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Item 8. Financial Statements and Supplementary Data

2026-06-15 compared with 2025-07-02 · 329 added, 254 removed, 607 unchanged (49% of the section changed)

12 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Credo Technology Group Holding Ltd (the Company) as of May 3, 2025 and April 27, 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended May 3, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at May 3, 2025 and April 27, 2024, and the results of its operations and its cash flows for each of the three years in the period ended May 3, 2025, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of Credo Technology Group Holding Ltd (the Company) as of May 2, 2026 and May 3, 2025, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended May 2, 2026, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at May 2, 2026 and May 3, 2025, and the results of its operations and its cash flows for each of the three years in the period ended May 2, 2026, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of May 3, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated July 1, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of May 2, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated June 15, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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San Jose, California

June 15, 2026

Report of Independent Registered Public Accounting Firm

3 unchanged sentences

In our opinion, Credo Technology Group Holding Ltd (the Company) maintained, in all material respects, effective internal control over financial reporting as of May 2, 2026, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 3, 2025 and April 27, 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended May 3, 2025, and the related notes and our report dated July 1, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 2, 2026 and May 3, 2025, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended May 2, 2026, and the related notes and our report dated June 15, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

16 unchanged sentences

San Jose, California

June 15, 2026

Credo Technology Group Holding Ltd

1 unchanged sentence

(in thousands, except per share amounts)

May 3, 2025 April 27, 2024

May 2, 2026 May 3, 2025

Current assets:

8 unchanged sentences

Right of use assets 24,640 15,234

Goodwill 92,798 —

Intangible assets, net 29,262 —

Other non-current assets 46,244 16,858

13 unchanged sentences

1,000,000 shares authorized;

171,169 and 164,305 shares issued and outstanding at May 3, 2025 and April 27, 2024, respectively

185,419 and 171,169 shares issued and outstanding at May 2, 2026 and May 3, 2025, respectively

Additional paid in capital 1,672,060 765,173

Accumulated other comprehensive loss ( 437 ) ( 519 )

Accumulated deficit ( 83,162 ) ( 135,345 )

Accumulated other comprehensive income (loss) 2,426 ( 437 )

Retained earnings (accumulated deficit) 389,117 ( 83,162 )

Total shareholders' equity 2,063,612 681,582

4 unchanged sentences

(in thousands, except per share amounts)

May 3, 2025 April 27, 2024 April 29, 2023

Product sales $ 412,177 $ 145,048 $ 141,475

Product engineering services 12,122 19,898 10,780

IP license 12,476 28,024 31,939

Total revenue 436,775 192,970 184,194

May 2, 2026 May 3, 2025 April 27, 2024

Revenue $ 1,335,116 $ 436,775 $ 192,970

Cost of revenue 426,767 153,866 73,539

Cost of product sales revenue 152,381 70,498 75,143

Cost of product engineering services revenue 1,314 2,225 972

Cost of IP license revenue 171 816 1,885

Total cost of revenue 153,866 73,539 78,000

Gross profit 908,349 282,909 119,431

2 unchanged sentences

Selling, general and administrative 183,963 98,918 60,193

Impairment charges 873 765 2,407

Total operating expenses 463,344 245,785 156,489

2 unchanged sentences

Income (loss) before income taxes 475,435 54,870 ( 22,745 )

Provision (benefit) for income taxes 2,687 5,624 ( 1,367 )

Provision for income taxes 3,156 2,687 5,624

Net income (loss) $ 472,279 $ 52,183 $ ( 28,369 )

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(in thousands)

May 3, 2025 April 27, 2024 April 29, 2023

May 2, 2026 May 3, 2025 April 27, 2024

Net income (loss) $ 472,279 $ 52,183 $ ( 28,369 )

6 unchanged sentences

(in thousands)

Ordinary Shares Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shareholders’ Equity

Ordinary Shares Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Shareholders’ Equity

Number of Shares Amount

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

Ordinary shares issued under employee share incentive plans 3,896 — 5,497 — — 5,497

Issuance of ordinary shares in connection with secondary public offering, net of offering costs 10,440 1 173,415 — 173,416

Ordinary shares issued under equity incentive plans 5,329 — 7,055 — — 7,055

Tax withheld related to RSU settlement ( 115 ) — ( 2,158 ) — — ( 2,158 )

Share-based compensation — — 39,022 — — 39,022

2 unchanged sentences

Balances at April 27, 2024 164,305 $ 8 $ 676,054 $ ( 519 ) $ ( 135,345 ) $ 540,198

Issuance of common stock in connection with secondary public offering, net of offering costs 10,440 1 173,415 — 173,416

Ordinary shares issued under employee share incentive plans

5,329 — 7,055 — — 7,055

Ordinary shares issued under equity incentive plans 7,057 — 7,831 — — 7,831

Tax withheld related to RSU settlement ( 194 ) — ( 9,253 ) — — ( 9,253 )

2 unchanged sentences

Warrant contra revenue — — 13,186 — — 13,186

Total comprehensive loss — — — ( 328 ) ( 28,369 ) ( 28,697 )

Balances at April 27, 2024 164,305 $ 8 $ 676,054 $ ( 519 ) $ ( 135,345 ) $ 540,198

Ordinary shares issued under employee share incentive plans 7,057 — 7,831 — — 7,831

Total comprehensive income — — — 82 52,183 52,265

Balances at May 3, 2025 171,169 $ 8 $ 765,173 $ ( 437 ) $ ( 83,162 ) $ 681,582

Ordinary shares issued under At-The-Market Offering, net of issuance costs 4,820 — 736,327 — — 736,327

Ordinary shares issued upon exercise of Customer Warrant 3,761 — — — — —

Ordinary shares issued under equity incentive plans 5,835 1 7,083 — — 7,084

Tax withheld related to RSU settlement ( 166 ) — ( 19,161 ) — — ( 19,161 )

Share-based compensation — — 182,638 — — 182,638

Warrant contra revenue — — 13,186 — — 13,186

Total comprehensive income — — — 2,863 472,279 475,142

4 unchanged sentences

(in thousands)

May 3, 2025 April 27, 2024 April 29, 2023

May 2, 2026 May 3, 2025 April 27, 2024

Cash flows from operating activities:

Net income (loss) $ 472,279 $ 52,183 $ ( 28,369 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 34,637 21,938 13,771

Amortization of acquired intangible assets 400 — —

Share-based compensation 182,638 77,355 39,022

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Accounts payable 48,752 41,930 8,806

Accrued compensation and other liabilities 15,933 5,312 3,677

Net cash provided by (used in) operating activities 65,083 32,737 ( 24,615 )

Accrued compensation and benefits, other current liabilities and other non-current liabilities 25,058 15,933 5,312

Net cash provided by operating activities 464,292 65,083 32,737

Cash flows from investing activities:

2 unchanged sentences

Maturities of short-term investments 310,010 406,777 169,754

Business acquisitions, net of cash acquired ( 112,908 ) — —

Net cash provided by (used in) investing activities ( 253,528 ) 111,990 ( 249,485 )

Cash flows from financing activities:

Proceeds from issuance of ordinary shares in connection with public offering, net of offering costs — 173,431 —

Proceeds from issuance of ordinary shares in connection with public offerings, net of offering costs 736,327 — 173,431

Payments on technology license obligations ( 6,624 ) ( 6,306 ) ( 3,052 )

Proceeds from employee share incentive plans 7,831 7,055 5,501

Proceeds from equity incentive plans 7,083 7,831 7,055

Tax withheld related to RSU settlement ( 19,157 ) ( 9,253 ) ( 2,158 )

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Income taxes paid $ 2,472 $ 1,447 $ 1,054

Purchases of property and equipment included in accounts payable, accrued expenses and other liabilities $ 8,877 $ 8,287 $ 10,909

Purchases of property and equipment included in accounts payable, other current liabilities and other non-current liabilities $ 16,106 $ 8,877 $ 8,287

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

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

Description of Business and Basis of Presentation

Credo Technology Group Holding Ltd was formed as an exempted company under the laws of the Cayman Islands in September 2014.

Credo Technology Group Holding Ltd directly owns Credo Technology Group Ltd., which owns, directly and indirectly, all of the shares of its subsidiaries in mainland China, Hong Kong, and the United States (U.S.).

Credo Technology Group Holding Ltd directly owns Credo Technology Group Ltd., which owns, directly and indirectly, all of the shares of its subsidiaries in the United States (U.S.), Singapore, mainland China, Hong Kong, Taiwan and Canada.

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’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.

The Company’s products are based on its Serializer/Deserializer (SerDes) and Digital Signal Processor (DSP) technologies.

The Company’s product families include integrated circuits (ICs), Active Electrical Cables (AECs) and SerDes Chiplets.

The Company’s intellectual property (IP) solutions consist primarily of SerDes IP licensing.

The Company’s mission is to transform connectivity at scale through fast, reliable and energy-efficient system solutions.

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.

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 DSPs for optical and copper Ethernet and PCIe, all leveraging the Company’s PILOT diagnostic and analytics software platform.

The Company’s innovations enable our customers to connect the systems that connect the world.

Basis of Presentation

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Accordingly, every fifth or sixth fiscal year will have a 53-week period.

The fiscal years ended April 27, 2024 (fiscal year 2024) and April 29, 2023 (fiscal year 2023) were both 52-week fiscal years.

The fiscal years ended May 2, 2026 (fiscal year 2026) and April 27, 2024 (fiscal year 2024) were both 52-week fiscal years.

The fiscal year ended May 3, 2025 (fiscal year 2025) was a 53-week fiscal year.

1 unchanged sentence

Certain prior period balances were reclassified to conform to the current period’s presentation.

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

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

In October 2025, the Company entered into an equity distribution agreement with Goldman Sachs & Co.

LLC related to the sale from time to time of the Company’s ordinary shares for an aggregate offering price of up to $ 750 million (the ATM Offering).

During the fiscal year ended May 2, 2026, the Company completed the ATM Offering and received $ 736.3 million in net proceeds through an issuance of 4.8 million ordinary shares.

The total issuance costs were $ 13.7 million.

Significant Accounting Policies

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The Company bases its estimates and judgments on historical experience, knowledge of current conditions and beliefs of what could occur in the future, given the available information.

Estimates are used for, but not limited to, write-down for excess and obsolete inventories, the standalone selling price 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-based awards and customer warrant, the realizability of tax assets and estimates of tax reserves, impairment of long-lived assets, and incremental borrowing rate used in the Company’s operating lease calculations.

Actual results may differ from those estimates and such differences may be material to the financial statements.

As new events continue to evolve and additional information becomes available, any

Estimates are used for, but not limited to, write-down for excess and obsolete inventories, variable consideration from

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

changes to these estimates and assumptions will be recognized in the consolidated financial statements as soon as they become known.

revenue contracts, determination of the fair value of share-based awards, the realizability of tax assets and estimates of tax reserves, valuation of acquired intangible assets, impairment of long-lived assets and goodwill (as applicable) and incremental borrowing rate used in the Company’s operating lease calculations.

Actual results may differ from those estimates and such differences may be material to the financial statements.

As new events continue to evolve and additional information becomes available, any changes to these estimates and assumptions will be recognized in the consolidated financial statements as soon as they become known.

Foreign Currency

All of the Company’s subsidiaries use U.S.

dollars as their functional currency, except for its entities located in Taiwan and mainland China.

dollars as their functional currency, except for its entities located in Taiwan, Canada and mainland China.

The functional currencies of these entities are their respective local currency.

1 unchanged sentence

Revenue and expenses are remeasured at the exchange rates in effect during the period the transactions occurred, except for those expenses related to balance sheet amounts, which are remeasured at historical exchange rates.

Gains or losses from foreign currency transactions are included in the consolidated statements of operations as part of ‘other income (expense), net’.

Gains or losses from foreign currency transactions are included in the consolidated statements of operations as part of ‘other income, net’.

Translation gains and losses are recorded in accumulated other comprehensive income as a component of shareholders' equity.

9 unchanged sentences

Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established.

Business Combinations

The Company allocates the fair value of the purchase consideration of its business acquisitions to the tangible assets, liabilities and intangible assets acquired, including developed technology and in-process research and development (IPR&D), based on their estimated fair values under the acquisition method of accounting.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

The estimates and assumptions used in valuing intangible assets include, but are not limited to, the amount and period involved in recreating the acquired intangible assets, discount rate used to determine the present value and asset lives.

These estimates are inherently uncertain and, therefore, actual results may differ from the estimates made.

Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount, net of allowance for credit losses.

The Company performs periodic credit evaluations of its customers’ financial condition and does not require collateral from them.

The Company performs periodic credit evaluations of its customers’ financial condition and does not require

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

collateral from them.

The Company assesses the collectability by reviewing accounts receivable on a customer-by-customer basis.

To manage credit risk, management performs ongoing credit evaluations of the customers’ financial condition, monitors payment performance, and assesses current economic conditions, as well as reasonable and supportable forecasts of future economic conditions, that may affect collectability of the outstanding receivables.

Management does not believe that an allowance for credit losses is needed as of May 3, 2025 or April 27, 2024 based on review of credit worthiness of the customers and their payment histories.

Management does not believe that an allowance for credit losses is needed as of May 2, 2026 or May 3, 2025 based on review of credit worthiness of the customers and their payment histories.

The Company values its inventory, which includes raw materials, assembly and test, and other manufacturing costs, at the lower of cost and net realizable value.

2 unchanged sentences

The Company regularly reviews inventory quantities on hand and records write-downs for excess and obsolete inventory based primarily on the shipment history and its estimated forecast of product demand.

These factors are impacted by market and economic conditions,

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

technology changes, new product introductions and changes in strategic direction.

These factors are impacted by market and economic conditions, technology changes, new product introductions and changes in strategic direction.

If the future demand for the Company’s services and products is less favorable than the Company’s forecasts, the value of the inventories may be required to be reduced, which could result in additional expense to the Company and affect its results of operations.

7 unchanged sentences

Useful lives by asset category are as follows:

Asset Category Useful Life

Asset Category Useful Life (in years)

Computer equipment and software 3

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Lease expense for these leases is recognized on a straight line basis over the lease term.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

Goodwill is recorded when the consideration paid for a business acquisition exceeds the fair value of net tangible and intangible assets acquired.

Goodwill is measured and tested for impairment annually on the last business day of the fiscal fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable.

The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount or the Company may determine to proceed directly to the quantitative impairment test.

If the Company assesses qualitative factors and concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount or if the Company determines not to use the qualitative assessment, then a quantitative impairment test is performed.

The quantitative impairment test requires comparing the fair value of the reporting unit to its carrying value, including goodwill.

The Company has identified that its business operates as a single operating segment and as a single reporting unit for the purpose of goodwill impairment testing.

An impairment exists if the fair value of the reporting unit is lower than its carrying value.

If the fair value of the reporting unit is lower than its carrying value, the Company would record an impairment loss in the fiscal quarter in which the determination is made.

Impairment of Long-lived Assets

The Company assesses the impairment of long-lived assets, which consist primarily of property and equipment, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable.

The Company assesses the impairment of long-lived assets, which consist primarily of property and equipment and intangible assets whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable.

Events or changes in circumstances that may indicate that an asset is impaired include significant decreases in the market value of an asset, significant underperformance relative to expected historical or projected future results of operations, a change in the extent or manner in which an asset is utilized, significant declines in the estimated fair value of the overall Company for a sustained period, shifts in technology, loss of key management or personnel, changes in the Company’s operating model or strategy and competitive forces.

1 unchanged sentence

Fair value is determined based on the present value of estimated expected future cash flows using a discount rate commensurate with the risk involved, quoted market prices or appraised values, depending on the nature of the asset.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

Revenue Recognition

The Company’s revenues consist of sales of its products, licensing of its IP and providing product and IP license engineering services.

Product sales consist of shipments of its ICs and AEC products.

IP license revenue includes fees from licensing of the Company’s SerDes IP and related support and royalties.

Product and IP license engineering services revenue consists of engineering fees associated with integration of the Company’s technology solutions into its customers’ products and IP, respectively.

The Company’s customers are primarily original equipment manufacturers who design and manufacture end market devices for the communications and enterprise networks markets.

The Company’s revenue is driven by various trends in these markets.

The Company’s revenue is also impacted by changes in the number and average selling prices of its IC products.

The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to receive in exchange for those goods and services.

5 unchanged sentences

Accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional other than the passage of time.

The Company recognizes deferred revenue when it has received consideration or an amount of consideration is due from the customer and it has a future obligation to transfer products or services.

Product Sales - The Company transacts with customers primarily pursuant to standard purchase orders for delivery of products and generally allows customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment date.

The Company offers standard performance warranties of twelve months after product delivery and offers limited product return rights to certain distributors.

The Company recognizes product sales when it transfers control of promised goods in an amount that reflects the consideration to which it expects to be entitled to in exchange for those goods, net of accruals for estimated sales returns and rebates.

As of May 3, 2025 and April 27, 2024, the sales returns and rebate reserves were not material.

Product Engineering Services Revenue - Some product revenue contracts include non-recurring engineering services deliverables.

The Company recognizes revenue from these agreements over time as services are provided or at point in time upon completion and acceptance by the customer of contract deliverables, depending on the terms of the arrangement.

Revenue is deferred for any amounts billed or received prior to delivery of services.

The Company believes the input method, based on time spent by its engineers, best depicts the efforts expended to transfer services to the customers.

IP License Revenue - The Company’s IP license revenue consists of perpetual licenses, support and maintenance, engineering services and royalties.

The Company enters into perpetual semiconductor IP license agreements, that have a fixed fee, whereby licensees pay a fixed fee for the right to incorporate the Company’s IP technologies into the licensee’s products.

The IP license agreements do not typically grant the customer the right to terminate for convenience.

Where such rights exist, termination is prospective, with no refund of fees already paid by the customer.

IP revenue recognition is dependent on the nature and terms of each agreement.

The Company recognizes license revenue at the point of time of the delivery of the IP.

In connection with the license arrangements, the Company offers support to assist customers in qualifying their final product.

Revenue from customer support is deferred and recognized ratably over the support period, which is typically one year.

Some IP license revenue contracts also include non-recurring engineering services deliverables, which were not material for any of the periods presented.

The Company recognizes revenue from these

The Company recognizes deferred revenue when it has received consideration or an amount of consideration is due from the customer and it has a future obligation to transfer products.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

agreements similar to the method described under the caption “Product Engineering Services Revenue” above.

In certain cases, the Company also charges licensees royalties related to the distribution or sale of products that use its technologies.

Such royalties are reported to us on a quarterly basis.

The Company estimates the sales-based royalties earned each quarter primarily based on its customers’ reporting of sales activity incurred in that quarter.

The Company recognizes the estimated royalty revenue when it is probable that reversal of such amounts will not occur.

Any differences between actual royalties owed by a customer and the quarterly estimates are recognized when updated information becomes available.

The Company transacts with customers primarily pursuant to standard purchase orders for delivery of products and generally allows customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment date.

The Company offers standard performance warranties of twelve months after product delivery and offers limited product return rights to certain distributors.

As of May 2, 2026 and May 3, 2025, the sales returns and rebate reserves were not material.

Customer Warrant

The Company accounts for the warrant issued to Amazon.com NV Investment Holdings LLC as an equity instrument, based on the specific terms of the warrant agreement.

When management determines that it is probable that a tranche of the warrant will vest and we recognize the related revenue, the grant date 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.

When management determines that it is probable that a tranche of the warrant will vest and we recognize the related revenue, the grant date fair value of the associated tranche will be recognized in shareholders’ equity and the underlying expense amortized as a reduction of revenue in proportion to the amount of related revenue recognized.

Cost of Revenue

Cost of revenue includes cost of materials, including 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 and impairment of production equipment no longer in use.

Cost of revenue includes cost of product sales revenue, cost of product engineering services revenue and cost of IP license revenue.

Shipping and Handling Costs

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The Company estimates the expected life of options granted based on the simplified method.

The Company estimates the volatility of

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

its ordinary shares on the date of grant based on the Company’s historical stock price volatility.

The Company estimates the volatility of its ordinary shares on the date of grant based on the Company’s historical stock price volatility.

The Company has not paid and has no current plans to pay dividends.

The Company accounts for forfeitures as they occur.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

The fair value of each restricted share unit is estimated based on the market price of the Company’s ordinary share on the date of grant.

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Accounting Pronouncement Recently 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,

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

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 adopted this guidance in the fourth quarter of fiscal year 2025 on a retrospective basis.

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.

This standard is effective for fiscal years beginning after December 15, 2024, and may be applied on a retrospective or prospective basis.

The Company adopted this guidance in the fiscal year 2026 on a prospective basis.

The adoption did not have a material impact to the Company’s consolidated financial statements.

Refer to ‘Note 13.

Segment and Geographic Information’ for further details.

Income Taxes’ for further details.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

Recent Accounting Pronouncements Not Yet Adopted

This standard is effective for fiscal years beginning after December 15, 2024, and may be applied on a retrospective or prospective basis.

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

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures , which requires disclosure of, in interim and annual reporting periods, additional information about certain expenses in the financial statements.

1 unchanged sentence

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

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets , providing all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.

This ASU is effective for annual reporting periods beginning after December 15, 2025.

The Company is currently evaluating the impact of electing the practical expedient and the impact it may have on its consolidated financial statements and disclosures.

Concentrations

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Historically, a relatively small number of customers have accounted for a significant portion of the Company’s revenue.

The particular customers which account for revenue concentration have varied from period to period as a result of the addition of new contracts, completion of existing contracts, and the volumes and prices at which the customers have recently bought the Company’s products.

The particular customers which account for revenue concentration have varied from period to period as a result of the volumes and prices at which the customers have recently bought the Company’s products.

These variations are expected to continue in the foreseeable future.

The following table summarizes the significant customers’ accounts receivable and revenue as a percentage of total accounts receivable and total revenue, respectively:

Accounts Receivable May 3, 2025 April 27, 2024

Accounts Receivable May 2, 2026 May 3, 2025

Customer A 53 % 86 %

Customer B 20 % *

Revenue May 3, 2025 April 27, 2024 April 29, 2023

Customer C 19 % *

Revenue May 2, 2026 May 3, 2025 April 27, 2024

Customer A 49 % 67 % 39 %

1 unchanged sentence

Customer C * * 15 %

Customer D * * 12 %

* Less than 10% of total accounts receivable or total revenue.

The Company believes that the concentration of credit risk in its trade receivables is substantially mitigated by the high level of credit worthiness of its customers and the relatively short collection terms.

The Company performs ongoing credit evaluations of its customers’ financial conditions and limits the

The Company performs ongoing credit evaluations of its customers’ financial conditions and limits the amount of credit extended when deemed necessary based upon payment history and the customer’s current credit worthiness, but generally require no collateral.

The Company currently outsources all of its integrated circuit manufacturing to Taiwan Semiconductor Manufacturing Company Limited with the remaining assembly and testing processes

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

amount of credit extended when deemed necessary based upon payment history and the customer’s current credit worthiness, but generally require no collateral.

The Company currently outsources all of its integrated circuit manufacturing to Taiwan Semiconductor Manufacturing Company Limited with the remaining assembly and testing processes outsourced to other subcontractors primarily in Asia.

outsourced to other subcontractors primarily in Asia.

Any disruption of or interference with the Company’s access to the goods or services from these subcontractors would impact the Company’s operations.

Revenue Recognition

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 May 3, 2025 and April 27, 2024.

Contract assets are presented within the “Other current assets” caption on the Consolidated Balance Sheet.

The Company had a contract asset balance of $ 9.9 million as of May 3, 2025, compared to $ 22.3 million as of April 27, 2024.

The decrease in contract assets of $ 12.4 million was primarily driven by IP licensing and engineering services arrangements where certain billing milestones were reached during fiscal 2025 while the criteria for recognition of revenue had previously been met.

Deferred revenue is presented within the “Other current liabilities” and “Other non-current liabilities” captions on the Consolidated Balance Sheet.

The Company had a deferred revenue balance of $ 1.5 million as of May 3, 2025, compared to $ 4.0 million as of April 27, 2024.

The decrease in deferred revenue of $ 2.5 million was primarily due to revenue recognized from a customer advance.

During the year ended May 3, 2025, the Company recognized $ 3.9 million of revenue that was included in the deferred revenue balance as of April 27, 2024.

During the year ended April 27, 2024, the Company recognized $ 4.1 million of revenue that was included in the deferred revenue balance as of April 29, 2023.

During the year ended April 29, 2023, the Company recognized $ 1.2 million of revenue that was included in the deferred revenue balance as of April 30, 2022.

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 $ 4.8 million and the satisfied but unrecognized performance obligations was approximately $ 1.1 million as of May 3, 2025, which the Company expects to recognize over the next fiscal year.

The Company applied constraints on the satisfied but unrecognized performance obligations due to uncertainty around the collectability of milestone payments.

The contracted but unsatisfied performance obligation was approximately $ 31.9 million which the Company expects to recognize over the next fiscal year.

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 4.1 million of our ordinary shares at an exercise price of $ 10.74 per share (the Customer Warrant).

The exercise period of the Warrant is through the seven th anniversary of the issue date.

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

The shares issuable vest in tranches over the contract term based on the amount of global payments by Holder and its affiliates to the Company, up to $ 201.0 million in aggregate payments.

A total of 4.1 million and 1.1 million Warrant shares were vested as of May 3, 2025 and April 27, 2024, respectively.

The grant date fair value of the Warrant share was determined at $ 4.65 per share using the Black-Scholes option pricing model.

The grant date fair value of the Warrant share was estimated using the following assumptions:

A total of 4.1 million Customer Warrant shares were vested as of May 3, 2025.

As of May 2, 2026, the Holder has exercised all Customer Warrant shares, resulting in a net issuance of 3.8 million shares after 0.3 million shares withheld for exercise price.

During the fiscal years ended May 3, 2025 and April 27, 2024, the Company recognized $ 13.2 million and $ 3.9 million, respectively, as contra revenue within the product sales revenue on the consolidated statements of operations.

The contra revenue impact associated with the Customer Warrant has been fully amortized as of May 3, 2025.

Business Combination

On September 29, 2025, the Company acquired 100 % of the equity interest of Hyperlume, Inc.

(Hyperlume), a developer of miniature light-emitting diode (microLED)-based optical interconnect technology for chip-to-chip communication, for a total purchase consideration of $ 92.0 million.

Total purchase consideration is attributable to cash consideration of $ 88.7 million and cash settlement of vested share-based payment awards of $ 3.3 million by Hyperlume.

This acquisition was primarily intended to expand the Company’s comprehensive portfolio of end-to-end system-level connectivity solutions with Hyperlume’s cutting-edge microLED technology to address the future of artificial intelligence-driven data infrastructure deployments.

The factors contributing to the recognition of goodwill were based upon the Company’s conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition.

Goodwill recorded for the Hyperlume acquisition is not expected to be deductible for tax purposes.

The Company has one reportable segment and accordingly, there is no goodwill assignment based on reporting units.

The following table summarizes the total purchase consideration (in thousands):

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

At Grant Date

Expected volatility 40.00 %

Weighted-average expected term (in years) 7

Risk-free interest rate 1.41 %

Dividend yield — %

Fair value per ordinary share $ 10.74

During the fiscal years ended May 3, 2025, April 27, 2024 and April 29, 2023, the Company recognized $ 13.2 million, $ 3.9 million and $ 1.2 million, respectively, as contra revenue within the product sales revenue on the consolidated statements of operations.

The contra revenue impact associated with the Warrant has been fully amortized as of May 3, 2025.

Cash consideration $ 88,698

Cash settlement of Hyperlume share-based payment awards 3,319

Total purchase consideration

Cash and cash equivalents acquired

Net cash payment for acquisition

IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter.

When an IPR&D project is completed, the IPR&D is reclassified as an amortizable intangible asset and amortized over the asset’s estimated useful life.

The functional currency of the acquired business is Canadian dollars, and the assets and liabilities are translated into U.S.

dollars at each fiscal quarter-end period.

The differences for goodwill and intangible asset between purchase price allocation and balance sheet result from currency translation rate changes.

The purchase price allocation is as follows (in thousands):

Cash and other assets $ 11,084

Goodwill 69,134

Intangible asset

Deferred tax liabilities

Other current liabilities and non-current operating lease liabilities

On February 25, 2026, the Company acquired 100 % of the equity interest of CoMira Solutions, Inc.

(Comira), a high-speed connectivity IP innovator, for a total cash consideration of $ 35.1 million.

This acquisition was primarily intended to bring specialized link layer, error correction and security semiconductor IP to support the development of new and advanced system-level solutions for scale-up and scale-out AI architectures.

Goodwill recorded for the Comira acquisition is not expected to be deductible for tax purposes.

The following table summarizes the total purchase consideration (in thousands):

Cash consideration $ 35,073

Cash and cash equivalents acquired

Net cash payment for acquisition

The purchase price allocation is as follows (in thousands):

Cash and other assets $ 5,167

Goodwill 21,789

Intangible asset

Deferred tax liabilities

Other current liabilities and non-current operating lease liabilities

Acquisition-related costs are expensed in the periods such costs are incurred and were not material for the periods presented for Hyperlume and Comira acquisitions.

Pro forma results of operations for both

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

acquisitions have not been presented because the effect of the acquisitions was not material to the Company’s financial results.

Goodwill and Intangible Assets, Net

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in business combinations.

Goodwill is not subject to amortization but is tested for impairment annually during the fourth fiscal quarter, as well as whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The Company performed the required annual goodwill impairment test as of May 2, 2026 and concluded that goodwill was not impaired.

As a result of the qualitative assessments, the Company determined that it was not necessary to perform a quantitative assessment at that time.

Intangible Assets, Net

As of May 2, 2026, the net carrying amounts are as follows (in thousands, except for weighted-average remaining amortization period):

Gross Carrying Amounts

Accumulated Amortization

Foreign Currency Translation Net Carrying Amounts

Weighted-Average Amortization Period (Years)

Developed technology

$ 12,000 $ ( 400 ) $ — $ 11,600 5

17,200 — 462 17,662 N/A

Total intangible assets $ 29,200 $ ( 400 ) $ 462 $ 29,262

Amortization for acquired intangible assets was $ 0.4 million during the year ended May 2, 2026 and charged to research and development expenses.

The aggregate future amortization expense for acquired amortizable intangible assets as of May 2, 2026 are as follows (in thousands):

Fiscal Year Amount

Fair Value Measurements

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Level 1 - Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

Level 2 - Other inputs that are directly or indirectly observable in the marketplace.

5 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, or measured at amortized cost which approximates fair value, as of May 3, 2025 and April 27, 2024 (in thousands).

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

The following tables present the fair value of the financial instruments measured on a recurring basis, or measured at amortized cost which approximates fair value, as of May 2, 2026 and May 3, 2025 (in thousands).

Level 1 Level 2 Level 3 Total

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Total cash equivalents and short-term investments $ 1,073,486 $ 356,198 $ — $ 1,429,684

April 27, 2024

Level 1 Level 2 Level 3 Total

1 unchanged sentence

Money market funds $ 148,036 $ — $ — $ 148,036

Certificates of deposit

— 65,137 — 65,137

Short-term investments:

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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 May 3, 2025 and April 27, 2024, there were no unrealized loss or gains associated with the Company’s financial instruments.

The interest income recognized during the years ended May 3, 2025, April 27, 2024 and April 29, 2023 was $ 18.8 million, $ 15.3 million and $ 4.7 million, respectively.

As of May 2, 2026 and May 3, 2025, there were no unrealized loss or gains associated with the Company’s financial instruments.

The interest income recognized during the years ended May 2, 2026, May 3, 2025 and April 27, 2024 was $ 31.3 million, $ 18.8 million and $ 15.3 million, respectively.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

Supplemental Financial Information

Inventories consisted of the following (in thousands):

May 3, 2025 April 27, 2024

May 2, 2026 May 3, 2025

Raw materials $ 64,357 $ 12,734

2 unchanged sentences

$ 250,831 $ 90,029

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

Property and Equipment, Net

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

May 3, 2025 April 27, 2024

May 2, 2026 May 3, 2025

Production equipment $ 63,214 $ 44,789

2 unchanged sentences

Leasehold improvements 4,096 3,513

Others 291 534

Construction in progress 27,027 9,687

2 unchanged sentences

$ 101,605 $ 63,631

Depreciation and amortization expense, excluding the asset impairment charges, for the years ended May 3, 2025, April 27, 2024 and April 29, 2023, was $ 21.9 million, $ 13.8 million, and $ 9.5 million, respectively.

Depreciation and amortization expense, excluding the asset impairment charges, for the years ended May 2, 2026, May 3, 2025 and April 27, 2024, was $ 34.6 million, $ 21.9 million, and $ 13.8 million, respectively.

Construction in progress and production equipment primarily includes mask set costs capitalized relating to the Company’s products.

During the years ended May 3, 2025, April 27, 2024 and April 29, 2023, the Company recorded impairment charges of $ 0.9 million, $ 0.8 million and $ 2.4 million, respectively.

Generally, the impairment charges were related to impairment of property and equipment or third-party IP licenses for future products that did not reach production qualification.

Other Current Liabilities

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

May 3, 2025 April 27, 2024

Accrued expenses $ 12,202 $ 8,832

May 2, 2026 May 3, 2025

Accruals relating to inventory purchases $ 7,193 $ 10,164

3 unchanged sentences

$ 68,120 $ 35,456

Other Non-current Liabilities

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

May 3, 2025 April 27, 2024

Non-current payables relating to purchases of property and equipment $ 5,762 $ 4,950

Other non-current liabilities 1,509 1,031

$ 7,271 $ 5,981

Commitments and Contingencies

3 unchanged sentences

Notes to Consolidated Financial Statements

Fiscal Year Purchase Commitments to Manufacturing Vendors Technology License Fees Total

2026 $ 34,675 $ 11,795 $ 46,470

Fiscal Year Purchase Commitments to Manufacturing Vendors and Foundry Partners Technology License Fees Total

2027 $ 333,503 $ 12,555 $ 346,058

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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 May 3, 2025, the total value of non-cancelable inventory purchase orders payable within the next one year that were committed with the Company’s third-party subcontractors was approximately $ 30.3 million.

As of May 2, 2026, the total value of non-cancelable inventory purchase orders payable within the next one year that were committed with the Company’s foundry partners and third-party subcontractors was approximately $ 149.2 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 May 3, 2025.

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

The Company has three manufacturing supply capacity reservation agreements with assembly subcontractors as of May 2, 2026.

Under these arrangement, the Company has paid refundable deposits to the supplier in exchange for reserved manufacturing production capacity over the remaining term of the agreements, which range from two to five years .

In addition, the Company committed to certain purchase levels that were in line with the capacity reserved.

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In addition, the Company had refundable deposits of $ 71.0 million as of May 2, 2026, of which $ 39.8 million was recorded in other current assets and $ 31.2 million was recorded in other non-current assets on the consolidated balance sheets.

Subsequent to May 2, 2026, the Company entered into a manufacturing supply capacity reservation agreement with an assembly subcontractor and will pay $ 13.1 million of refundable deposits.

The total inventory purchase within the next two years that was committed with the subcontractor was approximately $ 43.7 million.

Warranty Obligations

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

Accordingly, the Company has no liabilities recorded for these agreements as of May 3, 2025 and April 27, 2024.

Accordingly, the Company has no liabilities recorded for these agreements as of May 2, 2026 and May 3, 2025.

Credo Technology Group Holding Ltd

6 unchanged sentences

As of the date of issuance of the consolidated financial statements, the Company was not subject to any litigation.

No accruals for loss contingencies or recognition of actual losses have been recorded in any of the periods presented.

Accruals for loss contingencies or recognition of actual losses were not material in any of the periods presented.

Ordinary Shares

The Company filed the Amended and Restated Memorandum of Association with Cayman Islands, which authorized 1,000 million ordinary shares, par value $ 0.00005 per share and 50 million preferred shares.

The Company filed the Amended and Restated Memorandum of Association with Cayman Islands, which authorized 1 billion ordinary shares, par value $ 0.00005 per share and 50 million preferred shares.

Each ordinary share is entitled to one vote per share.

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As of January 27, 2022, the 2015 Plan has ceased to be available for grants of new awards.

Prior to the aforementioned cessation of the 2015 Plan for new grants and as of April 30, 2022, 26.0 million ordinary shares were authorized for issuance under the 2015 Plan.

Options under the 2015 Plan may be granted for periods of up to ten years and at prices no less than 100 % of the estimated fair value of the shares on the date of grant as determined by the Company’s Board of Directors.

Both RSAs and options granted generally vest over four years and vest at a rate of 25 % upon the first anniversary of the issuance date and 1/48th per month thereafter.

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Options canceled/ forfeited — $ 4.58

Balances as of April 27, 2024 6.4 $ 1.97 5.30 $ 106.5

Balances as of May 3, 2025 3.5 $ 2.23 4.79 $ 162.8

Options exercised and vested ( 1.4 ) $ 2.23

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Vested or expected to vest as of May 2, 2026 2.1 $ 2.24 3.96 $ 383.4

3.5 $ 2.23 4.79 $ 162.8

Exercisable as of May 2, 2026 2.1 $ 2.24 3.96 $ 383.4

3.5 $ 2.21 4.78 $ 161.6

During the years ended May 3, 2025, April 27, 2024 and April 29, 2023, the total intrinsic value of options exercised was $ 130.5 million, $ 36.2 million and $ 22.2 million, respectively.

The weighted-average grant date fair value of options vested was $ 1.64 , $ 1.52 and $ 1.41 per share for the years ended May 3, 2025, April 27, 2024 and April 29, 2023, respectively.

The total grant date fair value of share options that vested was $ 6.8 million, $ 13.3 million and $ 15.6 million as of May 3, 2025,April 27, 2024 and April 29, 2023, respectively.

As of May 3, 2025, the total unrecognized compensation cost was $ 0.1 million related to share options, which are expected to be recognized over a weighted-average period of 0.21 years.

During the years ended May 2, 2026, May 3, 2025 and April 27, 2024, the total intrinsic value of options exercised was $ 162.9 million, $ 130.5 million and $ 36.2 million, respectively.

The weighted-average grant date fair value of options vested was $ 1.78 , $ 1.64 and $ 1.52 per share for the years ended May 2, 2026, May 3, 2025 and April 27, 2024, respectively.

The total grant date fair value of share options that vested was $ 6.3 million, $ 6.8 million and $ 13.3 million as of May 2, 2026, May 3, 2025 and April 27, 2024, respectively.

As of May 2, 2026, there was no unrecognized compensation cost related to share options.

2021 Long-Term Incentive Plan

In December 2021, the Company adopted the 2021 long-term incentive plan (the 2021 Plan).

Upon the adoption, the 2021 Plan had 19.9 million ordinary shares reserved for issuance.

Upon the adoption, the 2021 Plan had 19.9 million ordinary shares reserved for issuance and additional 35.4 million ordinary shares reserved thereafter.

Awards granted under the 2021 Plan may include, but are not limited to, options, time-based restricted share units (RSUs) and performance-based restricted share units (PSUs).

1 unchanged sentence

None of the awards granted under the 2021 Plan as of May 2, 2026 allowed cash settlement.

Awards under the 2021 Plan generally vest over 4 years.

RSU awards under the 2021 Plan generally vest over 4 years.

As of May 2, 2026, 34.8 million shares remained available for future issuance under the 2021 Plan.

1 unchanged sentence

Notes to Consolidated Financial Statements

A summary of time-based RSU activity is as follows:

A summary of RSU activity is as follows:

Number of shares (in millions)

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

Balances as of 4/30/2022 4.1 $ 10.26 1.65 $ 45.6

Balances as of Balance as of April 29, 2023 7.8 $ 11.66 1.65 $ 63.2

Granted 5.4 $ 20.08

1 unchanged sentence

Canceled/ forfeited ( 0.4 ) $ 11.49

Balances as of 4/29/2023

7.8 $ 11.66 1.65 $ 63.2

Balances as of Balances as of April 27, 2024 10.1 $ 16.11 1.52 $ 188.2

Granted 3.9 $ 59.10

1 unchanged sentence

Canceled/ forfeited ( 0.6 ) $ 20.05

Balances as of 4/27/2024

10.1 $ 16.11 1.52 $ 188.2

Balances as of Balances as of May 3, 2025 9.5 $ 33.88 1.39 $ 458.1

Granted 2.2 $ 112.72

1 unchanged sentence

Canceled/ forfeited ( 0.3 ) $ 32.40

Balances as of 5/03/2025

9.5 $ 33.88 1.39 $ 458.1

Expected to vest as of May 03, 2025

9.5 $ 33.88 1.39 $ 458.1

Balances as of Balances and expected to vest as of May 2, 2026 7.2 $ 58.43 1.18 $ 1,319.6

As of May 2, 2026, unamortized compensation expense related to RSUs was $ 367.9 million.

The unamortized compensation expense for RSUs will be amortized on a straight-line basis and is expected to be recognized over a weighted-average period of 2.28 years.

During fiscal year 2025, the Company granted 0.2 million PSUs to certain named executive officers which will be eligible to become earned between 0 % and 200 % of target levels based on the Company’s achievement of specified revenue goals for the fiscal year ending May 2, 2026.

At the end of such fiscal year, the Compensation Committee will measure the achievement of such goals and determine the number of Refresh PSUs that have become earned based on performance (the Achievement PSUs).

The Achievement PSUs will then be subject to a service-based vesting requirement over an additional three-year period, with 25 % on the number of Achievement PSUs vesting on each of June 10, 2026, June 10, 2027, June 10, 2028 and June 10, 2029.

In the event of a termination of service due to an executive’s death or disability, any unvested PSUs will vest in full as of the date of termination with respect to the number of Achievement PSUs (or target PSUs, if the number of Achievement PSUs has not yet been determined).

As of May 3, 2025, the PSUs remain unvested and there were no cancellations/forfeitures.

The weighted-average grant date fair value of the PSUs was $ 43.70 with a weighted-average remaining contractual term of 2.5 years and aggregate intrinsic value of $ 10.1 million As of May 3, 2025, unamortized compensation expense related to PSUs was $ 17.1 million.

A summary of PSU activity is as follows:

Number of shares (in millions)

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

Balances as of April 27, 2024

— $ — 0.00 $ —

Granted 0.2 $ 43.70

Balances as of May 3, 2025

0.2 $ 43.70 2.53 $ 10.1

Granted 1.3 $ 92.57

Balances as of Balances and expected to vest as of May 2, 2026 1.5 $ 85.33 2.15 $ 272.1

The PSUs became earned at 200 % of target levels based on the Company’s achievement of specified revenue goals and will be vested subsequent to May 2, 2026.

During fiscal year 2026, the Company granted 1.3 million PSUs to certain named executive officers and employees which will be eligible to become fully earned or unearned at 100 % of target levels based on the Company’s achievement of stock price, product qualification and specified revenue goals.

The Compensation Committee will measure the achievement of such goals and determine the number of refresh PSUs that have become earned based on performance.

The PSUs will then be subject to a service-based vesting requirement over an additional three to four-year period.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

As of May 2, 2026, unamortized compensation expense related to PSUs was $ 37.0 million.

The unamortized compensation expense for PSUs will be amortized on a straight-line basis and is expected to be recognized over a weighted-average period of 2.15 years.

Employee Stock Purchase Plan

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Participants will be granted the right to purchase ordinary shares at a price per share that is 85 % of the lesser of the fair market value of the shares at (i) the participant’s entry date into the two-year offering period or (ii) the end of each six-month purchase period within the offering period.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

During the years ended May 3, 2025, April 27, 2024 and April 29, 2023, 0.2 million, 0.3 million and 0.2 million shares were issued under the ESPP, respectively.

During the years ended May 2, 2026, May 3, 2025 and April 27, 2024, 0.2 million, 0.2 million and 0.3 million shares were issued under the ESPP, respectively.

As of May 2, 2026, 7.5 million shares remained available for future issuance under the ESPP.

The following weighted-average assumptions to calculate the fair value of ordinary shares to be issued under the ESPP on the date of grant using the Black-Scholes option pricing model in the periods presented:

May 3, 2025 April 27, 2024 April 29, 2023

May 2, 2026 May 3, 2025 April 27, 2024

Grant date fair value $ 27.64 $ 10.51 $ 6.04

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The following table summarizes share-based compensation cost included in the consolidated statements of operations (in thousands).

May 3, 2025 April 27, 2024 April 29, 2023

May 2, 2026 May 3, 2025 April 27, 2024

Cost of revenue $ 1,416 $ 1,194 $ 1,131

2 unchanged sentences

$ 182,638 $ 77,355 $ 39,022

In connection with the Hyperlume acquisition, the Company issued 87 thousand RSUs under its 2021 long-term incentive plan in replacement for the unvested options under Hyperlume’s equity incentive plan.

The RSUs retain the same vesting conditions as the unvested options that they replaced.

The Company also issued 132 thousand restricted shares of the Company to one of the founders of Hyperlume and 132 thousand restricted shares of a newly formed subsidiary of the Company that are exchangeable into restricted shares of the Company to the other founder of Hyperlume.

The restricted shares were issued in exchange for the founders’ outstanding equity interests in Hyperlume and vest on a quarterly basis, subject to continued employment with the Company over the next 4 years.

Both RSUs and restricted shares were measured at the acquisition date’s fair value of $ 146.01 per share and the fair value of those shares represent post-acquisition share-based compensation expense

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

that will be recognized as these employees provide service over the remaining vesting periods of up to 4 years.

The Company's leases include office space located in the United States and other international locations, which are all classified as operating leases.

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

May 3, 2025 April 27, 2024

May 2, 2026 May 3, 2025

Operating lease expenses $ 5,077 $ 4,186

1 unchanged sentence

Right-of-use assets obtained in exchange for lease obligation $ 12,787 $ 5,178

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

The aggregate future lease payments for operating leases as of May 2, 2026 are as follows (in thousands):

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As of May 2, 2026, the weighted average remaining lease term for the Company's operating leases was 5.11 years and the weighted average discount rate used to determine the present value of the Company's operating leases was approximately 6.27 %.

In December 2025, the Company entered into multiple leasing agreements for additional office spaces to expand the corporate headquarter buildings in the United States.

The lease that has not yet commenced has an initial lease term of 6 years and an annual base rent of approximately $ 1.5 million.

The lease arrangements further extend headquarter office spaces through calendar year 2036.

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

Income (loss) before provision (benefit) for income taxes consists of the following (in thousands):

May 3, 2025 April 27, 2024 April 29, 2023

May 2, 2026 May 3, 2025 April 27, 2024

United States $ 36,047 $ 13,795 $ 8,611

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The components of income tax expense (benefit) are summarized as follows (in thousands):

May 3, 2025 April 27, 2024 April 29, 2023

May 2, 2026 May 3, 2025 April 27, 2024

Federal $ — $ — $ 2

State 32 12 3

International 6,224 2,253 1,484

4 unchanged sentences

Total deferred tax expense (benefit) ( 3,100 ) 422 4,135

Total tax expense (benefit) $ 2,687 $ 5,624 $ ( 1,367 )

Total tax expense $ 3,156 $ 2,687 $ 5,624

The Company adopted ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , on a prospective basis, in the fiscal year 2026.

The Company consists of a Cayman Islands parent holding company with various international and U.S.

subsidiaries.

The applicable statutory rate in Cayman Islands is zero for the Company for the years ended May 2, 2026, May 3, 2025 and April 27,

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

A reconciliation of the U.S.

21% rate to the effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended May 2, 2026, was as follows (in thousands):

Statutory federal tax expense $ 99,841 21 %

State tax, net of federal benefit

( 2,980 ) ( 1 ) %

Nontaxable or nondeductible items:

Share-based compensation ( 73,448 ) ( 15 ) %

Section 162(m) limitation

Research tax credit

( 32,047 ) ( 7 ) %

Change in valuation allowance

Foreign rate differential:

Cayman Islands ( 86,088 ) ( 18 ) %

Withholding taxes 148 — %

Other foreign jurisdictions ( 635 ) — %

Change in unrecognized tax benefits 9,362 2 %

Effective tax rate $ 3,156 1 %

Pursuant to the disclosure requirements of ASU 2023-09, the following table presents income taxes paid, net of refunds received, for the year ended May 2, 2026 (in thousands):

Hong Kong 1,992

Cayman Islands 101

Total income taxes paid $ 2,472

The Company consists of a Cayman Islands parent holding company with various international and U.S.

subsidiaries.

Under the current laws of the Cayman Islands, the Company is not subject to tax on its income.

For purposes of the reconciliation, prior to adoption of ASU 2023-09, Income Taxes (Topic 740):

improvements to Income Tax Disclosures , between the provision (benefit) for income taxes at the

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

statutory rate and the effective tax rate, a notional U.S.

21% rate is applied to pretax income (loss) as a result of the following for the periods indicated, respectively:

May 2, 2026 May 3, 2025 April 27, 2024

Statutory federal tax expense rate 21 % 21 % 21 %

State tax, net of federal benefit — % — % ( 2 ) %

Research tax credits ( 5 ) % ( 24 ) % 20 %

Share-based compensation ( 14 ) % ( 53 ) % 24 %

Other 1 % — % ( 1 ) %

Foreign rate differential ( 19 ) % ( 12 ) % ( 34 ) %

Change in valuation allowance 17 % 72 % ( 49 ) %

Withholding taxes — % 1 % ( 4 ) %

Effective tax rate 1 % 5 % ( 25 ) %

The tax effects of significant items comprising the Company’s deferred taxes are as follows (in thousands):

May 3, 2025 April 27, 2024

May 2, 2026 May 3, 2025

Deferred tax assets

2 unchanged sentences

Research and development credits 72,874 35,641

Share compensation 3,667 2,310

Share-based compensation 10,560 3,667

Lease liability 4,968 3,063

Intangibles — 141

Others 870 11

Total deferred tax assets 170,486 72,984

2 unchanged sentences

Right of use assets ( 4,780 ) ( 2,890 )

Others — ( 8 )

Intangibles ( 6,499 ) —

Total deferred tax liabilities ( 13,233 ) ( 4,853 )

16 unchanged sentences

As of May 2, 2026, the Company had no foreign tax credit carryover.

Internal Revenue Code Section 382 limits the use of net operating loss and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company.

Internal Revenue Code Section 382 limits the use of net operating loss and tax credit carryforwards in certain situations where changes occur in the

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

stock ownership of a company.

In the event that we had a change of ownership, utilization of the net operating loss and tax credit carryforwards may be restricted.

A summary activity of the valuation allowance is as follows (in thousands):

May 3, 2025 April 27, 2024 April 29, 2023

May 2, 2026 May 3, 2025 April 27, 2024

Beginning valuation allowance

3 unchanged sentences

$ 162,892 $ 69,456 $ 23,258

Foreign earnings may be subject to withholding taxes in local jurisdictions if they are distributed.

The amount of cumulative undistributed earnings that are permanently reinvested that could be subject to withholding taxes were $ 47.1 million as of May 3, 2025.

The Company intends to reinvest these earnings indefinitely.

The Company consists of a Cayman Islands parent holding company with various international and U.S.

subsidiaries.

The applicable statutory rate in Cayman Islands is zero for the Company for the years

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

ended May 3, 2025, April 27, 2024 and April 29, 2023.

For purposes of the reconciliation between the provision for income taxes at the statutory rate and the effective tax rate, a U.S.

statutory tax rate of 21% for the years ended May 3, 2025, April 27, 2024 and April 29, 2023 is applied as follows:

May 3, 2025 April 27, 2024 April 29, 2023

Statutory federal tax expense rate 21 % 21 % 21 %

State tax, net of federal benefit — % ( 2 ) % 1 %

Research tax credits ( 24 ) % 20 % 14 %

Share compensation ( 53 ) % 24 % 18 %

Other — % ( 1 ) % 1 %

Foreign rate differential ( 12 ) % ( 34 ) % ( 32 ) %

Change in valuation allowance 72 % ( 49 ) % ( 15 ) %

Withholding taxes 1 % ( 4 ) % ( 1 ) %

Effective tax rate 5 % ( 25 ) % 8 %

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):

May 3, 2025 April 27, 2024

May 2, 2026 May 3, 2025

Beginning gross unrecognized tax benefits $ 9,440 $ 4,574

4 unchanged sentences

The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on such position’s technical merits as of the reporting date and only in an amount more likely than not to be sustained upon review by the tax authorities.

Included in the balance of unrecognized tax benefits as of May 3, 2025 and April 29, 2024 were potential benefits of $ 9.4 million and $ 4.6 million, respectively, which if recognized, would potentially affect the effective tax rate.

If the unrecognized tax benefits were recognized, it would result in additional deferred tax assets, which are expected to require a full valuation allowance based on the Company’s current valuation allowance position.

Unrecognized tax benefits are not expected to significantly increase or decrease within the next 12 months.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

For the years ended May 3, 2025, April 29, 2024 and April 29, 2023, the Company’s current tax provision was not impacted by interest and penalties.

For the years ended May 2, 2026, and May 3, 2025, the Company’s current tax provision was not impacted by interest and penalties.

The Company files U.S.

8 unchanged sentences

Net income (loss) per share was determined as follows for the years presented (in thousands, except per share amounts):

May 3, 2025 April 27, 2024 April 29, 2023

April 27, 2024

Net income (loss) $ 472,279 $ 52,183 $ ( 28,369 )

7 unchanged sentences

Diluted $ 2.51 $ 0.29 $ ( 0.18 )

Potential dilutive securities include dilutive ordinary shares from share-based awards attributable to the assumed exercise of share options, restricted share units and employee stock purchase plan shares using the treasury stock method.

Potential dilutive securities include dilutive ordinary shares from share-based awards attributable to the assumed exercise of share options, time-based and performance-based restricted share units and employee stock purchase plan shares using the treasury stock method.

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

The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted average shares outstanding for the years ended May 3, 2025, April 27, 2024 and April 29, 2023 :

May 3, 2025 April 27, 2024 April 29, 2023

The following potentially dilutive securities outstanding (in thousands) have been excluded from the computations of diluted weighted average shares outstanding for the years ended May 2, 2026, May 3, 2025 and April 27, 2024 :

May 2, 2026 May 3, 2025 April 27, 2024

Share-based compensation awards 609 3,349 16,777

10 unchanged sentences

The table below provides information about the Company’s revenue, significant segment expenses and other segment expenses (in thousands):

May 3, 2025 April 27, 2024 April 29, 2023

Revenue $ 436,775 $ 192,970 $ 184,193

April 27, 2024

Cost of revenue

4 unchanged sentences

*Other segment items primarily include lease expenses, external professional services expenses, depreciation and amortization, interest income and tax provision (benefit).

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

May 3, 2025 April 27, 2024 April 29, 2023

Hong Kong $ 243,727 $ 70,162 $ 9,646

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

April 27, 2024

United States

Mainland China

Taiwan 3,624 21,286 5,363

Rest of World

$ 436,775 $ 192,970 $ 184,194

The following table presents long-lived assets information based on the physical location of the assets by geographic region (in thousands):

May 3, 2025 April 27, 2024

Property and equipment, net:

Taiwan $ 38,501 $ 24,874

United States

Hong Kong 8,047 5,208

Mainland China 4,290 2,433

$ 63,631 $ 43,665

Rest of World

Subsequent Events

Business Combination

In May 2026, the Company acquired 100 % of the equity interest in DustPhotonics Ltd., a leading developer of silicon photonics photonic integrated circuit technology for optical connectivity, for a total purchase consideration of $ 770 million cash and approximately 0.8 million shares of the Company’s ordinary shares.

In addition, the Company may pay incremental contingent consideration of up to

Credo Technology Group Holding Ltd

Notes to Consolidated Financial Statements

approximately 2.8 million shares and $ 31.6 million cash based on the achievement of certain financial milestones, subject to the terms of the definitive agreement.

Share Incentive Plan

On May 28, 2026, the Board of Directors of the Company approved a special performance-based equity award for the Company’s Chief Executive Officer in the form of performance-based restricted stock units (Special PSUs) under the 2021 Plan.

The Special PSUs are 100 % performance-based and tied to six progressively challenging performance hurdles based on both revenue and stock price growth.

Specifically, the Special PSUs are eligible to vest in six substantially equal tranches (set forth in the table below) subject to the achievement of (i) a revenue goal (Revenue Goal) and (ii) a stock price goal (Stock Price Goal) over a five-year performance period beginning on the grant date and ending on June 30, 2031.

The Revenue Goal and Stock Price Goal hurdles for each tranche of the Special PSUs are as follows:

Revenue Goal Hurdle

Stock Price Goal Hurdle

(share amounts)

$ 2,500,000,000 $ 244.70 239,500

$ 3,500,000,000 $ 293.64 239,500

$ 4,500,000,000 $ 342.58 239,500

$ 5,500,000,000 $ 391.52 239,500

$ 6,500,000,000 $ 440.46 239,500

$ 7,500,000,000 $ 489.40 239,500

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data