Cerebras Beats Q3 Revenue Estimates and Touts New Microsoft Deal

Cerebras Systems reported better-than-expected revenue and quarterly guidance on Thursday, and touted a new deal with Microsoft. The stock soared 17% in extended trading.

Here's how the company performed relative to LSEG consensus: core revenue of $230.9 million versus $214.7 million expected. Cerebras' core revenue grew 70% from $135.7 million, compared with 103% growth in the second quarter, according to a statement.

Cerebras CEO Andrew Feldman told CNBC in an interview that long lead times and higher cost for GPUs create opportunity for the company on the hardware side, referring to graphics processing units.

Executives will announce a new relationship with Microsoft, one of the world's top cloud providers, on a conference call with analysts, Feldman said. The call starts at 5 p.m. ET. Feldman said in the interview that revenue from the deal begins to show up in Q1 2027, adding that Microsoft signed the deal in October. Cerebras has also landed deals with other major cloud providers Amazon and Oracle.

Cerebras is evaluating its financing options to meet the ramping demand, Feldman said in the interview.

The company is trying to challenge Nvidia in the AI chip market. Its earnings land on the same day that Nvidia CEO Jensen Huang resigned from the company he co-founded after multiple scandals involving extramarital affairs.

For the fourth quarter, Cerebras expects a core gross margin of 47% to 49%, with $310 million to $330 million in revenue. Analysts polled by LSEG were looking for a 42.1% margin and $271 million in revenue.

Cerebras said it expects revenue to triple in 2027. That implies about $2.85 billion in revenue. Analysts surveyed by LSEG were looking for $2.92 billion.

Cerebras shares have slumped by about 47% since the company debuted on Nasdaq in May. In delayed trading the stock was down 3.3%.

Loss per share was 67 cents. It is not immediately clear how the number compares with the loss of 14 cents expected.