SAN JOSE, California, September 2, 2026, 03:32 PDT —
- Credo traded at $188.47 at 06:32 EDT, down 8.8% from Tuesday’s close.
- Fiscal first-quarter revenue rose 114.7% to $479.0 million.
- GAAP gross margin fell to 64.5%; the fiscal Q2 midpoint is 63.9%.
- Management expects fiscal 2027 optical revenue above $600 million.
Credo Technology Group Holding Ltd. NASDAQ:CRDO shares fell 8.8% before Wednesday’s open. Record sales failed to offset concern about the company’s margin path.
The stock traded at $188.47 at 06:32 EDT. That was 16.8% below Monday’s $226.49 close Yahoo Finance. The two-step decline has reset a rich AI-connectivity valuation.
Credo’s two-session price reset
USD per share. Source: Yahoo Finance; premarket quotes can change before the open.
Fiscal first-quarter revenue reached $479.0 million. Sales grew 9.6% sequentially and 114.7% from a year earlier. Non-GAAP diluted earnings were $1.20 a share SEC filing.
Quarterly revenue has more than doubled
Revenue in millions of dollars; fiscal Q2 uses the $530 million guidance midpoint.
Source: Credo’s September 1 earnings release. Guidance is preliminary.
The quality of that growth changed. GAAP gross margin fell to 64.5% from 68.2% in the prior quarter. Non-GAAP margin held near 68.0% after acquisition amortization and stock compensation.
Credo guided fiscal second-quarter revenue to $525 million–$535 million. The midpoint implies 10.6% sequential growth. Its GAAP margin midpoint is 63.9%, another 60 basis points below fiscal Q1.
GAAP gross margin bends lower
Percent of revenue. The fiscal Q2 figure is the midpoint of 62.9%–64.9% guidance.
Source: Credo’s SEC-filed results and outlook.
Chief Executive Bill Brennan said the portfolio now spans “connectivity from millimeters to kilometers.” Active electrical cables remain the largest business. Optics is growing faster earnings-call transcript.
Management expects more than $600 million of optical revenue this fiscal year. It also forecasts total sales growth above 85%. First 1.6-terabit DSP revenue remains scheduled for later this year.
Customer concentration remains unusually high. The four largest buyers produced 33%, 28%, 13% and 10% of quarterly revenue. The top two alone supplied 61%.
Four customers generated 84% of revenue
Fiscal Q1 revenue share by end customer.
Source: CFO Dan Fleming on Credo’s September 1 earnings call.
Cash and short-term investments fell to $764.3 million. Credo attributed most of the $679 million sequential decline to its DustPhotonics purchase. Inventory rose $62.2 million to $313.1 million.
Operating cash flow was $90.2 million, down $92.0 million sequentially. Free cash flow reached $82.9 million. Management said working capital reflected preparations for second-half supply.
At Tuesday’s close, market value was $38.53 billion against $1.59 billion of trailing sales StockAnalysis. At $188.47, unchanged shares imply about $35.1 billion. That estimate equals roughly 22 times trailing sales.
Risks: Four customers drive most revenue, while the optical ramp requires supply and qualification work. Tariffs remain fluid. The wide GAAP-to-non-GAAP gap also bears watching.
The regular-session response starts at 09:30 EDT. Investors now must decide whether faster optics can protect margins at a lower valuation.
