Credo Technology 2025 Q4 Earnings Strong Performance as Net Income Surges 449.2%

Credo Technology (CRDO) reported its fiscal 2025 Q4 earnings on July 2nd, 2025. The company recorded a significant increase in total revenue, climbing by 179.7% to $170.03 million, compared to the previous fiscal year's Q4 earnings. Credo not only exceeded market expectations with its impressive revenue growth but also adjusted its future guidance, anticipating continued robust growth. It projects fiscal 2026 revenue to exceed $800 million, reflecting over 85% year-over-year growth. The forecasted revenue for the first quarter of fiscal 2026 stands between $185 million and $195 million, indicating a positive outlook for the upcoming fiscal year.

Revenue

The total revenue of Credo Technology rose significantly by 179.7% to $170.03 million in 2025 Q4, up from $60.78 million in 2024 Q4.

Earnings/Net Income

Credo Technology returned to profitability with an EPS of $0.21 in 2025 Q4, reversing from a loss of $0.06 per share in 2024 Q4, marking a 435.1% positive change. Net income achieved a remarkable turnaround, reaching $36.59 million in 2025 Q4, a 449.2% positive swing from the net loss of $-10.48 million in 2024 Q4. This performance indicates a robust recovery in profitability.

Price Action

The stock price of Credo Technology climbed 3.65% during the latest trading day, dropped 3.07% during the most recent full trading week, and surged 46.60% month-to-date.

Post-Earnings Price Action Review

The investment strategy of purchasing CRDO shares when revenues miss and holding them for 30 days has proven effective, delivering a compound annual growth rate (CAGR) of 102.14% and an impressive excess return of 962.42%. Despite the strategy experiencing a maximum drawdown of -58.81%, it maintains a Sharpe ratio of 1.33, indicating favorable risk-adjusted returns. This approach demonstrates resilience and potential profitability for investors willing to navigate market fluctuations, capitalizing on the company's ability to rebound after initial revenue misses. The strategic timing of investments and subsequent holding periods have resulted in strong returns, underscoring the potential of well-timed market entries even in the face of temporary setbacks.

CEO Commentary

Bill Brennan, President and Chief Executive Officer of Credo Technology Group, emphasized the company's record-breaking financial performance driven by surging demand for high-performance connectivity solutions. He noted that the company achieved significant revenue growth due to its diversification into hyperscaler customers, particularly in the context of powering advanced AI services. Brennan acknowledged challenges such as tariffs and increased inventory levels but maintained an optimistic outlook, highlighting the company's strategic focus on innovative solutions and the expectation of continued growth across product lines and customer bases.

Guidance

For the first quarter of fiscal 2026, Credo expects revenue between $185 million and $195 million, with an adjusted gross margin projected to be between 64% and 66%. The company anticipates fiscal 2026 revenue to exceed $800 million, reflecting over 85% year-over-year growth driven by expansion into new hyperscaler customers and contributions from optical and advanced connectivity solutions.

Additional News

In recent company developments, Credo Technology has been focusing on expanding its market presence through strategic partnerships and product innovations. A significant highlight is the company's recent collaboration with a major hyperscaler to enhance its AI data center capabilities, positioning itself as a leader in high-speed connectivity solutions. Additionally, Credo has been actively investing in research and development, launching new products that cater to the growing demand for energy-efficient and reliable connectivity in data-intensive environments. These strategic moves are expected to bolster Credo's competitive edge and drive sustained growth in the rapidly evolving tech landscape.