Q1 2025 Credo Technology Group Holding Ltd Earnings Call Transcript
Key Points
- Credo Technology Group Holding Ltd (CRDO) reported a record product revenue of $57.3 million, up 30% compared to the prior quarter.
- The company achieved a non-GAAP gross margin of 62.9%, driven by increasing scale and product mix.
- Credo's AEC product line continues to be a major revenue driver, with expectations for further growth in fiscal 2025.
- The optical DSP business is on track to contribute at least 10% of fiscal 2025 revenue, with significant customer traction and design wins.
- The company is well-capitalized with $398.6 million in cash and equivalents, providing a substantial buffer for growth investments.
- Revenue for Q1 was $59.7 million, down 2% sequentially, indicating some volatility in quarterly performance.
- IP business revenue was $2.4 million, down 14% year-over-year, and below the long-term expectation of 10% to 15% of total revenue.
- Non-GAAP operating income decreased to $2.2 million from $7.5 million last quarter, with a non-GAAP operating margin of 3.7%, down from 12.3%.
- Cash flow used in operations was $7.2 million, primarily due to changes in working capital driven by a ramp in product shipments.
- Free cash flow was negative $13.1 million, a significant decrease of $32.4 million year-over-year, indicating higher capital expenditures and operational costs.
Ladies and gentlemen, thank you for standing by. (Operator Instructions). I would now like to turn the conference over to Dan O'Neill. Please go ahead, sir.
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Good afternoon. Thank you for joining our earnings call for the first quarter of fiscal 2025. Today, I'm joined by Bill Brennan, Credo's Chief Executive Officer; and Dan Fleming, our Chief Financial Officer.
As a reminder, during the call, we will make certain forward-looking statements. These forward-looking statements are subject to risks and uncertainties that are discussed in detail in our documents filed with the SEC, which can be found in the Investor Relations section of the company's website.
It's not possible for the company's management to predict all risks nor can the company assess the impact of all factors on this business. For the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements.
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