Next-generation data center equipment specialist Credo Technology Group (CRDO 5.09%) had an excellent week on the market with its stock. According to data compiled by S&P Global Market Intelligence, it surged by over 14% over the period after posting quite an impressive set of quarterly results.
Massive improvements
Arguably the most impressive facet of Credo's fiscal first quarter of 2026 was its revenue line. This ballooned nearly fourfold year over year to over $233 million for the period. Both of its main top-line sources saw notable improvements with the larger one -- product sales -- zooming to over $217 million from the $57 million of 2025's Q1. IP licensing brought in $6 million from the year-ago $2.4 million.
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Compounding that, the top-line figure trounced the average analyst estimate. Collectively, pundits tracking Credo stock were expecting the company to book less than $191 million.
These dynamics were similar for non-GAAP (adjusted) profitability. In the quarter, Credo netted $98.3 million ($0.52 per share), easily bettering the $65.3 million in the same period of fiscal 2025.
We're in something of a data center arms race, with many operators of such facilities eager to build them out to accommodate artificial intelligence (AI) functionalities. So this is something of a boom time for data center equipment companies, and Credo is clearly taking good advantage of the opportunity.
A beat on guidance too
Credo also proffered guidance for its current (second) quarter, forecasting that its revenue will come in at $230 million to $240 million. That's well above the analyst consensus of $199 million. The company's adjusted gross margin should range from 64% to 66%. It did not provide any bottom-line projections.
