Credo Technology Delivers Record Revenue and Strong Profitability as AI Demand Accelerates
Quarterly Revenue Jumps 272% Year-Over-Year—A Historic Performance
Credo Technology Group (NASDAQ: CRDO) has set a new milestone in its financial history, reporting second quarter fiscal 2026 revenue of $268.03 million—an impressive 20.2% sequential rise and a 272.1% surge from the same quarter last year. The company's GAAP net income landed at $82.64 million, swinging decisively from a loss just a year earlier.
Margins Remain Strong Amid Surging Sales
The company’s profitability story is just as striking as its revenue growth. GAAP gross margin reached 67.5%, with non-GAAP gross margin at 67.7%, indicating robust pricing power even as the top line scales rapidly. Non-GAAP net income soared to $127.79 million, underscoring that recent expansion isn’t coming at the cost of efficiency.
| Key Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 |
|---|---|---|---|
| Revenue ($M) | 268.03 | 223.07 | 72.03 |
| GAAP Gross Margin (%) | 67.5 | 67.4 | 63.2 |
| Non-GAAP Net Income ($M) | 127.79 | 98.28 | 12.26 |
| GAAP Net Income ($M) | 82.64 | 63.40 | (4.23) |
| GAAP Diluted EPS ($) | 0.44 | 0.34 | (0.03) |
AI Infrastructure Expansion Fuels Outlook—Management Expects Continued Growth
According to CEO Bill Brennan, “These are the strongest quarterly results in Credo's history, and they reflect the continued build-out of the world's largest AI training and inference clusters.” Credo expects to benefit from ongoing investments in AI-driven cloud computing and hyperscale networks, supported by strong adoption of its AEC and IC products, and new optical connectivity solutions launching soon.
Looking ahead, management projects third-quarter revenue to land between $335 million and $345 million—a 26% increase quarter-over-quarter at the high end. GAAP gross margin is expected in the range of 63.8% to 65.8%, and non-GAAP margins are set to remain robust at 64% to 66%.
Balance Sheet and Cash Position Remain Healthy
Credo ended the quarter with a formidable $813.58 million in cash and short-term investments, a buffer that provides both stability and strategic flexibility as growth accelerates.
| Balance Sheet Item | Nov 1, 2025 ($M) | May 3, 2025 ($M) |
|---|---|---|
| Cash and Cash Equivalents | 567.58 | 236.33 |
| Short-term Investments | 246.00 | 195.01 |
| Total Current Assets | 1,243.42 | 713.53 |
| Total Liabilities | 163.20 | 127.68 |
| Total Shareholders' Equity | 1,286.07 | 681.58 |
Takeaway: A Company Firing on All Cylinders with a Bullish AI-Fueled Outlook
Credo Technology's Q2 numbers showcase an organization capitalizing on AI infrastructure trends with both rapid sales growth and healthy profitability. With new product launches slated for the coming quarters and robust demand in hyperscale connectivity, Credo is well-positioned for sustained growth. Investors and analysts alike will want to keep a close watch as Credo seeks to extend this momentum into the next fiscal year and beyond.
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