Credo Technology Group Holding Ltd

Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session where we request that you please limit yourselves to one question only. At that time, if you have a question, you will need to press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star and then the number one again. I would now like to turn the conference over to Dan O'Neill. Please go ahead, sir.

Good afternoon. Thank you all for joining our fourth quarter fiscal 2026 earnings call. Today, I am joined by Bill Brennan, Credo's chief executive officer, and Dan Fleming, Credo's chief financial officer. During this call, we will make certain forward-looking statements. These forward-looking statements are subject to risks and uncertainties discussed in detail in our documents filed with the SEC. These documents can be found in the investor relations portion of the company's website. It is not possible for the company's management to predict all risks, nor can the company assess the impact of all factors on its business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statement. Given these risks, uncertainties, and assumptions, the forward-looking events discussed during this call may not occur. and actual results could differ materially and adversely from those anticipated, implied, or inferred. The company undertakes no obligation to publicly update forward-looking statements for any reason after the date of this call to conform these statements to changes in the company's expectations or to actual results, except as required by law. Also, during this call, we will refer to certain non-GAAP financial measures, which we consider to be important measures of the company's performance. These non-GAAP financial measures are provided in addition to, and not as a substitute for or superior to, financial performance prepared in accordance with U.S. GAAP. A discussion of why we use non-GAAP financial measures and reconciliations between our GAAP and non-GAAP financial measures is available in the earnings release we issued today, which can be accessed using the investor relations portion of our website. I will now turn the call over to our CEO. Bill?

Thanks, Dan, and thank you all for joining our fourth quarter and full fiscal year 26 earnings call. I'll begin with a review of our fiscal 26 performance, discuss the major developments across our business, and share our perspective on the opportunities ahead. Dan Fleming, our Chief Financial Officer, will then provide additional detail on our Q4 and fiscal year 26 results, along with guidance for the first quarter of our fiscal 27. We'll then open the call for questions. Fiscal 26 marked another defining year for Credo. Revenue exceeded $1.3 billion, more than tripling year over year, while non-GAAP net income increased more than five times to $662 million. Very few semiconductor companies have scaled at this pace while sustaining product leadership, strong margins, and operational execution. In the fourth quarter of fiscal 26, revenue reached a record $437 million. Notably, our revenue in the quarter exceeded our entire fiscal 25 revenue. Q4 non-GAAP gross margin was 68.3 percent. Non-GAAP net income grew to $227 million and was more than 30 percent greater than our revenue in the year-ago quarter. Producing these results required incredible effort and expertise, and I want to sincerely thank Team Credo for their continued stellar performance. These results reflect Credo's ability to capitalize on a fundamental shift occurring across AI infrastructure. As AI clusters scale from tens of thousands to hundreds of thousands of GPUs, connectivity is no longer just about bandwidth. Reliability, power efficiency, signal integrity, and telemetry have become critical architectural requirements. Today's AI infrastructure is increasingly constrained not by compute, but by the reliability and efficiency of the connectivity fabric tying these systems together. Over the past several years, AI network reliability has become Credo's North Star. Our roadmap, our product investments, our software architecture, and our system-level approach have all been built around helping customers accelerate cluster bring-up, maximize GPU utilization, and maintain stable operation at unprecedented scale. Credo was purpose-built for this transition. Our strategy is centered on delivering connectivity solutions across the full spectrum of AI infrastructure from die-to-die and chip-to-chip connectivity to multi-rack scale copper, and to row scale and facility-wide optical interconnect. By extending both inward toward the silicon and outward across the data center, we've positioned Credo to become a foundational network architecture partner for our customers. Importantly, hyperscale and neocloud operators increasingly want partners capable of delivering multiple generations of connectivity solutions with deep system-level integration. This is where Credo differentiates itself through our vertically integrated approach, spanning core service technology, silicon and system-level solutions, firmware and telemetry software, and operational execution. I'll now discuss our businesses in more detail. First, regarding active electrical cables, our ADC business remains a core growth engine for the company. and we continue to see substantial long-term opportunity ahead. As AI clusters scale, reliability and power efficiency have become primary design constraints. AECs have become the preferred solution for in-rack connectivity and for many multi-rack deployments up to seven meters. Credo Zero Flap AECs deliver up to 1,000 times greater reliability than commodity laser-based optical modules. while consuming much less power. In environments where cluster downtime can cost millions of dollars and delay AI deployment schedules, network reliability matters more than ever. We continue to see strong customer adoption across hyperscaler and neocloud operators, both at 100 gig per lane and emerging 200 gig per lane deployments. Our vertically integrated model positions us well for continued leadership as both lane speeds and cluster complexity increase. We also remain on track with our PCIe Gen 6 ADC family, where customer engagement and design activity continue to strengthen. Now, turning to optics, we believe fiscal 27 represents an inflection point for Credo's optical business. First, at an optical DSP component level, we see momentum in both design wins and revenue contributions. We're looking forward to continued growth in this product family, and we've received excellent customer feedback on the solutions we announced last quarter, both Robin, a highly optimized DSP at 100 gig per lane, and Cardinal, a leading edge DSP at 200 gig per lane. Next, the acquisition of Dust Photonics, which closed last week, significantly expands our optics position with highly differentiated silicon photonics PIC technology. Thus brings strong design wind momentum and a portfolio spanning 800 gig and 1.6T solutions, along with a roadmap to 3.2 terabits per second and beyond. Importantly, their architecture enables simplified optical designs with substantially fewer lasers. In addition to enabling better reliability, power efficiency, and cost, Laser count reduction can ease the industry supply chain limitations. The Dust Silicon Photonics roadmap also provides a direct path to CPO and NPO architectures, allowing us to address a broad range of customer requirements as AI deployments evolve in the scale of network domain. Based on current customer engagements, initial revenue for CPO and NPO designs is expected in our fiscal 28th. Finally, our zero-flap optics platform continues to gain strong traction as customers increasingly prioritize network reliability. With the addition of SIFO PIC technology to our zero-flap optics platform, we can now control a significantly larger portion of the optical stack, extending visibility deeper into optical link behavior and performance. The tighter DSP-to-PIC integration enables richer telemetry, enhanced diagnostics, and more intelligent system-level optimization. By combining optimized hardware and our pilot software with switch-level SDK integration, zero-flap optics continuously monitor link health and autonomously detect and mitigate link instability conditions before impacting the cluster. Results have shown a meaningful improvement in network reliability, time-to-cluster stability, and long-term uptime. In summary, we're very enthusiastic about the prospects of our optical portfolio. In fiscal 27, we expect our optical DSPs, SIFO picks, and zero-flap optics will each contribute more than $100 million of revenue, and in total, more than $600 million of revenue. with this expected ramp accelerating in the second half of the year. Based on customer and market feedback, we believe this portfolio will deliver sustained, rapid growth in future years. Now, regarding retimers, our retimer business also continues to gain momentum. We're seeing strong growth for retimers at 100 gig and 200 gigabits per second per lane, as well as increasing traction for our PCIe Gen 6 retimers. Our Blue Heron 200 gig per lane retimer was purpose-built for scale-out and emerging scale-up networks. We're seeing increased interest and demand as the device combines support for the broad range of 200 gig per lane protocols, including Ethernet, UA-Link, and eSUN. As AI infrastructure becomes increasingly complex, and protocol diversity expands, we believe our system-level expertise and software integration capabilities position us well for continued share gains. Now, moving to our emerging growth categories. We also continue to make strong progress across our newer growth vectors, including active LED cables and OmniConnect. Our ALC solutions will extend the reliability and power profile of AECs into row scale optical connectivity by replacing traditional lasers with micro LED technology. This creates a highly differentiated connectivity category capable of delivering AEC class reliability with optical reach of up to 30 meters. Our OmniConnect family expands our solutions inward towards the silicon. Our first gearbox solution, Weaver, will address growing memory bandwidth and density challenges by enabling substantially higher memory IO density and more flexible architectures. Customer engagement remains strong, especially around next generation inference designs. We continue to expect production ramps for both ALC and OmniConnect solutions beginning in our fiscal 28. And in conclusion, the data center connectivity market continues to evolve. As AI scales toward gigawatt-class deployments and increasingly dense architectures, network reliability becomes even more critical. Even isolated link instabilities can impact cluster bring-up times, GPU utilization, and overall system availability. That's why reliability has been Credo's North Star over the past several years. It drives our system-level philosophy, our telemetry-first software architecture, and the investments across the full spectrum of our solutions. Fiscal 26 was another transformative year for Credo, and yet we believe we are still in the early innings of the opportunity ahead. With that, I'll turn the call over to Dan Fleming for a detailed financial review and our outlook for Q1 fiscal 27.