Cerebras stock fell after earnings as CEO said margin forecasts had been misunderstood

Shares of Cerebras Systems fell nearly 20% on Wednesday, even after the company delivered better-than-expected results First quarter earnings Tuesday.

That’s because in its first earnings report since going public, the AI ​​chip maker forecast a narrower gross margin in its core business, guiding for a full-year margin of 38% to 41%, compared to the 47% reported in the first quarter. The stock hit a new low on Wednesday, nearly hitting the company’s IPO price.

Cerebras CEO Andrew Feldman He told CNBC That investors misunderstood the company’s margin guidance, indicating that Cerebras would need to lease some equipment from one of its largest customers.

The company said during Earnings call It decided to provide more capacity sooner by temporarily leasing its own systems from an existing customer while it built and deployed its own data center capacity. The company said this will reduce profit margins this year.

According to the company’s earnings report, revenue for the quarter reached $193 million, up 94% year over year. The net loss narrowed to $14 million, down from $23.9 million the previous year.