UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ___________ Commission File Number: 001-41249 Credo Technology Group Holding Ltd (Exact name of registrant as specified in its charter) Cayman Islands N/A For the quarterly period ended February 1, 2025 (State or other jurisdiction of incorporation or organization) or c/o Maples Corp ...

Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, March 10:Credo Technology Group Holding Ltd (CRDO) : This networking and connectivity solutions provider has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 26% over the last 60 days.Credo Technology Group's shares gained 64.0% over the last six months compared with the S&P 500’s advanced of 3.8%. The company possesses a Momentum Score of A.Ooma, Inc. ( ...

Group 1 - The article highlights Uttam as a growth-oriented investment analyst focusing on the technology sector, particularly in semiconductors, Artificial Intelligence, and Cloud software [1] - Uttam's research also encompasses MedTech, Defense Tech, and Renewable Energy, indicating a diverse investment interest [1] - The Pragmatic Optimist Newsletter, co-authored by Uttam and his wife Amrita Roy, is recognized and cited by major publications like the Wall Street Journal and Forbes [1] Group 2 - Prior to his research career, Uttam led teams at major technology firms such as Apple and Google, showcasing his extensive experience in the industry [1]

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Core Insights - Credo Technology (NASDAQ: CRDO) shares have experienced a significant decline in recent weeks, despite a strong earnings report failing to improve investor sentiment [2]. Company Summary - The decline in Credo Technology's stock is attributed to movements within the industry group, indicating broader market influences rather than company-specific issues [2]. Industry Summary - The performance of Credo Technology reflects the challenges faced by the industry as a whole, suggesting that investor sentiment may be influenced by external factors affecting the sector [2].

Group 1 - The article discusses the investment potential of Credo Technology Group Holding Ltd (NASDAQ: CRDO), highlighting its business growth trajectory [1] - The chief investment analyst, Daniel Sereda, emphasizes the importance of filtering vast amounts of data to identify critical investment ideas [1] - The investing group, Beyond the Wall Investing, provides access to high-quality analysis similar to that used by institutional market participants [1] Group 2 - The article does not provide any specific financial metrics or performance data related to Credo Technology Group Holding Ltd [2]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [3]. Core Insights - The company reported a significant revenue increase of 154.4% year-over-year and 87.4% quarter-over-quarter for FY25Q3, achieving $135 million in revenue [1]. - The GAAP net profit for FY25Q3 was $29.36 million, reflecting a year-over-year increase of 6760% and a return to profitability [1]. - The company expects FY25Q4 revenue to be between $155 million and $165 million, with a year-over-year growth of 163% [1]. Summary by Sections Performance Review - For FY25Q3, the company achieved a GAAP gross margin of 63.6% and a Non-GAAP gross margin of 63.8% [1]. - Non-GAAP net profit for FY25Q3 was $45.38 million, showing a year-over-year increase of 618% [1]. Operational Analysis - Revenue growth in FY25Q3 was primarily driven by increased demand from major clients, with the largest client accounting for 86% of revenue [2]. - The company anticipates that 3-4 clients will contribute over 10% of revenue in FY25Q4 [2]. - The company is actively expanding its PCIe-related product offerings and plans to showcase PCIe AEC products at the upcoming GTC event [2]. Profit Forecast, Valuation, and Rating - The company is positioned as a leading player in the AEC industry, with expectations of benefiting from the growth in AI Ethernet networking and ASIC demand [3]. - Revenue projections for FY25, FY26, and FY27 are $423.46 million, $662.22 million, and $798.71 million, respectively, with year-over-year growth rates of 119.4%, 56.4%, and 20.6% [6]. - GAAP net profit forecasts for the same periods are $35.30 million, $95.45 million, and $174.25 million [6].

Core Insights - Credo Technology Group reported third-quarter earnings of 25 cents per share, exceeding the analyst consensus estimate of 18 cents, with quarterly revenue of $135 million, significantly up from $53.05 million a year ago, and above the consensus estimate of $120.06 million [1][2] - The company anticipates fourth-quarter revenue between $155 million and $165 million, surpassing the consensus estimate of $137.43 million [1] Financial Performance - The revenue beat was driven by a substantial increase in sales to its largest customer, Amazon, which accounted for 86% of third-quarter revenue, reflecting a sequential growth of 388% [2][4] - Management expects Amazon's revenue contribution to remain strong in the fourth quarter, while other customers are projected to account for approximately 33% of total revenue [3][4] Customer Diversification - Credo is planning to diversify its customer base, with expectations that 3-4 customers will exceed the 10% revenue threshold starting in the fourth quarter of fiscal 2025 and continuing into fiscal 2026 [4][6] - The company has ramped AECs (Application-Specific Integrated Circuits) at three hyperscalers, including Microsoft and Amazon, and is in qualification with two additional hyperscalers for fiscal 2026 [6][7] Future Outlook - Management reiterated expectations for over 50% growth in fiscal 2026, despite a more robust second half of fiscal 2025 than previously anticipated [5] - Analysts have responded positively, with Needham and Roth MKM maintaining a Buy rating on Credo, both setting a price target of $80, while Susquehanna lowered its price target from $80 to $60 [8] Stock Performance - Following the earnings report, CRDO stock experienced a decline of 15.4%, trading at $45.87 [9]

Core Viewpoint - Credo Technology Group (CRDO) has experienced significant stock underperformance in 2023, with a 30.9% decline year-to-date, compared to the broader Zacks Computer & Technology sector's decrease of 5.8% and the Zacks Electronics - Semiconductors industry's decline of 13.5% [1][2]. Financial Performance - In the third quarter of fiscal 2025, Credo Technology reported earnings of 25 cents per share, exceeding the Zacks Consensus Estimate by 38.89%, compared to earnings of 4 cents per share a year ago [3]. - The company achieved revenues of $135 million, representing an 87% sequential increase and a 154% year-over-year increase, surpassing the Zacks Consensus Estimate by 12.50% [6]. Product and Market Dynamics - The growth in revenues was primarily driven by a significant increase in production from its largest hyperscale customer, reflecting the rising demand for AI-powered connectivity solutions [6]. - Credo's Active Electrical Cables (AEC) product line experienced triple-digit sequential growth, driven by increased adoption in the data center market, as AECs are more reliable than traditional laser-based optical solutions [7][8]. - The optical business, particularly Optical DSPs, also saw strong growth, with increased market demand for 50G and 100G designs for Active Optical Cable and transceiver applications [9]. Competitive Positioning - The demand for Credo's PCIe retimers and Ethernet retimers is growing, especially in AI server scale-out networks, highlighting the importance of high-performance solutions in this rapidly expanding market [11]. - Credo's PCIe 5.0 specification-capable "Toucan" retimer has successfully passed compliance testing, reinforcing its market reputation and positioning for future revenue growth, with demand for PCIe retimers expected to exceed $1 billion by 2027 [12][13]. Future Guidance - For the fiscal fourth quarter of 2025, Credo expects revenues between $155 million and $165 million, indicating a potential growth of 122.52% year-over-year, while the consensus estimate for earnings is 22 cents per share, suggesting a 214.29% increase year-over-year [14][15]. Valuation Concerns - Credo Technology's stock is currently trading at a forward 12-month Price/Sales ratio of 16.46, significantly higher than the sector average of 5.97, indicating a stretched valuation [18].

Core Viewpoint - The rapid expansion of AI-enabled data centers is significantly increasing demand for Credo Technology's high-speed connectivity solutions, despite a recent decline in stock price following strong earnings results [1][2]. Financial Performance - Credo Technology reported a revenue of $135.0 million for Q3 2025, a 154% increase year-over-year from $53.1 million in Q3 2024 [4]. - GAAP operating income flipped to a positive $26.2 million from a loss of $5.9 million, while adjusted operating income surged 667% to $42.4 million [4]. - GAAP net income reached $29.4 million, a remarkable increase of 7,250% compared to $0.4 million in the previous year [4]. - Adjusted net income also saw a significant rise of 621% to $45.4 million [4]. - The company ended the quarter with $379.2 million in cash and short-term investments, with no long-term debt [6]. Segment Performance - Product sales accounted for $129.4 million, reflecting a 224% increase year-over-year, while product engineering services declined by 77% to $2.7 million [7]. - Revenue from intellectual property (IP) licenses increased by 137% to $3.0 million [7]. Market Guidance - For Q4 2025, management provided revenue guidance of $155 million to $165 million, indicating a year-over-year growth of 155% to 171%, surpassing Wall Street's estimate of $136.3 million [10]. - The expected adjusted gross margin for Q4 is projected to be between 63% and 65%, consistent with Q3's adjusted gross margin of 63.8% but lower than the previous year's 66.1% [11]. Customer Concentration - The company experienced a high concentration risk, with 86% of revenue generated from a single customer, identified as Microsoft [13]. - The CFO indicated that this concentration was an outlier and expected to decrease in the coming quarters, with a forecast of three to four customers contributing over 10% of revenue [14].