0001807794false00018077942024-12-022024-12-02


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): December 2, 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 December 2, 2024, Credo Technology Group Holding Ltd (the "Company") issued a press release announcing its financial results for the fiscal quarter ended November 2, 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: December 2, 2024
By:/s/ Daniel Fleming
Daniel Fleming
Chief Financial Officer



Exhibit 99.1
 


Credo Reports Second Quarter of Fiscal Year 2025
Financial Results


San Jose, Calif. (December 2, 2024) - Credo Technology Group Holding Ltd (Nasdaq: CRDO), an innovator in providing secure, high-speed connectivity solutions that deliver improved energy efficiency as data rates and corresponding bandwidth requirements increase through the data infrastructure market, today reported financial results for the second quarter of fiscal year 2025, ended November 2, 2024.

Second Quarter of Fiscal Year 2025 Financial Highlights

•Revenue of $72.0 million, grew by 20.6% quarter over quarter and 63.6% year over year
•GAAP gross margin of 63.2% and non-GAAP gross margin of 63.6%
•GAAP operating expenses of $53.9 million and non-GAAP operating expenses of $37.6 million
•GAAP net loss of $(4.2) million and non-GAAP net income of $12.3 million
•GAAP diluted net loss per share of $(0.03) and non-GAAP diluted net income per share of $0.07
•Ending cash and short-term investment balance of $383.0 million

Management Commentary

Bill Brennan, Credo’s President and Chief Executive Officer, stated, “In the fiscal second quarter ended November 2, 2024 Credo generated record revenue of $72.0 million, up 21% sequentially and 64% year over year. The second quarter was our most successful to date across our three main product lines and Credo delivered total product revenue of $69.1 million. For the past few quarters, we have anticipated an inflection point in our revenues during the second half of fiscal 2025. I am pleased to share that this turning point has arrived, and we are experiencing even greater demand than initially projected, driven by AI deployments and deepening customer relationships.”



Third Quarter of Fiscal 2025 Financial Outlook
 
•Revenue is expected to be between $115.0 million and $125.0 million
•GAAP gross margin is expected to be between 60.6% and 62.6%, and non-GAAP gross margin is expected to be between 61.0% and 63.0%
•GAAP operating expenses are expected to be between $58.6 million and $60.6 million, and non-GAAP operating expenses are expected to be between $42.0 million and $44.0 million



Conference Call

Credo will conduct a conference call on Monday, December 2, 2024, at 2:00 p.m. Pacific Time to discuss its financial results for the second quarter of fiscal year 2025, ended November 2, 2024. Interested parties may join the conference call by registering online at https://register.vevent.com/register/BI87c69953bb554b49af7cc32591eee82a. After registering, a confirmation will be sent through email, including dial-in details and a unique conference call code 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. The non-GAAP financial measures that Credo presents may not be comparable to similarly titled measures of other companies and other companies may not calculate such measures in the same manner as we do.

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 ongoing 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 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

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 EndedSix Months Ended
November 2, 2024August 3, 2024October 28, 2023November 2, 2024October 28, 2023
Revenue:
Product sales$64,443 $53,839 $34,247 $118,282 $64,275 
Product engineering services4,632 3,486 2,434 8,118 4,727 
IP license2,959 2,389 7,354 5,348 10,128 
Total revenue72,034 59,714 44,035 131,748 79,130 
Cost of revenue:
Cost of product sales revenue25,883 21,884 17,346 47,767 31,214 
Cost of product engineering services revenue571 452 171 1,023 464 
Cost of IP license revenue68 95 401 163 545 
Total cost of revenue26,522 22,431 17,918 48,953 32,223 
Gross profit45,512 37,283 26,117 82,795 46,907 
Operating expenses:
Research and development31,742 30,409 21,736 62,151 44,374 
Selling, general and administrative22,177 21,325 13,256 43,502 25,799 
Total operating expenses53,919 51,734 34,992 105,653 70,173 
Operating loss(8,407)(14,451)(8,875)(22,858)(23,266)
Other income, net4,474 5,533 2,702 10,007 4,859 
Loss before income taxes(3,933)(8,918)(6,173)(12,851)(18,407)
Provision (benefit) for income taxes292 622 450 914 (87)
Net loss
$(4,225)$(9,540)$(6,623)$(13,765)$(18,320)
Net loss per share:
Basic and diluted
$(0.03)$(0.06)$(0.04)$(0.08)$(0.12)
Weighted-average shares used in computing net loss per share:
Basic and diluted
166,487 165,140 150,232 165,789 149,755 



Credo Technology Group Holding Ltd
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
November 2, 2024April 27, 2024
Assets
Current assets:
Cash and cash equivalents$239,237 $66,942 
Short-term investments143,716 343,061 
Accounts receivable81,776 59,662 
Inventories36,313 25,907 
Contract assets19,977 21,562 
Prepaid expenses and other current assets17,233 13,131 
Total current assets538,252 530,265 
Property and equipment, net68,226 43,665 
Right of use assets15,190 13,077 
Other non-current assets16,883 14,925 
Total assets$638,551 $601,932 
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable$13,026 $13,417 
Accrued compensation and benefits9,182 9,000 
Accrued expenses and other current liabilities25,390 18,301 
Deferred revenue2,047 3,902 
Total current liabilities49,645 44,620 
Non-current operating lease liabilities12,945 11,133 
Other non-current liabilities8,054 5,981 
Total liabilities70,644 61,734 
Shareholders' equity:
Ordinary shares
8 8 
Additional paid in capital717,319 676,054 
Accumulated other comprehensive loss(310)(519)
Accumulated deficit(149,110)(135,345)
Total shareholders' equity567,907 540,198 
Total liabilities and shareholders' equity$638,551 $601,932 


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

Three Months EndedSix Months Ended
November 2, 2024August 3, 2024October 28, 2023November 2, 2024October 28, 2023
GAAP gross profit$45,512 $37,283 $26,117 $82,795 $46,907 
Reconciling item:
Share-based compensation331 281 250 612 439 
Total reconciling item:331 281 250 612 439 
Non-GAAP gross profit (A)$45,843 $37,564 $26,367 $83,407 $47,346 
GAAP gross margin63.2 %62.4 %59.3 %62.8 %59.3 %
Non-GAAP gross margin63.6 %62.9 %59.9 %63.3 %59.8 %
Total GAAP operating expenses$53,919 $51,734 $34,992 $105,653 $70,173 
Reconciling item:
Share-based compensation(16,332)(16,359)(7,894)(32,691)(15,673)
Total reconciling item:(16,332)(16,359)(7,894)(32,691)(15,673)
Total Non-GAAP operating expenses (B)$37,587 $35,375 $27,098 $72,962 $54,500 
GAAP operating loss$(8,407)$(14,451)$(8,875)$(22,858)$(23,266)
Non-GAAP operating income (loss) (A-B)$8,256 $2,189 $(731)$10,445 $(7,154)
GAAP operating loss margin(11.7)%(24.2)%(20.2)%(17.3)%(29.4)%
Non-GAAP operating income (loss) margin11.5 %3.7 %(1.7)%7.9 %(9.0)%
GAAP net loss
$(4,225)$(9,540)$(6,623)$(13,765)$(18,320)
Reconciling items:
Share-based compensation16,663 16,640 8,144 33,303 16,112 
Pre-tax total reconciling item16,663 16,640 8,144 33,303 16,112 
Other income tax effects and adjustments(183)(61)(358)(244)(1,350)
Non-GAAP net income (loss)
$12,255 $7,039 $1,163 $19,294 $(3,558)
GAAP weighted-average shares - basic
166,487 165,140 150,232 165,789 149,755 
GAAP weighted-average shares - diluted
166,487 165,140 150,232 165,789 149,755 
Non-GAAP adjustment15,769 15,894 14,664 16,087 — 
Non-GAAP weighted-average shares - diluted
182,256 181,034 164,896 181,876 149,755 
GAAP diluted net income (loss) per share
$(0.03)$(0.06)$(0.04)$(0.08)$(0.12)
Non-GAAP diluted net income (loss) per share
$0.07 $0.04 $0.01 $0.11 $(0.02)




Credo Technology Group Holding Ltd
Reconciliation of GAAP Forward-Looking Estimates to Non-GAAP Forward-Looking Estimates
(In millions, except percentages)

Outlook for Three Months Ending February 1, 2025
LowHigh
GAAP gross margin60.6 %62.6 %
Reconciling item:
Share-based compensation0.4 %0.4 %
Total reconciling item:0.4 %0.4 %
Non-GAAP gross margin61.0 %63.0 %
Total GAAP operating expenses$58.6 $60.6 
Reconciling item:
Share-based compensation16.6 16.6 
Total reconciling item:16.6 16.6 
Total Non-GAAP operating expenses$42.0 $44.0 



v3.24.3
Cover Page
Dec. 02, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Dec. 02, 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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