Credo Reports First Quarter of Fiscal Year 2027 Financial Results
San Jose, Calif. (September 1, 2026) – Credo Technology Group Holding Ltd (Credo) (Nasdaq: CRDO), an innovator in providing connectivity at scale through fast, reliable, and energy-efficient system solutions, today announced financial results for the first quarter of fiscal year 2027, ended August 1, 2026.
First Quarter of Fiscal Year 2027 Financial Highlights:
- Revenue of $479.0 million, grew by 9.6% quarter over quarter and 114.7% year over year
- GAAP gross margin of 64.5% and non-GAAP gross margin of 68.0%
- GAAP operating expenses of $188.4 million and non-GAAP operating expenses of $95.2 million
- GAAP net income of $129.4 million and non-GAAP net income of $236.3 million
- GAAP diluted net income per share of $0.67 and non-GAAP diluted net income per share of $1.20
- Ending cash and short-term investment balance of $764.3 million
Bill Brennan, Credo’s President and Chief Executive Officer, stated, “During the first quarter of fiscal 2027, Credo delivered revenue of $479.0 million and non-GAAP net income of $236.3 million, representing 115% and 140% year-over-year growth respectively. Our portfolio now spans connectivity from millimeters to kilometers, with solutions across optics and copper. As AI infrastructure scales, we will continue to provide an innovative suite of reliable and energy-efficient connectivity solutions for the data center.”
Second Quarter of Fiscal 2027 Financial Outlook
- Revenue is expected to be between $525 million and $535 million
- GAAP gross margin is expected to be between 62.9% and 64.9%, and non-GAAP gross margin is expected to be between 67.0% and 69.0%
- GAAP operating expenses are expected to be between $199 million and $204 million, and non-GAAP operating expenses are expected to be between $100 million and $105 million
Condensed Consolidated Statements of Operations
| (In thousands, except per share amounts) — Three Months Ended | August 1, 2026 | May 2, 2026 | August 2, 2025 |
|---|---|---|---|
| Revenue | $479,003 | $437,003 | $223,074 |
| Cost of revenue | 169,923 | 138,936 | 72,706 |
| Gross profit | 309,080 | 298,067 | 150,368 |
| Research and development | 114,524 | 90,534 | 52,448 |
| Selling, general and administrative | 73,856 | 51,688 | 37,178 |
| Total operating expenses | 188,380 | 142,222 | 89,626 |
| Operating income | 120,700 | 155,845 | 60,742 |
| Other income, net | 8,140 | 12,136 | 3,946 |
| Income before income taxes | 128,840 | 167,981 | 64,688 |
| Provision (benefit) for income taxes | (585) | (1,121) | 1,289 |
| Net income | $129,425 | $169,102 | $63,399 |
| Net income per share — Basic | $0.70 | $0.92 | $0.37 |
| Net income per share — Diluted | $0.67 | $0.88 | $0.34 |
| Weighted-average shares — Basic | 186,007 | 184,683 | 171,927 |
| Weighted-average shares — Diluted | 194,378 | 192,681 | 184,577 |
Condensed Consolidated Balance Sheets
| (In thousands) | August 1, 2026 | May 2, 2026 |
|---|---|---|
| Cash and cash equivalents | $466,869 | $1,164,952 |
| Short-term investments | 297,389 | 278,334 |
| Accounts receivable | 288,798 | 233,377 |
| Inventories | 313,051 | 250,831 |
| Other current assets | 100,186 | 73,576 |
| Total current assets | 1,466,293 | 2,001,070 |
| Property and equipment, net | 114,462 | 101,605 |
| Right-of-use assets | 25,061 | 24,640 |
| Goodwill | 986,447 | 92,798 |
| Intangible assets, net | 378,817 | 29,262 |
| Other non-current assets | 41,647 | 46,244 |
| Total assets | $3,012,727 | $2,295,619 |
| Accounts payable | $101,822 | $107,345 |
| Accrued compensation and benefits | 20,731 | 21,626 |
| Other current liabilities | 75,612 | 68,120 |
| Total current liabilities | 198,165 | 197,091 |
| Non-current operating lease liabilities | 20,737 | 20,617 |
| Deferred tax liabilities | 53,659 | 5,754 |
| Other non-current liabilities | 11,676 | 8,545 |
| Total liabilities | 284,237 | 232,007 |
| Ordinary shares | 9 | 9 |
| Additional paid in capital | 2,210,077 | 1,672,060 |
| Accumulated other comprehensive income (loss) | (138) | 2,426 |
| Retained earnings | 518,542 | 389,117 |
| Total shareholders’ equity | 2,728,490 | 2,063,612 |
| Total liabilities and shareholders’ equity | $3,012,727 | $2,295,619 |
The balance sheet reflects a major acquisition completed during the quarter: goodwill increased to $986.4 million from $92.8 million, acquired intangibles rose to $378.8 million, additional paid-in capital increased by $538.0 million and cash declined by $698.1 million, with acquisition and integration related costs of $10.4 million recorded in the quarter.
Reconciliations from GAAP to Non-GAAP
| (In thousands, except percentages and per share amounts) — Three Months Ended | August 1, 2026 | May 2, 2026 | August 2, 2025 |
|---|---|---|---|
| GAAP gross profit | $309,080 | $298,067 | $150,368 |
| Share-based compensation | 5,715 | 354 | 356 |
| Amortization of acquired intangible assets | 11,000 | — | — |
| Non-GAAP gross profit | $325,795 | $298,421 | $150,724 |
| GAAP gross margin | 64.5% | 68.2% | 67.4% |
| Non-GAAP gross margin | 68.0% | 68.3% | 67.6% |
| Total GAAP operating expenses | $188,380 | $142,222 | $89,626 |
| Share-based compensation | (82,264) | (49,344) | (35,099) |
| Acquisition and integration related costs | (10,362) | (9,279) | — |
| Amortization of acquired intangible assets | (600) | (400) | — |
| Impairment charges | — | (1,500) | — |
| Total Non-GAAP operating expenses | $95,154 | $81,699 | $54,527 |
| GAAP operating income | $120,700 | $155,845 | $60,742 |
| Non-GAAP operating income | $230,641 | $216,722 | $96,197 |
| GAAP operating income margin | 25.2% | 35.7% | 27.2% |
| Non-GAAP operating income margin | 48.2% | 49.6% | 43.1% |
| GAAP net income | $129,425 | $169,102 | $63,399 |
| Share-based compensation | 87,979 | 49,698 | 35,455 |
| Acquisition and integration related costs | 10,362 | 9,279 | — |
| Amortization of acquired intangible assets | 11,600 | 400 | — |
| Impairment charges | — | 1,500 | — |
| Pre-tax total reconciling item | 109,941 | 60,877 | 35,455 |
| Other income tax effects and adjustments | (3,104) | (3,299) | (573) |
| Non-GAAP net income | $236,262 | $226,680 | $98,281 |
| GAAP net income margin | 27.0% | 38.7% | 28.4% |
| Non-GAAP net income margin | 49.3% | 51.9% | 44.1% |
| GAAP weighted-average shares — basic | 186,007 | 184,683 | 171,927 |
| GAAP weighted-average shares — diluted | 194,378 | 192,681 | 184,577 |
| Non-GAAP adjustment | 3,126 | 3,255 | 4,288 |
| Non-GAAP weighted-average shares — diluted | 197,505 | 195,936 | 188,866 |
| GAAP diluted net income per share | $0.67 | $0.88 | $0.34 |
| Non-GAAP diluted net income per share | $1.20 | $1.16 | $0.52 |
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of share-based compensation expenses, acquisition and integration related costs, amortization of acquired intangible assets, asset impairment and related charges (if applicable), and the related tax effect adjustment to the provision for income taxes. Credo uses a full-year non-GAAP tax rate to compute the non-GAAP tax provision. This non-GAAP information should not be construed as an alternative to the reported results determined in accordance with GAAP, and may not be comparable to similarly titled measures of other companies.
About Credo
Credo’s mission is to transform connectivity at scale through fast, reliable and energy-efficient system solutions. Our high-speed copper and optical interconnect products deliver industry-leading power and performance from chip to cluster to meet the ever-expanding data infrastructure demands of AI. Our vertically integrated connectivity portfolio is comprised of our flagship purple ZeroFlap (ZF) Active Electrical Cables (AECs) and ZF optical transceivers; optical components including silicon photonics-based photonic integrated circuits (SiPho PICs) and DSPs; OmniConnect AI memory and chip-to-chip interconnect; and retimers for Ethernet and PCIe—supported by our PILOT diagnostic and analytics software platform. Credo innovations enable our customers to connect the systems that connect the world. For more information, please visit www.credosemi.com.