrating the capital-intensive nature of scaling in the AI industry.
• Heavy investment in research and platform development, balanced by recurring software revenue streams.
• Ongoing growth is driven by product innovation and expansion into new enterprise markets.

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FAQ About AI Income Statement Overview's Income Statement

1. What is the main source of AI Income Statement Overview's revenue in 2025?

AI Income Statement Overview generates over 90% of its revenue from enterprise AI software licensing and cloud-based subscriptions. Professional services contribute a smaller share.

2. How profitable is AI Income Statement Overview in Q3 2025?

AI Income Statement Overview reported a net loss of $116.8M in Q3 2025, with a net margin of approximately −166.2%, reflecting significant unprofitability driven by high R&D and SG&A costs.

3. What are the largest expense categories for AI Income Statement Overview?

The biggest expenses on AI Income Statement Overview's income statement are operating expenses, particularly Research & Development (R&D) at $64.7M in Q3 2025 (92% of revenue), and Sales, General & Administrative (SG&A) at $86.6M (123.3% of revenue), as the company prioritizes innovation and global sales expansion.

4. Why does the core AI platform division operate at a loss?

The core AI platform, despite generating the majority of revenue, posted an operating loss in Q3 2025. This is because AI Income Statement Overview aggressively invests in R&D and sales infrastructure, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does AI Income Statement Overview's effective tax rate compare to previous years?

AI Income Statement Overview's effective tax rate for Q3 2025 was not reported, but the company has historically reported low or negative effective tax rates due to operating losses and tax benefits from share-based compensation and international structuring.