DILUTION If you purchase shares of our Class A common stock in this offering, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share of our Class A common stock in this offering and the pro forma as adjusted net tangible book value per share of our Class A common stock immediately after this offering. As of December 31, 2025, our historical net tangible book value (deficit) was $ , or $ per share of our Class A common stock. Our historical net tangible book value (deficit) per share represents our total tangible assets less total liabilities and redeemable convertible preferred stock, divided by the aggregate number of shares of our Class A common stock outstanding as of December 31, 2025. Our pro forma net tangible book value as of December 31, 2025 was $ , or $ per share of Class A common stock. Pro forma net tangible book value per share represents tangible assets, less liabilities, divided by the aggregate number of shares of Class A common stock outstanding, after giving effect to (i) the filing and effectiveness of our amended and restated certificate of incorporation; (ii) the Preferred Stock Conversion; (iii) the Common Stock Reclassification; (iv) the RSU Net Settlement; (v) the increase in accrued expenses and other current liabilities and an equivalent decrease in additional paid-in capital of $ in connection with the estimated tax withholding and remittance obligations related to the RSU Net Settlement; and (vi) stock-based compensation expense of approximately $ that we will recognize upon the completion of this offering related to RSUs subject to service-based and liquidity-based vesting conditions for which the service-based vesting condition was satisfied as of December 31, 2025 and for which the liquidity-based vesting condition will be satisfied in connection with this offering. After giving effect to (i) the pro forma adjustments set forth above, (ii) the sale by us of shares of our Class A common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and (iii) the use of a portion of the net proceeds from this offering to satisfy the estimated tax withholding and remittance obligations related to the RSU Net Settlement, our pro forma as adjusted net tangible book value as of December 31, 2025 would have been $ , or $ per share. This represents an immediate increase in pro forma net tangible book value to existing stockholders of $ per share and an immediate dilution in pro forma net tangible book value to new investors of $ per share. Dilution per share represents the difference between the price per share to be paid by new investors for the shares of our Class A common stock sold in this offering and the pro forma as adjusted net tangible book value per share immediately after this offering. The following table illustrates this dilution on a per share basis:
Assumed initial public offering price per share ......................................................... / $
Pro forma net tangible book value per share as of December 31, 2025 ............... ... $
Increase in pro forma net tangible book value per share attributable to new investors participating in this offering ..............................................................
Pro forma as adjusted net tangible book value per share after this offering ..............
Dilution per share to new investors participating in this offering ............................. ... $
Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our pro forma as adjusted net tangible book value per share after this offering by $ per share and the dilution in pro forma per share to investors participating in this offering by $ per share, assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of shares of Class A common stock offered by us would increase or decrease, as applicable, our pro forma as adjusted net tangible book value per
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share after this offering by $ per share and the dilution in pro forma as adjusted net tangible book value per share to investors participating in this offering by $ per share, assuming the initial public offering price of $ per share remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ over-allotment option is exercised in full, the pro forma as adjusted net tangible book value per share of our Class A common stock after this offering would be $ per share, and the dilution in pro forma net tangible book value per share to investors participating in this offering would be $ per share of our Class A common stock. The following table sets forth, on the pro forma basis described above, as of December 31, 2025, the number of shares of Class A common stock purchased from us, the total consideration paid, or to be paid, and the weighted- average price per share paid, or to be paid, by existing stockholders and by the new investors, at an assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:
Shares Purchased
Shares Purchased / Shares Purchased / Total Consideration / Total Consideration / Total Consideration / Weighted- Average Price Per Share
Number / Percent / Amount / Percent / Weighted- Average Price Per Share
(in thousands, except share, per share and percent data) / (in thousands, except share, per share and percent data) / (in thousands, except share, per share and percent data) / (in thousands, except share, per share and percent data) / (in thousands, except share, per share and percent data) / (in thousands, except share, per share and percent data) / (in thousands, except share, per share and percent data) / (in thousands, except share, per share and percent data) / (in thousands, except share, per share and percent data)
Existing stockholders ......................... ... % / $ / % / $
New investors .....................................
Total ............................................... ... 100% / $ / 100%
Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the total consideration paid by new investors, total consideration paid by all stockholders, and the weighted-average price per share paid by all stockholders by approximately $ , $ , and $ , respectively, assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of shares of Class A common stock offered by us would increase or decrease, as applicable, the total consideration paid by new investors, total consideration paid by all stockholders, and the weighted-average price per share paid by all stockholders by approximately $ , $ , and $ , respectively, assuming the assumed initial public offering price of $ per share remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The foregoing tables assume no exercise of the underwriters’ over-allotment option. If the underwriters exercise their over-allotment option in full, the number of shares of Class A common stock held by our existing stockholders will represent approximately % of the total number of shares of our Class A common stock outstanding after this offering and the number of shares held by new investors will represent approximately % of the total number of shares of our Class A common stock outstanding after this offering. The foregoing tables and calculations (other than the historical net tangible book value calculation) are based on no shares of our Class A common stock, shares of our Class B common stock, and no shares of our Class N common stock outstanding as of December 31, 2025, after giving effect to the Preferred Stock Conversion, the Common Stock Reclassification, and the RSU Net Settlement, and excludes: •28,361,707 shares of our Class B common stock issuable upon the exercise of outstanding stock options as of December 31, 2025, with a weighted-average exercise price of $4.97 per share;
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• shares of our Class B common stock issuable upon the vesting and settlement of RSUs subject to service-based and liquidity-based vesting conditions outstanding as of December 31, 2025, for which the service-based vesting condition was not yet satisfied as of December 31, 2025 and for which the liquidity- based vesting condition will be satisfied in connection with this offering, after giving effect to the RSU Net Settlement; • shares of Class B common stock issuable upon the vesting and settlement of RSUs subject to service-based and liquidity-based vesting conditions granted after December 31, 2025, for which the service-based vesting condition was not yet satisfied as of December 31, 2025 and for which the liquidity- based vesting condition will be satisfied in connection with this offering, after giving effect to the RSU Net Settlement; •9,000,000 shares of Class B common stock issuable upon the vesting and settlement of PRSUs subject to market-based vesting conditions granted after December 31, 2025, for which the market-based vesting condition was not yet satisfied as of December 31, 2025 (see the section titled “Executive and Director Compensation—Narrative to Summary Compensation Table—Equity-Based Compensation—2026 Founder PRSU Awards” for additional information); •33,445,026 shares of our Class N common stock issuable upon the exercise of the OpenAI Warrant, subject to satisfaction of vesting conditions (see the section titled “Capitalization—Vesting of Shares Underlying the OpenAI Warrant” for additional information); •2,696,678 shares of our Class N common stock issuable upon the exercise of a warrant authorized after December 31, 2025, with an exercise price of $100.00 per share, subject to satisfaction of vesting conditions; •3,682,000 shares of our Class N common stock issued after December 31, 2025; • shares of our Class A common stock reserved for future issuance under the 2026 Plan, which will become effective on the day immediately prior to the date of effectiveness of the registration statement of which this prospectus forms a part, including new shares and the number of shares (i) that remain available for grant of future awards under the 2016 Plan at the time the 2026 Plan becomes effective, which shares will cease to be available for issuance under the 2016 Plan at such time and (ii) underlying outstanding Prior Plan Awards that expire, or are cancelled, forfeited, reacquired, or withheld; and • shares of our Class A common stock reserved for future issuance under the ESPP, which will become effective on the day immediately prior to the date of effectiveness of the registration statement of which this prospectus forms a part. The 2026 Plan and the ESPP also provide for automatic annual increases in the number of shares reserved thereunder. See the section titled “Executive and Director Compensation—Equity Compensation Plans” for additional information. If all of the foregoing securities, other than the shares reserved for the 2026 Plan or the ESPP, were converted, exercised, or vested in connection with this offering, the number of shares of Class A common stock held by our existing stockholders would represent approximately % of the total number of shares of our Class A common stock outstanding after this offering and the number of shares held by new investors would represent approximately % of the total number of shares of our Class A common stock outstanding after this offering, in each case, assuming no exercise of the underwriters’ over-allotment option. To the extent we issue any additional stock options, warrants, RSUs, or PRSUs or any outstanding stock options, warrants, or RSUs or PRSUs are exercised or settled, or to the extent we issue any other securities or convertible debt in the future, investors will experience further dilution.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the section titled “Summary Consolidated Financial Data,” our audited consolidated financial statements and related notes, and other financial information appearing elsewhere in this prospectus. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this prospectus, particularly in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Data as of and for the years ended December 31, 2025 and 2024 has been derived from our audited consolidated financial statements included elsewhere in this prospectus. 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 up to 15 times faster than leading GPU- based solutions as benchmarked on leading open-source models. 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. Our growth reflects the broader acceleration of AI adoption. Our revenue increased from $24.6 million in 2022 to $78.7 million in 2023 and to $290.3 million in 2024, representing a more than tenfold increase over three years. Our revenue increased to $510.0 million in 2025, representing year-over-year growth of 76%. Our gross margin was 12%, 33%, 42% and 39% in 2022, 2023, 2024 and 2025, respectively. We earned net income of $237.8 million in 2025 and incurred net loss of $481.6 million in 2024. We incurred non-GAAP net loss of $75.7 million in 2025 and $21.8 million in 2024, after excluding the impact of stock-based compensation expense and change in fair value
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(extinguishment) of forward contract liability from our GAAP net income (loss). For more information and for a reconciliation of non-GAAP net loss to net income (loss), see the section titled “—Non-GAAP Financial Measures.”
Our Business Model We deliver high-performance AI offerings primarily through on-premises hardware and cloud-based solutions. Customers can also use a hybrid approach and train models on premises and then leverage our inference cloud in production, benefiting from flexible capacity that can scale with demand. We use a combination of direct sales and partnerships to address the rapidly growing AI market. On-Premises Hardware Solutions. We sell our hardware platform to leading organizations who seek maximum security over their data and their AI infrastructure, fulfilling their needs for high-performance AI compute on premises. Each system combines tightly integrated hardware and software and includes a renewable software subscription that provides continuous updates and upgrades. Cloud and Other Services. We also provide access to Cerebras high-performance AI compute through Cerebras Cloud as well as through our partner cloud platforms, including AWS Marketplace, Microsoft Marketplace, IBM watsonx Model Gateway, OpenRouter, Hugging Face, and Vercel AI Gateway. These offerings enable customers to utilize the full capabilities of our AI supercomputers without incurring the capital expenditures associated with building or maintaining on-premises infrastructure, and without the operational complexity of assembling and managing training or inference software. Customers can begin to use our cloud resources within minutes. Cerebras Cloud serves a broad spectrum of users—from individual developers using our entry-level tier to some of the world’s largest enterprises. Customers can run open-source, fine-tuned, and proprietary models for both training and inference workloads. Across a variety of use cases, our cloud offerings provide access to ultra-high- performance AI compute. Customers can procure cloud capacity directly from Cerebras through two primary models: Dedicated Capacity and On-Demand. They can also purchase from our cloud partners. Our Dedicated Capacity customers receive a single integrated solution tailored to their needs, which is delivered over the contractual term for a predetermined amount of capacity regardless of usage. As such, revenue is recognized over time as these services are provided. For customers seeking compute capacity On-Demand, we sell high-performance AI compute through Cerebras Cloud or our cloud partners, based on various consumption- or usage-based pricing models. We also offer deployment services to assist customers with data preparation, model architecture design, training management, inference optimization, and, in select cases, ongoing system operations and management. We also offer a subscription service providing access to an ongoing stream of software updates and upgrades for purchasers of our hardware. We provide professional services to assist customers throughout the entire AI workflow.
Strategic Partnerships OpenAI Collaboration In December 2025, we entered into a Master Relationship Agreement (the “MRA”) with OpenAI OpCo, LLC (“OpenAI”), under which OpenAI agreed to purchase 750MW of AI inference compute capacity (the “Committed Capacity”) and related services, including collaboration on engineering development and integrations. The relationship is intended to integrate purpose‑built, low‑latency inference systems into OpenAI’s broader compute portfolio, enabling faster response times for complex AI workloads by reducing bottlenecks associated with conventional inference architectures. We expect to deploy the Committed Capacity in tranches during 2026 through 2028, with each tranche of deployed capacity having a term of three or four years that is extendable by OpenAI to a maximum of five years in total. In addition to the Committed Capacity, which we are contractually obligated to deliver and OpenAI is contractually obligated to purchase, OpenAI has the option to purchase an additional 1.25GW of AI inference compute capacity (the “Additional Capacity”) for deployment in tranches by the end of 2030.
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Pursuant to the MRA, OpenAI is obligated to pay fees to us as capacity tranches are delivered, as well as to reimburse certain data center–related costs as pass-throughs under agreed terms. In addition, to accelerate our engineering development, manufacturing scale up and data center expansion, OpenAI advanced to us a working capital loan of approximately $1.0 billion (the “Working Capital Loan”), which we will repay in cash or through the delivery of compute capacity or hardware or other services under the MRA. The Working Capital Loan is subject to a secured promissory note with a maturity date of no later than December 31, 2032, which may be prepaid in whole or in part at any time without penalty, and which bears interest at 6% per annum, provided any accrued interest shall be waived to the extent such loan is repaid through delivery of compute capacity, hardware or other services, or assignment or transfer of certain assets, in accordance with the MRA. In December 2025, we issued the OpenAI Warrant to OpenAI in connection with the execution of the MRA. Pursuant to the OpenAI Warrant, OpenAI has the right to purchase up to 33,445,026 shares of our Class N common stock at an exercise price of $0.00001 per share. The OpenAI Warrant expires on the earlier of December 24, 2035 and five business days following the first date during which there is no binding capacity purchase commitments or contractually obligated current or future payments under the MRA. The shares of Class N common stock underlying the OpenAI Warrant vest upon the achievement of certain commercial and market capitalization milestones, with full vesting occurring only if OpenAI exercises all options to purchase Additional Capacity under the MRA, such that a total of 2GW of AI inference compute capacity and related services is purchased by OpenAI. See the section titled “Capitalization—Vesting of Shares Underlying the OpenAI Warrant” for additional information. Sovereign AI Initiatives The United Arab Emirates (“UAE”) has emerged as a global leader in AI through its visionary UAE Strategy for Artificial Intelligence 2031 and Vision 2031, which aim to position the nation as a hub for innovation and sustainable development. Spearheaded by the UAE Artificial Intelligence Office, the initiative emphasizes leveraging AI to enhance governance, improve quality of life, and drive economic diversification by integrating AI into key sectors such as healthcare, education, energy, and public services. The UAE has also prioritized building a skilled workforce and contributing to research and development in AI. These efforts align with the broader goal of transforming the UAE into a knowledge-based economy, where AI drives efficiency, innovation, and global competitiveness while addressing societal challenges such as healthcare access and environmental sustainability. We have established strategic relationships with Group 42 Holding Ltd (together with its affiliates, “G42”), an Abu Dhabi-based technology group whose portfolio of companies spans multiple sectors such as energy, finance, cloud infrastructure, security, and healthcare; and the Mohamed bin Zayed University of Artificial Intelligence (“MBZUAI”), an Abu Dhabi-based university dedicated entirely to the advancement of science through AI. G42 and MBZUAI have acted as our customers, vendors, partners, and/or research collaborators on multiple initiatives in model training, inference, and AI compute infrastructure. G42 and MBZUAI have been significant customers. For the year ended December 31, 2025, MBZUAI accounted for 62% of our total revenue. G42 accounted for 24% and 85% of our total revenue for the years ended December 31, 2025 and 2024, respectively. In December 2025, we issued a warrant to G42 to purchase an aggregate of up to 1,857,516 shares of our Class N common stock, with an exercise price of $0.01 per share. The warrant is fully vested and was exercised in full in January 2026. In April 2026, we issued a warrant to G42 to purchase an aggregate of up to 1,655,975 shares of our Class N common stock, with an exercise price of $0.01 per share. The warrant is fully vested and was exercised in full in April 2026.
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Key Factors Affecting Our Performance We believe that the growth and future success of our business depend on many factors. While these factors present significant opportunities for our business, they also pose important challenges that we will need to address in order to improve our results of operations. Commercial relationship with strategic partners. We expect to derive a substantial portion of our revenue from sales of cloud capacity to OpenAI, G42, and MBZUAI. Any changes in these parties’ demand for our solution, whether due to competitive factors, data center availability, changes in their respective business strategy, budgetary constraints, or other reasons could materially impact our financial performance in the future. We have received substantial advance payments from G42 and MBZUAI for our AI systems and a $1.0 billion Working Capital Loan from OpenAI to support future installations. Access to such capital has allowed us to reduce our working capital needs and provide access to a significant portion of our initial production volumes to support our ambitious, multi-year AI investment plans. AI compute demand and highly dynamic models and approaches. The escalating global demand for AI training and inference compute, fueled by advancements in LLMs, GenAI, and other AI-powered applications, plays a significant role in the demand for our solutions. We have designed our AI compute platform to address the challenges of accelerating large-scale AI workloads, and our customer base in hyperscalers, foundation model labs, AI-native and digital-native businesses, and research and government sectors reflects the increasing recognition of our differentiated technology. We believe that increasingly dynamic and complex AI models and approaches will continue to require substantial computational resources and speed for training and inference, and will support the demand for our low-latency, high-performance AI compute platform. We will depend on continued growth in compute demand to drive our future financial performance. Investment in data center capacity. A key determinant of our significant growth in cloud-based solutions will be our ability to continue expanding our cloud infrastructure through the successful procurement of long-term data center arrangements in strategic locations. We need to scale through identifying, negotiating and maintaining long- term data center leases on favorable terms for both power and space to keep pace with demand, including time-based milestones and performance obligations that need to be met for take-or-pay capacity commitments pursuant to the MRA with OpenAI. As we expand our cloud services with OpenAI and other strategic partners through Cerebras Cloud or our cloud partners, we will incur significantly greater capital expenditures. In addition, our operations are further dependent on our professional team’s ability to procure and deploy auxiliary equipment, including cooling systems and back-up generators. Our continued execution in these key areas among others will strengthen our ability to meet customer demand, support expansion, and enhance our overall cloud offering. Supply chain and manufacturing capacity. We operate a fabless business model that utilizes third-party suppliers and manufacturers, such as third-party wafer foundries and module assembly and test service providers in a number of countries, including outside the United States. We do not generally have long-term capacity commitments with our suppliers, and we source a number of the components used in our products from sole or single-source suppliers or use a single supplier to perform certain of the processes involved in the manufacture of our products. The continued and timely supply of input materials and the availability of manufacturing capacity and packaging and testing services impact our ability to meet customer demand. Onboarding new third-party suppliers and our dependency on them to allocate sufficient manufacturing capacity to meet our needs in a cost-effective and timely manner may impact our ability to scale and support growing customer demand. New customer adoption. Attracting new customers to our platform is a key driver of our revenue growth strategy. We have successfully grown our customer base to include hyperscalers, foundation model labs, AI-native and digital-native businesses, enterprises, and Sovereign AI initiatives seeking to leverage the power of AI for their specific needs. An increase in new customers will impact our revenue growth and market share and also contributes to a diversified customer base, which can provide greater stability over the long term. Additionally, new customers bring fresh perspectives and use cases, which can drive innovation and product development, further enhancing our competitive position.
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AI adoption and the emergence of new use cases and applications. We expect to benefit from the rapid adoption of AI across industries and the emergence of innovative AI use cases and applications. As organizations increasingly recognize the transformative potential of AI to enhance efficiency, productivity, and decision-making, we expect the demand for high-performance AI compute solutions to accelerate. The rapidly expanding range of AI use cases, from natural language processing and computer vision to drug discovery and climate modeling, among others, creates a broad market opportunity for our AI compute solution. We expect our ability to address the evolving needs of diverse industries and applications with cutting-edge AI compute technology to be instrumental in driving our growth and market leadership in the years to come. Sovereign AI initiatives. The expansion of Sovereign AI initiatives represents a significant opportunity to drive demand for our solution. We believe that our focus on developing secure, high-performance AI infrastructure positions us well to meet this demand. We will invest in our product capabilities as well as sales and marketing initiatives to pursue these opportunities. Investment in technology leadership and product development. Increasing our investment in technology leadership and product development directly impacts our competitive position and future financial performance. Our continued commitment to research and development enables us to focus on emerging market needs and expand into new applications of AI. As we develop new products and services tailored to specific industries and use cases, we can unlock additional demand and continue to broaden our customer base. Additionally, technical leadership is important to help us attract and retain top talent, which is essential for maintaining our technological edge and driving continuous innovation. A talented workforce, in turn, contributes to the development of new solutions that can continue to fuel our revenue growth. We intend to continue to invest heavily in our research and development efforts to remain competitive.
Non-GAAP Financial Measures We use certain non-GAAP financial measures to supplement the performance measures in our consolidated financial statements, which are presented in accordance with GAAP. These non-GAAP financial measures include non-GAAP operating loss and non-GAAP 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 non-GAAP operating loss and non-GAAP 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. Non-GAAP Operating Loss We define non-GAAP operating loss as operating loss presented in accordance with GAAP, adjusted to exclude stock-based compensation expenses. We have presented non-GAAP operating loss because we consider non-GAAP operating loss to be a useful metric for investors and other users of our financial information in evaluating our operating performance. We exclude the impact of stock-based compensation, a non-cash charge that can vary from period to period, as such variations are unrelated to our core 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.
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A reconciliation of our GAAP operating loss, the most directly comparable GAAP financial measure, to non- GAAP operating loss is presented below:
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024
(in thousands) / (in thousands) / (in thousands)
GAAP operating loss ................................................................................................. ... $(145,862) / $(101,438)
Add: Stock-based compensation expense .................................................................. ... 49,767 / 58,564
Non-GAAP operating loss ......................................................................................... ... $(96,095) / $(42,874)
Non-GAAP Net Loss We monitor non-GAAP net loss for planning and performance measurement purposes. We define non-GAAP net loss as net loss reported on our consolidated statements of operations, excluding the impact of stock-based compensation expenses and change in fair value of forward contract liability. We have presented non-GAAP 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 non-GAAP 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 non- GAAP net loss is presented below:
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024
(in thousands) / (in thousands) / (in thousands)
GAAP net income (loss) ............................................................................................ ... $237,827 / $(481,602)
Add: Stock-based compensation expense ............................................................... ... 49,767 / 58,564
Add: Change in fair value (extinguishment) of forward contract liability ................ ... (363,336) / 401,264
Non-GAAP net loss ................................................................................................... ... $(75,742) / $(21,774)
_______________ (1)Non-GAAP net loss does not include the tax effects of the stock-based compensation expense adjustment because such tax effects were not material during the periods presented.
Components of Results of Operations Revenue We generate revenue primarily from the sale of AI systems, cloud-based offerings, and support services, including custom AI model services. We primarily sell directly to end customers. Contracts with our customers typically include multiple performance obligations. For contracts with more than one performance obligation, we allocate the transaction price to each separate obligation. Hardware Solutions Hardware revenue consists of sales of our AI systems and other equipment that can be used for both training and inference on premise at a customer location. 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.
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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. In the near term, we also expect to begin recognizing revenue for pass through data center costs due to a customer agreement. 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 customer’s 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 our recently executed MRA with OpenAI for the delivery of the Committed Capacity, we expect 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. Cost of Revenue and Gross Profit 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. 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.
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We expect overall gross profit will increase in absolute dollars in future periods as revenue increases. However, gross margin is expected to initially be lower compared to recent periods, and may fluctuate, due to factors such as contra-revenue that will be recognized in future periods in connection with warrants granted to customers that will lower the amount of revenue reported compared to what would have been recognized without such warrants, customer arrangements with pass through amounts for data center costs that will be included in both revenue and cost of revenue and will have a dilutive impact on gross margin, and other start-up costs related to expediting the availability of cloud capacity to fulfill the significant increase in near-term demand. When we begin to recognize contra-revenue amounts from the warrants in the first quarter of 2026, we expect quarterly revenue growth rates will decline from recent trends. In addition, following this offering (and particularly during the quarter in which this offering is completed), gross margin will be impacted by stock-based compensation expense for equity awards for which the liquidity-based vesting condition will be satisfied in connection with this offering. 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, 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. Research and development expenses are forecasted to include additional stock-based compensation expense related to equity awards for which the liquidity-based vesting condition will be satisfied in connection with this offering. Sales and Marketing Expenses Sales and marketing expenses primarily consist of personnel costs, including salaries, 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 will be satisfied in connection with this offering. 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.
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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 higher stock-based compensation expense related to equity awards for which the liquidity-based vesting condition will be satisfied in connection with this offering. Other Income (Expense), Net Other income (expense), net consists primarily of interest income, dividend income, and the fair value gains and losses arising from the remeasurement or extinguishment of forward contract liability and warrant liability at each reporting date. 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:
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024
(in thousands) / (in thousands) / (in thousands)
Revenue:
Hardware ............................................................................................................... ... $358,440 / $211,965
Cloud and other services ....................................................................................... ... 151,551 / 78,287
Total revenue .................................................................................................... ... 509,991 / 290,252
Cost of revenue:
Hardware ............................................................................................................... ... 204,746 / 137,310
Cloud and other services ....................................................................................... ... 106,174 / 30,204
Total cost of revenue ........................................................................................ ... 310,920 / 167,514
Gross profit ................................................................................................................ ... 199,071 / 122,738
Operating expenses:
Research and development ................................................................................ ... 243,319 / 158,234
Sales and marketing ........................................................................................... ... 70,645 / 20,980
General and administrative ................................................................................ ... 30,969 / 44,962
Total operating expenses .................................................................................. ... 344,933 / 224,176
Loss from operations ................................................................................................. ... (145,862) / (101,438)
Other income (expense), net ...................................................................................... ... 390,746 / (378,237)
Income (loss) before income tax ............................................................................... ... 244,884 / (479,675)
Income tax expense ................................................................................................... ... 7,057 / 1,927
Net income (loss) ....................................................................................................... ... $237,827 / $(481,602)
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_______________ (1)Includes stock-based compensation expense as follows:
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024
(in thousands) / (in thousands) / (in thousands)
Cost of revenue ................................................................................................................. ... $827 / $921
Research and development ............................................................................................... ... 32,154 / 41,397
Sales and marketing ......................................................................................................... ... 9,950 / 8,723
General and administrative ............................................................................................... ... 6,836 / 7,523
Total stock-based compensation expense ........................................................................ ... $49,767 / $58,564
Stock-based compensation expense included $14.1 million and $30.7 million for the years ended December 31, 2025 and 2024, respectively, related to secondary transactions in each period. Refer to Note 14 – Stock-Based Compensation to our audited consolidated financial statements included elsewhere in this prospectus for further discussion. Pursuant to the 2016 Plan, our 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 is satisfied upon the occurrence of an initial public offering, direct listing, or sale of our company. 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 years ended December 31, 2025 and 2024, no stock-based compensation expense has been recognized for RSUs as the liquidity events, as described above, was deemed not probable. Refer to Note 14 – Stock-Based Compensation to our audited consolidated financial statements included elsewhere in this prospectus for further discussion. As of December 31, 2025, 2,901,491 RSUs had met the service-based vesting condition but not the liquidity-based vesting condition. If a liquidity event had occurred as of December 31, 2025, we would have recognized stock-based compensation expense of $150.5 million, and unrecognized stock-based compensation expense related to RSUs for which the service-based vesting condition had not been satisfied as of December 31, 2025 would have been $ million, which would have been recognized over a weighted-average requisite service period of years. In the three months ending June 30, 2026, we expect to record a cumulative one-time stock-based compensation expense of $ 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 will be satisfied in connection with this offering. We will record stock-based compensation expense related to RSUs using the accelerated attribution method over the remaining requisite service period once the liquidity-based vesting condition is satisfied. In addition, as described in the section titled “Executive and Director Compensation—Narrative to Summary Compensation Table—Equity-Based Compensation—2026 Founder Equity Awards,” in February 2026, our board of directors granted performance stock units to our Chief Executive Officer and Chief Technology Officer. We are in the process of determining the grant-date fair value of these awards in accordance with Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation. The fair value of the option will be recognized as compensation expense over the requisite service period, using the accelerated attribution method, once the performance condition becomes probable of being achieved. Once the performance condition is met, the compensation expense will be recognized over the requisite service period, regardless of whether, and the extent to which, the market condition is ultimately satisfied.
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The following table sets forth selected consolidated statements of operations data expressed as a percentage of revenue for each of the periods indicated:
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024
(as a percentage of revenue) / (as a percentage of revenue) / (as a percentage of revenue)
Revenue:
Hardware ............................................................................................................... ... 70.3% / 73.0%
Cloud and other services ....................................................................................... ... 29.7 / 27.0
Total revenue .................................................................................................... ... 100.0 / 100.0
Cost of revenue:
Hardware ............................................................................................................... ... 40.1 / 47.3
Cloud and other services ....................................................................................... ... 20.8 / 10.4
Total cost of revenue ........................................................................................ ... 61.0 / 57.7
Gross profit ................................................................................................................ ... 39.0 / 42.3
Operating expenses:
Research and development ................................................................................... ... 47.7 / 54.5
Sales and marketing .............................................................................................. ... 13.9 / 7.2
General and administrative ................................................................................... ... 6.1 / 15.5
Total operating expenses .................................................................................. ... 67.6 / 77.2
Loss from operations ................................................................................................. ... (28.6) / (34.9)
Other income (expense), net ...................................................................................... ... 76.6 / (130.3)
Income (loss) before income tax ............................................................................... ... 48.0 / (165.2)
Income tax expense ................................................................................................... ... 1.4 / 0.7
Net income (loss) ....................................................................................................... ... 46.6% / (165.9)%
Comparison of the Years Ended December 31, 2025 and 2024 Revenue
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024 / $ Change / % Change
(in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages)
Hardware ............................................................. ... $358,440 / $211,965 / $146,475 / 69%
Cloud and other services ..................................... ... 151,551 / 78,287 / 73,264 / 94%
Total revenue ....................................................... ... $509,991 / $290,252 / $219,739 / 76%
Total revenue for the year ended December 31, 2025 increased by $219.7 million, or 76%, compared to the year ended December 31, 2024. Hardware revenue increased by $146.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. This increase was primarily due to demand for on-premises hardware solutions from our strategic partner MBZUAI. Cloud and other services revenue increased $73.3 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to increased services and support revenues for the larger installed base of on-premises systems sold to our strategic partners G42 and MBZUAI, and growing demand for our cloud inference services in the second half of 2025.
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Cost of Revenue and Gross Profit
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024 / $ Change / % Change
(in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages)
Hardware ............................................................. ... $204,746 / $137,310 / $67,436 / 49%
Cloud and other services ..................................... ... 106,174 / 30,204 / 75,970 / 252%
Total cost of revenue ........................................... ... $310,920 / $167,514 / $143,406 / 86%
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024 / $ Change / % Change
(in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages)
Gross profit ......................................................... ... $199,071 / $122,738 / $76,333 / 62%
Gross margin ....................................................... ... 39.0% / 42.3%
Cost of revenue for the year ended December 31, 2025 increased by $143.4 million, or 86%, compared to the year ended December 31, 2024, primarily due to increases in costs related to adding systems and compute capacity for our new inference services offering, a proportional increase in cost of materials, operations and management, professional services labor, warranty and returns rework costs as a result of higher on-premises hardware and solution sales. Gross profit for the year ended December 31, 2025 was $199.1 million, an increase of $76.3 million compared to $122.7 million in the year ended December 31, 2024. Gross margin for the year ended December 31, 2025 decreased to 39.0% from 42.3% for the year ended December 31, 2024, primarily due to higher data center costs related to our cloud inference capacity services. Operating Expenses Research and Development
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024 / $ Change / % Change
(in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages)
Research and development .................................. ... $243,319 / $158,234 / $85,085 / 54%
Percentage of revenue ......................................... ... 48% / 55%
Research and development expenses for the year ended December 31, 2025 increased by $85.1 million, or 54%, compared to the year ended December 31, 2024. The increase in research and development expenses was primarily attributable to higher cost of compensation and benefits reflecting growth in the number of our employees. Sales and Marketing
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024 / $ Change / % Change
(in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages)
Sales and marketing ............................................ ... $70,645 / $20,980 / $49,665 / 237%
Percentage of revenue ......................................... ... 14% / 7%
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Sales and marketing expenses for the year ended December 31, 2025 increased by $49.7 million, or 237%, compared to the year ended December 31, 2024. The increase in sales and marketing expenses was primarily attributable to higher cost of compensation and benefits reflecting growth in the number of our employees and higher marketing expenses related to launching and growing our cloud inference services. General and Administrative
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024 / $ Change / % Change
(in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages)
General and administrative ................................. ... $30,969 / $44,962 / $(13,993) / (31)%
Percentage of revenue ......................................... ... 6% / 15%
General and administrative expenses for the year ended December 31, 2025 decreased by $14.0 million, or 31%, compared to the year ended December 31, 2024. The decrease in general and administrative expenses was primarily attributable to lower legal expenses and litigation settlement costs, partially offset by higher cost of compensation and benefits reflecting growth in the number of our employees and higher consulting and professional services fees incurred. Other Income (Expense), Net
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024 / $ Change / % Change
(in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages)
Other income (expense), net ............................... ... $390,746 / $(378,237) / $768,983 / (203)%
Other income (expense), net for the year ended December 31, 2025 increased by $769.0 million, or 203%, compared to the year ended December 31, 2024. The increase in other income (expense), net was primarily attributable to a gain of $363.3 million recognized upon extinguishment of the forward contract liability during 2025, compared to remeasurement losses of $401.3 million on the forward contract liability in 2024. The increase was also driven by higher interest and dividend income due to higher balances of cash, cash equivalents, and investments. Income Tax Expense
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024 / $ Change / % Change
(in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages) / (in thousands, except percentages)
Income tax expense ............................................. ... $7,057 / $1,927 / $5,130 / 266%
Income tax expense for the year ended December 31, 2025 increased compared to the year ended December 31,
offset by a decrease in our current and deferred foreign tax provision of $2.4 million and a decrease to the current federal tax provision of $0.7 million.
Quarterly Results of Operations The following table sets forth selected unaudited quarterly consolidated statements of operations data for each of the quarters presented. The information for each of these quarters has been prepared on the same basis as our audited consolidated financial statements and reflect, in the opinion of management, all adjustments, consisting of normal, recurring adjustments that are necessary for a fair statement of this information. These quarterly operating results are not necessarily indicative of the results that may be expected for a full year or any other fiscal period.
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This information should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in the prospectus.
Three Months Ended,
Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended,
March 31, 2024 / June 30, 2024 / September 30, 2024 / December 31, 2024 / March 31, 2025 / June 30, 2025 / September 30, 2025 / December 31, 2025
(in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands)
Revenue:
Hardware ................... ......... $49,411 / $54,858 / $50,280 / $57,416 / $69,674 / $70,295 / $96,794 / $121,677
Cloud and other services ................. ... 17,220 / 14,913 / 22,039 / 24,115 / 29,838 / 33,027 / 38,920 / 49,766
Total revenue ...... ................. 66,631 / 69,771 / 72,319 / 81,531 / 99,512 / 103,322 / 135,714 / 171,443
Cost of revenue:
Hardware ................... ......... 33,619 / 32,823 / 34,143 / 36,725 / 48,410 / 46,649 / 47,969 / 61,718
Cloud and other services ................. ... 7,873 / 6,068 / 6,169 / 10,094 / 9,498 / 24,574 / 32,610 / 39,492
Total cost of revenue ........... ... 41,492 / 38,891 / 40,312 / 46,819 / 57,908 / 71,223 / 80,579 / 101,210
Gross profit ..................... .... 25,139 / 30,880 / 32,007 / 34,712 / 41,604 / 32,099 / 55,135 / 70,233
Gross margin ................... ...... 37.7% / 44.3% / 44.3% / 42.6% / 41.8% / 31.1% / 40.6% / 41.0%
Total operating expenses .................. ... 43,190 / 54,640 / 51,384 / 74,962 / 70,074 / 89,281 / 81,604 / 103,974
Loss from operations ...... ......... (18,051) / (23,760) / (19,377) / (40,250) / (28,470) / (57,182) / (26,469) / (33,741)
Net income (loss) ............ ....... $(15,750) / $(50,855) / $(309,341) / $(105,656) / $(23,867) / $309,512 / $(22,201) / $(25,617)
_______________ (1)Includes stock-based compensation as follows:
Three Months Ended,
Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended,
March 31, 2024 / June 30, 2024 / September 30, 2024 / December 31, 2024 / March 31, 2025 / June 30, 2025 / September 30, 2025 / December 31, 2025
(in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands)
Cost of revenue ........................... ... $189 / $231 / $237 / $264 / $326 / $187 / $161 / $153
Operating expenses ..................... ... 9,237 / 22,672 / 16,591 / 9,143 / 8,828 / 13,094 / 11,185 / 15,833
Total stock-based compensation .................... ... $9,426 / $22,903 / $16,828 / $9,407 / $9,154 / $13,281 / $11,346 / $15,986
Revenue Hardware revenue varies based on the number of AI systems delivered and has significantly increased over time, reflecting demand from existing and new customers. Cloud and other services revenue generally increased due to ongoing support services as a result of our growing installed base and the growing demand for inference-related services. Cost of Revenue Cost of revenue has varied based on mix of the volume of AI systems, inference services, professional services, and ongoing support services delivered in each quarter. Cost of revenue has significantly increased over time as the volume of hardware units sold has grown and as data center costs have ramped to support our newly launched inference services business. Gross Profit and Gross Margin Gross profit has primarily increased as a result of higher revenues. The mix of hardware and cloud and services revenue also impacts our gross margin in any particular quarter.
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Total Operating Expenses Research and development expense was the largest component of our operating expenses and was approximately 56% of operating expenses or higher during the quarters presented.
Quarterly Trends in Non-GAAP Financial Measures Non-GAAP Operating Loss and Non-GAAP Net Loss The following tables set forth our non-GAAP operating loss and non-GAAP net income (loss), for each of the periods presented. See the section titled “—Non-GAAP Financial Measures” for the details of how we calculate non-GAAP operating loss and non-GAAP net loss:
Three Months Ended,
Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended,
March 31, 2024 / June 30, 2024 / September 30, 2024 / December 31, 2024 / March 31, 2025 / June 30, 2025 / September 30, 2025 / December 31, 2025
(in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands)
GAAP operating loss .... ............. $(18,051) / $(23,760) / $(19,377) / $(40,250) / $(28,470) / $(57,182) / $(26,469) / $(33,741)
Add: Stock-based compensation expense .................... ... 9,426 / 22,903 / 16,828 / 9,407 / 9,154 / 13,281 / 11,346 / 15,986
Non-GAAP operating loss .......................... ... $(8,625) / $(857) / $(2,549) / $(30,843) / $(19,316) / $(43,901) / $(15,123) / $(17,755)
Three Months Ended,
Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended, / Three Months Ended,
March 31, 2024 / June 30, 2024 / September 30, 2024 / December 31, 2024 / March 31, 2025 / June 30, 2025 / September 30, 2025 / December 31, 2025
(in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands) / (in thousands)
GAAP net income (loss) .......................... ... $(15,750) / $(50,855) / $(309,341) / $(105,656) / $(23,867) / $309,512 / $(22,201) / $(25,617)
Add: Stock-based compensation expense ................... ... 9,426 / 22,903 / 16,828 / 9,407 / 9,154 / 13,281 / 11,346 / 15,986
Add: Change in fair value (extinguishment) of forward contract liability ...................... ... — / 30,327 / 296,898 / 74,039 / — / (363,336) / — / —
Non-GAAP net income (loss) .......................... ... $(6,324) / $2,375 / $4,385 / $(22,210) / $(14,713) / $(40,543) / $(10,855) / $(9,631)
_______________ (1)Non-GAAP net income (loss) does not include the tax effects of the stock-based compensation expense adjustment because such tax effects were not material during the periods presented.
Liquidity and Capital Resources As of December 31, 2025, our principal sources of liquidity were cash, cash equivalents, and restricted cash of $930.4 million and marketable securities of $406.5 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. Since our inception, we have financed our operations primarily through sales of redeemable convertible preferred stock and payments from our customers, including prepayments from G42 and MBZUAI. We had no
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outstanding debt as of December 31, 2025. Our principal uses of cash in recent periods have been to fund our operations and invest in research and development. As of December 31, 2025, we had an accumulated deficit of $905.3 million. In January 2026, our capital resources increased significantly when we received an additional $2.0 billion in cash, consisting of $1.0 billion in net proceeds from the issuance of Series H redeemable convertible preferred stock and $1.0 billion from the Working Capital Loan. Refer to Note 18 – Subsequent Events to our audited consolidated financial statements included elsewhere in this prospectus for further discussion. 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 prospectus. 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 will be 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 are secured by cash collateral only, with no guarantees required. Following the completion of this offering, and on the date we meet pro forma covenant compliance and customary closing conditions (such date, the “Phase Two Effective Date”), the Revolving Credit Facility shall be upsized to up to $850.0 million, the proceeds of which may be used for general corporate purposes. On and after the Phase Two Effective Date, 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 SOFR plus 2.25%, which decreases to 2.00% per annum upon achievement of an enhanced debt to EBITDA ratio. On and after the Phase Two Effective Date, we will be 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. On and after 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, commencing on and after 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 (including, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, violation of certain covenants, cross-default to certain
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other indebtedness, bankruptcy and insolvency events, material judgments, change of control, and certain material ERISA events). Cash Flows The following table summarizes our cash flows for the periods presented:
Year Ended December 31, / Year Ended December 31, / Year Ended December 31,
2025 / 2024
(in thousands) / (in thousands) / (in thousands)
Net cash provided by (used in) operating activities ................................................... ... $(10,050) / $451,978
Net cash used in investing activities .......................................................................... ... $(667,576) / $(16,785)
Net cash provided by financing activities .................................................................. ... $1,026,560 / $112,296
Operating Activities Net cash used in operating activities was $10.0 million for the year ended December 31, 2025. Our largest source of operating cash was cash collection from sales of our products to customers. Net income of $237.8 million, includes a one-time $363.3 million gain due to the extinguishment of the Forward Contract Liability related to the purchase agreement for certain Series F redeemable convertible preferred stock (refer to Note 12 – Redeemable Convertible Preferred Stock to our audited consolidated financial statements included elsewhere in this prospectus for further discussion). Operating cash flows reflect a decrease in customer deposits of $285.9 million as these prepayments offset amounts invoiced for items delivered subject to related purchase orders, as well as an increase to prepaid and other assets of $13.9 million. These decreases to operating cash flows were partially offset by $131.7 million of non-cash charges primarily consisting of stock-based compensation, depreciation and amortization expense, non-cash lease expense, and for provision for product warranties. Changes in working capital include increases from deferred revenue $109.5 million as our total revenues increased, a decrease in inventories of $63.3 million as we sold and deployed more product in our data centers, a decrease in accounts receivable $87.0 million due to timing of payments, an increase in accounts payable of $21.2 million related to higher expenses and timing of payments and other liabilities of $3.1 million. Net cash provided by operating activities was $452.0 million for the year ended December 31, 2024, driven primarily by a $640.3 million increase in customer deposits and a $38.2 million increase in deferred revenue from higher support service sales. These inflows were partially offset by working capital uses, including a $145.0 million increase in inventory due to higher order volumes, a $130.7 million increase in accounts receivable, and a $17.1 million increase in prepaid expenses and other assets, partially mitigated by a $57.7 million increase in accounts payable and other liabilities. Operating cash flows also reflect a net loss of $481.6 million adjusted for non- cash items, including a $401.3 million change in fair value of forward contract liability, $58.6 million of stock-based compensation, $11.5 million of depreciation and amortization, and $25.3 million of other non-cash charges, partially offset by $6.5 million related to amortization of premium and accretion of discount on investments. Investing Activities Net cash used in investing activities of $667.6 million for the year ended December 31, 2025 was the result of $382.7 million in purchases of property and equipment primarily for systems to deliver Cerebras Cloud services and the purchase of $525.4 million in purchases of various investments offset by $240.6 million in maturities of these investments. Net cash used in investing activities of $16.8 million for the year ended December 31, 2024, was the result of $23.4 million in purchases of property and equipment and purchases of $302.9 million in various investments offset by $309.5 million in maturities and sales of these investments.
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Financing Activities Net cash provided by financing activities of $1.0 billion for the year ended December 31, 2025 was the result of $1.1 billion from the sale of shares of our redeemable convertible preferred stock and $17.3 million in proceeds from stock option exercises, partially offset by cash paid to settle stock-based compensation awards of $49.3 million and the repurchase of common stock of $21.4 million and issuance costs related to the Series G redeemable convertible preferred stock financing of $16.7 million. Net cash provided by financing activities of $112.3 million for the year ended December 31, 2024 was the result of $85.0 million from the sale of shares of our redeemable convertible preferred stock and $27.8 million in proceeds from stock option exercises. Commitments and Contractual Obligations Operating lease commitments. As of December 31, 2025, our operating lease commitments included data centers and corporate office leases, for which we had fixed lease payment obligations of $318.9 million, with $66.3 million to be paid within 12 months of December 31, 2025, and the remainder thereafter. Refer to Note 16 – Leases to our audited consolidated financial statements included elsewhere in this prospectus for further discussion. Purchase commitments. As of December 31, 2025, future payments related to non-cancelable commitments for contracts with a remaining term of over one year are as follows: $4.1 million (2026), and $3.0 million (2027). Refer to Note 17 – Commitments and Contingencies to our audited consolidated financial statements included elsewhere in this prospectus for further discussion.
Quantitative and Qualitative Disclosures About Market Risk Foreign Currency and Exchange Risk The functional currency for each of our subsidiaries, including our subsidiaries located in Canada and India, is the local currency of the country in which the subsidiary operates. As such, we expect to be exposed to both currency transaction remeasurement and translation risk. However, we engage in a small number and immaterial amount of transactions outside of the functional currency of the reporting unit, resulting in negligible exposure to foreign currency risk. We have not hedged such exposure, although we may do so in the future if our exposure to foreign currency risk increases. Any fluctuations in exchange rates may adversely affect our financial position, results of operations and cash flows. Interest Rate Risk We had cash, cash equivalents, and restricted cash of $930.4 million as of December 31, 2025. Cash and cash equivalents primarily consists of amounts deposited in money market instruments with financial institutions that have an original maturity of three months or less. We hold cash and cash equivalents for working capital purposes. Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our historical consolidated financial statements.
Critical Accounting Estimates We prepare our financial statements in accordance with GAAP. In preparing these financial statements, we are required to make estimates and judgments that affect the amounts and balances reported and contingencies disclosed. We evaluate our estimates on an ongoing basis, specifically including those related to revenue recognition, inventory, stock-based compensation, valuation of our common stock, and income taxes, and base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
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The following critical accounting estimates require the use of significant judgment and estimation in the preparation of our audited consolidated financial statements. The accounting estimates and judgment discussed in this section are those that we consider to be the most critical in the preparation of our audited consolidated financial statements. Refer to Note 4 – Significant Accounting Policies to our audited consolidated financial statements included elsewhere in this prospectus for further discussion. Revenue Recognition We derive substantially all of our revenue through sales of hardware, delivery of inference services, and embedded software and through provision of installation, integration, and acceptance services and other technical support to our customers. Contracts with Multiple Performance Obligations A critical estimate required in recognizing revenue relates to contracts consisting of more than one performance obligation. When a contract with a customer consists of more than one performance obligation, we must exercise judgment in determining whether each obligation within the contract is distinct as well as in determining the relative standalone selling price to allocate to each performance obligation. Typically, the standalone selling price is the price at which we sell a promised good or service separately to a customer. The best evidence of the standalone selling price, when available, is the price we have charged for goods or services in similar circumstances and to similar customers. If the standalone selling price is not directly observable, management estimates the standalone selling price using various observable inputs including cost-plus expected margin analysis due to the limited standalone sales history. Certain arrangements include non-cash consideration, including equity instruments issued to customers, which require judgment in determining the fair value of such instruments, assessing the probability of vesting for instruments subject to performance conditions, and determining the timing of recognition as a reduction of revenue. Refer to Note 4 – Significant Accounting Policies—Revenue Recognition to our audited consolidated financial statements included elsewhere in this prospectus for further discussion. Stock-Based Compensation We measure stock-based awards, including stock options, restricted stock unit (“RSUs”), and restricted stock awards (“RSAs”), granted to employees and non-employees based on the estimated fair value as of the grant date. Stock option awards with only service-based vesting conditions are granted to employees and non-employees. The fair value of stock options are estimated using the Black-Scholes option pricing model, which requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected term of the stock option, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock. Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop. The fair value of RSUs and RSAs are based on the price of our common stock on the date of grant. We recognize the fair value of each award with only service-based vesting conditions on a straight-line basis over the requisite service period of the award. For certain equity awards that have both service- and liquidity-based vesting conditions, we recognize the expense using the accelerated attribution method over the requisite service period if it is probable that the performance conditions will be achieved. We reassess the achievement of the performance conditions at each reporting date and adjust the stock-based compensation accordingly for such awards. Stock-based compensation expense is based on the value of the portion of stock-based awards that is ultimately expected to vest. As such, our stock-based compensation is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
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Pursuant to the 2016 Plan, our RSUs vest on 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 is satisfied upon the occurrence of an initial public offering, direct listing, or sale of our company, given prevailing market conditions. For the years ended December 31, 2025 and 2024, no stock-based compensation expense had been recognized, except in connection with RSUs that participated in our tender offer during the year ended December 31, 2025. Refer to Note 14 – Stock-Based Compensation to our audited consolidated financial statements included elsewhere in this prospectus for further discussion. Common Stock Valuations The fair value of common stock underlying our stock-based awards has historically been determined by our board of directors, with input from management and contemporaneous third-party valuations. We believe that our board of directors has the relevant experience and expertise to determine the fair value of our common stock. Given the absence of a public trading market of our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, our board of directors exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock at each grant date. These factors included: •the results of contemporaneous valuations performed at periodic intervals by a third-party valuation firm; •the prices, rights, preferences, and privileges of our redeemable convertible preferred stock relative to those of our common stock; •the prices of our redeemable convertible preferred stock and common stock sold to investors in arms-length transactions; •our actual operating and financial performance and estimated trends and prospects for our future performance; •our stage of development; •the likelihood of achieving a liquidity event, such as an initial public offering, direct listing, or sale of our company, given prevailing market conditions; •the lack of marketability involving securities in a private company; •the market performance of comparable publicly traded companies; and •U.S. and global capital market conditions. In valuing our common stock, the fair value of our business was determined using various valuation methods, including combinations of the income approach and the market approach with input from management. The income approach involves applying an appropriate risk-adjusted discount rate to projected cash flows based on forecasted revenue and costs. The market approach estimates value based on a comparison of our company to comparable public companies in a similar line of business. From the comparable companies, a representative market value multiple was determined, which was applied to our operating results to estimate the enterprise value of our company. Once the enterprise value was determined under the market approach, we derived the equity value of our company and used a hybrid method that considered both an option pricing model (“OPM”) and the probability weighted expected return method (“PWERM”) to allocate that value among the various classes of securities to arrive at the fair value of our common stock. The OPM is based on the Black-Scholes-Merton option pricing model, which
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allows for the identification for a range of possible future outcomes, each with an associated probability. The OPM is appropriate to use when the range of possible future outcomes is difficult to predict and thus creates highly speculative forecasts. PWERM involves a forward-looking analysis of the possible future outcomes of an enterprise, including an initial public offering as well as non-initial public offering market-based outcomes. After the equity value is determined and allocated to the various classes of securities, a discount for lack of marketability (“DLOM”) is applied to arrive at the fair value of our common stock. A DLOM is applied based on the theory that as an owner of private company stock, the stockholder has limited opportunities to sell this stock, and any such sale would involve significant transaction costs, thereby reducing overall fair market value. In addition, we also considered any secondary transactions involving our capital stock. In our evaluation of those transactions, we considered the facts and circumstances of each transaction to determine the extent to which they represented a fair value exchange. Factors considered included transaction volume, timing, whether the transactions occurred among unrelated parties, and whether the transactions involved investors with access to our financial information. Application of these approaches involves the use of estimates, judgment, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and future cash flows, discount rates, market multiples, the selection of comparable companies, and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation of our common stock. For valuations after the completion of this offering, our board of directors will determine the fair value of each share of underlying common stock based on the closing price of our common stock as reported on the grant date. Future expense amounts for any particular period could be affected by changes in our assumptions or market conditions.
JOBS Act Accounting Election We are an emerging growth company, as defined in the JOBS Act, and, for so long as we continue to be an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that would have been applicable were we a public company that was not an emerging growth company. Such exemptions include, but are not limited to, the exemption to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, the exemption from holding a non-binding advisory vote on executive compensation, and the exemption from stockholder approval of any golden parachute payments not previously approved. In addition, pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to take advantage of the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. If we cease to be an emerging growth company, we will no longer be able to take advantage of these exemptions or the extended transition period for complying with new or revised accounting standards.
Recent Accounting Pronouncements Refer to Note 3 to our audited consolidated financial statements included elsewhere in this prospectus for further discussion.
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