Credo Technology (US:CRDO) ZACKS·2025-06-03 15:31Core Insights - Credo Technology Group Holding Ltd (CRDO) reported strong financial results for fiscal 2025, with adjusted earnings per share (EPS) of 70 cents, a significant increase from 9 cents in fiscal 2024, and revenues of $436.8 million, up 126% year over year [2][11] - The company's fourth-quarter fiscal 2025 adjusted EPS was 35 cents, exceeding the Zacks Consensus Estimate by 29.6%, while revenues surged 179.7% year over year to $170 million, surpassing estimates by 6.27% [1][3] - The stock price jumped approximately 15% in pre-market trading following the announcement of these results [3] Financial Performance - For fiscal 2025, CRDO's revenues were driven by strong demand for high-performance connectivity solutions, particularly from hyperscaler customers supporting advanced AI services [2][11] - In the fourth quarter, product sales increased 303.3% year over year to $164.5 million, while product engineering services fell 60% to $1.3 million, and IP license sales dropped 75% to $4.2 million [3][4] - Non-GAAP gross profit for Q4 was $114.5 million, up from $40.2 million, with a gross margin expansion of 130 basis points to 67.4% [5][8] Expense and Cash Flow - Total non-GAAP operating expenses rose 58.9% year over year to $52 million, with research and development expenses increasing 76.7% to $47.6 million [5][6] - As of May 3, 2025, CRDO had $431.3 million in cash and cash equivalents, with a fourth-quarter cash flow from operating activities of $57.8 million, resulting in a free cash flow of $54.2 million [9] Future Outlook - For Q1 fiscal 2026, CRDO expects revenues between $185 million and $195 million, with a projected non-GAAP gross margin of 64–66% [10] - The company anticipates revenues to exceed $800 million for fiscal 2026, implying over 85% year-over-year growth, driven by strong AI demand [11]