Explore C3.ai’s Fair Values from the Community and select yours
We can readily understand why investors are attracted to unprofitable companies. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.
So, the natural question for C3.ai (NYSE:AI) shareholders is whether they should be concerned by its rate of cash burn. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. First, we’ll determine its cash runway by comparing its cash burn with its cash reserves.
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A company’s cash runway is calculated by dividing its cash hoard by its cash burn. In April 2025, C3.ai had US$743m in cash, and was debt-free. Importantly, its cash burn was US$44m over the trailing twelve months. That means it had a cash runway of very many years as of April 2025. Importantly, though, analysts think that C3.ai will reach cashflow breakeven before then. If that happens, then the length of its cash runway, today, would become a moot point. The image below shows how its cash balance has been changing over the last few years.
Check out our latest analysis for C3.ai
It was fairly positive to see that C3.ai reduced its cash burn by 51% during the last year. And considering that its operating revenue gained 25% during that period, that’s great to see. It seems to be growing nicely. While the past is always worth studying, it is the future that matters most of all. So you might want to take a peek at how much the company is expected to grow in the next few years.
We are certainly impressed with the progress C3.ai has made over the last year, but it is also worth considering how costly it would be if it wanted to raise more cash to fund faster growth. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By comparing a company’s annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).
C3.ai’s cash burn of US$44m is about 1.9% of its US$2.4b market capitalisation. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply.
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