Credo Technology Group Holding Ltd Reports Fourth Quarter and Fiscal Year 2026 Financial Results

About this update from Credo Technology Group Holding Ltd

Credo Technology Group Holding Ltd (Nasdaq: CRDO) (“Credo”), an innovator in providing connectivity at scale through fast, reliable, and energy-efficient system solutions, today reported financial results for the fourth quarter and full fiscal year 2026, ended May 2, 2026. Fourth Quarter of Fiscal Year 2026 Financial Highlights Revenue of $437.0 million grew by 7.4% quarter over quarter and 157.0% year over year GAAP gross margin of 68.2% and non-GAAP gross margin of 68.3% GAAP operating expenses of $142.2 million and non-GAAP operating expenses of $81.7 million GAAP net income of $169.1 million and non-GAAP net income of $226.7 million GAAP diluted net income per share of $0.88 and non-GAAP diluted net income per share of $1.16 Ending cash and short-term investment balance of $1.4 billion Management Commentary Bill Brennan, Credo’s President and Chief Executive Officer, stated, “Fiscal 2026 marked another defining year for Credo. For the year, revenue more than tripled to $1.3 billion, and non-GAAP net income increased more than five times to $662 million. As we enter into fiscal 2027, Credo expects to achieve continued strong financial performance with our innovative and vertically integrated approach that enables customers to accelerate cluster time-to-stability, maximize GPU utilization, improve network reliability, and reduce overall infrastructure power and operating costs.” First Quarter of Fiscal Year 2027 Financial Outlook Revenue is expected to be between $465.0 million and $475.0 million GAAP gross margin is expected to be between 66.9% and 68.9%, and non-GAAP gross margin is expected to be between 67.0% and 69.0% GAAP operating expenses are expected to be between $167.6 million and $171.6 million, and non-GAAP operating expenses are expected to be between $86.0 million and $90.0 million Webcast and Conference Call Information Credo will conduct a conference call on Monday, June 1, 2026, at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter and fiscal year 2026, ended May 2, 2026. Interested parties may join the conference call by dialing 833-461-5787 (toll-free) or +1 585-542-9983 (international). The conference ID for the call is 721028678. It is recommended that participants register and dial in for 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, 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 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 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   Year Ended   May 2, 2026   January 31, 2026   May 3, 2025   May 2, 2026   May 3, 2025 Revenue   437,003       407,012     170,025     1,335,116     436,775 Cost of revenue   138,936       128,144       55,837       426,767       153,866   Gross profit   298,067       278,868       114,188       908,349       282,909   Operating expenses:                   Research and development   90,534       78,483       48,455       279,381       146,867   Selling, general and administrative   51,688       50,763       31,945       183,963       98,918   Total operating expenses   142,222       129,246       80,400       463,344       245,785   Operating income   155,845       149,622       33,788       445,005       37,124   Other income, net   12,136       9,459       3,821       30,430       17,746   Income before income taxes   167,981       159,081       37,609       475,435       54,870   Provision (benefits) for income taxes   (1,121 )     1,939       1,021       3,156       2,687   Net income $ 169,102     $ 157,142     $ 36,588     $ 472,279     $ 52,183   Net income per share:                   Basic $ 0.92     $ 0.86     $ 0.21     $ 2.65     $ 0.31   Diluted $ 0.88     $ 0.82     $ 0.20     $ 2.51     $ 0.29   Weighted average shares used in computing net income per share:                   Basic   184,683       182,222       170,405       178,538       167,505   Diluted   192,681       192,023       182,119       188,232       181,158   Credo Technology Group Holding Ltd Condensed Consolidated Balance Sheets (Unaudited) (In thousands)       May 2, 2026   May 3, 2025 Assets Current assets:         Cash and cash equivalents   $ 1,164,952   $ 236,328   Short-term investments     278,334       195,010   Accounts receivable     233,377       162,144   Inventories     250,831       90,029   Other current assets     73,576       30,023   Total current assets     2,001,070       713,534   Property and equipment, net     101,605       63,631   Right-of-use assets     24,640       15,234   Goodwill     92,798       —   Intangible assets, net     29,262       —   Other non-current assets     46,244       16,858   Total assets   $ 2,295,619     $ 809,257   Liabilities and Shareholders' Equity Current liabilities:         Accounts payable   $ 107,345     $ 56,158   Accrued compensation and benefits     21,626       16,097   Other current liabilities     68,120       35,456   Total current liabilities     197,091       107,711   Non-current operating lease liabilities     20,617       12,693   Other non-current liabilities     14,299       7,271   Total liabilities     232,007       127,675   Shareholders' equity:         Ordinary shares     9       8   Additional paid-in capital     1,672,060       765,173   Accumulated other comprehensive income (loss)     2,426       (437 ) Retained earnings (accumulated deficit)     389,117       (83,162 ) Total shareholders' equity     2,063,612       681,582   Total liabilities and shareholders' equity   $ 2,295,619     $ 809,257   Credo Technology Group Holding Ltd Reconciliations from GAAP to Non-GAAP Results (Unaudited) (In thousands, except percentages and per share amounts)     Three Months Ended   Year Ended   May 2, 2026   January 31, 2026   May 3, 2025   May 2, 2026   May 3, 2025 GAAP gross profit $ 298,067     $ 278,868     $ 114,188     $ 908,349     $ 282,909   Reconciling item:                   Share-based compensation   354       354       356       1,418       1,194   Total reconciling item   354       354       356       1,418       1,194   Non-GAAP gross profit $ 298,421     $ 279,222     $ 114,544     $ 909,767     $ 284,103                       GAAP gross margin   68.2 %     68.5 %     67.2 %     68.0 %     64.8 % Non-GAAP gross margin   68.3 %     68.6 %     67.4 %     68.1 %     65.0 %                     Total GAAP operating expenses $ 142,222     $ 129,246     $ 80,400     $ 463,344     $ 245,785   Reconciling items:                   Share-based compensation   (49,344 )     (51,806 )     (27,506 )     (181,220 )     (76,161 ) Acquisition and integration related costs   (9,279 )     —       —       (9,279 )     —   Amortization of acquired intangible assets   (400 )     —       —       (400 )     —   Impairment and related charges   (1,500 )     —       (873 )     (1,500 )     (873 ) Total reconciling items   (60,523 )     (51,806 )     (28,379 )     (192,399 )     (77,034 ) Total Non-GAAP operating expenses $ 81,699     $ 77,440     $ 52,021     $ 270,945     $ 168,751                       GAAP operating income $ 155,845     $ 149,622     $ 33,788     $ 445,005     $ 37,124   Non-GAAP operating income $ 216,722     $ 201,782     $ 62,523     $ 638,822     $ 115,352                       GAAP operating income margin   35.7 %     36.8 %     19.9 %     33.3 %     8.5 % Non-GAAP operating income margin   49.6 %     49.6 %     36.8 %     47.8 %     26.4 %                     GAAP net income $ 169,102     $ 157,142     $ 36,588     $ 472,279     $ 52,183   Reconciling items:                   Share-based compensation   49,698       52,160       27,862       182,638       77,355   Acquisition and integration related costs   9,279       —       —       9,279       —   Amortization of acquired intangible assets   400       —       —       400       —   Impairment and related charges   1,500       —       873       1,500       873   Pre-tax total reconciling items   60,877       52,160       28,735       193,817       78,228   Other income tax effects and adjustments   (3,299 )     (509 )     (69 )     (4,553 )     (485 ) Non-GAAP net income $ 226,680     $ 208,793     $ 65,254     $ 661,543     $ 129,926                       GAAP net income margin   38.7 %     38.6 %     21.5 %     35.4 %     11.9 % Non-GAAP net income margin   51.9 %     51.3 %     38.4 %     49.5 %     29.7 %                     GAAP weighted average shares - basic   184,683       182,222       170,405       178,538       167,505   GAAP weighted average shares - diluted   192,681       192,023       182,119       188,232       181,158   Non-GAAP adjustment   3,255       2,878       4,824       3,024       3,486   Non-GAAP weighted average shares - diluted   195,936       194,901       186,943       191,256       184,644                       GAAP diluted net income per share $ 0.88     $ 0.82     $ 0.20     $ 2.51     $ 0.29   Non-GAAP diluted net income per share $ 1.16     $ 1.07     $ 0.35     $ 3.46     $ 0.70   Credo Technology Group Holding Ltd Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates (In millions, except percentages)       Three Months Ended August 1, 2026     Low   High           GAAP gross margin     66.9 %     68.9 % Reconciling item:         Share-based compensation     0.1 %     0.1 % Total reconciling item     0.1 %     0.1 % Non-GAAP gross margin     67.0 %     69.0 %                     Total GAAP operating expenses   $ 167.6     $ 171.6   Reconciling item:         Share-based compensation     70.0       70.0   Acquisition and integration related costs     11.0       11.0   Amortization of acquired intangible assets     0.6       0.6   Total reconciling item     81.6       81.6   Total non-GAAP operating expenses   $ 86.0     $ 90.0     View source version on businesswire.com: https://www.businesswire.com/news/home/20260601641616/en/

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