Erik Isakson Credo Technology (NASDAQ:CRDO) is a leading player in the high-performance connectivity market, with rapid business growth driven by AI and data center expansions. I anticipate that Credo will significantly grow its comprehensive Ethernet connectivity solutions in the near future., doubling its AI related revenue by FY25. I am initiating with a 'Buy' rating with a one-year price target of $35 per share. Leadership in High-Speed Connectivity Market Credo Technology is a pure play in the connecti ...

Revenue and Gross Margin - Revenue for fiscal 2024 increased by $8.8 million primarily due to increases in product engineering services revenue of $9.1 million[534] - Product sales revenue growth was driven by Chiplet and Optical products, offset by a modest decline in AEC products, resulting in a more diverse product mix in fiscal 2024[535] - Gross margin increased by 4.2 percentage points in fiscal 2024, driven by higher product engineering services revenue and improved product sales gross margin from 46.9% to 51.4%[536][537] - Total cost of revenue decreased by 5.7% to $73.5 million in fiscal 2024 compared to $78.0 million in fiscal 2023[565] - Gross profit increased by 12.5% to $119.4 million in fiscal 2024, with gross margin improving to 61.9% from 57.7% in fiscal 2023[565] Expenses - Research and development expenses increased by $18.8 million in fiscal 2024, primarily due to $7.0 million in personnel costs and $8.0 million in share-based compensation[538] - Selling, general and administrative expenses increased by $11.9 million in fiscal 2024, driven by $2.6 million in personnel costs and $7.0 million in share-based compensation[539] - Research and development expenses increased by 24.4% to $95.5 million in fiscal 2024, representing 49.5% of total revenue[565] - Impairment charges decreased by 68.2% to $765,000 in fiscal 2024, representing 0.4% of total revenue[567] - Provision for income taxes increased by $7.0 million in fiscal 2024 due to a full valuation allowance for U.S. deferred tax assets[568] Cash Flow and Financing - Net cash used in investing activities was $130.9 million in fiscal 2023, primarily due to $21.7 million in property and equipment purchases and $159.2 million in certificates of deposit investments[544] - Net cash provided by financing activities was $4.9 million in fiscal 2023, mainly from $5.5 million in proceeds from employee share options and share purchase plans[546] - Net cash used in operating activities was $24.6 million in fiscal 2023, driven by a $16.5 million net loss and $50.4 million in working capital outflows[571] - Net cash used in investing activities was $249.5 million in fiscal 2024, primarily due to $169.8 million in investments in certificates of deposit and $15.7 million in property and equipment purchases[572] - Net cash provided by financing activities was $175.3 million in fiscal 2024, mainly from $173.4 million in proceeds from a follow-on public offering[573] - The company maintains sufficient cash and cash equivalents to meet its needs for at least the next 12 months[569] Inventory and Assets - Inventory totaled $25.9 million as of April 27, 2024, representing 4.3% of total assets, valued at the lower of cost and net realizable value[563] Foreign Exchange and Risk Management - Foreign exchange sensitivity analysis showed that a 10% weakening of the U.S. dollar would increase operating expenses by approximately 2% in fiscal 2024[554] - The company may enter into foreign currency derivatives in the future to hedge against foreign exchange risks[581] Customer Concentration - Two customers accounted for 39% and 15% of total revenue in fiscal 2024, with the top 10 customers representing approximately 86% of total revenue[117]

Financial Data and Key Metrics Changes - In fiscal Q4, the company reported record revenue of $60.8 million, up 15% sequentially and up 89% year-over-year [23][50] - For fiscal year 2024, total revenue reached $193 million, a 5% increase year-over-year, with product revenue growing by 8% [49] - Non-GAAP gross margin for Q4 was 66.1%, exceeding guidance and up 391 basis points sequentially [53] - Non-GAAP operating income was a record $7.5 million in Q4, with an operating margin of 12.3%, a sequential increase of 771 basis points [55] Business Line Data and Key Metrics Changes - The AEC product line continued to lead the market, with significant customer engagement and a transition from concept to a de facto solution in many data centers [24][27] - The Optical DSP products achieved material production revenue, with significant wins at hyperscalers [28] - The SerDes licensing business performed well, with solid results driven by speed and power efficiency [35] Market Data and Key Metrics Changes - Approximately three-quarters of total revenue in Q4 was driven by AI workloads, indicating a strong market demand for high bandwidth and energy-efficient connectivity solutions [20][60] - The company expects AI revenue to double year-over-year from Q4 fiscal 2024 to Q4 fiscal 2025 [60] Company Strategy and Development Direction - The company aims to increase product margins and operating leverage as it scales, focusing on innovative, low-power, customer-centric connectivity solutions [22][38] - The strategy includes deepening customer relationships and enhancing speed-to-market for customized solutions [25][96] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for AI-related products and the company's ability to capitalize on this trend [37][60] - The company anticipates an inflection point in AEC revenue growth during the second half of fiscal 2025, driven by customer feedback and forecasts [27] Other Important Information - The company ended Q4 with cash and equivalents of $410 million, maintaining a strong capital position for future investments [57] - Non-GAAP operating expenses in Q4 were $32.7 million, reflecting a 7% sequential increase due to R&D and SG&A investments [54] Q&A Session Summary Question: Can you provide details on the revenue mix from your largest customers? - The company had four customers contributing over 10% of revenue in Q4, including two AEC hyperscalers and a large consumer company [64][65] Question: What is the status of the third hyperscaler customer? - The third hyperscaler is engaged in a switch rack program at 50 gig per lane, with additional programs for AI appliance racks at 100 gig per lane expected to ramp in the second half of the fiscal year [70] Question: How is AI revenue expected to grow in the next fiscal year? - AI revenue is expected to double year-over-year, with significant contributions from production scale programs across multiple customers [60][75] Question: What is the outlook for non-AI revenue? - Non-AI revenue is expected to see modest year-over-year growth, with AI programs driving the majority of growth in fiscal 2025 [74] Question: How is the company addressing competition in the AEC market? - The company has not seen significant changes in the competitive environment and continues to focus on being first to deliver and qualify products [45]

What's Next for Credo Technology Group? While Credo Technology Group has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? Credo Technology Group Holding Ltd. (CRDO) came out with quarterly earnings of $0.07 per share, beating the Zacks Consensus Estimate of $0.05 per share. This compares to loss of $0.04 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 40%. ...

Exhibit 99.1 Credo Technology Group Holding Ltd Reports Fourth Quarter and Fiscal Year 2024 Financial Results San Jose, Calif. (May 29, 2024) - Credo Technology Group Holding Ltd (Nasdaq: CRDO) ("Credo"), an innovator in providing secure, high-speed connectivity solutions that deliver improved energy efficiency, today reported financial results for the fourth quarter and full fiscal year 2024, ended April 27, 2024. Fourth Quarter of Fiscal Year 2024 Financial Highlights Management Commentary Bill Brennan, C ...

SAN JOSE, Calif., May 29, 2024 (GLOBE NEWSWIRE) -- Credo Technology Group Holding Ltd (Nasdaq: CRDO) ("Credo"), an innovator in providing secure, high-speed connectivity solutions that deliver improved energy efficiency, today reported financial results for the fourth quarter and full fiscal year 2024, ended April 27, 2024. Bill Brennan, Credo's President and Chief Executive Officer, stated, "In fiscal 2024, Credo achieved record revenue of $193.0M, with strong contributions from each of our product and lic ...

The presentation will be webcast live on Credo's IR website at http://investors.credosemi.com/. The webcast replay will be available as soon as possible following the event on Credo's IR website. About Credo SAN JOSE, Calif., May 21, 2024 (GLOBE NEWSWIRE) -- Credo Technology Group Holding Ltd (Credo) (NASDAQ:CRDO), an innovator in providing secure, high-speed connectivity solutions that deliver improved energy efficiency as data rates and corresponding bandwidth requirements increase throughout the data inf ...

shulz Overview My recommendation for Credo Technology (NASDAQ:CRDO) is a buy rating, as I have become more confident that growth will accelerate in the coming years. CRDO is also gradually diversifying its customer base, which is great as it reduces the volatility of growth. Given this positive outlook, I have shifted my view that CRDO’s valuation multiple would see a mean reversion to sustaining at a premium multiple. Note that I previously rated the buy rating for CRDO as the growth outlook remains po ...

Keysight co-developed the industry’s first working 1.6 terabit Ethernet test and measurement system in a testbed with Credo Semiconductor. Running at full line rate, it can transmit and process more than a billion packets per second over a 2-meter active electrical cable – an unprecedented rate of speed. (Photo: Business Wire)Keysight co-developed the industry’s first working 1.6 terabit Ethernet test and measurement system in a testbed with Credo Semiconductor. Running at full line rate, it can transmit an ...

Jacob Wackerhausen/iStock via Getty Images Credo Technology (NASDAQ:CRDO) is a company providing high-speed connectivity solutions, such as integrated circuits / ICs, Active Electrical Cables / AECs, and Serializer and Deserializaer / SerDes Chiplets. Share performance has been relatively strong since going public in 2022 at the price of $11 per share. Despite the demand shock from a major customer in 2023 that caused the stock to reach an all-time low of $8, CRDO has had a strong rebound since. Over the pa ...