Credo Technology 2026 Q2 Earnings Record Net Income Surges 2055.9%

Credo Technology (CRDO) delivered a historic earnings beat in Q2 2026, reporting $268.03 million in revenue and $82.64 million in net income. The results far exceeded estimates and guidance, with management projecting $335–345 million in Q3 revenue.

Revenue

Credo’s Q2 revenue surged 272.1% year-over-year to $268.03 million, driven by robust demand across global markets. Hong Kong led with $117.89 million, followed by the United States at $103.70 million. Mainland China contributed $23.63 million, while the Rest of World segment added $22.80 million, reflecting the company’s diversified geographic footprint.

Earnings/Net Income

Credo returned to profitability with EPS of $0.47, reversing a $0.03 loss in the prior year. Net income skyrocketed 2055.9% to $82.64 million, marking a record high for Q2 and underscoring the company’s operational efficiency. This dramatic turnaround highlights the effectiveness of cost management and strategic market expansion.

Price Action

CRDO shares experienced mixed short-term volatility, declining 3.68% in the latest trading day but gaining 24.92% for the week and 13.10% month-to-date. The post-earnings rally reflects investor optimism despite daily fluctuations.

Post-Earnings Price Action Review

A strategy of buying CRDO when revenues miss and holding for 30 days yielded exceptional returns: 1784.99% total strategy return, 1727.05% excess return, and a CAGR of 115.47%. The strategy’s maximum drawdown of 0.00% and Sharpe ratio of 1.49 underscore its robust risk-adjusted performance.

CEO Commentary

CEO William Brennan emphasized Credo’s leadership in AI-driven connectivity, citing 20% sequential growth in AECs and ICs. The company is expanding into Zero Flap optics, ALCs, and OmniConnect gearboxes, targeting a $10 billion TAM. Brennan highlighted operational excellence and innovation as key drivers for sustained growth.

Guidance

Credo projected Q3 2026 revenue of $335–345 million (27% sequential growth at midpoint), a non-GAAP gross margin of 64–66%, and operating expenses of $68–72 million. Long-term, the company anticipates ALCs and OmniConnect will drive multibillion-dollar TAMs, with initial revenue from Zero Flap optics expected in 2027.

Additional News

Credo’s recent licensing agreement with The Siemon Company for active electrical cable patents opened a high-margin revenue stream, validating its IP value. The CEO outlined expansion into three new markets—Zero Flap optics, ALCs, and OmniConnect—positioning the company to capitalize on a $10 billion TAM. Additionally, CRDO shares surged 13% post-earnings, driven by record revenue and guidance that exceeded Wall Street’s expectations.

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