Key Highlights

  • Credo reported first-quarter fiscal 2027 revenue of $479.0 million, up 114.7% year on year and 9.6% on the previous quarter.
  • GAAP gross margin was 64.5% and non-GAAP gross margin was 68.0%, with non-GAAP operating income of $230.6 million.
  • GAAP net income was $129.4 million, or $0.67 per diluted share, and non-GAAP net income was $236.3 million, or $1.20.
  • Second-quarter revenue is guided to $525 million to $535 million, and cash and short-term investments stood at $764.3 million.

Credo Technology Group Holding Ltd (NASDAQ:CRDO) reported first-quarter results for fiscal 2027 in early September 2026, covering the quarter that ended on August 1.

Revenue was $479.0 million, up 114.7% on a year earlier and 9.6% on the previous quarter. The company supplies the connections that move data between servers and switches in data centers, a niche that has expanded alongside investment in artificial intelligence.

Cables, Optics and Chips

Credo's flagship product is the ZeroFlap active electrical cable, a copper interconnect with built-in signal processing. It has broadened its range to include ZeroFlap optical transceivers, silicon photonics-based photonic integrated circuits, OmniConnect AI products for memory and chip-to-chip links, Ethernet and PCIe retimers, and a diagnostic and analytics software platform called PILOT. Chief executive Bill Brennan said the portfolio now spans connectivity from millimeters to kilometers, covering both copper and optical solutions. It is a semiconductor and hardware business rather than a services provider, though it operates within the wider technology sector.

Profitability in the Quarter

GAAP gross margin was 64.5% and non-GAAP gross margin was 68.0%. GAAP operating income was $120.7 million, while non-GAAP operating income was $230.6 million. GAAP net income was $129.4 million, or $0.67 per diluted share, and non-GAAP net income was $236.3 million, or $1.20 per share, which Brennan described as 140% growth year on year.

The difference between the GAAP and non-GAAP operating figures is large, at roughly $110 million, and the company's reconciliation table is the place to see which items are excluded. GAAP net income of $129.4 million was above GAAP operating income, so items below the operating line added to profit (see the full release). Cash and short-term investments stood at $764.3 million.

What Management Expects

For the second fiscal quarter, ending October 31, 2026, Credo guided to revenue of $525 million to $535 million. It expects a GAAP gross margin of 62.9 to 64.9% and a non-GAAP gross margin of 67.0 to 69.0%. GAAP operating expenses are expected to be $199 million to $204 million and non-GAAP operating expenses $100 million to $105 million.

The midpoint of the revenue range, $530 million, would be about 11% above the first-quarter figure. As a further illustration, the guided non-GAAP gross margin and operating expenses imply a non-GAAP operating income of roughly $258 million at the revenue midpoint, an extension of guidance, not a company statement.

Context and Risks

Other uncertainties include competition from optical and copper connectivity rivals, the cost and availability of manufacturing capacity, and the risk that customers redesign networks around different technologies. Rapid revenue growth also raises the bar for future quarters, since the base against which growth is measured keeps rising.

Credo's Margin and Product Mix in the Next Quarter

The key markers are whether revenue lands within the guided range for the second quarter, whether non-GAAP gross margin stays near the 68% reported, how quickly optical and photonic products contribute alongside cables, and whether operating expenses stay within the guided bands.