01—Abstract
Summary
Summary of the 10-Q filed June 24, 2026. Cited figures are marked; the original filing is the authoritative source.
Cerebras Systems (CBRS) reported Q1 2026 (three months ended March 31, 2026) revenue of $193.4 milliona, up 94% year over year from $99.5 million, with cloud and other services growing 178% to $82.8 million and hardware up 59% to $110.6 million.
Gross margin expanded to 44.6% from 41.8%, and net loss narrowed to $14.0 millionb from $23.9 million. However, management flagged that gross margin is expected to be significantly lower in the near term because amortization of customer warrant assets (a non-cash reduction to revenue) and pass-through data center costs will weigh on reported results, and that overall gross profit will decline in absolute dollars as cloud capacity start-up costs are incurred. The balance sheet and liquidity picture changed sharply.
Cash, cash equivalents and restricted cash rose to $2.7 billionc, largely from a $1.0 billion Series H preferred raise and a $1.0 billion secured Working Capital Loan from OpenAI, which bears 6% interest and is repaid through non-cash service credits. Remaining performance obligations reached $25.0 billion, with a significant portion tied to OpenAI's 750MW Master Relationship Agreement. Customer concentration is extreme: Customer A (MBZUAI, per the risk factors) accounted for 63% of Q1 revenue, and three customers made up 86% of receivables.
The company also disclosed material weaknesses in internal control over financial reporting, and its disclosure controls were concluded to be not effective as of March 31, 2026. Subsequent events are significant. The company completed its IPO on May 15, 2026, at $185.00d per share, raising about $6.2 billion net, and it entered a $850 million revolving credit facility upsized on June 17, 2026.
It also signed an AWS commercial agreement with a warrant for up to 2.7 million Class N shares, and it has substantial new data center leases (about $1.6 billion of undiscounted commitments). Because the IPO's share count, proceeds and stock-based compensation effects are not reflected in Q1 figures, the next reported quarter should show materially higher stock-based compensation, including about $366.8 million of expected cumulative RSU expense in Q2 2026.
02—Key points
Key Highlights
- Q1 2026 revenue rose 94% year over year to $193.4 million, driven by cloud and other services (up 178% to $82.8 million) and hardware (up 59% to $110.6 million).
- Gross margin improved to 44.6% from 41.8%, but management guided to significantly lower gross margins in the near term due to non-cash customer warrant amortization and pass-through data center costs.
- Net loss narrowed to $14.0 million (EPS of -$0.22) from $23.9 million a year earlier, while core net loss, a non-GAAP measure excluding stock-based compensation, pass-through items and warrant amortization, was $2.5 million.
- Remaining performance obligations of $25.0 billion, with a significant portion tied to OpenAI's 750MW committed capacity agreement and an option for up to 2.0GW total.
- Extreme customer concentration: Customer A accounted for 63% of Q1 revenue and 41% of receivables, and three customers made up 86% of receivables.
- Liquidity increased to $2.7 billion in cash and restricted cash, supported by a $1.0 billion Series H raise and a $1.0 billion OpenAI Working Capital Loan at 6% interest, with the IPO closing May 15, 2026 for about $6.2 billion net proceeds.
- Disclosure controls were not effective as of March 31, 2026, due to previously reported material weaknesses in IT general controls, segregation of duties and accounting resources.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2026, Cerebras Systems lost $0.07.
- Revenue$193.4M100.0%
- Cost of revenue−$107.2M55.4%
- Gross profit$86.2M44.6%
- Operating costs−$101.2M52.3%
- Operating income−$15.0M7.8%
- Interest, other & tax$1.0M0.5%
- Net income−$14.0M7.2%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed June 24, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $193.41M$99.51M | +94.4% |
| Cost of Revenue | $107.23M$57.91M | +85.2% |
| Gross Profit | $86.18M$41.60M | +107.1% |
| R&D Expenses | $75.50M$52.75M | +43.1% |
| Operating Expenses | $101.21M$70.07M | +44.4% |
| Operating Income | -$15.04M-$28.47M | +47.2% |
| Net Income | -$14.01M-$23.87M | +41.3% |
| EPS (Basic) | $-0.22$-0.46 | +52.2% |
| EPS (Diluted) | $-0.22$-0.46 | +52.2% |
| Shares Outstanding (Basic) | 62.81M52.00M | +20.8% |
| Shares Outstanding (Diluted) | 62.81M52.00M | +20.8% |
05—Questions
Frequently Asked Questions
How did Cerebras's revenue and profitability trend in Q1 2026?
Revenue grew 94% to $193.4 million, and gross profit rose to $86.2 million with gross margin of 44.6%. Operating loss narrowed to $15.0 million from $28.5 million, and net loss narrowed to $14.0 million. Much of the improvement reflects hardware margin gains and higher cloud pricing and utilization, partly offset by new non-cash warrant amortization that reduces revenue.
Why do management and the filing expect gross margins to fall in the near term?
Customer warrant assets issued to OpenAI, AWS and G42 are amortized as a reduction to revenue, which lowers reported revenue without any cash cost. Pass-through data center costs, which carry low margins, are recorded in both revenue and cost of revenue, and start-up costs for expanding cloud capacity will also weigh on margins. Management expects gross profit to decline in absolute dollars in the near term.
How much cash does Cerebras have, and is the OpenAI loan a concern?
Cash, cash equivalents and restricted cash totaled $2.7 billion at March 31, 2026, plus $515.6 million in investments, and the IPO added about $6.2 billion in net proceeds after the period. The $982.9 million Working Capital Loan carries 6% interest and is repaid through non-cash service credits rather than cash, but it may become due immediately if the OpenAI MRA is terminated for reasons other than OpenAI's uncured breach. Investors should weigh that acceleration risk against the company's concentration on a single major customer.
What are the main risks from customer concentration and the new AWS and data center commitments?
A small number of customers, principally OpenAI, G42, MBZUAI and now AWS, drive most revenue, and the MRA imposes capacity delivery deadlines and service-level obligations that could trigger termination or refunds. New leases total about $2.3 billion undiscounted as of March 31, plus about $1.6 billion signed in Q2, and the AWS agreement includes exclusivity and minimum manufacturing capacity commitments. Excess capacity or a failure to renew could leave the company with costly idle infrastructure.
What changes after the IPO that could affect future results and share count?
The IPO on May 15, 2026 converted all preferred stock into Class B shares with 20 votes per share, so founders and early holders control roughly 99.2% of voting power. The company expects a cumulative RSU stock-based compensation charge of about $366.8 million in Q2 2026, plus ongoing expense from executive PRSUs once their service conditions are met, which will sharply increase reported operating losses. Lock-up releases of about 171.1 million shares during the period through Q3 2026 could pressure the stock.
06—Continue