Credo Technology Group Holding (CRDO) 2 Dec 242025 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Credo Second Quarter Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Dan O'Neill. Please go ahead.

afternoon. Good joining for for of second earnings XXXX. fiscal our you the call quarter Thank joined Chief by Brennan, am I Today, Credo's Chief Officer, and Executive Financial Dan Fleming. our Bill Officer,

statements. company's we in Relations make to call, the and in with Investor documents discussed website. section in uncertainties statements can the this During SEC, risks certain forward-looking which are These will subject our filed the detail of forward-looking be found

can to nor company It its of to factor results possible predict materially those actual impact is all assess or to cause for management of from risks not contained the company's business the all or which combination the any factors on in statements. differ may the factors extent any forward-looking

uncertainties this assumptions, discussed from actual and occur, and those events forward-looking call could implied. not risks, differ and during results the anticipated Given materially adversely may these or

any date these company no company's statements obligation to publicly in law. changes as actual to expectations conform forward-looking update call the except the required reason for statements or to this by The after results to undertakes of

we provided available portion financial is use Investor measures call, and as this and company's which be the our financial measures financial to non-GAAP reconciliations of today, be the with a accordance These non-GAAP we for the to we measures measures refer accessed we GAAP discussion GAAP. using website. U.S. to consider and during Also our to financial measures, why in can earnings Relations issued important financial non-GAAP non-GAAP of A between release superior in or performance. in of certain addition are which will substitute not performance prepared

over now Bill? CEO. turn the to our I will call

gross revenue provide was our the will and and fiscal Fleming, on XX% up I'll generated Welcome CFO, comments of our Dan quarter, sequentially and XX.X%. 'XX results non-GAAP our provide I'll year-over-year. then earnings second discussing QX up guidance. details call. to the In After $XX outlook. remarks, second million, margin XX% our my quarter, for Credo by QX begin QX on

most The beginning lines see quarters. point and was marked We the shipments record in the we've marks revenue X our to second date. discussed the quarter inflection successful revenue uptick that main of our across in product began to past

a gig innovative Today, of second. SerDes Credo differentiated retimers, SerDes including DSPs, speeds offers card or connectivity electrical up suite ADCs, terabits Ethernet X.X cables IP solutions, and to per port from licenses line XXX and ranging chiplets for active optical

become and has we also reliability enable processing, suite in are increasingly where AI power retimers announced We ], ADCs driven rapidly, connectivity the dense sourcing. network These clusters Summit and OCP cooling including a are and which developing demonstrated back-end cluster advancements solutions, [ at scalable by October. of PCIe evolving and architectures advancements in paramount.

of which link the environment, costs this lapse, creating achieving and addressing cutting-edge power are In as managing eliminating in operational disruptions supporting solutions, in which are operation are to is architectures. high-speed This crucial implementation rapid these momentary network reliability. as connectivity opportunities seamless for significant and evolution links or well essential

This unparalleled company's participated in signal maintaining Credo's excel believe AECs optimizing by that fuel Built differentiation Credo's expertise range highlights critical increase. next-generation of we efficiency addressing represent integrity, to Credo number solving a QX, exemplifies points. a we demonstrated that substantial of solutions power challenges. innovation AEC industry in to deliver customers existing in connectivity continued SerDes growth. a will conferences, Credo speeds our pain the and ability In broad and around market technology. as in solution fundamental delivering data continue customer reliability where ROI for

are seeing turning businesses anticipated in pleased this to I point of half and in momentum second detail. greater our initially 'XX. fiscal revenues we've quarters, our share even inflection we point more than the review that several For will I'm an has projected. during now arrived,

another and AEC we AEC QX, line. emerging record quarter In top for X customers an product revenue, our demand hyperscaler. driven regarding First, achieved from by our strong

proud our also we reliable future we maybe the are optics, laser-based early AECs for reduced most to optimistic high-speed, We of and about market importantly, up We believe adoption, recently connectivity outperform AECs power of efficient AI greater lengths of for in AEC back-end leader. our cost business. still X lower our networks, achievements, power, AI-driven launched and accelerating. XXX-gig market are offering we're as ZeroFlaps positioned reliability. supporting While widespread is stages demand we that well are the and of the meters.

AECs rack of liquid GPU to causing With AI Linkflaps certain lengths are shorter possible. physical back-end shift have increasing to power to enables now displace loss productivity become This Optical in applications. and costly, density cooling, and switch significant and optics training clusters for increasingly clusters. downtime connections the for

operations of Our flaps. unparalleled billions demonstrated reliability have without AECs offer hardware of link hours and

critical approach focus have a solving architecture trusted system the embedded customers. our challenges as and to us level Our of partner, collaborative network in positioned plans

earlier, AEC anticipate and continued beyond fiscal growth our will Furthermore, revenue be 'XX as products. center ecosystem. Building growth across second driven adoption data we engagements highlighted half the the market on adoption expands by our

achieved values, products DSP our our revenues, customers alongside continue optical Credo. for core second I'll support. DSP enhanced another by Now we the turn backed milestone optical innovate to In marking we exceptional our record business. significant delivering to True to quarter, value

and from end module our realizing DSP increasingly optical are customers tangible solutions. users benefits optical Our

XXX XXX fueled speeds was and XXX-gig gig range supporting revenue quarter, XX-gig to This per of AOCs including a broad solutions, port lane transceivers, gig. by from and

Our continues increased international effectiveness across both driving unique markets. to and adoption cost power domestic customers, of innovation with and efficiency, resonate performance, combination

lane solutions demand with is the their for XX-gig close market optical and significant opportunities long-term industry for and module per and collaboration XXX-gig growth leading DSP believe our supported We presents end This manufacturers by robust Credo. customers.

on the efficiency. tape-out We've our of XXX-gig a designs completed the enthusiastic per we're recently strong XXX-gig about lane our ahead, per lane Looking potential of X-nanometer power focus solutions. with

to operating we that solutions expect DSP full LRO solutions 'XX, half calendar approximately industry-leading deliver watts at XX alongside In power. at

committed and providing options LRO to are always, full customers' As high-performance we and to agnostic DSP solutions. remain preferences tailored our for

with Credo sampling both is solutions module leading optical manufacturers. actively

As in architectures disruptive and growth a we continue optical Credo's DSP connectivity market. cementing the innovator from both role full as deployments, LRO anticipate to evolve, further

Now card regarding our line added card business. retimer QX, retimer momentum. our also overall our business In positive line to

During the quarter, we XXX-gig by and applications. generated record revenue driven quarterly XXX-gig

substantial this networking included encryption. MACsec against and market, Across advantages and customers consumption cost and manufacturers. gearboxing ] global with is as for Our have AI competitive product set, for Credo traditional [ OEMs, solutions appliance our leader a products. well as In hyperscalers retiming power we

continued applications. as see retimers in AI we forward, XXX-gig line for Going lane switching networks scale are app growth per and opportunities card adopted for appliances

has production scaleup to sample October, feedback AEC. in as support customers as own per better encouraging need in 'XX introduced X been for we Customer our with to latency, to revenues plan they've Built retimers, At these Gen our the second Gen we We for showcasing OCP expect a several X our PCIe the reach, with expressed they X and terabits 'XX. Gen PCIe to performance PCIe migration networks. X products tools. in PCIe development with calendar plan calendar silicon expected first and SerDes in including development power a demos, and enter in technology, advantages market PCIe

customer marked record up, by showcased continued traction. revenues, and outstanding QX innovation execution sum To increased

sustained inflection for anticipated the is greater point With Credo seeing and momentum fueled are deployments growth second relationships, increasing half are We than customer we projected. in positioned well by seeing profitability. 'XX, AI deepening revenue fiscal initially even demand and and

Dan will Now provide our Fleming, details. CFO, additional

revenue $XX will well sequentially I and first In up results and reported and up then XX% for Thank the fiscal QX review we afternoon. XX% 'XX. you, of our year-over-year our Bill, million, range. guidance and outlook of high our discuss good end QX above year QX, of

QX, of up our business year-over-year. digits product up lines sequentially sequentially new, main XX% levels. achieve XX% generated X record $XX.X Notably, revenue Our double and million grew in product to revenue

excluding product QX, higher of product prior generated another revenue in our engineering the quarter. million product $XX.X services business, previous record record in XX% than Our

revenue million in generated $X business IT Our QX. of

which by our opportunities product customer revenue demonstrated the on are ramp, are seeing product substantial we As with side, we programs prioritizing.

contribute not of year years. revenue to trajectory, our this do current or Given future IP we product more our growth in or expect XX%

and ROI align. and a However, of pursue will part combination relevance remains IP business, select our we opportunities strategic strategic where of the

not prioritization operating model non-GAAP This impact does for gross of margin margin our company-wide XX%. XX% to non-GAAP long-term of to or XX% XX%

had customers greater top XX% another X were in Our X XX% X% each that revenue. We and QX. customers between end were end of of revenue than each

base. mix we strongly vary fact at While to the revenue are Credo in greater that than of quarter X% the X customers how quarter, reinforces had our will diversifying quarter customer second customer end from

points and up improved margin gross guidance non-GAAP QX end margin result as sequentially near high of a contribution higher and product delivered XX.X%, quarter. team basis range leverage line our the the Our in of of XX top

product was project-related due in X% the up operating higher range R&D non-GAAP quarter. million, XXX basis in gross XX second basis midpoint points Our sequentially quarter our of up were primarily non-GAAP scale. up and the Total in margin to points spend $XX.X quarter, expenses to due increasing and sequentially year-over-year, XX.X% guidance the above the

$X.X QX. $X.X income in to was in QX operating non-GAAP Our non-GAAP million million of income operating compared

basis prior non-GAAP operating sequential reported We points. quarter, the to non-GAAP QX in income operating $XX.X XX.X% operations XXX a was of non-GAAP Cash ramp compared X.X% shipments. Our in of in QX. margin in our million million, $X quarter quarter $XX.X driven from of compared the of from in net a second to leverage primarily net in increase our due to by flow was profitability non-GAAP million up increased income sequentially, margin the product

a CapEx flow continue $X.X cash tape-outs. the in free largely quarter million first decrease with We $XX.X from improvement of remain opportunities driven growth maintaining the $XXX million And first cash by capitalized of $XX.X our buffer. from was negative production quarter. in million equivalents X-nanometer quarter, We well was a to quarter. ended million, million, substantial of an the $XX.X cash while investing and the

up ending $XX.X QX inventory was Our million, million $X.X sequentially.

'XX guidance. midpoint. revenue and our of We to $XXX million, $XXX expect QX fiscal XX% at turning between Now up the be million currently to sequentially in

gross a We XX% XX%. non-GAAP expect within margin QX to range to be of

expenses million. $XX $XX We to expect non-GAAP million and be between operating QX

We expect average to diluted XXX shares. count weighted QX million be share approximately

revenue sequential half of year fiscal And or 'XX, double-digit from we expect growth second fiscal fiscal 'XX, 'XX revenue from XXX% the enter we expect to year-over-year year QX. As we more. to QX year growth of

half operating fiscal to expect than less rate expenses grow from revenue We to fiscal of non-GAAP 'XX at 'XX. year the year

forward to driving we throughout As year. operating leverage result, a look the

I And for open with questions. will up it that,

the be [Operator Toshiya line today Sachs first of Instructions] Goldman will Our of coming question from Hari

XX had us on if in our question to fiscal that's both? really Obviously, can outlook talked couple that the certain if certain my what of ago? that's of above, is most the timing first would level for days Is you expand the driving QX. quarter? guiding AECs, be the you a size were Is a significant that, the maybe projects expecting of What's quarters Curious ago well really of projects? models. You upside coming it it above Bill, it's in what but on or about you're helpful. in

have expected. Sure. we're to qualifications new visibility forecasts we've as even a on wanting we Yes. We've XX projects as the with see engaged at going together talked stronger and in -- days, the look a the in we as forecast that couple in come come stronger as projects we the about we're start past through last together. and than to better of Really, seen

this opportunity that overall we're speaks addressing, especially to products. the with the AEC think I

I as come think so it's together. thing nice And it's a

that As follow. quarters we will look the towards

QX. encouraged think as I mentioned well, about as we're Dan

about products. really and talking of we inflection think of been as our we're all we've healthy about point design across a And across several 'XX, And seeing for activity FY number this quarters. customers

growth And over time. continued so we expect to see

being in on Although able do past 'XX, expectations order give for that guidance of really we're order have specific to to expect be of kind on XX% and not the kind the been growth we annually. the the fiscal of what of

what follow-up, my announced today? you've IPO, said traction, the after. in made that One you're think kind spoken early time That's companies an what to ZeroFlap super going the but of AECs, competitive your of AEC like really opportunity. landscape since of endorsement be seem the helpful. Many competition you It the would on have the as then and And like feel marketplace curious I vision be or that the feedback in seeing significant well. AEC they've as any on would you're helpful And doesn't OCP always product

Yes.

last the there's to the hasn't market landscape we're changed that support large to that the enough I our trying about days. players. that XX the suppliers think market competitive think in we With space. ourselves that is wants that that think So way I significantly this a don't the any question with been I sense as And perspective that market There's think to over the from position question multiple no in clear be we're we've said, first. approaching multiple

given with And putting It's a to production perspective ownership all the cable. First, can't the that product in enough that's to from the deliver a of product first first as really ramp complex. accountable into products, to family customer strongly significantly. not responsible this unique, calling any a way difficulty the ultimately, design being taking highly It's and qualification. That's production. market under and this retimer means our product a from solution. as through system-level really be simple view differentiated say we that qualified and I as system-level

I And deliver that we as customized on go more high to quality product. we SKUs very reliable around our and show unique can and them we think more work and quickly and and forward turn customers

to to to that to I an and going pole the position in continue kind continue on the of advantage, us be hyperscalers with. put think that's different going working we're that's

X so relates back alluded and but last we're the clusters this very we if like ago, super for to the was it important something to X a high on -- to ZeroFlap is we go priority, this about that much. is months call, seeing AECs, more more that reliability talked that not network thing the AI As the

do being enabled better enabling about As it and in made are that's connections, announcement that in maximum and -- advances at, can made you and relates connections fundamentally the a October be momentary cooling of covered about reliability the whatever network basically say, shut sourcing, being sourcing, by we the go that start reliable minutes to the with we're flaps, connection down an effect AECS power of customers in training that that liquid productivity talked we as with laser-based we've a AI [indiscernible] XX-plus losing of entire on a cluster and in cooling talking demonstrated, more are appliances optics. you can that back And single AECs. than of and rack it's looking of sense can order the you power disruption in, what can link going with also we're was regarding shorter in from particular, done. if sense make density actually and And to the

the us relates seeing And looking architectures Flaps. and have trying the different shipped any failures years. hundreds the different as thousands to back so we're ZeroFlap AECs And it through out at capability. engineers build we've a to have really of taking a to to of multiple And Link and AECs, network over report last approach yet come customers and we

operating kind at billions [ scale. we're on, been I -- we're what of mean, why to of designs environment. scale looking momentum hours seeing that's versus this previously ] focused is we've so which related rack that's And And row in an

that color. gives hopefully, more So you

next Thomas will coming from of of line Your O'Malley question the be Barclays.

opportunity trajectory lane I the for maybe Could spend next you the thought maybe fiscal XXX-gig Bill, you already. become time But and mentioned can, into out the that those in preamble, in fiscal on year the comment the what that will fiscal per of growth stats that into out was large I you're growth year, the at you next And to impressive, next are taped And have as drivers just ramp really Because, growth there. you a you most you growth DSP kind solution impactful you drivers? year? more DSP you the could LRO obviously, on well. that if the in AEC look seeing product into year? mentioned extent that little splitting to next start that the think you those guys the mentioned, a XX%

talked would based AEC lines that to continue. them overall that our product largest And market talked different developing, about expect product the way we've and line, we about talked we've is market largest market that I on about say we're we're being Yes. that we've the the addressing the size.

DSP kind So we addressing. with being largest we're said, second that that market view as of optical the

is this And for retimers, of And the Ethernet, then so chiplets course. forth. copper and linecard so solutions,

on And our that time, So almost size we I think you'll for in see the by growth driven over we're AECs. be over product sure, will FY addressing. our But time lines. with see the based 'XX all the revenues match markets said, the main that of driver that market being

don't we're a driver, being a than any change faster I thinking there's will product perspective AECs. growth be optical growth about maybe from that so think percentage way in And lines the a Optical

AECs But say, larger what generally, were of seeing great we're design base. course, the board. much is working across a activity from And I'll

I think we out are clear. bring to advantages very market well. playing They're the the that

kind it's been of messaging that same the basically, so giving. And we've

then helpful. here. question this a XX,XXX-foot And Super view is just

You're certain different into applications. seeing expand market the Ethernet

the You're expand. market PCIe also seeing

You in Ethernet to the that Is debate term? on or constant too hear kind of moving to and you playing opinion markets of maybe love benefits your into daily you back you the world. where think towards market more just a just But the it run part do growth well. both across the reach the talked give part allows about towards as that more towards could on end would we commentary in your moves world It's PCIe the of both. Obviously, of longer it.

Yes.

is we our relates heading about it towards Ethernet So PCIe that and the as and the to to PCI And to hot space think advantages speeds We advantage. that market those XXX of a We're we lane. When speeds, bit play where will it's about in out we're space. as in XX plays advantages played solutions, think really the faster same ultimately a our sure. that is bringing market gig that the know agnostic to kind out the heading. for market gig the per go topic

already that With lane UA market in particular, there's that. to per that going that topic a for discussed. And a towards that about well conversation we're is said, feels networks, lane XXX-gig like scale-up it and lot towards if surely, the Ethernet be faster Link to moving positioned pushing speeds. in And XXX-gig moves lane of well is is per

So we PCIe look long as it Ethernet trend lanes, addressing the towards that's And at well really us as faster think well . really as I both advantage clearly for an term.

the And from our coming of next & Quinn will question Needham Bolton Company. of line be

Congratulations on into the guess, results back nice well, well Street for maybe half guidance the the I the you and AEC. above start, Bill, expectations as look to is outlook. of year

that customers changing You that lot into per I that of [ give guys, ] ratio ] per may [ to Can 'XX. X us and sense you some of accelerator have that driving a from NIC you as card 'XX are sort AECs be think, as how of fiscal fiscal XX% number or growth. ship the look

X that might up continues of you could wondering I you from too to but what think you I'm now the to being that have the grow effectively AEC the fiscal bandwidth an business from that one, some attach a have GPU, number get AEC trying that that you into ends 'XX? Just guys, conversations, half ratio if low? one NIC sense if be confidence may gives past to aggregates in that cards, implied

Sure.

customer. architectures seeing each different on seeing what we're architecture, different As really we're it relates is to the based at deployments --

continue it's And I how does kind X per on we've the is any to design products think out, Now we we're I moving of know for connections. ] based don't trend GPUs, and think [ we've things got the tie think these across relates again, as 'XX. And if GPU a that tie one activity approaches, seeing for the of simple don't attach activity. play given really to AECs that itself higher about qualification I map of to we're our trend to to per great do multiple fits think calculation great directly number . I different got multiple that there's But per growth strategy? talked of What fact a towards the different ratio one all. of speeds expectations GPU. building. really out. And do playing from GPU size lane it rates it's a and I see where to in all will can across that that I customers. I that We've of fiscal

GPU a as you you number driven or do market half a attach rack? Or of Maybe, see mostly driven guys the go -- XPUs Bill, year, of just acceleration of devices. by more in seeing of mix deployed? rate higher business Is follow-up, new look you per a the it ASP these some with is as it projects to or per into towards by it second the are the higher shift GPUs an AECs -- is

You about market gig in XXX now. talked the

XXX-gig the all color a it launching ZeroFlap of appreciated. -- be got or Just is X? You've combination would any AECs

Sure.

will I I factors time, long into of those think think play over growth. our all term,

what the related our they've decided of qualification being this of been XX perception. expect we're it it's in more end architectures last several that going on These and quarters that to process. year, through through That's we GPUs seen we've the to what fiscal are As deployed. sheer days, number relates the ago, and are the

that sheer is -- in is last our I opportunity number just the that of think as big. being for deployed, increasing. we saw out the GPUs this think And XX days relates customers number reflects it it there I the is overall what end to

will And question the Svanberg from Tore Stifel. coming line our of next Instructions] of be [Operator

the not on and just strong here, so and that what so of this type forth. ask growth, look of on when results. at to the climate that have inventory this because there's we some visibility given you right, Congratulations question especially gives geopolitical Bill, history, build I the

different there's at that that ways look we things. think I

talked of staged, partners. the from how we've ultimately, can different puts several -- or about any of one are supply standpoint a together kind chain customers of consumed. plan, times, course, see number together And when sets products at the deployments, time, a by our end good how put about that customers actual build Of inventory surge got of [indiscernible] we've pretty given fluctuate deployments maybe on deployments. their our with And into what view is you as is

a we're seeing our that's is inventory logistics consumption there's What lot customers. see right high within don't a now We partners. pretty of rate being built within their

here. mean, of visibility. we Now see said, within right like that's that with -- a happening you're that are what's chain from following one I for shipping. okay, closely I thinking, us now, perspective, time looking that supply that the think the all product we're constantly Any very, we're flow-through really very we better the see surge in of why of course, And

thought? I'm it's Yes. you wondering optical copper. copper That's starting if Credo much [indiscernible], you originally than And obviously, And a that great they you're whether color. is on of customers And unique that Ethernet. these wondering to more large greater perhaps a or to as unique I'm my mentioned of sort or the very for being chose vendor, very obviously latest think has follow-up, system product. PCIe if of and focus their is so really architecture lot opportunities your using see driven why with just about just GPU this, some

two. don't link those personally I

the for them, and wouldn't that's striving I that out. the these larger any What out we I the thing, about find those hard on the I of architecture GPU is all but think But focus scale things. to if what we specifically same say, success. based comment can't we're network each trend the AI engineers guy or on really versus kind a for direction cluster market architecture me that there for where seeing collaborate supplier pursuing are solution. one with link going network is they're certain customer to It's can scale best up that of and there's

will coming of America question Arya And the next from of the Vivek Bank line be Securities. the of

has an is Blackwell Bill, driving inflection product I You that What somewhat. second inflection marks said the when that Because half now? that pushed out look at point. been

a just is this that it more perhaps is Or hoppers there to inflection is lot curious ASIC that more driving just now? more accelerator this is deployments. being So I'm custom are see deployed? what

Sure.

consistent this towards last, X quarters. So that Blackwell. in playing the I pretty is think maybe is say, we've shift long-term talking on don't the And like say, see really based talking like a This edge, plan this have for I leading that about Happening for is a of suggest But about really we to, been with type this out there out on like, the the architectures just is playing been little really frozen. nothing going plan of And this towards, deployment. long-term to say, stronger an a a is bit based than expected. Blackwell that of architecture. you're

being don't have GPU that we visibility say into will is really used. what for I us,

be they at interface we see number fact, customer, an What deploying of In with given any the GPUs. could card. NIC any is

we're as GPU And from agnostic seeing perspective that so we're it's to a -- really the with deployments customers.

Or into and these X, you is XX% X one across XX% go how the customers, customers them? it QX, these customers? driven of growing the demand big is by more on were Just as XX% being

Yes, Vivek, this Dan. is

Let me address that.

mentioned, So we had in as we XX% as surprises X they were. end QX, who to customers no

we last the X described the were AEC X first third. that emerging first quarter The was hyperscaler hyperscalers our then

were above customer see we've XX% a warrant, So were is They the at is during Microsoft, filed, And XX% they second knows you'll whom talked remained is a AEC QX. hyperscale which customer. have when just customer our what that they we that XX%. everyone first a hyperscaler, AEC with Q about

QX from million as be they actually ramp mentioned sequentially down always So expect from didn't were would if quarter, the we to we you And last $XX linear. do $XX math, million. the to QX

that point, single half of driver we that inflection is most However, that really stated customer. second this the previously important

customer So of QX. the obviously, will larger our become as a they a percentage total in

emerging And revenue. XX% at customer were They then the our customer. third hyperscale of

from there's diversification land is the of a takeaways our increase product perspective, perspective. from throughout clearly, from deployment both really And one we solutions for key my environment. QX So need broad-based revenue speeds significant innovative that as a the customer and demonstrated hyperscale

ROTH question line of Desilva coming of Suji And will next Capital. from the be the

strong talk for now Congrats the X to diversification. of penetrating months versus you're terms the that the customer. about guidance. hyperscale ago? about on Maybe be It's the Can would follow-up half. just growing? X it you a be last that's a helpful multiple kind breadth penetrating the on year maybe Is of of Or programs color important going programs program second question in

Yes.

that we're, And with multiple we see again, over think seeing continuing time. I activity customers. that design

And second hard to maybe us certain saw we reviewed particular next surge. do that, and as something talk will Amazon, wasn't so for the an this surge the linear so in up quarter quarter. we about see definitely that just quarter specifically that Dan that about example, as the say, or quarter. how But talked We've particular for numbers first it's customers

got term. of And into design make us And fuel activity period a going we've sure the key can't customer. so much to for you read that a to hyperscalers. too across as The really long much our growth given all given with is XX-day that's

large to how of X customer out Okay. staying X the you're confirm then that broadened I hyperscalers? is Can the Or shipping diversification the -- just that shipping customers now. in to And on large understand yes. pipeline? X you are across all you know there, to they hyperscalers the you're the Or

Yes.

And xAI, on including talked companies kind classify talked about U.S. Oracle. being companies category, And that Omniva. also we've within hyperscalers. focused we've companies of like emerging hyperscalers, we like So really about the

we've relationship -- relationship Microsoft, talked openly what our we've our Amazon. we've so And pretty about with is about with talked

about which exactly customer our during #X we've been during been in hyperscalers. is X lot We haven't conference press a the that represents out of the ZeroFlap xAI mention U.S. too of specifically OCP did with that the the clear work release hyperscaler doing good We category.

or mind all progress. really products, we're form our consuming hyperscalers pretty competitors, been be several that with will production. that's question And say saying can I the that other with so I've fashion AECs. category those With that long hyperscalers, Credo will all AEC AEC term. with And the ramping my no of be our making some be using itself, customers starting U.S. or of I hyperscalers expect of one in all doing consistent that well there's that the we're that in will U.S. whether AECs

As to DSPs, way it optical we're single every really same customer. approaching relates we're trying that the that to penetrate ultimately end

there so And fully we're there. not yet. I We're partially think

think I further so p represents opportunities. that's And -- growth that

be from And of Mizuho. Rakesh our question will next line Vijay the coming of

AI add question quick AI follow-up. I wondering was I have what servers. the would AEC AI 'XX, -- new to percent sorry. calendar into going of in if XX% the a looking a be Just side, side. And was XXXX on And to you revenues customers --

Yes.

AI. were question, think AECs to the is much Is restate correct? that related particular, you I how to just So asking about in

right. . Yes. That's

no all per I'd AI based Yes. we're clear, are is really of are the AEC on solutions with based That's question say the deployments lane There's on shipments that are very XXX speeds. right large applications. gig AI. majority making those now that XXX% especially the

it. Got

So in the 'XX, new terms calendar I customers XX% part second guess? in of

what not QX. this tripped XX% on expect based additional as threshold There out. hyperscaler I would we customers laid that we've mentioned, in have, 'XX, Calendar emerging

in that So again the threshold future. they trip could

is So FY calendar or repeat it sorry. of of expectation kind will year a 'XX, current our we've be had 'XX year through calendar

side, a obviously, you wondering, DSP And But on ramp the have the now? on do there. DSP optical just many optical customers side nice how it. Got

ways. of different look couple that way The can you -- Yes. it a at

can manufacturing we're the module exact being number But for and the with. the position hyperscalers. the that not at partners much You seeing or customers can look at qualifications. to customers activity of that of end end are think broader working I'm design And optical I you with the articulate seeing engaged number at we're of -- in there optical look and from we increased relationships number activity customers level, . a module we're we're

And line the Cowen. of of will question Joshua next from be coming the TD Buchalter

DSPs. numbers. also was XXX was could I a about position, some step hit impressive XX change incumbents record we Should you be market. X-nanometer the some and on DSP you maybe optical DSP -- as spend your results. on and be your talk thinking and about for XXX-gig go-to-market the hear about function and gig proven ] hoping you further a competitive pretty on serving of I'd mentioned grounds. pretty position cited and per about power specifically to catalyst XXX in against [ big feel XX and sort your talking the product how that I are minute X your the curious you -- lane Congrats inflection optical stats mean or competitive

going be this well think half 'XX growth second of We our in as in as per XXX-gig gig lane lane XX fiscal really is Yes. by to and driven that the per designs. year

to that excited fiscal becoming are just market out bit We out. were We than in about than believe a optical market really gig DSPs going taped a that play little lane the that on We fiscal see term is 'XX. longer our per 'XX. probably high-volume XXX

more by and to we're XX that hopefully, The near-term and be more growth gives designs. large lane so you color. the seeing is that And XXX-gig driven gig for so going really per opportunity

increasingly vendors to an customers you multiple generally, the about And saw to projects? maybe in are -- across it. your different clusters. are resilience at the customers you how AI is lead competitor AECs -- have second up guys same I know against specifically? your you are has up, think you or But a sourcing been third spread And speak morning. on wonder, on market sourcing follow different second your AEC it about and guys think AECs using I'd the you and important -- in going from one Or made this Got ecosystem. could of announcement customers if be architectures. you

thoughts your hear to there? curious be Just

also desire the the hyperscaler that. Yes. we're of We're delivering question good definitely to position always if That's strategy samples, have multiple first and for No our to first seeing a seeing ramp. sources. qualification to our continue And delivering what units, qualified first to have customers out can being play be about the is we that to compete from.

We're we've And deliver fact, uniquely the customized to we've -- so at think customers. seen to given for working that several been all out solutions that that different we're firmware the And think able be in of organized SKUs sense I with. I more developed than we've hardware a well in play customers customization with in XX of for flavors got a unique just as that, quarters that position in customization. last different customers as we've several

really expectation job I'm are that comfortable competition source. our second customers living all for how And ultimately with so as customer. to can going we're do the at each delivering we the of very approaching the best

competing we're high the So on. what from ground really is focused

question line Karl be And our of BNP next of will the coming Ackerman from

I have X as well.

you -- line revenue the revenue, how of rather do do more be think onetime business. First of your in licensing I implied could also your licensing than the that that's revenue January contribution outlook. about And how XX% was your question, you quarter, I royalty in -- below regards was hoping anticipate licensing visibility the on appears repayments. I these you you of we more item, to given, whether now in to have your discuss believe, is based

be if helpful. a And could that, you So that just follow-up. have highlight would I

been a And now, we're point IP theme think been we've many, that company. smaller fundamentally This inflection very with that a seeing the product over become revenue last very consistent over will many that consistent. has especially say right percentage that the I'll product I Well, licensing we're quarters time.

the as to really ROI see. it treat We're We opportunities will strategically. to different that driven we'll business the continue relates

threshold guidance. specifically about about asked number we much a as a hitting talk XX% on You increased

I that in current not to quarter. expectation my XX% that would cross this say threshold is

pursue see a As somewhat the good But over licenses the that we'll think we be IP be we rules look time, the is that too And that. to the will continue revenue really company. in for beyond business different can't specific recognition this written. have we'll lumpy I -- way return that are that we

X in than card that the can the DSP [ these as or as are in offering? primarily concentrated broad X% just also occurring Sure. revenue you helpful. greater customers other Of you buckets customer in, are is breadth about of Or segmentation where would be Maybe X that well mentioned, speak offering your they the line AECs. ] customers

you card say. product And our had, is I did lines, would line we our sequential definitely those XX% broad-based concentrated strengths, the what among AEC. X fact, make growth if top talk are in of AEC, retimers. quarterly that comments. Optical We about But we in all had customers Yes. It's plus largely and

customers we broadly So was could if you related. about kind not that correctly just talked you of -- based, assume X additional the AEC

Please Q&A over conclude for this And for back go remarks. today. the Brennan the session would does I Bill to now turn you. like closing call to ahead. Thank

Credo, So callbacks. all in forward to much the appreciate for the ongoing Really interest look you and very thank the I questions.

very So thank you much.

conference This Thank you for today's today's does joining call. conclude meeting.

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