Credo Technology (US:CRDO) ZACKS·2025-11-21 14:41Core Insights - Credo Technology Group Holding Ltd (CRDO) has shown exceptional momentum entering fiscal 2026, with first-quarter revenues of $223 million, reflecting a 31% sequential increase and a 274% year-over-year growth, driven by high demand for connectivity solutions in hyperscale AI infrastructure [1][10] Financial Performance - The company reported a non-GAAP gross margin of 67.6% for the first quarter, exceeding guidance and improving by 20 basis points sequentially. Non-GAAP operating income reached $96.2 million, resulting in a non-GAAP operating margin of 43.1%, up from 36.8% in the previous quarter [2] - Credo achieved a record non-GAAP net income of $98.3 million, translating to a non-GAAP net margin of 44.1%, highlighting operational discipline alongside rapid revenue growth [2] Business Segments - The AEC (active electrical cable) business remains a key growth driver, with the top three customers contributing over 10% each to first-quarter revenues. The company anticipates maintaining this level of contribution from three to four customers through fiscal 2026 [3] - Credo is expanding its product offerings beyond AECs, with significant progress in optical DSPs and PCIe retimers. Optical revenues are expected to double in fiscal 2026, supported by new product developments [4] Future Outlook - The company projects revenues of $230–$240 million for the upcoming quarter, indicating mid-single-digit sequential growth, with a non-GAAP gross margin forecasted between 64% and 66% [5] - For fiscal 2026, Credo anticipates a mid-single-digit sequential revenue increase, resulting in approximately 120% year-over-year growth, with a non-GAAP net margin expected to remain near 40% [5] Competitive Landscape - Credo faces increasing competition from semiconductor giants like Marvell Technology and Broadcom, which are also expanding their connectivity portfolios to meet rising AI workload demands [6][7]