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    CBRS
    Earnings call· Jun 2026(Q2 FY26)

    Cerebras Systems Q2 FY26 earnings call CBRS

    Aug 12, 2026 Source

    Executive summary

    Cerebras Q2 FY26 — Record Core Revenue and Strategic Partnerships Drive Future Growth

    Cerebras Systems delivered a strong Q2 FY26, exceeding guidance across all core metrics, driven by exceptional demand for fast inference and significant capacity expansion. The company is building foundational capabilities through strategic partnerships with AWS and AMD for disaggregated inference, expanding its market reach and improving economics. With a substantial $25.4 billion RPO, Cerebras is poised for massive revenue growth in 2027 and beyond, despite near-term gross margin pressures from temporary capacity rental.

    Highlights

    5

    • Core revenue reached $209.9 million, marking a 103% year-over-year increase and exceeding guidance.

    • Core cloud and other services revenue surged by 287% year-over-year to $127.7 million.

    • Core gross margin improved significantly to 40.6%, up 940 basis points year-over-year, beating expectations.

    • Core operating margin improved to negative 16% from negative 42% a year ago, an improvement of 2,600 basis points.

    • Secured over 600 megawatts of data center capacity by the end of 2027, with a pipeline measured in gigawatts.

    Concerns

    2

    • Core gross margin sequentially declined to 40.6% in Q2 FY26 from 46.5% in Q1 FY26, primarily due to higher costs from temporarily renting back systems.

    • Q3 FY26 core gross margin is expected to be the low point, projected in the range of 38% to 40%.

    Guidance & targets

    10
    CategoryTargetConfidence
    Core Revenue
    $214 million to $216 million
    high materiality
    High
    Core Gross Margin
    38% to 40%
    medium materiality
    High
    Core Operating Margin
    minus 25% to minus 23%
    medium materiality
    High
    Full Year Core Revenue
    $880 million to $890 million
    high materiality
    High
    Full Year Core Gross Margin
    41% to 43%
    medium materiality
    High
    Full Year Core Operating Margin
    negative 19% to negative 17%
    medium materiality
    High
    Core Revenue Growth
    more than triple
    high materiality
    High
    Core Revenue Growth
    continue to grow at multiples
    high materiality
    High
    Margin Expansion
    significant margin expansion
    high materiality
    High
    Core Gross Margin
    60% plus
    high materiality
    High

    Operational metrics

    17
    Core Revenue
    $209.9 millionup 103% year-over-year
    Q2 FY26

    Record core revenue.

    Core Gross Margin
    40.6%up 940 basis points year-over-year
    Q2 FY26

    Reflects increase in value of fast inference, product improvements, and economies of scale. Sequentially lower due to higher cost for rented capacity.

    Core Cloud and Other Services Gross Margin
    41.8%1,600 basis points better than Q2 '25
    Q2 FY26

    Component of total core gross margin.

    Core Hardware Gross Margin
    38.8%510 basis points higher than a year ago
    Q2 FY26

    Component of total core gross margin.

    Core Operating Loss
    $33.6 million
    Q2 FY26

    Reflects investments in people, manufacturing, and data center capacity.

    Core Operating Margin
    -16%compared to negative 42% a year ago, an improvement of approximately 2,600 basis points year-over-year
    Q2 FY26

    Demonstrates strong operating leverage while doubling revenues and stepping up investments.

    Cash and investments balance
    $8.6 billion
    as of June 30, 2026

    Strong liquidity and balance sheet position, enhanced by IPO in Q2.

    Revolving credit facility
    $850 millionunused to date
    Current

    Provides flexibility to invest.

    Data center capacity secured
    over 600 megawatts
    by end of 2027

    Expanding capacity across multiple locations globally, including Alabama, Dallas, Denver, Minneapolis, Santa Clara, Stockton, France, Finland, Manitoba, Montreal, Norway, Saskatchewan, and Toronto.

    Data center capacity pipeline
    gigawatts
    Future

    Pipeline of new opportunities for expansion continues to grow.

    Manufacturing capacity increase
    more than 10x
    in 2026

    Building new factories with Flex and Sanmina to support exceptional growth.

    Manufacturing capacity increase (2027 contracted)
    3x or 4x more
    for 2027

    Contracted facilities for growth in 2027, with more time to contract for additional capacity.

    Throughput increase (AMD partnership)
    5x
    Current

    Combined solution with AMD Helios racks and Cerebras CS systems for disaggregated inference.

    Throughput increase (product roadmap)
    more than 20x
    through the end of 2027

    Planned improvement for the Wafer-Scale Engine, drastically improving performance and inference economics.

    Speed increase (product roadmap)
    double
    each year

    Starting with a 15x performance advantage over the industry.

    OpenAI GPT-5.6 Sol serving speed
    10x faster
    Current

    Cerebras serves GPT-5.6 Sol, the largest frontier model, at this speed.

    Deals over $30 million
    6
    Q2 FY26

    Signed in Q2, outside of OpenAI and hyperscalers.

    Industry KPIs

    7
    MetricValueDetails
    Backlog order book$25.4 billionUSD
    Fab capacity utilization—
    Bookings net order intake—
    Design wins socket pipeline—
    Inventory channel inventory—
    Node platform ramp schedule5-nanometer node
    End market segment revenue mixCore cloud and other services revenue: $127.7 million; Core hardware revenue: $82.1 millionUSD

    Orderbook & backlog

    1
    Remaining Performance Obligations (RPO)$25.4 billionJune 30, 2026

    Does not reflect any backlog of business from AWS or any other hyperscaler at this time. Provides visibility and high confidence in future revenue growth.

    Product announcements

    2
    ProductTypeDetails
    CS4launch
    CS5roadmap

    Deals & partnerships

    11
    OpenAIStrategic partnership for delivery of GPT-5.6 Sol and providing fast inference cloud services.

    Cerebras serves GPT-5.6 Sol 10x faster than others, providing scale and frontier insight.

    Amazon Web Services (AWS)Collaboration to offer Cerebras solutions through AWS' Bedrock platform.

    Solutions will be deployed in Amazon data centers and delivered via Bedrock API. Solutions generally available in Q1 2027.

    AMDCollaboration to build disaggregated inference solutions combining AMD Helios racks with Cerebras CS systems.

    Helios racks handle prefill, Cerebras systems handle decode. Solutions are running in labs and expected to be deployed and available in Q4 2026.

    FigmaNew agreement for AI coding services.

    Expands Cerebras' footprint in the AI coding category.

    CognitionNew agreement for AI coding services.

    Expands Cerebras' footprint in the AI coding category.

    LovableMajor win in Europe for AI coding services.

    Extends Cerebras' presence in Europe for AI coding.

    BlockNew agreement to leverage fast inference for custom-made agents.

    Supports agentic flows, where the value of speed compounds.

    AlphaSenseNew agreement to leverage fast inference for custom-made agents.

    Supports agentic flows, where the value of speed compounds.

    GSKNew agreement to leverage fast inference for custom-made agents.

    Supports agentic flows, where the value of speed compounds.

    CrowdStrikeWin for an AI-based security application.

    Application only exists if AI is fast, enabling LLMs to secure enterprise traffic invisibly without delay or disruption.

    U.S. governmentPartnerships for delivery of stacked memory solutions and integrated wafer-scale optical solutions.

    Part of Cerebras' invention engine, focusing on pioneering advances.

    Capital programs

    2
    Data Center Capacity ExpansionUnderway
    Funding: Primarily Cerebras' own hardware (lower BOM cost); meaningful portion of fit-out reimbursed by largest customer
    Start: Over the last 7 months

    Benefit: Over 600 MW live or under contract by end of 2027; pipeline measured in gigawatts

    Aggressive push to secure and build out data centers in Alabama, Dallas, Denver, Minneapolis, Santa Clara, Stockton, France, Finland, Manitoba, Montreal, Norway, Saskatchewan, and Toronto. Focus on inference allows flexibility in site selection, not requiring gigawatt training clusters.

    Manufacturing Capacity ExpansionUnderway

    Benefit: Increase by more than 10x in 2026; 3x-4x more contracted for 2027

    Building new factories with Flex and Sanmina to support exceptional growth expected in the years ahead.

    Risks & headwinds

    2
    Data center capacity bottleneckOngoing

    The faster we and our customers bring on new data centers, the faster we grow.

    Mitigation: Aggressive push to secure and build out data centers, repeatable process for site selection and deployment, leveraging inference needs (not gigawatt training clusters) for flexibility, and a pipeline of new opportunities measured in gigawatts.

    Temporary reduction in core gross marginQ2 FY26 and Q3 FY26

    Q2 core gross margin 40.6% vs 46.5% in Q1 FY26. Would have been ~500 bps higher without rented capacity. Q3 expected to be low point (38%-40%).

    Mitigation: Expects Q3 to be the low point, with significant improvement in Q4 FY26 as more data centers with lower-cost Cerebras-owned systems come online. Long-term target of 60%+ gross margin.

    What to watch in Q3 FY26

    5

    Core Gross Margin trajectory

    Q4 FY26
    Current40.6% (Q2 FY26), 46.5% (Q1 FY26)
    TargetImprovement from Q3 low point (38%-40%)

    Why it matters

    Management expects Q3 to be the low point and Q4 to improve significantly as owned systems replace rented capacity, impacting profitability.

    Looking forward, we expect Q3 to be the low point for core gross margin before improving significantly in Q4 '26 as we bring on more data centers filled with lower-cost Cerebras-owned systems.

    Q&A highlights

    7

    How will customer concentration evolve in 2027 with AWS ramping, given OpenAI's current large share? What about other hyperscalers?

    OpenAI will remain a meaningful portion of revenue next year but will shrink as a percentage over time as AWS and other customers (coding, security) grow. Cerebras has a history of expanding its customer base from initial wins (government, sovereign cloud, frontier lab, now AWS). Discussions with other hyperscalers are ongoing.

    “OpenAI will shrink as a percentage of our revenue over time. But I think you can expect for next year them to still be a meaningful portion of our revenue.”

    asked by Timothy Arcuri · answered by Andrew Feldman

    2 min read5 chapters

    Detailed Narrative

    01

    Capacity Expansion & Supply Chain

    Cerebras has aggressively expanded its data center footprint, securing over 600 megawatts by the end of 2027 with a gigawatt pipeline, leveraging its ability to scale inference capacity across diverse locations globally. Manufacturing capacity is set to increase by over 10x in 2026 through new factories with Flex and Sanmina. This expansion is supported by strong relationships with TSMC for 5nm wafer supply, which is less constrained and more cost-effective than leading-edge nodes, reinforcing confidence in future growth plans.

    02

    Disaggregated Inference Strategy

    The company is pioneering disaggregated inference solutions with AMD (Helios) and AWS (Trainium), separating prefill (GPUs) and decode (Cerebras WSE). This approach significantly increases throughput by 5x with AMD while maintaining Cerebras' industry-leading speed. This improves inference economics by producing more high-value tokens per system at lower cost and power, and enables customers to leverage existing GPU investments, expanding the market for both Cerebras and its partners.

    03

    Product Roadmap & Innovation

    Cerebras continues rapid engineering execution, planning to double system speed annually for several years, starting with a 15x performance advantage. The CS4 system will be unveiled next week at the Supernova Conference, and the CS5 is on track for launch in H2 2027. Long-term innovation includes significant partnerships with the U.S. government for stacked memory and integrated wafer-scale optical solutions, focusing on advancements in chip architecture, packaging, I/O, and power delivery to reduce cost per token.

    04

    Customer Growth & Market Expansion

    Cerebras is expanding its customer base beyond OpenAI, with AWS solutions generally available in Q1 2027 via Bedrock, providing global enterprise reach. The company signed 6 deals over $30 million in Q2, growing in AI coding (Figma, Cognition, Lovable) and agentic flows (Block, AlphaSense, GSK). New markets like security (CrowdStrike win) are emerging, enabled by fast AI for real-time traffic inspection without user disruption, creating massive new opportunities.

    05

    Financial Performance & Outlook

    Q2 FY26 saw record core revenue of $209.9 million (up 103% YoY) and strong core gross margin of 40.6% (up 940 bps YoY), both exceeding guidance. The company raised its full-year 2026 guidance for core revenue ($880M-$890M), gross margin (41%-43%), and operating margin (-19% to -17%). With $25.4 billion in RPO and $8.6 billion in cash, Cerebras is well-positioned for substantial revenue and margin expansion in 2027 and beyond, targeting 60%+ gross margins.

    AI-generated summary of the company’s earnings call. Not investment advice.