01—Abstract
Summary
Summary of the 10-Q filed December 2, 2025. Cited figures are marked; the original filing is the authoritative source.
Credo Technology Group Holding Ltd reported a strong financial performance for the six months ended November 1, 2025, showcasing significant year-over-year growth.
Total revenue more than tripled to $491.1 milliona, primarily driven by a substantial increase in product sales, particularly Active Electrical Cables (AECs) to hyperscale data center customers. The company also achieved profitability, with net income reaching $146.0 million for the period, a stark contrast to the net loss reported in the prior year. Financially, Credo strengthened its balance sheet with a significant increase in cash and cash equivalents to $567.6 million, bolstered by a successful At-The-Market (ATM) offering that raised $384.6 million in net proceeds.
The company also completed a strategic acquisition of Hyperlume, Inc., aimed at expanding its microLED technology portfolio for chip-to-chip communication, adding goodwill and intangible assets to its balance sheet. Despite increased operating expenses related to growth and share-based compensation, the company maintained a healthy gross margin of 67.5%b and demonstrated improved operating leverage.
02—Key points
Key Highlights
- Total revenue surged by 272.8% year-over-year to $491.1 million for the six months ended November 1, 2025.
- The company achieved significant profitability, reporting a net income of $146.0 million for the six months ended November 1, 2025, compared to a net loss of $13.8 million in the prior year.
- Cash and cash equivalents significantly increased to $567.6 million as of November 1, 2025, supported by $384.6 million in net proceeds from an At-The-Market (ATM) offering.
- Gross margin improved to 67.5% for the six-month period, reflecting improved economies of scale in product sales.
- Credo completed the acquisition of Hyperlume, Inc. for $92.0 million to enhance its microLED optical interconnect technology capabilities.
- Research and Development (R&D) and Selling, General & Administrative (SG&A) expenses increased significantly year-over-year, reflecting investments in growth and share-based compensation.
- The company's customer concentration remains high, with specific customers accounting for substantial portions of revenue and accounts receivable.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Credo Technology Group Holding kept $0.28.
- Revenue$223.1M100.0%
- Cost of revenue−$72.7M32.6%
- Gross profit$150.4M67.4%
- Operating costs−$89.6M40.2%
- Operating income$60.7M27.2%
- Interest, other & tax$2.7M1.2%
- Net income$63.4M28.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed December 2, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $223.07M$59.71M | +273.6% |
| Cost of Revenue | $72.71M$22.43M | +224.1% |
| Gross Profit | $150.37M$37.28M | +303.3% |
| R&D Expenses | $52.45M$30.41M | +72.5% |
| SG&A Expenses | $37.18M$21.32M | +74.3% |
| Operating Expenses | $89.63M$51.73M | +73.2% |
| Operating Income | $60.74M-$14.45M | +520.3% |
| Net Income | $63.40M-$9.54M | +764.6% |
| EPS (Basic) | $0.37$-0.06 | +716.7% |
| EPS (Diluted) | $0.34$-0.06 | +666.7% |
| Shares Outstanding (Basic) | 171.93M165.14M | +4.1% |
| Shares Outstanding (Diluted) | 184.58M165.14M | +11.8% |
05—Questions
Frequently Asked Questions
What drove the significant increase in Credo's revenue?
The substantial increase in revenue, particularly product sales, was primarily driven by the ramp-up of Credo's Active Electrical Cable (AEC) solutions at hyperscale data center customers. Unit shipments of AEC products contributed over 95% of the increase in product sales revenue.
How has Credo's profitability changed?
Credo has transitioned from a net loss in the prior year to significant profitability. For the six months ended November 1, 2025, the company reported a net income of $146.0 million, a substantial improvement from a net loss of $13.8 million in the same period last year. This is attributed to increased revenue, improved gross margins, and a shift in operating income from a loss to a gain.
What is the financial impact of the Hyperlume acquisition?
Credo acquired Hyperlume, Inc. for $92.0 million to expand its microLED optical interconnect technology portfolio. This acquisition resulted in the recognition of $69.1 million in goodwill and $17.2 million in intangible assets on the balance sheet as of November 1, 2025. The purchase price allocation is preliminary and subject to further adjustments.
What is Credo's liquidity position, and how has it been strengthened?
Credo's liquidity has been significantly strengthened. Cash and cash equivalents increased to $567.6 million as of November 1, 2025, up from $236.3 million at May 3, 2025. This increase was largely due to the $384.6 million in net proceeds raised from an At-The-Market (ATM) equity offering during the period.
06—Continue