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Credo Technology Group is posting the kind of growth numbers that make even seasoned semiconductor analysts do a double take. The company reported Q1 FY2027 revenue of approximately $470 million, representing a 111% increase from the $223 million it pulled in during the same quarter last year.
Non-GAAP earnings per share came in around $1.17, more than doubling the $0.52 figure from Q1 FY2026. Both numbers landed at or above Wall Street consensus estimates, continuing a pattern of quarterly beats that has become something of a habit for the company.
The optical growth engine
The real headline buried in the numbers is Credo’s full-year FY2027 guidance for optical revenue: north of $600 million. That figure alone would have constituted the majority of the company’s entire revenue just two fiscal years ago.
Three product categories within the optical segment are each expected to generate more than $100 million in revenue for FY2027. Those are ZeroFlap optics, silicon photonics PICs (photonic integrated circuits), and optical DSPs (digital signal processors).
Management has indicated that the optical ramp will accelerate in the second half of FY2027, with optical products expected to contribute roughly half of the absolute dollar growth for the year. The other half comes from Credo’s copper-based Active Electrical Cable (AEC) products, which continue to show strength as data center operators build out AI training clusters.
Credo guided Q1 revenue in a range of $465 million to $475 million, almost perfectly in line with consensus estimates of $470 million to $471 million. Non-GAAP gross margins were projected between 67% and 69%, while non-GAAP operating expenses were guided at $86 million to $90 million.
A banner prior year sets a high bar
To understand where Credo sits today, it helps to look at FY2026, the fiscal year that just ended. The company posted record revenue exceeding $1.3 billion, a staggering 206% year-over-year increase. Non-GAAP net income hit $662 million.
The growth trajectory for FY2027 projects total revenue increasing more than 80% year-over-year. That’s a slight deceleration from the triple-digit growth of FY2026, but sustaining 80%-plus growth on a much larger revenue base is arguably more impressive than tripling revenue from a smaller starting point.
Credo’s AEC products replace traditional copper cables with active electronics that can push signals over longer distances at higher speeds. Its optical products address connections that copper cannot handle, particularly as data rates push toward 800 Gbps and beyond.
What investors should watch
The earnings call is scheduled for after market close on September 1, 2026. Prior quarters have shown a consistent pattern of beating both revenue and EPS estimates, which means the market has increasingly priced in outperformance. Meeting guidance may not be enough to move the stock if investors have already baked in a beat.
One risk factor worth flagging is customer concentration. Credo’s revenue is heavily weighted toward a small number of hyperscale cloud customers. The company’s ability to diversify its customer base across additional cloud providers and enterprise buyers will be a key metric to track over the next several quarters.
The gross margin guidance of 67% to 69% also deserves attention. As optical revenue scales and becomes a larger portion of the mix, whether Credo can maintain or expand margins as the product mix evolves will say a lot about the company’s competitive moat.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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