Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Equity Bottom-Up

<ul><li>In-line 2QFY26 revenue and EBIT beat on cost controls, but gross margin pressure from IPDs. </li><li>2QFY26 revenue of $75.1 million was essentially on target and cost controls drove a better-than-expected bottom line with EBIT of ($42 million) [Street = ($52 million)]. </li><li>However, non-GAAP gross margin was 54.5%, up 280 bps but more than 300 bps below Street expectations.</li></ul>

In-line 2QFY26 revenue and EBIT beat on cost controls, but gross margin pressure from IPDs. 2QFY26 revenue of $75.1 million was essentially on target and cost controls drove a better-than-expected bottom line with EBIT of ($42 million) [Street = ($52 million)]. However, non-GAAP gross margin was 54.5%, up 280 bps but more than 300 bps below Street expectations.

C3.ai, Inc.  - IPDs and the Gross Margin Squeeze

<ul><li>Essential enterprise AI orchestration layer. C3 AI operates as the critical bridge between powerful foundational AI models from providers like OpenAI, Anthropic, and Google and the complex reality of enterprise operations.</li><li>Rather than competing with foundation model providers, C3 AI sits above them in the technology stack, adding capabilities that large language models (LLMs) alone cannot deliver, including enterprise data integration, granular security controls, regulatory compliance, hallucination minimization, and pre-built industry applications.</li><li>The company’s LLM-agnostic architecture allows customers to integrate and switch between any foundation model, while treating the LLM as just one component of a complete enterprise solution.</li></ul>

Essential enterprise AI orchestration layer. C3 AI operates as the critical bridge between powerful foundational AI models from providers like OpenAI, Anthropic, and Google and the complex reality of enterprise operations.Rather than competing with foundation model providers, C3 AI sits above them in the technology stack, adding capabilities that large language models (LLMs) alone cannot deliver, including enterprise data integration, granular security controls, regulatory compliance, hallucination minimization, and pre-built industry applications.The company’s LLM-agnostic architecture allows customers to integrate and switch between any foundation model, while treating the LLM as just one component of a complete enterprise solution.

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>C3.ai surged over 4% after Reuters reported that the artificial intelligence software firm is evaluating strategic alternatives, including a potential sale.</li><li>The news follows the recent resignation of its founder and long-time CEO, Thomas Siebel, who stepped down due to unexpected health issues.</li><li>Siebel’s departure marks a significant leadership transition at a critical time, as the company also reported its first-ever revenue miss as a public entity.</li></ul>

C3.ai surged over 4% after Reuters reported that the artificial intelligence software firm is evaluating strategic alternatives, including a potential sale.The news follows the recent resignation of its founder and long-time CEO, Thomas Siebel, who stepped down due to unexpected health issues.Siebel’s departure marks a significant leadership transition at a critical time, as the company also reported its first-ever revenue miss as a public entity.

C3.ai Stock Jumps After Siebel Quits—Buyout On The Table?

<ul><li>C3.ai has recently detailed its financial results for the first quarter of fiscal 2026, revealing several noteworthy aspects of its performance and strategy moving forward.</li><li>On the positive side, C3.ai has successfully maintained a strong subscription-based revenue model, with subscription revenue comprising 86% of total revenue for the quarter.</li><li>This suggests ongoing customer reliance on its AI solutions.</li></ul>

C3.ai has recently detailed its financial results for the first quarter of fiscal 2026, revealing several noteworthy aspects of its performance and strategy moving forward.On the positive side, C3.ai has successfully maintained a strong subscription-based revenue model, with subscription revenue comprising 86% of total revenue for the quarter.This suggests ongoing customer reliance on its AI solutions.

C3.ai’s Latest CEO Change: Will Stephen Ehikian’s Strategy Help Them Dominate The Defense

<ul><li>C3.ai has demonstrated dynamic progress and significant strides in its fiscal year ending April 30, 2025, highlighted by impressive growth metrics and strategic advancements.</li><li>The company reported a 25% year-over year revenue increase, reaching $389.1 million, marking three consecutive years of accelerating revenue growth.</li><li>This upward trajectory underscores the company’s effective strategies in the expansive Enterprise AI market.</li></ul>

C3.ai has demonstrated dynamic progress and significant strides in its fiscal year ending April 30, 2025, highlighted by impressive growth metrics and strategic advancements.The company reported a 25% year-over year revenue increase, reaching $389.1 million, marking three consecutive years of accelerating revenue growth.This upward trajectory underscores the company’s effective strategies in the expansive Enterprise AI market.

C3.ai Strikes Gold with Powerhouse Partnerships—Is Big Tech Its Secret Weapon?

United States

C3.ai, Inc. operates as a software company. The Company focuses on developing, deploying, and operating enterprise AI applications. C3.ai serves customers worldwide.

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C3.ai Inc (AI US)

C3.ai, Inc. - IPDs and the Gross Margin Squeeze

2QFY26 revenue of $75.1 million was essentially on target and cost controls drove a better-than-expected bottom line with EBIT of...

Water Tower Research

Enterprise AI Pure Play at a Crossroads

C3 AI operates as the critical bridge between powerful foundational AI models from providers like OpenAI, Anthropic, and Google and the complex...

Water Tower Research

C3.ai Stock Jumps After Siebel Quits—Buyout On The Table?

C3.ai surged over 4% after Reuters reported that the artificial intelligence software firm is evaluating strategic alternatives, including a...

Baptista Research

C3.ai’s Latest CEO Change: Will Stephen Ehikian’s Strategy Help Them Dominate The Defense

C3.ai has recently detailed its financial results for the first quarter of fiscal 2026, revealing several noteworthy aspects of its performance...

Baptista Research

C3.ai Strikes Gold with Powerhouse Partnerships—Is Big Tech Its Secret Weapon?

C3.ai has demonstrated dynamic progress and significant strides in its fiscal year ending April 30, 2025, highlighted by impressive growth metrics...

Baptista Research

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