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 May 3, 2025 compared to the fiscal year ended April 27, 2024 is presented below.
−Removed: 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: At Credo, our mission is to redefine high-speed connectivity by delivering breakthrough solutions that enable the next generation of AI-driven applications.
−Removed: 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.
−Removed: 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.
−Removed: Our products are based on our Serializer/Deserializer (SerDes) and Digital Signal Processor (DSP) technologies.
+Added: A discussion regarding our financial condition and our results of operations for the fiscal year ended May 2, 2026 compared to the fiscal year ended May 3, 2025 is presented below.
+Added: A discussion regarding our results of operations for the fiscal year ended May 3, 2025 compared to the fiscal year ended April 27, 2024 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 May 3, 2025 , filed with the SEC on July 2, 2025.
+Added: At Credo, our mission is to transform connectivity at scale through fast, reliable and energy-efficient system solutions.
+Added: The Company’s highspeed copper and optical interconnect products deliver industry-leading power and performance at up to 1.6T to meet the ever-expanding data infrastructure demands of AI.
+Added: The Company’s product portfolio includes ZeroFlap (ZF) Active Electrical Cables (AECs) and ZF optical transceivers, OmniConnect memory solutions and a suite of retimers and Digital Signal Processors (DSPs) for optical and copper Ethernet and PCIe, all leveraging the PILOT diagnostic and analytics software platform.
+Added: Our innovations enable our customers to connect the systems that connect the world.
+Added: Our connectivity solutions are optimized for optical and electrical Ethernet, PCIe and emerging UALink, ESUN and SUE applications, ranging in speeds from 32G (or Gigabits per second per lane) to 200G.
+Added: Our products are based on our own optimized Serializer/Deserializer (SerDes) and DSP technologies.
Our product families include integrated circuits (ICs), Active Electrical Cables (AECs) and SerDes Chiplets.
Our intellectual property (IP) solutions consist primarily of SerDes IP licensing.
−Removed: Data generation has increased dramatically over the past ten years, creating new and complicated challenges in both circuit and system design.
+Added: Artificial Intelligence (AI) has bred a new generation of data centers over the past 5 years that depend much more heavily on high speed, reliable communications for Front End, Scale Out, Scale Up and emerging Scale In Networks.
Our proprietary SerDes and DSP technologies enable us to achieve similar performance to leading competitors’ products but at a lower cost and more highly available legacy node (n-1 advantage).
Beyond power and performance, Credo continues to innovate to address customers’ system level requirements.
−Removed: We partner with Microsoft on our HiWire Switch AEC and open-source implementation that helps realize Microsoft’s vision for a highly reliable network-managed dual-Top-of-Rack (ToR) architecture (a network architecture design in which computing equipment located within the same or an adjacent rack are, for redundancy, connected to two in-rack network switches, which are, in turn, connected to aggregation switches via fiber optic cables), overcome complex and slow legacy enterprise approaches, simplify deployment and improve connection reliability in the data center.
−Removed: The multibillion-dollar data infrastructure market that we serve is driven largely by hyperscale data centers (hyperscalers), as well as general compute, AI/ML infrastructure, multi-service operators (MSOs) and mobile network operators (MNOs).
−Removed: 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.
+Added: We partnered with Oracle to develop our ZeroFlap Optics that helps address the reliability issues known as Link Flap which plague commodity options in AI data centers enabling faster AI cluster turn on and time to first revenue.
+Added: The multibillion-dollar data infrastructure market that we serve is driven largely by hyperscale data centers (hyperscalers) and emerging NeoClouds building AI/Machine Learning (ML) Infrastructure as well as general compute and data centers.
+Added: The demands for increased bandwidth, better reliability and improved power efficiency have grown as AI model sizes have increased from billions to trillions of parameters and the workload has expanded from training to inference.
We design, market and sell both product, software and IP solutions.
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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.
−Removed: 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 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: During fiscal 2026 and 2025, we generated $1.3 billion and $436.8 million in total revenue, respectively.
Geographically, 58% and 15% of our total revenue in fiscal 2026 and 2025 was generated from customers in North America, and 42% and 85% of our total revenue in fiscal 2026 and 2025 was generated from customers in the rest of the world, primarily in Asia.
−Removed: During fiscal 2025 and 2024, we generated $52.2 million of net income and $28.4 million of net loss, respectively.
+Added: During fiscal 2026 and 2025, we generated $472.3 million and $52.2 million of net income, respectively.
We derive the substantial majority of our revenue from a limited number of customers.
1 unchanged sentence
We expect that as our products are more widely adopted and as our number of customers increase, customer concentration will decrease.
−Removed: We sell our products to hyperscalers, original equipment manufacturers (OEMs), original design manufacturers (ODMs) and optical module manufacturers, as well as to companies in the enterprise and HPC markets.
+Added: We sell our products to hyperscalers, Neoclouds, original equipment manufacturers (OEMs), original design manufacturers (ODMs), contract manufacturers (CM) and optical module manufacturers, as well as to companies in the enterprise and HPC markets.
We work closely and have engagements with industry-leading companies across these segments.
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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: May 3, 2025 April 27, 2024
−Removed: Customer E 63 % 20 %
−Removed: Customer F * 26 %
+Added: May 2, 2026 May 3, 2025
Customer B 32 % *
+Added: Customer D 33 % 63 %
+Added: Customer E 19 % *
* Less than 10% of total revenue.
1 unchanged sentence
We are a product-focused business with a strong foundation in IP, pioneering comprehensive connectivity solutions that deliver bandwidth, scalability and end-to-end signal integrity for next-generation platforms.
−Removed: We also develop IP solutions to address the specific and complex needs of our customers.
−Removed: We earn revenue from these IP solutions primarily through licensing fees and royalties.
−Removed: In addition to product sales and IP license revenue, we also generated revenue from providing engineering services as part of our product and license arrangements with certain customers.
−Removed: Over time, we expect to generate an increased proportion of our revenue from sales of our products.
−Removed: We expect to see a long-term benefit from improvements in our operating leverage as our business continues to gain scale.
We utilize a fabless business model, working with a network of third parties to manufacture, assemble and test our connectivity products.
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By engaging directly with the end user, we are able to better understand the needs of our customers and cater our solutions to their most pressing connectivity requirements.
−Removed: This strategy has enabled us to become the preferred vendor to a number of our customers who, in turn, in some cases, require their suppliers, OEMs, ODMs and optical module manufacturers to utilize our solutions.
+Added: This strategy has enabled us to become the preferred vendor to a number of our customers who, in turn, in some cases, require their suppliers, OEMs, ODMs, CMs and optical module manufacturers to utilize our solutions.
Components of Our Operating Results
−Removed: Our revenues consist of sales of our products, licensing of and providing engineering services related to our IP and providing product engineering services.
−Removed: Product sales primarily consist of shipments of our ICs and AEC products.
−Removed: IP license revenue includes fees from licensing of our SerDes IP and related engineering and support fees and royalties.
−Removed: Product engineering consists of engineering fees associated with integration of our technology solutions into our customers’ products.
−Removed: Our customers are primarily OEMs who design and manufacture end market devices for the communications and enterprise networks markets.
+Added: Our revenues primarily consist of shipments of our AEC and ICs products.
+Added: Our customers are primarily hyperscalers, NeoClouds and other cloud infrastructure providers.
Our revenue is driven by various trends in these markets.
−Removed: Our revenue is also impacted by changes in the number and average selling prices of our IC products.
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 also consider the constraint on estimates of variable consideration when estimating the total transaction price.
Our policy is to record revenue net of any applicable sales, use or excise taxes.
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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 notice periods prior to the scheduled shipment date.
+Added: 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.
We recognize product sales when we transfer control of promised goods in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods, net of accruals for estimated sales returns and rebates.
−Removed: Product Engineering Services Revenue - Some product revenue contracts include non-recurring engineering services deliverables.
−Removed: We recognize revenue from these agreements over time as services are provided or at a point in time upon completion and acceptance by the customer of contract deliverables, depending on the terms of the arrangement.
−Removed: Revenue is deferred for any amounts billed or received prior to delivery of services.
−Removed: We believe the input method, based on time spent by our engineers, best depicts the efforts expended to transfer services to the customers.
−Removed: 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
−Removed: 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.
−Removed: The IP license agreements do not typically grant the customer the right to terminate for convenience.
−Removed: Where such rights exist, termination is prospective, with no refund of fees already paid by the customer.
−Removed: IP revenue recognition is dependent on the nature and terms of each agreement.
−Removed: We recognize IP license revenue at the point of time of the delivery of the IP.
−Removed: In connection with the license arrangements, we offer support to assist customers in qualifying their final product.
−Removed: Revenue from customer support is deferred and recognized ratably over the support period, which is typically one year.
−Removed: Some IP license revenue contracts also include non-recurring engineering services deliverables, which were not material for any of the periods presented.
−Removed: We recognize revenue from these agreements similar to the method described under the caption “Product Engineering Services Revenue” above.
−Removed: In certain cases, we also charge licensees royalties related to the distribution or sale of products that use our technologies.
−Removed: Such royalties are reported to us on a quarterly basis.
−Removed: We estimate the sales-based royalties earned each quarter primarily based on our customers’ reporting of sales activity incurred in that quarter.
−Removed: We recognize the estimated royalty revenue when it is probable that reversal of such amounts will not occur.
−Removed: Any differences between actual royalties owed by a customer and the quarterly estimates are recognized when updated information becomes available.
Cost of Revenue
Cost of revenue includes cost of materials, such as wafers processed by third-party foundries, cost associated with packaging and assembly, testing and shipping, cost of personnel, including share-based compensation, depreciation of equipment associated with manufacturing support, logistics and quality assurance, warranty cost, amortization of intellectual property purchased from third parties, write-down of inventories and amortization of production mask costs.
−Removed: Costs of revenue includes cost of product sales revenue, cost of product engineering services revenue and cost of IP license revenue.
Research and Development Expenses
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Selling expenses consist of personnel costs including salaries, benefits and share-based compensation expense, field application engineering support, samples to customers, shipping costs and travel and entertainment costs.
−Removed: General and administrative expenses consist primarily of personnel costs including salaries, benefits and share-based compensation, related to corporate, finance, legal and human resource functions, contractor and professional services fees, audit and compliance expenses, insurance costs and general corporate expenses including allocated facilities expenses.
−Removed: Impairment Charges
−Removed: 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.
+Added: General and administrative expenses consist primarily of personnel costs including salaries, benefits and share-based compensation, related to corporate, finance, legal and human resource functions, contractor and professional services fees, audit and compliance expenses, insurance costs, acquisition and integration-related expenses and general corporate expenses including allocated facilities expenses.
Other Income and Expense, Net
2 unchanged sentences
Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year.
+Added: The Company uses the asset and liability method to account for income taxes.
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.
5 unchanged sentences
Results of Operations
−Removed: Years Ended May 3, 2025 and April 27, 2024
+Added: Years Ended May 2, 2026 and May 3, 2025
The following table sets forth information derived from our consolidated statements of operations expressed as a percentage of total revenue:
−Removed: May 3, 2025 April 27, 2024
−Removed: Product sales 94.4 % 75.2 %
−Removed: Product engineering services 2.8 % 10.3 %
−Removed: IP license 2.9 % 14.5 %
−Removed: Total revenue 100.0 % 100.0 %
+Added: May 2, 2026 May 3, 2025
+Added: Revenue 100.0 % 100.0 %
Cost of revenue 32.0 % 35.2 %
−Removed: Cost of product sales revenue 34.9 % 36.5 %
−Removed: Cost of product engineering services revenue 0.3 % 1.2 %
−Removed: Cost of IP license revenue — % 0.4 %
−Removed: Total cost of revenue 35.2 % 38.1 %
Gross margin 68.0 % 64.8 %
2 unchanged sentences
Selling, general and administrative 13.8 % 22.6 %
−Removed: Impairment charges 0.3 % 0.4 %
Total operating expenses 34.7 % 56.3 %
−Removed: Operating income (loss)
−Removed: 8.5 % (19.2) %
−Removed: Other income (expense), net 4.1 % 7.4 %
−Removed: Income (loss) before income taxes
−Removed: 12.6 % (11.8) %
−Removed: Provision (benefit) for income taxes
−Removed: Net income (loss)
−Removed: 11.9 % (14.7) %
−Removed: Comparison of Years Ended May 3, 2025 and April 27, 2024
+Added: Operating income 33.3 % 8.5 %
+Added: Other income, net 2.3 % 4.1 %
+Added: Income before income taxes 35.6 % 12.6 %
+Added: Provision for income taxes 0.2 % 0.7 %
+Added: Net income 35.4 % 11.9 %
+Added: Comparison of Years Ended May 2, 2026 and May 3, 2025
Year Ended % Change
−Removed: May 3, 2025 April 27, 2024
+Added: May 2, 2026 May 3, 2025
(in thousands, except percentages)
−Removed: Product sales $ 412,177 $ 145,048 184.2 %
−Removed: Product engineering services 12,122 19,898 (39.1) %
−Removed: IP license 12,476 28,024 (55.5) %
−Removed: Total revenue $ 436,775 $ 192,970 126.3 %
−Removed: 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.
−Removed: 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.
−Removed: 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%.
−Removed: The decrease in IP license revenue was primarily due to fewer contracts entered into during fiscal 2025 as compared to fiscal year 2024.
+Added: Revenue $ 1,335,116 $ 436,775 205.7 %
+Added: Revenue for fiscal 2026 increased by $898.3 million as compared to fiscal 2025 primarily due to significant increase in volume unit shipments for AEC products.
+Added: The sales increase was primarily driven by the ramp-up of our AEC solutions at our hyperscale data center customers during fiscal 2026 which contributed over 99% of the increase in revenue.
Cost of Revenue
Year Ended % Change
−Removed: May 3, 2025 April 27, 2024
+Added: May 2, 2026 May 3, 2025
(in thousands, except percentages)
−Removed: Cost of product sales revenue $ 152,381 $ 70,498 116.1 %
−Removed: Cost of product engineering services revenue 1,314 2,225 (40.9) %
−Removed: Cost of IP license revenue 171 816 (79.0) %
−Removed: Total cost of revenue $ 153,866 $ 73,539 109.2 %
−Removed: Total cost of revenue increased by $80.3 million primarily due to an $81.9 million increase in cost of product sales revenue.
−Removed: The increase was driven by the significant increase of unit shipments for our AEC products discussed above.
+Added: Cost of revenue $ 426,767 $ 153,866 177.4 %
+Added: Cost of revenue increased by $272.9 million primarily due to significant increase of unit shipments for our AEC products discussed above.
Gross Profit and Gross Margin
Year Ended % Change
−Removed: May 3, 2025 April 27, 2024
+Added: May 2, 2026 May 3, 2025
(in thousands, except percentages)
1 unchanged sentence
Gross margin 68.0 % 64.8 %
−Removed: 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.
+Added: Gross margin increased by 3.2 percentage points in fiscal 2026 primarily driven by the improved economies of scale in our revenue.
Research and Development
Year Ended % Change
−Removed: May 3, 2025 April 27, 2024
+Added: May 2, 2026 May 3, 2025
(in thousands, except percentages)
2 unchanged sentences
Research and development expenses for fiscal 2026 increased by $132.5 million compared to fiscal 2025.
−Removed: 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.
+Added: The increase was due primarily to a $60.9 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, an $18.8 million increase in personnel costs primarily as a result of new hires for product development, a $35.4 million increase in design activities and higher engineering activities relating to testing and laboratory supplies for new product development, a $5.1 million increase in acquisition and integration related costs relating to the business acquisitions and a $4.0 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: May 3, 2025 April 27, 2024
+Added: May 2, 2026 May 3, 2025
(in thousands, except percentages)
2 unchanged sentences
Selling, general and administrative expenses for fiscal 2026 increased by $85.0 million compared to fiscal 2025.
−Removed: 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.
−Removed: Impairment Charges
−Removed: Year Ended % Change
−Removed: May 3, 2025 April 27, 2024
−Removed: (in thousands, except percentages)
−Removed: Impairment charges $ 873 $ 765 14.1 %
−Removed: % of total revenue 0.3 % 0.4 %
−Removed: 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: The increase was due primarily to a $44.4 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $15.1 million increase in personnel costs as a result of higher selling, general and administrative headcount and a $14.8 million increase in external professional fees relating to general and administrative function.
Provision for Income Taxes
Year Ended % Change
−Removed: May 3, 2025 April 27, 2024
+Added: May 2, 2026 May 3, 2025
(in thousands, except percentages)
2 unchanged sentences
% of total revenue 0.2 % 0.7 %
−Removed: Provision for income taxes in fiscal 2025 decreased by $2.9 million compared to the same period in fiscal 2024.
−Removed: The decrease was primarily due to the tax expense related to the establishment of a full valuation allowance in the U.S.
−Removed: in fiscal 2024.
+Added: Provision for income taxes in fiscal 2026 increased by $0.5 million compared to the same period in fiscal 2025.
+Added: The increase was primarily driven by higher pre-tax income generated in tax-paying jurisdictions during the current year relative to the same period in fiscal 2025.
Liquidity and Capital Resources
−Removed: 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 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.
−Removed: Our principal use of cash is to fund our operations and invest in research and development to support our growth.
+Added: Our activities consist primarily of selling our products.
+Added: As of May 2, 2026 and May 3, 2025, we had cash and cash equivalents of $1.2 billion and $236.3 million, respectively, and working capital of $1.8 billion and $605.8 million, respectively.
+Added: Our principal use of cash is to fund our operations and invest in
+Added: research and development and acquisitions of complementary businesses or technologies to support our growth.
See also Note 9 to our consolidated financial statements included in this Annual Report on Form 10-K for a further discussion of our cash requirements under non-cancelable purchase obligations.
+Added: During fiscal 2026, the Company received $736.3 million in net proceeds through the issuance of 4.8 million ordinary shares under the ATM Offering (defined below).
+Added: See Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a further discussion of our arrangement under the ATM Offering.
We believe our existing cash and cash equivalents and other components of working capital will be sufficient to meet our needs for at least the next 12 months and in the longer term.
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
−Removed: 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 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: May 3, 2025 April 27, 2024
+Added: May 2, 2026 May 3, 2025
(in thousands)
2 unchanged sentences
Net cash provided by (used in) investing activities $ (253,528) $ 111,990
−Removed: $ 111,990 $ (249,485)
Net cash provided by (used in) financing activities
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The cash inflows from operating activities for fiscal 2026 were primarily due to net income of $472.3 million adjusted for the following non-cash items:
−Removed: share-based compensation expense of $77.4 million, depreciation and amortization of $21.9 million and other non-cash items of $22.0 million.
+Added: share-based compensation expense of $182.6 million, depreciation and amortization of $34.6 million, write-down for excess and obsolete inventory of $15.1 million and other non-cash items of $1.9 million.
This was offset by $242.3 million of cash outflows for working capital purposes.
The cash outflows from working capital for fiscal 2026 were primarily driven by (a) an increase in accounts receivable of $70.8 million primarily due to increased sales in the fiscal 2026 compared to fiscal 2025 and timing of collection;
−Removed: (b) and an increase in inventory of $70.5 million to support unfulfilled backlog and related new product ramps.
−Removed: 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.
+Added: (b) an increase in inventory of $174.0 million to support unfulfilled backlog and related new product ramps;
+Added: (c) an increase in other current and non-current assets of $71.3 million of payment for refundable deposits to the suppliers in exchange for reserved manufacturing production capacity.
+Added: This was offset by increases in accounts payable of $48.8 million and accrued compensation and benefits, other current liabilities and other non-current liabilities of $25.1 million due to increased purchases of inventory to support growing demand for our products.
Net cash used in operating activities was $65.1 million for fiscal 2025.
−Removed: 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: 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 account payable of $41.9 million and accrued compensation and benefits, other current liabilities and other non-current liabilities of $15.9 million due to increased purchases of inventory to support growing demand for our products.
Cash Flows Provided by (Used in) Investing Activities
−Removed: 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.
+Added: Net cash used in investing activities of $253.5 million for fiscal 2026 was attributable to purchases of property and equipment of $57.3 million, investments in certificates of deposit of $393.3 million and acquisitions of Hyperlume and Comira for $112.9 million, offset by maturities of investment in certificates of deposit of $310.0 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 $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.
+Added: The acquisitions were primarily intended to expand the Company’s comprehensive portfolio of end-to-end system-level connectivity solutions.
+Added: Net cash used in 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 investment 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.
Cash Flows Provided by (Used in) Financing Activities
+Added: Net cash provided by financing activities of $717.6 million for fiscal 2026 was primarily attributable to $736.3 million in proceeds from the ATM Offering and $7.1 million in proceeds from exercises of employee share options and the issuance of shares under our employee share purchase plan, offset by $19.2 million tax withheld related to RSU settlement and $6.6 million in payments for long-term technology license obligations.
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.
−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 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, variable consideration from revenue contracts, determination of the fair value of share awards, 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.
Actual results may differ from those estimates and such differences may be material to the financial statements.
+Added: See Note 2 Significant Accounting Policies included in Part II, Item 8 of this Annual Report on Form 10-K for further information on use of estimates.
We continue to monitor and assess our critical estimates in light of developments, and as events continue to evolve and additional information becomes available, our estimates may change materially in future periods.
−Removed: Revenue Recognition
−Removed: 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: Our policy is to record revenue net of any applicable sales, use or excise taxes.
−Removed: 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.
−Removed: We offer standard performance warranties of twelve months after product delivery and offer limited product return rights to certain distributors, other than returns due to warranty issues.
−Removed: We recognize product sales when we transfer control of promised goods in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods, net of accruals for estimated sales returns and rebates.
−Removed: We account for the warrant issued to Amazon.com NV Investment Holdings LLC as an equity instrument, based on the specific terms of the warrant agreement.
−Removed: We analyze the probability of vesting of each tranche of the warrant based on the demand forecast from the customer.
−Removed: 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 is amortized as a reduction of revenue in proportion to the amount of related revenue recognized.
Inventory Valuation
2 unchanged sentences
Net realizable value is the estimated selling price of our products in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.
−Removed: We regularly review inventory quantities on hand and non-cancellable purchase commitments and record write-downs for excess and obsolete inventory based primarily on the shipment history and our estimated forecast of product demand.
+Added: We regularly review inventory quantities on hand and non-cancellable purchase commitments and record write-downs for excess and obsolete inventory based primarily on the shipment
+Added: history and our estimated forecast of product demand.
These factors are impacted by market and economic conditions, technology changes, new product introductions and changes in strategic direction.
5 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.