Summary
Credo Technology Group Holding Ltd. (CRDO) has announced a significant update impacting its near-term revenue outlook. The company's largest customer has revised its demand forecast downwards for specific products, a move Credo attributes to factors external to its own performance and does not expect to affect its market share with that customer. This reduction, compounded by prevailing macroeconomic headwinds, has led Credo to adjust its fiscal fourth quarter revenue projection (ending April 29, 2023) to a range of $30 million to $32 million. Looking ahead, Credo anticipates its full fiscal year revenue ending April 27, 2024, will be flat compared to the current fiscal year. Despite this short-term pressure, the company projects sequential revenue growth starting from a low point in either Q4 FY23 or Q1 FY24 and expects its long-term financial model to remain consistent. Credo is actively managing operating expenses to align with future growth and profitability, while expressing continued confidence in the underlying technological trends and the demand for its connectivity solutions.
Key Highlights
- 1Largest customer reduced demand forecast for certain Credo products.
- 2Reduction in demand is understood to be unrelated to Credo's performance; market share with the customer is not expected to be impacted.
- 3Fiscal Q4 2023 (ending April 29, 2023) revenue forecast lowered to $30 million - $32 million.
- 4Full fiscal year 2024 revenue (ending April 27, 2024) is projected to be flat year-over-year.
- 5Sequential revenue growth expected to resume from a low point in Q4 FY23 or Q1 FY24.
- 6Long-term financial model remains unchanged.
- 7Company is managing operating expenses to support future growth and profitability.