First Quarter of Fiscal Year 2027
Filed Sep 1, 2026Credo reported first-quarter fiscal 2027 revenue of $479.0 million, up 9.6% quarter over quarter and 114.7% year over year, and guided second-quarter revenue to between $525 million and $535 million.
Revenue grew 9.6% quarter over quarter and 114.7% year over year, while the company guided to higher second-quarter revenue. GAAP profitability declined sequentially as GAAP operating expenses increased, but non-GAAP net income increased year over year and the company ended the quarter with $764.3 million of cash and short-term investments.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $ 479,003 | 9.6% | 114.7% |
| Cost of revenueGAAP | 169,923 | – | – |
| Gross profitGAAP | $ 309,080 | – | – |
| Gross marginGAAP | 64.5% | – | – |
| Gross profitnon-GAAP | $ 325,795 | – | – |
| Gross marginnon-GAAP | 68.0% | – | – |
| Research and developmentGAAP | 114,524 | – | – |
| Selling, general and administrativeGAAP | 73,856 | – | – |
| Total operating expensesGAAP | 188,380 | – | – |
| Total operating expensesnon-GAAP | $ 95,154 | – | – |
| Operating incomeGAAP | 120,700 | – | – |
| Operating income marginGAAP | 25.2% | – | – |
| Operating incomenon-GAAP | $ 230,641 | – | – |
| Operating income marginnon-GAAP | 48.2% | – | – |
| Other income, netGAAP | 8,140 | – | – |
| Income before income taxesGAAP | 128,840 | – | – |
| Provision (benefit) for income taxesGAAP | (585) | – | – |
| Net incomeGAAP | $ 129,425 | – | – |
| Net income marginGAAP | 27.0% | – | – |
| Net incomenon-GAAP | $ 236,262 | – | 140% |
| Net income marginnon-GAAP | 49.3% | – | – |
| Basic net income per shareGAAP | $ 0.70 | – | – |
| Diluted net income per shareGAAP | $ 0.67 | – | – |
| Diluted net income per sharenon-GAAP | $ 1.20 | – | – |
| GAAP weighted-average shares - basicGAAP | 186,007 | – | – |
| GAAP weighted-average shares - dilutedGAAP | 194,378 | – | – |
| Non-GAAP weighted-average shares - dilutednon-GAAP | 197,505 | – | – |
Three Months Ending October 31, 2026 outlook
- Revenuebetween $525 million and $535 million
- Gross marginGAAP 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%
- Operating expensesGAAP 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
- NoteShare-based compensation: 1.3% of gross margin
- NoteAmortization of acquired intangible assets: 2.8% of gross margin
- NoteShare-based compensation: $97.0 of operating expenses
- NoteAcquisition and integration related costs: $2.0 of operating expenses
What drove it
- Management said its portfolio spans connectivity from millimeters to kilometers, with solutions across optics and copper.
- Management linked the opportunity to scaling AI infrastructure and data-center connectivity demand.
- The company described its portfolio as including ZeroFlap Active Electrical Cables, optical transceivers, silicon photonics-based photonic integrated circuits, DSPs, OmniConnect AI memory and chip-to-chip interconnect, retimers, and PILOT diagnostic and analytics software.
Concerns
- GAAP gross margin was 64.5%, compared with 68.2% in the prior quarter and 67.4% in the prior-year quarter.
- GAAP operating income was 120,700, compared with 155,845 in the prior quarter.
- GAAP net income was $ 129,425, compared with $ 169,102 in the prior quarter.
- GAAP operating expenses were 188,380, compared with 142,222 in the prior quarter.
- The second-quarter GAAP gross-margin outlook of between 62.9% and 64.9% is below the first-quarter GAAP gross margin of 64.5% at its low end.
What to watch
- Second-quarter revenue execution against the outlook of between $525 million and $535 million.
- Second-quarter GAAP gross margin of between 62.9% and 64.9% and non-GAAP gross margin of between 67.0% and 69.0%.
- Second-quarter GAAP operating expenses of between $199 million and $204 million and non-GAAP operating expenses of between $100 million and $105 million.
- The effect of share-based compensation, acquisition and integration related costs, and amortization of acquired intangible assets on the GAAP-to-non-GAAP earnings gap.
- Balance-sheet movements in cash and cash equivalents, accounts receivable, inventories, goodwill, and intangible assets.
Balance sheet and cash flow
- Cash and cash equivalents: $ 466,869 as of August 1, 2026; $ 1,164,952 as of May 2, 2026
- Short-term investments: 297,389 as of August 1, 2026; 278,334 as of May 2, 2026
- Ending cash and short-term investment balance: $764.3 million
- Accounts receivable: 288,798 as of August 1, 2026; 233,377 as of May 2, 2026
- Inventories: 313,051 as of August 1, 2026; 250,831 as of May 2, 2026
- Total current assets: 1,466,293 as of August 1, 2026; 2,001,070 as of May 2, 2026
- Goodwill: 986,447 as of August 1, 2026; 92,798 as of May 2, 2026
- Intangible assets, net: 378,817 as of August 1, 2026; 29,262 as of May 2, 2026
- Total assets: $ 3,012,727 as of August 1, 2026; $ 2,295,619 as of May 2, 2026
- Total current liabilities: 198,165 as of August 1, 2026; 197,091 as of May 2, 2026
- Total liabilities: 284,237 as of August 1, 2026; 232,007 as of May 2, 2026
- Total shareholders' equity: 2,728,490 as of August 1, 2026; 2,063,612 as of May 2, 2026
Analysis
Credo reported a high-growth first quarter of fiscal 2027. Revenue was $479.0 million, growing 9.6% quarter over quarter and 114.7% year over year. GAAP net income was $129.4 million, while non-GAAP net income was $236.3 million. Management attributed its positioning to a connectivity portfolio spanning optics and copper and to the scaling of AI infrastructure.
Management, verbatim
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.
Bill Brennan, President and Chief Executive Officer
Not in the filing
stated, not guessed- Segment revenue, segment growth rates, and segment drivers were not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Capital expenditures were not reported.
- Debt balance was not reported.
- Share repurchases were not reported.
- Dividend payments or dividend declarations were not reported.
- Second-quarter tax-rate guidance was not reported.
- Second-quarter GAAP or non-GAAP EPS guidance was not reported.
- Previous-quarter outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.