Credo Technology Group Holding Ltd

Record growth + margin expansion (good) - FY26 revenue: $1.3B, +206% YoY (more than tripled). - FY26 non-GAAP net income: $662M, >5x YoY. - FY26 non-GAAP gross margin: 68.1% (+310 bps YoY). - Q4 FY26 revenue: $437M, a record and exceeded all of FY25 revenue. - Q4 non-GAAP gross margin: 68.3%; Q4 non-GAAP net income: $227M (+30% vs revenue in-year-ago quarter; >3x YoY).

Core thesis: AI datacenter scaling is shifting constraints from compute to connectivity reliability (opportunity) - Management argues AI clusters moving from tens of thousands to hundreds of thousands of GPUs make network reliability, power efficiency, signal integrity, and telemetry decisive. - Credo positions itself as a “system-level reliability” provider across copper and optics, with differentiation via vertically integrated stack: silicon + firmware/telemetry software + system execution.

Optics is expected to be the key FY27 inflection (forecast) - FY27 optical portfolio forecast: three legs each expected to contribute >$100M revenue; total optics >$600M. - Optical DSPs (> $100M) - Silicon photonics PICs (> $100M) - ZeroFlap optics platform (> $100M) - FY27 optics ramp acceleration: expected to be stronger in the second half. - Initial CPO/NPO expectation: from customer engagements, early revenue for CPO/NPO designs expected in FY28 (Dust Photonics enables roadmap via silicon photonics PIC technology).