0001807794false00018077942024-05-292024-05-29


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 29, 2024
_________________________
Credo Technology Group Holding Ltd
(Exact name of registrant as specified in its charter)
 _________________________
Cayman Islands001-41249N/A
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
c/o Maples Corporate Services, Limited,
PO Box 309, Ugland House
Grand Cayman, KY1-1104, Cayman Islands
N/A
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (408) 664-9329
N/A
(Former name or former address, if changed since last report)
_________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Ordinary shares, par value $0.00005 per shareCRDOThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).                    Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐





Item 2.02    Results of Operations and Financial Condition.
 
On May 29, 2024, Credo Technology Group Holding Ltd (the "Company") issued a press release announcing its financial results for the fiscal year ended April 27, 2024. A copy of the press release is furnished herewith as Exhibit 99.1.

The information in Item 2.02 of this current report on Form 8-K, including the accompanying Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01    Financial Statements and Exhibits.
    
(d) Exhibits.
Exhibit Number 
Description of Exhibit
99.1
104Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Credo Technology Group Holding Ltd
Date: May 29, 2024
By:/s/ Daniel Fleming
Daniel Fleming
Chief Financial Officer



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

•Revenue of $60.8 million grew by 89.4% year over year
•GAAP gross margin of 65.8% and non-GAAP gross margin of 66.1%
•GAAP operating expenses of $47.8 million and non-GAAP operating expenses of $32.7 million
•GAAP net loss of $10.5 million and non-GAAP net income of $11.8 million
•GAAP diluted net loss per share of $0.06 and non-GAAP diluted net income per share of $0.07
•Ending cash and short-term investment balance of $410.0 million

Management Commentary

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 license categories. The Company’s success in fiscal 2024 was primarily driven by our customers’ AI deployments. Looking forward, we anticipate accelerating demand for AI infrastructure. We believe customers will continue to choose Credo for their most complex connectivity needs, due to our customer centric focus on innovative, high-performance and energy-efficient solutions.”


First Quarter of Fiscal Year 2025 Financial Outlook
 
•Revenue is expected to be between $58.0 million and $61.0 million
•GAAP gross margin is expected to be between 62.3% and 64.3%, and non-GAAP gross margin is expected to be between 63.0% and 65.0%
•GAAP operating expenses are expected to be between $49.4 million and $51.4 million, and non-GAAP operating expenses are expected to be between $35.0 million and $37.0 million



Webcast and Conference Call Information

Credo will conduct a conference call on Wednesday, May 29, 2024, at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter and fiscal year 2024, ended April 27, 2024. Interested parties may join the conference call by registering online at https://register.vevent.com/register/BI4d5e6455e2a74e7cb96ee9a521f664fb. After registering, a confirmation will be sent through email, including dial-in details and unique conference call codes for entry. 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) on June 23, 2023, 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

Our mission is to deliver high-speed solutions to break bandwidth barriers on every wired connection in the data infrastructure market. Credo is an innovator in providing secure, high-speed connectivity solutions that deliver improved power and cost efficiency as data rates and corresponding bandwidth requirements increase exponentially throughout the data infrastructure market. Our innovations ease system bandwidth bottlenecks while simultaneously improving on power, security and reliability. 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.

Investor Relations Contact:

Dan O’Neil
IR@credosemi.com


Credo Technology Group Holding Ltd
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
 
Three Months EndedYear Ended
April 27, 2024January 27, 2024April 29, 2023April 27, 2024April 29, 2023
Revenue:
Product sales$40,798 $39,975 $23,830 $145,048 $141,475 
Product engineering services3,341 11,830 2,571 19,898 10,780 
IP license16,643 1,253 5,687 28,024 31,939 
Total revenue60,782 53,058 32,088 192,970 184,194 
Cost of revenue:
Cost of product sales revenue20,372 18,912 13,127 70,498 75,143 
Cost of product engineering services revenue290 1,471 226 2,225 972 
Cost of IP license revenue154 117 150 816 1,885 
Total cost of revenue20,816 20,500 13,503 73,539 78,000 
Gross profit39,966 32,558 18,585 119,431 106,194 
Operating expenses:
Research and development26,921 24,236 21,403 95,531 76,774 
Selling, general and administrative20,161 14,233 13,574 60,193 48,248 
Impairment charges765 — — 765 2,407 
Total operating expenses47,847 38,469 34,977 156,489 127,429 
Operating loss(7,881)(5,911)(16,392)(37,058)(21,235)
Other income, net5,163 4,291 1,703 14,313 3,321 
Loss before income taxes(2,718)(1,620)(14,689)(22,745)(17,914)
Provision (benefit) for income taxes7,759 (2,048)1,248 5,624 (1,367)
Net income (loss)$(10,477)$428 $(15,937)$(28,369)$(16,547)
Net income (loss) per share:
Basic$(0.06)$— $(0.11)$(0.18)$(0.11)
Diluted$(0.06)$— $(0.11)$(0.18)$(0.11)
Weighted average shares used in computing net income (loss) per share:
Basic163,677 157,155 148,212 155,091 146,556 
Diluted163,677 167,160 148,212 155,091 146,556 



Credo Technology Group Holding Ltd
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
April 27, 2024April 29, 2023
Assets
Current assets:
Cash and cash equivalents$66,942 $108,583 
Short-term investments343,061 109,228 
Accounts receivable59,662 49,541 
Inventories25,907 46,023 
Contract assets21,562 9,445 
Prepaid expenses and other current assets13,131 5,412 
Total current assets530,265 328,232 
Property and equipment, net43,665 40,222 
Right-of-use assets13,077 14,860 
Other non-current assets14,925 13,975 
Total assets$601,932 $397,289 
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable$13,417 $6,067 
Accrued compensation and benefits9,000 6,471 
Accrued expenses and other current liabilities18,301 14,454 
Deferred revenue3,902 4,040 
Total current liabilities44,620 31,032 
Non-current operating lease liabilities11,133 12,869 
Other non-current liabilities5,981 5,753 
Total liabilities61,734 49,654 
Shareholders' equity:
Ordinary shares
87
Additional paid-in capital676,054 454,795 
Accumulated other comprehensive loss(519)(191)
Accumulated deficit(135,345)(106,976)
Total shareholders' equity540,198 347,635 
Total liabilities and shareholders' equity$601,932 $397,289 


Credo Technology Group Holding Ltd
Reconciliations from GAAP to Non-GAAP Results (Unaudited)
(In thousands, except percentages and per share amounts)

Three Months EndedYear Ended
April 27, 2024January 27, 2024April 29, 2023April 27, 2024April 29, 2023
GAAP gross profit$39,966 $32,558 $18,585 $119,431 $106,194 
Reconciling item:
Share-based compensation234 458 83 1,131 634 
Total reconciling item234 458 83 1,131 634 
Non-GAAP gross profit (A)$40,200 $33,016 $18,668 $120,562 $106,828 
GAAP gross margin65.8 %61.4 %57.9 %61.9 %57.7 %
Non-GAAP gross margin66.1 %62.2 %58.2 %62.5 %58.0 %
Total GAAP operating expenses$47,847 $38,469 $34,977 $156,489 $127,429 
Reconciling items:
Share-based compensation(14,344)(7,874)(7,827)(37,891)(22,882)
Impairment and related charges(765)— — (765)(4,151)
Total reconciling items(15,109)(7,874)(7,827)(38,656)(27,033)
Total Non-GAAP operating expenses (B)$32,738 $30,595 $27,150 $117,833 $100,396 
GAAP operating loss$(7,881)$(5,911)$(16,392)$(37,058)$(21,235)
Non-GAAP operating income (loss) (A-B)$7,462 $2,421 $(8,482)$2,729 $6,432 
GAAP operating loss margin(13.0)%(11.1)%(51.1)%(19.2)%(11.5)%
Non-GAAP operating income (loss) margin12.3 %4.6 %(26.4)%1.4 %3.5 %
GAAP net income (loss)$(10,477)$428 $(15,937)$(28,369)$(16,547)
Reconciling items:
Share-based compensation14,578 8,332 7,910 39,022 23,516 
Impairment and related charges765 — — 765 4,151 
Pre-tax total reconciling items15,343 8,332 7,910 39,787 27,667 
Other income tax effects and adjustments6,940 (2,438)2,299 3,152 (2,433)
Non-GAAP net income (loss)$11,806 $6,322 $(5,728)$14,570 $8,687 
GAAP weighted average shares - basic163,677 157,155 148,212 155,091 146,556 
GAAP weighted average shares - diluted163,677 167,160 148,212 155,091 146,556 
Non-GAAP adjustment15,463 4,218 — 15,053 14,427 
Non-GAAP weighted average shares - diluted179,140 171,378 148,212 170,143 160,983 
GAAP diluted net income (loss) per share$(0.06)$— $(0.11)$(0.18)$(0.11)
Non-GAAP diluted net income (loss) per share$0.07 $0.04 $(0.04)$0.09 $0.05 




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 3, 2024
LowHigh
GAAP gross margin62.3 %64.3 %
Reconciling item:
Share-based compensation0.7 %0.7 %
Total reconciling item0.7 %0.7 %
Non-GAAP gross margin63.0 %65.0 %
Total GAAP operating expenses$49.4 $51.4 
Reconciling item:
Share-based compensation14.4 14.4 
Total reconciling item14.4 14.4 
Total non-GAAP operating expenses$35.0 $37.0 



v3.24.1.1.u2
Cover Page
May 29, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 29, 2024
Entity Registrant Name Credo Technology Group Holding Ltd
Entity Incorporation, State or Country Code E9
Entity File Number 001-41249
Entity Address, Address Line One Maples Corporate Services, Limited
Entity Address, Address Line Two PO Box 309, Ugland House
Entity Address, City or Town Grand Cayman
Entity Address, Postal Zip Code KY1-1104
Entity Address, Country KY
City Area Code 408
Local Phone Number 664-9329
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Ordinary shares, par value $0.00005 per share
Trading Symbol CRDO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001807794
Amendment Flag false
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