Cerebras Systems (NASDAQ: CBRS) delivered a volatile post-earnings session on Wednesday, with shares jumping about 12% during regular trading to $262.06 before reversing sharply in extended hours. The stock fell roughly 17% to 18% after the report, trading near $219, despite core revenue more than doubling year over year and management raising its full-year outlook.
For Q2, Cerebras reported core revenue of $209.9 million to $210 million, up 103% from a year earlier and above the $191 million Wall Street estimate. Core cloud and services revenue climbed 287% to $127.7 million, driven by OpenAI deployments and expanded customer usage. However, GAAP revenue came in at $180.1 million, missing the roughly $194 million consensus. The company also swung to a net loss of $450.5 million from net income of $309.5 million a year earlier, while adjusted operating loss of $34 million beat expectations for a $63 million loss.
The key pressure point was profitability. Core gross margin fell to 40.6% from 46.5% in the first quarter, and management guided third-quarter core gross margin to 38% to 40% before an expected improvement in Q4. Cerebras said it is temporarily renting systems back from cloud customers to meet inference demand while its own data-center capacity comes online. It lifted full-year core revenue guidance to $880 million to $890 million and raised its gross margin outlook to 41% to 43%. The adjusted operating margin forecast also improved to around -18% from -30%.
The company ended June with about $25 billion to $25.4 billion in remaining performance obligations, broadly unchanged from the previous quarter. The backlog is anchored by a multi-year OpenAI cloud contract that includes an option to expand and stock warrants. Cerebras has also added deals with Amazon and AMD, positioning its WSE chip alongside their chips for high-speed inference tasks. Analysts at Morgan Stanley had previously said that nothing in these numbers was disappointing, while Wedbush and TD Cowen pointed to execution and margin pressure as central investor concerns.
Since its May IPO at $185 per share, CBRS has been exceptionally volatile. It opened at $350 on its first day, reached $386, and later slid to $161 by late June. The stock has moved more than 3% in either direction on 43 of its 62 public trading days, with a market cap around $59.37 billion. Cerebras reported $8.6 billion in cash, restricted cash and short-term investments at quarter-end, more than 600 megawatts of data-center capacity live or under contract through 2027, and plans to expand manufacturing capacity more than tenfold this year.
