Cerebras hardware revenue falls 23% as cloud business nearly quadruples

Cerebras Systems Inc. reported hardware revenue fell 23% to $54.1 million in the June quarter, while cloud revenue nearly quadrupled to $126 million.

"Hardware sales ebb and flow — that's the nature of the business," Chief Executive Officer Andrew Feldman said in an interview, adding the company will keep selling systems alongside its cloud service.

Core revenue rose 103% to $210 million, with the cloud segment contributing $126 million and becoming the largest source of income. GAAP revenue of $180.1 million missed the $194 million consensus, and the company posted a net loss of $450.5 million, mostly tied to $386.6 million in stock-compensation costs.

Metric	Actual	Consensus	Beat/Miss
GAAP revenue	$180.1M	$194M	-7.2%
EPS	-$2.98	-$0.18	Miss
Gross margin	38-40%	36%	Beat

The company raised its full-year core revenue outlook to $880-890 million, from $855-865 million, and expects revenue to more than triple next fiscal year, backed by $25.4 billion in remaining performance obligations. Shares fell 14% after hours, paring a 42% gain since the May initial public offering, when Cerebras priced at $185 and raised $6.4 billion.

Feldman attributed the hardware decline to the lumpy timing of large system orders, a pattern he said is inherent to selling computers. The company, which listed on the Nasdaq in May, is challenging Nvidia Corp. for AI inference workloads that need low-latency responses, a segment Cerebras calls "fast inference."

The shift toward cloud is reshaping Cerebras's revenue mix. The cloud unit, which rents AI computing capacity built on the company's wafer-scale chips, now accounts for more than half of core revenue, insulating results from the swings of direct hardware sales. The higher-margin cloud business is supporting overall profitability as hardware volumes fluctuate.

Cerebras guided to core revenue of $214-216 million for the current quarter, above the $212.6 million analysts expected. Core gross margin will expand to 38% to 40%, addressing a key investor concern. "Fast inference is priced at a premium," Feldman said, adding the company increased the AI output of its systems.

The company named OpenAI, Amazon Web Services, Advanced Micro Devices Inc. and CrowdStrike Holdings Inc. as partners, with disaggregated inference slated for Amazon Bedrock in the first quarter of 2027. Cerebras also said OpenAI can use its chips to serve its latest model, GPT 5.6-Sol.

The guidance raise shows management expects AI inference demand to accelerate. Investors will watch the Q3 earnings call for updated segment margins and the timing of hardware order recoveries.

This article is for informational purposes only and does not constitute investment advice.