Cerebras Systems Inc (NASDAQ:CBRS) shares fell 11% Thursday after the AI chipmaker reported second-quarter revenue below Wall Street estimates, even as the company raised its full-year guidance.
The company posted second-quarter revenue of $180.1 million, missing the $194 million analyst estimate, though up 74% year-over-year.
Core revenue, which excludes certain accounting adjustments, came in at $209.9 million, up 103% year-over-year.
Gross margin came in at 14%, well below the 26.3% estimate. Core gross margin was 41%, up 940 basis points year-over-year.
Hardware revenue fell to $54.1 million, down 23% year-over-year and below the $73.1 million estimate. Cloud revenue rose 281% year-over-year to $126 million, ahead of the $116.3 million estimate.
Cerebras raised its full-year core revenue guidance to a range of $880 million to $890 million, above the $867.6 million estimate, with core gross margin guided to 41% to 43% and core operating margin guided to negative 17% to negative 19%.
For the third quarter, the company guided core revenue of $214 million to $216 million, above the $212 million estimate, with core gross margin of 38% to 40% and core operating margin of negative 23% to negative 25%.
Analysts at Wedbush said the results and raised guidance were largely in line with expectations, and attributed the stock's decline to elevated expectations heading into the print, given the shares' sharp run-up in the days before earnings. The firm also pointed to another sequential drop in hardware sales and a Q4 outlook that remained largely unchanged despite the higher Q3 and full-year guides.
On the hardware decline, Wedbush said management attributed the drop to customers lacking sufficient data center capacity to build out Cerebras installations. The firm said the dip was largely anticipated given prior expectations that a limited supply of wafers would need to be allocated to OpenAI, adding that while Cerebras appears to have secured incremental supply from TSMC, converting that into revenue will take time due to sales cycles and data center constraints, including hundreds of millions of dollars in late-stage deals still in the sales pipeline.
Wedbush said it views next week's Supernova event, which is expected to include the release of the WSE-4 chip and potential new customer and partner announcements, as a more likely catalyst for the stock than the quarterly print.