By Adam Levine
Cerebras Systems reported better-than-expected third-quarter earnings results on Tuesday afternoon. It's the chip maker's first earnings report since it went public in May. Shares were down in after-hours trading.
Revenue for the quarter reached $193 million, beating projections of $181 million, and up 94% on the year. The company's adjusted operating loss was a smaller-than-expected $3.5 million, versus a $44 million loss last year.
This is breaking news. Read a preview of Cerebras's earnings below and check back for more analysis soon.
Newly public artificial-intelligence chip maker Cerebras Systems will release its first earnings report on Tuesday afternoon. The stock trades at a high valuation based on elevated expectations for the next three years. There's already a lot of share-price volatility and first-quarter earnings could light it up again.
The stock was priced at $185 in its May initial public offering, and the timing could not have been better. The company makes a unique chip for artificial intelligence, and that sector was screaming in the weeks leading up to the IPO. It's been a wild ride, one that's probably not over.
Shares surged as high as $386 on the first day of trading and, out of the 25 trading days since then, 19 have seen share price moves of more than 3%. At Monday's close, the stock was at $224.43.
Though Cerebras just went public, there are already 11 analysts who have initiated coverage, according to FactSet, with an average price target of $294 and a Buy rating. First-quarter sales are expected to come in at $181 million, an 82% rise from last year. The company still operates at a loss, and is not expected to show a profit until its $20 billion multiyear cloud contract with OpenAI accelerates next year.
The revenue picture is clouded by warrants for 33.4 million shares that the company granted to OpenAI, practically for free. In January, 4.5 million shares vested, and the value of these warrants is recorded as a sales discount, a noncash charge called contra-revenue. In its IPO prospectus, the company warned that these charges would begin in the first quarter as Cerebras began delivering on its end of the deal.
Needham analyst Quinn Bolton says that contra-revenue will be modest in the first quarter, but grow as the OpenAI contract ramps. Cerebras will provide investors with a "core revenue" metric, which will exclude contra-revenue.
Another 29 million shares await vesting milestones, one of which may have been triggered this month.
OpenAI uses Cerebras' cloud to host one of its software coding models, Codex-Spark. This is typical of the medium-sized AI models seen running on Cerebras hardware, but the company claims they will soon be able to run much larger models, like OpenAI's ChatGPT 5.5.
The chip maker also has a binding term sheet with Amazon Web Services, which would be the first major cloud to host Cerebras' AI chips.
At the end of 2025, Cerebras' backlog was $24.6 billion, mostly from the OpenAI deal. The company said that it will recognize $3.7 billion of the backlog as revenue in 2026 and 2027.
Investors are betting that Cerebras gets caught up in the same tailwind that has sent the stocks of companies like Nvidia and Micron soaring: the AI data center boom that is providing a massive secular boost to the normally cyclical chip sector. Starting from half a billion in sales last year, analysts project Cerebras' core revenue to rise to $7.2 billion in 2028. Adjusted earnings per share for that year are seen at $5.53, with the stock currently trading at 41 times that.
The stock price has been volatile, and one of the reasons is that only about 15% of shares outstanding were sold during the IPO. The rest are locked up until set milestones, one of which will be hit this Thursday, when almost 13% of the IPO shares are eligible to be sold by insiders and early investors. This may lead to downward pressure on the share price if new supply hits the float. The next trigger comes two days after the company reports its second-quarter earnings, and that will make another 17% of shares eligible to trade.
The first quarter ended in March, before the IPO, so the accompanying changes to the company's balance sheet and cash flow statement will not yet be reflected.
Write to Adam Levine at adam.levine@barrons.com
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June 23, 2026 16:59 ET (20:59 GMT)
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