Credo Technology Group's Q4 2025: Unpacking Contradictions on Customer Concentration, Margins, and Market Growth

Customer concentration and diversification, gross margin expectations, new hyperscaler ramp timelines, optical DSP market growth, and customer concentration and diversification are the key contradictions discussed in Credo Technology Group's latest 2025Q4 earnings call.



Revenue Growth and Market Inflection:
- Credo Technology Group reported revenue of $170 million for Q4 fiscal '25, marking a 26% sequential increase and 180% year-over-year growth.
- This growth was driven by surging demand for the company's innovative, reliable, and energy-efficient high-performance connectivity solutions, as well as a long-term commitment to customer-driven innovation.

Operational and Financial Performance:
- For fiscal '25, Credo achieved revenue of $437 million, indicating a 126% year-over-year increase, with a non-GAAP gross margin of 65%.
- The company's strong financial performance was attributed to significant product revenue growth and effective top-line leverage, resulting in an earnings per share improvement of $0.62.

Active Electrical Cable (AEC) Market Expansion:
- Credo’s AEC product line maintained a steep growth trajectory, with record revenue levels in Q4.
- This growth is due to the increasing diversified customer base, including three hyperscalers each contributing over 10% of revenue, and the adoption of AECs as a robust rack-to-rack solution.

Optical and Retimer Product Success:
- Credo's optical business achieved growth targets, with significant DSP wins for an 800 gig transceiver, and strong customer diversity across lane rates and port speeds.
- This success was driven by new product announcements, such as 5 nanometer 100 gig per lane optical DSPs, and strategic partnerships for product demonstrations.