Credo Technology Group Holding Ltd (CRDO)

[US Market News]

Credo Technology Group Holding Ltd Reports Third Quarter of Fiscal Year 2026 Financial Results

March 2, 2026 4:05 PM
Business Wire

Credo Technology Group Holding Ltd (Credo) (Nasdaq: CRDO), an innovator in providing connectivity at scale through fast, reliable, and energy-efficient system solutions, today reported financial results for the third quarter of fiscal year 2026, ended January 31, 2026.

Third Quarter of Fiscal Year 2026 Financial Highlights

• 
  Revenue of $407.0 million, grew by 51.9% quarter over quarter and 201.5% year over year
  
  


• 
  GAAP gross margin of 68.5% and non-GAAP gross margin of 68.6%
  
  


• 
  GAAP operating expenses of $129.2 million and non-GAAP operating expenses of $77.4 million
  
  


• 
  GAAP net income of $157.1 million and non-GAAP net income of $208.8 million
  
  


• 
  GAAP diluted net income per share of $0.82 and non-GAAP diluted net income per share of $1.07
  
  


• 
  Ending cash and short-term investment balance of $1.3 billion
  
  

Management Commentary

Bill Brennan, Credo’s President and Chief Executive Officer, stated, “In the third quarter Credo once again delivered record results with revenue of $407.0 million, an increase of more than 50% sequentially and 200% year over year. With continued growth in AECs and ICs and the announcement of three new multi-billion dollar TAM expansions through ZeroFlap optics, ALCs, and OmniConnect, we remain confident in our ability to innovate and grow in the expanding AI infrastructure landscape.”

Fourth Quarter of Fiscal 2026 Financial Outlook

• 
  Revenue is expected to be between $425.0 million and $435.0 million
  
  


• 
  GAAP gross margin is expected to be between 63.9% and 65.9%, and non-GAAP gross margin is expected to be between 64.0% and 66.0%
  
  


• 
  GAAP operating expenses are expected to be between 125.5 million and 129.5 million, and non-GAAP operating expenses are expected to be between $76.0 million and $80.0 million
  
  

Conference Call

Credo will conduct a conference call on Monday, March 2, 2026, at 2:00 p.m. Pacific Time to discuss its financial results for the third quarter of fiscal year 2026, ended January 31, 2026. Interested parties may join the conference call beginning at 2:00 p.m. Pacific Time on Monday, March 2, 2026, by dialing [phone] (toll-free) or [phone] (international). The conference ID for the call is 5251802. It is recommended that participants dial in to the call at least 10 minutes before the start of the call. A live webcast of the conference call will be available on Credo’s Investor Relations website at http://investors.credosemi.com. A replay of the webcast will be available via the web at http://investors.credosemi.com.

Discussion of Non-GAAP Financial Measures

This press release contains references to the non-GAAP financial measures of non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating income (loss) margin, non-GAAP net income (loss) and non-GAAP diluted net income (loss) per share. Reconciliation of these non-GAAP measures to their comparable GAAP measures is included below. This non-GAAP information should not be construed as an alternative to the reported results determined in accordance with GAAP. The non-GAAP financial measures that Credo presents may not be comparable to similarly titled measures of other companies and other companies may not calculate such measures in the same manner as we do.

Non-GAAP financial measures exclude the effect of share-based compensation expenses, 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 full-year non-GAAP tax rate is based on Credo’s annual GAAP income, adjusted to exclude non-GAAP items, as well as the effects of significant non-recurring and period-specific tax items which vary in size and frequency. Credo’s non-GAAP tax rate is determined on an annual basis and may be adjusted during the year to take into account events that may materially affect the non-GAAP tax rate, such as tax law changes, significant changes in Credo’s geographic mix of revenue and expenses or changes to Credo’s corporate structure.

GAAP diluted net income (loss) per share is calculated using basic weighted average shares outstanding when there is a GAAP net loss, and calculated using diluted weighted average shares outstanding when there is a GAAP net income. Non-GAAP diluted net income (loss) per share is calculated using basic weighted average shares outstanding when there is a non-GAAP net loss, and calculated using non-GAAP diluted weighted average shares outstanding when there is a non-GAAP net income. Non-GAAP adjustment for the number of shares used in the diluted per share calculations excludes the impact of share-based compensation expenses expected to be incurred in future periods and not yet recognized in the financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method.

Credo believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to Credo’s financial condition and results of operations. While Credo uses non-GAAP financial measures as a tool to enhance its understanding of certain aspects of its financial performance, Credo does not consider these measures to be a substitute for, or superior to, financial measures calculated in accordance with GAAP. Consistent with this approach, Credo believes that disclosing non-GAAP financial measures to the readers of its financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial measures, allows for greater transparency in the review of its financial and operational performance.

Externally, management believes that investors may find Credo’s non-GAAP financial measures useful in their assessment of Credo's operating performance and the valuation of Credo. Internally, Credo's non-GAAP financial measures are used in the following areas:

• 
  Management’s evaluation of Credo’s ongoing operating performance;
  
  


• 
  Management’s establishment of internal operating budgets; and
  
  


• 
  Management’s performance comparisons with internal forecasts and targeted business models.
  
  

Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of Credo’s business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of Credo’s results as reported under GAAP. The exclusion of the above items from our GAAP financial metrics does not necessarily mean that these costs are unusual or infrequent.

Forward-Looking Statements under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact could be deemed forward-looking statements, including, but not limited to, any statements regarding: launches of new or expansion of existing products or services; technology developments and innovation; our plans, strategies or objectives with respect to future operations; financial outlook; future financial results; expectations regarding the markets and industries in which Credo conducts business; and assumptions underlying any of the foregoing. Words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “seeks,” “estimates,” “can,” “may,” “will,” “would,” “outlook,” “forecast,” “targets” and similar expressions, or their negatives, may identify such forward-looking statements. These statements are not guarantees of results and should not be considered as an indication of future activity or future performance. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties that may cause actual events or results to differ materially from those described in this press release. Readers are encouraged to review risk factors and all other disclosures appearing in Credo’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (SEC) on July 2, 2025, as well as Credo’s other filings with the SEC, for further information on risks and uncertainties that could affect Credo’s business, financial condition and results of operation. Copies of these filings are available from the SEC, Credo’s website or Credo’s investor relations department. Forward-looking statements speak only as of the date they are made. Credo assumes no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date herein.

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 at up to 1.6T to meet the ever-expanding data infrastructure demands of AI.

Our product portfolio includes ZeroFlap (ZF) Active Electrical Cables (AECs) and ZF optical transceivers, OmniConnect memory solutions, and a suite of retimers and DSPs for optical and copper Ethernet and PCIe, all leveraging the PILOT diagnostic and analytics software platform. Credo innovations enable our customers to connect the systems that connect the world.

For more information, please visit https://www.credosemi.com.

Credo and the Credo logo are registered trademarks of Credo Technology Group Limited in the United States and other jurisdictions. All other trademarks referenced herein are the property of their respective owners.

 

 

Credo Technology Group Holding Ltd Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts)
		Three Months Ended									Nine Months Ended
		January 31, 2026			November 1, 2025			February 1, 2025			January 31, 2026			February 1, 2025
Revenue			407,012			268,027			135,002			898,113			266,750
Cost of revenue			128,144			86,981			49,076			287,831			98,029
Gross profit			278,868			181,046			85,926			610,282			168,721
Operating expenses:
Research and development			78,483			57,916			36,261			188,847			98,412
Selling, general and administrative			50,763			44,334			23,471			132,275			66,973
Total operating expenses			129,246			102,250			59,732			321,122			165,385
Operating income			149,622			78,796			26,194			289,160			3,336
Other income, net			9,459			4,889			3,918			18,294			13,925
Income before income taxes			159,081			83,685			30,112			307,454			17,261
Provision for income taxes			1,939			1,049			752			4,277			1,666
Net income		$	157,142		$	82,636		$	29,360		$	303,177		$	15,595
Net income per share:
Basic		$	0.86		$	0.47		$	0.17		$	1.72		$	0.09
Diluted		$	0.82		$	0.44		$	0.16		$	1.62		$	0.09
Weighted-average shares used in computing net income per share:
Basic			182,222			175,307			168,167			176,490			166,562
Diluted			192,023			187,659			182,464			186,598			180,495

 

Credo Technology Group Holding Ltd Condensed Consolidated Balance Sheets (Unaudited) (In thousands)
		January 31, 2026			May 3, 2025
Assets
Current assets:
Cash and cash equivalents		$	1,220,464		$	236,328
Short-term investments			81,000			195,010
Accounts receivable			243,213			162,144
Inventories			207,958			90,029
Other current assets			33,958			30,023
Total current assets			1,786,593			713,534
Property and equipment, net			105,989			63,631
Right-of-use assets			15,517			15,234
Goodwill			70,859			—
Intangible asset			17,624			—
Other non-current assets			40,757			16,858
Total assets		$	2,037,339		$	809,257
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable		$	93,822		$	56,158
Accrued compensation and benefits			14,419			16,097
Other current liabilities			56,951			35,456
Total current liabilities			165,192			107,711
Non-current operating lease liabilities			12,616			12,693
Other non-current liabilities			10,645			7,271
Total liabilities			188,453			127,675
Shareholders' equity:
Ordinary shares			9			8
Additional paid in capital			1,626,787			765,173
Accumulated other comprehensive income (loss)			2,075			(437	)
Retained earnings (accumulated deficit)			220,015			(83,162	)
Total shareholders' equity			1,848,886			681,582
Total liabilities and shareholders' equity		$	2,037,339		$	809,257

 

Credo Technology Group Holding Ltd Reconciliations from GAAP to Non-GAAP (Unaudited) (In thousands, except percentages and per share amounts)
		Three Months Ended												Nine Months Ended
		January 31, 2026				November 1, 2025				February 1, 2025				January 31, 2026				February 1, 2025
GAAP gross profit		$	278,868			$	181,046			$	85,926			$	610,282			$	168,721
Reconciling item:
Share-based compensation			354				354				226				1,064				838
Total reconciling item:			354				354				226				1,064				838
Non-GAAP gross profit (A)		$	279,222			$	181,400			$	86,152			$	611,346			$	169,559
GAAP gross margin			68.5	%			67.5	%			63.6	%			68.0	%			63.3	%
Non-GAAP gross margin			68.6	%			67.7	%			63.8	%			68.1	%			63.6	%
Total GAAP operating expenses		$	129,246			$	102,250			$	59,732			$	321,122			$	165,385
Reconciling item:
Share-based compensation			(51,806	)			(44,970	)			(15,964	)			(131,875	)			(48,655	)
Total reconciling item:			(51,806	)			(44,970	)			(15,964	)			(131,875	)			(48,655	)
Total Non-GAAP operating expenses (B)		$	77,440			$	57,280			$	43,768			$	189,247			$	116,730
GAAP operating income		$	149,622			$	78,796			$	26,194			$	289,160			$	3,336
Non-GAAP operating income (A-B)		$	201,782			$	124,120			$	42,384			$	422,099			$	52,829
GAAP operating income margin			36.8	%			29.4	%			19.4	%			32.2	%			1.3	%
Non-GAAP operating income margin			49.6	%			46.3	%			31.4	%			47.0	%			19.8	%
GAAP net income		$	157,142			$	82,636			$	29,360			$	303,177			$	15,595
Reconciling items:
Share-based compensation			52,160				45,324				16,190				132,939				49,493
Pre-tax total reconciling item			52,160				45,324				16,190				132,939				49,493
Other income tax effects and adjustments			(509	)			(172	)			(172	)			(1,254	)			(416	)
Non-GAAP net income		$	208,793			$	127,788			$	45,378			$	434,862			$	64,672
GAAP net income margin			38.6	%			30.8	%			21.7	%			33.8	%			5.8	%
Non-GAAP net income margin			51.3	%			47.7	%			33.6	%			48.4	%			24.2	%
GAAP weighted-average shares - basic			182,222				175,307				168,167				176,490				166,562
GAAP weighted-average shares - diluted			192,023				187,659				182,464				186,598				180,495
Non-GAAP adjustment			2,878				2,896				2,028				3,103				3,335
Non-GAAP weighted-average shares - diluted			194,901				190,555				184,492				189,701				183,830
GAAP diluted net income per share		$	0.82			$	0.44			$	0.16			$	1.62			$	0.09
Non-GAAP diluted net income per share		$	1.07			$	0.67			$	0.25			$	2.29			$	0.35

 

Credo Technology Group Holding Ltd Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates (In millions, except percentages)
		Outlook for Three Months Ending May 2, 2026
		Low				High
GAAP gross margin			63.9	%			65.9	%
Reconciling item:
Share-based compensation			0.1	%			0.1	%
Total reconciling item:			0.1	%			0.1	%
Non-GAAP gross margin			64.0	%			66.0	%
Total GAAP operating expenses		$	125.5			$	129.5
Reconciling item:
Share-based compensation			49.5				49.5
Total reconciling item:			49.5				49.5
Total Non-GAAP operating expenses		$	76.0			$	80.0

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20260302499009/en/

Investor Contact:

Dan O’Neil

[e-mail]

Original: Credo Technology Group Holding Ltd Reports Third Quarter of Fiscal Year 2026 Financial Results