Credo Technology Crushes Q1 Targets, Guides Higher; Stock Jumps Late

Credo Technology (CRDO) reported Q1 earnings of 52 cents per share, surpassing the 36 cents expected by analysts. Revenue reached $223.1 million, exceeding the $190.6 million predicted. The company guided higher for Q2 revenue of $230-240 million, beating the $201.9 million expected. Credo stock jumped 5.8% in after-hours trading.

Credo Technology Group Holding Ltd (CRDO) has reported its Q1 fiscal 2026 earnings, exceeding analyst expectations. The company reported earnings per share (EPS) of 52 cents, surpassing the 36 cents expected by analysts [1]. Revenue reached $223.1 million, exceeding the $190.6 million predicted by FactSet [2]. The company also guided higher for Q2 revenue of $230-240 million, beating the $201.9 million expected [3].

The strong Q1 results were driven by robust demand for the company's active electrical cables (AECs), optical DSPs, and PCIe retimers, which are key components in AI infrastructure. Credo's AEC portfolio has seen increased demand due to its reliability advantages over laser-based optical solutions [1]. Additionally, the company's optical DSP business has seen expansion in customer diversity across various lane rates, port speeds, and applications, contributing to revenue growth [1].

Despite the positive results, Credo faces several challenges. The company has seen increasing market competition and macroeconomic uncertainties, which could impact its revenue growth [1]. Additionally, Credo's operating expenses have been rising, with non-GAAP operating expenses expected to be between $54 million and $56 million in the to-be-reported quarter, up from $52 million in the previous quarter [1].

Investors should also consider the potential risks associated with Credo's valuation. The company's forward 12-month Price/Sales ratio of 26.02 is higher than the Electronic-Semiconductors sector's multiple of 8.83, suggesting a stretched valuation [1]. However, existing investors can hold the stock as its long-term growth prospects remain intact.

References:
[1] https://finance.yahoo.com/news/credo-technology-report-q1-earnings-133300636.html
[2] https://www.marketscreener.com/news/earnings-flash-crdo-credo-technology-group-holding-ltd-reports-q1-revenue-223-1m-vs-factset-est-ce7d59dbdd89ff2c
[3] https://www.tradingview.com/news/reuters.com,2025-09-03:newsml_PLX592918:0-brief-credo-technology-q1-revenue-usd-223-1-million-vs-ibes-estimate-usd-190-8-million/