Credo Technology (US:CRDO)2024-12-03 22:18Revenue Performance - For the three months ended November 2, 2024, total revenue was $72.0 million, a 63.6% increase from $44.0 million for the same period in 2023[106]. - The company generated $131.7 million in total revenue for the six months ended November 2, 2024, a 66.5% increase from $79.1 million for the same period in 2023[107]. - Product sales revenue for the six months ended November 2, 2024, increased by $30.2 million, primarily due to a significant increase in unit shipments of AEC and Optical products, contributing over 95% of the revenue increase[111]. - Total revenue for the six months ended November 2, 2024, increased by $28.0 million compared to the same period in fiscal year 2024, despite a $4.4 million decrease in IP license revenue[111]. Profitability and Margins - The company reported a net loss of $4.2 million for the three months ended November 2, 2024, compared to a net loss of $18.3 million for the same period in 2023[106]. - Gross profit for the three months ended November 2, 2024, was $45.5 million, representing a 74.3% increase compared to $26.1 million in the same period last year[116]. - The gross margin improved to 63.2% for the three months ended November 2, 2024, up from 59.3% in the same period of 2023[106]. - Gross margin for the three months ended November 2, 2024, increased by 3.9 percentage points to 63.2%, driven by improved economies of scale and higher gross margin AEC products[116]. Expenses - Research and development expenses were 44.1% of total revenue for the three months ended November 2, 2024, compared to 49.4% in the same period of 2023[106]. - Research and development expenses for the six months ended November 2, 2024, increased by $17.8 million, primarily due to an $8.2 million increase in share-based compensation and a $5.7 million increase in personnel costs[120]. - Selling, general and administrative expenses for the six months ended November 2, 2024, increased by $17.7 million, mainly due to an $8.9 million increase in share-based compensation and a $4.0 million increase in personnel expenses[122]. Cash Flow and Liquidity - Cash and cash equivalents as of November 2, 2024, were $239.2 million, up from $66.9 million as of April 27, 2024[126]. - Net cash provided by operating activities for the six months ended November 2, 2024, was $3.0 million, with cash outflows for working capital primarily driven by a $22.1 million increase in accounts receivable[130]. - The company believes its existing cash and cash equivalents will be sufficient to meet its needs for at least the next 12 months[127]. - Net cash provided by operating activities was $29.6 million for the six months ended October 28, 2023, primarily due to $23.7 million of cash inflows for working capital purposes[131]. Investing and Financing Activities - Net cash used in investing activities was $9.7 million for the six months ended October 28, 2023, primarily due to purchases of property and equipment of $7.4 million[135]. - Net cash provided by financing activities was $0.7 million for the six months ended October 28, 2023, attributed to $3.7 million in proceeds from exercises of employee share options[137]. - Cash inflows from investing activities for the six months ended November 2, 2024, were $171.5 million, primarily from maturities of certificates of deposit[134]. Market and Operational Insights - The company expects to derive a significant portion of its revenue from a limited number of customers for the foreseeable future[100]. - The company operates a fabless business model, focusing on engineering and design while outsourcing manufacturing[102]. - The company continues to monitor and assess its critical accounting estimates in light of the current macroeconomic environment, which may lead to material changes in future periods[138]. - There were no material changes in market risk assessment during the three and six months ended November 2, 2024, compared to the previous assessment[139].