Credo Technology Group Holding Ltd. reported third‑quarter fiscal 2026 revenue of $407.0 million, a 51.9% sequential increase and a 201.5% year‑over‑year jump from $135 million in Q3 FY2025. Adjusted earnings per share rose to $1.07, beating the consensus estimate of $0.96 by $0.11. Non‑GAAP gross margin reached 68.6%, up from 64.5% in the prior quarter, while non‑GAAP net income totaled approximately $209 million.
"In the third quarter Credo once again delivered record results with revenue of $407.0 million, an increase of more than 50% sequentially and 200% year over year," said President and CEO Bill Brennan. He added that the company’s active electrical cable and optical product lines continued to drive demand, and that the expansion of ZeroFlap optics, ALCs and OmniConnect is expected to open multi‑billion‑dollar total addressable markets. CFO Daniel Fleming noted, "We delivered non‑GAAP gross margin of 68.6% and generated approximately $209 million of non‑GAAP net income."
Credo guided fourth‑quarter revenue to $425 million–$435 million, comfortably above the Street’s estimate of $411–$422.6 million. The company also reiterated a 120% year‑over‑year growth outlook for fiscal 2026, while analysts expect more than 200% growth for the current fiscal year. Cash and equivalents rose to $1.3 billion, an increase of $487.9 million from the second quarter, driven by proceeds from an ATM offering that ended in December. "We remain well capitalized to continue investing in our growth opportunities while maintaining a substantial cash buffer," Fleming said.
Management highlighted that the projected decline in Q4 gross margin to 64%–66% reflects a shift in product mix toward higher‑volume, lower‑margin items as the company scales. The company also noted that its top three customers accounted for 39%, 32% and 17% of revenue in Q3 FY2026, underscoring ongoing concentration risk. A "fluid" tariff regime was cited as a potential source of uncertainty, while the company emphasized its pricing power and operational leverage in the AI data‑center market.
Credo’s results reinforce its position as a leading connectivity provider for AI data centers, with strong demand for high‑speed, low‑power solutions. The company’s ability to generate significant operating leverage, maintain high gross margins, and sustain a robust cash position positions it well to invest in next‑generation IP and production capacity as it expands its product portfolio.
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