Q2 2025 Credo Technology Group Holding Ltd Earnings Call Transcript
Key Points
- Credo Technology Group Holding Ltd (CRDO) reported a significant revenue increase of 21% sequentially and 64% year-over-year, reaching $72 million in Q2.
- The company achieved record revenue across its three main product lines, marking its most successful quarter to date.
- Credo's AEC product line saw another record quarter driven by strong demand from top customers and an emerging hyperscaler.
- The company is well-positioned for sustained growth with anticipated double-digit sequential revenue growth from Q3 to Q4 and a projected 100% year-over-year revenue growth from fiscal year '24 to fiscal year '25.
- Credo's innovative solutions, such as the 800 gig zero flap AECs, are gaining traction, offering lower power, reduced cost, and greater reliability compared to laser-based optics.
- Despite strong revenue growth, the company's free cash flow was negative $11.7 million in Q2, although this was an improvement from the previous quarter.
- The company's non-GAAP operating expenses were above the midpoint of guidance, increasing 6% sequentially due to higher R&D project-related spending.
- Credo's IP business is not expected to contribute 10% or more of revenue this year or in future years, indicating a limited impact on overall revenue growth.
- The company faces competitive pressure in the AEC market, with customers expressing a desire for multiple suppliers.
- There is uncertainty regarding the long-term market direction between Ethernet and PCIE, which could impact strategic planning and resource allocation.
Good day. And thank you for standing by. Welcome to the Credo second quarter fiscal year 2025 earnings conference call. At this time, (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to turn the conference over to your speaker for today, Dan OĆ¢Neil. Please go ahead.
Good afternoon. Thank you for joining our earnings call for the second quarter of fiscal 2025.
Today, I am joined by Creo's Chief Executive Officer, Bill Brennan, and our Chief Financial Officer, Dan Fleming.
During this call, we will make certain forward-looking statements. These forward-looking statements are subject to risks and uncertainties 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 is not possible for the company's management to predict all risks nor can the company assess the impact of all factors on its business or the
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