01—Abstract
Summary
Summary of the 10-K filed June 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Credo Technology Group Holding Ltd (CRDO) reported a fiscal year 2024 revenue of $193.0 milliona, a slight increase from $184.2 million in fiscal year 2023.
The company, a provider of high-speed and power-efficient connectivity solutions for the data infrastructure market, saw growth in product engineering services and product sales, although IP license revenue saw a decline. Despite revenue growth, the company incurred a net loss of $28.4 millionb in fiscal year 2024, an increase from a net loss of $16.5 million in fiscal year 2023, primarily due to significant investments in research and development. The company continues to benefit from secular tailwinds in the data infrastructure market, driven by AI/ML and increasing network traffic, positioning it to capitalize on future demand.
Financially, Credo ended fiscal year 2024 with $66.9 millionc in cash and cash equivalents and a working capital of $485.6 million. The company's growth strategy focuses on extending its leadership in SerDes technologies, broadening its product portfolio, acquiring new customers, and deepening relationships with existing ones. A key risk remains the high customer concentration, with the top 10 customers accounting for 86% of revenue in fiscal year 2024, including two customers representing 39% and 15% respectively.
02—Key points
Key Highlights
- Revenue grew 4.8% year-over-year to $193.0 million in fiscal year 2024, driven by strong performance in product engineering services and product sales.
- The company reported a net loss of $28.4 million in fiscal year 2024, an increase from $16.5 million in fiscal year 2023, attributed to increased R&D and SG&A expenses, including share-based compensation.
- Gross margin improved by 4.2 percentage points to 61.9% in fiscal year 2024, primarily due to a higher mix of high-margin product engineering services and improved product sales gross margins.
- Research and Development (R&D) expenses increased by 24.4% to $95.5 million, representing 49.5% of revenue, highlighting the company's investment in innovation and future growth.
- Selling, General, and Administrative (SG&A) expenses also rose by 24.8% to $60.2 million, reflecting increased headcount and share-based compensation.
- The company ended the fiscal year with $66.9 million in cash and cash equivalents and $485.6 million in working capital, indicating a solid liquidity position.
- Customer concentration remains a significant factor, with the top 10 customers accounting for 86% of total revenue in fiscal year 2024.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2024, Credo Technology Group Holding lost $0.15.
- Revenue$193.0M100.0%
- Cost of revenue−$73.5M38.1%
- Gross profit$119.4M61.9%
- Operating costs−$156.5M81.1%
- Operating income−$37.1M19.2%
- Interest, other & tax$8.7M4.5%
- Net income−$28.4M14.7%
04—Financials
Financial Highlights
Figures from 10-KFY2024filed June 24, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $192.97M$184.19M | +4.8% |
| Cost of Revenue | $73.54M$78.00M | −5.7% |
| Gross Profit | $119.43M$106.19M | +12.5% |
| R&D Expenses | $96.30M$76.77M | +25.4% |
| SG&A Expenses | $60.19M$48.25M | +24.8% |
| Operating Expenses | $156.49M$127.43M | +22.8% |
| Operating Income | -$37.06M-$21.23M | −74.5% |
| Net Income | -$28.37M-$16.55M | −71.4% |
| EPS (Basic) | $-0.18$-0.11 | −63.6% |
| EPS (Diluted) | $-0.18$-0.11 | −63.6% |
| Shares Outstanding (Basic) | 155.09M146.56M | +5.8% |
| Shares Outstanding (Diluted) | 155.09M146.56M | +5.8% |
05—Questions
Frequently Asked Questions
What is Credo's primary business and market focus?
Credo Technology Group Holding Ltd provides innovative, secure, high-speed, and power-efficient connectivity solutions. Their primary market focus is the data infrastructure sector, driven by the increasing demands of Artificial Intelligence infrastructure and applications, hyperscale data centers, and other data-intensive industries.
How did Credo perform financially in fiscal year 2024?
In fiscal year 2024, Credo generated $193.0 million in revenue, a slight increase from $184.2 million in fiscal year 2023. However, the company reported a net loss of $28.4 million, an increase from $16.5 million in the prior year, primarily due to increased investments in research and development and higher operating expenses.
What are the key growth drivers for Credo?
Credo's growth is primarily driven by the exponential increase in bandwidth requirements within the data infrastructure market, fueled by the accelerating deployment of AI/ML infrastructure and the general growth in hyperscale data center traffic. The company's SerDes and DSP technologies are well-positioned to capitalize on these trends.
What are the main risks highlighted in the filing for Credo?
A significant risk for Credo is customer concentration, with a large portion of revenue coming from a few key customers. The company also faces intense competition, is subject to the cyclical nature of the semiconductor industry, and relies on third-party manufacturers. Additionally, risks related to R&D investment, product development delays, and the lengthy sales cycles are noted.
06—Continue