Cerebras (CBRS) Doubled Core Revenue. Why Did GAAP Hardware Sales Fall 23%?

Cerebras Systems Inc. (CBRS) reported a 103% increase in core revenue to $209.9 million for the second quarter, up from $104.3 million a year earlier. However, GAAP revenue rose 74% to $180.1 million, below the $194.23 million consensus. Core revenue increased due to a shift in the revenue mix, with cloud and other services revenue roughly quadrupling to $126 million.

Hardware revenue declined 23% to $54.1 million. Core hardware revenue, excluding non-cash customer-warrant amortization, rose 17% to $82.1 million. GAAP hardware revenue fell 23% to $54.1 million. The mixed revenue growth raises questions about how investors should value Cerebras as its business evolves toward cloud services.