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Credo Technology Group Holding 8-K Report, Financial Results (Sep 3, 2025)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed September 3, 2025
Period End
September 3, 2025
Security
CRDO
In the record · 2022–202610-K610-Q148-K38

CRDO filed 6 annual reports (10-K), 14 quarterly reports (10-Q) and 38 current reports (8-K) between 2022 and 2026.

  1. Leadership change8-K · Apr ’24Apr ’24
  2. Leadership change8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed September 3, 2025. Cited figures are marked; the original filing is the authoritative source.

Credo Technology Group (CRDO) reported first-quarter fiscal 2026 results (quarter ended August 2, 2025) with revenue of $223.1 milliona, up 274% year over year and 31% sequentially.

GAAP gross margin was 67.4% and non-GAAP gross margin was 67.6%. GAAP net income was $63.4 millionb, or $0.34 per diluted share, and non-GAAP net income was $98.3 million, or $0.52 per diluted share. GAAP operating income of $60.7 million (27.2% margin) was roughly 2.9x the prior quarter's level and well above the $(14.5) million loss a year earlier.

Cash and short-term investments totaled $479.6 millionc at quarter end, up from $431.3 million in early May 2025, and shareholders' equity rose to $781.4 million. The outlook for the second quarter (ended November 1, 2025) calls for revenue of $230.0 million to $240.0 million, implying roughly 3% to 8% sequential growth at the midpoint, a sharp deceleration from the 31% sequential gain in Q1. Management guided GAAP gross margin down to 63.5% to 65.5% (non-GAAP 64.0% to 66.0%), and GAAP operating expenses up to $96.0 million to $98.0 million, with share-based compensation expected to rise to about $40 million.

Investors will want to weigh the strong profitability and balance sheet against the guided slowdown in top-line growth and margin compression. The balance sheet shows some working-capital build. Inventories rose about 30% sequentially to $116.7 milliond and accounts receivable rose about 12% to $181.2 million, while accounts payable were roughly flat.

Share-based compensation was $35.5 million in the quarter, about 40% of GAAP operating expenses, and is the main reconciling item between GAAP and non-GAAP results. Management characterizes growth as driven by deep partnerships with hyperscalers and key customers, with an expectation of continued revenue growth and customer, protocol, and application diversification.

02—Key points

Key Highlights

  1. Q1 FY2026 revenue of $223.1 million, up 274% year over year and 31% quarter over quarter; product sales were $217.1 million and IP license revenue $6.0 million.
  2. GAAP operating income of $60.7 million (27.2% margin) versus $33.8 million in the prior quarter and a $(14.5) million loss a year ago; non-GAAP operating margin was 43.1%.
  3. GAAP diluted EPS of $0.34 and non-GAAP diluted EPS of $0.52, compared with $0.20 and $0.35 in the prior quarter.
  4. Gross margin was stable at 67.4% GAAP and 67.6% non-GAAP, up from 67.2% and 67.4% in the prior quarter.
  5. Cash and short-term investments of $479.6 million at quarter end, with accumulated deficit reduced to $(19.8) million from $(83.2) million; the company has no debt on the balance sheet based on the reported liabilities.
  6. Q2 FY2026 guidance: revenue of $230.0 million to $240.0 million, GAAP gross margin of 63.5% to 65.5%, and GAAP operating expenses of $96.0 million to $98.0 million.
  7. Inventories rose about 30% sequentially to $116.7 million and receivables rose about 12% to $181.2 million, which investors may monitor against the guided revenue slowdown.

03—Questions

Frequently Asked Questions

  1. How strong was Credo's growth and profitability in the first quarter of fiscal 2026?

    Revenue of $223.1 million grew 274% year over year and 31% sequentially. GAAP operating income reached $60.7 million, a 27.2% margin, and GAAP net income was $63.4 million, compared with a GAAP net loss of $9.5 million in the year-ago quarter. Growth was driven by product sales, which were $217.1 million, while IP license revenue was $6.0 million.

  2. Why is the second-quarter guidance implying a slowdown?

    Q2 revenue guidance of $230 million to $240 million implies roughly 3% to 8% sequential growth, compared with 31% in Q1. The filing does not give a detailed explanation for the deceleration in the press release. Investors should review the earnings call and subsequent SEC filings for management's commentary on customer timing, product mix, and demand.

  3. Why is the gap between GAAP and non-GAAP results so large?

    The main reconciling item is share-based compensation, which was $35.5 million in Q1 and is expected to rise to about $40 million in Q2. Non-GAAP operating expenses were $54.5 million versus GAAP operating expenses of $89.6 million. Non-GAAP results exclude these costs, so GAAP results are the more conservative measure of profitability.

  4. Is Credo's balance sheet strong enough to support its growth plans?

    Cash and short-term investments totaled $479.6 million, up from $431.3 million in May 2025, and shareholders' equity rose to $781.4 million. Total liabilities were $123.8 million. Working capital increased, with inventories up about 30% and receivables up about 12% sequentially, so investors may want to watch whether these build-ups convert to cash as expected.

04—Continue

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