Earnings Recap — Q1 FY2027
CY Q3 2026 · Reported September 1, 2026 · Beat 7 of last 7 quarters
Credo Technology Group Holding Ltd reported Q1 FY2027 revenue of $479.0M, a beat of 1.2% against consensus, and EPS of $1.20, a beat of 2.6%.
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Credo's results confirm that AI connectivity is scaling as fast as compute. The company's 115% YoY growth reflects deepening hyperscaler adoption of its AEC platform across 5 customers, while the optical business is emerging as a second major growth engine. The zero-flap optics approach, which uses continuous telemetry to predict and prevent link failures before they affect cluster utilization, addresses a pain point that grows more acute as cluster sizes expand into hundreds of thousands of GPUs. The NPO/CPX initiative and silicon photonics acquisitions position Credo as a connectivity platform company rather than a component supplier, with relevance across scale-out and scale-up architectures through the 1.6T and 3.2T transitions.
Credo delivered another record quarter with revenue of $479 million, up 115% YoY and 10% sequentially, marking the seventh consecutive quarter of triple-digit year-over-year growth. AECs remained the largest business with record revenue, now deployed across 5 hyperscalers with expanding Neo Cloud engagement. Optical DSPs also delivered record revenue across 50-gig and 100-gig-per-lane solutions, with 1.6T DSP revenue on track for later this fiscal year. The company recognized its first silicon photonics PIC revenue following the Dust Photonics acquisition, securing 2 major design wins for fiscal 2028 ramps. Retimers also hit record revenue driven by Screaming Eagle (100G/lane) and Blue Heron (200G/lane) deployments.
Management reiterated full-year FY2027 guidance for more than 85% YoY total revenue growth, with optical revenue exceeding $600 million driven by zero-flap optics, silicon photonics PICs, and optical DSPs each contributing over $100 million. Non-GAAP gross margin is expected to be broadly consistent with FY2026 levels, and non-GAAP net margin is expected to remain around 50%. Operating expenses are guided to increase approximately 55% YoY, well below the revenue growth rate, reflecting continued heavy R&D investment. Management described FY2027 as a stepping stone and expressed confidence in outsized growth continuing through fiscal 2028, 2029, and 2030 as ALC, OmniConnect, and NPO solutions begin contributing revenue.
“AECs continue to grow, Optics is growing faster. And based on the customer engagements and ramps underway across the portfolio, we remain confident in the outsized growth we expect to deliver in fiscal 27.”
on Growth trajectory
“We are now the pacesetter on innovation in the optical space.”
on Competitive positioning
Can you unpack your position in optical and how the $600M+ target breaks down between DSPs, PICs, and ZFO for fiscal 2027 and beyond?
Bill Brennan said the Dust team brought strong momentum and the company now has design wins with 2 major players for fiscal 2028 ramps. He described fiscal 2027 as a stepping stone and highlighted the pluggable transceiver market growing from 60 million units in 2026 to 175 million units by 2030. Credo plans to pursue both component and system-level solutions for the scale-up market via the OpenCPX consortium.
How is Credo positioned for the inference opportunity versus training?
Brennan highlighted OmniConnect solutions addressing memory fan-out limitations in inference architectures. The SerDes IP enables 10-inch reach between XPU and memory, and the Weaver gearbox provides an LPDDR5 interface (with LPDDR6 to follow) that can scale memory capacity to 2 terabytes. Revenue from OmniConnect is expected in fiscal 2028, with content potentially reaching thousands of dollars per GPU.
Can you clarify the AEC versus optics mix in the second half given the 85% full-year growth and $600M optical target?
Brennan said AECs will continue to grow but at a slower pace than optics, which is ramping from a smaller base. AECs more than doubled in FY2024 to FY2025 and tripled from FY2025 to FY2026. He expects a balanced portfolio between copper and optical solutions long term.