Credo Technology recently released its 10-K report. Credo Technology Group Holding Ltd. designs and sells high-speed connectivity products for optical and electrical Ethernet and PCIe applications, with operations in the United States, Taiwan, Mainland China, Hong Kong and other markets. Its portfolio includes active electrical cables, optical PAM4 digital signal processors, low-power line card PHYs, SerDes chiplets, SerDes IP, PCIe retimers and related software and support services.
In Item 7, management said fiscal 2026 was a much larger year for the company than fiscal 2025, with revenue rising to $1.335 billion from $436.8 million. The increase of $898.3 million was driven primarily by higher unit shipments of AEC products, and management said the ramp at hyperscale data center customers accounted for more than 99% of the revenue increase. Cost of revenue rose to $426.8 million from $153.9 million, but gross profit still increased to $908.3 million from $282.9 million, lifting gross margin to 68.0% from 64.8%.
Operating expenses grew in dollar terms but fell sharply as a share of revenue. Research and development increased to $279.4 million from $146.9 million, with management pointing to a $60.9 million jump in share-based compensation, an $18.8 million increase in personnel costs, a $35.4 million increase in design and engineering activity, $5.1 million in acquisition and integration costs, and $4.0 million more in depreciation. Selling, general and administrative expenses rose to $184.0 million from $98.9 million, led by a $44.4 million increase in share-based compensation.
The result was operating income of 33.3% of revenue, up from 8.5% a year earlier. Income before taxes reached 35.6% of revenue, compared with 12.6% in fiscal 2025, and net income rose to $472.3 million from $52.2 million. Management also said the company continues to rely on a limited number of customers, with revenue concentrated among hyperscalers, NeoClouds, OEMs, ODMs, contract manufacturers and optical module makers, as well as enterprise and HPC customers. The market has reacted to these announcements by moving the company's shares -6.16% to a price of $243.42. For the full picture, make sure to review Credo Technology's 10-K report.
