Cerebras Q1 profit beats but warns gross margins compress to 36–38% in Q2

Cerebras Systems reported Q1 2026 revenue of $191.3 million, up 92% year-over-year, and beat consensus revenue expectations. However, Q2 guidance signaled a sharp gross margin compression: the company projects Q2 gross margin at 36–38%, down steeply from 47% in Q1, triggering a 10% premarket selloff after earnings were released Tuesday.

The margin crunch stems from Cerebras temporarily renting back its own systems from an existing customer to meet near-term demand while it builds new data center capacity. CFO Bob Komin said this cost burden would depress margins temporarily; the company targets long-term gross margins of 60% for its cloud business. For full-year 2026, Cerebras guides revenue of $855–865 million (69% growth at midpoint) and gross margin of 38–41%.

For investors in AI infrastructure plays, Cerebras illustrates a tension between hypergrowth and unit economics. The company is scaling revenue at 88–92% quarterly rates but absorbing temporary costs to meet OpenAI's 750-megawatt deployment contract—a $20 billion multi-year deal that anchors long-term growth but pressures near-term margins.