Cerebras Warns Q2 Gross Margin to Slide to 36%-38%, Shares Fall 14%
CBRS•Cerebras reported Q1 revenue of $193.4 million, up 94% year over year, with a net loss of $14 million and a core gross margin of 46.5%. It projects gross margin to drop to 36%-38% next quarter and 38%-41% for full year, sending shares down about 14% premarket.
1. Q1 Financial Results
Cerebras delivered first-quarter revenue of $193.4 million, marking a 94% increase year over year, while reporting a net loss of $14 million, or $0.22 per share. Core gross margin reached 46.5%, reflecting robust top-line growth but continued unprofitability on a GAAP basis.
2. Margin Outlook and Drivers
The company forecast core gross margin to decline to 36%–38% in the current quarter and settle between 38%–41% for full-year 2026. Management attributed the compression to a temporary leaseback of data center capacity, which is expected to depress cloud and services margins by 10 to 15 percentage points.
3. Revenue Guidance and Growth
Cerebras projected second-quarter core revenue of approximately $194 million, representing 88% year-over-year growth, and full-year core revenue of $855 million to $865 million, a midpoint increase of about 69%. Core operating margins are expected to remain negative, in a range of –28% to –32%, as the company continues investing in expansion.
4. Market Reaction and Strategic Deals
Shares slid roughly 14% in premarket trading on the margin warning overshadowing growth metrics. The company also disclosed a multi-year OpenAI agreement exceeding $20 billion for 750 megawatts of compute infrastructure and a partnership with AWS, following a May IPO that raised $6.4 billion.
