Credo Technology Group Holding Ltd - Fiscal 2024 Fourth Quarter and Year-End Financial Report

Credo Technology Group Holding Ltd. (NASDAQ: CRDO), a leading company in the communication equipment sector, has announced its financial results for the fourth quarter and the fiscal year ending 2024. Below is a detailed analysis of the company's performance based on the recent earnings call and financial disclosures.

Forward-Looking Statements

The company's management discussed forward-looking statements regarding expected future financial results, strategies, plans, operations, and market conditions. These statements are subject to risks and uncertainties as detailed in Credo's filings with the SEC. Actual results may differ materially from those anticipated or implied due to various factors, and the company is under no obligation to update these forward-looking statements publicly after the date of this call.

Non-GAAP Financial Measures

In addition to GAAP measures, the company uses non-GAAP financial measures, which are provided as important indicators of performance. These non-GAAP measures include exclusions such as stock-based compensation and are reconciled with GAAP results in the company's earnings release available on the Investor Relations section of the Credo website.

Q4 Fiscal 2024 Summary

Credo achieved significant milestones in the fourth quarter of fiscal 2024:

• Revenue: Credo posted record revenues of $60.8M, representing a substantial increase of 15% sequentially and 89% year-over-year.
• Gross Margin: Non-GAAP gross margin for the quarter was 66.1%, a sequential improvement of 391 basis points.
• Operating Expenses: Total non-GAAP operating expenses were reported at $32.7M, a 7% increase from the previous quarter, driven by a 17% increase in R&D and a 26% increase in SG&A expenses year-over-year.
• Operating Income: Non-GAAP operating income reached a record $7.5M, showing significant improvement from the previous quarter's $2.4M, leading to an operating margin of 12.3%.
• Net Income: Non-GAAP net income for the quarter came in at $11.8M, compared to $6.3M in the preceding quarter.
• Cash and Equivalents: The company ended the quarter with $410M in cash and equivalents, bolstered by positive operating cash flows of $4.2M.

Fiscal Year 2024 Performance

For the entire fiscal year 2024, Credo reported the following key metrics:

• Total Revenue: $193M, an increase of 5% from the previous fiscal year.
• Gross Profit: Reported at $119.4M, resulting in a gross margin of 62.5%, up 448 basis points year-over-year.
• Operating Expenses: Total operating expenses stood at $155.7M, primarily driven by investments in R&D and public company infrastructure.
• Operating Income: The company reported an operating loss of $36.3M, equating to an operating margin of -18.8%.
• Net Income: Credo reported a net loss of $28.4M for the year, translating to an EPS of -$0.18.

Financial Position

As of the end of fiscal year 2024, Credo's financial position was robust, marked by the following points:

• Total Assets: Reported at $601.93M, with current assets amounting to $530.3M.
• Total Liabilities: Total liabilities stood at $61.73M, with current liabilities accounting for $44.62M.
• Stockholders' Equity: Total equity reported was $540.2M, supported by substantial cash and short-term investments of $410M.

Ratio Analysis

Credo outperformed its peers in several key financial metrics:

• Gross Profit Margin: 60.13%, the highest among its peers.
• Current Ratio: 1,188.4%, indicating strong liquidity.
• Quick Ratio: 1,100.9%, reflecting the company's ability to meet short-term obligations.

Despite strong performance in these areas, the company reported:

• Operating Profit Margin: -18.81%, amidst ongoing investments and expenditures.
• Net Profit Margin: -14.70%, indicating challenges in achieving net profitability for the fiscal year.

Outlook for Fiscal Year 2025

Looking ahead to fiscal year 2025, Credo expects:

• Q1 Revenue: To be in the range of $58M to $61M, a slight sequential decline.
• Q1 Gross Margin: Expected to range between 63% to 65%.
• Non-GAAP Operating Expenses: To be within $35M to $37M for Q1.
• AI Revenue Growth: Forecasted to double year-over-year by Q4 FY 2025, driven by increasing production scale of AI-related programs.

For more detailed financial information and complete reconciliations, please refer to Credo Technology Group's SEC filings and investor relations website.