Cerebras reports Q3 core revenue up 70% YoY to $230.9M, vs. $214.7M est., issues strong guidance, and announces a Microsoft deal; CBRS jumps 15%+ after hours (Jordan Novet/CNBC)
โก Executive Summary & Key Facts
- [Core Event] Andrew Feldman, CEO of Cerebras Systems; Microsoft Corporation (Q3 earnings call): Reported $230.9M core revenue (+70% YoY) and signed a compute deal with Microsoft, expected to contribute revenue starting Q1 2027.
- [Root Cause & Mechanism] Capitalizing on GPU supply chain constraints and high costs by positioning wafer-scale architecture as an alternative for massive AI training workloads.
- [Key Metrics] Core revenue reached $230.9M (+70% YoY), exceeding analyst estimates.
- [Key Position & Outlook] Q4 revenue guidance raised to $310M-$330M, with gross margins significantly outperforming consensus.
๐ค AI Radar Technical Deep-Dive
Cerebras's strategic imperative is to leverage its Wafer Scale Engine architecture to bypass the interconnect bottlenecks inherent in traditional GPU clusters, transitioning from a hardware vendor to a critical AI infrastructure provider. Their success hinges on validating the software stack and long-term stability of contracts with hyperscalers like Microsoft, as they directly challenge Nvidia's proprietary interconnect ecosystem.
๐ฐ Full In-Depth Coverage
CNBC Full ReportCerebras Systems reported better-than-expected revenue and quarterly guidance in its earnings report on Thursday, and touted a new deal with Microsoft. The stock soared 18% in extended trading.
Cerebras' core revenue grew 70% from $135.7 million, compared with 103% growth in the second quarter, according to a statement.
"I think there is opportunity created by, particularly on the hardware side, the sale of hardware, where long lead times in GPUs and more expense creates opportunity for us," Cerebras CEO Andrew Feldman told CNBC in an interview, referring to graphics processing units.
Executives will announce a new relationship with Microsoft, one of the world's top cloud providers, on a conference call with analysts, Feldman said. The call starts at 5 p.m. ET.
"We believe revenue begins to show up in Q1 '27," Feldman said in the interview, adding that Microsoft signed the deal in October. Cerebras has also landed deals with other major cloud providers Amazon and Oracle.
Cerebras is evaluating its financing options to meet the ramping demand, Feldman said in the interview.
The company is trying to challenge Nvidia in the AI chip market. Its earnings land on the same day that Nvidia CEO Jensen Huang resigned from the company he co-founded after multiple scandals involving extramarital affairs.
For the fourth quarter, Cerebras expects a core gross margin of 47% to 49%, with $310 million to $330 million in revenue. Analysts polled by LSEG were looking for a 42.1% margin and $271 million in revenue.
Cerebras said it expects revenue to triple in 2027. That implies about $2.85 billion in revenue. Analysts surveyed by LSEG were looking for $2.92 billion.
Cerebras shares have slumped by about 47% since the company debuted on Nasdaq in May.
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