Second Quarter of Fiscal Year 2026 Financial Highlights
- Revenue of $268.0 million, grew by 20.2% QoQ and 272.1% YoY
- GAAP gross margin of 67.5% and non-GAAP gross margin of 67.7%
- GAAP operating expenses of $102.3 million and non-GAAP operating expenses of $57.3 million
- GAAP net income of $82.6 million and non-GAAP net income of $127.8 million
- GAAP diluted net income per share of $0.44 and non-GAAP diluted net income per share of $0.67
- Ending cash and short-term investment balance of $813.6 million
Guidance Third Quarter of Fiscal Year 2026
- Revenue 335 million to 345 million
- GAAP Gross Margin 63.8-65.8%
- GAAP operating Expense 116-120 Million
- non-GAAP operating Expenses 68-72 Million
Key Information from Conference Call
- 4 customers above 10% revenue and expect a 5th to join them
- ALC (Active LED Cables) TAM is twice as large as AEC (Active Electronic Cable) TAM [5-10B]
- 3 new product lines in optical space
- Omnionnect transports memory data and competes with HBM by allowing memory to be moved up to 10 inches away. This increases reliability as well as lift physical limitations on density.
- Most sales are in 50 gig per lane but seeing transition to 100 gig per lane product and future sales in 200 gig per lane.
“As a result, we expect our non-GAAP net margin to be approximately 45% for fiscal year '26. This should translate to net income more than quadrupling year-over-year.”
Thoughts
They are performing extremely well. They are guiding 28% QoQ growth at the high side and in the last year they have beat their high side guidance by an average of 9%. They do seem a little expensive with a P/E of 154 but their non-GAAP run rate P/E is 64. A 2.4 ratio is a very promising sign that the company has been accelerating its bottom line growth.
Drew
Long CRDO
23 Likes
I had Chat GPT do a comparative analysis of CRDO and ALAB’s results this quarter. Not sure why ALAB hasn’t had a similar response to its excellent earnings (maybe not as excellent as CRDO’s, but still splendid) and why it reversed hard this morning from 181 to 151 within a little over an hour. 
Comparative Strengths & Differences
| Metric / Feature |
CRDO (Credo) |
ALAB (Astera Labs) |
| Revenue (latest quarter) |
US$ 268.0M (higher) |
US$ 230.6M |
| YoY revenue growth |
+272% YoY (very strong) |
+104% YoY (strong) |
| Profitability |
GAAP net income of US$ 82.6M; non-GAAP EPS US$ 0.67 (turnaround from prior net loss) |
Net income US$ 91.1M; EPS US$ 0.49–0.50 (continuing profit) |
| Gross margin |
~67.5% (good margin) |
~76.2% (very high margin) |
| Business momentum |
Sharp inflection — scaling fast with AEC shipments to hyperscalers |
Steady growth — benefiting from demand for AI-connectivity chips, PCIe, fabric switches |
| Cash / Balance-sheet |
~US$ 813.6M cash + short-term investments — strong liquidity |
Reported ~$1.13B cash (most recent balance) and modest debt-to-equity — healthy position Yahoo Finance+2Yahoo Finance+2 |
Interpretation
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CRDO shows a dramatic acceleration: massive revenue growth and a swing from loss to profit. That suggests it’s rapidly scaling its connectivity-hardware business — likely driven by surging demand from AI/hyperscale data centers.
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ALAB, while growing less explosively, rests on strong margins and continues to deliver stable profitability, indicating mature product adoption and solid execution in delivering semiconductor-based connectivity solutions.
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The higher gross margin for ALAB suggests its product mix (semiconductor connectivity, retimers, fabric switches) may carry higher margin than CRDO’s — which seems to rely heavily on volume of Active Electrical Cables (AEC).
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CRDO appears more “high growth / rapid scale-up,” while ALAB appears more “high-margin, stable growth” — different value propositions in the AI infrastructure supply chain.
What This Means for Investors or Observers
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If you are looking for fast growth and upside potential in AI-infrastructure demand, CRDO might appeal more — it’s rapidly scaling and benefiting from surging data center connectivity demand.
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If you prefer high margin, proven execution, and steadier profitability, ALAB offers a more conservative but solid base, potentially less volatility and more consistent performance.
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Both companies benefit from the broader AI / cloud-infrastructure boom — but they are playing different roles: CRDO as a high-volume cable/connectivity supplier; ALAB as a semiconductor-centric, margin-optimized connectivity solutions provider.
14 Likes
Alab pulled back on the AMD-Oracle announcement for a datacenter. It seems like AMD is doing a large portion of the datacenter.
I am not sure why that is pullback worthy because AMD doesn’t make retimers.
Drew
6 Likes
I guess TD Cowen lowered ALAB to a HOLD today and lowered price target from 225 to 170. I’ve been adding all day and doubled my position.
13 Likes