Key facts
- Cerebras shares fell 14%.
- The company forecast a full-year gross margin of 38% to 41%.
- Cerebras reported a 47% gross margin in Q1.
- CEO Andrew Feldman stated the outlook was misunderstood.
- Feldman cited temporary equipment rentals to customers as impacting profit.
Cerebras Systems saw its shares decline by 14% after releasing its full-year financial outlook, which included a projected gross margin between 38% and 41%. This forecast represents a notable decrease from the 47% gross margin the company achieved in the first quarter. CEO Andrew Feldman addressed the market's reaction, stating that the company's full-year outlook was misunderstood. He explained that the reduced margin forecast is influenced by the practice of temporarily renting equipment to customers. This rental arrangement, while beneficial for customer adoption, impacts the company's short-term profitability and thus the gross margin calculation for the full year. Feldman's comments aim to clarify the financial implications of their customer engagement strategies and reassure investors about the company's underlying performance and future prospects.