The following discussion and analysis of financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes, and other financial information, included elsewhere in this Quarterly Report on Form 10-Q and our final prospectus (the “Prospectus”) filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”), on May 14, 2026, in connection with our initial public offering (the “IPO”). In addition to our historical results of operations and financial position, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results to be expected for any period in the future, and results for any interim period should not be construed as an inference of what our results would be for any full year or future period. Overview We are building the fastest AI infrastructure in the world. In AI, speed is critical to win. Speed improves user engagement, expands product capabilities, can lower operating costs, and opens new markets. It shortens iteration cycles for engineers, researchers, and professionals across industries, allowing them to be more productive. Speed unlocks new applications and new industries. Our solutions are built for speed. Cerebras Inference delivers answers substantially faster than GPU-based solutions. These performance breakthroughs are the result of our core innovation: the world’s first and only commercialized wafer-scale processor. Our customers include hyperscalers, foundation model labs, AI-native and digital native businesses, enterprises, and sovereign AI initiatives. Our customers use Cerebras solutions to run applications that demand speed, scale, and intelligence. This work includes training and serving large frontier models with near-instant responses, processing massive datasets in real time, and generating full-stack applications in a single step. Once customers adopt fast inference, user expectations for interactivity rise, and engineering teams shift from latency optimizations to other work, making it difficult to return to slower inference. We deliver our solutions to customers in several different ways. Organizations that require full data and infrastructure control can purchase Cerebras AI supercomputers for on-premises deployments. Customers seeking cloud flexibility can access Cerebras compute through consumption-based models on Cerebras Cloud or through partner clouds. For example, our high-speed inference services are available through partners, including AWS Marketplace, Microsoft Marketplace, IBM watsonx Model Gateway, Vercel AI Gateway, OpenRouter, and Hugging Face, enabling seamless adoption within existing workflows. Beyond providing compute infrastructure, we provide AI services to our customers to co-develop solutions to address their most complex challenges, from training state-of-the-art models to optimizing deployments for each application’s needs, and maintaining and operating their on-premises hardware. Recent Developments OpenAI Collaboration 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. Initial Public Offering 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. 30 Table of Contents AWS In June 2026, we entered into a global hardware leasing agreement with Amazon Web Services (“AWS”) to collaborate on the development and deployment of a joint compute solution in AWS data centers, together with related software and support services. As of June 30, 2026, the applicable lease commencement conditions had not been satisfied. Accordingly, the leases had not commenced, and we had not recognized revenue under the arrangement. In connection with the arrangement, we also issued a warrant to AWS. Refer to Note 12 - Common Stock to our unaudited condensed consolidated financial statements for additional information regarding the warrant issued in connection with the AWS collaboration. Components of Results of Operations Revenue We generate revenue primarily from hardware solutions and cloud and other services. Hardware solutions consist of sales of our AI systems and related equipment for on-premises use. Cloud and other services include our Dedicated Capacity and On-Demand cloud offerings, support and management services, and AI modeling services. Cloud and other services revenue also includes pass-through amounts for data center set-up and operation costs that we incur and bill to certain specific customers under custom arrangements with those customers. These pass-through revenues are not part of our core technology or service offerings. Hardware Solutions 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. Cloud and Other Services Customers procure cloud capacity from us through two primary models: Dedicated Capacity and On-Demand. Dedicated Capacity contracts are generally structured as take-or-pay commitments, under which customers pay for dedicated compute capacity irrespective of utilization. We recognize revenue from sales of these cloud-based computing services, including hosted inference, over the service term, as the customer benefits from our services throughout the contract period. Beginning in the first quarter of 2026, we began recognizing revenue for pass-through data center costs due to a customer agreement. Also beginning in the first quarter of 2026, we began amortization of customer warrant assets as a reduction in revenue. Refer to Note 12 - Common Stock for additional information on warrants issued to customers. This non-cash reduction in revenue negatively impacts sequential revenue growth trends in the near term. Our On-Demand model includes a consumption-based “pay-as-you-go” approach for inference, allowing customers to either pay for tokens as they consume them or pre-purchase token bundles for fixed amounts that are drawn down over time as the tokens are consumed, as well as for training workloads that run for contracted periods of time. The On-Demand model allows customers to scale elastically and many customers have begun with on-demand usage and transitioned to dedicated capacity as their workloads expand. We generate services and support revenue primarily through software support agreements that range from one to five years, as well as offering a comprehensive suite of services to manage and operate Cerebras supercomputer clusters located in our customers’ data centers. Such revenue is recognized ratably over time as the services are provided. We also generate revenue from custom AI modeling services over time as services are provided or at a point-in-time upon completion and acceptance by the customer of contract deliverables, depending on the terms of the agreement. As a result of the MRA with OpenAI for the delivery of the Committed Capacity, we expect our cloud and other services revenue to comprise a significantly higher percentage of total revenue in future periods. The mix of hardware and cloud and other services revenue may vary from period to period based on OpenAI’s deployment options and the manner in which they elect to have the Committed Capacity, and any Additional Capacity, delivered by us. In the near term, we expect pass-through revenue to also increase significantly as initial Committed Capacity will be deployed in our cloud. This may vary over the longer term based on the deployment options elected for future Committed Capacity. 31 Table of Contents Hardware Cost of Revenue Cost of revenue for hardware consists primarily of the cost of materials, such as wafers processed by third-party foundries, costs associated with packaging, assembly, shipping, logistics, quality assurance, warranty cost, cost of personnel, including salaries, stock-based compensation, and employee benefits, write-down of inventories, and facilities expenses. Cloud and Other Services Cost of Revenue Cost of revenue for cloud-based and other support services revenue primarily consists of data center costs, depreciation or rental of equipment, cost of personnel, including salaries, stock-based compensation, and employee benefits, and facilities expenses. We expect to incur other start-up costs related to expediting the availability of cloud capacity to fulfill the significant increase in near-term demand. We also began recognizing pass-through data center costs due to our MRA with OpenAI and expect these costs to grow as we deliver more cloud capacity under the agreement. Gross Profit and Gross Margin Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross profit has been, and we expect will continue to be, influenced by several factors, including sales volume and pricing of our products and services, mix of revenue between hardware and cloud and other services, changes in inventory costs, including wafer yield, contract manufacturing and supplier pricing, data center costs, repair and warranty costs, cost of logistics, and personnel costs. We expect overall gross profit will increase in absolute dollars in the near term, primarily due to higher gross profit from Cloud and other services as revenue increases in connection with the continued ramp-up of dedicated cloud capacity deployments. We expect gross margin to be significantly lower in the near term compared to recent prior periods and to fluctuate from period to period. These fluctuations are primarily driven by the amortization of customer warrant assets, which will reduce reported revenue in future periods. Gross margin is also expected to be adversely impacted by pass-through data center costs recorded in both revenue and cost of revenue, as well as start-up costs incurred to expedite cloud capacity to meet increased near-term demand. Because we began amortization of customer warrant assets in the first quarter of 2026, future quarterly revenue growth rates may decline from historical trends. Operating Expenses Research and Development Expenses 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. We also expense software development costs, including costs to develop the software component of hardware to be sold, leased, or marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products. 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. Sales and Marketing Expenses Sales and marketing expenses primarily consist of personnel costs, including salaries, commissions, stock-based compensation, employee benefits, public relations costs, tradeshow and other sales event costs, advertising, travel and entertainment costs, costs to provide prospective customers with demonstrations or trials of Cerebras Cloud, and facilities expenses. We expect sales and marketing expenses to increase in absolute dollar terms as we grow our customer base and brand. We expect to have higher stock-based compensation expense related to equity awards for which the liquidity-based vesting condition was satisfied in connection with the IPO. 32 Table of Contents General and Administrative Expenses General and administrative expenses consist primarily of personnel costs, including salaries, stock-based compensation, employee benefits and bonuses related to corporate, finance, legal, information technology and human resource functions, professional services fees, audit and compliance expenses, software subscription costs, travel and related costs, insurance costs, depreciation and amortization, allocation of facilities and other general corporate expenses. We expect to incur additional expenses as a result of operating as a public company, including expenses to comply with the rules and regulations applicable to companies listed on a national securities exchange, expenses related to auditing, compliance, and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations, and professional services. 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. Other Income, Net Other income, net consists primarily of interest income, dividend income, and interest expense on the Working Capital Loan. Income Tax Expense Income tax expense consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized. Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses, such as stock-based compensation, and changes in our valuation allowance. Results of Operations The following tables set forth selected consolidated statements of operations data for each of the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Revenue: Hardware $ 54,119 $ 70,295 $ 164,712 $ 139,969 Cloud and other services 125,991 33,027 208,804 62,865 Total revenue 180,110 103,322 373,516 202,834 Cost of revenue(1): Hardware 53,141 46,649 118,072 95,059 Cloud and other services 101,410 24,574 143,709 34,072 Total cost of revenue 154,551 71,223 261,781 129,131 Gross profit 25,559 32,099 111,735 73,703 Operating expenses: Research and development(1) 320,151 60,768 395,646 113,519 Sales and marketing(1) 86,969 18,228 101,670 28,554 General and administrative(1) 95,672 10,285 106,689 17,282 Total operating expenses 502,792 89,281 604,005 159,355 Loss from operations (477,233) (57,182) (492,270) (85,652) Other income, net 26,979 368,358 29,507 374,644 Income (loss) before income tax (450,254) 311,176 (462,763) 288,992 Income tax expense 274 1,664 1,771 3,347 Net income (loss) $ (450,528) $ 309,512 $ (464,534) $ 285,645 33 Table of Contents _______________ (1)Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Cost of revenue $ 15,353 $ 187 $ 16,303 $ 513 Research and development 222,147 9,301 227,846 15,013 Sales and marketing 71,055 1,533 72,847 3,482 General and administrative 68,453 2,260 69,605 3,427 Total stock-based compensation expense $ 377,008 $ 13,281 $ 386,601 $ 22,435 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. 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. 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. The following table sets forth selected consolidated statements of operations data expressed as a percentage of revenue for each of the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (as a percentage of revenue) Revenue: Hardware 30.0 % 68.0 % 44.1 % 69.0 % Cloud and other services 70.0 32.0 55.9 31.0 Total revenue 100.0 100.0 100.0 100.0 Cost of revenue: Hardware 29.5 45.1 31.6 46.9 Cloud and other services 56.3 23.8 38.5 16.8 Total cost of revenue 85.8 68.9 70.1 63.7 Gross profit 14.2 31.1 29.9 36.3 Operating expenses: Research and development 177.8 58.8 105.9 56.0 Sales and marketing 48.3 17.6 27.2 14.1 General and administrative 53.1 10.0 28.6 8.5 Total operating expenses 279.2 86.4 161.7 78.6 Loss from operations (265.0) (55.3) (131.8) (42.2) Other income, net 15.0 356.5 7.9 184.7 Income (loss) before income tax (250.0) 301.2 (123.9) 142.5 Income tax expense 0.2 1.6 0.5 1.7 Net income (loss) (250.1 %) 299.6 % (124.4 %) 140.8 % 34 Table of Contents Comparison of the Three and Six Months Ended June 30, 2026 and 2025 Revenue Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Hardware $ 54,119 $ 70,295 $ (16,176) (23 %) 164,712 139,969 $ 24,743 18 % Cloud and other services 125,991 33,027 92,964 281 208,804 62,865 145,939 232 Total revenue $ 180,110 $ 103,322 $ 76,788 74 % $ 373,516 $ 202,834 $ 170,682 84 % Total revenue for the three months ended June 30, 2026 increased by $76.8 million, or 74%, compared to the same period in 2025. Revenue for the six months ended June 30, 2026 increased by $170.7 million, or 84%, compared to the same period in 2025. The increases were primarily attributable to higher customer consumption, the continued ramp of dedicated cloud capacity and related services, and higher revenue under existing customer arrangements, partially offset by amortization of customer warrant assets as a reduction of revenue. Hardware revenue decreased by $16.2 million, or 23%, for the three months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily attributable to $28.0 million in amortization of customer warrant assets as a reduction of revenue. This was partially offset by $11.9 million of higher hardware revenue under existing customer arrangements. For the six months ended June 30, 2026, hardware revenue increased by $24.7 million, or by 18%, compared to the same period in 2025. The increase was primarily attributable to $53.8 million of higher hardware revenue under existing customer arrangements, partially offset by $29.0 million in amortization of customer warrant assets as a reduction of revenue. Cloud and other services revenue increased by $93.0 million, or 281%, for the three months ended June 30, 2026, compared to the same period in 2025, primarily attributable to $109.8 million from higher cloud services and related revenue from increased customer consumption, the commencement and ramp of services under customer arrangements, and dedicated cloud capacity deployments, partially offset by $16.2 million in amortization of customer warrant assets as a reduction of revenue. Cloud and other services revenue increased by $145.9 million, or 232%, for the six months ended June 30, 2026, compared to the same period in 2025, primarily attributable to $163.6 million from higher cloud services and related revenue from increased customer consumption, the commencement and ramp of services under customer arrangements, and dedicated cloud capacity deployments, partially offset by $17.3 million in amortization of customer warrant assets as a reduction of revenue. Cost of Revenue and Gross Margin Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Hardware $ 53,141 $ 46,649 $ 6,492 14 % $ 118,072 $ 95,059 $ 23,013 24 % Cloud and other services 101,410 24,574 76,836 313 143,709 34,072 109,637 322 Total cost of revenue $ 154,551 $ 71,223 $ 83,328 117 % $ 261,781 $ 129,131 $ 132,650 103 % Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Hardware $ 978 $ 23,646 $ (22,668) (96 %) $ 46,640 $ 44,910 $ 1,730 4 % Cloud and other services $ 24,581 $ 8,453 $ 16,128 191 % $ 65,095 $ 28,793 $ 36,302 126 % Total gross profit $ 25,559 $ 32,099 $ (6,540) (20 %) $ 111,735 $ 73,703 $ 38,032 52 % Hardware 2 % 34 % (32 %) 28 % 32 % (4 %) Cloud and other services 20 % 26 % (6 %) 31 % 46 % (15 %) Total gross margin 14 % 31 % (17 %) 30 % 36 % (6 %) 35 Table of Contents Total cost of revenue increased by $83.3 million, or 117%, for the three months ended June 30, 2026, and $132.7 million, or 103%, for the six months ended June 30, 2026, compared to the same periods in 2025. The increases reflected higher costs to support revenue growth and included $15.8 million of IPO-related stock-based compensation expense and related tax costs. Hardware gross margin decreased to 2% for the three months ended June 30, 2026, compared to 34% for the same period in 2025 and to 28% for the six months ended June 30, 2026, from 32% in the corresponding period in 2025. The decreases were primarily attributable to the amortization of customer warrant assets as a reduction of revenue and IPO-related stock-based compensation expense and related tax costs. Excluding these items, which are not part of our core business, hardware gross margin improved by 5 percentage points and by 8 percentage points year over year for the three and six months ended June 30, 2026, respectively, reflecting lower material costs and continued improvement in manufacturing efficiency. Cloud and other services gross margin decreased to 20% for the three months ended June 30, 2026 compared to 26% for the same period in 2025 and to 31% for the six months ended June 30, 2026 compared to 46% in the corresponding period in 2025. The decreases were primarily attributable to the amortization of customer warrant assets as a reduction of revenue and IPO-related stock-based compensation expense and related tax costs. Excluding these items, which are not part of our core business, cloud and other services gross margin improved by 16 percentage points and was flat year over year for the three and six months ended June 30, 2026, respectively. The improvement in gross margin for the three months ended June 30, 2026, was due to higher pricing and greater utilization of deployed capacity. Total gross profit decreased by $6.5 million for the three months ended June 30, 2026, and increased by $38.0 million for the six months ended June 30, 2026, compared to the same periods in 2025. Total gross margin decreased to 14% for the three months ended June 30, 2026 from 31% for the same period in 2025, and decreased to 30% for the six months ended June 30, 2026, from 36% in the corresponding period in 2025. Excluding the effects of IPO-related stock-based compensation expense and related tax costs, pass-through revenue and costs, and amortization of customer warrant assets as a reduction of revenue, which are not part of our core business, total gross margin improved 9 percentage points and 7 percentage points, year over year, for the three and six months ended June 30, 2026, respectively due to a higher mix of cloud and inference revenue and improved hardware and cloud margins discussed above. Research and Development Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Research and development $ 320,151 $ 60,768 $ 259,383 427 % $ 395,646 $ 113,519 $ 282,127 249 % Percentage of revenue 178 % 59 % 106 % 56 % Research and development expenses increased by $259.4 million, or 427%, for the three months ended June 30, 2026, and $282.1 million, or 249%, for the six months ended June 30, 2026, compared to the same periods in 2025. The increases were primarily attributable to $228.0 million of IPO-related stock-based compensation and related tax costs in each period, as well as continued investment in headcount, engineering, product and software development initiatives, including next-generation product programs and prototype activities. Sales and Marketing Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Sales and marketing $ 86,969 $ 18,228 $ 68,741 377 % $ 101,670 $ 28,554 $ 73,116 256 % Percentage of revenue 48 % 18 % 27 % 14 % Sales and marketing expenses increased by $68.7 million, or 377%, for the three months ended June 30, 2026, and $73.1 million, or 256%, for the six months ended June 30, 2026, compared to the same periods in 2025. The increases were primarily attributable to $75.0 million and $80.0 million, respectively, of IPO-related stock-based compensation and related tax costs, partially offset by lower data center cloud spend on trial customers. 36 Table of Contents General and Administrative Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) General and administrative $ 95,672 $ 10,285 $ 85,387 830 % $ 106,689 $ 17,282 $ 89,407 517 % Percentage of revenue 53 % 10 % 29 % 9 % General and administrative expenses increased by $85.4 million, or 830%, for the three months ended June 30, 2026, and $89.4 million, or 517%, for the six months ended June 30, 2026, compared to the same periods in 2025. The increases were primarily attributable to $65.0 million of IPO-related stock-based compensation and related tax costs in each period, as well as higher legal and other professional services, personnel-related costs, insurance costs and consulting fees to support public company operations. Other Income, Net Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Other income, net $ 26,979 $ 368,358 $ (341,379) (93 %) $ 29,507 $ 374,644 $ (345,137) (92 %) Other income, net decreased by $341.4 million, or 93%, for the three months ended June 30, 2026, and $345.1 million, or 92%, for the six months ended June 30, 2026, compared to the same periods in 2025. The decrease was primarily attributable to the non-recurring $363.3 million gain recognized in the prior-year period from the release of the forward contract liability following cancellation of the committed purchase obligation. Other decreases include $19.7 million and $38.6 million, respectively, of non-cash interest expense recognized against the Working Capital Loan and added to deferred revenue as part of the OpenAI arrangement, as further discussed in Note 10 - Debt to our condensed consolidated financial statements. The decreases were partially offset by $43.5 million and $59.7 million, respectively, from higher interest and dividend income due to higher cash, cash equivalents, and investment balances. Income Tax Expense Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change (in thousands, except percentages) Income tax expense $ 274 $ 1,664 $ (1,390) (84 %) $ 1,771 $ 3,347 $ (1,576) (47 %) Income tax expense decreased by $1.4 million, or 84%, for the three months ended June 30, 2026 and $1.6 million, or 47%, for the six months ended June 30, 2026, compared to the same periods in 2025. The decreases were primarily attributable to lower state tax expense resulting from tax benefits from employee stock-based compensation deductions in connection with the IPO, partially offset by higher income tax expense for international subsidiaries. 37 Table of Contents Non-GAAP Financial Measures We use certain non-GAAP financial measures to supplement the performance measures in our unaudited condensed consolidated financial statements, which are presented in accordance with GAAP. These non-GAAP financial measures include core gross profit, core operating loss, and core net loss. We use these non-GAAP financial measures for financial and operational decision-making and as a means to assist us in evaluating period-to-period comparisons. By excluding certain items that may not be indicative of our recurring core operating results, we believe that core gross profit, core operating loss, and core net loss provide meaningful supplemental information regarding our performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and they may be used by our institutional investors and the analyst community to help them analyze the health of our business. However, there are a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures. Core Gross Profit 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. A reconciliation of our GAAP gross profit, the most directly comparable GAAP financial measure, to core gross profit is presented below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 GAAP gross profit $ 25,559 $ 32,099 $ 111,735 $ 73,703 Less: Pass-through revenue and related data center costs, net(1) (428) — (549) — Add: Amortization of customer warrant assets(1) 44,262 — 46,315 — Add: Stock-based compensation expense 15,353 187 16,303 513 Add: Employer payroll tax related to stock-based compensation from IPO(2) 471 — 471 — Core gross profit $ 85,217 $ 32,286 $ 174,275 $ 74,216 _______________ (1)Core gross profit does not include the tax effects of the non-GAAP adjustments because such tax effects were not material during the periods presented. (2)Employer payroll taxes related to the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity-based vesting condition was satisfied in connection with our IPO. Core Operating Loss 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. 38 Table of Contents A reconciliation of our GAAP loss from operations, the most directly comparable GAAP financial measure, to core operating loss is presented below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 GAAP loss from operations $ (477,233) $ (57,182) $ (492,270) $ (85,652) Less: Pass-through revenue and related data center costs, net(1) (428) — (549) — Add: Stock-based compensation expense(1) 377,008 13,281 386,601 22,435 Add: Amortization of customer warrant assets(1) 44,262 — 46,315 — Add: Employer payroll tax related to stock-based compensation from IPO(2) 22,778 — 22,778 — Core operating loss $ (33,613) $ (43,901) $ (37,125) $ (63,217) _______________ (1)Core operating loss does not include the tax effects of the non-GAAP adjustments because such tax effects were not material during the periods presented. (2)Employer payroll taxes related to the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity-based vesting condition was satisfied in connection with our IPO. Core Net Loss 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. A reconciliation of our GAAP net loss, the most directly comparable GAAP financial measure, to our core net loss is presented below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 GAAP net income (loss) $ (450,528) $ 309,512 $ (464,534) $ 285,645 Less: Pass-through revenue and related data center costs, net(1) (428) — (549) — Less: Extinguishment of forward contract liability — (363,336) — (363,336) Add: Stock-based compensation expense(1) 377,008 13,281 386,601 22,435 Add: Amortization of customer warrant assets(1) 44,262 — 46,315 — Add: Employer payroll tax related to stock-based compensation from IPO(2) 22,778 — 22,778 — Core net loss $ (6,908) $ (40,543) $ (9,389) $ (55,256) _______________ (1)Core net loss does not include the tax effects of the non-GAAP adjustments because such tax effects were not material during the periods presented. (2)Employer payroll taxes related to the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity-based vesting condition was satisfied in connection with our IPO. Liquidity and Capital Resources 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. 39 Table of Contents 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. We believe that our current cash, cash equivalents, restricted cash, and marketable securities will be sufficient to fund our operations for at least the next 12 months from the date of this Quarterly Report on Form 10-Q. Our future capital requirements, however, will depend on many factors, including our growth rate, the portion of our business that comes from cloud services requiring additional capital expense for our systems and related long-term data center obligations, the timing and extent of our sales and marketing and research and development expenditures including personnel costs, capital expenditures for tape-outs of our chip designs, the continuing market acceptance of our products, and the use of cash to fund potential mergers or acquisitions. In the event that additional financing is required from outside sources, we may seek to raise additional funds through equity, equity-linked arrangements, and debt. The sale of additional equity would result in dilution to our stockholders. The incurrence of debt would result in debt service obligations, and the instruments governing such debt could provide for operational and/or financial covenants that further restrict our operations. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition could be adversely affected. Revolving Credit Agreement On April 14, 2026, we entered into a revolving credit and guaranty agreement (the “Revolving Credit Agreement”) with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, the letter of credit issuers from time to time party thereto, and the lenders from time to time party thereto, which provides for a revolving credit facility (the “Revolving Credit Facility”) of up to $250.0 million that may initially be used solely for standby letters of credit to data center landlords and developers. Prior to the Phase Two Effective Date (as defined below), loans under the Revolving Credit Facility will incur interest, at our option, at a rate per annum equal to either (i) a base rate or (ii) term secured overnight interest rate (“SOFR”) plus 1.50%. Additionally, prior to the Phase Two Effective Date, we were required to pay commitment fees of 0.250% per annum on the undrawn portion of the commitments under the Revolving Credit Facility. Prior to the Phase Two Effective Date, the obligations under the Revolving Credit Facility were secured by cash collateral only, with no guarantees required. Following the completion of the IPO and satisfaction of pro forma covenant compliance and customary closing conditions, on June 17, 2026 (such date, the “Phase Two Effective Date”), the Revolving Credit Facility was upsized to up to $850.0 million, the proceeds of which may be used for general corporate purposes. Following the Phase Two Effective Date, loans under the Revolving Credit Facility incur interest, at our option, at a rate per annum equal to either (i) a base rate or (ii) term SOFR plus 2.25%, which decreases to 2.00% per annum upon achievement of an enhanced debt to EBITDA ratio. Beginning on the Phase Two Effective Date, we are required to pay commitment fees of 0.375% per annum on the undrawn portion of the commitments under the Revolving Credit Facility. The Revolving Credit Facility matures on April 14, 2031. Following the Phase Two Effective Date, the obligations under the Revolving Credit Facility are secured by liens on substantially all of our assets with carveouts for certain items, including securitization and leased infrastructure assets. The Revolving Credit Agreement contains a liquidity covenant requiring that unrestricted cash and cash equivalents (subject to certain exclusions), plus the undrawn revolver commitments, be not less than $150.0 million as of the last day of each fiscal quarter. Additionally, the Revolving Credit Agreement contains customary affirmative and, following the Phase Two Effective Date, negative covenants (including restrictions on indebtedness, liens, investments, asset dispositions, and affiliate transactions, each subject to customary exceptions and baskets) and customary events of default. Cash Flows The following table summarizes our cash flows for the periods presented: Six Months Ended June 30, 2026 2025 (in thousands) Net cash used in operating activities $ (47,488) $ (123,843) Net cash used in investing activities $ (1,309,933) $ (87,296) Net cash provided by financing activities $ 7,853,242 $ 5,148 40 Table of Contents Operating Activities 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. Net cash used in operating activities was $123.8 million for the six months ended June 30, 2025, reflecting net income of $285.6 million, offset by $317.5 million of net non-cash adjustments and a $91.9 million net use of cash from changes in operating assets and liabilities. Net non-cash adjustments consisted primarily of a $363.3 million non-cash gain from the extinguishment of the forward contract liability, partially offset by $22.4 million of stock-based compensation expense and $9.3 million of depreciation and amortization expense. Investing Activities 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. 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. Financing Activities 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. 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. Commitments and Contractual Obligations 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. 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. Critical Accounting Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements and the related notes thereto, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). In preparing the unaudited condensed consolidated financial statements, we apply accounting policies and estimates that affect the reported amounts and related disclosures. Inherent in such policies are certain key assumptions and estimates made by management, which we believe best reflect our underlying business and economic conditions. Our estimates are based on historical experience and various other factors and assumptions that we believe are reasonable under the circumstances. We regularly re-evaluate our estimates used in the preparation of the unaudited condensed consolidated financial statements based on our latest assessment of the current and projected business and economic environment. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty, and actual results could differ materially from the amounts 41 Table of Contents reported based on these estimates. There have been no material changes to our critical accounting policies and estimates as described in the Prospectus. For additional information about our critical accounting estimates, see the disclosure included in the Prospectus. Recent Accounting Pronouncements Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). The guidance requires disaggregated information about certain income statement expense line items on an annual and interim basis. This guidance will be effective for annual periods beginning after December 15, 2026 and for interim periods thereafter. The new standard permits early adoption and can be applied prospectively or retrospectively. The Company is evaluating the effect that this guidance will have on its unaudited condensed consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU No. 2025-06, Intangibles: Goodwill and Other‒Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The guidance modernizes the accounting for software costs and enhances transparency about an entity’s software costs. The guidance will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Upon adoption, the guidance can be applied prospectively, retrospectively, or under a modified transition approach. The Company is evaluating the effect that this guidance will have on its unaudited condensed consolidated financial statements and related disclosures and does not expect the adoption of this guidance to have a material impact on its unaudited condensed consolidated financial statements.