Cerebras Cloud Growth Offsets 23% Hardware Revenue Drop

Cerebras Systems Inc. reported a 74% year-over-year increase in total second-quarter sales to $180.1 million, though the company posted a loss of $2.98 per share. The results highlight a shift in the company's business model, as cloud division revenue nearly quadrupled to $126 million, becoming the primary driver of growth.

This cloud expansion offset a 23% decline in hardware revenue, which fell to $54.1 million. Chief Executive Officer Andrew Feldman attributed the slump to "lumpy" demand and a lack of sufficient data center space among customers. Despite the hardware volatility, the Sunnyvale-based company raised its full-year revenue guidance to between $880 million and $890 million and expects third-quarter revenue of approximately $215 million, surpassing Wall Street estimates.

Shares of the company fell approximately 17% following the report. Cerebras continues to position its single-chip silicon design as a direct challenger to the market dominance of Nvidia Corp.