Cerebras Systems Inc. Exceeds Revenue and EPS Estimates, Signals Strong FY2026 Guidance

Cerebras Systems Inc. reported a core revenue of $191.3 million for Q1 FY2026, surpassing the street estimate of $181.2 million by 5.6%. The company's EPS of -$0.04 was significantly better than the estimated -$0.16, representing a 75.6% surprise. This strong performance is a testament to the company's ability to capitalize on the growing demand for AI compute solutions.

The revenue growth was driven by both hardware and cloud and services segments. Core hardware revenue contributed $111.6 million, up 60% year-over-year, while core cloud and services revenue reached $79.8 million, growing 167% year-over-year. According to CEO Andrew Feldman, "We delivered core revenue of $191.3 million, up 92% year-over-year." CFO Robert Komin added, "Our core total revenue was $191.3 million, representing 92% year-over-year growth."

Cerebras reported a core gross margin of 46.5% in Q1 FY2026, a significant improvement from 42.1% in the prior year period and 41% last quarter. This improvement is attributed to scale economies, manufacturing efficiency, and performance-driven pricing improvements.

Cerebras provided strong guidance for Q2 FY2026 and the full year 2026. For Q2, the company expects core revenue of approximately $194 million, representing year-over-year growth of 88%. For the full year 2026, Cerebras projects core revenue in the range of $855 million to $865 million, representing year-over-year growth of 69% at the midpoint.

The company expects core gross margin for the full year 2026 to be in the range of 38% to 41%, and core operating margin to be in the range of minus 28% to minus 32%. The near-term margin pressure is expected to be driven by the rental of systems until significant capacity is deployed in the company's own data centers.

Cerebras ended the quarter with a strong cash position of $3.3 billion, including cash, cash equivalents, restricted cash, and marketable securities. The company has raised significant capital over the past year, including $1 billion in Series G equity in September 2025, another $1 billion in Series H equity in February 2026, and $6.4 billion from its IPO in April 2026.

Non-GAAP operating expenses were $92.6 million, up 51% from a year ago, but at just more than half the rate of core revenue growth of 92%. This demonstrates the strong operating leverage available as the company grows.

R&D was the largest area of investment at $69.8 million, reflecting the company's focus on innovation and product development. Sales and marketing expense was $12.9 million, reflecting continued investment in customer engagement, field capacity, developer adoption, and go-to-market infrastructure.

Cerebras signed a definitive agreement with OpenAI on December 24, 2025, for the purchase of more than $20 billion of Cerebras compute over the next several years. This agreement underscores the company's strategic importance in the AI compute market.

Cerebras relies on TSMC (TSM) for the fabrication of its wafer-scale AI chips (WSE-3, 4nm class). The strong relationship with TSMC is crucial for Cerebras's ability to deliver high-performance AI solutions. The company's strategic partnership with TSMC ensures a steady supply of advanced semiconductor technology.

Cerebras's performance stands out when compared to its peers in the fabless subsector. While companies like NVIDIA (NVDA) and Meta (META) have reported strong revenue growth and gross margins, Cerebras's 92% year-over-year revenue growth and 46.5% gross margin are competitive. NVIDIA reported a revenue of $81.61 billion with a gross margin of 74.9%, and Meta reported a revenue of $56.31 billion with a gross margin of 81.9%.

The tone of the earnings call was positive, with a sentiment score of 0.24 and a guidance tone of 0.25. The call was characterized by a high level of preparedness and a focus on the company's strategic initiatives and future growth prospects. Robert Komin's comments on the company's ability to achieve its target profitability profile of approximately 60% gross margin and 40% operating margin in the medium to long term were particularly noteworthy.

For a detailed history of the company's call delivery, see the tone history.

Cerebras Systems Inc. delivered a strong Q1 FY2026 performance, exceeding both revenue and EPS estimates. The company's guidance for Q2 FY2026 and the full year 2026 indicates continued strong growth and margin improvement, despite near-term headwinds. The strategic partnership with OpenAI and the strong relationship with TSMC position Cerebras well for long-term success in the AI compute market. The company's focus on innovation, customer engagement, and operational efficiency is expected to drive sustainable growth and profitability.