What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-03-10 compared with 2024-12-03 · 193 added, 162 removed, 504 unchanged (41% of the section changed)

3 unchanged sentences

(unaudited, in thousands, except per share amounts)

November 2, 2024 April 27, 2024

February 1, 2025 April 27, 2024

Current assets:

24 unchanged sentences

1,000,000 shares authorized;

167,157 and 164,305 shares issued and outstanding at November 2, 2024 and April 27, 2024, respectively

169,699 and 164,305 shares issued and outstanding at February 1, 2025 and April 27, 2024, respectively

Additional paid in capital 738,371 676,054

7 unchanged sentences

(unaudited, in thousands, except per share amounts)

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Product sales $ 129,371 $ 39,975 $ 247,653 $ 104,250

12 unchanged sentences

Total operating expenses 59,732 38,469 165,385 108,642

Operating loss ( 8,407 ) ( 8,875 ) ( 22,858 ) ( 23,266 )

Operating income (loss)

26,194 ( 5,911 ) 3,336 ( 29,177 )

Other income, net

3,918 4,291 13,925 9,150

Loss before income taxes ( 3,933 ) ( 6,173 ) ( 12,851 ) ( 18,407 )

Provision (benefit) for income taxes

Income (loss) before income taxes

30,112 ( 1,620 ) 17,261 ( 20,027 )

Provision (benefit) for income taxes

752 ( 2,048 ) 1,666 ( 2,135 )

Net loss per share:

Basic and diluted

Net income (loss)

$ 29,360 $ 428 $ 15,595 $ ( 17,892 )

Net income (loss) per share:

Basic $ 0.17 $ — $ 0.09 $ (0.12)

Diluted $ 0.16 $ — $ 0.09 $ ( 0.12 )

Weighted-average shares:

Basic and diluted

166,487 150,232 165,789 149,755

Basic 168,167 157,155 166,562 152,063

Diluted 182,464 167,160 180,495 152,063

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Credo Technology Group Holding Ltd

Condensed Consolidated Statements of Comprehensive Loss

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited, in thousands)

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Net income (loss)

$ 29,360 $ 428 $ 15,595 $ ( 17,892 )

2 unchanged sentences

( 93 ) 241 116 ( 144 )

Total comprehensive loss

Total comprehensive income (loss)

$ 29,267 $ 669 $ 15,711 $ ( 18,036 )

22 unchanged sentences

Balances at November 2, 2024 167,157 $ 8 717,319 $ ( 310 ) $ ( 149,110 ) 567,907

Ordinary shares issued under equity incentive plans

2,618 — 2,413 — — 2,413

Tax withheld related to RSU settlement ( 76 ) — ( 4,909 ) — — ( 4,909 )

Share-based compensation

— — 16,190 — — 16,190

Warrant contra revenue — — 7,358 — — 7,358

Total comprehensive income

— — — ( 93 ) 29,360 29,267

Balances at February 1, 2025 169,699 $ 8 $ 738,371 $ ( 403 ) $ ( 119,750 ) $ 618,226

Balances at April 29, 2023 148,651 7 454,795 ( 191 ) ( 106,976 ) 347,635

15 unchanged sentences

Balances at October 28, 2023 150,546 $ 8 $ 475,412 $ ( 576 ) $ ( 125,296 ) $ 349,548

Issuance of ordinary share in connection with public offering, net of underwriter discounts and offering costs 10,440 — 173,415 — — 173,415

Ordinary shares issued under employee share plan 2,138 — 1,955 — — 1,955

Tax withheld related to RSU settlement ( 56 ) — ( 985 ) — — ( 985 )

Share-based compensation — — 8,332 — — 8,332

Warrant contra revenue — — 1,033 — — 1,033

Total comprehensive income — — — 241 428 669

Balances at January 27, 2024 163,068 $ 8 659,162 $ ( 335 ) $ ( 124,868 ) $ 533,967

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands)

Six Months Ended

November 2, 2024 October 28, 2023

Nine Months Ended

February 1, 2025 January 27, 2024

Cash flows from operating activities:

Net loss $ ( 13,765 ) $ ( 18,320 )

Net income (loss)

$ 15,595 $ ( 17,892 )

Adjustments to reconcile net loss to net cash provided by operating activities:

20 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of ordinary share in connection with public offering, net of underwriter discounts and offering costs — 173,636

Payments on technology license obligations ( 5,394 ) ( 3,052 )

2 unchanged sentences

( 7,159 ) ( 1,348 )

Net cash provided by financing activities ( 2,422 ) 664

Net cash provided by (used in) financing activities

( 5,756 ) 175,269

Effect of exchange rate changes on cash 106 ( 69 )

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

232,266 ( 12,510 )

11 unchanged sentences

References to the “Company” in these notes refer to Credo Technology Group Holding Ltd and its subsidiaries on a consolidated basis, unless otherwise specified.

The Company is an innovator in providing secure, high-speed connectivity solutions that deliver improved power and cost efficiency.

The Company’s mission is to redefine high-speed connectivity by delivering breakthrough solutions that enable the next generation of AI-driven applications.

The Company is committed to enabling faster, more reliable, more energy-efficient, and scalable solutions that support the ever-expanding demands of AI, cloud computing, and hyperscale networks.

The Company’s connectivity solutions are optimized for optical and electrical Ethernet applications, including the 100G, 200G, 400G, 800G and emerging 1.6T markets.

12 unchanged sentences

Its fiscal year ending May 3, 2025 (fiscal year 2025) is a 53-week fiscal year.

The first quarter of fiscal year 2025 ended on August 3, 2024, the second quarter ended on November 2, 2024, and the third quarter ends on February 1, 2025.

The first quarter of fiscal year 2025 ended on August 3, 2024, the second quarter ended on November 2, 2024, and the third quarter ended on February 1, 2025.

Significant Accounting Policies

10 unchanged sentences

None of these reclassifications had an impact on reported net income or cash flows for any of the periods presented.

Recent Accounting Pronouncements Not Yet Adopted

Credo Technology Group Holding Ltd

Notes to Unaudited Condensed Consolidated Financial Statements

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis.

This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements.

The Company is currently evaluating the impact that this new standard will have on its consolidated financial statements and disclosures.

The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

14 unchanged sentences

In the tables below, customers are defined as the contracting entities who place purchase orders or enter into revenue contracts with the Company:

Accounts Receivable November 2, 2024 April 27, 2024

Accounts Receivable February 1, 2025 April 27, 2024

Customer A 88 % 53 %

Customer B * 23 %

Customer C * 23 %

Three Months Ended Six Months Ended

Revenue November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

Three Months Ended Nine Months Ended

Revenue February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Customer A 84 % 41 % 66 % 37 %

Customer B * 23 % * 15 %

Customer C * 11 % * *

Customer D * * * 12 %

4 unchanged sentences

The following table summarizes revenue disaggregated by primary geographical market based on destination of shipment and location of contracting entity, which may differ from the customer’s principal offices (in thousands):

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Hong Kong $ 93,337 $ 28,393 $ 152,695 $ 48,885

United States 21,856 7,837 32,655 14,252

Mainland China 25,263 798 48,535 22,415

United States 7,626 15,436 40,281 29,688

Taiwan 1,080 3,482 2,255 13,730

Rest of World 7,696 4,949 22,984 17,470

1 unchanged sentence

Contract Balances

The contract assets are primarily related to the Company’s fixed fee IP licensing arrangements and rights to consideration for performance obligations delivered but not billed as of November 2, 2024 and April 27, 2024.

During the six months ended November 2, 2024, the Company recognized $ 2.6 million of revenue that was included in the deferred revenue balance as of April 27, 2024.

During the six months ended October 28, 2023, the Company recognized $ 2.6 million of revenue that was included in the deferred revenue balance as of April 29, 2023.

During the six months ended November 2, 2024, the decrease in contract assets of $ 2.3 million was primarily driven by billings for certain milestones that had been met.

During the nine months ended February 1, 2025, the Company recognized $ 3.7 million of revenue that was included in the deferred revenue balance as of April 27, 2024.

During the nine months ended February 1, 2025, the decrease in contract assets of $ 8.7 million was primarily driven by billings for certain milestones that had been met.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods.

The contracted but unsatisfied performance obligation was approximately $ 4.4 million and the satisfied but unrecognized performance obligation was approximately $ 1.1 million as of November 2, 2024 which the Company expects to recognize over the next 12 months.

The contracted but unsatisfied performance obligation was approximately $ 1.1 million and the satisfied but unrecognized performance obligation was approximately $ 1.1 million as of February 1, 2025 which the Company expects to recognize over the next 12 months.

The Company applied a performance constraint on the satisfied but unrecognized performance obligation due to uncertainty around the collectability of milestone payments.

Customer Warrant

During fiscal year 2022, the Company issued a warrant to Amazon.com NV Investment Holdings LLC (Holder) to purchase an aggregate of up to 4,080 thousand of the Company’s ordinary shares at an exercise price of $ 10.74 per share (the Customer Warrant).

In fiscal year 2022, the Company issued a warrant to Amazon.com NV Investment Holdings LLC (Holder) to purchase an aggregate of up to 4,080 thousand of the Company’s ordinary shares at an exercise price of $ 10.74 per share (the Customer Warrant).

The exercise period of the Customer Warrant is through the seventh anniversary of the issue date.

Upon issuance of the Customer Warrant, 40 thousand of the shares issuable upon exercise of the Customer Warrant vested immediately and the remainder of the shares issuable will vest in tranches over the contract term based on the amount of global payments by Holder and its affiliates to us, up to $ 201 million in aggregate payments.

A total of 2,080 thousand and 1,080 thousand of the shares issuable upon exercise of the Customer Warrant were vested as of November 2, 2024 and April 27, 2024, respectively.

Using a grant date fair value of $ 4.65 , the Company recognized $ 2.6 million and $ 5.8 million for the three and six months ended November 2, 2024, respectively, and $ 0.4 million and $ 0.8 million for the three and six months ended October 28, 2023, respectively, as contra revenue within product sales revenue on the condensed consolidated statements of operations.

A total of 4,080 thousand and 1,080 thousand of the shares issuable upon exercise of the Customer Warrant were deemed vested as of February 1, 2025 and April 27, 2024, respectively.

Using a grant date fair value of $ 4.65 , the Company recognized $ 7.4 million and $ 13.2 million for the three and nine months ended February 1, 2025, respectively, and $ 1.0 million and $ 1.8 million for the three and nine months ended January 27, 2024, respectively, as contra revenue within product sales revenue on the condensed consolidated statements of operations.

Fair Value Measurements

12 unchanged sentences

Pricing sources may include industry standard data providers, security master files from large financial institutions, and other third -party sources used to determine a daily market value.

The following tables present the fair value of the financial instruments measured on a recurring basis as of November 2, 2024 and April 27, 2024 (in thousands).

November 2, 2024

The following tables present the fair value of the financial instruments measured on a recurring basis as of February 1, 2025 and April 27, 2024 (in thousands).

February 1, 2025

Level 1 Level 2 Level 3 Total

17 unchanged sentences

The carrying amount of the Company’s financial instruments, including cash equivalents, short-term investments, accounts receivable and accounts payable, approximate their respective fair values because of their short maturities.

As of November 2, 2024 and April 27, 2024, there were no unrealized losses or gains associated with the Company’s financial instruments.

Interest income recognized for the three and six months ended November 2, 2024 was $ 4.8 million and $ 10.6 million, respectively.

Interest income recognized for the three and six months ended October 28, 2023 was $ 2.9 million and $ 5.5 million, respectively.

As of February 1, 2025 and April 27, 2024, there were no unrealized losses or gains associated with the Company’s financial instruments.

Interest income recognized for the three and nine months ended February 1, 2025 was $ 4.2 million and $ 14.7 million, respectively.

Interest income recognized for the three and nine months ended January 27, 2024 was $ 4.4 million and $ 9.9 million, respectively.

Supplemental Financial Information

Inventories consisted of the following (in thousands):

November 2, 2024 April 27, 2024

February 1, 2025 April 27, 2024

Raw materials $ 13,228 $ 9,415

6 unchanged sentences

Property and equipment consisted of the following (in thousands):

November 2, 2024 April 27, 2024

February 1, 2025 April 27, 2024

Production equipment $ 34,474 $ 27,608

7 unchanged sentences

$ 67,805 $ 43,665

Depreciation and amortization expense was $ 5.0 million and $ 9.2 million for the three and six months ended November 2, 2024, respectively and $ 3.7 million and $ 6.6 million for the three and six months ended October 28, 2023, respectively.

Depreciation and amortization expense was $ 5.1 million and $ 14.3 million for the three and nine months ended February 1, 2025, respectively and $ 3.4 million and $ 10.1 million for the three and nine months ended January 27, 2024, respectively.

Computer equipment and software primarily includes technology licenses for computer-aided design tools relating to the Company’s R&D design of future products and intellectual properties.

2 unchanged sentences

Accrued expenses and other current liabilities consisted of the following (in thousands):

November 2, 2024 April 27, 2024

February 1, 2025 April 27, 2024

Accrued expenses $ 23,652 $ 9,610

4 unchanged sentences

Other non-current liabilities consisted of the following (in thousands):

November 2, 2024 April 27, 2024

February 1, 2025 April 27, 2024

Non-current payables relating to purchases of property and equipment $ 7,064 $ 4,950

3 unchanged sentences

Non-cancelable Purchase Obligations

Total future non-cancelable purchase obligations as of November 2, 2024 are as follows (in thousands):

Total future non-cancelable purchase obligations as of February 1, 2025 are as follows (in thousands):

Credo Technology Group Holding Ltd

9 unchanged sentences

Under the Company’s manufacturing relationships with its foundry partners, cancellation of outstanding purchase orders is allowed but requires payment of all costs and expenses incurred through the date of cancellation.

As of November 2, 2024, the total value of non-cancelable purchase orders payable within the next one year that were committed with the Company’s third-party subcontractors was approximately $ 39.8 million.

As of February 1, 2025, the total value of non-cancelable purchase orders payable within the next one year that were committed with the Company’s third-party subcontractors was approximately $ 35.2 million.

Such purchase commitments are included in the preceding table.

The Company has a manufacturing supply capacity reservation agreement with an assembly subcontractor as of November 2, 2024.

The Company has a manufacturing supply capacity reservation agreement with an assembly subcontractor as of February 1, 2025.

Under this arrangement, the Company has paid refundable deposits to the supplier in exchange for reserved manufacturing production capacity over the term of the agreement, which approximates five years .

13 unchanged sentences

The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification obligations.

Accordingly, the Company had no liabilities recorded for these agreements as of November 2, 2024 and April 27, 2024.

Accordingly, the Company had no liabilities recorded for these agreements as of February 1, 2025 and April 27, 2024.

Legal Proceedings

9 unchanged sentences

The Company leases office space, in the United States and internationally, under operating leases.

The Company’s leases have remaining lease terms generally between one year and seven years .

The Company’s leases have remaining lease terms generally between one year and six years .

Operating leases are included in right of use assets, accrued expenses and other current liabilities, and non-current operating lease liabilities on the Company’s unaudited condensed consolidated balance sheets.

1 unchanged sentence

Lease expense and supplemental cash flow information are as follows (in thousands):

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Operating lease expenses $ 1,047 $ 983 $ 3,084 $ 2,814

2 unchanged sentences

$ 947 $ 739 $ 4,478 $ 739

The aggregate future lease payments for operating leases as of November 2, 2024 are as follows (in thousands):

The aggregate future lease payments for operating leases as of February 1, 2025 are as follows (in thousands):

Fiscal Year Operating Leases

3 unchanged sentences

Present value of lease liabilities $ 16,136

In addition to the table above, the Company entered into a new office space lease arrangement, as of November 2, 2024, for a total of $ 1.1 million over a five year lease term, for which the lease commencement date has not started.

As of November 2, 2024, the weighted-average remaining lease term for the Company's operating leases was 5.5 years and the weighted-average discount rate used to determine the present value of the Company's operating leases was 6.3 %.

As of February 1, 2025, the weighted-average remaining lease term for the Company's operating leases was 5.3 years and the weighted-average discount rate used to determine the present value of the Company's operating leases was 6.3 %.

Share Incentive Plan

Restricted Stock Unit (RSU) Awards

Credo Technology Group Holding Ltd

Notes to Unaudited Condensed Consolidated Financial Statements

A summary of information related to RSU activity during the six months ended November 2, 2024 is as follows:

A summary of information related to RSU activity during the nine months ended February 1, 2025 is as follows:

RSUs Outstanding

1 unchanged sentence

Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in millions)

Balances as of April 27, 2024 10,139 $ 16.11 1.52 $ 188.2

Balance as of April 27, 2024 10,139 $ 16.11 1.52 $ 188.2

Granted 1,028 $ 41.11

1 unchanged sentence

Canceled/ forfeited ( 543 ) $ 20.28

Balances and expected to vest as of November 2, 2024 8,895 $ 17.87 1.25 $ 359.6

Balance and expected to vest as of February 1, 2025 7,533 $ 19.47 1.26 $ 527.5

Credo Technology Group Holding Ltd

Notes to Unaudited Condensed Consolidated Financial Statements

Share Option Awards

A summary of information related to share option activity during the six months ended November 2, 2024 is as follows:

A summary of information related to share option activity during the nine months ended February 1, 2025 is as follows:

Options Outstanding

3 unchanged sentences

Options canceled/ forfeited ( 13 ) $ 4.58

Balance and expected to vest as of November 2, 2024 5,129 $ 2.01 4.89 $ 197.1

Exercisable as of November 2, 2024 5,129 $ 2.01 4.89 $ 197.1

Balance exercisable and expected to vest as of February 1, 2025 4,178 $ 2.14 4.94 $ 283.6

Employee Stock Purchase Plan (ESPP)

The Company issued 139 thousand shares during the six months ended November 2, 2024 and 205 thousand shares during the six months ended October 28, 2023, under the ESPP.

The Company issued 56 thousand and 195 thousand shares during the three and nine months ended February 1, 2025, respectively, and 76 thousand and 281 thousand shares during the three and nine months ended January 27, 2024, respectively, under the ESPP.

Summary of Share-based Compensation Expense

The following table summarizes share-based compensation expense included in the unaudited condensed consolidated statements of operations (in thousands):

Three months ended Six Months Ended

November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

Three months ended Nine Months Ended

February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Cost of revenue $ 226 $ 458 $ 838 $ 897

5 unchanged sentences

The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in accurately predicting its pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, changes in tax laws, the applicability of special tax regimes, changes in how we do business, and discrete items.

Credo Technology Group Holding Ltd

Notes to Unaudited Condensed Consolidated Financial Statements

Provision (benefit) for income taxes for the three and six months ended November 2, 2024 and October 28, 2023 was as follows (in thousands except percentages):

Provision (benefit) for income taxes for the three and nine months ended February 1, 2025 and January 27, 2024 was as follows (in thousands except percentages):

Three Months Ended

Six Months Ended

November 2, 2024 October 28, 2023 % Change November 2, 2024 October 28, 2023 % Change

Nine Months Ended

February 1, 2025 January 27, 2024 % Change February 1, 2025 January 27, 2024 % Change

Provision (benefit) for income taxes

1 unchanged sentence

Effective tax rate 2.5 % 126.4 % 9.7 % 10.7 %

The Company’s effective tax rate for the three months ended November 2, 2024 remains consistent with the same period in the prior fiscal year.

The Company’s effective tax rate for the six months ended November 2, 2024 differs from the same period in the prior fiscal year primarily due to the tax benefit of share-based compensation expense being offset by a full valuation allowance on deferred tax assets in the U.S.

The Company’s effective tax rate for the three and nine months ended February 1, 2025 differed from the same period in the prior fiscal year primarily due to the tax benefit of share-based compensation expense being offset by a full valuation allowance on deferred tax assets in the U.S.

entity in fiscal year 2025.

During the three and six months ended November 2, 2024, there were no material changes to the total amount of unrecognized tax benefits and the Company does not expect any significant changes in the next 12 months.

Net Loss Per Share

Credo Technology Group Holding Ltd

Notes to Unaudited Condensed Consolidated Financial Statements

During the three and nine months ended February 1, 2025, there were no material changes to the total amount of unrecognized tax benefits and the Company does not expect any significant changes in the next 12 months.

Net Income (Loss) Per Share

The Company reports both basic net income (loss) per share, which is based on the weighted-average number of ordinary shares outstanding during the period, and diluted net income (loss) per share, which is based on the weighted-average number of ordinary shares outstanding and potentially dilutive shares outstanding during the period.

Net loss per share for the three and six months ended November 2, 2024 and October 28, 2023 , respectively, was determined as follows (in thousands, except per share amounts):

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

Net income (loss) per share for the three and nine months ended February 1, 2025 and January 27, 2024 , respectively, was determined as follows (in thousands, except per share amounts):

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Net income (loss)

$ 29,360 $ 428 $ 15,595 $ ( 17,892 )

Weighted-average shares - basic and diluted

Weighted-average shares - basic

168,167 157,155 166,562 152,063

Net loss per share:

Basic and diluted

Effect of dilutive shares

Share-based compensation awards

10,919 9,827 10,966 —

Customer Warrant

3,378 179 2,968 —

Weighted-average shares - diluted

182,464 167,160 180,495 152,063

Net income (loss) per share:

$ 0.17 $ — $ 0.09 $ ( 0.12 )

$ 0.16 $ — $ 0.09 $ ( 0.12 )

Potential dilutive securities include dilutive ordinary shares from the Customer Warrant, share-based awards attributable to the assumed exercise of share options and vesting of RSUs and ESPP shares using the treasury stock method.

Under the treasury stock method, potential ordinary shares outstanding are not included in the computation of diluted net income per share if their effect is anti-dilutive.

The following potentially dilutive securities outstanding (in thousands) have been excluded from the computations of diluted weighted-average shares outstanding for the three and six months ended November 2, 2024 and October 28, 2023:

Three and Six Months Ended

November 2, 2024 October 28, 2023

The following potentially dilutive securities outstanding (in thousands) have been excluded from the computations of diluted weighted-average shares outstanding for the three and nine months ended February 1, 2025 and January 27, 2024:

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Share-based compensation awards 175 3,921 242 13,747

1 unchanged sentence

— 3,901 — 4,080

175 7,822 242 17,827

Subsequent Events

On March 7, 2025, the Compensation Committee of the Board of Directors of the Company (Compensation Committee) approved annual refresh grants to the Company’s certain current named executive officers in the form of performance-based restricted stock units (PSUs) under the Company’s 2021 Long-Term Incentive Plan (the Plan).

Refer to the section titled “ Annual PSU Refresh Grants” within Item 5.

Other Information for further details .

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

1 unchanged sentence

Some of the information contained in this discussion and analysis includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” of this Quarterly Report on Form 10-Q.

Credo provides innovative, secure, high-speed and power-efficient connectivity solutions.

Our solutions target the data infrastructure market, where bandwidth requirements are increasing exponentially, driven by the accelerating deployment of leading edge Artificial Intelligence infrastructure and applications.

At Credo, our mission is to redefine high-speed connectivity by delivering breakthrough solutions that enable the next generation of AI-driven applications.

We are committed to enabling faster, more reliable, more energy-efficient, and scalable solutions that support the ever-expanding demands of AI, cloud computing, and hyperscale networks.

Our connectivity solutions are optimized for optical and electrical Ethernet applications, including the 100G (or Gigabits per second), 200G, 400G, 800G and emerging 1.6T (or Terabits per second) markets.

13 unchanged sentences

Once developed, these tailored solutions can generally be broadly leveraged across our portfolio and we are able to sell the part or license the IP to the broader market.

During the three and six months ended November 2, 2024, we generated $72.0 million and $131.7 million in total revenue, respectively, and during the three and six months ended October 28, 2023, we generated $44.0 million and $79.1 million in total revenue, respectively.

Product sales and product engineering services revenue comprised 95.9% of our total revenue in both the three and six months ended November 2, 2024 and 83.3% and 87.2% in the three and six months ended October 28, 2023, respectively, and IP license revenue represented 4.1% of our total revenue in both the three and six months ended November 2, 2024 and 16.7% and 12.8% in the three and six months ended October 28, 2023, respectively.

During the three and six months ended November 2, 2024, we generated $4.2 million and $13.8 million in net losses, respectively, and during the three and six months ended October 28, 2023, we generated $6.6 million and $18.3 million in net losses, respectively.

During the three and nine months ended February 1, 2025, we generated $135.0 million and $266.8 million in total revenue, respectively, and during the three and nine months ended January 27, 2024, we generated $53.1 million and $132.2 million in total revenue, respectively.

Product sales and product engineering services revenue comprised 97.8% and 96.9% of our total revenue in the three and nine months ended February 1, 2025 and 97.6% and 91.4% in the three and nine months ended January 27, 2024, respectively.

IP license revenue represented 2.2% and 3.1% of our total revenue in the three and nine months ended February 1, 2025 and 2.4% and 8.6% in the three and nine months ended January 27, 2024, respectively.

During the three and nine months ended February 1, 2025, we generated $29.4 million and $15.6 million in net income, respectively, and during the three and nine months ended January 27, 2024, we generated $0.4 million net income and $17.9 million in net losses, respectively.

We derive the substantial majority of our revenue from a limited number of customers.

9 unchanged sentences

As a supplement to our financial statement footnote disclosure, and to provide further insight into our end customer concentration, the following table summarizes our revenue by customer as a percentage of total revenue based on end customer profile, rather than based on the contracting parties who place purchase orders or sign revenue contracts with us:

Three Months Ended Six Months Ended

Revenue November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

Three Months Ended Nine Months Ended

Revenue February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Customer E 86 % 19 % 64 % 13 %

Customer B 14 % * 10 % *

Customer F * 28 % * 31 %

Customer B * 23 % * 15 %

Customer D * * * 12 %

Customer G * 11 % * *

* Less than 10% of total revenue.

12 unchanged sentences

Results of Operations

Three and Six Months Ended November 2, 2024 and October 28, 2023

Three and Nine Months Ended February 1, 2025 and January 27, 2024

The following table sets forth information derived from our unaudited condensed consolidated statements of operations expressed as a percentage of total revenue:

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 February 1, 2025 January 27, 2024

Product sales 95.8 % 75.3 % 92.8 % 78.9 %

20 unchanged sentences

21.7 % 0.8 % 5.8 % (13.5) %

Comparison of Three and Six Months Ended November 2, 2024 and October 28, 2023

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 % Change

Comparison of Three and Nine Months Ended February 1, 2025 and January 27, 2024

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 % Change

(in thousands, except percentages) (in thousands, except percentages)

3 unchanged sentences

Total revenue $ 135,002 $ 53,058 154.4 % $ 266,750 $ 132,188 101.8 %

Total revenue for the three months ended November 2, 2024 increased by $28.0 million, compared to the same period in fiscal year 2024, primarily due to an increase in product sales revenue of $30.2 million and product engineering services revenue of $2.2 million.

This was offset by a decrease in IP license revenue of $4.4 million.

The increase in product sales revenue for the three months ended November 2, 2024, compared to the same period in fiscal year 2024, was primarily due to a significant increase in the volume of unit shipments of AEC and Optical products which contributed over 95% of the increase in product sales revenue, compared to the same period in fiscal year 2024.

The sales increase was primarily driven by new design wins and increased diversification of our customer base across the product lines.

The increase in product engineering services revenue for the three months ended November 2, 2024, compared to the same period in fiscal year 2024, was primarily due to an increase in engineering time of 156% spent in our product engineering services arrangements.

The decrease in IP license revenue for the three months ended November 2, 2024, compared to the same period in fiscal year 2024, was primarily due to fewer contracts entered into in the period as compared to the same period in fiscal 2024.

Total revenue for the six months ended November 2, 2024 increased by $28.0 million, compared to the same period in fiscal year 2024, primarily due to an increase in product sales revenue of $30.2 million and product engineering services revenue of $2.2 million.

This was offset by a decrease in IP license revenue of $4.4 million.

The increase in product sales revenue for the six months ended November 2, 2024, compared to the same period in fiscal year 2024, was primarily due to a significant increase in the volume of unit shipments of AEC and Optical products which contributed over 95% of the increase in product sales revenue.

Total revenue for the three months ended February 1, 2025 increased by $81.9 million, compared to the same period in fiscal year 2024, primarily due to an increase in product sales revenue of $89.4 million and IP license revenue of $1.7 million.

This was offset by a decrease in product engineering services revenue of $9.2 million.

The increase in product sales revenue for the three months ended February 1, 2025, compared to the same period in fiscal year 2024, was primarily due to a significant increase in the volume of unit shipments of AEC products to a hyper-scaler customer which contributed over 95% of the increase in product sales revenue, compared to the same period in fiscal year 2024.

The increase in IP license revenue for the three months ended February 1, 2025, compared to the same period in fiscal year 2024, was primarily due to increased royalty revenue in which the royalty component of an existing agreement had begun.

The decrease in product engineering services revenue for the three months ended February 1, 2025, compared to the same period in fiscal year 2024, was primarily due to completion of certain product engineering services arrangements resulting in a decrease in engineering time of 87%.

Total revenue for the nine months ended February 1, 2025 increased by $134.6 million, compared to the same period in fiscal year 2024, primarily due to an increase in product sales revenue of $143.4 million offset by a decrease in product engineering services revenue of $5.8 million and IP license revenue of $3.1 million.

The increase in product sales revenue for the nine months ended February 1, 2025, compared to the same period in fiscal year 2024, was primarily due to a significant increase in the volume of unit shipments of AEC and Optical products which contributed over 95% of the increase in product sales revenue.

The sales increase was primarily driven by new design wins and increased diversification of our customer base across the product lines.

The increase in product engineering services revenue for the six months ended November 2, 2024, compared to the same period in fiscal year 2024, was primarily due to an increase in engineering time of 134% spent in our product engineering services arrangements.

The decrease in IP license revenue for the six months ended November 2, 2024, compared to the same period in fiscal year 2024, was primarily due to fewer contracts entered into in the period as compared to the same period in fiscal year 2024.

The decrease in product engineering services revenue for the nine months ended February 1, 2025, compared to the same period in fiscal year 2024, was primarily due to the completion of certain product engineering services arrangements resulting in a decrease in engineering time of 47%.

The decrease in IP license revenue for the nine months ended February 1, 2025, compared to the same period in fiscal year 2024, was primarily due to fewer contracts entered into in the period as compared to the same period in fiscal year 2024.

Cost of Revenue

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 % Change

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 % Change

(in thousands, except percentages) (in thousands, except percentages)

3 unchanged sentences

Total cost of revenue $ 49,076 $ 20,500 139.4 % $ 98,029 $ 52,723 85.9 %

Cost of revenue for the three months ended November 2, 2024 increased by $8.6 million compared to the same period in fiscal year 2024, primarily due to an increase in cost of product sales revenue of $8.5 million.

Cost of revenue for the three months ended February 1, 2025 increased by $28.6 million compared to the same period in fiscal year 2024, primarily due to an increase in cost of product sales revenue of $29.9 million.

The increase was primarily due to the increased shipments of AEC products noted above.

Cost of revenue for the six months ended November 2, 2024 increased by $16.7 million compared to the same period in fiscal year 2024, primarily due to an increase in cost of product sales revenue of $16.6 million.

Cost of revenue for the nine months ended February 1, 2025 increased by $45.3 million compared to the same period in fiscal year 2024, primarily due to an increase in cost of product sales revenue of $46.5 million.

The increase was primarily due to the increased shipments of AEC products noted above.

Gross Profit and Gross Margin

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 % Change

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 % Change

(in thousands, except percentages) (in thousands, except percentages)

1 unchanged sentence

Gross margin 63.6 % 61.4 % 63.3 % 60.1 %

Gross margin in the three months ended November 2, 2024 increased by 3.9 percentage points compared to the same period in fiscal year 2024, primarily driven by the improved economies of scale in our product sales.

Our product sales gross margin increased by 10.5 percentage points for the three months ended November 2, 2024, compared to the same period in the prior year, driven primarily by the increased shipments of higher gross margin AEC products, partially offset by a $2.0 million increase of write-downs for excess and obsolete inventory.

Gross margin in the six months ended November 2, 2024 increased by 3.6 percentage points compared to the same period in fiscal year 20244, primarily driven by the improved economies of scale in our product sales.

Our product sales gross margin increased by 8.2 percentage points for the six months ended November 2, 2024, compared to the same period in the prior fiscal year, driven primarily by the increase shipments of higher gross margin AEC products, partially offset by a $1.5 million increase of write-downs for excess and obsolete inventory.

Gross margin in the three months ended February 1, 2025 increased by 2.2 percentage points compared to the same period in fiscal year 2024, primarily driven by the improved economies of scale in our product sales.

Our product sales gross margin increased by 9.6 percentage points for the three months ended February 1, 2025, compared to the same period in the prior year, driven primarily by the increased shipments of higher gross margin AEC products, partially offset by a $2.2 million increase of write-downs for excess and obsolete inventory.

Gross margin in the nine months ended February 1, 2025 increased by 3.2 percentage points compared to the same period in fiscal year 2024, primarily driven by the improved economies of scale in our product sales.

Our product sales gross margin increased by 9.1 percentage points for the nine months ended February 1, 2025, compared to the same period in the prior fiscal year, driven primarily by the increase shipments of higher gross margin AEC products, partially offset by a $3.7 million increase of write-downs for excess and obsolete inventory.

Research and Development

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 % Change

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 % Change

(in thousands, except percentages) (in thousands, except percentages)

1 unchanged sentence

% of total revenue 26.9 % 45.7 % 36.9 % 51.9 %

Research and development expense for the three months ended November 2, 2024 increased by $10.0 million compared to the same period in fiscal year 2024.

Research and development expense for the three months ended February 1, 2025 increased by $12.0 million compared to the same period in fiscal year 2024.

The increase was due primarily to a $3.6 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $3.2 million increase in personnel costs as a result of new hires for product development, a $3.1 million increase in design activities and higher engineering activities relating to testing and laboratory supplies for new product development and a $0.9 million increase in depreciation expense associated with increase in R&D equipment.

Research and development expense for the six months ended November 2, 2024 increased by $17.8 million compared to the same period in fiscal year 2023.

The increase was due primarily to an $8.2 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $5.7 million increase in personnel costs as a result of new hires for product development, a $1.8 million increase in design activities and higher engineering activities relating to testing and laboratory supplies for new product development and a $1.7 million increase in depreciation expense driven by increased computer equipment and software, and laboratory equipment utilized in research and development activities.

Research and development expense for the nine months ended February 1, 2025 increased by $29.8 million compared to the same period in fiscal year 2023.

The increase was due primarily to an $11.9 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, an $8.3 million increase in personnel costs as a result of new hires for product development, a $6.4 million increase in design activities and higher engineering activities relating to testing and laboratory supplies for new product development and a $2.6 million increase in depreciation expense driven by increased computer equipment and software, and laboratory equipment utilized in research and development activities.

Selling, General and Administrative

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 % Change

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 % Change

(in thousands, except percentages) (in thousands, except percentages)

2 unchanged sentences

% of total revenue 17.4 % 26.8 % 25.1 % 30.3 %

Selling, general and administrative expense for the three months ended November 2, 2024 increased by $8.9 million compared to the same period in fiscal year 2024.

The increase was primarily due to a $4.7 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, $2.0 million increase in personnel costs as a result of higher selling, general and administrative headcount, a $0.7 million increase in external consultation fees relating to general and administrative expenses, and a $0.5 million increase in logistic expenses related to selling activities.

Selling, general and administrative expense for the six months ended November 2, 2024 increased by $17.7 million compared to the same period in fiscal year 2023.

The increase was primarily due to an $8.9 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $4.0 million increase in personnel expenses from new hires, a $2.8 million increase in external consultation fees relating to general and administrative expenses, and a $0.5 million increase in logistic expenses related to selling activities.

Selling, general and administrative expense for the three months ended February 1, 2025 increased by $9.2 million compared to the same period in fiscal year 2024.

The increase was primarily due to a $4.3 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $2.3 million increase in personnel costs as a result of higher selling, general and administrative headcount, a $1.5 million increase in external consultation fees relating to general and administrative expenses, a $0.4 million increase in depreciation and software license expense driven by increased computer equipment and software utilized in selling, general and administrative activities and a $0.2 million increase in logistic expenses related to selling activities.

Selling, general and administrative expense for the nine months ended February 1, 2025 increased by $26.9 million compared to the same period in fiscal year 2023.

The increase was primarily due to a $13.1 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $6.2 million increase in personnel expenses from new hires, a $4.3 million increase in external consultation fees relating to general and administrative expenses, a $0.9 million increase in depreciation and software license expense driven by increased computer equipment and software utilized in selling, general and administrative activities, a $0.8 million increase in logistic expenses related to selling activities, a $0.7 million increase in general building management expenses due to increased headcount and a $0.3 million increase in tradeshow expenses driven by increased tradeshow participation.

Provision (Benefit) for Income Taxes

Three Months Ended Six Months Ended

November 2, 2024 October 28, 2023 % Change

Three Months Ended Nine Months Ended

February 1, 2025 January 27, 2024 % Change

(in thousands, except percentages) (in thousands, except percentages)

2 unchanged sentences

% of total revenue 0.6 % (3.9) % 0.6 % (1.6) %

Provision for income taxes for the three months ended November 2, 2024 remained consistent, decreasing by $0.2 million, compared to the same period in fiscal year 2024.

Provision for income taxes for the six months ended November 2, 2024 increased by $1.0 million, compared to the same period in fiscal year 2024.

Provision for income taxes for the three and nine months ended February 1, 2025 increased by $2.8 million and $3.8 million, respectively, compared to the same period in fiscal year 2024.

The fluctuation was primarily due to the tax benefit of share-based compensation expense being offset by a full valuation allowance on deferred tax assets in the U.S.

2 unchanged sentences

Our activities consist primarily of selling our products, licensing our IP, providing product and IP engineering services, and conducting research and development of our products and technology.

As of November 2, 2024 and April 27, 2024, we had $239.2 million and $66.9 million in cash and cash equivalents, respectively, and working capital of $488.6 million and $485.6 million, respectively.

As of February 1, 2025 and April 27, 2024, we had $299.2 million and $66.9 million in cash and cash equivalents, respectively, and working capital of $538.4 million and $485.6 million, respectively.

Our principal use of cash is to fund our operations and invest in research and development to support our growth.

5 unchanged sentences

The following table summarizes our cash flows for the periods indicated.

Six Months Ended

November 2, 2024 October 28, 2023

Nine Months Ended

February 1, 2025 January 27, 2024

(in thousands)

6 unchanged sentences

Cash Flows Provided by Operating Activities

Net cash provided by operating activities was $3.0 million for the six months ended November 2, 2024.

The cash inflows from operating activities for the six months ended November 2, 2024 were primarily due to $50.6 million of non-cash items, partially offset by $33.7 million of cash outflows for working capital purposes and $13.8 million in net loss.

The cash outflows from working capital for the six months ended November 2, 2024 were primarily driven by (a) an increase in accounts receivable of $22.1 million primarily due to large billings from customers not due yet in the six months ended November 2, 2024;

(b) an increase in inventory of $12.6 million to support unfulfilled backlog and related new product ramps;

and (c) a decrease in deferred revenue of $2.0 million due to the satisfaction of performance obligations over the passage of time.

Net cash provided by operating activities was $29.6 million for the six months ended October 28, 2023.

The cash inflows from operating activities for the six months ended October 28, 2023 were primarily due to $23.7 million of cash inflows for working capital purposes and $24.3 million of non-cash items, partially offset by $18.3 million in net loss.

The cash inflows from working capital for the six months ended October 28, 2023 were primarily driven by (a) an decrease in accounts receivable of $16.8 million primarily due to collection of large customer invoices in the fiscal quarter ended October 28, 2023;

(b) an decrease in inventory of $9.6 million primarily driven by tightened production management and increased product sales compared to the fiscal quarter ended April 29, 2023;

Net cash provided by operating activities was $7.3 million for the nine months ended February 1, 2025.

The cash inflows from operating activities for the nine months ended February 1, 2025 were primarily due to $15.6 million in net income and $81.3 million of non-cash items, partially offset by $89.6 million of cash outflows for working capital purposes.

The cash outflows from working capital for the nine months ended February 1, 2025 were primarily driven by (a) an increase in accounts receivable of $97.5 million primarily due to large billings from customers not due yet in the nine months ended February 1, 2025 and (b) an increase in inventory of $31.7 million to support unfulfilled backlog and related new product ramps.

These cash outflows were offset by cash inflows relating to (a) an increase in accounts payable of $22.3 million and (b) an increase in accrued expenses of $13.0 million, both relating to increased inventory purchases.

Net cash provided by operating activities was $28.6 million for the nine months ended January 27, 2024.

The cash inflows from operating activities for the nine months ended January 27, 2024 were primarily due to $9.5 million of cash inflows for working capital purposes and $37.0 million of non-cash items, partially offset by $17.9 million in net loss.

The cash inflows from working capital for the nine months ended January 27, 2024 were primarily driven by (a) a

decrease in accounts receivable of $4.8 million primarily due to collection of large customer invoices in the fiscal quarter ended January 27, 2024;

(b) a decrease in inventory of $13.8 million primarily driven by tightened production management and increased product sales compared to the fiscal quarter ended April 29, 2023;

(c) an increase in accounts payable of $5.3 million due to amounts payable relating to increased research and development spending.

1 unchanged sentence

Cash Flows Provided by (Used in) Investing Activities

Net cash provided by investing activities of $171.5 million in the six months ended November 2, 2024 was primarily attributable to maturities of certificates of deposit for $313.1 million, offset by purchases of the same for $113.7 million and purchases of property and equipment of $27.8 million.

Net cash provided by investing activities of $230.7 million in the nine months ended February 1, 2025 was primarily attributable to maturities of certificates of deposit for $376.8 million, offset by purchases of the same for $113.7 million and purchases of property and equipment of $32.4 million.

Purchases of property and equipment primarily related to mask set costs capitalized relating to the Company’s products already introduced or to be introduced, and third-party IP licenses and computer equipment and software used for research and development purposes.

Net cash used in investing activities of $9.7 million in the six months ended October 28, 2023 was attributable to purchases of property and equipment of $7.4 million and net outflow from certificates of deposit of $2.3 million from maturities of certificates of deposit for $109.2 million and purchases of the same for $111.5 million.

Net cash used in investing activities of $216.3 million in the nine months ended January 27, 2024 was attributable to purchases of property and equipment of $12.5 million and net outflow from certificates of deposit of $203.8 million from maturities of certificates of deposit for $169.8 million and purchases of the same for $373.6 million.

Purchases of property and equipment primarily related to mask sets purchases for new products introduced or in process of being introduced, and computer equipment and software used for research and development purposes.

Cash Flows Provided by (Used in) Financing Activities

Net cash used in financing activities of $2.4 million for the six months ended November 2, 2024 was primarily attributable to $4.6 million in payments for long-term technology license obligations and $2.3 million tax withheld related to RSU settlement, offset by $4.4 million in proceeds from exercises of employee share options.

Net cash provided by financing activities of $0.7 million for the six months ended October 28, 2023 was solely attributable to $3.7 million in proceeds from exercises of employee share options and issuances of shares under the ESPP offset by $3.1 million in payments for long-term technology license obligations.

Net cash used in financing activities of $5.8 million for the nine months ended February 1, 2025 was primarily attributable to $5.4 million in payments for long-term technology license obligations and $7.2 million tax withheld related to RSU settlement, offset by $6.8 million in proceeds from exercises of employee share options.

Net cash provided by financing activities of $175.3 million for the nine months ended January 27, 2024 was solely attributable to $4.7 million in proceeds from exercises of employee share options and issuances of shares under the ESPP offset by $3.1 million in payments for long-term technology license obligations.

Critical Accounting Estimates

There have been no material changes to our critical accounting estimates during the three and six months ended November 2, 2024, as compared to those disclosed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended April 27, 2024.

There have been no material changes to our critical accounting estimates during the three and nine months ended February 1, 2025, as compared to those disclosed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended April 27, 2024.

In the current macroeconomic environment, our estimates could require increased judgment and carry a higher degree of variability and volatility.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements