Credo Technology Group Holding Ltd

Credo Technology Group Holding Ltd operates in the data infrastructure market, which is driven largely by hyperscale data centers and emerging NeoClouds building AI/ML infrastructure as well as general compute and data centers. The multibillion-dollar data infrastructure market is being driven by several factors, including AI/ML driving an explosion in network traffic, hyperscaler general compute traffic doubling every 2-3 years, and the evolution of connectivity standards for servers such as PCIe and consumer devices such as USB. The Company's hyperscale customers are increasingly pursuing AI/ML infrastructure that requires back end scale out interconnectivity densities that are an order or magnitude higher than their general compute infrastructure. Back end scale up networks have grown from an appliance scale of 8 GPUs to rack scale of 72 GPUs in calendar 2024 and there is strong interest in growing this to scale in the coming years. Scale up networks are already 10x denser than scale out networks, a full 100x denser than front end networks.

Credo believes it is the only company in its industry offering a complete suite of high-performance connectivity solutions. Its principal competitors with respect to its products include Broadcom Ltd., Marvell Technology, Inc. and Astera Labs, Inc., as well as various cable and optical transceiver suppliers. The Company believes its key competitive strengths include foundational intellectual property, a comprehensive family of connectivity solutions, best-in-class technology, a culture of continuous innovation, and top industry talent and experienced leadership team. As of May 2, 2026, the Company owned 86 ¹ issued patents and 39 ² pending patent applications in the United States, and 52 ³ issued patents and 41 ⁴ pending patent applications in mainland China. Its subsidiary Hyperlume, Inc. owns 16 ⁵ of these pending patent applications in the United States and 13 ⁶ of these pending applications in mainland China.

Credo generates revenue through the design, marketing and sale of product, software and IP solutions. The Company's product portfolio includes ZeroFlap Active Electrical Cables (AECs) and ZeroFlap optical transceivers, OmniConnect memory solutions and a suite of retimers and DSPs for optical and copper Ethernet and PCIe, all leveraging the Company's PILOT diagnostic and analytics software platform. The Company sells its products to hyperscalers, NeoClouds and other cloud infrastructure providers, and its customer base includes over 20 blue chip clients, including a broad mix of original equipment manufacturers (OEMs), original design manufacturers (ODMs), optical module manufacturers and other leading enterprises. The Company utilizes a fabless business model, working with a network of third parties to manufacture, assemble and test its connectivity products.

Credo's product families include integrated circuits (ICs), Active Electrical Cables (AECs) and SerDes Chiplets. The ZeroFlap AECs are plug-and-play copper interconnect cables designed for affordable, lossless operation at 100G, 200G, 400G, 800G and emerging 1.6T data speeds, and include CLOS, SPAN, SHIFT and SWITCH family of cables. The Optical DSPs are core components within optical transceivers deployed in AI clusters, hyperscale data centers, service-provider networks, enterprise networks, and 5G wireless infrastructure, supporting data rates from 50 Gb/s to 1.6 Tb/s and higher. The Credo Seagull family of DSPs operate at 50G per lane and includes 1×50G, 2×50G, 4×50G, and 8×50G variants supporting transceivers and AOCs from 50 Gb/s to 400 Gb/s. The Credo Dove, Lark, and Robin families operate at 100G/lane across three successive technology generations, including 4×100G and 8×100G DSPs with multiple integrated laser-driver options. In September 2025, Credo introduced Bluebird, its first 200G/lane DSP, manufactured on a 3nm process node, designed to enable a new generation of full-retimed and LRO-based 1.6 Tb/s transceivers. The ZeroFlap optical transceivers support 400G, 800G, and 1.6T network speeds and include 200GBASE-DR2, 400GBASE-DR4, and 800G 2xDR4 variants. The OmniConnect platform, introduced in November 2025, includes Weaver, a memory fanout gearbox designed in 5nm process node that delivers 12x ⁷ higher total memory bandwidth and up to 40x ⁸ higher memory density compared to conventional on-substrate LPDDR solution. The Toucan PCI Express Gen6.x/CXL 3.x retimers are built using the 7nm process node. The microLED solutions include Active LED Cables (ALCs) built to deliver high-speed connectivity in pluggable form-factors, extending interconnect reach up to 30m ⁹ and reducing cable bulk.

Credo's intellectual property solutions consist primarily of SerDes IP licensing. The Company's SerDes Chiplets are designed for high performance and low power from mature processes, allowing customers to fabricate their core logic in advanced processes and combine them in their MCM SoC. The PILOT software platform was released for evaluation on Credo's Toucan PCIe retimers in the first quarter of fiscal 2026 and made available across Credo's SerDes, retimers and system level AECs during fiscal year 2026. The Company's patent and patent application portfolio primarily relates to four main areas: Ethernet standard, network cable technology, chip manufacturing and MCM and SerDes cores, with issued patents expected to expire between 2029 and 2046.

During fiscal 2026, Credo completed the acquisition of Hyperlume Inc. on September 29, 2025, and the acquisition of CoMira Solutions Inc. on February 25, 2026. In connection with the Hyperlume acquisition, the Company issued 1,184,000 ¹⁰ restricted stock units and 1,184,000 ¹¹ restricted shares, of which 592,000 ¹² restricted shares were issued to a newly formed subsidiary. In connection with the CoMira acquisition, the Company issued 1,184,000 ¹³ restricted stock units and 1,184,000 ¹⁴ restricted shares. Subsequent to fiscal year end, on May 28, 2026, the Company granted 1,200,000 ¹⁵ performance shares under the 2021 Long Term Incentive Plan. Also subsequent to fiscal year end, on May 31, 2026, the Company acquired DustPhotonics Ltd. for total consideration of approximately 1,000,000 ¹⁶ ordinary shares. The Company's research and development expenses for fiscal 2026 and 2025 were $279.4 million ¹⁷ and $146.9 million ¹⁸, respectively. As of May 2, 2026, the Company employed 616 ¹⁹ engineers out of 807 ²⁰ full-time equivalent employees.

In fiscal 2026, Credo generated total revenue of $1.3 billion ²¹ compared to $436.8 million ²² in fiscal 2025, representing significant growth. The Company generated net income of $472.3 million ²³ in fiscal 2026 and $52.2 million ²⁴ in fiscal 2025, compared to a net loss of $28.4 million ²⁵ in fiscal 2024. As of May 3, 2025, the Company had an accumulated deficit of $83.2 million ²⁶. In fiscal 2026, sales to the top 10 customers accounted for approximately 90% ²⁷ of total revenue, and the Company had two customers that accounted for 10% or more of total revenue.

Credo's growth strategy focuses on extending its leadership in SerDes technologies through continued investment in research and development. The Company intends to broaden its portfolio of offerings by developing new products to meet the evolving needs of the data infrastructure ecosystem as well as expand into adjacent markets it does not serve today. The Company believes it has a substantial opportunity to continue to grow its customer base and intends to accelerate new customer acquisition across the markets it serves as well as enter into new market segments by scaling its sales and marketing capabilities. The Company also intends to extend and deepen relationships with existing customers, including leading hyperscalers, Neoclouds, OEMs, ODMs and optical module manufacturers.

The Company's growth is also driven by its expansion into new product categories. Credo introduced Bluebird, its first 200G/lane DSP manufactured on a 3nm process node, designed to enable a new generation of full-retimed and LRO-based 1.6 Tb/s transceivers targeting deployment in high-density AI data centers. The OmniConnect platform, including the Weaver memory fanout gearbox designed in 5nm process node, addresses the AI inference memory wall by extending LPDDR memory beyond the substrate, delivering 12x ²⁸ higher total memory bandwidth and up to 40x ²⁹ higher memory density. The microLED solutions, including Active LED Cables (ALCs), extend interconnect reach up to 30m ³⁰ and reduce cable bulk, allowing data center architects to distribute compute power across multiple racks. The Company is also developing solutions based on microLED technology to facilitate high-speed, low-latency data transmission providing multi-Terabit throughput required to scale massive AI clusters.Credo utilizes a fabless business model, working with a network of third parties to manufacture, assemble and test its connectivity products. In fiscal year 2026, the Company exclusively used Taiwan Semiconductor Manufacturing Company Limited (TSMC) for semiconductor wafer production. The Company uses third-party contractors for packaging, assembly and testing, including Amkor Technology Inc. and Advanced Semiconductor Engineering, Inc. for packaging, King Yuan Electronics Company and Sigurd Microelectronics Corp. for testing, and BizLink Technology, Inc. for manufacturing AEC products. The Company's engineers work closely with its third-party foundry vendor and other contractors to increase yield, lower manufacturing costs and improve product quality. As of May 2, 2026, the Company employed 616 ³¹ engineers, with 330 ³² located in North America and 477 ³³ located in Asia.

Research and development expenses for fiscal 2026 were $279.4 million ³⁴ and for fiscal 2025 were $146.9 million ³⁵. The Company has committed, and plans to continue to commit, significant resources to technology and product innovation and development. The filing does not disclose specific capital expenditure plans, share repurchase authorization amounts, or dividend policy.

The Company faces macroeconomic risks including recessions, inflation, stagflation and other economic conditions that could impact customer demand. The U.S. has implemented a series of tariffs targeting various nations and industries, which have triggered global reactions, affecting markets, slowing global economic growth, and heightening concerns about broader financial instability. Tariffs and escalations of trade tensions between the U.S. and its trading partners, especially China, and the decoupling of global economies could result in a global economic slowdown and long-term changes to global trade. The Company is also subject to risk from inflation and increasing market prices of certain components, supplies and commodity raw materials, which are incorporated into its end products or used by its manufacturing partners or suppliers.

The Company faces risks related to its dependence on a limited number of customers for a substantial portion of its revenue. In fiscal 2026, sales to the top 10 customers accounted for approximately 90% ³⁶ of total revenue, and the Company had two customers that accounted for 10% or more of total revenue. The Company does not have long-term purchase commitments from its customers, and substantially all product sales have been made on a purchase order basis, permitting customers to cancel, change or delay orders upon specified notice. The Company has an accumulated deficit and may incur additional net losses in the future, having incurred net losses of $28.4 million ³⁷ in fiscal 2024. The Company faces intense competition and expects competition to increase in the future, with principal competitors including Broadcom Ltd., Marvell Technology, Inc. and Astera Labs, Inc.

Credo depends on a limited number of customers for a substantial portion of its revenue, with sales to the top 10 customers accounting for approximately 90% ³⁸ of total revenue in fiscal 2026 and two customers representing 10% or more of total revenue. The Company does not have long-term purchase commitments from customers, as substantially all product sales are made on a purchase order basis, permitting customers to cancel, change or delay orders upon specified notice, which could cause revenue to decline materially. The Company faces intense competition from Broadcom Ltd., Marvell Technology, Inc. and Astera Labs, Inc., and expects competition to increase. Changes in global trade policies, including tariffs and trade barriers, particularly between the U.S. and China, may adversely affect the business, as the Company exclusively used TSMC for semiconductor wafer production in fiscal 2026 and relies on third-party contractors in Asia for packaging, assembly and testing. The Company has an accumulated deficit of $83.2 million ³⁹ as of May 3, 2025, and incurred net losses of $28.4 million ⁴⁰ in fiscal 2024, indicating potential for future net losses.

Management's message emphasizes Credo's mission to transform connectivity at scale through fast, reliable and energy-efficient system solutions, highlighting that the Company's high-speed copper and optical interconnect products deliver industry-leading power and performance at up to 1.6T to meet the ever-expanding data infrastructure demands of AI. Management notes that the Company's innovations enable customers to connect the systems that connect the world. The strategic priorities emphasized include extending leadership in SerDes technologies, broadening the portfolio of products, attracting and acquiring new customers, and extending and deepening relationships with existing customers. Management highlights the Company's culture of continuous innovation, noting achievements such as pioneering the 100G, 200G, 400G, 800G and emerging 1.6T AEC market, delivering 112G XSR IP for MCM solutions, production shipments of SerDes Chiplets including two versions of 3.2Tbps Chiplets, and introducing the world's first 800G DSP for Linear Receive Optics. Management also emphasizes the Company's engagement with all major hyperscalers and a customer base including over 20 blue chip clients.