TLDR
- Q1 revenue hit $193.4M, up 94% year-over-year, beating the $181M estimate
- Q2 revenue guidance of $194M also topped Wall Street’s $178M consensus
- Stock dropped over 9% in after-hours despite the beat, closing at $226.72 before the move
- Gross margins are expected to decline through the year as Cerebras rents equipment back to OpenAI to meet surging demand
- An insider lock-up unlock this Thursday makes roughly 13% of IPO shares eligible to trade
Cerebras Systems (CBRS) posted its first earnings report since going public in May, and the numbers were good. Revenue, guidance, and the operating loss all came in better than expected. The stock still dropped more than 9% after hours.
The stock closed Tuesday at $226.72. It priced at $185 in its May IPO.
Q1 revenue came in at $193.4 million, up 94% year-over-year and ahead of the $181 million Wall Street was looking for. Cloud and services revenue jumped 178% from a year ago. The adjusted operating loss was $3.5 million, far better than the $19.3 million loss in the same period last year.
$CBRS Q1 revenue rose 94% YoY to $193.4M, beating $181.4M est.
FY26 revenue guide: $855M-$865M vs. $824.8M est.
Cerebras also announced a $20B+ OpenAI deal for 750MW of inference compute and a multi-year AWS inference partnership. pic.twitter.com/Rh14PGcfUz
— Wall St Engine (@wallstengine) June 23, 2026
Q2 revenue guidance of $194 million also beat consensus estimates of $178 million, representing 88% year-over-year growth.
Margin Pressure Is the Story
The catch is margins. Full-year gross margin guidance came in at 38-41%, and Q2 guidance narrows further to 36-38%. The reason: Cerebras is renting equipment it originally sold to other customers and redirecting it to OpenAI, whose demand is outpacing new server capacity.
The $20 billion multi-year deal with OpenAI is the engine of Cerebras’ growth, but it’s also squeezing profitability in the near term. The company says it will recognize $3.7 billion of its $24.6 billion backlog as revenue in 2026 and 2027.
There’s another wrinkle. Cerebras granted OpenAI warrants for 33.4 million shares, practically for free. These vest over time and are recorded as contra-revenue, a non-cash charge that reduces reported sales figures. Needham analyst Quinn Bolton has flagged this as a growing headwind as the OpenAI contract scales up.
OpenAI uses Cerebras’ cloud to run Codex-Spark, a coding model. The company also recently launched enterprise trials of Kimi K2.6 and Gemma 4.
Lock-Up Expiry Adds Pressure
Only about 15% of total shares were sold in the IPO. The rest are locked up.
This Thursday, a milestone is hit that makes roughly 13% of IPO shares eligible to sell — insiders and early investors. That could add downward pressure on the stock in the near term.
A second, larger unlock is set for two days after Q2 earnings are reported, freeing up another 17% of shares.
Since its first day of trading, when the stock hit $386, 19 out of 26 trading sessions have seen moves of more than 3%. The volatility isn’t going anywhere.
Eleven analysts have already initiated coverage, with an average price target of $294 and a Buy rating, according to FactSet. Analysts project core revenue rising to $7.2 billion by 2028, with adjusted EPS of $5.53. At Tuesday’s close, the stock trades at 41 times that figure.
Cerebras also closed a revolving credit facility of up to $850 million in April to support data center expansion, on top of the $6.4 billion raised in its IPO and a $1 billion working capital loan from OpenAI.
🚨 Our JUNE Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for June, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
