Cerebras Systems, an artificial intelligence chipmaker, released its first earnings report since its May IPO, revealing a 92% year-over-year revenue increase to $193.4 million for the first quarter, up from $99.5 million a year earlier [1]. The company reported a net loss of $14 million, narrowing from $23.9 million in the prior year, with a loss per share of 22 cents [1]. Despite the strong revenue growth, Cerebras' stock fell 8% in extended trading after the company forecasted a decline in its core gross margin to between 36% and 38% for the second quarter, down from 46.5% in the first quarter [1].
Since its IPO, which was priced at $185 per share, Cerebras' stock initially surged, opening at $350 and closing at $311.07 on its first day. However, shares have since dropped 28%, closing at $226.72 on Tuesday [1]. The company expects core revenue growth of 88% year-over-year to $914 million for the second quarter and projects full-year core revenue between $855.5 million and $865 million, representing 69% growth at the midpoint [1].
Cerebras has positioned itself as a challenger to AI chip leader Nvidia and operates a service for running AI models in data centers using its processors [1]. The company highlighted a performance advantage due to its chip's higher SRAM memory compared to Google's latest tensor processing unit and Nvidia's Groq 3LPU chip, according to a Mizuho note [1]. In the first quarter, Cerebras announced its chips would be used in Amazon Web Services' data centers and disclosed a deal worth over $20 billion to supply OpenAI with computing power [1].
Executives planned to discuss these results with analysts on a conference call at 5 p.m. ET [1].
CONCLUSION
Cerebras delivered impressive revenue growth and narrowed losses in its first post-IPO earnings, but the forecast for shrinking margins led to an 8% drop in its share price. Despite high-profile deals and ambitious growth projections, investor concerns about profitability pressured the stock. The market's reaction underscores the importance of margin trends even amid rapid expansion.