Artificial-intelligence chip maker Cerebras Systems reports its third-quarter earnings on Thursday with three challenges, two related to OpenAI.
At the end of the second quarter, Cerebras had a $25 billion backlog for its hardware and cloud services, and a "significant amount of the balance" was related to its OpenAI cloud agreement from the end of 2025.
So first Cerebras must prove that it can execute on its end of the OpenAI deal. OpenAI accounted for 32% of the company's revenue in the June quarter, and that share is likely to keep trending higher. OpenAI sales were $57 million in the second quarter, up from $18 million in the first.
Wall Street analysts are expecting adjusted revenue of $215 million in the third quarter. The adjustments are due to quirks in the company's accounting. In the first place, there is some pass-through revenue, which the company subtracts. And Cerebras has issued warrants to customers, and these get amortized as noncash reductions in revenue by standard accounting rules, so these are also left out of the adjusted figure.
In the third quarter of last year, the company had $136 million in sales, with no adjustments.
The second big challenge is to show that the company can find other customers besides OpenAI, raise the backlog, and lower its customer concentration. The company has announced deals with larger cloud providers Amazon.com and Oracle to host its AI servers, but both announcements were short on details.
Finally, profitability is elusive, and it certainly wouldn't hurt if Cerebras can show some progress here. The company hasn't been able to build its cloud fast enough to meet demand. To fill that gap, the company is renting servers it has sold to other customers to resell on Cerebras cloud, and that is shaving gross margins and making operating losses deeper. For the third quarter, analysts expect a $51 million adjusted operating loss, resulting in a -24% operating margin, compared with -16% last quarter.
Management expects margins to improve in the current quarter, so guidance on that front will also be key.