Research · Sep 3, 2026
[CRDO] Credo Technology Thesis 2026: Active Electrical Cables Surge as Hyperscaler AI Spend Accelerates
Credo Technology Group Holding Ltd FY25 (Apr year-end) revenue $437M (+126% YoY); op income $37M (vs -$37M FY24); NI $52M (vs -$28M FY24); EPS $0.29 (vs -$0.18). FCF $29M (+70%). Q4 revenue $170M (+180% YoY, +26% QoQ). Three hyperscalers each contributing >10% of Q4 revenue (vs 86% single-customer concentration Q3) — meaningful customer diversification milestone. AEC product line: ZeroFlap AECs replacing optics at largest customer + multi-hyperscaler ramp. Optical DSP business: 50-gig + 100-gig per lane solutions; new DSPs at OFC; 3nm tape-out for leading-edge. Retimer business: 50/100 gig per lane Ethernet + PCIe retimer entry + AI server ODM platform commitment. PILOT software platform. Q1 FY26 guide: revenue $185M-$195M (+12% sequential midpoint); non-GAAP gross margin 64-66%; non-GAAP opex $54-56M. FY26 guide: revenue >$800M (+85% YoY); non-GAAP net margin approaching 40%. Risks: hyperscaler AI capex cycle, customer concentration history, competitive landscape (Marvell, Broadcom, Cisco, Astera Labs), AEC vs optical migration pace, 3nm tape-out execution, Cayman / China relationship + export controls, TSMC capacity.