C3.ai, Inc. (AI) shares tumbled 6.73% in the after-market session on Wednesday, despite the artificial intelligence software company reporting a 26% year-over-year increase in revenue for its fiscal third quarter of 2024. The plunge was triggered by the company's weaker-than-expected earnings guidance for the fourth quarter and full year, overshadowing its strong revenue growth.

While C3.ai's revenue hit $98.78 million, exceeding estimates of $98.27 million, the company posted a non-GAAP loss of $0.12 per share, missing analyst expectations of a $0.25 per share loss. Additionally, the company's adjusted operating income of -$23.14 million fell short of expectations, despite marking a significant improvement over the prior year's quarter.

Investors were further concerned by C3.ai's billings growth of 21.2% year-over-year, which lagged behind the revenue growth rate, indicating a potential slowdown in future sales. Moreover, the company's customer acquisition costs remained elevated, with a payback period of over 13 years, suggesting challenges in efficiently acquiring new customers in a highly competitive market.