Credo Technology Group (CRDO) Q3 2026 earnings summary

Executive summary

• Achieved record Q3 revenue of $407.0 million, up 51.9% sequentially and 201.5% year-over-year, driven by strong demand from hyperscale customers and AEC product shipments.

• Non-GAAP net income reached $208.8 million, quadrupling from the prior year; GAAP net income was $157.1 million.

• Gross margin improved to 68.6% non-GAAP and 68.5% GAAP, reflecting economies of scale.

• Significant growth in AEC and IC product lines, with new product families (ZeroFlap optics, ALCs, OmniConnect) expanding total addressable market.

• Completed major acquisitions: Comera to strengthen protocol IP and security, and Hyperlume for microLED-based optical interconnect technology.

Financial highlights

• Q3 revenue: $407.0 million, up 52% sequentially and over 200% year-over-year.

• Non-GAAP gross margin: 68.6%; GAAP gross margin: 68.5%.

• Non-GAAP operating income: $201.8 million; GAAP operating income margin: 36.8%.

• Free cash flow: $139.7 million; cash and equivalents: $1.3 billion at quarter end.

• Working capital increased to $1,621.4 million; net cash provided by operating activities for nine months was $282.1 million.

Outlook and guidance

• Q4 revenue expected between $425 million and $435 million.

• Non-GAAP gross margin projected at 64% to 66%; GAAP gross margin at 63.9%–65.9%.

• Operating expenses for Q4 projected at $76 million to $80 million non-GAAP, $125.5–$129.5 million GAAP.

• Fiscal 2027 revenue growth expected to be mid-single digits sequentially, over 50% year-over-year.

• Management expects revenue concentration to decrease as adoption broadens.