Cerebras reports mixed Q2, raises fiscal 2026 outlook

Cerebras Systems Inc. (NASDAQ: CBRS ) stock is falling in premarket trading Thursday after the company reported mixed second-quarter results after Wednesday's market close. 5 cents per share, narrower than the analyst estimate for a loss of 17 cents per share. 20 million consensus estimate.

9 million, up 103% year over year and above the company's guidance. Core gross and operating margins also exceeded expectations. 6%. 8%.

Chief Financial Officer Bob Komin said quarterly adjusted gross margin would have been 500 basis points higher without additional costs tied to expanding cloud capacity by renting back more of the company's systems. 6 million. The operating margin improved to negative 16% from negative 42% a year earlier. 6 billion in cash and marketable securities.

The company also had an unused $850 million revolving credit facility. 7 million. Cerebras cited demand for fast inference services and the ramp-up of its OpenAI deployment. 1 million.

Cerebras has secured more than 600 megawatts of data center capacity over the past seven months. The capacity is either operational or contracted for delivery by the end of 2027. Its broader pipeline has reached gigawatt scale. The company is also working with AWS on solutions expected to become available through AWS Bedrock in the first quarter of 2027, expanding its reach among enterprise customers.

CEO Andrew Feldman said Cerebras plans to unveil its fourth-generation CS-4 system next week. The company also signed six deals worth more than $30 million each during the second quarter. 4 billion in remaining performance obligations does not include backlog from AWS or other hyperscalers. Cerebras Raises 2026 Outlook During the earnings call, Feldman said emerging neo-cloud providers are beginning to diversify beyond NVIDIA Corporation (NASDAQ: NVDA ) after initially focusing heavily on its hardware.

Feldman said some neo-clouds are adopting multiple vendors, while others are building around Advanced Micro Devices, Inc. (NASDAQ: AMD ) or power assets, creating what he called "large" opportunities for Cerebras in 2027. For the third quarter of 2026, Cerebras expects core revenue of $214 million to $216 million, a gross margin of 38% to 40% and an operating margin of negative 25% to negative 23%. Management expects core gross margin to bottom at 38% to 40% in the third quarter before improving in the fourth quarter.

The company expects lower-cost, company-owned systems to replace rented capacity. Cerebras raised its fiscal 2026 outlook to revenue of $880 million to $890 million, a gross margin of 41% to 43% and an operating margin of negative 19% to negative 17%. Targets Faster AI Inference Feldman said the company's disaggregated inference technology, with GPUs currently running in its labs, is expected to be deployed and commercially available in the fourth quarter. Cerebras expects inference throughput to increase more than 20-fold over the next 18 months.

New systems are also expected to deliver roughly two times the speed annually for several years. The company expects core revenue to more than triple in 2027. Manufacturing capacity is projected to expand more than 10-fold during 2026, supported by new factories with Flex and Sanmina, with further expansion planned for 2027. Revenue from other hyperscaler partnerships is expected to begin in mid-2027 and ramp through 2028.

4 billion in remaining performance obligations excludes AWS and other hyperscaler backlog. Cerebras Targets Gross Margins Above 60% Cerebras is targeting long-term core gross margins above 60%. The company expects higher fast-inference pricing, increased use of owned data center capacity, improved throughput, scale benefits, lower wafer costs and reduced reliance on high-bandwidth memory to support margins. 24 during premarket trading on Thursday, according to Pro data.

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