01—Abstract
Summary
Summary of the 10-Q filed August 12, 2026. Cited figures are marked; the original filing is the authoritative source.
Cerebras Systems (CBRS) reported a sharply higher revenue base but a widening GAAP loss in the quarter ended June 30, 2026, driven largely by IPO-related stock-based compensation.
Q2 2026 total revenue was $180.1 milliona, up 74% year over year from $103.3 million, and six-month revenue was $373.5 million, up 84%. Cloud and other services revenue rose 281% in the quarter to $126.0 million, while hardware revenue fell 23% to $54.1 million. GAAP gross margin compressed to 14% from 31%, reflecting roughly $44.3 million of non-cash amortization of customer warrant assets recorded as a reduction of revenue, IPO-related stock-based compensation and payroll tax costs, and start-up costs for cloud capacity.
GAAP net loss was $450.5 millionb for the quarter, versus net income of $309.5 million a year earlier, which had included a one-time $363.3 million gain from extinguishment of a forward contract liability. The balance sheet was transformed by the May 2026 IPO, which raised approximately $6.2 billion net, and by a $1.0 billion secured Working Capital Loan from OpenAI. Cash, cash equivalents, and restricted cash totaled $7.4 billion and marketable securities $1.2 billion at June 30, 2026, against $918.2 million of outstanding loan principal and $1.5 billion of total current liabilities.
Management states liquidity is sufficient for at least 12 months. Company-defined core operating loss narrowed to $33.6 millionc in the quarter from $43.9 million, and core gross profit rose to $85.2 million from $32.3 million, but these non-GAAP measures exclude substantial recurring costs and should be weighed against GAAP results. Remaining performance obligations reached $25.4 billion, with a significant share tied to the OpenAI master relationship agreement covering 750MW of committed inference capacity.
Investors should weigh the very high concentration of revenue and receivables among a few customers (OpenAI, G42, MBZUAI, AWS), the heavy capital and lease commitments for data centers (new non-cancelable leases of roughly $2.3 billiond disclosed across Q2 and Q3), and disclosed material weaknesses in internal control over financial reporting, which mean disclosure controls were not effective as of June 30, 2026. Lock-up expirations beginning in the coming months could also add supply to the stock.
02—Key points
Key Highlights
- Q2 2026 total revenue of $180.1M, up 74% YoY; six-month revenue of $373.5M, up 84%, led by cloud and other services revenue up 281% in the quarter to $126.0M.
- GAAP gross margin fell to 14% in Q2 from 31% a year earlier, driven by $44.3M of non-cash customer warrant asset amortization, IPO-related stock compensation and tax costs, and cloud start-up costs.
- GAAP net loss of $450.5M in Q2 2026 versus net income of $309.5M in Q2 2025, which had included a non-recurring $363.3M forward contract liability gain; R&D expense rose to $320.2M, largely from $228M of IPO-related stock-based compensation.
- Company-defined core operating loss narrowed to $33.6M from $43.9M and core gross profit rose to $85.2M from $32.3M, though these non-GAAP measures exclude pass-through costs, warrant amortization and stock compensation.
- Net proceeds of about $6.2B from the May 2026 IPO and a $1.0B OpenAI Working Capital Loan left $7.4B in cash and restricted cash plus $1.2B in investments, with $918.2M of loan principal outstanding.
- Remaining performance obligations of $25.4B, with a significant portion tied to the OpenAI MRA covering 750MW of committed capacity plus an option for 1.25GW more.
- Material weaknesses in internal control over financial reporting remain; disclosure controls were concluded to be not effective as of June 30, 2026, and customer concentration is high (AR: two customers held 76%).
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 12, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $180.11M$103.32M | +74.3% |
| Cost of Revenue | $154.55M$71.22M | +117.0% |
| Gross Profit | $25.56M$32.10M | −20.4% |
| R&D Expenses | $320.15M$60.77M | +426.8% |
| Operating Expenses | $502.79M$89.28M | +463.2% |
| Operating Income | -$477.23M-$57.18M | −734.6% |
| Net Income | -$450.53M$309.51M | −245.6% |
| EPS (Basic) | $-2.98$2.28 | −230.7% |
| EPS (Diluted) | $-2.98$1.91 | −256.0% |
| Shares Outstanding (Basic) | 150.97M52.72M | +186.4% |
| Shares Outstanding (Diluted) | 150.97M161.82M | −6.7% |
05—Questions
Frequently Asked Questions
Why did the company swing from a net profit a year ago to a large net loss this quarter?
The prior-year quarter included a one-time $363.3M non-cash gain from releasing a forward contract liability, which made Q2 2025 net income $309.5M. In Q2 2026, the company posted a $450.5M net loss, mainly due to $377.0M of stock-based compensation (largely IPO-triggered RSU and PRSU expense), $44.3M of warrant asset amortization that reduces revenue, and $19.7M of non-cash interest on the OpenAI Working Capital Loan, partly offset by $48.8M of interest and dividend income.
Is the company's cash position strong enough to fund its buildout?
Management says current cash, restricted cash, and marketable securities are sufficient for at least the next 12 months. The company had $7.4B of cash and restricted cash and $1.2B of marketable securities at June 30, 2026, and an undrawn $850M revolving credit facility. However, capital expenditures were $548.9M in the first half alone, operating cash flow was still negative at -$47.5M, and it has signed roughly $2.3B of additional data center leases, so cash burn will rise substantially as capacity is built.
What are the main risks from customer concentration?
A few customers drive most of the business. MBZUAI accounted for 34% of Q2 revenue and G42 for 9%, while OpenAI's MRA represents a large share of the $25.4B backlog. The OpenAI loan may need to be repaid immediately if the MRA terminates for reasons other than OpenAI's uncured breach, and AWS's new agreement carries exclusivity and minimum capacity terms. Losing or renegotiating any of these relationships would materially affect revenue and cash flow.
Are the reported margins and core profit measures a reliable guide to profitability?
Not on their own. Core gross profit and core operating loss exclude stock-based compensation, warrant amortization, pass-through data center costs, and IPO-related payroll taxes, which together were tens of millions to hundreds of millions of dollars this quarter. GAAP gross margin of 14% and GAAP operating loss of $477.2M are the audited-basis reference points, and management itself expects GAAP gross margin to remain significantly lower in the near term.
What should investors know about governance and control risks after the IPO?
Class B shares carry 20 votes each and hold about 99.2% of voting power post-IPO, meaning insiders and pre-IPO holders control a majority of votes even with a much smaller economic stake. The company also reported ineffective disclosure controls due to material weaknesses in IT general controls, segregation of duties, and accounting resources. Lock-up expirations covering up to about 171.1M shares begin after the quarter ending September 30, 2026, which could pressure the stock.
06—Continue