# Credo's Profit Drop Signals Cash Shortfall

> Credo's $236M profit came with just $83M cash flow, sparking a 42% stock drop.
- Title: Credo's Profit Drop Signals Cash Shortfall · Yahoo Finance
- Summary: Credo's $236M profit came with just $83M cash flow, sparking a 42% stock drop. Credo Technology Group reported $236 million adjusted profit but only $83…
- Keywords: credo, free cash flow, stock drop, inventory build, customer concentration, ai connectivity chipmaker, nasdaq, analyst ratings, business, finance, Credo's, Profit
- Source: Yahoo Finance — https://finance.yahoo.com/markets/stocks/articles/credo-236-million-adjusted-profit-154239820.html
- Published: 2026-09-16T15:42:39+00:00
- Read time: 1 min
- Topics: credo, free cash flow, stock drop, inventory build, customer concentration, ai connectivity chipmaker, nasdaq, analyst ratings, business, finance
## Credo's Profit
Credo reported $236.3 million adjusted profit for fiscal Q1.

> Credo reported $236.3 million in adjusted profit
## Cash Flow Drop
Free cash flow fell to $82.9 million from $90.2 million operating cash flow.

> Free cash flow, defined as operating cash flow minus $7.3 million in capital expenditures, was $82.9 million
## Stock Decline
Shares dropped 42.14% to $150.39 in one month.

> Shares last traded at $150.39, down 42.14% over the past month
## Analyst Ratings
18 of 19 analysts maintain Buy ratings with $281.47 consensus target.

> 18 of 19 analysts maintain Buy ratings with a $281.47 consensus target
## Customer Concentration
Top two customers represent 33% and 28% of revenue.

> Top two customers represent 33% and 28% of revenue
## Inventory Build
Inventory increased $62.2 million, using $61.54 million cash.

> Ending inventory was $313.1 million, up $62.2 million sequentially
## Cash Flow Impact
Working capital changes reduced cash flow by $92 million.

> Cash flow from operations in the first quarter was $90.2 million, down $92 million sequentially
## Q2 Guidance
Revenue expected at $525 million to $535 million.

> Fiscal Q2 revenue guidance of $525 million to $535 million
## Bull Case
AI ramp and inventory conversion could boost cash flow.

> The bull case is that the AI infrastructure ramp is real
## Key takeaway

Credo Technology Group reported $236 million adjusted profit but only $83 million free cash flow, causing a 42% stock decline amid analyst concerns about inventory buildup and customer concentration.