Credo Technology Group (CRDO) Q1 2027 earnings summary

Executive summary

• Achieved record Q1 revenue of $479 million, up 10% sequentially and 115% year-over-year, driven by strong AEC product shipments to hyperscale data center customers and marking the seventh consecutive quarter of triple-digit annual growth.

• Non-GAAP net income reached $236.3 million, up 140% year-over-year, with a non-GAAP net margin of 49.3%.

• GAAP net income was $129.4 million, reflecting strong operational performance and higher sales volumes.

• Growth was driven by AECs, optical DSPs, retimers, and an expanding customer base among hyperscalers and neo clouds.

• The acquisition of DustPhotonics for $1.3 billion expanded the vertically integrated connectivity stack and contributed to first silicon photonics PIC revenue.

Financial highlights

• Q1 non-GAAP gross margin was 68%; GAAP gross margin was 64.5%.

• Non-GAAP operating expenses were $95.2 million, up 16% sequentially due to increased R&D investment; GAAP operating expenses were $188.4 million.

• Cash flow from operations was $90.2 million; free cash flow was $82.9 million.

• Ended Q1 with $764.3 million in cash and equivalents, down due to the DustPhotonics acquisition.

• Inventory increased to $313.1 million, reflecting preparation for higher demand.

Outlook and guidance

• Q2 revenue expected between $525 million and $535 million; non-GAAP gross margin of 67%-69%.

• Q2 non-GAAP operating expenses projected at $100-$105 million.

• Fiscal 2027 total revenue growth expected to exceed 85% year-over-year, driven by over $600 million in optical revenue.

• Non-GAAP net margin expected near 50% for fiscal 2027.

• Existing cash and working capital are considered sufficient for at least the next 12 months.