01—Abstract
Summary
Summary of the 8-K filed June 2, 2025. Cited figures are marked; the original filing is the authoritative source.
Credo Technology Group Holding Ltd (Nasdaq: CRDO) reported record fourth quarter and full fiscal 2025 results (fiscal year ended May 3, 2025).
Q4 revenue was $170.0 milliona, up 25.9% sequentially and 179.7% year over year, driven by product sales of $164.5 million. GAAP gross margin was 67.2% and non-GAAP gross margin 67.4%. GAAP operating income was $33.8 million (19.9% margin), and GAAP net income was $36.6 million, or $0.20 per diluted share.
Non-GAAP net income was $65.3 millionb, or $0.35 per diluted share. For the full year, revenue rose 126% to $436.8 million, GAAP net income swung to $52.2 million from a $28.4 million loss, and GAAP operating income reached $37.1 million versus a $37.1 million loss in the prior year. The quarter's profitability was supported by strong operating leverage, but investors should note that GAAP operating expenses rose sharply to $80.4 million, with share-based compensation of $27.5 million in Q4 accounting for most of the gap between GAAP and non-GAAP operating expenses.
Balance sheet strength improved: cash and short-term investments totaled $431.3 millionc at year-end. Accounts receivable ($162.1 million, up from $59.7 million) and inventories ($90.0 million, up from $25.9 million) grew much faster than revenue, which warrants monitoring of working capital and collection trends. For the first quarter of fiscal 2026, management guided revenue of $185.0 million to $195.0 million, GAAP gross margin of 63.4% to 65.4%, and GAAP operating expenses of $88.3 million to $90.3 million.
The guidance implies continued growth but a modest step-down in gross margin from the Q4 level. Management attributed results to surging hyperscaler demand for AI infrastructure connectivity, a trend it expects to persist. The filing references the company's fiscal 2024 Form 10-K for risk factors, and forward-looking statements carry standard uncertainty.
02—Key points
Key Highlights
- Q4 FY2025 revenue of $170.0M, up 25.9% QoQ and 179.7% YoY, with product sales comprising $164.5M of the total.
- Full-year FY2025 revenue of $436.8M, up 126% from $193.0M, with GAAP net income of $52.2M versus a $28.4M loss in FY2024.
- Q4 GAAP gross margin of 67.2% (non-GAAP 67.4%), up from 63.6% in the prior quarter; full-year GAAP gross margin of 64.8%.
- Q4 GAAP diluted EPS of $0.20 and non-GAAP diluted EPS of $0.35; full-year GAAP diluted EPS of $0.29 versus a $(0.18) loss last year.
- Q4 GAAP operating expenses of $80.4M, including $27.5M of share-based compensation, which drives a large gap to non-GAAP opex of $52.0M.
- Cash and short-term investments of $431.3M at May 3, 2025, with total shareholders' equity of $681.6M.
- Q1 FY2026 guidance: revenue of $185M-$195M, GAAP gross margin of 63.4%-65.4%, and GAAP opex of $88.3M-$90.3M.
03—Questions
Frequently Asked Questions
How strong were Credo's fiscal 2025 results?
Credo posted record results. Full-year revenue reached $436.8 million, up 126% year over year, and the company swung to GAAP net income of $52.2 million from a loss of $28.4 million in fiscal 2024. Full-year GAAP operating income was $37.1 million, compared with an operating loss of $37.1 million a year earlier.
What is driving Credo's revenue growth?
Management attributes growth to surging demand from hyperscaler customers building advanced AI infrastructure. Product sales rose to $412.2 million for the year from $145.0 million, which accounts for almost all of the increase. Management expects this demand trend to persist for the foreseeable future.
What does the Q1 fiscal 2026 guidance imply?
Guidance calls for revenue of $185M-$195M, which would be roughly 9%-15% above Q4 FY2025's $170.0M. GAAP gross margin is guided to 63.4%-65.4%, below Q4's 67.2%, and GAAP operating expenses are expected to rise to $88.3M-$90.3M, reflecting continued investment and share-based compensation.
Why do GAAP and non-GAAP results differ so much?
Non-GAAP measures exclude share-based compensation, which was $27.9 million in Q4 FY2025 and $77.4 million for the full year, plus minor impairment charges. Share-based compensation is a significant recurring cost, so investors should weigh GAAP results heavily. Q4 GAAP net income was $36.6 million versus $65.3 million non-GAAP.
Are there any balance sheet concerns?
The balance sheet is strong, with $431.3 million in cash and short-term investments and $681.6 million in equity against $127.7 million in liabilities. However, accounts receivable rose to $162.1 million from $59.7 million and inventories rose to $90.0 million from $25.9 million, both growing much faster than revenue. Investors should watch collection and inventory trends in upcoming filings.
04—Continue