01—Abstract
Summary
Summary of the 10-Q filed September 2, 2026. Cited figures are marked; the original filing is the authoritative source.
Credo Technology Group Holding Ltd reported a strong second quarter for fiscal year 2027, with revenue nearly doubling year-over-year to $479 milliona, driven primarily by a significant increase in the volume of Active Electrical Cable (AEC) product shipments to hyperscale data center customers.
Net income also saw substantial growth, reaching $129.4 millionb, up from $63.4 million in the prior year's comparable quarter. This robust performance reflects the increasing demand for high-speed connectivity solutions in AI infrastructure. The company made significant strategic acquisitions during the period, notably DustPhotonics for $1.3 billion, to enhance its vertically integrated connectivity offerings.
While these acquisitions, along with increased R&D and SG&A expenses, have led to a substantial increase in goodwill and intangible assets, the company maintains a strong liquidity position with $466.9 millionc in cash and cash equivalents and positive operating cash flow of $90.2 million. Despite a slight decrease in gross margin due to amortization of acquired intangibles, the overall financial health and growth trajectory appear positive, supported by strategic investments in AI-driven markets.
02—Key points
Key Highlights
- Revenue surged by 114.7% to $479 million, primarily driven by a significant increase in AEC product shipments to hyperscale data centers.
- Net income more than doubled, reaching $129.4 million ($0.67 diluted EPS) compared to $63.4 million ($0.34 diluted EPS) in the prior year's quarter.
- The company completed the significant acquisition of DustPhotonics for $1.3 billion to bolster its Silicon Photonics capabilities.
- Goodwill increased substantially to $986.4 million from $92.8 million, largely due to the DustPhotonics acquisition.
- Operating cash flow remained strong at $90.2 million, despite significant investments and working capital changes.
- Gross margin slightly decreased to 64.5% from 67.4%, attributed to the amortization of acquired intangible assets.
- Cash and cash equivalents decreased significantly to $466.9 million from $1.16 billion, primarily due to the DustPhotonics acquisition.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2027, Credo Technology Group Holding kept $0.27.
- Revenue$479.0M100.0%
- Cost of revenue−$169.9M35.5%
- Gross profit$309.1M64.5%
- Operating costs−$188.4M39.3%
- Operating income$120.7M25.2%
- Interest, other & tax$8.7M1.8%
- Net income$129.4M27.0%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2027filed September 2, 2026Financial Statements
Q2 FY2027 against Q2 FY2026
| Line item | Q2 FY2027Q2 FY2026 | Change |
|---|---|---|
| Revenue | $479.00M$223.07M | +114.7% |
| Cost of Revenue | $169.92M$72.71M | +133.7% |
| Gross Profit | $309.08M$150.37M | +105.5% |
| R&D Expenses | $114.52M$52.45M | +118.4% |
| SG&A Expenses | $73.86M$37.18M | +98.7% |
| Operating Expenses | $188.38M$89.63M | +110.2% |
| Operating Income | $120.70M$60.74M | +98.7% |
| Net Income | $129.43M$63.40M | +104.1% |
| EPS (Basic) | $0.70$0.37 | +89.2% |
| EPS (Diluted) | $0.67$0.34 | +97.1% |
| Shares Outstanding (Basic) | 186.01M171.93M | +8.2% |
| Shares Outstanding (Diluted) | 194.38M184.58M | +5.3% |
05—Questions
Frequently Asked Questions
What was the primary driver of Credo's significant revenue growth in this quarter?
The primary driver of Credo's revenue growth was a substantial increase in the volume of Active Electrical Cable (AEC) product shipments, which contributed over 90% of the revenue increase. This growth was largely fueled by the ramp-up of AEC solutions at hyperscale data center customers, reflecting strong demand in AI infrastructure.
How has the recent acquisition of DustPhotonics impacted the company's financial statements?
The acquisition of DustPhotonics for $1.3 billion significantly impacted the balance sheet, leading to a substantial increase in goodwill to $986.4 million from $92.8 million. It also contributed to an increase in intangible assets and deferred tax liabilities. The acquisition-related amortization of intangible assets also put some pressure on the gross margin.
What is the company's outlook on liquidity and future capital needs?
Credo Technology Group Holding Ltd believes its existing cash and cash equivalents and other components of working capital are sufficient to meet its needs for at least the next 12 months and in the longer term. However, the company acknowledges that future capital requirements will depend on various factors, and it cannot assure that additional financing will be available on acceptable terms if needed.
06—Continue