Cerebras Swings to Surprise Q3 Profit, Raises Full-Year Outlook

What happened

Cerebras shares rose more than 17% in extended trading after the results. The AI chip and cloud company posted an adjusted profit for the quarter, reversing a loss a year earlier, while raising its full-year revenue outlook and announcing the Microsoft deal. At Thursday’s close, the shares were down 47.2% from their May IPO price of $185.

The full-year outlook rose to $940 million to $960 million, from $880 million to $890 million previously. Revenue from the Microsoft cloud deal is expected to start in the first quarter of 2027, with details in the first half of next year; Microsoft is the third hyperscaler customer, after Amazon Web Services and Oracle.

CEO Andrew Feldman said on the earnings call that delivery delays under the $20 billion multi-year OpenAI deal stemmed from industry-wide shortages of land and power, not chip manufacturing. Remaining performance obligations tied to the deal stood at $26.1 billion as of September 30; OpenAI business has grown since the second quarter, but Cerebras lacks the capacity to support a broad rollout of OpenAI’s faster Ultrafast service tier.

The numbers

Under standard accounting rules, third-quarter revenue was $210.8 million, up 55% year over year. Adjusted revenue was $230.9 million, above the $214.7 million analysts had expected on average. Adjusted cloud and services revenue was $144.9 million, up more than twofold, which the company says reflects the OpenAI deal.

Adjusted net income was $29.82 million, against an adjusted loss of $10.86 million a year earlier; analysts had expected an adjusted loss of $38.4 million on average. The company says it is the first adjusted profit since going public. Fourth-quarter adjusted revenue is guided at about $310 million to $330 million, and the company reiterated its plan to triple revenue in 2027.

Key facts

1. Revenue: Adjusted revenue of $230.9 million, up 70%, above the $214.7 million analysts expected; GAAP revenue of $210.8 million, up 55%
2. Profit: Adjusted net income of $29.82 million, against an adjusted loss of $10.86 million a year earlier; the first adjusted profit since going public
3. Cloud: Adjusted cloud and services revenue of $144.9 million, up more than twofold, which the company says reflects the OpenAI deal
4. Outlook: Full-year adjusted revenue outlook raised to $940 million to $960 million, from $880 million to $890 million; Q4 guided at about $310 million to $330 million
5. Microsoft: Signed a Microsoft cloud deal, with revenue expected from Q1 2027; Microsoft is the third hyperscaler customer
6. OpenAI: Delivery delays under the $20 billion multi-year OpenAI deal stem from land and power shortages; remaining performance obligations of $26.1 billion
7. Shares: Shares rose more than 17% in extended trading after the results, which would add nearly $4 billion to market value if gains hold