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Commitments and Contingencies
 3 Months Ended
Jul. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Non-cancellable Purchase Commitments
In the normal course of business, the Company enters into non-cancellable purchase commitments with various parties. As of July 31, 2025, the Company had remaining purchase commitments of $409.6 million related to cloud hosting and associated services and $96.9 million related to professional services due over the next one to five years. The Company incurred costs totaling $39.0 million and $19.2 million during the three months ended July 31, 2025 and 2024, respectively, under these arrangements.
Leases
On August 25, 2021, the Company entered into a new lease to acquire approximately 283,015 square feet of office space in several phases in Redwood City, California. The lease commencement date was determined as the date when the landlord delivered the leased space to the Company. Accordingly, the first two phases of the lease commenced in the quarter ended January 31, 2022, the third phase of the lease commenced in the quarter ended October 31, 2022, the fourth phase of the lease commenced in the quarter ended April 30, 2023, the fifth phase of the lease commenced in the quarter ended July 31, 2023, the sixth phase of the lease commenced in the quarter ended January 31, 2024, and the seventh and final phase of the lease commenced in the quarter ended July 31, 2024. During the quarter ended July 31, 2025, there was remeasurement of right-of-use assets and liabilities related to phase three and seven of the lease due to changes in the timing of receipt of lease incentives. As a result, the lease liability for these phases was reduced to $6.3 million and the right-of-use asset correspondingly was reduced to $5.4 million.
Legal Proceedings
Securities Litigation
On March 4, 2022, a putative securities class action complaint (captioned The Reckstin Family Trust v. C3.ai, Inc. et al., 22-cv-01413-HSG) was filed in the U.S. District Court for the Northern District of California against the Company, and certain current and former officers and directors. On December 12, 2022, the court appointed a lead plaintiff and lead counsel. On February 15, 2023, the lead plaintiff and three additional named plaintiffs filed an amended complaint. The amended complaint names as defendants the Company, four current and former officers and directors, the underwriters in the Company’s initial public offering (“IPO”), and Baker Hughes Company (“Baker Hughes”). The amended complaint generally alleges that the defendants made material misstatements or omissions about the Company’s partnership with Baker Hughes and the Company’s own salesforce. The amended complaint alleges that defendants made these misstatements or omissions in connection with the Company’s IPO in violation of Sections 11 and 15 of the Securities Act of 1933 and between December 9, 2020 and December 2, 2021, inclusive, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The amended complaint further alleges that certain defendants engaged in insider trading in violation of Section 20A of the Securities Exchange Act of 1934. Plaintiffs seek unspecified damages, interest, fees and costs. All defendants moved to dismiss Plaintiffs’ amended complaint on May 1, 2023. On June 30, 2023, Plaintiffs voluntarily dismissed the underwriter defendants. On February 22, 2024, the court granted the motion to dismiss on all claims except for portions of the alleged violations of Section 11 and Section 15. Plaintiffs filed a second amended complaint on April 4, 2024. Defendants filed motions to dismiss on May 17, 2024. Plaintiffs filed an opposition brief on July 15, 2024. While the motions were pending, Plaintiffs filed a motion to amend their second amended complaint on September 27, 2024 to add new factual allegations. On February 13, 2025, the Court granted Plaintiffs’ motion to amend, and the Plaintiffs filed their third amended complaint on February 14, 2025. On March 25, 2025, Defendants filed a motion to dismiss the third amended complaint. On June 6, 2025, the Court took the motion under submission.
Six putative shareholder derivative actions have been filed: (1) Suri v. Siebel et al. (22-cv-03031) filed on May 23, 2022 in the U.S. District Court for the Northern District of California; (2) Rabasca v. Siebel et al. (23-cv-1566) filed on April 3, 2023 in the U.S. District Court for the Northern District of California; and (3) Vo v. Siebel et al. (23-cv-428) filed on April 19, 2023 in the U.S. District Court for the District of Delaware; and (4) Lanfair v. Siebel et al. (24-cv-01869) filed on March 26, 2024 in the U.S. District Court for the Northern District of California; (5) Pankow v. Siebel et al. (2024-0530-NAC) on May 15, 2024 in the Chancery Court of Delaware; and (6) Rosenfeld v. Siebel et al. (2024-0698) on June 28, 2024 in the Chancery Court of Delaware. In these cases, the plaintiffs assert claims on the Company’s behalf against certain of the Company’s current and former officers and directors for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, gross mismanagement, corporate waste, abuse of control, unjust enrichment, and violations of the Securities Exchange Act of 1934 based on allegations similar to those in the securities class action. In all six cases, the Company is named as a nominal defendant. The derivative complaints seek unspecified damages, disgorgement of profits from board member stock sales, an award of costs and expenses, including reasonable attorneys’ fees, and corporate governance reforms. On September 7, 2022, Suri was stayed pending resolution of the Reckstin case. On August 3, 2023, Vo was transferred to the U.S. District Court for the Northern District of California (3:23-cv-03895). On August 30, 2023, the Vo action was stayed on the same terms as the Suri action. On December 21, 2023, Rabasca was stayed on the same terms as Suri, and both Rabasca and Vo were consolidated with Suri. On July 1, 2024, Lanfair was consolidated with Suri and stayed on the same terms. The Pankow and Rosenfeld actions have not been consolidated with the Suri action but were stayed on November 13, 2024 and January 15, 2025 respectively. The Company has not yet been required to answer the complaints in any of the derivative actions.
On August 22, 2025, a putative securities class action complaint (captioned John Liggett Sr. v. C3.ai, Inc. et al., Case No. 3:25-cv-7129) was filed in the U.S. District Court for the Northern District of California against the Company, Mr. Siebel, our Executive Chairman, and our chief financial officer. The complaint alleges that the defendants made false and materially misleading statements during February to July 2025, regarding the status of the health of Mr. Siebel and its impact on the Company’s business operations. The complaint asserts causes of action for violations of 1) Sections 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5, and 2) Section 20(a) of the Exchange Act. The plaintiff seeks to represent a class of investors who acquired C3.ai securities between February 26, 2025 and August 8, 2025. The complaint requests unspecified damages and other relief. The defendants have not filed a response to the complaint.
On August 29, 2025, a putative shareholder derivative complaint (captioned Dennis Jaffee v. C3.ai, Inc. et al., Case No. 3:25-cv-7334) was filed in the U.S. District Court for the Northern District of California against Mr. Siebel, our Executive Chairman, our chief financial officer, and members of our board of directors. The complaint names the Company as a nominal defendant. In the complaint, the plaintiff asserts causes of action on the Company’s behalf based on allegations similar to those in the complaint filed in John Liggett Sr. v. C3.ai, Inc. et al. The plaintiff seeks an award of unspecified damages to the Company, recovery of attorneys’ fees and other costs and expenses, corporate governance reforms, and other relief. The defendants have not filed a response to the complaint.
As of the date of this report, the Company does not believe it is probable that these cases will result in an unfavorable outcome; however, if an unfavorable outcome were to occur in these cases, it is possible that the impact could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and estimable. Due to the early stages of these legal proceedings, neither the likelihood that a loss, if any, will be realized, nor an estimate of the possible loss or range of loss, if any, can be determined.
On February 27, 2024, the Company filed a lawsuit in the Court of Rome, Italy against Enel Global Services S.r.l. and any involved corporate affiliates (“Enel”). The claims in the suit against Enel include misappropriation of trade secrets under Articles 98 and 99 of the Italian Industrial Property Code and breach of contract. In this action, the Company seeks compensatory damages in the amount of €2.1 billion, equitable and other relief, as well as fees and costs. The parties have submitted briefs to the court to prepare for the pretrial conference scheduled for September 18, 2025. A final round of briefing is due on September 8, 2025. The Company has also filed a report of criminal misconduct with Italian law enforcement under Article 623 of the Italian Criminal Code. On December 23, 2024, Enel initiated two lawsuits against the Company in Rome, claiming ownership of two of C3’s patent applications filed in the European Patent Office. The motions to stay were granted. Because any legal action is unpredictable, it is difficult to quantify the potential recoveries, associated potential costs, and timeline associated with resolution of this matter. Any gain on this matter is considered a gain contingency and will be recognized in the period in which the award is realized or realizable.
In addition, from time to time, the Company is involved in various other legal proceedings arising in the ordinary course of business. Apart from the foregoing, the Company is not presently a party to any other such litigation the outcome of which, the Company believes, if determined adversely to the Company, would individually, or taken together, have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition.