Summary
Credo Technology Group Holding Ltd reported a significant revenue decline of 24.5% year-over-year for the second quarter of fiscal year 2024, ending July 29, 2023. Total revenue was $35.1 million, down from $46.5 million in the prior year period. This decrease was primarily driven by a substantial 73.3% drop in IP license revenue, largely due to a large one-time license delivered in the prior year, and a 14.8% decrease in product sales, attributed to a demand forecast reduction by a major customer. Despite the revenue challenges, gross margin remained stable at 59.2%. However, operating expenses increased significantly, leading to a wider net loss of $11.7 million, compared to a nominal loss of $0.1 million in the same period last year. The company is investing heavily in Research & Development, with expenses increasing by 35.7% year-over-year, reflecting a strategic focus on future product development.
Financial Highlights
46 data points| Revenue | $35.09M |
| Cost of Revenue | $14.30M |
| Gross Profit | $20.79M |
| R&D Expenses | $22.64M |
| SG&A Expenses | $12.54M |
| Operating Expenses | $35.18M |
| Operating Income | -$14.39M |
| Net Income | -$11.70M |
| EPS (Basic) | $-0.08 |
| EPS (Diluted) | $-0.08 |
| Shares Outstanding (Basic) | 149.28M |
| Shares Outstanding (Diluted) | 149.28M |
Key Highlights
- 1Total revenue decreased by 24.5% to $35.1 million for the three months ended July 29, 2023, compared to $46.5 million in the prior year period.
- 2Product sales revenue declined 14.8% year-over-year, primarily due to reduced demand from a key customer.
- 3IP license revenue saw a significant decrease of 73.3%, impacted by a large prior-year deal.
- 4Gross margin remained stable at 59.2%, indicating consistent product profitability.
- 5Operating expenses, particularly Research & Development (up 35.7%) and Selling, General & Administrative (up 12.0%), increased substantially, leading to a wider net loss.
- 6Net loss for the quarter was $11.7 million, a significant increase from $0.1 million in the prior year period.
- 7The company generated positive operating cash flow of $24.6 million, a substantial improvement from negative $12.2 million in the prior year, driven by favorable working capital changes, particularly a decrease in accounts receivable.