4 unchanged sentences
Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors.”
−Removed: A discussion regarding our financial condition and our results of operations for the fiscal year ended April 27, 2024 compared to the fiscal year ended April 29, 2023 is presented below.
+Added: A discussion regarding our financial condition and our results of operations for the fiscal year ended May 3, 2025 compared to the fiscal year ended April 27, 2024 is presented below.
A discussion regarding our results of operations for the fiscal year ended April 27, 2024 compared to the fiscal year ended April 29, 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended April 27, 2024 , filed with the SEC on June 24, 2024.
−Removed: Credo provides innovative, secure, high-speed and power-efficient connectivity solutions.
−Removed: 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.
−Removed: 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.
+Added: At Credo, our mission is to redefine high-speed connectivity by delivering breakthrough solutions that enable the next generation of AI-driven applications.
+Added: 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.
+Added: Our connectivity solutions are optimized for optical and electrical Ethernet and PCIe applications, including the 100G (or Gigabits per second), 200G, 400G, 800G and emerging 1.6T (or Terabits per second) ethernet markets and the 32G PCIe5 and upcoming 64G PCIe6 markets.
Our products are based on our Serializer/Deserializer (SerDes) and Digital Signal Processor (DSP) technologies.
7 unchanged sentences
The demands for increased bandwidth, improved power and cost efficiency and heightened security have simultaneously and dramatically expanded as work, education and entertainment have rapidly digitized across myriad endpoint users.
−Removed: We design, market and sell both product and IP solutions.
+Added: We design, market and sell both product, software and IP solutions.
We help define industry conventions and standards within the markets we target by collaborating with technology leaders and standards bodies.
3 unchanged sentences
During fiscal 2025 and 2024, we generated $436.8 million and $193.0 million in total revenue, respectively.
−Removed: Product sales and product engineering services revenue comprised 85% and 83% of our total revenue in fiscal 2024 and 2023, respectively, and IP license and IP license engineering services revenue represented 15% and 17% of our total revenue in fiscal 2024 and 2023, respectively.
−Removed: Geographically, 31% of our total revenue in both fiscal 2024 and 2023 was generated from customers in North America, and 69% of our total revenue in both fiscal 2024 and 2023 was generated from customers in the rest of the world, primarily in Asia.
−Removed: During fiscal 2024 and 2023, we generated $28.4 million and $16.5 million of net loss, respectively.
+Added: Product sales and product engineering services revenue comprised 97% and 85% of our total revenue in fiscal 2025 and 2024, respectively, and IP license revenue represented 3% and 15% of our total revenue in fiscal 2025 and 2024, respectively.
+Added: Geographically, 15% and 31% of our total revenue in fiscal 2025 and 2024 was generated from customers in North America, and 85% and 69% of our total revenue in fiscal 2025 and 2024 was generated from customers in the rest of the world, primarily in Asia.
+Added: During fiscal 2025 and 2024, we generated $52.2 million of net income and $28.4 million of net loss, 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:
−Removed: April 27, 2024 April 29, 2023
−Removed: Customer Z 26 % 55 %
−Removed: Customer Y 20 % *
−Removed: Customer B 15 % *
−Removed: Customer C * 12 %
+Added: May 3, 2025 April 27, 2024
Customer E 63 % 20 %
+Added: Customer F * 26 %
+Added: Customer B * 15 %
* Less than 10% of total revenue.
12 unchanged sentences
Components of Our Operating Results
−Removed: Our revenues consist of sale of our products, licensing of and providing engineering services related to our IP and providing product engineering services.
−Removed: Product sales primarily consists of shipment of our ICs and AEC products.
+Added: Our revenues consist of sales of our products, licensing of and providing engineering services related to our IP and providing product engineering services.
+Added: Product sales primarily consist of shipments of our ICs and AEC products.
IP license revenue includes fees from licensing of our SerDes IP and related engineering and support fees and royalties.
5 unchanged sentences
Where an arrangement includes multiple performance obligations, the transaction price is allocated to these on a relative standalone selling price (SSP) basis.
−Removed: We determine the SSP based on an observable standalone selling price when it is available, as well as other factors, including the price charged to customers and our overall pricing objectives, while maximizing observable inputs.
−Removed: When SSPs are not directly observable, we use the adjusted market assessment approach or residual approach, if applicable.
We also consider the constraint on estimates of variable consideration when estimating the total transaction price.
5 unchanged sentences
We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer and we have a future obligation to transfer products or services.
−Removed: Product Sales - We transact with customers primarily pursuant to standard purchase orders for delivery of products and generally allow customers to cancel or change purchase orders within limited
−Removed: notice periods prior to the scheduled shipment date.
+Added: Product Sales - We transact with customers primarily pursuant to standard purchase orders for delivery of products and generally allow customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment date.
We offer standard performance warranties of twelve months after product delivery and offer limited product return rights to certain distributors.
5 unchanged sentences
IP License Revenue - Our IP license revenue consists of perpetual licenses, support and maintenance, engineering services and royalties.
−Removed: We enter into perpetual semiconductor IP license agreements that have a fixed fee, whereby licensees pay a fixed fee for the right to incorporate our IP technologies into the licensee’s products.
+Added: We enter into perpetual semiconductor IP license
+Added: agreements that have a fixed fee, whereby licensees pay a fixed fee for the right to incorporate our IP technologies into the licensee’s products.
The IP license agreements do not typically grant the customer the right to terminate for convenience.
22 unchanged sentences
Impairment Charges
−Removed: Impairment charges consist primarily of impairment on property and equipment for assets no longer in service.
+Added: Impairment charges consist primarily of impairment of property and equipment and third-party IP licenses for assets no longer in service or for future products that did not reach production qualification.
Other Income and Expense, Net
−Removed: Other income and expense, net consists primarily of interest income from significant financing components related to IP license revenue contracts, and foreign exchange gains and losses.
+Added: Other income and expense, net consists primarily of interest income from cash and cash equivalents and short-term investments and interest expense relating to certain purchases of computer equipment and software.
Provision for Income Taxes
Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year.
−Removed: Under this method, deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and net operating loss and credit carryforward.
+Added: Under this method, deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled.
4 unchanged sentences
Results of Operations
−Removed: Years Ended April 27, 2024 and April 29, 2023
+Added: Years Ended May 3, 2025 and April 27, 2024
The following table sets forth information derived from our consolidated statements of operations expressed as a percentage of total revenue:
−Removed: April 27, 2024 April 29, 2023
+Added: May 3, 2025 April 27, 2024
Product sales 94.4 % 75.2 %
13 unchanged sentences
Total operating expenses 56.3 % 81.1 %
−Removed: Operating loss (19.2) % (11.5) %
+Added: Operating income (loss)
+Added: 8.5 % (19.2) %
Other income (expense), net 4.1 % 7.4 %
−Removed: Loss before income taxes (11.8) % (9.7) %
+Added: Income (loss) before income taxes
+Added: 12.6 % (11.8) %
Provision (benefit) for income taxes
+Added: Net income (loss)
11.9 % (14.7) %
−Removed: Net loss (14.7) % (9.0) %
−Removed: Comparison of Years Ended April 27, 2024 and April 29, 2023
+Added: Comparison of Years Ended May 3, 2025 and April 27, 2024
Year Ended % Change
−Removed: April 27, 2024 April 29, 2023
+Added: May 3, 2025 April 27, 2024
(in thousands, except percentages)
3 unchanged sentences
Total revenue $ 436,775 $ 192,970 126.3 %
−Removed: Revenue for fiscal 2024 increased by $8.8 million primarily due to increases in product engineering services revenue of $9.1 million.
−Removed: The increase in product engineering services revenue was primarily due to Credo entering into two new non-recurring engineering contracts, one of which was entered into in fiscal 2024 and which saw significant ramp-up in the year, resulting in revenue recognition of $15.5 million.
−Removed: The increase in product sales revenue was driven by growth in Chiplet and Optical products, offset by a modest decline in AEC products.
−Removed: As a result, the product mix was more diverse in fiscal 2024 than in fiscal 2023.
+Added: Revenue for fiscal 2025 increased by $243.8 million compared to fiscal 2024 primarily due to increases in product sales revenue of $267.1 million, offset by reductions in product engineering services revenue and IP license revenue of $7.8 million and $15.5 million, respectively.
+Added: The increase in product sales revenue was primarily due to a significant increase in volume unit shipments for AEC products which contributed over 95% of the increase in product sales revenue.
+Added: The decrease in product engineering services revenue was due to the completion of certain product engineering services arrangements resulting in a decrease in engineering time of 55%.
+Added: The decrease in IP license revenue was primarily due to fewer contracts entered into during fiscal 2025 as compared to fiscal year 2024.
Cost of Revenue
Year Ended % Change
−Removed: April 27, 2024 April 29, 2023
+Added: May 3, 2025 April 27, 2024
(in thousands, except percentages)
3 unchanged sentences
Total cost of revenue $ 153,866 $ 73,539 109.2 %
−Removed: Cost of revenue decreased by $4.5 million primarily due to $4.6 million decrease in cost of product sales revenue.
−Removed: The decrease was driven by improvement of our product sales gross margin from 46.9% in fiscal 2023 to 51.4% in fiscal 2024 as a result of increased product sales that drove the economies of scales.
+Added: Total cost of revenue increased by $80.3 million primarily due to an $81.9 million increase in cost of product sales revenue.
+Added: The increase was driven by the significant increase of unit shipments for our AEC products discussed above.
Gross Profit and Gross Margin
Year Ended % Change
−Removed: April 27, 2024 April 29, 2023
+Added: May 3, 2025 April 27, 2024
(in thousands, except percentages)
1 unchanged sentence
Gross margin 64.8 % 61.9 %
−Removed: Gross margin increased by 4.2 percentage points in fiscal 2024 primarily driven by (a) an increase in our high-margin product engineering services revenue as a percentage of overall revenue;
−Removed: and (b) an increase of product sales gross margin as noted above.
+Added: Gross margin increased by 2.9 percentage points in fiscal 2025 primarily driven by our product sales business gaining scale from the improvements in our operating leverage.
Research and Development
Year Ended % Change
−Removed: April 27, 2024 April 29, 2023
+Added: May 3, 2025 April 27, 2024
(in thousands, except percentages)
2 unchanged sentences
Research and development expenses for fiscal 2025 increased by $50.5 million compared to fiscal 2024.
−Removed: The increase was due primarily to a $7.0 million increase in personnel costs primarily as a result of new hires for product development, an $8.0 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $2.2 million increase in depreciation expense driven by increased computer equipment and software and laboratory equipment utilized in research and development activities, and a $1.5 million increase in information technology and facilities costs.
+Added: The increase was due primarily to a $20.6 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $13.3 million increase in personnel costs primarily as a result of new hires for product development, a $10.0 million increase in design activities and higher engineering activities relating to testing and laboratory supplies for new product development and a $3.6 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
Year Ended % Change
−Removed: April 27, 2024 April 29, 2023
+Added: May 3, 2025 April 27, 2024
(in thousands, except percentages)
1 unchanged sentence
% of total revenue 22.6 % 31.2 %
−Removed: Selling, general and administrative expenses for fiscal 2024 increased by $11.9 million compared to the same period in fiscal 2023.
−Removed: The increase was due primarily to a $2.6 million increase in personnel costs as a result of higher selling, general and administrative headcount, a $7.0 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $1.1 million increase in legal expenses and a $0.6 million increase in software licenses.
+Added: Selling, general and administrative expenses for fiscal 2025 increased by $38.7 million compared to fiscal 2024.
+Added: The increase was due primarily to a $17.7 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $10.3 million increase in personnel costs as a result of higher selling, general and administrative headcount and a $5.6 million increase in external consultation fees relating to general and administrative expenses.
Impairment Charges
Year Ended % Change
−Removed: April 27, 2024 April 29, 2023
+Added: May 3, 2025 April 27, 2024
(in thousands, except percentages)
1 unchanged sentence
% of total revenue 0.3 % 0.4 %
−Removed: Impairment charges incurred in fiscal 2024 and 2023 were primarily related to the impairments on property and equipment, and third-party IP license that did not reach production qualification.
−Removed: Provision (benefit) for Income Taxes
+Added: Impairment charges incurred in fiscal 2025 and 2024 were primarily related to the impairments of property and equipment and third-party IP license that did not reach production qualification.
+Added: Provision for Income Taxes
Year Ended % Change
−Removed: April 27, 2024 April 29, 2023
+Added: May 3, 2025 April 27, 2024
(in thousands, except percentages)
−Removed: Provision (benefit) for income taxes
+Added: Provision for income taxes
$ 2,687 $ 5,624 (52.2) %
% of total revenue 0.7 % 2.9 %
−Removed: Provision for income taxes in fiscal 2024 increased by $7.0 million compared to the same period in fiscal 2023.
−Removed: The increase was primarily due to the establishment of a full valuation allowance to offset U.S.
−Removed: deferred tax assets in fiscal 2024.
+Added: Provision for income taxes in fiscal 2025 decreased by $2.9 million compared to the same period in fiscal 2024.
+Added: The decrease was primarily due to the tax expense related to the establishment of a full valuation allowance in the U.S.
+Added: in fiscal 2024.
Liquidity and Capital Resources
Our activities consist primarily of selling our products, licensing our IP, providing IP customization services and conducting research and development of our products and technology.
−Removed: As of April 27, 2024 and April 29, 2023, we had cash and cash equivalents of $66.9 million and $108.6 million, respectively, and working capital of $485.6 million and $297.2 million, respectively.
+Added: As of May 3, 2025 and April 27, 2024, we had cash and cash equivalents of $236.3 million and $66.9 million, respectively, and working capital of $605.8 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.
2 unchanged sentences
Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, customer demand and the continuing market acceptance of our solutions.
−Removed: In the event that we need to borrow funds or issue additional equity, we cannot be assured that any such additional financing will be available on terms acceptable to us, if at all.
+Added: In the event that we need to borrow funds or issue additional equity, we
+Added: cannot be assured that any such additional financing will be available on terms acceptable to us, if at all.
If we are unable to raise additional capital when we need it, our business, results of operations and financial condition would be adversely affected.
The following table summarizes our cash flows for the periods indicated.
−Removed: April 27, 2024 April 29, 2023
+Added: May 3, 2025 April 27, 2024
(in thousands)
−Removed: Net cash provided by (used in) operating activities
+Added: Net cash provided by operating activities
$ 65,083 $ 32,737
−Removed: Net cash used in investing activities $ (249,485) $ (130,941)
−Removed: Net cash provided by financing activities $ 175,276 $ 4,885
−Removed: Cash Flows Provided by (Used in) Operating Activities
+Added: Net cash provided by (used in) investing activities
+Added: $ 111,990 $ (249,485)
+Added: Net cash provided by (used in) financing activities
+Added: $ (7,728) $ 175,276
+Added: Cash Flows Provided by Operating Activities
Net cash provided by operating activities was $65.1 million for fiscal 2025.
−Removed: The cash inflows from operating activities for fiscal 2024 were primarily due to a net loss of $28.4 million adjusted for the following non-cash items:
+Added: The cash inflows from operating activities for fiscal 2025 were primarily due to net income of $52.2 million adjusted for the following non-cash items:
share-based compensation expense of $77.4 million, depreciation and amortization of $21.9 million and other non-cash items of $22.0 million.
1 unchanged sentence
The cash outflows from working capital for fiscal 2025 were primarily driven by (a) an increase in accounts receivable of $102.5 million primarily due to increased sales in the fiscal 2025 compared to fiscal 2024 and timing of collection;
−Removed: (b) and an increase in contract assets of $12.1 million primarily driven by certain IP licensing and engineering services arrangements where certain billing milestones had not yet been reached but the criteria for revenue had been met.
−Removed: This was offset by a decrease in inventory of $15.8 million primarily driven by tightened production management and increased product sales compared to fiscal 2023.
+Added: (b) and an increase in inventory of $70.5 million to support unfulfilled backlog and related new product ramps.
+Added: This was offset by increases in accounts payable of $41.9 million and accrued compensation and other liabilities of $15.9 million due to increased purchases of inventory to support growing demand for our products.
Net cash used in operating activities was $32.7 million for fiscal 2024.
−Removed: The cash outflows from operating activities for fiscal 2023 were primarily due to $16.5 million of net loss and $50.4 million of cash outflows for working capital purposes, partially offset by $42.4 million of non-cash items.
+Added: The cash inflows from operating activities for fiscal 2024 were primarily due to $28.4 million of net loss adjusted for the following non-cash items:
+Added: share-based compensation expense of $39.0 million, depreciation and amortization of $13.8 million and other non-cash items of $9.0 million.
+Added: This was offset by $0.7 million of cash outflows for working capital purposes.
The cash outflows from working capital for fiscal 2024 were primarily driven by (a) an increase in accounts receivable of $10.1 million primarily due to increased sales in the fiscal 2024 compared to fiscal 2023 and timing of collection;
−Removed: (b) an increase in inventory of $24.4 million to better support unfulfilled backlog and related new product ramps;
−Removed: (c) and an increase in contract assets of $1.6 million primarily driven by certain IP licensing and engineering services arrangements where certain billing milestones had not yet been reached but the criteria for revenue had been met.
−Removed: This was offset by increases in accounts payable of $3.8 million and accrued expenses, compensation and other liabilities of $0.5 million due to amounts payable relating to increased purchases of inventory to support growing demand for our products.
−Removed: Cash Flows Used in Investing Activities
−Removed: Net cash used in investing activities of $249.5 million in fiscal 2024 was attributable to purchases of property and equipment of $15.7 million and investments in certificates of deposit of $169.8 million, partially offset by maturities of investment in certificates of deposit of $403.6 million.
+Added: (b) and an increase in contract assets of $12.1 million primarily driven by certain IP licensing and engineering services arrangements where certain billing milestones had not yet been reached but the criteria for revenue had been met.
+Added: This was offset by a decrease in inventory of $15.8 million primarily driven by tightened production management and increased product sales compared to fiscal 2023.
+Added: Cash Flows Provided by (Used in) Investing Activities
+Added: Net cash provided by investing activities of $112.0 million for fiscal 2025 was attributable to maturities of investment in certificates of deposit of $406.8 million, partially offset by purchases of property and equipment of $36.1 million and investments in certificates of deposit of $258.7 million.
Purchases of property and equipment primarily relate 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.
−Removed: Net cash used in investing activities of $130.9 million in fiscal 2023 was attributable to purchases of property and equipment of $21.7 million and investment in certificates of deposit of $159.2 million, partially offset by maturities of investment in certificates of deposits of $50.0 million.
+Added: Net cash used in investing activities of $249.5 million for fiscal 2024 was attributable to purchases of property and equipment of $15.7 million and investment in certificates of deposit of $403.6 million, partially offset by maturities of investment in certificates of deposits of $169.8 million.
Purchases of property and equipment primarily relate 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.
−Removed: Cash Flows Provided by Financing Activities
−Removed: Net cash provided by financing activities of $175.3 million for fiscal 2024 was primarily attributable to $173.4 million proceeds from issuance of ordinary shares in connection our follow-on public offering, net of offering costs, $7.1 million in proceeds from exercises of employee share options and the issuance of
−Removed: shares under our employee share purchase plan, offset by $3.1 million in payments for long-term technology license obligations.
−Removed: Net cash provided by financing activities of $4.9 million in fiscal 2023 was primarily attributable to $5.5 million in proceeds from exercises of employee share options and the issuance of shares under our employee share purchase plan.
+Added: Cash Flows Provided by (Used in) Financing Activities
+Added: Net cash used in financing activities of $7.7 million for fiscal 2025 was primarily attributable to $9.3 million tax withheld related to RSU settlement and $6.3 million in payments for long-term technology license obligations, offset by $7.8 million in proceeds from exercises of employee share options and the issuance of shares under our employee share purchase plan.
+Added: Net cash provided by financing activities of $175.3 million for fiscal 2024 was primarily attributable to $173.4 million proceeds from issuance of ordinary shares in connection with our follow-on public offering, net of offering costs, $7.1 million in proceeds from exercises of employee share options and the issuance of shares under our employee share purchase plan, offset by $3.1 million in payments for long-term technology license obligations and $2.2 million tax withheld related to RSU settlement.
Critical Accounting Estimates
5 unchanged sentences
We base our estimates and judgments on our historical experience, knowledge of current conditions and our beliefs of what could occur in the future, given the available information.
−Removed: Estimates are used for, but not limited to, write-down for excess and obsolete inventories, the SSP for each distinct performance obligation included in customer contracts with multiple performance obligations, variable consideration from revenue contracts, determination of the fair value of share awards and customer warrant, valuation of ordinary shares and the realization of tax assets and estimates of tax reserves.
+Added: Estimates are used for, but not limited to, write-down for excess and obsolete inventories, variable consideration from revenue contracts, determination of the fair value of share awards, and the realization of tax assets and estimates of tax reserves.
Actual results may differ from those estimates and such differences may be material to the financial statements.
2 unchanged sentences
We recognize revenue upon transfer of control of promised goods and services in an amount that reflects the consideration we expect to receive in exchange for those goods and services.
−Removed: Where an arrangement includes multiple performance obligations, the transaction price is allocated to these on a relative standalone selling price (SSP) basis.
−Removed: We determine the SSP based on an observable standalone selling price when it is available, as well as other factors, including the price charged to customers and our overall pricing objectives, while maximizing observable inputs.
−Removed: The determination of the SSP for certain of our IP requires an estimate of the fair value under the income approach, involving the estimation of future cash flow expected to be generated from the IP.
Our policy is to record revenue net of any applicable sales, use or excise taxes.
5 unchanged sentences
When we determine that it is probable that a tranche of the warrant will vest and we recognize the related revenue, the grant date
−Removed: fair value of the associated tranche will be recognized in shareholders’ equity and the underlying expense will be amortized as a reduction of revenue in proportion to the amount of related revenue recognized.
+Added: fair value of the associated tranche will be recognized in shareholders’ equity and the underlying expense is amortized as a reduction of revenue in proportion to the amount of related revenue recognized.
Inventory Valuation
10 unchanged sentences
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.