Summary
Credo Technology Group Holding Ltd (CRDO) reported its fiscal second-quarter 2023 results, showing significant year-over-year revenue growth driven by strong performance in product sales. Total revenue surged by 94.4% to $51.4 million for the quarter, and an impressive 163.3% to $97.8 million for the first six months. This growth was primarily fueled by increased unit shipments of Active Electrical Cables (AECs) and a substantial IP license deal contributing significantly to the six-month period. Despite the revenue surge, the company reported a net loss of $3.4 million for the quarter, an improvement from a $4.1 million loss in the prior year, and a net loss of $3.4 million for the six-month period, a considerable reduction from $16.7 million in the prior year. The company's gross margin saw a slight decrease to 54.4% in the quarter, attributed to a shift in revenue mix towards product sales which carry lower margins than IP licensing. Operating expenses, particularly in Research and Development and Selling, General & Administrative, increased due to higher personnel costs, share-based compensation, and investments in product development and public company compliance. The company ended the period with a solid cash position of $190.5 million, though net cash used in operating activities was $10.5 million for the six-month period, largely due to working capital movements.
Financial Highlights
46 data points| Revenue | $51.37M |
| Cost of Revenue | $23.41M |
| Gross Profit | $27.96M |
| R&D Expenses | $18.16M |
| SG&A Expenses | $11.54M |
| Operating Expenses | $29.70M |
| Operating Income | -$1.74M |
| Net Income | -$3.36M |
| EPS (Basic) | $-0.02 |
| EPS (Diluted) | $-0.02 |
| Shares Outstanding (Basic) | 146.01M |
| Shares Outstanding (Diluted) | 146.01M |
Key Highlights
- 1Total revenue for the second quarter of fiscal year 2023 increased by 94.4% to $51.4 million, driven primarily by a 140.3% increase in product sales.
- 2For the six months ended October 29, 2022, total revenue more than doubled to $97.8 million, a 163.3% increase year-over-year, with product sales up 209.6%.
- 3Net loss for the three months ended October 29, 2022, narrowed to $3.4 million from $4.1 million in the prior year's comparable period.
- 4Gross margin for the quarter decreased to 54.4% from 60.4% in the prior year, primarily due to a shift in revenue mix towards product sales with lower gross margins compared to IP licensing.
- 5Research and Development (R&D) expenses increased by 53.9% for the quarter and 62.1% for the six-month period, reflecting investments in product development and new hires.
- 6The company ended the period with $190.5 million in cash and cash equivalents, indicating a healthy liquidity position.
- 7Significant customer concentration exists, with specific customers accounting for a substantial portion of both revenue and accounts receivable, though this is expected to decrease over time.