SAN JOSE, Calif.--(BUSINESS WIRE)--June 02, 2025--
Credo Technology Group Holding Ltd (Nasdaq: CRDO) ("Credo"), an innovator in providing secure, high-speed connectivity solutions that deliver improved reliability and energy efficiency as data rates and corresponding bandwidth requirements increase throughout the data infrastructure market, today reported financial results for the fourth quarter and full fiscal year 2025, ended May 3, 2025.
Fourth Quarter of Fiscal Year 2025 Financial Highlights
--
Revenue of $170.0 million grew by 25.9% quarter over quarter and 179.7%
year over year
--
GAAP gross margin of 67.2% and non-GAAP gross margin of 67.4%
--
GAAP operating expenses of $80.4 million and non-GAAP operating
expenses of $52.0 million
--
GAAP net income of $36.6 million and non-GAAP net income of $65.3
million
--
GAAP diluted net income per share of $0.20 and non-GAAP diluted net
income per share of $0.35
--
Ending cash and short-term investment balance of $431.3 million
Management Commentary
Bill Brennan, Credo's President and Chief Executive Officer, stated, "I'm proud of Credo's achievements in fiscal 2025. For the year, the Company delivered record-breaking financial results, with revenue up 126% year over year to $436.8 million. The Company's results were fueled by surging demand for our innovative, reliable, and energy-efficient high-performance connectivity solutions. We continue to see growing demand for our solutions across hyperscaler customers to power advanced AI services, a trend we believe will persist for the foreseeable future."
First Quarter of Fiscal Year 2026 Financial Outlook
--
Revenue is expected to be between $185.0 million and $195.0 million
--
GAAP gross margin is expected to be between 63.4% and 65.4%, and
non-GAAP gross margin is expected to be between 64.0% and 66.0%
--
GAAP operating expenses are expected to be between $88.3 million and
$90.3 million, and non-GAAP operating expenses are expected to be between
$54.0 million and $56.0 million
Webcast and Conference Call Information
Credo will conduct a conference call on Monday, June 2, 2025, at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter and fiscal year 2025, ended May 3, 2025. Interested parties may join the conference call by dialing 888-596-4144 (toll-free) or +1 646-968-2525 (international). The conference ID for the call is 5251802. It is recommended that participants register and dial in for the call at least 10 minutes before the start of the call. A live webcast of the conference call will be available on Credo's Investor Relations website at http://investors.credosemi.com/. A replay of the webcast will be available via the web at http://investors.credosemi.com/.
Discussion of Non-GAAP Financial Measures
This press release contains references to the non-GAAP financial measures of non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating income (loss) margin, non-GAAP net income (loss) and non-GAAP diluted net income (loss) per share. Reconciliation of these non-GAAP measures to their comparable GAAP measures is included below. This non-GAAP information should not be construed as an alternative to the reported results determined in accordance with GAAP.
Non-GAAP financial measures exclude the effect of share-based compensation expenses, asset impairment and related charges (if applicable), and the related tax effect adjustment to the provision for income taxes.
Credo uses a full-year non-GAAP tax rate to compute the non-GAAP tax provision. This full-year non-GAAP tax rate is based on Credo's annual GAAP income, adjusted to exclude non-GAAP items, as well as the effects of significant non-recurring and period-specific tax items which vary in size and frequency. Credo's non-GAAP tax rate is determined on an annual basis and may be adjusted during the year to take into account events that may materially affect the non-GAAP tax rate, such as tax law changes, significant changes in Credo's geographic mix of revenue and expenses or changes to Credo's corporate structure.
GAAP diluted net income (loss) per share is calculated using basic weighted average shares outstanding when there is a GAAP net loss, and calculated using diluted weighted average shares outstanding when there is a GAAP net income. Non-GAAP diluted net income (loss) per share is calculated using basic weighted average shares outstanding when there is a non-GAAP net loss, and calculated using non-GAAP diluted weighted average shares outstanding when there is a non-GAAP net income. Non-GAAP adjustment for the number of shares used in the diluted per share calculations excludes the impact of share-based compensation expenses expected to be incurred in future periods and not yet recognized in the financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method.
Credo believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to Credo's financial condition and results of operations. While Credo uses non-GAAP financial measures as a tool to enhance its understanding of certain aspects of its financial performance, Credo does not consider these measures to be a substitute for, or superior to, financial measures calculated in accordance with GAAP. Consistent with this approach, Credo believes that disclosing non-GAAP financial measures to the readers of its financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial measures, allows for greater transparency in the review of its financial and operational performance.
Externally, management believes that investors may find Credo's non-GAAP financial measures useful in their assessment of Credo's operating performance and the valuation of Credo. Internally, Credo's non-GAAP financial measures are used in the following areas:
--
Management's evaluation of Credo's operating performance;
--
Management's establishment of internal operating budgets; and
--
Management's performance comparisons with internal forecasts and
targeted business models.
Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of Credo's business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of Credo's results as reported under GAAP. The exclusion of the above items from our GAAP financial metrics does not necessarily mean that these costs are unusual or infrequent.
Forward-Looking Statements under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact could be deemed forward-looking statements, including, but not limited to, any statements regarding: launches of new or expansion of existing products or services; technology developments and innovation; our plans, strategies or objectives with respect to future operations; financial outlook; future financial results; expectations regarding the markets and industries in which Credo conducts business; and assumptions underlying any of the foregoing. Words such as "anticipates," "expects," "intends," "plans," "projects," "believes," "seeks," "estimates," "can," "may," "will," "would," "outlook," "forecast," "targets" and similar expressions, or their negatives, may identify such forward-looking statements. These statements are not guarantees of results and should not be considered as an indication of future activity or future performance. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties that may cause actual events or results to differ materially from those described in this press release. Readers are encouraged to review risk factors and all other disclosures appearing in Credo's Annual Report on Form 10-K as filed with the Securities and Exchange Commission $(SEC.UK)$ on June 24, 2024, as well as Credo's other filings with the SEC, for further information on risks and uncertainties that could affect Credo's business, financial condition and results of operation. Copies of these filings are available from the SEC, Credo's website or Credo's investor relations department. Forward-looking statements speak only as of the date they are made. Credo assumes no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date herein.
About Credo
At Credo, our mission is to redefine high-speed connectivity by delivering breakthrough solutions that enable the next generation of AI-driven applications. We are committed to enabling faster, more reliable, more energy-efficient, and scalable solutions that support the ever-expanding demands of AI, cloud computing, and hyperscale networks. Our connectivity solutions are optimized for optical and electrical Ethernet applications, including the 100G (or Gigabits per second), 200G, 400G, 800G and emerging 1.6T (or Terabits per second) port markets. Our products are based on our proprietary Serializer/Deserializer (SerDes) and Digital Signal Processor $(DSP)$ technologies. Our product families include integrated circuits (ICs), Active Electrical Cables (AECs) and SerDes Chiplets. Our intellectual property $(IP)$ solutions consist primarily of SerDes IP licensing.
For more information, please visit https://www.credosemi.com. Follow Credo on LinkedIn.
Credo and the Credo logo are registered trademarks of Credo Technology Group Limited in the United States and other jurisdictions. All other trademarks referenced herein are the property of their respective owners.
Credo Technology Group Holding Ltd
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
Three Months Ended Year Ended
------------------------------ ---------------------
May 3, February April 27, May 3, April 27,
2025 1, 2025 2024 2025 2024
-------- --------- --------- -------- -----------
Revenue:
Product sales $164,524 $ 129,371 $ 40,798 $412,177 $145,048
Product
engineering
services 1,337 2,667 3,341 12,122 19,898
IP license 4,164 2,964 16,643 12,476 28,024
------- -------- ------- ------- -------
Total revenue 170,025 135,002 60,782 436,775 192,970
Cost of revenue:
Cost of product
sales revenue 55,779 48,835 20,372 152,381 70,498
Cost of product
engineering
services
revenue 58 233 290 1,314 2,225
Cost of IP
license
revenue -- 8 154 171 816
------- -------- ------- ------- -------
Total cost of
revenue 55,837 49,076 20,816 153,866 73,539
------- -------- ------- ------- -------
Gross
profit 114,188 85,926 39,966 282,909 119,431
------- -------- ------- ------- -------
Operating expenses:
Research and
development 47,582 36,261 26,921 145,994 95,531
Selling, general
and
administrative 31,945 23,471 20,161 98,918 60,193
Impairment
charges 873 -- 765 873 765
------- -------- ------- ------- -------
Total
operating
expenses 80,400 59,732 47,847 245,785 156,489
------- -------- ------- ------- -------
Operating
income
(loss) 33,788 26,194 (7,881) 37,124 (37,058)
------- -------- ------- ------- -------
Other income, net 3,821 3,918 5,163 17,746 14,313
------- -------- ------- ------- -------
Income (loss)
before income
taxes 37,609 30,112 (2,718) 54,870 (22,745)
------- -------- ------- ------- -------
Provision for
income taxes 1,021 752 7,759 2,687 5,624
------- -------- ------- ------- -------
Net income
(loss) $ 36,588 $ 29,360 $(10,477) $ 52,183 $(28,369)
======= ======== ======= ======= =======
Net income (loss)
per share:
Basic $ 0.21 $ 0.17 $ (0.06) $ 0.31 $ (0.18)
Diluted $ 0.20 $ 0.16 $ (0.06) $ 0.29 $ (0.18)
======= ======== ======= ======= =======
Weighted average
shares used in
computing net
income (loss) per
share:
Basic 170,405 168,167 163,677 167,505 155,091
Diluted 182,119 182,464 163,677 181,158 155,091
======= ======== ======= ======= =======
Credo Technology Group Holding Ltd
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
May 3, 2025 April 27, 2024
-------------- -------------------
Assets
Current assets:
Cash and cash equivalents $ 236,328 $ 66,942
Short-term investments 195,010 343,061
Accounts receivable 162,144 59,662
Inventories 90,029 25,907
Other current assets 30,023 34,693
--------- ------------
Total current assets 713,534 530,265
Property and equipment, net 63,631 43,665
Right-of-use assets 15,234 13,077
Other non-current assets 16,858 14,925
--------- ------------
Total assets $ 809,257 $ 601,932
========= ============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 56,158 $ 13,417
Accrued compensation and
benefits 16,097 9,000
Other current liabilities 35,456 22,203
--------- ------------
Total current liabilities 107,711 44,620
Non-current operating lease
liabilities 12,693 11,133
Other non-current liabilities 7,271 5,981
--------- ------------
Total liabilities 127,675 61,734
--------- ------------
Shareholders' equity:
Ordinary shares 8 8
Additional paid-in capital 765,173 676,054
Accumulated other comprehensive
loss (437) (519)
Accumulated deficit (83,162) (135,345)
--------- ------------
Total shareholders' equity 681,582 540,198
--------- ------------
Total liabilities and
shareholders' equity $ 809,257 $ 601,932
========= ============
Credo Technology Group Holding Ltd
Reconciliations from GAAP to Non-GAAP Results (Unaudited)
(In thousands, except percentages and per share amounts)
Three Months Ended Year Ended
---------------------------------------- --------------------------
May 3, February 1, April 27, May 3, April 27,
2025 2025 2024 2025 2024
------------ ------------ ------------ ------------ ------------
GAAP gross profit $114,188 $ 85,926 $ 39,966 $282,909 $119,431
Reconciling item:
Share-based
compensation 356 226 234 1,194 1,131
------- ------- ------- ------- -------
Total reconciling
item 356 226 234 1,194 1,131
------- ------- ------- ------- -------
Non-GAAP gross
profit $(A)$ $114,544 $ 86,152 $ 40,200 $284,103 $120,562
======= ======= ======= ======= =======
GAAP gross margin 67.2% 63.6% 65.8% 64.8% 61.9%
======= ======= ======= ======= =======
Non-GAAP gross
margin 67.4% 63.8% 66.1% 65.0% 62.5%
======= ======= ======= ======= =======
Total GAAP
operating
expenses $ 80,400 $ 59,732 $ 47,847 $245,785 $156,489
Reconciling items:
Share-based
compensation (27,506) (15,964) (14,344) (76,161) (37,891)
Impairment
and related
charges (873) -- (765) (873) (765)
------- ------- ------- ------- -------
Total reconciling
items (28,379) (15,964) (15,109) (77,034) (38,656)
------- ------- ------- ------- -------
Total Non-GAAP
operating expenses
$(B)$ $ 52,021 $ 43,768 $ 32,738 $168,751 $117,833
======= ======= ======= ======= =======
GAAP operating
income (loss) $ 33,788 $ 26,194 $ (7,881) $ 37,124 $(37,058)
======= ======= ======= ======= =======
Non-GAAP operating
income (A-B) $ 62,523 $ 42,384 $ 7,462 $115,352 $ 2,729
======= ======= ======= ======= =======
GAAP operating
income (loss)
margin 19.9% 19.4% (13.0)% 8.5% (19.2)%
======= ======= ======= ======= =======
Non-GAAP operating
income margin 36.8% 31.4% 12.3% 26.4% 1.4%
======= ======= ======= ======= =======
GAAP net income
(loss) $ 36,588 $ 29,360 $(10,477) $ 52,183 $(28,369)
Reconciling items:
Share-based
compensation 27,862 16,190 14,578 77,355 39,022
Impairment
and related
charges 873 -- 765 873 765
------- ------- ------- ------- -------
Pre-tax total
reconciling items 28,735 16,190 15,343 78,228 39,787
Other income
tax effects
and
adjustments (69) (172) 6,940 (485) 3,152
------- ------- ------- ------- -------
Non-GAAP net income $ 65,254 $ 45,378 $ 11,806 $129,926 $ 14,570
======= ======= ======= ======= =======
GAAP weighted
average shares -
basic 170,405 168,167 163,677 167,505 155,091
======= ======= ======= ======= =======
GAAP weighted
average shares -
diluted 182,119 182,464 163,677 181,158 155,091
======= ======= ======= ======= =======
Non-GAAP
adjustment 4,824 2,028 15,463 3,486 15,053
Non-GAAP weighted
average shares -
diluted 186,943 184,492 179,140 184,644 170,143
======= ======= ======= ======= =======
GAAP diluted net
income (loss) per
share $ 0.20 $ 0.16 $ (0.06) $ 0.29 $ (0.18)
======= ======= ======= ======= =======
Non-GAAP diluted
net income per
share $ 0.35 $ 0.25 $ 0.07 $ 0.70 $ 0.09
======= ======= ======= ======= =======
Credo Technology Group Holding Ltd Reconciliation of GAAP
Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates (In
millions, except percentages)
Three Months Ended
August 2, 2025
-------------------------------
Low High
----------------- ------------
GAAP gross margin 63.4% 65.4%
Reconciling item:
Share-based compensation 0.6% 0.6%
------- --- ------
Total reconciling item 0.6% 0.6%
------- --- ------
Non-GAAP gross margin 64.0% 66.0%
======= === ======
Total GAAP operating expenses $ 88.3 $ 90.3
Reconciling item:
Share-based compensation 34.3 34.3
------- ---- ------ ---
Total reconciling item 34.3 34.3
------- ---- ------ ---
Total non-GAAP operating expenses $ 54.0 $ 56.0
======= ==== ====== ===
View source version on businesswire.com: https://www.businesswire.com/news/home/20250602805230/en/
CONTACT: Investor Contact:
Dan O'Neil
dan.oneil@credosemi.com
Media Contact:
Diane Vanasse
diane.vanasse@credosemi.com
(END) Dow Jones Newswires
June 02, 2025 16:05 ET (20:05 GMT)
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