Investing analyses

# CRDO — Q2 FY26 Earnings Review (Atlas)

> Date: 2026-02-23
> Quarter: Q2 FY26 (October 2025) | Full results: Dec 1, 2025
> Q3 FY26 Preliminary: $404-408M pre-announced Feb 9, 2026 (full results March 2, 2026)
> Market cap: ~$23.3B | EV/TTM Rev: ~28x | Revenue growth: +272% YoY

---

## Verdict

Q2 FY26 delivered another step-up in both revenue and profitability — $268M (+272% YoY), record non-GAAP operating margin of 46.3%, and a 5th consecutive guidance beat. The more important signal is the Q3 FY26 pre-announcement: $404-408M vs $335-345M guided — a $63-68M beat that represents QoQ re-acceleration from +20% to +51%. FY26 is now tracking >$1.3B vs an original $800M guide. Five pillars, four hyperscalers at 10%+, zero debt, $813M cash. The only open question is whether Q3 margins held at ~67% gross or compressed as guided (63.8-65.8% GAAP). Answer comes March 2. Conviction 4/5.

---

## Qualification Gate

| Criterion | Threshold | Actual | Pass/Fail |
|-----------|-----------|--------|-----------|
| Revenue YoY growth | >30% (>40% preferred) | +272% | **PASS** |
| Gross margin | >60% (>70% preferred) | 67.5% GAAP | **PASS** |
| Revenue per quarter | >$50M | $268M | **PASS** |
| Data availability | 4+ quarters | 12 quarters | **PASS** |
| Share dilution | <10% annual | +13.6% Q1FY24→Q2FY26 over 9Q (~7% annualized) | **PASS** (marginal — watch) |
| GAAP profitability trajectory | Improving or positive | GAAP op margin: 29.4%; GAAP profitable since Q3 FY25 | **PASS** |

---

## Six-Factor Score

| Factor | Rating | Detail |
|--------|--------|--------|
| Growth | Strong | +272% YoY; Q3 prelim +201% on a much larger base; QoQ re-accelerated to +51% |
| Trajectory | Flat/Complex | YoY decelerating by arithmetic (272% → 201%) but QoQ re-accelerated sharply (20% → 51%); FY26 guide raised 60%+ from initial |
| Margins | High/Expanding | GAAP GM 67.5% (+4.3pp YoY); NG op margin 46.3% (+34.8pp YoY); both all-time highs |
| Dominance | Dominant | 73-88% AEC market share; de

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# CRDO — Customer Revenue Reconstruction
**Date:** 2026-03-03 | **Analyst:** wsm007 | **Type:** Supplementary Analysis

---

## Customer Identity Map

| Customer | Evidence | Confidence |
|---|---|---|
| **Amazon (AWS)** | Named in SEC warrant filing ($201M cumulative threshold), CFO named on Q3 FY25 call, AWS CEO LinkedIn purple cable photo | **Confirmed** |
| **Microsoft** | Barclays analyst named (CEO unchallenged), HiWire SWITCH press release quotes MSFT exec, Needham analyst confirmed, SemiAnalysis 2023 report | **Confirmed** |
| **xAI** | CEO named at Barclays conference (Sept 2025), Colossus 2 purple cable photos from Musk, Needham analyst confirmed | **Confirmed** |
| **Meta** | CEO confirmed at Goldman conference ("purple cables... all NVIDIA gear"), OCP Summit rack display | **Confirmed** |
| **Oracle** | CEO named at Barclays (ZF Optics customer, links too long for AEC), co-chair OCP Optics Reliability Workstream | **Confirmed (ZF Optics, not AEC)** |
| **Google** | No direct evidence found | **Speculative** (likely 5th hyperscaler) |

**Key sources:**
- SEC: Amazon warrant in 10-K (crdo-20250503)
- Transcripts: Q3 FY25 (CFO named Amazon), Q2 FY26 (CFO: "#2 at 24% = first hyperscaler to ramp")
- Conferences: Barclays Sept 2025 (Microsoft named by analyst, xAI named by CEO), Goldman Sept 2025 (Meta confirmed)
- Analysts: Needham (Quinn Bolton) confirmed Amazon, Microsoft, xAI
- Media: CNBC "500 purple cables" (Oct 2025), Benzinga analyst roundup (Mar 2025)

---

## Cross-Quarter Linkages (from Q3 FY26 transcript)

- Q3 Top 1 (39%) = "same customer as Q1's largest" + "quite a large increase Q2→Q3" → **xAI**
- Q3 Top 2 (32%) = "was largest customer in Q2" → **Amazon**
- Q3 Top 3 (17%) = "first hyperscaler to ramp" → **Microsoft**
- Q2 Top 2 (24%) = "first hyperscaler to ramp" (from Q2 transcript) → **Microsoft**

---

## Per-Customer Revenue Reconstruction ($M)

### Revenue by Customer

| Customer | Q3 FY25 (Jan-25) | Q4 FY25 (Apr-25) | Q1 FY26 (Jul-25) | Q2

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---
ticker: CRDO
task: earnings-review
period: Q3_FY26 (Full Results)
date: 2026-03-02
analyst: Phil Fisher
prior: CRDO_earnings-review_Q3_FY26.md (preliminary, 2026-02-22)
---

# Credo Technology (CRDO) — Q3 FY26 Full Earnings Review
**Philip A. Fisher | March 2, 2026**

---

## Preface

Three weeks ago, I wrote my preliminary assessment of Credo's Q3 FY26 based on the revenue pre-announcement alone. I stated plainly that the one unresolved question — the 22-point gap between GAAP and non-GAAP gross margins — must await today's full results. Today is March 2, and the results are in. I can now speak with the confidence that complete data affords.

The answer is unambiguous. The concern I flagged was not merely resolved — it was demolished.

---

## The Margin Question Answered

This was the central tension from my February analysis. Management had guided Q3 non-GAAP gross margin at 64–66%, a meaningful step-down from Q2's 67.7%. I noted a separate and more troubling figure — a ~45% non-GAAP gross margin reference for full-year FY26 that created a 22-point gap versus GAAP. I flagged this as the one dimension I could not score until today.

The Q3 actual results:

| Metric | Q2 FY26 | Q3 FY26 Guide | Q3 FY26 Actual |
|--------|---------|---------------|----------------|
| GAAP Gross Margin | 67.5% | 63.8–65.8% | **68.5%** |
| Non-GAAP Gross Margin | 67.7% | 64.0–66.0% | **68.6%** |

Management guided gross margins down by 200–380 basis points. Instead, margins expanded by 100 basis points — to 68.5% GAAP and 68.6% non-GAAP. This is the second consecutive quarter in which Credo guided margins conservatively and then exceeded the high end.

The ~45% figure I questioned was, as other analysts in this corpus suspected, almost certainly a mislabeled reference to non-GAAP operating margin or net margin targets, not gross margin. With Q3 non-GAAP operating margin at 49.6% and non-GAAP net margin at 51.3%, even those metrics have now substantially exceeded the ~45% figure. Th

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---
# CRDO — Q3 FY26 Earnings Review (Preliminary)
**Date:** 2026-02-22 | **GauchoRico** | *First look — no prior GR corpus on CRDO*

---

## Headline

Holy smokes!! Credo Technology just delivered the largest beat in its public company history — $406M preliminary vs. a $340M guide midpoint, a 19% upside that adds ~$63-68M in a single quarter. FY26 implied revenue crossed $1.3B and the company raised full-year guidance to >200% growth. This is not a normal quarter for a semiconductor business.

That said, this is a preliminary release. The full earnings call is March 2, 2026. There is one open question so alarming that it could change the thesis: a non-GAAP gross margin guide of ~45% against a GAAP GM of 67.5%. Until that contradiction is resolved, I am treating this as a conditional buy.

---

## Atlas Baseline Read

Atlas scored CRDO at conviction 4/5 with a six-factor rating that I largely agree with. Atlas correctly identified the GM discrepancy as "the critical question for March 2." It weighted the 5-consecutive-beat pattern over the literal Q4 sequential guide (mid-single digits), which I think is right — management has been systematically under-promising by 15-20%+ for five straight quarters. The bear case Atlas flagged — customer concentration and AI capex cycle dependency — are real, but concentration is improving (2 → 4 customers >10%). I agree with the 4/5 conviction. My own read adds more weight to the gross margin question and the LEAPS opportunity if the March 2 call clears it up.

---

## 12-Quarter Revenue Table

| | Q4_FY23 | Q1_FY24 | Q2_FY24 | Q3_FY24 | Q4_FY24 | Q1_FY25 |
| | Apr-23 | Jul-23 | Oct-23 | Jan-24 | Apr-24 | Jul-24 |
|---|---|---|---|---|---|---|
| Revenue ($m) | 32.1 | 35.1 | 44.0 | 46.6* | 60.8* | 59.7 |
| QoQ % | -40.9% | +9.4% | +25.4% | +5.7% | +30.5% | -1.8% |
| YoY % | -14.4% | -24.5% | -14.4% | — | +30.5% | +70.1% |
| GAAP GM % | — | — | — | — | — | — |
| GAAP Op Margin % | — | — | — | — | — | — |

| | Q2_FY25 | Q3_FY25 | Q4_

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# CRDO — Earnings Review: Q3 FY26 (Full Results)
**Date:** 2026-03-03 | **Analyst:** Bear (PaulWBryant) | **Quarter:** Q3 FY26 (Jan 2026)
**Position:** None (evaluating)

---

## Prior Beliefs / Updated Beliefs

I wrote five open questions on February 22nd when the prelim dropped. Let me be honest about how each resolved.

**Prior Belief #1: Q3 GAAP gross margin — did 67.5% hold at $406M revenue?**
→ Updated: 68.5% GAAP. Not only held — expanded. Beat the high end of guidance by 270bps. I could not have been more wrong to worry about this. Fleming guided 63.8-65.8% and delivered 68.5%. Third consecutive quarter of systematic margin guidance undershoot. The "45% non-GAAP" confusion from the prelim was indeed a misattribution to operating margin. Resolved cleanly.

**Prior Belief #2: Clarify 45% non-GAAP guidance — operating margin, not gross margin?**
→ Updated: Confirmed. Non-GAAP operating margin: 49.6%. Non-GAAP gross margin: 68.6%. GAAP/NG spread on GM is 10bps — trivially small. The large spread is at the operating line (36.8% GAAP vs 49.6% NG), driven by $52.2M SBC (12.8% of revenue, down from 16.9% Q2). No mystery.

**Prior Belief #3: Formal Q4 guidance vs "mid-single-digit sequential" language**
→ Updated: $425-435M. Midpoint $430M = +6.1% QoQ. GM guided 64-66%. Based on the three-quarter pattern (250-270bps beats on GM), I'd expect actual Q4 revenue of $460-490M and GM of 67%+. But that's speculation, not conviction.

**Prior Belief #4: Did 5th hyperscaler cross 10%?**
→ Updated: No. 10%+ customers dropped from 4 to 3. Fourth hyperscaler's results were "in line with expectations from 90 days ago" but the largest customer's upside changed the denominator. Top-3 combined: 88% (up from 82% Q2). This gives me pause.

**Prior Belief #5: Cash buildup explanation**
→ Updated: ATM equity program. Cash: $813.6M → $1,301.5M (+$487.9M). FCF was $139.7M, leaving ~$348M from ATM. Raising equity while stock is strong, building a fortress. $1.3B cash, zero debt. Sensible c

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# CRDO — Earnings Review, Q3 FY26
**Date:** 2026-02-22 | **Analyst:** Saul Rosenthal
**Quarter:** Q3 FY26 (ended January 31, 2026) — PRELIMINARY RESULTS
**Official results + transcript:** March 2, 2026

---

## Verdict

CRDO just delivered the biggest beat in its history — $406 million versus guidance of $335–345 million. That is a $63–68 million upside, roughly 19% above the midpoint. And the company raised its full-year FY26 growth outlook from 170% to more than 200%.

You know what that means? It means demand picked up SHARPLY late in the quarter. And management said exactly that. This is the opposite of deceleration. This is re-acceleration.

**Thesis: Strengthening. I am not adding pre-March 2 — but if the margins hold up on the official results, I would be a buyer.**

---

## Revenue Trajectory — The Only Thing That Matters First

| | Q3_FY25 | Q4_FY25 | Q1_FY26 | Q2_FY26 | Q3_FY26* |
| | Jan-25 | Apr-25 | Jul-25 | Oct-25 | Jan-26 |
|---|---|---|---|---|---|
| Revenue ($m) | 135.0 | 170.0 | 223.1 | 268.0 | 406.0 |
| YoY % | +154% | +180% | +274% | +272% | +201% |
| QoQ % | +36% | +26% | +31% | +20% | +51% |

*Preliminary, unaudited. Official results March 2.

Look at that QoQ column. After decelerating from +36% to +26% to +31% to +20%, we get FIFTY-ONE PERCENT sequential growth. That is such a preposterous result! The revenue went from $268 million to $406 million in a single quarter. That's $138 million of new revenue added in 90 days.

Yes, YoY decelerated from 272% to 201%. But that is a math problem — we are lapping the massive ramp that started in Q3 FY25. The QoQ re-acceleration tells the real story. Demand is not slowing. Demand is accelerating.

---

## Multi-Quarter Financial Table (Latest Complete Data = Q2 FY26)

| | Q1_FY25 | Q2_FY25 | Q3_FY25 | Q4_FY25 | Q1_FY26 | Q2_FY26 |
| | Jul-24 | Oct-24 | Jan-25 | Apr-25 | Jul-25 | Oct-25 |
|---|---|---|---|---|---|---|
| Revenue ($m) | 59.7 | 72.0 | 135.0 | 170.0 | 223.1 | 268.0 |
| YoY % | +70% | +64% | 

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# CRDO — Earnings Review: Q3 FY26 (Full Results)
**Date:** 2026-03-03 | **Analyst:** StockNovice (Joe) | **Quarter:** Q3 FY26 (Jan 2026)

---

## The Headline

Credo started March with what I consider an absolute monster of a quarter. And I don't throw that word around lightly.

$407M revenue. +201% YoY. +52% QoQ. Beat their own guide by $67M — that's not a rounding error, that's a whole extra quarter for the company they were two years ago. Fifth consecutive beat-and-raise. Every margin metric at record levels. FCF inflecting to $140M from $39M last quarter.

Here's the thing — I had four red flags pinned to my board going into this report. Every single one resolved in Credo's favor. That... doesn't happen very often.

---

## Pre-Earnings Homework: What I Was Watching

When the prelim dropped on February 9th, I flagged these open items:

**1. The gross margin mystery.** There was this weird 45% "gross margin" guidance floating around that didn't reconcile with the 67.5% GAAP GM they'd been printing. Was the company actually guiding for a 22-point margin collapse?

**Verdict:** Nope. It was a mislabeled operating margin figure, just like I suspected. Actual Q3 GAAP GM: 68.5%. Non-GAAP GM: 68.6%. Beat the guided range of 63.8-65.8% by 270 basis points on the high end. This wasn't close. The margin concern is dead.

**2. Customer concentration direction.** Top-3 customers at 82% in Q2, with the 4th hyperscaler just crossing 10%. Were they diversifying?

**Verdict:** Mixed. Top-1 dropped from 42% to 39% — that's the right direction. But Top-2 surged from 24% to 32%, and Top-3 held at 17%. Combined top-3: 88%. That's *worse* than Q2's 82%. The 4th hyperscaler actually fell back below 10%. I'll talk more about this below because it's the one wart on an otherwise flawless report.

**3. Q4 formal guidance.** Would they just say "mid-single-digit sequential" or give real numbers?

**Verdict:** Real numbers: $425-435M. GM 64-66%. Based on the beat pattern, I'd pencil in som

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# CRDO — Credo Technology | Q3 FY26 Earnings Review (Preliminary)
*muji (CMF_muji) | 2026-02-22 | HHHYPERGROWTH*

**Note: This is based on the Q3 FY26 PRELIMINARY release only. Full results + transcript: March 2, 2026 after market.**

long CRDO ~10%

---

## Links
- Q3 FY26 Preliminary Press Release: [Credo Technology IR](https://investors.credosemi.com)
- Full results + call: March 2, 2026, 2:00 PM PT
- Prior analysis: First muji writeup on CRDO

---

## The Headline Number

$404-408M (prelim) vs $335-345M guide.

Let me put that in context. Management guided $340M midpoint. They printed $406M midpoint. That's a **+$66M beat, ~19% above the top of the range**. On a run rate basis that's a company guide of ~$1.36B annualized that printed at ~$1.62B.

Revenue trajectory:
| | Q3_FY25 | Q4_FY25 | Q1_FY26 | Q2_FY26 | Q3_FY26 (prelim) |
| | Jan-25 | Apr-25 | Jul-25 | Oct-25 | Jan-26 |
|---|---|---|---|---|---|
| Revenue ($m) | 135 | 170 | 223 | 268 | 406 |
| YoY % | — | +180% | +274% | +272% | +201% ^^ |
| QoQ % | — | +26% | +31% | +20% | +51% !! |
| Beat vs guide | +$10M | +$15M | +$28M | +$28M | +$66M !!! |
| GM [GAAP] | 64.1% | 67.4% | 67.4% | 67.5% | TBD (Mar 2) |
| Op margin [GAAP] | (10.5%) | 36.8% | 27.2% | 29.4% | TBD (Mar 2) |

That beat streak: +10 → +15 → +28 → +28 → +66 !!!

Five consecutive quarters of sandbagging, each wider than the last. But +$66M is not sandbagging. That's a **fundamental revision to demand visibility**. Something changed materially in Q3.

FY26 guide raised to >200% YoY. That implies ~$1.3B+ for the year. With Q3 prelim at $406M and three quarters done at $135+$170+$223+$268 = $796M... wait, that's only the first three. Let me recalculate: Q1+Q2+Q3 = $223+$268+$406 = $897M. FY26 ends April 2026. So Q4 needs to bring it to whatever >200% implies off FY25 base.

FY25 revenue was approximately $223+$170 (Q4)+earlier quarters. From the data: FY25 TTM was roughly $435-440M. >200% of that = >$1.31B. With $897M in first three quarters, Q4 need

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# CRDO — Q3 FY26 Earnings Review (Bert Hochfeld)

> Date: 2026-04-28
> Quarter: Q3 FY26 (ended Jan 31, 2026; reported March 2, 2026)
> Stock: $94.21 (last close used in 3/31 analysis) | Market cap: $17.6B | EV: ~$16.3B
> FY ends: April

## Summary

I initiated coverage of Credo on March 31 with a Buy at 3-4% target weight. Returning now to the Q3 FY26 print in proper earnings-review format, the conclusions only firm up. Revenue of $407M came in at +201.5% YoY and +51.9% sequentially, beating the guide midpoint by $67M, or 19.7% — the largest beat-and-raise in company history and the fifth consecutive quarter of widening beat magnitude. Non-GAAP gross margin of 68.6% was 260bp above the high end of guidance, non-GAAP operating margin of 49.6% set a record, and free cash flow of $139.7M (34.3% of revenue) marked the cash-flow inflection point I had been waiting for. The Rule of 40 score is 235. Q4 FY26 revenue is guided to $425-$435M with non-GAAP gross margin of 64.0-66.0% — a guidance pattern that, on my read of the prior five quarters, is deliberately undemanding. FY27 commentary points to "nearly $2B" of revenue, more than 50% YoY. None of this is reflected in a stock that remains 56% off its $213.80 peak. **Recommendation: Buy. 3-4% initial weight, add to 5-6% on Q4 margin confirmation.** Thesis status moves from Intact (New Coverage) to **Strengthening**.

## Headline KPIs (Q3 FY26)

- **Revenue:** $407.0M | YoY +201.5% | QoQ +51.9% | Beat guide by +$67M (+19.7%)
- **Non-GAAP GM:** 68.6% (guide: 64.0-66.0%) | GAAP GM: 68.5%
- **Non-GAAP Op Margin:** 49.6% (record, +327bp QoQ) | GAAP Op Margin: 36.8%
- **Non-GAAP Net Margin:** 51.3% | Non-GAAP EPS: $1.07 vs consensus $0.94
- **OCF:** $166.2M | **FCF:** $139.7M (34.3% margin) | **Cash + ST inv:** $1,301.5M | **Debt:** $0
- **AEC ≈ 80% of revenue** | AEC product GM ≈ 72% | IC solutions GM ≈ 62%
- **Customers >10%:** 3 (39%, 32%, 17% — top-3 = 88%)
- **RPO:** $33.9M (Q2 disclosure; Q3 not separately quantified)
- **

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