Credo Technology Exceeds Q1 Earnings and Revenue Expectations, Announces Robust Q2 Outlook

Credo Technology reported Q1 Non-GAAP EPS of $0.52, beating estimates by $0.16. Revenue reached $223.07M, a 273.6% YoY increase and $32.44M above consensus. The company expects Q2 revenue to be between $230M and $240M, above the consensus estimate of $198.62M.

Credo Technology Group Holding Ltd. (CRDO) reported its first-quarter 2025 results, showing a significant increase in revenue and earnings per share (EPS). The company reported a Non-GAAP EPS of $0.52, which beat analysts' estimates by $0.16. Revenue reached $223.07 million, a 273.6% year-over-year (YoY) increase and $32.44 million above consensus estimates [1].

The company's guidance for the second quarter (Q2) 2025 revenue was between $230 million and $240 million, which is above the consensus estimate of $198.62 million [2]. Credo Technology expects continued strong performance, driven by its diverse portfolio of products, including active electrical cables (AECs), optical DSPs, and retimers. The company's expansion into rack-to-rack use cases has also contributed to the growth in revenue.

Despite the positive results, investors should consider several risks. Operating expenses surged 19% sequentially in the fiscal fourth quarter, primarily due to higher headcount, and are expected to be between $54 million and $56 million in the current quarter [2]. Additionally, the company faces intense competition from semiconductor giants like Broadcom Inc. (AVGO) and Marvell Technology, Inc. (MRVL), and overreliance on a few clients for revenue growth presents a significant headwind [2].

CRDO shares have surged 116.2% in the past three months, significantly outperforming its peers and the broader market [2]. However, the company's valuation is considered stretched, with a forward 12-month Price/Sales ratio of 26.02, higher than the sector's multiple of 8.83 [2].

References:
[1] https://www.marketscreener.com/news/earnings-flash-crdo-credo-technology-group-holding-ltd-reports-q1-revenue-223-1m-vs-factset-est-ce7d59dbdd89ff2c
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3UO0VS:0-credo-technology-group-holding-ltd-expected-to-post-earnings-of-36-cents-a-share-earnings-preview/