Credo Technology 2026 Q2 Earnings Record Net Income Surges 2055.9%

Credo Technology (CRDO) delivered a historic performance in Q2 2026, crushing revenue and earnings estimates while raising full-year guidance. The company reported $268.03 million in revenue—a 272.1% year-over-year surge—and a net income of $82.64 million, reversing a prior-year loss. Analysts and investors are now pricing in sustained growth, with Q3 revenue guidance of $335–345 million and a projected 170% YoY fiscal 2026 revenue increase.

Revenue

Credo’s Q2 revenue surged to $268.03 million, driven by robust demand for AI infrastructure and cloud connectivity solutions. Product engineering services accounted for the lion’s share at $261.29 million, while IP licensing added $6.73 million. Geographically, Mainland China contributed $23.63 million, and the rest of the world generated $22.80 million. This performance reflects the company’s expanding market share in high-speed connectivity and its ability to scale across diverse regions.

Earnings/Net Income

Credo returned to profitability with a net income of $82.64 million in Q2 2026, a staggering 2055.9% increase from a $4.22 million loss in the prior-year period. Earnings per share (EPS) surged to $0.47, reversing a $0.03 loss and marking a 1666.7% positive swing. This turnaround underscores the company’s strong operational leverage and margin expansion. Credo’s EPS and net income represent a remarkable transformation, validating its strategic focus on high-margin AI connectivity solutions.

Price Action

Credo’s stock price exhibited mixed short-term volatility, dropping 3.68% on the latest trading day but surging 24.92% for the week and 13.10% month-to-date. The post-earnings rally aligns with the company’s guidance and broader market enthusiasm for AI infrastructure plays.

Post-Earnings Price Action Review

The strategy of buying CRDO when revenues miss and holding for 30 days delivered impressive results, with a 743.21% strategy return, 672.14% excess return, and a CAGR of 104.89%. The strategy had a maximum drawdown of 0.00% and a Sharpe ratio of 1.31, indicating a strong risk-adjusted return and minimal downside risk.

CEO Commentary

William Brennan, President and CEO, highlighted Credo’s Q2 record revenue of $268 million, driven by AEC growth and AI cluster demand. He emphasized strategic expansion into Zero Flap optics, ALCs, and OmniConnect gearboxes, aiming to scale the total addressable market to $10 billion. The leadership team remains confident in its ability to innovate and address multibillion-dollar AI infrastructure opportunities.

Guidance

CFO Daniel Fleming guided Q3 revenue to $335–345 million (27% sequential growth at midpoint), with non-GAAP gross margin of 64–66% and operating expenses of $68–72 million. For fiscal 2026, the company expects mid-single-digit sequential revenue growth, >170% YoY growth, and 45% non-GAAP net margin. Long-term growth will be driven by AEC and IC businesses, with new product lines contributing from 2027–2028.

Additional News

Credo’s recent patent licensing agreement with The Siemon Company for active electrical cable technology marks a strategic pivot toward IP monetization, creating a high-margin revenue stream. The deal validates Credo’s intellectual property and diversifies its income beyond hardware sales. Additionally, the company added a new hyperscale customer contributing at least 10% of revenue, expanding its customer base beyond the top four clients, who now account for over 90% of sales. Roth/MKM raised its price target to $250 from $170, citing improved growth visibility and product diversification. These developments underscore Credo’s ability to capitalize on AI-driven demand while mitigating customer concentration risks.