Shares of the Redwood City, Calif. company dropped 11.3% to $107.37 in trading Tuesday.
C3.ai reported a loss of 23 cents a share on an adjusted basis compared with a loss of 27 cents a year earlier.Analysts were expecting the company to report a loss of 19 cents a share.
Revenue increased 19% to $49.1 million, compared with Wall Street's consensus of $47.3 million.
Subscription revenue for the quarter was $42.7 million, up from $34.6 million one year ago.
Looking ahead, C3.ai said it expects fourth-quarter revenue of $50 million to $51 million, compared with Wall Street's forecast of $48.3 million. The company is expecting a loss from operations to range from $28 million to $27 million.
The company sees fiscal 2021 revenue ranging from $180.9 million to $181.9 million, compared with analysts' estimates of $177.1 million.
"This is a large and rapidly growing market; we continue to innovate; we continue to expand our market-partner ecosystem and associated distribution capacity; and we continue to demonstrate technology leadership," CEO Thomas Siebel said in a statement.
Wedbush analyst Dan Ives maintained his outperform rating on the stock, but cut his price target to $175 from $200 "to reflect more variability in the company's AI deal trajectory going forward."
"We view C3.ai as one of the more disruptive enterprise software vendors in the last decade with the company laser focused on the convergence of AI, big data, and cloud computing," Ives said.
C3.ai, the analyst continued, "has amassed an impressive reference customer list from Shell to AstraZeneca to the largest financial institutions that have successfully deployed the company's AI solution set within its respective organizations to gain important and valuable insight into the petabytes of data flowing through the network."
C3.ai began trading in December $100 a share, up 138% from its initial public offering price of $42.