Cerebras Systems Inc.

Previous wording

In December 2025, we entered into a master relationship agreement (the “MRA”) with OpenAI OpCo, LLC (“OpenAI”), under which OpenAI committed to purchase 750MW of AI inference compute capacity and related services, with deployment expected in tranches during 2026 through 2028. OpenAI also has the option to purchase an additional 1.25GW of capacity for deployment by the end of 2030. During the three months ended March 31, 2026, we began recognizing revenue from the arrangement, and the initial tranche of the warrant issued to OpenAI vested upon the funding of a working capital loan of approximately $1.0 billion (the “Working Capital Loan”) in January 2026. Refer to Note 3 – Revenue, Note 10 – Working Capital Loan, and Note 12 – Common Stock to our unaudited condensed consolidated financial statements for additional information regarding the OpenAI collaboration, including the revenue arrangement, Working Capital Loan, and warrant, respectively. The Company has to date repaid, and expects to continue to repay, the balance using non-cash service credits.

Current wording

In December 2025, we entered into a master relationship agreement (the “MRA”) with OpenAI OpCo, LLC (“OpenAI”), under which OpenAI committed to purchase 750MW of AI inference compute capacity and related services, with deployment expected in tranches during 2026 through 2028. OpenAI also has the option to purchase an additional 1.25GW of capacity for deployment by the end of 2030. In the first quarter of 2026, we began recognizing revenue from the arrangement, and the initial tranche of the warrant issued to OpenAI vested upon the funding of a working capital loan of approximately $1.0 billion (the “Working Capital Loan”) in January 2026. Refer to Note 3 - Revenue, Note 10 - Debt, and Note 12 - Common Stock to our unaudited condensed consolidated financial statements for additional information regarding the OpenAI collaboration, including the revenue arrangement, Working Capital Loan, and warrant, respectively. The Company has to date repaid a portion of the balance using non-cash service credits and expects to continue to repay the balance using non-cash service credits.

Previous wording

On May 13, 2026, our registration statement on Form S-1 (File No. 333-295145) related to the IPO was declared effective by the SEC, and our Class A common stock began trading on the Nasdaq Global Select Market on May 14, 2026. The IPO was completed on May 15, 2026. As a result, our unaudited condensed consolidated financial statements as of March 31, 2026 do not reflect the impact of the IPO. For additional information, see Note 17 – Subsequent Events to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

On May 13, 2026, our registration statement on Form S-1 (File No. 333-295145) related to the IPO was declared effective by the SEC, and our Class A common stock began trading on the Nasdaq Global Select Market on May 14, 2026. The IPO was completed on May 15, 2026. For additional information, see Note 2 - Basis of Presentation and Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Hardware revenue consists of sales of our AI systems and other equipment that can be used for both training and inference on-premise. We recognize revenue from sales of AI systems when control of the goods transfers to the customer, which generally occurs upon shipment or delivery, depending on shipping terms or upon meeting the contractual acceptance terms. Beginning in the first quarter of 2026, we began recognizing amortization of customer warrant assets as a reduction in revenue. Refer to Note 12 - Common Stock, for additional information on common stock warrants issued to customers. This non-cash reduction in revenue negatively impacts sequential revenue growth trends in the near term.

Current wording

Hardware revenue consists of sales of our AI systems and other equipment that can be used for both training and inference on-premises. We recognize revenue from sales of AI systems when control of the goods transfers to the customer, which generally occurs upon shipment or delivery, depending on shipping terms or upon meeting the contractual acceptance terms. Beginning in the first quarter of 2026, we began recognizing amortization of customer warrant assets as a reduction in revenue. Refer to Note 12 - Common Stock for additional information on common stock warrants issued to customers. This non-cash reduction in revenue negatively impacts sequential revenue growth trends in the near term.

Previous wording

Research and development expenses primarily consist of costs incurred in performing research and development activities and include salaries, stock-based compensation, employee benefits, tape-out costs, which include layout services, mask sets, prototype components, system qualification and testing incurred before releasing new system designs into production, shipping, data center costs, depreciation and amortization, professional services fees, cloud computing, and facilities expenses. We expense research and development costs as incurred.

Current wording

Research and development expenses primarily consist of costs incurred in performing research and development activities and include salaries, stock-based compensation, employee benefits, tape-out costs, which include layout services, mask sets, prototype components, system qualification and testing incurred before releasing new system designs into production, shipping, data center costs, depreciation and amortization, professional services fees, cloud computing, artificial intelligence tooling costs, and facilities expenses. We expense research and development costs as incurred.

Previous wording

We expect research and development expenses to increase in absolute dollar terms as we continue to build new innovations with our wafer-scale technology and to remain competitive in the dynamic AI market. We expect to have significantly higher stock-based compensation expense related to equity awards, including the Executive Grants for our CTO discussed in Note 13 - Stock-Based Compensation, for which the liquidity-based vesting condition was satisfied in connection with the IPO on May 13, 2026. The Company will begin recognizing the stock-based compensation expense for these awards in the second quarter of 2026.

Current wording

We expect research and development expenses to increase in absolute dollar terms as we continue to build new innovations with our wafer-scale technology and to remain competitive in the dynamic AI market. We expect to have significantly higher stock-based compensation expense related to equity awards, including the Executive Grants for our CTO discussed in Note 13 - Stock-Based Compensation, for which the liquidity-based vesting condition was satisfied in connection with the IPO on May 13, 2026. The Company began recognizing the stock-based compensation expense for these awards in the second quarter of 2026.

Previous wording

We expect general and administrative expenses to increase in absolute dollar terms as we grow the business and have more employees around the world, and incur additional expenses to operate as a public company, including expenses to comply with rules and regulations applicable to companies listed on a securities exchange, expenses related to compliance and reporting obligations in various jurisdictions, and professional services. We expect to have significantly higher stock-based compensation expense related to equity awards, including the Executive Grants for our CEO as discussed in Note 13 - Stock-Based Compensation, for which the liquidity-based vesting condition was satisfied in connection with the IPO on May 13, 2026. The Company will begin recognizing the stock-based compensation expense for these awards in the second quarter of 2026.

Current wording

We expect general and administrative expenses to increase in absolute dollar terms as we grow the business and have more employees around the world, and incur additional expenses to operate as a public company, including expenses to comply with rules and regulations applicable to companies listed on a securities exchange, expenses related to compliance and reporting obligations in various jurisdictions, and professional services. We expect to have significantly higher stock-based compensation expense related to equity awards, including the Executive Grants for our CEO as discussed in Note 13 - Stock-Based Compensation, for which the liquidity-based vesting condition was satisfied in connection with the IPO on May 13, 2026. The Company began recognizing the stock-based compensation expense for these awards in the second quarter of 2026.

Previous wording

Stock-based compensation expense included $3.9 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively, related to secondary transactions in each period. Refer to Note 13 – Stock-Based Compensation to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.

Current wording

Stock-based compensation expense included $2.0 million and $5.9 million for the three and six months ended June 30, 2026, respectively, and $1.5 million and $3.0 million for the three and six months ended June 30, 2025, respectively, related to secondary transactions in each period. Refer to Note 13 - Stock-Based Compensation to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

Pursuant to our 2016 Equity Incentive Plan (as amended, the “2016 Plan”), our restricted stock units (“RSUs”) vest upon the satisfaction of both service- and liquidity-based vesting conditions. The service-based vesting condition for these awards is generally satisfied by rendering continuous service through the applicable vesting period which is generally four years. The liquidity-based vesting condition was satisfied in connection with the IPO. Since the liquidity-based vesting condition had not been satisfied as of March 31, 2026, we had not recorded any stock-based compensation expense for our RSUs at that date.

Current wording

Pursuant to our 2016 Equity Incentive Plan (as amended, the “2016 Plan”), our restricted stock units (“RSUs”) vest upon the satisfaction of both service-based and liquidity-based vesting conditions. The service-based vesting condition for these awards is generally satisfied by rendering continuous service through the applicable vesting period, which is generally four years. The liquidity-based vesting condition was satisfied in connection with the IPO.

Previous wording

For such RSUs, we recognize stock-based compensation expense using the accelerated attribution method over the requisite service period if it is probable that the performance conditions will be achieved. For the three months ended March 31, 2026 and 2025, no stock-based compensation expense has been recognized for RSUs as the liquidity events, as described above, were deemed not probable. As of March 31, 2026, 3,921,423 RSUs had met the service-based vesting condition but not the liquidity-based vesting condition. If a liquidity event had occurred as of March 31, 2026, we would have recognized stock-based compensation expense of $222.1 million, and unrecognized stock-based compensation expense related to RSUs for which the service-based vesting condition had not been satisfied as of March 31, 2026 would have been $769.3 million, which would have been recognized over a weighted-average requisite service period of 2.8 years. In the three months ending June 30, 2026, we expect to record a cumulative stock-based compensation expense of $366.8 million, determined using the grant date fair values of the RSUs, for which we expect the service-based vesting condition will be satisfied as of June 30, 2026 and for which the liquidity-based vesting condition was satisfied in connection with the IPO. We will record the remaining stock-based compensation expense related to RSUs using the accelerated attribution method over the remaining requisite service period now that the liquidity-based vesting condition is satisfied.

Current wording

For such RSUs, we recognize stock-based compensation expense using the accelerated attribution method over the requisite service period if it is probable that the performance conditions will be achieved. We recognized $273.6 million of stock-based compensation expense during the six months ended June 30, 2026, associated with vested RSUs as a result of the satisfaction of the service-based and liquidity-based vesting conditions, one of which was satisfied in connection with the IPO. We will record the remaining stock-based compensation expense related to RSUs using the accelerated attribution method over the remaining requisite service period now that the liquidity-based vesting condition is satisfied.

Previous wording

Comparison of the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

We define Core gross profit as gross profit presented in accordance with GAAP, adjusted to exclude pass-through revenue and related data center costs as these are not part of our core technology or service offerings. In addition, we exclude non-cash amortization of customer warrant assets, and stock-based compensation expense. We present Core gross profit because it provides investors and other users of our financial information with additional information to evaluate the value of our hardware delivery to customers, whether through direct hardware sales or cloud services. This measure also provides an additional basis for comparing business performance across companies and periods by excluding the effects of items that may vary for reasons unrelated to core technology and service offerings and did not occur in prior periods.

Current wording

We define core gross profit as gross profit presented in accordance with GAAP, adjusted to exclude pass-through revenue and related data center costs as these are not part of our core technology or service offerings. In addition, we exclude non-cash amortization of customer warrant assets, stock-based compensation expense, and employer payroll tax related to stock-based compensation from the IPO. We present core gross profit because it provides investors and other users of our financial information with additional information to evaluate the value of our hardware delivery to customers, whether through direct hardware sales or cloud services. This measure also provides an additional basis for comparing business performance across companies and periods by excluding the effects of items that may vary for reasons unrelated to core technology and service offerings that did not occur in prior periods.

Previous wording

We define Core operating loss as loss from operations presented in accordance with GAAP, adjusted to exclude pass-through revenue and data center costs, amortization of customer warrant assets, and stock-based compensation expense. We have presented core operating loss because we consider core operating loss to be a useful metric for investors and other users of our financial information in evaluating our overall operating performance. This metric also provides investors and other users of our financial information with an additional tool to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Current wording

We define core operating loss as loss from operations presented in accordance with GAAP, adjusted to exclude pass-through revenue and data center costs, amortization of customer warrant assets, stock-based compensation expense, and employer payroll tax related to stock-based compensation from IPO. We have presented core operating loss because we consider core operating loss to be a useful metric for investors and other users of our financial information in evaluating our overall operating performance. This metric also provides investors and other users of our financial information with an additional tool to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Previous wording

We monitor core net loss for planning and performance measurement purposes. We define core net loss as net loss presented in accordance with GAAP, adjusted to exclude pass-through revenue and data center costs, amortization of customer warrant assets and stock-based compensation expense. We have presented core net loss because we believe that the exclusion of these charges allows for a more relevant comparison of our results of operations to other companies in our industry and facilitates period-to-period comparisons as it eliminates the effect of certain factors unrelated to our overall operating performance. Our calculation of core net loss does not currently include the tax effects of the stock-based compensation expense adjustment because such tax effects have not been material to date.

Current wording

We monitor core net loss for planning and performance measurement purposes. We define core net loss as net income (loss) presented in accordance with GAAP, adjusted to exclude pass-through revenue and data center costs, amortization of customer warrant assets, stock-based compensation, the extinguishment of forward contract liability, and employer payroll tax related to stock-based compensation from IPO. We have presented core net loss because we believe that the exclusion of these charges allows for a more relevant comparison of our results of operations to other companies in our industry and facilitates period-to-period comparisons as it eliminates the effect of certain factors unrelated to our overall operating performance. Our calculation of core net loss does not currently include the tax effects of the stock-based compensation expense adjustment because such tax effects have not been material to date.

Previous wording

As of March 31, 2026, our principal sources of liquidity were cash, cash equivalents, and restricted cash of $2.7 billion and marketable securities of $515.6 million. Our cash and cash equivalents primarily consisted of cash deposited in money market or holding accounts with financial institutions. Marketable securities were comprised of investments in U.S. government securities with an original maturity greater than three months at the time of purchase but less than or equal to one year at period-end.

Current wording

As of June 30, 2026, our principal sources of liquidity were cash, cash equivalents, and restricted cash of $7.4 billion and marketable securities of $1.2 billion. Our cash and cash equivalents primarily consisted of cash deposited in money market or holding accounts with financial institutions. Marketable securities were comprised of investments in U.S. government securities with an original maturity greater than three months at the time of purchase but less than or equal to one year at period-end.

Previous wording

Since our inception, we have financed our operations primarily through sales of redeemable convertible preferred stock and payments from our customers, including prepayments from customers. As of March 31, 2026, we had an outstanding Working Capital Loan of $982.9 million related to the remaining principal balance of the Working Capital Loan with OpenAI. Our principal uses of cash in recent periods have been to fund our operations and invest in research and development. As of March 31, 2026, we had an accumulated deficit of $919.3 million.

Current wording

Since our inception, we have financed our operations primarily through sales of common stock and redeemable convertible preferred stock and payments from our customers, including prepayments from customers. On May 15, 2026, we completed the IPO, in which we issued and sold 34,500,000 shares of Class A common stock at $185.00 per share. We received net proceeds of approximately $6.2 billion from the IPO, after deducting underwriting discounts and commissions and estimated offering expenses. As of June 30, 2026, we had an outstanding Working Capital Loan of $918.2 million related to the remaining principal balance of the Working Capital Loan with OpenAI. Our principal uses of cash in recent periods have been to fund our operations and invest in research and development. As of June 30, 2026, we had an accumulated deficit of $1.4 billion.

Previous wording

Net cash used in operating activities was $54.9 million for the three months ended March 31, 2025, reflecting a net loss of $23.9 million and a $51.3 million net use of cash from changes in operating assets and liabilities, partially offset by $20.2 million of non-cash charges. The net use of cash from changes in operating assets and liabilities was primarily driven by a $159.6 million decrease in customer deposits, a $15.3 million decrease in other liabilities, and a $5.7 million decrease in accounts payable, partially offset by a $56.8 million decrease in accounts receivable, a $53.8 million decrease in inventories, a $15.1 million increase in deferred revenue, and a $3.7 million decrease in prepaid expenses and other assets. Non-cash charges consisted primarily of $9.2 million of stock-based compensation expense, $4.5 million of provision for product warranties, $3.9 million of depreciation and amortization expense, and $2.9 million of non-cash lease expense, partially offset by $0.3 million of other non-cash adjustments.

Current wording

Net cash used in operating activities was $47.5 million for the six months ended June 30, 2026, reflecting a net loss of $464.5 million and a $142.4 million net use of cash from changes in operating assets and liabilities, partially offset by $559.5 million of non-cash charges. Non-cash charges consisted primarily of $386.6 million of stock-based compensation expense, $46.3 million of amortization of customer warrant assets, and $42.6 million of depreciation and amortization expense.

Previous wording

Net cash used in investing activities of $236.6 million for the three months ended March 31, 2026 was the result of $308.8 million in purchases of various investments and $132.0 million in purchases of property and equipment primarily for systems to deliver Cerebras Cloud services, offset by $204.2 million in maturities of these investments.

Current wording

Net cash used in investing activities of $1.3 billion for the six months ended June 30, 2026 was the result of $1.3 billion in purchases of various investments and $548.9 million in purchases of property and equipment primarily for systems to deliver Cerebras Cloud services, offset by $514.5 million in maturities and sales of these investments.

Previous wording

Net cash used in investing activities of $56.7 million for the three months ended March 31, 2025, was the result of $98.2 million in purchases of property and equipment and purchases of $20.2 million in various investments offset by $61.7 million in maturities and sales of these investments.

Current wording

Net cash used in investing activities of $87.3 million for the six months ended June 30, 2025 was the result of $185.1 million in purchases of property and equipment and purchases of $20.2 million in various investments offset by $118.0 million in maturities and sales of these investments.

Previous wording

Net cash provided by financing activities of $2.0 billion for the three months ended March 31, 2026 was the result of $1.0 billion from the sale of shares of our redeemable convertible preferred stock, $1.0 billion received from the Working Capital Loan from OpenAI, $15.0 million in proceeds from issuance of common stock and $5.3 million in proceeds from stock option exercises.

Current wording

Net cash provided by financing activities of $7.9 billion for the six months ended June 30, 2026 was the result of $6.2 billion in proceeds from our initial public offering, net of underwriting discounts and commissions, $1.0 billion net proceeds from the issuance of Series H redeemable convertible preferred stock, $1.0 billion received from the Working Capital Loan from OpenAI, $20.2 million in proceeds from stock option exercises, and $15.0 million in proceeds from issuance of common stock, partially offset by $416.7 million of tax withholding related to the tender offer and the IPO, $12.7 million in payments of deferred offering costs and other financing activities, and $3.8 million in fees paid for the revolving credit facility.

Previous wording

Net cash provided by financing activities of $1.6 million for the three months ended March 31, 2025 was the result of $1.6 million in proceeds from stock option exercises.

Current wording

Net cash provided by financing activities of $5.1 million for the six months ended June 30, 2025 was primarily the result of $5.2 million in proceeds from stock option exercises.

Previous wording

Operating lease commitments. As of March 31, 2026, our operating lease commitments included data centers and corporate office leases, for which we had fixed lease payment obligations of $460.3 million. Refer to Note 15 – Leases to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.

Current wording

Operating lease commitments. As of June 30, 2026, our operating lease commitments included data centers and corporate office leases, for which we had fixed lease payment obligations of $690.3 million. During the three months ended June 30, 2026, we executed non-cancelable lease agreements for additional data center capacity with lease commencement dates in 2026. These agreements are not included in the $690.3 million amount above. In the third quarter of 2026, we entered into additional non-cancelable lease agreements for data center capacity, also with lease commencement dates in 2026. Aggregate undiscounted future minimum lease payments under these agreements total approximately $2.3 billion over the respective lease term. Refer to Note 15 - Leases and Note 17 - Subsequent Events to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

Purchase commitments. As of March 31, 2026, future payments related to non-cancelable commitments for contracts with a remaining term of over one year are as follows: $5.4 million (remaining 9 months of 2026), $6.2 million (2027), and $0.5 million (2028). Refer to Note 16 – Commitments and Contingencies to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.

Current wording

Purchase commitments. As of June 30, 2026, future payments related to non-cancelable commitments for contracts with a remaining term of over one year are as follows: $3.6 million (remaining 6 months of 2026), $6.2 million (2027), and $0.5 million (2028). Refer to Note 16 - Commitments and Contingencies to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.