01—Abstract
Summary
Summary of the 10-K filed July 2, 2025. Cited figures are marked; the original filing is the authoritative source.
Credo Technology Group Holding Ltd (CRDO) reported significant revenue growth in fiscal year 2025, driven primarily by a substantial increase in product sales, particularly in Active Electrical Cables (AECs).
Total revenue surged by 126.3% to $436.8 milliona, with product sales contributing 94.4% of this revenue, up from 75.2% in the prior year. This shift reflects a strategic move towards product-centric revenue streams, with IP license revenue decreasing to 2.9% from 14.5%. The company achieved profitability in fiscal year 2025, reporting a net income of $52.2 million, a marked improvement from a net loss of $28.4 million in fiscal year 2024.
This turnaround is supported by a gross margin expansion to 64.8%b, driven by economies of scale in product sales. Despite strong growth, the company continues to rely heavily on a few key customers, with one customer accounting for 67% of fiscal year 2025 revenue, highlighting a significant concentration risk. Credo is well-positioned to capitalize on the growing demand for high-speed connectivity in AI, cloud computing, and hyperscale networks.
The company's investment in R&D, particularly in SerDes and DSP technologies, fuels its competitive advantage. However, investors should remain aware of the substantial customer concentration, the competitive landscape, and the ongoing investments required in R&D to maintain its market leadership.
02—Key points
Key Highlights
- Fiscal year 2025 revenue increased by 126.3% to $436.8 million, driven by strong product sales.
- The company returned to profitability in fiscal year 2025 with a net income of $52.2 million, compared to a net loss of $28.4 million in fiscal year 2024.
- Gross margin improved to 64.8% in fiscal year 2025, up from 61.9% in the prior year, reflecting increased operating leverage.
- Product sales represented 94.4% of total revenue in fiscal year 2025, up from 75.2% in fiscal year 2024, indicating a shift towards product-driven growth.
- Research and development expenses increased by 52.8% to $146.0 million, underscoring continued investment in technological innovation.
- The company faces significant customer concentration, with one customer accounting for 67% of fiscal year 2025 revenue.
- Cash and cash equivalents increased significantly to $236.3 million as of May 3, 2025, indicating improved liquidity.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Credo Technology Group Holding kept $0.12.
- Revenue$436.8M100.0%
- Cost of revenue−$153.9M35.2%
- Gross profit$282.9M64.8%
- Operating costs−$245.8M56.3%
- Operating income$37.1M8.5%
- Interest, other & tax$15.1M3.4%
- Net income$52.2M11.9%
Where FY2025 revenue went
$436.8M- Cost of revenue: $153.9M, 35% of revenue
- R&D: $146.9M, 34% of revenue
- SG&A: $98.9M, 23% of revenue
- Operating income: $37.1M, 8.5% of revenue
Kept 8.5% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed July 2, 2025Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $436.77M$192.97M | +126.3% |
| Cost of Revenue | $153.87M$73.54M | +109.2% |
| Gross Profit | $282.91M$119.43M | +136.9% |
| R&D Expenses | $146.87M$96.30M | +52.5% |
| SG&A Expenses | $98.92M$60.19M | +64.3% |
| Operating Expenses | $245.78M$156.49M | +57.1% |
| Operating Income | $37.12M-$37.06M | +200.2% |
| Net Income | $52.18M-$28.37M | +283.9% |
| EPS (Basic) | $0.31$-0.18 | +272.2% |
| EPS (Diluted) | $0.29$-0.18 | +261.1% |
| Shares Outstanding (Basic) | 167.50M155.09M | +8.0% |
| Shares Outstanding (Diluted) | 181.16M155.09M | +16.8% |
05—Questions
Frequently Asked Questions
What is Credo Technology's primary revenue driver, and how has it evolved?
Credo Technology's primary revenue driver is its connectivity solutions, particularly its Active Electrical Cables (AECs) and optical digital signal processors (DSPs). In fiscal year 2025, product sales accounted for 94.4% of total revenue, a significant increase from 75.2% in fiscal year 2024. This indicates a strategic shift towards product sales, with IP license revenue decreasing to 2.9% in FY2025 from 14.5% in FY2024.
What is the company's financial performance in fiscal year 2025, and what are the key factors contributing to it?
Credo Technology achieved profitability in fiscal year 2025, reporting a net income of $52.2 million, a substantial turnaround from a net loss of $28.4 million in fiscal year 2024. This improvement is attributed to a robust increase in total revenue by 126.3% to $436.8 million, driven by strong product sales volume, and an expansion in gross margin to 64.8%, reflecting improved operating leverage as the business scales.
What are the key risks investors should be aware of based on this filing?
A significant risk highlighted is customer concentration, with one customer representing 67% of fiscal year 2025 revenue, making the company highly dependent on a few key clients. Additionally, the company operates in a highly competitive semiconductor market, requiring substantial and continuous investment in R&D to stay competitive. Managing supply chain relationships and potential macroeconomic downturns are also key risks mentioned.
How is Credo Technology investing for future growth?
Credo Technology is investing heavily in research and development, as evidenced by a 52.8% increase in R&D expenses to $146.0 million in fiscal year 2025. These investments focus on extending leadership in SerDes technologies, broadening its portfolio of products and IP solutions, and attracting and acquiring new customers while deepening relationships with existing ones. The company is also focusing on enabling next-generation AI-driven applications through its high-speed connectivity solutions.
06—Continue