Data Center
Credo Fiscal Q3: Hypergrowth, Strong Margins, and AI Accelerator Agnostic
Credo reported a large beat and raise in Q3 ending in January, with revenue coming in more than 12% above estimates at $135 million for growth of 154.4% YoY and 87.4% QoQ. This is the most growth I can recall from any AI-related earnings report this quarter with an earnings season that wraps up this evening. Gross margin exceeded management’s guidance at 63.6% while Credo’s strong operating leverage was visible as operating margin came in nearly 8 points ahead of guidance and improved more than 30 points sequentially. Also, note that Credo had very high customer concentration this quarter with 86% of revenue from one customer (hinted to be Amazon) yet is ramping with other hyperscalers (likely Microsoft, xAI, Oracle). This means the company is agnostic, which is truly the best spot to be given they have both large custom silicon and merchant GPU customers.
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