Credo Technology (NASDAQ: CRDO) Q1 FY2027: Revenue Doubles YoY to $479M, EPS Tops Estimates

Credo Technology Group Holding Ltd (NASDAQ: CRDO) reported first-quarter fiscal 2027 results on September 1, 2026, posting revenue of $479.0 million, a 114.7% year-over-year increase, alongside adjusted EPS of $1.20 that edged past the $1.19 consensus estimate. Shares fell -8.65% on the session while the S&P 500 declined 0.69%.

Q1 FY2027 Results (Quarter Ended August 1, 2026)

• Revenue: $479.0 million, up 114.7% year over year and 9.6% sequentially from $437.0 million in Q4 FY2026
• GAAP gross margin: 64.5%; non-GAAP gross margin: 68.0%
• GAAP net income: $129.4 million ($0.67 diluted EPS); non-GAAP net income: $236.3 million ($1.20 diluted EPS)
• Non-GAAP operating income: $230.6 million, up 139.8% year over year, with non-GAAP operating margin expanding 5.1 percentage points to 48.2%
• Cash and short-term investments: $764.3 million at quarter end

What Drove the Results

Adjusted EPS of $1.20 beat the $1.19 consensus estimate by approximately 1.1%, while GAAP EPS of $0.67 compared to $0.34 in the year-ago quarter. Revenue of $479.0 million more than doubled against the prior-year quarter's $223.1 million, reflecting continued demand for the company's connectivity solutions in AI data center deployments.

Non-GAAP operating margin expanded to 48.2% from 43.1% a year earlier, reflecting operating leverage even as the company increased research and development spending to $114.5 million from $52.4 million and selling, general, and administrative expenses to $73.9 million from $37.2 million year over year. The gap between GAAP net income of $129.4 million and non-GAAP net income of $236.3 million was driven primarily by $88.0 million in share-based compensation and $11.6 million in amortization of acquired intangible assets in the quarter.

Goodwill on the balance sheet rose to $986.4 million from $92.8 million at the end of the prior quarter, and intangible assets climbed to $378.8 million from $29.3 million, indicating a significant acquisition closed during the period. The company's press release did not provide further detail on the transaction in the excerpt available.

Wall Street View

Credo's Q2 FY2027 outlook calls for revenue of $525 million to $535 million, implying continued sequential growth of roughly 10% to 12% from Q1. The company guided for GAAP gross margin of 62.9% to 64.9% and non-GAAP gross margin of 67.0% to 69.0% for the quarter ending October 31, 2026, with non-GAAP operating expenses projected at $100 million to $105 million. CEO Bill Brennan stated that non-GAAP net income of $236.3 million represented 140% year-over-year growth, and that the company's portfolio now spans connectivity from "millimeters to kilometers, with solutions across optics and copper."

Investor Takeaway

The Q1 print confirmed accelerating revenue scale and meaningful non-GAAP operating leverage, with the 48.2% non-GAAP operating margin setting a new high-water mark for the company. Forward guidance of $525 million to $535 million for Q2 FY2027 represents the metric investors will weigh most carefully against current valuation levels, as it implies the rate of sequential growth is expected to hold but not dramatically accelerate from the Q1 pace. The sharp rise in goodwill and intangible assets relative to the prior quarter also warrants monitoring as acquisition-related amortization and integration costs are now a recurring feature of the GAAP earnings structure.