Credo Tech Soars: Revenue Triples, Swings to Profit on Strong Product Sales

TL;DR

**CRDO is back in the game, turning a massive profit and fueling growth with a fresh $384.6M cash injection – this stock is looking bullish.**

AI Summary

Credo Technology Group Holding Ltd (CRDO) reported a significant financial turnaround for the three and six months ended November 1, 2025. Total revenue for the three months surged to $268,027 thousand, a 272% increase from $72,034 thousand in the prior year, driven primarily by product sales revenue of $261,293 thousand. Net income for the three-month period was $82,636 thousand, a substantial improvement from a net loss of $4,225 thousand in the same period last year. For the six months ended November 1, 2025, total revenue reached $491,101 thousand, up from $131,748 thousand, and net income was $146,035 thousand, reversing a $13,765 thousand loss. The company's cash and cash equivalents dramatically increased to $567,575 thousand as of November 1, 2025, from $236,328 thousand on May 3, 2025, largely due to $384,620 thousand in net proceeds from an At-The-Market (ATM) offering. Operating expenses rose, with R&D at $57,916 thousand and SG&A at $44,334 thousand for the three months, reflecting increased investment. A business acquisition, net of cash acquired, cost $82,564 thousand, contributing to goodwill of $68,875 thousand and an intangible asset of $17,131 thousand on the balance sheet.

Why It Matters

This filing signals a robust recovery and significant growth for Credo Technology Group, driven by strong demand for its high-speed connectivity solutions crucial for AI and cloud computing. The substantial increase in revenue and net income, coupled with a successful $384.6 million ATM offering, provides CRDO with significant capital for future expansion and R&D, potentially strengthening its competitive position against rivals in the SerDes and DSP markets. For investors, this indicates strong operational execution and market traction, while employees benefit from a more stable and growing company. Customers can expect continued innovation in critical networking infrastructure, impacting the broader tech ecosystem's ability to support next-generation AI applications.

Risk Assessment

Risk Level: medium — While CRDO shows strong financial performance, the 'Special Note Regarding Forward-Looking Statements' highlights dependence on a limited number of customers and end customers, which could introduce revenue volatility. Additionally, the significant increase in inventory to $150,194 thousand from $90,029 thousand, and accounts receivable to $245,197 thousand from $162,144 thousand, suggests potential working capital risks if demand fluctuates or collections slow.

Analyst Insight

Investors should consider CRDO's strong revenue growth and profitability as a positive indicator, but monitor customer concentration and inventory levels closely. The successful ATM offering provides a strong cash position, which could be deployed for strategic acquisitions or further R&D, potentially driving long-term value.

Financial Highlights

debt To Equity

0.13

revenue

$268,027,000

operating Margin

29.4%

total Assets

$1,449,272,000

total Debt

$163,199,000

net Income

$82,636,000

eps

$0.47

gross Margin

67.5%

cash Position

$567,575,000

revenue Growth

+272.0%

Revenue Breakdown

Key Numbers

• $268.0M — Total Revenue (3 months) (Increased 272% from $72.0M in prior year)
• $82.6M — Net Income (3 months) (Swung from a $4.2M loss in prior year)
• $491.1M — Total Revenue (6 months) (Increased from $131.7M in prior year)
• $146.0M — Net Income (6 months) (Swung from a $13.8M loss in prior year)
• $567.6M — Cash and Cash Equivalents (As of Nov 1, 2025, up from $236.3M on May 3, 2025)
• $384.6M — ATM Offering Net Proceeds (Received during the three months ended Nov 1, 2025)
• $150.2M — Inventories (As of Nov 1, 2025, up from $90.0M on May 3, 2025)
• $82.6M — Business Acquisition Cost (Net of cash acquired, during the six months ended Nov 1, 2025)
• 180,631,719 — Ordinary Shares Outstanding (As of November 23, 2025)
• $0.47 — Basic Net Income Per Share (3 months) (Up from $(0.03) in prior year)

Key Players & Entities

• Credo Technology Group Holding Ltd (company) — registrant
• Goldman Sachs & Co. LLC (company) — equity distribution agreement partner
• U.S. Securities and Exchange Commission (regulator) — filing oversight
• $268,027 thousand (dollar_amount) — total revenue for three months ended Nov 1, 2025
• $82,636 thousand (dollar_amount) — net income for three months ended Nov 1, 2025
• $491,101 thousand (dollar_amount) — total revenue for six months ended Nov 1, 2025
• $146,035 thousand (dollar_amount) — net income for six months ended Nov 1, 2025
• $567,575 thousand (dollar_amount) — cash and cash equivalents as of Nov 1, 2025
• $384.6 million (dollar_amount) — net proceeds from At-The-Market offering
• $82,564 thousand (dollar_amount) — cost of business acquisition

FAQ

Risk Factors

• Integration of Acquired Business [medium — operational]: The company recently completed a business acquisition for $82,564 thousand, resulting in goodwill of $68,875 thousand and an intangible asset of $17,131 thousand. Failure to successfully integrate this acquisition could disrupt operations, impact financial performance, and prevent the realization of expected synergies.
• Reliance on ATM Offering [medium — financial]: The significant increase in cash to $567,575 thousand was largely due to $384,620 thousand in net proceeds from an At-The-Market (ATM) offering. Over-reliance on such offerings for liquidity could dilute existing shareholders and may not be sustainable long-term.
• Increased Competition and Technological Advancements [high — market]: The semiconductor industry is characterized by rapid technological change and intense competition. Credo must continuously innovate and invest in R&D, which increased to $57,916 thousand for the three months, to maintain its competitive position and market share.
• Inventory Management [medium — operational]: Inventories increased from $90,029 thousand to $150,194 thousand. Managing these higher inventory levels effectively is crucial to avoid obsolescence, carrying costs, and potential write-downs, especially given the fast-paced nature of the semiconductor market.

Industry Context

Credo operates in the highly competitive semiconductor industry, specifically focusing on high-speed interconnect solutions. The industry is characterized by rapid technological advancements, significant R&D investment requirements, and a dynamic customer base in data center, enterprise networking, and high-performance computing markets. Companies like Credo must continually innovate to meet increasing bandwidth demands and maintain a competitive edge against established players and emerging technologies.

Regulatory Implications

As a publicly traded technology company, Credo is subject to SEC regulations and reporting requirements, including the timely filing of financial statements and disclosures. Compliance with accounting standards (GAAP) and securities laws is critical. Potential future regulations related to supply chain security, data privacy, or international trade could also impact operations and market access.

What Investors Should Do

1. Monitor integration progress of the recent acquisition.
2. Analyze the sustainability of revenue growth and profitability.
3. Evaluate the impact of increased R&D and SG&A expenses.
4. Assess the company's cash management strategy.

Key Dates

• 2025-11-01: End of the third quarter and first six months of fiscal year 2026 — Reported significant revenue growth and a strong swing to profitability, driven by product sales.
• 2025-05-03: End of the second quarter and first fiscal year 2026 — Previous balance sheet date, showing a lower cash position and accumulated deficit.
• 2025-11-01: Completion of ATM offering — Provided $384,620 thousand in net proceeds, significantly boosting the company's cash reserves.
• 2025-11-01: Business Acquisition — Acquisition completed, adding goodwill and intangible assets to the balance sheet, indicating strategic expansion.

Glossary

At-The-Market (ATM) offering

A type of public offering where a company sells its shares directly into the open market over a period of time, typically through an underwriter. (Credo raised a substantial $384,620 thousand through an ATM offering, significantly increasing its cash position.)

Goodwill

An intangible asset that arises when a company acquires another business for a price greater than the fair value of its identifiable net assets. (The recent business acquisition resulted in $68,875 thousand of goodwill on Credo's balance sheet.)

Intangible asset

A non-physical asset that has value, such as patents, trademarks, copyrights, and brand recognition. In this case, it likely relates to the acquired business's intellectual property or technology. (Credo recorded an intangible asset of $17,131 thousand from the recent acquisition.)

Retained earnings (accumulated deficit)

The cumulative amount of net income that a company has retained over time, after paying dividends. An accumulated deficit means the company has incurred more losses than profits historically. (Credo has moved from an accumulated deficit of $(83,162) thousand to retained earnings of $62,873 thousand, reflecting its recent profitability.)

Weighted-average shares

The average number of outstanding shares during a period, adjusted for the timing of any share issuances or repurchases. Used to calculate earnings per share. (The increase in weighted-average shares from 166,487 thousand to 175,307 thousand (basic) for the three-month period reflects potential share issuances, possibly related to the ATM offering or stock-based compensation.)

Year-Over-Year Comparison

Credo Technology Group Holding Ltd has demonstrated a remarkable turnaround compared to the prior year's filing. Total revenue for the three months ended November 1, 2025, surged by 272% to $268.0 million, a stark contrast to $72.0 million in the prior year. This revenue growth has translated into significant profitability, with net income swinging from a loss of $4.2 million to a gain of $82.6 million. Operating expenses have increased, reflecting investments in R&D and SG&A, but the company's gross margin remains strong at 67.5%. The balance sheet shows a substantial increase in cash, largely due to an ATM offering, and the addition of goodwill and intangible assets from a recent acquisition.

Key Financial Figures

• $0.00005 — registered Ordinary shares, par value $0.00005 per share CRDO The Nasdaq Stock Market

Filing Documents

• crdo-20251101.htm (10-Q) — 905KB
• a101executivecicseverancep.htm (EX-10.1) — 156KB
• a311302certificationofceo_.htm (EX-31.1) — 11KB
• a312302certificationofcfo_.htm (EX-31.2) — 11KB
• a3211350certificationofceo.htm (EX-32.1) — 6KB
• a3221350certificationofcfo.htm (EX-32.2) — 6KB
• 0001628280-25-054549.txt ( ) — 5814KB
• crdo-20251101.xsd (EX-101.SCH) — 37KB
• crdo-20251101_cal.xml (EX-101.CAL) — 70KB
• crdo-20251101_def.xml (EX-101.DEF) — 160KB
• crdo-20251101_lab.xml (EX-101.LAB) — 537KB
• crdo-20251101_pre.xml (EX-101.PRE) — 364KB
• crdo-20251101_htm.xml (XML) — 738KB

Financial Statements

Item 1. Financial Statements 5 Condensed Consolidated Balance Sheets 5 Condensed Consolidated Statements of Operations 6 Condensed Consolidated Statements of Comprehensive Income ( Loss ) 7 Condensed Consolidated Statements of Shareholders' Equity 8 Condensed Consolidated Statements of Cash Flows 9 Notes to Unaudited Condensed Consolidated Financial Statements 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 21

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 27

Controls and Procedures

Item 4. Controls and Procedures 27

—OTHER INFORMATION

PART II—OTHER INFORMATION 28

Legal Proceedings

Item 1. Legal Proceedings 28

Risk Factors

Item 1A. Risk Factors 28

Other Information

Item 5. Other Information 28

Exhibits

Item 6. Exhibits 30

Signatures

Signatures 31 2 Special Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains statements relating to our expectations, projections, beliefs, and prospects, which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as "anticipate," "expect," "intend," "plan," "goal," "projects," "believes," "seeks," "estimates," "forecast," "target," "predict," "future," "may," "can," "will," "would" or the negative of these terms or similar expressions. You should read these statements carefully because they may relate to future expectations around growth, strategy and anticipated trends in our business, contain projections of future results of operations or financial condition or state other "forward-looking" information. These statements are only predictions based on our current expectations, estimates, assumptions, and projections about future events and are applicable only as of the dates of such statements. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended May 3, 2025 and our Quarterly Reports on Form 10-Q and other reports we file with the U.S. Securities and Exchange Commission (SEC). Factors that could cause actual results to differ materially from those predicted include, but are not limited to: our expectations regarding our ability to address market and customer demands and to timely develop new or enhanced solutions to m

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. Credo Technology Group Holding Ltd Condensed Consolidated Balance Sheets (unaudited, in thousands, except per share amounts) November 1, 2025 May 3, 2025 Assets Current assets: Cash and cash equivalents $ 567,575 $ 236,328 Short-term investments 246,000 195,010 Accounts receivable 245,197 162,144 Inventories 150,194 90,029 Other current assets 34,457 30,023 Total current assets 1,243,423 713,534 Property and equipment, net 85,994 63,631 Right-of-use assets 15,666 15,234 Goodwill 68,875 — Intangible asset 17,131 — Other non-current assets 18,183 16,858 Total assets $ 1,449,272 $ 809,257 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 64,097 $ 56,158 Accrued compensation and benefits 19,347 16,097 Other current liabilities 56,927 35,456 Total current liabilities 140,371 107,711 Non-current operating lease liabilities 12,811 12,693 Other non-current liabilities 10,017 7,271 Total liabilities 163,199 127,675 Commitments and contingencies (Note 8) Shareholders' equity: Ordinary shares, $ 0.00005 par value; 1,000,000 shares authorized; 178,517 and 171,169 shares issued and outstanding at November 1, 2025 and May 3, 2025, respectively 9 8 Additional paid in capital 1,223,823 765,173 Accumulated other comprehensive loss ( 632 ) ( 437 ) Retained earnings (accumulated deficit) 62,873 ( 83,162 ) Total shareholders' equity 1,286,073 681,582 Total liabilities and shareholders' equity $ 1,449,272 $ 809,257 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 Credo Technology Group Holding Ltd Condensed Consolidated Statements of Operations (unaudited, in thousands, except per share amounts) Three Months Ended Six Months Ended November 1, 2025 November 2, 2024 November 1, 2025 November 2, 2024 Revenue: Product sales revenue $ 261,293 $ 69,075 $ 478,352 $ 126,400 IP license revenue 6,734 2,959 12,749 5,348 Total

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View this 10-Q filing on SEC EDGAR