Financial Data and Key Metrics Changes - The company reported Q3 revenue of $53.1 million, which is up 20% sequentially but down 2% year-over-year [11] - Non-GAAP gross margin for the product business was 62.2%, an increase of 235 basis points sequentially [82] - Non-GAAP net income for Q3 was $6.3 million, compared to $1.2 million in the previous quarter [13] - The company expects Q4 revenue to be between $59 million and $62 million, representing a 14% sequential increase at the midpoint [14] Business Line Data and Key Metrics Changes - The IP business generated $1.3 million in Q3, down 83% sequentially and down 90% year-over-year [11] - The product business generated $51.8 million in revenue in Q3, up 41% sequentially and up 24% year-over-year [82] - Non-GAAP operating income was $2.4 million in Q3, compared to a non-GAAP operating loss of $0.7 million last quarter [83] Market Data and Key Metrics Changes - The company anticipates that U.S. hyperscalers will continue to dominate AEC demand in the foreseeable future [70] - The optical DSP market is gaining traction, with production shipments to multiple global hyperscale end customers [77] - The company is engaged with five U.S. hyperscalers and other global hyperscalers for various applications [70] Company Strategy and Development Direction - The company is focused on innovation in its SerDes technology, which is critical for high-speed connectivity solutions [74] - There is an emphasis on developing AEC solutions for both front-end and back-end networks, with expectations for significant revenue growth [76] - The company is also working on 400-gig and 800-gig AEC solutions, which are expected to yield significant future revenue [76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the increasing market demand for high-speed connectivity driven by AI applications [69] - The company expects an inflection point in the second half of fiscal '25, indicating a positive outlook for future revenue growth [16] - Management noted that the visibility into customer projects has improved, leading to greater confidence in revenue forecasts [100] Other Important Information - The company ended the quarter with cash and equivalents of $409.1 million, an increase of $168.6 million from the previous quarter [112] - Total non-GAAP operating expenses in Q3 were $30.6 million, up 13% sequentially and up 19% year-over-year [111] - The company is well-capitalized to continue investing in growth opportunities while maintaining a substantial cash buffer [112] Q&A Session Summary Question: What is the outlook for the AEC market? - Management indicated that the AEC market is heating up, with increasing interest from customers and expectations for broader adoption in the future [47][62] Question: How does the company view the competitive landscape in the optical DSP market? - Management noted that they are agnostic to customer preferences and are focused on delivering the right connectivity solutions for each hyperscale customer [28] Question: Can you provide insights on the chiplet business? - The chiplet business is expanding, with multiple customers engaging for designs, although it is still dominated by a single customer at this point [92] Question: What are the expectations for revenue visibility moving forward? - Management expressed increased confidence in revenue visibility due to a diversified customer base and product offerings [100][150]

Credo Technology Group Holding Ltd. (CRDO) came out with quarterly earnings of $0.04 per share, beating the Zacks Consensus Estimate of $0.03 per share. This compares to earnings of $0.05 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 33.33%. A quarter ago, it was expected that this company would post earnings of $0.01 per share when it actually produced earnings of $0.01, delivering no surprise.Over the last four quarters, t ...

Credo Technology Group Holding Ltd Notes to Unaudited Condensed Consolidated Financial Statements | --- | --- | --- | --- | --- | |---------------------------------------------------------|-------|---------------------------------|-------|-----------------------------| | Computer equipment and software | $ | January 27, 2024 \n18,217 | $ | April 29, 2023 \n13,942 | | Laboratory equipment | | 17,720 | | 15,577 | | Production equipment | | 24,718 | | 19,783 | | Leasehold improvements | | 2,009 | | 2,005 | | O ...

Credo Technology Group Holding Ltd Reports Third Quarter of Fiscal Year 2024 Financial Results Third Quarter of Fiscal Year 2024 Financial Highlights Management Commentary Fourth Quarter of Fiscal 2024 Financial Outlook Conference Call Discussion of Non-GAAP Financial Measures Non-GAAP financial measures exclude the effect of share-based compensation expenses, asset impairment and related charges (if applicable), and the related tax effect adjustments to the provision for income taxes. GAAP diluted net inco ...

SAN JOSE, Calif., Feb. 12, 2024 (GLOBE NEWSWIRE) -- Credo Technology Group Holding Ltd ("Credo") (NASDAQ:CRDO), an innovator in providing secure, high-speed connectivity solutions that deliver improved power efficiency, today announced it will hold a conference call on Tuesday, February 27, 2024, at 2:00 p.m. Pacific Time to discuss its financial results for the fiscal third quarter ended January 27, 2024. The news release announcing the third quarter fiscal year 2024 financial results will be disseminated ...

SAN JOSE, Calif.--(BUSINESS WIRE)--Credo Technology Group Holding Ltd (“Credo”) (Nasdaq: CRDO), an innovator in providing secure, high-speed connectivity solutions that deliver improved power efficiency as data rates and corresponding bandwidth requirements increase throughout the data infrastructure market, will be exhibiting in booth 316 at the Chiplet Summit Conference and Exhibition taking place February 6-8, at the Santa Clara Convention Center. The summit is an excellent platform for Credo representa ...

Credo Technology Group Holding Ltd. (CRDO) shares ended the last trading session 8.3% higher at $20.78. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.6% loss over the past four weeks.The surge in price can be attributed to the company's projected growth in revenues and gross margin, as outlined in its guidance. Additionally, the company's actual performance, aligning with its projections, serves as another fact ...

Credo Technology Group Holding Ltd (NASDAQ:CRDO) Q2 2024 Earnings Call Transcript November 29, 2023 4:30 PM ET Company Participants Dan O'Neil - VP-Corporate Development and IR Bill Brennan - CEO Dan Fleming - CFO Conference Call Participants Toshiya Hari - Goldman Sachs Thomas O'Malley - Barclays Tore Svanberg - Stifel Karl Ackerman - BNP Paribas. Vijay Rakesh - Mizuho Suji Desilva - ROTH MKM Richard Shannon - Craig-Hallum Capital Group Quinn Bolton - Needham and Company Operator Ladies and gentlemen, than ...

Cash and Cash Equivalents - Cash and cash equivalents increased to $128,986 thousand as of October 28, 2023, compared to $108,583 thousand as of April 29, 2023[28] - As of October 28, 2023, the company had $129.0 million in cash and cash equivalents, an increase from $108.6 million as of April 29, 2023[71] - Cash and cash equivalents at the end of the period were $128.99 million, down from $190.54 million at the end of the same period in 2022[36] Accounts Receivable - Accounts receivable decreased to $32,723 thousand as of October 28, 2023, from $49,541 thousand as of April 29, 2023[28] - Accounts receivable for Customer A decreased from 54% to 44% from April 29, 2023, to October 28, 2023, while Customer B and Customer C accounted for less than 10% of total accounts receivable[105][106] - Net cash provided by operating activities was $29.6 million for the six months ended October 28, 2023, driven by a $16.8 million decrease in accounts receivable and a $9.6 million decrease in inventory[74] Inventories - Inventories decreased to $35,761 thousand as of October 28, 2023, from $46,023 thousand as of April 29, 2023[28] - Inventory levels decreased from $46.023 million on April 29, 2023, to $35.761 million on October 28, 2023, with finished goods inventory dropping from $21.367 million to $12.605 million[116] Net Loss and Comprehensive Loss - Net loss for the three months ended October 28, 2023, was $6,623 thousand, compared to a net loss of $3,360 thousand for the same period in 2022[31] - Total comprehensive loss for the six months ended October 28, 2023, was $18,705 thousand, compared to $3,849 thousand for the same period in 2022[31] - Net loss for the six months ended October 28, 2023 was $18.32 million, compared to a net loss of $3.43 million for the same period in 2022[50] - Net loss of $6.6 million and $18.3 million for the three and six months ended October 28, 2023, respectively[190] Revenue - Total revenue for the six months ended October 28, 2023 was $79.13 million, a decrease from $97.84 million in the same period in 2022[50] - Product sales revenue for the six months ended October 28, 2023 was $64.28 million, down from $79.61 million in the same period in 2022[50] - IP license revenue for the six months ended October 28, 2023 was $10.13 million, compared to $13.65 million in the same period in 2022[50] - Revenue for the six months ended October 28, 2023, was $79.13 million, a decrease from $97.84 million in the same period in 2022[176] - Product sales for the six months ended October 28, 2023, were $64.275 million, down from $79.612 million in the same period in 2022[176] - IP license revenue for the six months ended October 28, 2023, was $10.128 million, compared to $13.65 million in the same period in 2022[176] - Generated $44.0 million and $79.1 million in total revenue for the three and six months ended October 28, 2023, respectively[190] - Product sales and product engineering services revenue comprised 83.3% and 87.2% of total revenue for the three and six months ended October 28, 2023, respectively[190] Research and Development Expenses - Research and development expenses increased to $44.37 million for the six months ended October 28, 2023, up from $34.84 million in the same period in 2022[50] - Research and development expenses for the three months ended October 28, 2023, were $4,664 thousand, up from $2,756 thousand in the prior year[163] - Research and development expense increased by $9.5 million for the six months ended October 28, 2023, compared to the same period in fiscal year 2023[208] Operating Activities and Cash Flow - Net cash provided by operating activities was $29.62 million for the six months ended October 28, 2023, compared to net cash used in operating activities of $10.46 million in the same period in 2022[36] - Net cash provided by operating activities was $29.6 million for the six months ended October 28, 2023, driven by a $16.8 million decrease in accounts receivable and a $9.6 million decrease in inventory[74] - The company's cash inflows from operating activities were partially offset by an $18.3 million net loss for the six months ended October 28, 2023[74] Total Assets and Liabilities - Total assets increased to $405,805 thousand as of October 28, 2023, from $397,289 thousand as of April 29, 2023[28] - Total liabilities increased to $56,257 thousand as of October 28, 2023, from $49,654 thousand as of April 29, 2023[28] - Shareholders' equity increased to $349,548 thousand as of October 28, 2023, from $347,635 thousand as of April 29, 2023[34] - Non-current liabilities increased to $7,412 thousand as of October 28, 2023, from $5,753 thousand as of April 29, 2023[152] Foreign Currency and Share-Based Compensation - Foreign currency translation loss for the three months ended October 28, 2023, was $223 thousand, compared to $320 thousand for the same period in 2022[31] - Share-based compensation expense for the three months ended October 28, 2023, was $8,144 thousand[34] Product and Market Focus - The company's products are optimized for optical and electrical Ethernet applications, including the 100G, 200G, 400G, 800G, and emerging 1.6T port markets[58] - The company's SerDes technology has scaled from 25Gbps/lane to 100Gbps/lane since its founding in 2008[168] - In 2021, the company launched new AEC solutions targeting ToR-to-NIC connections, enabling dual-ToR server racks to switch data traffic seamlessly[169] - Released 112G/lane AEC products including 400G, 800G, and 1.6T varieties in 2022, expanding AEC engagement to a second major hyperscaler[189] Revenue Recognition and IP Licensing - The company's IP license revenue consists of perpetual licenses, support and maintenance, engineering services, and royalties[44] - The company recognizes revenue upon transfer of control of promised goods and services, with transaction price allocated to multiple performance obligations on a relative standalone selling price basis[64] - IP license revenue is recognized at the point of IP delivery, with customer support revenue deferred and recognized ratably over the support period, typically one year[70] Customer Concentration and Revenue Distribution - The company's revenue is highly concentrated, with a significant portion derived from a limited number of customers[171] - Customer E accounted for 15% of revenue for the three and six months ended October 28, 2023[191] - Customer X accounted for 29% and 34% of revenue for the three and six months ended October 28, 2023, respectively[191] - Revenue concentration for Customer A decreased from 44% in October 2022 to 29% in October 2023, while Customer E's share remained stable at 15%[122] Gross Margin and Cost of Revenue - Gross margin for the six months ended October 28, 2023, was 59.3%, compared to 56.9% in the same period in 2022[176] - Gross margin increased to 59.3% for the six months ended October 28, 2023, compared to 56.9% in the same period in fiscal year 2023[206] - The company's cost of revenue for the three months ended October 28, 2023, was $250 thousand, compared to $149 thousand for the same period in the prior year[163] Selling, General, and Administrative Expenses - Selling, general, and administrative expenses for the three months ended October 28, 2023, were $3,230 thousand, compared to $1,986 thousand in the prior year[163] - Selling, general and administrative expense increased by $1.7 million for the three months ended October 28, 2023, compared to the same period in fiscal year 2023[209] Deferred Revenue and Contract Assets - Deferred revenue increased by $0.7 million during the six months ended October 28, 2023, due to billing milestones being met prior to revenue recognition[109] - Contract assets increased by $2.6 million during the six months ended October 28, 2023, driven by IP licensing and product engineering services arrangements[125] Future Commitments and Obligations - Total future non-cancelable purchase obligations as of October 28, 2023, are $32,691 thousand for manufacturing commitments and $11,399 thousand for technology license fees[153] - The company has purchase level commitments of at least $25.3 million for the remainder of fiscal year 2024 through fiscal year 2028 under a manufacturing supply capacity reservation agreement[154] - Total refundable deposits paid under the capacity reservation agreement amounted to $8.8 million as of October 28, 2023[154] Interest Income and Depreciation - Interest income recognized for the six months ended October 28, 2023, was $5.5 million, compared to $2.9 million for the three months ended the same date[114] - Depreciation and amortization expense for the six months ended October 28, 2023, was $6.6 million, up from $4.3 million for the same period in 2022[117] Effective Tax Rate - The company's effective tax rate for the three months ended October 28, 2023, differed from the prior year due to excluding zero-rate jurisdictions and a decrease in tax benefits from share-based compensation[148] - The company's effective tax rate for the six months ended October 28, 2023, was 0%, compared to -20% in the same period in 2022[183] Property and Equipment - Total property and equipment as of October 28, 2023, amounted to $44,971 thousand, compared to $40,222 thousand as of April 29, 2023[150] Working Capital - The company's working capital was $291.1 million as of October 28, 2023, slightly down from $297.2 million as of April 29, 2023[71] Share Issuance and ESPP - The company issued 204,761 shares under the ESPP during the six months ended October 28, 2023, compared to 154,053 shares in the prior year[162] Customer Warrant - As of October 28, 2023, 80,000 shares issuable upon exercise of the Customer Warrant were vested, with the remaining shares vesting based on global payments up to $201 million[110] Geographic Revenue Distribution - Total revenue for Mainland China decreased from $31.423 million in October 2022 to $5.425 million in October 2023, while the United States saw an increase from $6.422 million to $7.837 million over the same period[107] Risk Factors - The company's cash deposits exceed insured limits, and short-term investments are subject to counterparty risk[104] Future Revenue Expectations - The company expects to generate an increased proportion of revenue from product sales over time, leveraging improvements in operating leverage as the business scales[174] Decrease in Product Sales Revenue - Decrease in product sales revenue for the three and six months ended October 28, 2023, primarily due to reduced demand for AEC cables from a major customer[201]

FORM 10-Q (408) 664-9329 Registrant's telephone number, including area code Securities registered pursuant to Section 12(b) of the Act: Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth Large accelerated filer Non-accelerated filer Indicate by check mark whe ...