Credo Technology Group Holding Ltd (CRDO) — Fundamental Analysis
Snapshot & Big Picture
Credo Technology Group is a semiconductor company focused on high-speed connectivity solutions — think SerDes chiplets, active electrical cables, and line card retimers that keep hyperscale data centers running at ever-increasing bandwidth. The company sits squarely in the AI infrastructure buildout narrative, supplying the connectivity fabric that ties together the GPUs and accelerators that the biggest cloud providers are racing to deploy. Its fiscal year ends in late April/early May, and the numbers below reflect that calendar.
| Metric | FY2024 (Apr 2024) | FY2025 (May 2025) | FY2026 (May 2026) |
|---|---|---|---|
| Revenue | $193.0M | $436.8M | $1,335.1M |
| Gross Margin | 61.9% | 64.8% | 68.0% |
| Operating Margin | -19.2% | 8.5% | 33.3% |
| Net Margin | -14.7% | 11.9% | 35.4% |
| EBITDA | -$23.3M | $59.1M | $479.6M |
The three-year arc tells a compelling story: from a loss-making startup-phase chip company to a business generating over $1.3 billion in annual revenue with a 35%+ net margin in just two fiscal years. That kind of inflection is rare and is almost entirely attributable to surging demand from hyperscale AI infrastructure customers.
Latest Quarter Snapshot
The most current data available comes from the 10-Q filed March 3, 2026, covering the quarter ended January 31, 2026. This is more recent than the annual figures and shows the business continuing to accelerate.
| Metric | Q3 FY2026 (Jan 31, 2026) |
|---|---|
| Quarterly Revenue | $407.0M |
| Gross Margin | 68.5% |
| Operating Margin | 36.8% |
| Net Margin | 38.6% |
| EBITDA | $156.3M |
| Current Ratio | 10.82x |
| Debt-to-Equity | 0.10x |
A single quarter generating $407 million in revenue is notable given the full-year FY2025 total was $437 million. Margins in this quarter actually exceed the full-year FY2026 figures, suggesting the business is still expanding its profitability profile. A net margin approaching 39% on over $400M in quarterly revenue is exceptional for a semiconductor company of this scale.
Profitability — Multi-Year Trend
Credo's profitability trajectory over the past three fiscal years is one of the most dramatic improvement stories in the semiconductor sector.
| Fiscal Year | Gross Margin | Operating Margin | Net Margin | EBITDA |
|---|---|---|---|---|
| FY2024 | 61.9% | -19.2% | -14.7% | -$23.3M |
| FY2025 | 64.8% | 8.5% | 11.9% | $59.1M |
| FY2026 | 68.0% | 33.3% | 35.4% | $479.6M |
Every profitability metric improved significantly year over year. Gross margin expanded roughly 200–300 basis points per year, reflecting both product mix improvement and operating leverage as volumes scale. The swing from a -19% operating margin in FY2024 to +33% in FY2026 indicates that the company's fixed cost base — primarily R&D — has been absorbed by dramatically higher revenue. EBITDA went from -$23M to nearly $480M in just two years. The latest quarterly data suggests this margin expansion has not plateaued.
Financial Health
Credo's balance sheet is notably clean for a high-growth semiconductor company.
| Metric | FY2024 | FY2025 | FY2026 | Q3 FY2026 |
|---|---|---|---|---|
| Current Ratio | 11.88x | 6.62x | 10.15x | 10.82x |
| Debt-to-Equity | 0.11x | 0.19x | 0.11x | 0.10x |
A current ratio consistently above 6x means the company has no near-term liquidity concerns — it has far more short-term assets than short-term obligations. The debt-to-equity ratio hovering around 0.10–0.19x signals an essentially unlevered balance sheet. This gives the company financial flexibility to invest heavily in next-generation product development without being constrained by debt service. The slight uptick in debt-to-equity in FY2025 reversed back to the lower range by FY2026 and the most recent quarter, suggesting any borrowing during the growth ramp was modest and temporary.
Growth
| Period | Revenue | Year-over-Year Growth |
|---|---|---|
| FY2024 | $193.0M | — |
| FY2025 | $436.8M | +126.4% |
| FY2026 | $1,335.1M | +205.7% |
| Q3 FY2026 (single quarter) | $407.0M | — (quarterly) |
Revenue more than doubled from FY2024 to FY2025, then tripled again from FY2025 to FY2026. That two-year compounded growth rate is extraordinary and reflects Credo's position as a key supplier during the hyperscale AI infrastructure buildout. The company went from roughly a $200M annual run-rate business to one generating over $400M in a single quarter. Sustaining triple-digit growth rates at scale is virtually impossible long-term, but even if growth moderates significantly, the base business now looks very different from where it stood two years ago.
Plain English Summary
Two years ago, Credo Technology was a promising but money-losing chip startup. Today it's a rapidly profitable business generating over $1.3 billion in annual revenue with margins that would make most established semiconductor companies envious. The company makes the high-speed connectivity chips that data centers need to keep up with the explosion in AI workloads — and demand from the hyperscale cloud giants has been the rocket fuel behind this transformation. The balance sheet is clean, with almost no debt and plenty of cash cushion, so the company isn't taking on financial risk to fund its growth. The most recent quarter shows margins still expanding, not compressing, which suggests the business hasn't hit a ceiling yet. The core risks here are concentration risk (a small number of large hyperscale customers likely drive the bulk of revenue) and cyclicality — semiconductor demand tied to a single megatrend like AI buildout can be lumpy. But on the fundamentals alone, the numbers show a business that has executed its growth phase exceptionally well and emerged as a genuinely profitable, cash-generative enterprise.
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