Credo Technology Group (CRDO) investor relations material

Deal rationale and strategic fit

• Acquisition expands the optical portfolio and accelerates expansion into silicon photonics and next-generation optical connectivity, strengthening position across the connectivity stack for AI infrastructure and deepening the optical interconnect portfolio across 800G, 1.6T, and 3.2T NPO and CPO.

• Integrates industry-leading silicon photonics PIC technology in-house, reducing component complexity, improving manufacturing yields, and enabling a more complete connectivity platform and system-level design.

• Enables a vertically integrated connectivity stack spanning SerDes, DSP, silicon photonics, and system integration for scale-out and scale-up networks, leveraging a system-level approach for optimized, energy-efficient solutions.

• DustPhotonics' differentiated SiPho PIC portfolio complements existing DSP and ZeroFlap Optical Transceiver platforms, simplifying architectures, reducing laser count, and supporting higher speeds with a roadmap to 3.2 Tbps.

• Strengthens position in AI-driven, hyperscale cloud infrastructure by offering end-to-end optical connectivity solutions and addressing both pluggable and scale-up network opportunities, including future CPO and NPO solutions.

Financial terms and conditions

• Upfront consideration of $750 million in cash and approximately 0.92 million shares of common stock, with potential contingent consideration of up to 3.21 million additional shares based on financial milestones.

• The agreement includes a contingency earn-out over two years, based on a mix of financial metrics.

• The deal is expected to be accretive to non-GAAP earnings per share in fiscal 2027 and beyond.

• Deal expected to close in the second quarter of calendar 2026, subject to customary closing conditions and regulatory approvals.

Synergies and expected cost savings

• Owning both DSP and PIC components enables faster product development, improved margins, and elimination of margin stacking from third-party purchases, while in-house SiPho PIC capability mitigates external supply dependencies.

• Integration of silicon photonics into ZF Optics is expected to be accretive to gross margins, targeting mid-60s%.

• Integration expected to lower cost structure at scale and improve reliability and power efficiency for AI clusters.

• Combined portfolio projected to generate over $500 million in optical revenue in fiscal 2027.