Blaize NASDAQ: BZAI lowered its full-year 2026 revenue outlook to $40 million to $43 million, from prior guidance of $130 million, citing delayed customer deployments, commercial opportunities that did not convert as expected, higher memory costs and a provision tied to an outstanding Starshine receivable.
Chief Executive Officer Dinakar Munagala said the revised forecast does not reflect all of the company’s contracted business. Blaize has a signed agreement covering 2,000 servers valued at about $70 million at current memory prices, he said. A portion is expected to become 2026 revenue, while the remainder is committed business expected to carry into 2027.
“Several engagements have not converted into orders, including some where pilots were completed successfully,” Munagala said. Other opportunities remain in progress but are closing later than Blaize had anticipated, he added.
Second-Quarter Revenue Rose, While Margin Declined
For the second quarter ended June 30, Blaize reported revenue of $12 million, up from $2.7 million in the first quarter. First-half revenue totaled $14.7 million, compared with $3 million in the year-earlier period.
Chief Financial Officer Harminder Sehmi said the quarter’s revenue was driven largely by third-party server hardware, which generated lower margins for the company. Gross profit was $0.9 million, producing an approximately 8% gross margin, compared with 58% in the first quarter.
The first-quarter margin had benefited from a higher mix of Blaize software and hardware, while the second quarter consisted almost entirely of third-party server hardware, Sehmi said.
Second-quarter operating expenses were $31.5 million, compared with $23.9 million in the prior quarter. The increase included a $7.1 million provision for the remaining Starshine receivable, about $1 million of additional investment in the company’s next-generation chip program and a $2.8 million one-time non-cash charge related to a related-party settlement.
Blaize reported an adjusted EBITDA loss of $20.9 million, compared with a $13.9 million loss in the first quarter. The company ended the quarter with $36.8 million in cash, up $3.6 million sequentially, after receiving $9.4 million in customer payments and $32.8 million in net proceeds from an equity offering.
Starshine Relationship Under Review; NeoTensor Activity Continues
Sehmi said Blaize has decided not to pursue further business with Starshine until the customer pays its outstanding balance. The company fully reserved the receivable during the quarter, has engaged local partners to pursue collection and is re-evaluating the commercial relationship.
“There is meaningful uncertainty as to whether it will progress further,” Sehmi said of Starshine.
Meanwhile, Blaize said NeoTensor paid in full the amount due from a fourth-quarter 2025 sale. The receivable from a second-quarter 2026 sale remains within contractual payment terms, and the companies are planning third- and fourth-quarter hybrid-server deliveries.
Sehmi said Blaize expects about $50 million in backlog at the end of 2026, based on binding, non-cancelable purchase orders that can be fulfilled with inventory commitments made or planned. He said the backlog is weighted heavily toward the company’s largest account.
During the question-and-answer session, Sehmi described the expected $50 million of backlog as a commitment from NeoTensor associated with an amendment to a previously announced agreement. He said Blaize expects 2027 revenue to be roughly 2.5 to three times the level anticipated for 2026, though the company did not provide formal 2027 guidance.
Delayed Deployments and Higher Memory Costs Reshape Outlook
Management said customers are delaying some follow-on orders as they scale their own AI deployments. Cloud and data-center customers have taken longer to qualify new technology, certain government programs have longer procurement cycles than expected, and a Middle East smart-city opportunity has moved into an extended field trial.
Chief Revenue Officer Stephen Patak said the delayed opportunities remain in the company’s pipeline and have not been lost. He attributed some timing issues to customers’ own pace of ramping AI services, including computer-vision offerings, which affects the capacity they need from Blaize.
Blaize also cited higher DRAM and LPDDR prices as capacity shifts toward high-bandwidth memory, along with suppliers seeking increased advance payments. Munagala said the company has begun discussions with memory suppliers regarding forward-buying arrangements and has invested roughly $8 million to $9 million in components, chips and equipment expected to convert into revenue over the next six to nine months.
The company also intends to retain the ability to adjust customer pricing as memory costs change, particularly on sales involving third-party hardware.
Focus on AI Services, New Regions and Cost Controls
Blaize expects gross margin of 17% to 19% in the second half of 2026 and an adjusted EBITDA loss of $62 million to $65 million for the full year. Sehmi said the company is reviewing its cost structure and identifying further operating-expense reductions as it seeks to preserve cash and extend financial flexibility.
The company is exploring non-dilutive debt financing that could be supported by customer contracts and is seeking advance customer payments to reduce working-capital requirements. No financing decision has been made, Sehmi said.
Management said it is pursuing growth through two primary revenue engines: silicon and software integrated into aerial robotics, autonomous systems and ruggedized equipment, and its hybrid AI platform for cloud, data-center, enterprise and government applications.
Blaize said it received its first European purchase order and has shipped thousands of units there. It also cited growing activity in Asia-Pacific and an emerging U.S. pipeline. Patak said several national-scale hybrid AI platform opportunities are progressing through qualification and customer acceptance but are not included in current guidance. He said a subset could potentially begin contributing revenue in the first quarter of 2027.
Munagala said Blaize expects its AI Services software suite to become a larger source of margin over time. The company expects its first AI Services revenue this year and is developing capabilities including document processing, quality grading, compliance scoring, video analytics, small-language-model assistance, model optimization and workload orchestration.
About Blaize (NASDAQ:BZAI)
Blaize NASDAQ: BZAI is a fabless semiconductor company that designs and develops hardware and software solutions for artificial intelligence (AI) and machine learning applications at the edge. The company’s core technology is centered on its proprietary Graph Streaming Processor (GSP) architecture, which combines dataflow computing with a highly parallel matrix processing engine to deliver real-time AI inference with low power consumption. Blaize’s platform is aimed at customers seeking to deploy sophisticated AI workloads in environments where power efficiency, latency and form factor are critical.
The company offers a hardware portfolio that includes standalone GSP modules, PCIe cards and M.2 form-factor boards, alongside its Blaize AI software stack.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Before you consider Blaize, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Blaize wasn't on the list.
While Blaize currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Click the link to see MarketBeat's list of seven stocks and why their long-term outlooks are very promising.
Get This Free Report
