Executive Summary
In Q4 2024, Credo Technology Group Holding Ltd (CRDO) reported a record revenue of $60.8 million, marking a significant 89% increase year-over-year and a 15% sequential growth. This robust performance is primarily attributed to the accelerating demand for AI-driven connectivity solutions, with approximately three-quarters of revenue generated from AI workloads. Management emphasized their strategic positioning in the high-speed connectivity market, enhanced by successful product innovations and customer relationships. Overall, Credo's growth trajectory is strengthened by expanding collaborations with hyperscale data center operators and ongoing investment in R&D, aimed at sustaining momentum heading into fiscal 2025.
Key Performance Indicators
Key Insights
Revenue: $60.8 million (up 89% YoY, up 15% QoQ)
Net Income: -$10.5 million (Net Income Margin: -17.2%)
Gross Margin: 66.1% (improved from 62.5% in Q3)
EBITDA: -$7.1 million
Cash Balance: $410.0 million
Current Ratio: 11.88, highlighting strong liquidity position.
Management highlighted strong contributions from both product and IP revenue, with IP revenue growing 193% YoY to $16.6 million, representing 27% of total revenue, significantly above the long-term expectation of 10-15%. This div...
Financial Highlights
Revenue: $60.8 million (up 89% YoY, up 15% QoQ)
Net Income: -$10.5 million (Net Income Margin: -17.2%)
Gross Margin: 66.1% (improved from 62.5% in Q3)
EBITDA: -$7.1 million
Cash Balance: $410.0 million
Current Ratio: 11.88, highlighting strong liquidity position.
Management highlighted strong contributions from both product and IP revenue, with IP revenue growing 193% YoY to $16.6 million, representing 27% of total revenue, significantly above the long-term expectation of 10-15%. This diversification of revenue sources is a positive indicator of the company's strategic direction and operational adaptability.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
60.78M |
73.19% |
0.00% |
| Gross Profit |
39.97M |
92.24% |
0.00% |
| Operating Income |
-7.12M |
50.55% |
0.00% |
| Net Income |
-10.48M |
10.43% |
0.00% |
| EPS |
-0.06 |
18.37% |
0.00% |
Key Financial Ratios
operatingProfitMargin
-11.7%
priceEarningsRatio
-69.79
Management Commentary
AI-Driven Growth: Bill Brennan, CEO, stated, "In Q4, roughly three quarters of our revenue was driven by AI workloads."
Product Portfolio Success: Brennan noted, "Credo achieved record revenue during both fiscal Q4 and fiscal 2024, demonstrating solid execution across various product lines, especially our Active Electrical Cables (AECs)."
Future Outlook: Dan Fleming, CFO, commented on expected revenue growth: "From Q4 of fiscal 2024 to Q4 of fiscal 2025, we expect AI revenue to double year-over-year as programs scale up."
This commentary reinforces the continued emphasis on AI technologies and indicates strong future revenue potential.
"We believe this positions Credo with a unique value to the market that is difficult to replicate," said Bill Brennan, emphasizing their competitive edge in customized solutions.
â Bill Brennan
"We expect to double AI revenues year-over-year as we move into fiscal 2025 thanks to strong customer engagement and successful deployments across various platforms," noted Dan Fleming.
â Dan Fleming
Forward Guidance
Looking ahead to Q1 of fiscal 2025, management guides for revenue between $58 million and $61 million, representing a slight sequential decline, but projecting 100% growth in AI revenue YoY. The expected gross margin for Q1 is between 63% and 65%, indicating robust profitability amidst growth investments. Management remains confident in achieving optical DSP revenue to represent 10% of overall revenue in fiscal 2025. The second half of FY25 is anticipated to see significant acceleration in revenue streams, particularly from AI deployments, which are forecasted to play an increasing role in the company's revenue mix.