Cerebras Systems delivered the strongest quarter in its history on November 12, and it added the customer that matters most for a company trying to prove there is a durable business beyond Nvidia's graphics processors. The AI chipmaker said Microsoft has signed a cloud deal with the company, making Microsoft its third hyperscaler customer after Amazon Web Services and Oracle.
Chief executive Andrew Feldman told CNBC that Microsoft signed in October and that revenue from the deal is expected to begin showing up in the first quarter of 2027. Cerebras gave no size or terms for the agreement and said it would share more details in the first half of 2027. Microsoft has not commented on the deal.
The numbers behind the announcement were record-setting. For the three months ended September 30, 2026, core revenue rose 70 percent from a year earlier to 230.9 million dollars, while revenue under standard accounting rules was 210.8 million dollars, up 55 percent. Core cloud and services revenue surged 272 percent to 144.9 million dollars, reflecting the company's shift toward renting out its wafer-scale chips rather than only selling systems. Hardware revenue was about 86 million dollars.
Cerebras also posted its first positive adjusted net income as a public company, at about 30 million dollars, even though its core operating margin was still negative 14 percent. Remaining performance obligations, which represent contracted work not yet counted as revenue, stood at 26.1 billion dollars as of September 30. The company said 700 megawatts of data center capacity are under contract for delivery by the end of 2027, and that it held 7.8 billion dollars in cash and short-term investments, plus 850 million dollars of debt capacity.
Management raised the outlook for the full year. Cerebras now expects 2026 core revenue of 940 million to 960 million dollars, up from a previous forecast of 880 million to 890 million dollars. For the fourth quarter, it expects core revenue of about 310 million to 330 million dollars. Feldman said the company expects to triple revenue in 2027, and shares rose more than 17 percent in extended trading after the results were released.
The weak spot in the report was delivery, not demand for the chips themselves. Cerebras said it has fallen behind on its first capacity deliveries to OpenAI under a take-or-pay contract for 750 megawatts. Feldman blamed land, power and data center construction, rather than the processors. The delays give OpenAI service credits, which Cerebras has already deducted from its backlog, and a delay of 90 days or more allows either side to cancel that portion of the contract. The company estimated that less than 5 percent of its committed megawatts could become open to cancellation this year, said none has been cancelled, and expects to be back on schedule by the second half of 2027.
That tension is now the central story for Cerebras. Its wafer-scale design, which builds a processor from an entire silicon wafer instead of cutting the wafer into many smaller chips, has won it a place in the inference plans of the largest cloud companies. Turning those wins into revenue on time will depend less on silicon than on buildings, power and construction schedules.
Photo: Andrew Feldman, co-founder and chief executive of Cerebras Systems, speaking at Collision 2024 in Toronto. Photo by Ramsey Cardy / Collision via Sportsfile, Wikimedia Commons, CC BY 2.0.