Cerebras Systems Inc.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 –Nature of Operations

Cerebras Systems Inc. (the “Company” or “Cerebras”) was incorporated in Delaware in April 2016. Cerebras is an artificial intelligence (“AI”) infrastructure company that designs and manufactures an AI compute platform comprised of proprietary systems and software that is delivered in standard racks for deployment in our, and our customers’, data centers up to supercomputer scale. The Company’s pioneering Wafer-Scale Engine (“WSE”), a chip encompassing an entire silicon wafer, was specifically designed to enable higher performance and speeds than GPUs for the computational demands of inference, Generative AI (“GenAI”), and other AI applications. Since its inception, Cerebras has dedicated resources to research and development activities that support its current projects and future development efforts. The Company is headquartered in Sunnyvale, California.

Note 2 –Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information, but do not include all the information and notes required by GAAP for complete financial statements. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2025 thereto contained in the Company’s final prospectus filed with the SEC on May 14, 2026 (the “Prospectus”), pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”). The condensed consolidated balance sheet at December 31, 2025 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025, are consistent with those discussed in Note 4 – Significant Accounting Policies to the audited consolidated financial statements in the Prospectus. There have been no significant changes in the Company’s significant accounting policies or critical accounting estimates since December 31, 2025 that have had a material impact on the Company’s unaudited condensed consolidated financial statements and related notes. In the opinion of management, these financial statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the financial position, results of operations, cash flows, and the changes in equity for the periods presented. The results of operations for the three months ended March 31, 2026 shown in this report are not necessarily indicative of the results to be expected for the full year ending December 31, 2026 or any other period. Certain prior period amounts reported in the Company’s condensed consolidated financial statements and notes thereto have been reclassified to conform to the current period presentation.

On May 15, 2026, the Company completed its initial public offering (the “IPO”), in which it issued and sold 34,500,000 shares of its Class A common stock at $185.00 per share, which includes the exercise in full by the underwriters of their option to purchase from the Company an additional 4,500,000 shares of Class A common stock. The Company received net proceeds of approximately $6.2 billion from the IPO, after deducting underwriting discounts and commissions and estimated offering expenses. Immediately prior to the completion of the IPO, all shares of the Company’s outstanding redeemable convertible preferred stock converted into 124,652,775 shares of Class B common stock on aone-for-one basis, and 60,457,570 shares of the Company’s then-outstanding Class A common stock, including shares of Class A common stock issued upon vesting and settlement of certain restricted stock units (“RSUs”) that vested upon completion of the IPO, were reclassified into an aggregate of 185,110,345 shares of Class B common stock on aone-for-one basis. Additionally, certain shares and equity awards were converted into, or amended to provide for issuance or settlement in, shares of Class A common stock instead of shares of Class B common stock.

The shares and proceeds from the IPO, the underwriters’ exercise of their option to purchase additional shares, the conversion of the Company’s redeemable convertible preferred stock, and the reclassification of the Company’s common stock are not reflected in the condensed consolidated financial statements as of and for the three months ended March 31, 2026. Refer to Note 17 – Subsequent Events for further discussion.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Areas of significant estimates include, but are not limited to, revenue recognition, including the determination of the standalone selling price (“SSP”) of performance obligations, significant financing components, useful life of property, plant and equipment, product warranty accruals, impairment of long-lived assets, the market value of and demand for inventory, valuation allowance on deferred income tax assets, the fair value of common stock and other assumptions used to measure stock-based compensation. The Company bases its estimates on historical experience, known trends, and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Actual results could significantly differ from those estimates. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts, and experience. Changes in estimates are recorded prospectively in the period in which they become known.

Supplier Concentration

Certain materials used by the Company in the manufacturing of its products are available from a limited number of suppliers. Shortages could occur in these materials due to an interruption of supply or increased demand in the industry. Three suppliers accounted for 16%,12%, and 11% of total purchases for thethree months ended March 31, 2026. Two suppliers accounted for 11% and 11% of total purchases for the three months ended March 31, 2025.

Note 3 –Revenue

Disaggregation of Revenue

The Company recognizes revenue classified in hardware at a point in time, and revenue classified in cloud and other services either at a point in time or over time. Revenue by point in time and over time was as follows (in thousands):

Revenue recognized during the three months ended March 31, 2026 that was included in deferred revenue as of December 31, 2025 was $32.3 million. Revenue recognized during the three months ended March 31, 2025 that was included in deferred revenue as of December 31, 2024 was $16.6 million.

During the three months ended March 31, 2026 the Company recognized a $2.1 million reduction in revenue related to the amortization of the customer warrant assets in the condensed consolidated statements of operations, in proportion to the amount of related revenues recognized. Refer to Note 12 – Common Stock for further discussion. The remaining balance of the customer warrant assets as of March 31, 2026 will be recorded as a reduction in revenue in the consolidated statement of operations through October 2031.

Significant Customers

Customers that each accounted for 10% or more of our total revenues were as follows:

(1)Customer A and Customer B are considered related parties with respect to each other as defined by ASC 850, Related Party Disclosures.

Customers that each accounted for 10% or more of accounts receivable balances as of the periods presented are as follows:

(1)Customer A and Customer B are considered related parties with respect to each other as defined by ASC 850, Related Party Disclosures.

*Percentage was less than 10%

OpenAI Collaboration

In December 2025, the Company entered into a Master Relationship Agreement (the “MRA”) with OpenAI OpCo, LLC (“OpenAI”) to provide 750 MW of AI inference compute capacity that OpenAI is contractually committed to purchase (the “Committed Capacity”) and related services over a multi-year term. The MRA includes (i) a services arrangement pursuant to which the Company will provide the Committed Capacity and related services over a term ofthree orfour years that is extendable by OpenAI to a maximum offive years in total, (ii) a secured promissory note of approximately $1.0 billion (the “Working Capital Loan”) funded by OpenAI in January 2026 to support the build-out of infrastructure and related capabilities required to deliver such services, and (iii) a warrant to purchase shares of the Company’s Class N common stock. Refer to Note 10 – Working Capital Loan and Note 12 – Common Stock for further discussion. The Company recognized revenue of $16.9 million, net of amortization of the customer warrant asset of $0.8 million for this arrangement for the three months ended March 31, 2026. In addition to the Committed Capacity, OpenAI has the option to purchase an additional 1.25 GW of AI inference compute capacity (the “Additional Capacity”) for deployment in tranches by the end of 2030 for up to a total of 2.0 GW.

Remaining Performance Obligation

Revenue allocated to remaining performance obligations that is unsatisfied (or partially unsatisfied), which includes deferred revenue and amounts that are expected to be invoiced and recognized as revenue in future periods, was $25.0 billion as of March 31, 2026. A significant amount of the balance was attributable to the Company’s obligations pursuant to the MRA with OpenAI.

The Company expects to recognize approximately 16% of this revenue over the initial 24 months ending March 31, 2028,45% between months 25 and 48, and the remaining balance recognized thereafter. However, time periods for revenue recognition may vary from the foregoing due to changes in timing of delivery at the customer’s request or otherwise.

The arrangement with OpenAI includes variable consideration related to pass-through costs that are included in the transaction price. These pass-through costs primarily relate to data centers consisting of fixed monthly data center rental costs, leasehold improvements, security and other variable monthly lease costs such as power and other utilities in connection to the delivery of the Committed Capacity. Amounts related to these pass-through costs are included in the transaction price and the remaining performance obligations for the initial 250 MW of Committed Capacity. Pass-through costs associated with Committed Capacity in excess of the initial 250 MW are excluded from remaining performance obligations because the related consideration is subject to factors outside the Company’s control which involves significant amounts that will be determined over the remaining years of the MRA. Revenue related to pass-through costs will be recognized as the underlying Committed Capacity is delivered and is reported on a gross basis.

Note 4 –Segment and Geographical Information

The Company operates asone reportable segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. Net income (loss) is the Company’s primary measure of profit or loss, and all costs and expenses categories on the Company’s consolidated statements of operations, as well as stock-based compensation, depreciation and amortization expenses, are significant. The Company’s CODM reviews net income or loss on a quarterly basis to assess overall operating performance, evaluate profitability and determine resource allocation, including capital spending and operating expense priorities. Refer to Note 8 – Balance Sheet Details and Note 13 – Stock-Based Compensation for further discussion. The measure of segment assets is reported on the consolidated balance sheet as total assets.

Revenue by geographic area is designated based upon the billing location of the customer. Revenue by geographic area was as follows (in thousands):

Property and equipment, net by geographic areas was as follows (in thousands):

Note 5 –Net Loss Per Share

The Company follows the two-class method when computing net loss per ordinary share when shares are issued that meet the definition of participating securities. The two-class method determines net loss per ordinary share for each class of ordinary shares and participating securities according to dividends declared or accumulated participation rights in undistributed earnings. The Company’s participating securities include all series of its redeemable convertible preferred stock and common stock warrants as the holders of these securities are contractually entitled to participate in dividends and other distributions but not contractually required to participate in losses. As such, net loss for the periods presented was not allocated to the Company’s participating securities. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common stock and Class N common stock are identical, except with respect to voting. As a result, the basic and diluted net loss per share for all shares of Class A common stock and Class N common stock are the same and therefore presented on a combined basis.

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of the Company’s common stock outstanding, adjusted for outstanding shares that are subject to repurchase. Shares issuable upon exercise of certain vested warrants for Class N common stock are considered in-substance outstanding for basic net loss per share because the exercise price is nominal and the issuance of shares is considered probable; accordingly, such shares are included in the weighted-average shares outstanding for purposes of basic net loss per share. Diluted net loss per share attributable to common stockholders gives effect to all potential shares of common stock, including common stock issuable upon conversion of the Company’s redeemable convertible preferred stock, stock options, and common stock warrants to the extent these are dilutive. As of March 31, 2026, dilutive securities in the Company’s diluted net loss per share calculation do not include unvested RSUs. Vesting of these RSUs is dependent upon the satisfaction of both a service condition and a liquidity condition. The liquidity condition is satisfied upon the occurrence of a qualifying event, such as the completion of an initial public offering. As of March 31, 2026, such a qualifying event had not occurred and until it occurs, the holders of these RSUs have no rights in the Company’s undistributed earnings.

For the three months ended March 31, 2026 and 2025, the following potential common shares were excluded from the computation of diluted net loss per share because their inclusion would have been anti-dilutive (in thousands):

Note 6 –Investments

The Company classifies its U.S. Treasury securities, which are accounted for as available-for-sale, and time deposits within Level 2 in the fair value hierarchy because it uses quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs to determine fair value.

The following tables summarize the Company’s investments (in thousands):

All of the Company’s investments have a stated contractual maturity date of less than one year.

Note 7 –Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis in accordance with ASC 820, Fair Value Measurement, which establishes a framework for measuring fair value and a fair value hierarchy based on the observability of inputs. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). As of March 31, 2026 and December 31, 2025, the Company did not hold any securities classified within Level 3 of the fair value hierarchy. The three levels of the fair value hierarchy are described below:

•Level 1 inputs are quoted prices in active markets for identical assets and liabilities;

•Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

•Level 3 inputs are unobservable inputs that are supported by little or no market activity, which require management judgment or estimation.

Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):

(1)Unrealized gains from remeasurement of U.S. Treasury securities have been recognized in AOCI.

(1)Unrealized gains from remeasurement of U.S. Treasury securities have been recognized in AOCI. Realized gains have been recognized in Other income (expense).

Note 8 –Balance Sheet Details

Inventories consisted of the following (in thousands):

As of March 31, 2026 and December 31, 2025, the Company’s inventory reserves were $8.4 million and $0.9 million, respectively.

During the three months ended March 31, 2026 and 2025, the Company recorded a charge of approximately $2.3 million and $0.9 million, respectively, to cost of revenue related to provision for excess, obsolete, and scrapped inventory, primarily related to the transition to the next generation of the Company’s product offering.

Prepaid expenses and other current assets consisted of the following (in thousands):

Property and equipment, net consisted of the following (in thousands):

Depreciation expense included in the consolidated statements of operations was as follows (in thousands):

Accrued and other current liabilities consisted of the following (in thousands):

The following table shows the changes in provision for product warranty during the three months ended March 31, 2026 and 2025 (in thousands):

Note 9 –Other Income, Net

Other income, net consisted of the following (in thousands):

(1)During the three months ended March 31, 2026, the Company recognized approximately $18.9 million of non-cash interest expense related to the significant financing component of the OpenAI arrangement. Refer to Note 10 - Working Capital Loan for further discussion.

Note 10 –Working Capital Loan

In January 2026, in connection with the MRA with OpenAI described in Note 3 – Revenue, the Company received cash proceeds of approximately $1.0 billion pursuant to the Working Capital Loan with OpenAI. Upon receipt, the proceeds were recorded as restricted cash. Amounts held as restricted cash are subject to contractual use restrictions and are available to fund permitted uses related to the build-out of infrastructure and related capabilities required to deliver services under the MRA.

The Company accounts for the Working Capital Loan as debt under ASC 470. The Working Capital Loan, which is a secured promissory note, bears stated interest at 6% per annum, unless waived or deemed paid in accordance with the secured promissory note and the MRA, and matures no later than December 31, 2032, unless earlier repaid or accelerated. The Working Capital Loan is secured by a first-priority security interest in the lockbox account and the related amounts held therein.

The Working Capital Loan may be repaid in cash or, subject to the terms of the MRA and the secured promissory note, through service fees, compute capacity, hardware, other services, pass-through monthly recurring charges, applicable asset transfers, or other permitted noncash credits under the MRA. As of March 31, 2026, no cash payments had been made and $21.7 million of non-cash billings were credited as an offset to the outstanding loan balance.

The Working Capital Loan includes customary covenants, events of default and remedies. Upon the occurrence of certain events, including termination of the MRA for reasons other than OpenAI’s material uncured breach, outstanding principal and accrued unpaid interest may become immediately due and payable, and OpenAI may exercise remedies with respect to the collateral. As of March 31, 2026, the Company was in compliance with the terms of the secured promissory note, and no event of default had occurred.

The MRA and Working Capital Loan are evaluated together in accounting for the overall OpenAI customer arrangement. The timing of OpenAI’s funding and the expected repayment of the Working Capital Loan through service fees and other permitted noncash credits under the MRA result in a significant financing component in the MRA services arrangement. The Company recognizes interest expense for the significant financing component and records a corresponding increase to deferred revenue. The related deferred revenue, including amounts attributable to the significant financing component, is recognized as revenue as the Company satisfies its performance obligations under the MRA.

During the three months ended March 31, 2026, the Company recognized approximately $18.9 million of interest expense related to the significant financing component of the OpenAI arrangement that is included in other income, net line item in the unaudited condensed consolidated statement of operations and recorded a corresponding increase to deferred revenue in the unaudited condensed consolidated balance sheet.

The following table summarizes the outstanding principal balance of the Working Capital Loan as of March 31, 2026 (in thousands):

Note 11 –Redeemable Convertible Preferred Stock

In January 2026, the Company entered into a Series H redeemable convertible preferred stock purchase agreement with various investors to issue up to 11,394,059 shares of the Company’s Series H redeemable convertible preferred stock. The Company raised $1.0 billion, net of issuance costs, through issuance of 11,394,059 shares of Series H redeemable convertible preferred stock at a price of $89.02 per share.

As of March 31, 2026, the Company had an aggregate of 124,652,775 shares of the Company’s Series A, Series B, Series C, Series D, Series E, Series F, Series F-1, Series G, and Series H, redeemable convertible preferred stock outstanding. On May 15, 2026, immediately prior to the completion of the IPO, all outstanding shares of redeemable convertible preferred stock were converted into 124,652,775 shares of Class B common stock. Refer to Note 17 – Subsequent Events for further discussion.

Note 12 –Common Stock

Prior to the completion of the IPO and as of March 31, 2026, the Company had two classes of authorized common stock: Class A common stock and Class N common stock. The rights of holders of Class A common stock and Class N common stock were identical, except with respect to voting and conversion rights. Each holder of Class A common stock was entitled to one vote per share, and each holder of Class N common stock was entitled to no votes per share. Each share of Class N common stock automatically converted to one fully paid and nonassessable share of Class A common stock upon the occurrence of a common transfer, meaning any direct or indirect sale, exchange, redemption, assignment, distribution, gift, retirement, transfer, conveyance, or other disposition. Permitted transferees included entities under common control with or controlled by such holder of the Class N common stock or if the holder provided prior written notice to the Company electing for the transfer to not result in a conversion. Once converted into Class A common stock, the Class N common stock would not be reissued.

In March 2026, the Company amended its certificate of incorporation to increase the number of authorized shares of Class A common stock from 271,800,000 shares to 287,000,000 shares and Class N common stock from 37,100,000 shares to 40,000,000 shares, each with a par value of $0.00001 per share. In March 2026, the Company entered into a data center lease agreement in Canada that is expected to commence in the second quarter of 2026. Concurrent with the lease, the Company entered into a stock purchase agreement with the lessor pursuant to which the lessor purchased 168,509 shares of the Company’s Class N common stock at a purchase price of $89.02 per share, for an aggregate purchase price of $15.0 million. For additional information regarding changes to the Company’s capital structure in connection with the completion of the IPO, refer to Note 17 – Subsequent Events for further discussion.

Common Stock Warrants

In December 2025, the Company issued a warrant to G42 (as defined below) to purchase an aggregate of up to 1,857,516 shares of Class N common stock at an exercise price of $0.01 per share (the “G42 Warrant”). The warrant was fully vested and immediately exercisable upon issuance. The warrant is classified as an equity instrument, and the grant-date fair value was $82.02 per share. The G42 Warrant was exercised in full in January 2026. Refer to Note 17 - Subsequent Events, for additional information on certain warrants issued to G42 subsequent to March 31, 2026.

Concurrent with the MRA, as discussed in Note 3 – Revenue, the Company issued to OpenAI a warrant to purchase an aggregate of up to 33,445,026 shares of the Company’s Class N common stock at an exercise price of $0.00001 per share (the “OpenAI Warrant”). The OpenAI Warrant vests in multiple tranches upon achievement of specified milestones associated with the MRA, including funding of the Working Capital Loan, delivery of the Committed Capacity and Additional Capacity in tranches, and certain market capitalization or customer payment thresholds. As of December 31, 2025, the Company concluded that vesting of the tranches related to the Working Capital Loan, the Committed Capacity, and the tranche that vests upon the earlier of achieving specified market capitalization or customer payment thresholds under the MRA were probable of vesting, while the remaining tranches associated with the Additional Capacity were not considered probable of vesting.

Subject to certain terms and conditions, the OpenAI Warrant expires on the earlier of December 24, 2035 and five business days following the first date during which there are no binding capacity purchase commitments or contractually obligated current or future payments under the MRA. The OpenAI Warrant is classified as an equity instrument, and the grant-date fair value was $82.02 per share. In January 2026, the vesting condition associated with 4,459,337 shares of Class N common stock was satisfied under the OpenAI Warrant. As of March 31, 2026, none of the vested OpenAI Warrant had been exercised.

The Company has recorded customer warrant assets that total $516.1 million and $152.4 million as of March 31, 2026 and December 31, 2025, respectively. During the three months ended March 31, 2026, the Company recognized $2.1 million as a reduction in revenue in the condensed consolidated statements of operations in proportion to the amount of related revenues. The remaining balance of the customer warrant assets as of March 31, 2026 will be recorded as a reduction in revenue in the consolidated statement of operations through October 2031.

Note 13 –Stock-Based Compensation

Total stock-based compensation expense for the three months ended March 31, 2026 and 2025 was as follows (in thousands):

Approximately $3.9 million and $1.6 million of the compensation expense recognized for the three months ended March 31, 2026 and 2025, respectively, was attributed to sales of shares of common stock by certain current and former employees of the Company to certain existing equity holders in the Company, through secondary market transactions, where the excess price paid above fair value for shares was recorded as stock-based compensation expense.

Executive Grants

In the first quarter of 2026, the Company’s board of directors approved equity awards to its co-founder executives, the Chief Executive Officer (“CEO”) and the Chief Technology Officer (“CTO”), consisting of RSUs and PRSUs.

The Company granted 743,902 RSUs to the CEO and 495,426 RSUs to the CTO. These RSUs vest subject to both service-based and liquidity-based vesting conditions. The service-based condition is satisfied ratably on a monthly basis beginning January 5, 2026 over periods of 48 to 60 months, subject to continued qualifying service. The liquidity-based vesting condition was satisfied on May 13, 2026 in connection with the IPO. The Company will recognize the aggregate grant date fair value of $101.6 million as stock-based compensation expense for these awards using the accelerated attribution method over the requisite service period from the date of completion of the IPO.

The Company also granted 5,700,000 PRSUs to the CEO and 3,300,000 PRSUs to the CTO. Each PRSU represents the right to receive one share of Class B common stock upon vesting. These PRSUs have service-based, market-based, and performance-based vesting conditions. The PRSUs vest inthree equal tranches based on the achievement of market capitalization thresholds of $75.0 billion, $150.0 billion, and $250.0 billion, respectively. Vesting may occur beginning six months following the completion of the IPO, subject to continued qualifying service through the applicable vesting date. Market capitalization is determined based on the 90-trading-day trailing average of the Company’s Class A common stock price multiplied by the number of outstanding shares of Class A common stock. Unvested PRSUs are forfeited upon termination of qualifying service, and any PRSUs that remain unvested as of the ninth anniversary of the completion of the IPO will be forfeited. In the event of a change in control, achievement of the market capitalization thresholds is determined based on the transaction price, with linear interpolation applied, as applicable. The performance-based vesting condition for the PRSUs was satisfied in connection with the IPO on May 13, 2026.

The Company calculated the grant date fair value of the PRSUs based on multiple stock price paths developed through the use of a Monte Carlo simulation. A Monte Carlo simulation also calculates a derived service period for each of the three vesting tranches, which is the measure of the expected time to achieve each market capitalization threshold. A Monte Carlo simulation requires the use of various assumptions, including the underlying stock price, volatility, and the risk-free interest rate as of the valuation date, corresponding to the length of time remaining in the performance period, and expected dividend yield. The grant date fair value of each tranche ranged from $45.89 to $72.69 per share, with an aggregate grant date fair value of $531.2 million. The derived service period of each tranche of the PRSUs ranged from 3.4 years to 5.9 years. The Company will recognize the aggregate stock-based compensation expense of $531.2 million over the derived service period of each tranche using the accelerated attribution method as long as the executives satisfy their service-based vesting conditions. If the market capitalization thresholds are met sooner than the derived service period, the Company will adjust its stock-based compensation to reflect the cumulative expense associated with the vested awards. The Company will recognize expense if the requisite service is provided, regardless of whether the market conditions are achieved. For the three months ended March 31, 2026, no stock-based compensation expense was recognized related to the PRSUs due to the performance-based vesting condition not being deemed probable as of March 31, 2026.

Note 14 –Income Taxes

The Company's effective tax rate was (12.0)% and (7.6)% for the three months ended March 31, 2026 and 2025, respectively.

The Company computed its provision for income taxes for the three months ended March 31, 2026 and 2025 based on a year-to-date actual effective tax rate because the forecasted annual effective tax rate was highly sensitive to fluctuations in pre-tax income and a reliable estimate of the annual effective tax rate could not be made. Despite experiencing pre-tax losses and maintaining a full valuation allowance on its U.S. deferred tax assets, the Company recorded income tax expense in all periods presented primarily due to the impact of foreign taxes in its international subsidiaries and current state taxes in certain U.S. jurisdictions.

The Company intends to continue maintaining a full valuation allowance on all its U.S. deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances which the Company does not anticipate in the foreseeable future. A release of valuation allowance would result in the recognition of certain deferred tax assets and a possible decrease to income tax expense in the period the release is recorded. The exact timing and amount of the valuation allowance release are subject to the accumulation of positive evidence, for example levels of profitability, that the Company is able to achieve.

Note 15 –Leases

Our lease obligations primarily consist of operating leases for our headquarters’ campus and domestic and international offices and data centers, with lease periods expiring between fiscal years 2027 and 2031.

Lease costs included in measurement of lease obligations and other information related to non-cancelable operating leases were as follows (in thousands):

(1)Short-term lease costs on leases with terms of over one month and less than one year.

The weighted-average remaining lease terms and discount rates were as follows:

As of March 31, 2026, future minimum lease payments of the Company’s operating lease liabilities were due as follows (in thousands):

Supplemental cash flow information related to leases was as follows (in thousands):

Leases Not Yet Commenced

In the three months ended March 31, 2026, the Company executed non-cancelable lease agreements for additional data center capacity with lease commencement dates in 2026. As of March 31, 2026, the leases had not commenced and therefore are not reflected in the consolidated balance sheets. The Company will recognize operating lease right-of-use assets and corresponding lease liabilities at the commencement date based on the present value of lease payments over the respective lease terms. Aggregate undiscounted future minimum lease payments under these agreements total approximately $2.3 billion over the lease term. Refer to Note 17 - Subsequent Events, for additional information on lease agreements executed subsequent to March 31, 2026.

Note 16 –Commitments and Contingencies

The Company has entered into certain contracts to receive consulting and other services that represent unconditional purchase obligations to purchase goods or services that are enforceable and legally binding. Purchase commitments exclude agreements that are cancellable without penalty and unconditional purchase commitments with a remaining term of one year or less. As of March 31, 2026, future payments related to non-cancelable commitments under these contracts are due as follows: $5.4 million (remaining nine months of 2026), $6.2 million (2027), and $0.5 million (2028).

In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes, or claims. Although the Company cannot predict with assurance the outcome of any litigation, it does not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on the Company’s financial condition, results of operations, or cash flows.

Note 17 –Subsequent Events

The Company has evaluated all transactions through June 23, 2026, the date these unaudited condensed consolidated financial statements were available to be issued, and has determined that there are no other events that would require disclosure in or adjustment to these financial statements except as discussed below.

Revolving Credit Agreement

On April 14, 2026, the Company entered into a revolving credit and guaranty agreement (the “Revolving Credit Agreement”) with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, and the lenders and letter of credit issuers party thereto. The agreement provides for an initial revolving credit facility of up to $250.0 million, available solely for standby letters of credit to data center landlords and developers.

Following the completion of the IPO and satisfaction of pro forma covenant compliance and other customary closing conditions on June 17, 2026 (such date, the “Phase Two Effective Date”), the facility increased to up to $850.0 million and may be used for general corporate purposes. Borrowings bear interest at variable rates based on a base rate or term rate plus applicable margins, and undrawn commitments are subject to commitment fees. The facility matures on April 14, 2031. The agreement includes a $150.0 million minimum liquidity covenant, customary covenants and events of default, and collateral terms that were updated upon the Phase Two Effective Date. Additional information regarding the Revolving Credit Agreement can be found in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Initial Public Offering and Changes in Capital Structure

On May 15, 2026, the Company completed the IPO and sold an aggregate of 34,500,000 shares of Class A common stock at a price to the public of $185.00 per share, which includes the exercise in full by the underwriters of their option to purchase from the Company an additional 4,500,000 shares of Class A common stock. The net proceeds to the Company from the initial public offering were $6.2 billion, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company used $416.0 million of the proceeds from the IPO to satisfy tax withholding and remittance obligations related to the RSUs that vested in connection with our IPO.

Following the effectiveness of the IPO registration statement, the Company filed an amended and restated certificate of incorporation, which became effective immediately prior to the closing of the IPO (the “Restated Certificate”). The Restated Certificate authorizes a total of 3,500,000,000 shares of Class A common stock,240,000,000 shares of Class B common stock,100,000,000 shares of Class N common stock, and 100,000,000 shares of preferred stock. Upon the filing and effectiveness of the Restated Certificate, and immediately prior to the closing of the IPO, each outstanding share of the Company’s Series A, Series B, Series C, Series D, Series E, Series F, Series F-1, Series G, and Series H redeemable convertible preferred stock and Class A common stock converted, on aone-for-one basis, into 185,110,345 shares of the Company’s Class B common stock (the conversion, the “Reclassification”). Following the completion of the IPO, the Company has three classes of outstanding common stock: Class A common stock, Class B common stock and Class N common stock. No shares of the Company’s preferred stock were issued and outstanding following the completion of the IPO.

Certain rights of the holders of all classes of stock pursuant to the Restated Certificate are as follows:

Common Stock

The rights of the holders of Class A common stock, Class B common stock, and Class N common stock (referred to together as the “common stock”) are identical, except with respect to voting and conversion.

Voting Rights

Each holder of the Company’s Class A common stock is entitled toone vote per share, each holder of the Company’s Class B common stock is entitled to 20 votes per share, and each holder of the Company’s Class N common stock is entitled tono votes per share. The holders of the Company’s Class A common stock and Class B common stock will generally vote as a single class on all matters submitted to a vote of its stockholders, unless otherwise required by Delaware law or the Restated Certificate. Delaware law could require holders of the Company’s Class A common stock or Class B common stock, or Class N common stock to vote separately as a single class in the following circumstances:

•if the Company were to seek to amend its Restated Certificate to increase or decrease the par value of a class of its capital stock, then that class would be required to vote separately to approve the proposed amendment; and

•if the Company were to seek to amend our Restated Certificate in a manner that alters or changes the powers, preferences, or special rights of a class of its capital stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment.

The Restated Certificate does not provide for cumulative voting for the election of directors. As a result, the holders of a majority of shares of the Company’s Class A common stock and Class B common stock can elect all of the directors then standing for election. The Restated Certificate established a classified board of directors, to be divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of the Company’s stockholders, with the other classes continuing for the remainder of their respective three-year terms.

Conversion Rights

Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. Following the completion of the IPO and prior to the Final Conversion Date (as defined below), each share of Class B common stock will convert automatically into one share of Class A common stock upon sale or transfer, except for certain permitted transfers, as set forth in the Restated Certificate, including estate planning or other transfers among the Founders (as defined below) and their permitted entities and permitted transferees. In addition, each share of Class B common stock held by a Founder will convert automatically into one share of the Company’s Class A common stock on the earlier of (i) the death or incapacity of such Founder or (ii) the date that is six months following the date on which such Founder is no longer an employee or director of the Company (unless such Founder has rejoined the Company during such six-month period). In addition, all outstanding shares of Class B common stock will convert automatically into one share of Class A common stock on the date that is six months following the date on which no Founder is an employee or director of the Company (unless a Founder has rejoined the Company during such six-month period). We refer to the date on which such final conversion of all outstanding shares of Class B common stock pursuant to the terms of the Restated Certificate occurs as the “Final Conversion Date,” and we refer to each of Andrew D. Feldman, Sean Lie, Jean-Philippe Fricker, and Michael James as the “Founders.” Once converted into Class A common stock, the Class B common stock will not be reissued.

Each share of Class N common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain permitted transfers, as set forth in the Restated Certificate. Permitted transferees include entities under common control with or controlled by such holder of Class N common stock or if the holder provides prior written notice to us electing for the transfer to not result in a conversion. Once converted into Class A common stock, the Class N common stock will not be reissued.

Dividend Rights

Subject to preferences that may apply to any outstanding preferred stock, holders of the Company’s common stock are entitled to receive dividends out of legally available funds if, when, and in the amounts declared by the Company’s board of directors. However, if a dividend is paid in the form of common stock, rights to acquire common stock, or securities convertible into or exchangeable for common stock, holders of Class A, Class B, and Class N common stock will generally receive securities of their respective class, unless different treatment is approved by a majority of the outstanding shares of each class voting separately.

Preferred Stock

The Restated Certificate also authorizes the issuance of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by the Company’s board of directors.

2026 Incentive Award Plan

In connection with the IPO, the Company’s board of directors adopted, and its stockholders approved, the 2026 Incentive Award Plan (the “2026 Plan”), which became effective on May 12, 2026.

The 2026 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), performance awards, and other stock-based awards to employees, directors, and consultants. An aggregate of 42,650,268 shares of the Company's Class A common stock were initially reserved for issuance under the 2026 Plan. The number of shares available for issuance under the 2026 Plan is subject to adjustment pursuant to the terms of the plan, including annual automatic increases beginning January 1, 2027.

Upon effectiveness of the 2026 Plan, no further awards may be granted under the Company’s 2016 Equity Incentive Plan (as amended, the “2016 Plan”), although awards previously granted under the 2016 Plan remain outstanding and continue to be governed by their existing terms.

2026 G42 Warrants

In April 2026, the Company issued a warrant to G42 to purchase an aggregate of up to 1,655,975 shares of Class N common stock at an exercise price of $0.01 per share (the “2026 G42 Warrant”). The warrant was fully vested and immediately exercisable upon issuance, and expired on April 15, 2026. The warrant is classified as an equity instrument, and the grant-date fair value was $90.23 per share. The 2026 G42 Warrant was exercised in full in April 2026.

The Company recorded a customer warrant asset of $149.4 million in the second quarter of 2026, all of which will be recognized as a reduction in revenue in the consolidated statement of operations in proportion to the amount of related revenues, which could occur until October 2031.

ESPP

In connection with the IPO, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2026 Employee Stock Purchase Plan (the “ESPP”), which became effective on May 12, 2026.

The option purchase price will be the lower of 85% of the closing trading price per share of the Company’s Class A common stock as of the first date of an offering period in which a participant is enrolled or 85% of the closing trading price per share as of the purchase date, which will occur on the last day of each purchase period within an offering period.

The maximum number of shares of the Company’s Class A common stock that will be authorized for sale under the ESPP is equal to the sum of (i)3,554,189 shares of Class A common stock and (ii) an annual increase on the first day of each fiscal year beginning in 2027 and ending in 2036, equal to the lesser of (A)1% of the sum of (1) all shares of all classes of the Company’s common stock, and (2) the number of shares issuable upon the exercise of warrants to purchase shares of the Company’s common stock with an exercise price per share of $0.01 or less, in each case, outstanding on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of Class A common stock as determined by the Company’s board of directors; provided, however, that no more than 48,870,099 shares of the Company’s Class A common stock may be issued under the ESPP. The shares reserved for issuance under the ESPP may be authorized but unissued shares, treasury shares, or reacquired shares.

Leases

In the second quarter of 2026, the Company executed non-cancelable lease agreements for additional data center capacity with lease commencement dates in 2026. The Company will recognize operating lease right-of-use assets and corresponding lease liabilities at the commencement date based on the present value of lease payments over the respective lease terms. Aggregate undiscounted future minimum lease payments under these agreements total approximately $1.6 billion over the lease term.

2026 AWS Warrant

In June 2026, the Company issued a warrant to AWS Warrantholder (as defined below) to acquire up to 2,696,678 shares of Class N common stock (the “AWS Warrant Shares”) at an exercise price of $100.00 per AWS Warrant Share. Of these AWS Warrant Shares,269,668 AWS Warrant Shares vested immediately upon issuance of the AWS Warrant (as defined below), and the remaining 2,427,010 AWS Warrant Shares vest in tranches upon the attainment of specified payment thresholds prior to the fifth anniversary of issuance, based on aggregate payments by Amazon (as defined below) to us pursuant to certain commercial arrangements between the parties. The AWS Warrant expires on June 19, 2033.

The Company is in the process of determining the grant-date fair value of these awards. The Company will record a customer warrant asset in the second quarter of 2026. The amortization of the customer warrant asset will be recognized as a reduction in revenue in the consolidated statements of operations in proportion to the amount of related revenues.