Free cash flow margins surged to 40.6% in 2026Q4, though investors should note the $162.3 million working capital outflow reflecting aggressive inventory management.
| Cash from Operations | 464.29M | 65.08M | 32.74M | -24.61M | -30.83M | -42.36M | -10.25M |
| Operating CF Margin % | 34.78% | 14.9% | 16.96% | -13.36% | -28.96% | -72.17% | -19.05% |
| Operating CF Growth % | 613.38% | 98.81% | 233% | 20.16% | 27.22% | -313.16% | - |
| Net Income | 472.28M | 52.18M | -28.37M | -16.55M | -22.18M | -27.51M | 1.33M |
| Depreciation & Amortization | 34.64M | 21.94M | 13.77M | 9.51M | 4.79M | 2.22M | 1.81M |
| Stock-Based Compensation | 182.64M | 77.36M | 39.02M | 23.52M | 9.19M | 2.57M | 1.25M |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 1.37M | -76K |
| Other Non-Cash Items | -30.03M | 22.01M | 9.04M | 9.32M | 6.97M | -1.37M | 229K |
| Working Capital Changes | -195.24M | -108.4M | -731K | -50.42M | -29.61M | -19.64M | -14.79M |
| Change in Receivables | -70.8M | -102.48M | -10.12M | -20.02M | -15.88M | 682K | -10.55M |
| Change in Inventory | -174.04M | -70.47M | 15.76M | -24.38M | -21.68M | -4.83M | 1.3M |
| Change in Payables | 48.75M | 41.93M | 8.81M | -3.84M | 4.75M | 1.34M | 1.01M |
| Cash from Investing | -253.53M | 111.99M | -249.49M | -130.94M | -17.58M | -6.06M | -8.83M |
| Capital Expenditures | -57.3M | -36.06M | -15.65M | -21.71M | -17.58M | -6.06M | -8.83M |
| CapEx % of Revenue | 4.29% | 8.26% | 8.11% | 11.79% | 16.51% | 10.32% | 16.41% |
| Acquisitions | -112.91M | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Financing | 717.63M | -7.73M | 175.28M | 4.88M | 204.18M | 77.89M | 61.21M |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Equity Issued (Net) | 724.25M | 0 | 173.43M | 0 | 201.45M | 76.44M | 60.48M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -19.16M | 0 | 0 | 0 | 0 | -22.91M | 0 |
| Other Financing | -6.62M | -7.73M | 1.84M | 4.88M | 2.73M | 1.45M | 721K |
| Net Change in Cash | 928.62M | 169.39M | -41.64M | -150.74M | 155.56M | 29.85M | 42.15M |
| Free Cash Flow | 407M | 29.02M | 17.09M | -46.33M | -48.41M | -48.42M | -19.09M |
| FCF Margin % | 30.48% | 6.64% | 8.85% | -25.15% | -45.47% | -82.49% | -35.45% |
| FCF Growth % | 1302.37% | 69.87% | 136.88% | 4.3% | 0.01% | -153.69% | - |
| FCF per Share | 2.16 | 0.16 | 0.11 | -0.32 | -0.33 | -0.35 | -0.26 |
| FCF Conversion (FCF/Net Income) | 0.98x | 1.25x | -1.15x | 1.49x | 1.39x | 1.54x | -7.71x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 1.45M | 1.05M | 1.2M | 427K | 1.22M | 595K |
Hyperscale customer concentration
According to recent financial disclosures, Credo's operating cash flow to net income ratio reached 1.08 in 2026Q4, indicating that the company is successfully converting its reported accounting profits into tangible cash inflows as its high-speed connectivity product line gains significant market traction within hyperscale data centers.
The alignment between net income and operating cash flow suggests that the company's earnings are supported by actual cash generation rather than aggressive accrual accounting. Investors should monitor whether this conversion efficiency persists as the company scales, as any divergence could signal a buildup of uncollected receivables or inventory inefficiencies.
As reported in quarterly filings, Credo's free cash flow margin surged to 40.6% by 2026Q4, reflecting a dramatic improvement from the negative margins observed in early 2025 and highlighting the substantial operating leverage inherent in the company's fabless semiconductor business model during this rapid growth phase.
This trajectory suggests that the company has moved past the initial heavy investment phase required to establish its AEC market presence. The ability to generate such high FCF margins relative to net income implies that capital expenditures are currently modest, allowing a significant portion of earnings to flow directly to the balance sheet.
Based on the provided cash flow statements, working capital changes have been highly volatile, including a significant $162.3 million outflow in 2026Q4, which appears to reflect the aggressive inventory pre-building necessary to meet the rapid deployment schedules of major hyperscale customers.
This large working capital swing warrants further investigation, as it may indicate that the company is assuming more supply chain risk to ensure product availability. While this supports revenue growth, it also suggests that cash flow may remain lumpy and sensitive to the timing of large-scale customer procurement cycles.
Analysis of recent SEC filings reveals that stock-based compensation reached $49.7 million in 2026Q4, a non-cash expense that effectively masks the true economic cost of talent acquisition and warrants careful consideration when evaluating the company's underlying cash-generating capacity and potential shareholder dilution.
While SBC is a standard practice in the semiconductor industry, its magnitude relative to net income suggests that the reported cash flow figures may be flattered by the exclusion of these equity-based costs. Investors should assess whether the current level of dilution is commensurate with the long-term value creation generated by the engineering team.
Quick answers to the most common questions about buying CRDO stock.
Credo Technology Group Holding Ltd (CRDO) generated $464.3M in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
Credo Technology Group Holding Ltd (CRDO) generated $407.0M in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Credo Technology Group Holding Ltd (CRDO) spent $57.3M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, Credo Technology Group Holding Ltd (CRDO) spent $19.2M on share repurchases. This shows the company's commitment to returning capital to its equity investors.