Cerebras raises full-year guidance despite Q2 revenue miss

Cerebras Systems raised its full-year guidance in the second earnings report following the chipmaker's initial public offering in May. But the stock tumbled about 14% in extended trading.

Here's how it did in the second quarter versus LSEG consensus estimates:

Revenue: $180 million, versus $194 million expected

Loss per share: 5 cents adjusted, versus 17 cents expected

Cerebras said in a statement on Wednesday that it expects core revenue of between $214 million and $216 million this quarter.

The company raised its full-year outlook and now expects core revenue of between $880 million and $890 million, up from a prior range of $855 million to $865 million.

The $180 million sales figure for the second quarter represents total revenue. Cerebras also reported a core revenue figure of $210 million, which includes "pass-through revenue."

The company recorded a net loss of $450.5 million, after finishing with a profit of $309.5 million, or $1.91 per share, a year earlier. Most of the loss is tied to stock-compensation costs of $386.6 million.

Cerebras CEO Andrew Feldman said in an interview that AI demand is "through the roof" and that companies are paying up for its specialty inference chips.

Cerebras is challenging AI chip leader Nvidia for some AI tasks, especially those that need "low latency," or quick responses for interactivity. The company calls it "fast inference." The company said its core gross margin will expand to between 38% and 40% in the current quarter, addressing a concern for investors.

"Gross margins are are in a good spot, and growing, because fast inference is priced at a premium," Feldman said in an interview, adding that Cerebras was able to increase the AI output of its systems.

Cerebras went public on the Nasdaq in May, capitalizing on investor interest in semiconductors that can run AI models. It priced its offering at $185 and raised $6.4 billion in the offering. The stock peaked in May and has fallen since, but closed on Wednesday at $262.06, up 42% from its IPO.

The chipmaker has $25.4 billion in remaining performance obligations, which it said was a sign of "extraordinary future demand." Feldman said that as Cerebras grows, it will benefit from larger scale. The company also said it expects revenue to triple in the next fiscal year.

"We will manufacture more efficiently. We'll get better pricing on componentry. We'll amortize our manufacturing organization over more units," Feldman said. "All of those point up and to the right."

In recent weeks, Cerebras announced a partnership with Nvidia rival Advanced Micro Devices , with products going into production later this year, and said that OpenAI can use its chips to serve its latest model, GPT 5.6 Sol. Cerebras also offers access to its chips through its cloud, which reported $126 million in revenue during the June quarter.