Cerebras Soars! Q3 Revenue Exceeds Expectations, Cloud Business Surges 272%, Raises Full-Year Guidance

The demand for AI inference continues to rise, and AI chip company Cerebras has exceeded market expectations in its third-quarter performance, with cloud business revenue becoming the core engine of growth. The company not only raised its full-year revenue guidance for 2026 but also expects revenue in 2027 to reach three times that of this year, reflecting its optimistic outlook on the growing demand for AI inference computing power.

On November 12 local time, Cerebras announced its Q3 2026 financial report. The company’s core revenue for the quarter reached $230.9 million, a 70% year-on-year increase, surpassing analysts' average expectation of $214.7 million; among this, cloud and other service revenues surged 272% to $144.9 million.

Driven by the growth of cloud business and customer demand, Cerebras raised its full-year core revenue guidance for 2026 from the previous $880 million to $890 million to a new range of $940 million to $960 million. The company also expects core revenue for the fourth quarter to reach between $310 million and $330 million, with core gross margins rising to between 47% and 49%.

In terms of order reserves, as of September 30, Cerebras had remaining performance obligations (RPO) of $26.1 billion. The company also disclosed that it has signed contracts for 700 megawatts of data center capacity, which it plans to deliver by the end of 2027.

However, the strong revenue growth has not yet translated into improvements in GAAP profitability. The company’s net loss for the third quarter widened to $161.2 million, compared to $22.2 million in the same period last year. As the company accelerates chip manufacturing and data center expansion, stock-based compensation and customer warrant amortization have also created significant discrepancies between GAAP and core operational performance.

Following the earnings report, Cerebras' stock price rose 17% in after-hours trading.

Cloud Business Revenue Soars, Hardware Sales Not the Only Growth Engine

From the revenue structure, Cerebras is expanding its cloud computing service business. In the third quarter, the company’s GAAP cloud and other service revenue reached $141.9 million, a 265% year-on-year increase; under core metrics, this revenue was $144.9 million, a 272% year-on-year increase, accounting for approximately 63% of total core revenue.

In contrast, hardware business revenue showed relatively weak performance. In the third quarter, GAAP hardware revenue was $68.88 million, down from $96.79 million in the same period last year. Calculated under core metrics, hardware revenue was $85.96 million, also lower than the $96.79 million from the previous year.

This change reflects that Cerebras' revenue structure is shifting towards cloud services. The company is no longer solely reliant on selling AI chips and computing systems but is also providing inference computing power through its own cloud platform and third-party cloud service providers to expand customer access to computing power.

However, the decline in hardware revenue does not mean the company is actively abandoning hardware sales. CEO Andrew Feldman stated that hardware sales are affected by uneven delivery times, rather than a strategic shift towards cloud business.

OpenAI, Microsoft, and Oracle Expand Cooperation, Computing Power Order Reserves Reach $26.1 Billion

Large customer collaborations are becoming an important support for Cerebras' expansion.

Cerebras has reached a multi-year computing power supply agreement with OpenAI worth approximately $20 billion. The company is expanding its chip supply scale to meet the computing power demands of this agreement and other customers.

Microsoft has become a new customer for Cerebras, with existing partners including Oracle and OpenAI. Oracle previously announced that it would integrate Cerebras' high-speed AI inference capabilities into Oracle Cloud Infrastructure, with related services expected to launch in 2027.

In terms of order reserves, as of September 30, Cerebras had remaining performance obligations (RPO) of $26.1 billion. The company also disclosed that it has signed contracts for 700 megawatts of data center capacity, which it plans to deliver by the end of 2027.

Additionally, Cerebras announced a new cloud business collaboration with one of the top three global hyperscale cloud service providers, but the customer name has not yet been disclosed. The company stated that further information will be released next year.

These collaborations mean that Cerebras is expanding its commercial coverage through various channels, including direct sales, cloud platforms, and third-party cloud service providers. For the company, whether it can deliver data center capacity as planned and convert order reserves into actual revenue will become an important indicator of future growth.

Raises Full-Year Guidance, Expects 2027 Revenue to Triple This Year

After exceeding expectations in the third quarter, Cerebras further raised its full-year performance outlook.

The company currently expects core revenue for 2026 to reach between $940 million and $960 million, higher than the previous estimate of $880 million to $890 million. Fourth-quarter core revenue is expected to be between $310 million and $330 million, with core gross margins expected to reach between 47% and 49%, and core operating profit margins expected to be between -1% and 1%.

For 2027, CEO Andrew Feldman provided a more optimistic growth forecast, expecting the company’s revenue to reach three times that of 2026.

To support this goal, Cerebras is accelerating manufacturing and infrastructure expansion. The company expects that by the end of 2026, manufacturing capacity will exceed ten times that of the beginning of the year and plans to further increase factories and production capacity in 2027.

In terms of funding, the company disclosed that as of the end of the third quarter, cash, cash equivalents, restricted cash, and short-term investments totaled $7.8 billion, with an additional $850 million in debt financing capacity.

GAAP Loss Widens, Quality of Growth Still to Be Verified

Despite strong revenue and order reserve performance, Cerebras' profitability remains a concern.

In the third quarter, the company’s GAAP net loss reached $161.2 million, significantly widening from $22.2 million in the same period last year; GAAP operating loss reached $224.1 million. In contrast, the company’s core operating profit margin was -14.3%, still failing to achieve adjusted operating profitability.

Stock-based compensation expenses are a significant factor contributing to the noticeable differences between the two financial metrics. In the third quarter, the company’s stock-based compensation expenses reached $155.1 million, totaling $541.7 million for the first three quarters. Additionally, customer warrant amortization also impacted GAAP performance.

In terms of gross margin, the third quarter GAAP gross margin was 20%, while the core gross margin was 41%. The company expects the core gross margin for the fourth quarter to further rise to between 47% and 49%, but this improvement still needs to be verified in subsequent financial reports.

For Cerebras, the growth in AI inference demand, expansion of cloud service customers, and expansion of computing power infrastructure are driving rapid revenue growth. However, against the backdrop of high capital investment and stock-based compensation expenses, whether orders can be converted into revenue on time and whether scale expansion can lead to sustained profitability improvements remain key issues for investors to watch.