Credo Technology Group Holding Ltd has recently released its 10-K report, providing a detailed look at its financial performance and operations. The company, founded in 2008 and headquartered in San Jose, California, specializes in providing high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Mexico, Mainland China, Hong Kong, and internationally. Its product offerings include HiWire active electrical cables, optical digital signal processors, low-power line card PHY, serializer/deserializer (SerDes) chiplets, and SerDes IP, targeting the data infrastructure market.
In the fiscal year ended April 27, 2024, Credo Technology generated $193.0 million in total revenue, a growth from $184.2 million in the previous fiscal year. Product sales and product engineering services revenue comprised 85% and 83% of the total revenue in fiscal 2024 and 2023, respectively, while IP license and IP license engineering services revenue represented 15% and 17% of the total revenue in fiscal 2024 and 2023, respectively. Geographically, 31% of the total revenue in both fiscal 2024 and 2023 was generated from customers in North America, with the remaining 69% from customers in the rest of the world, primarily in Asia. However, the company reported a net loss of $28.4 million in fiscal 2024, compared to a net loss of $16.5 million in fiscal 2023.
The company's business model is focused on providing comprehensive connectivity solutions that deliver bandwidth, scalability, and end-to-end signal integrity for next-generation platforms. Credo Technology aims to generate an increased proportion of its revenue from sales of its products over time. It utilizes a fabless business model, working with a network of third parties to manufacture, assemble, and test its connectivity products, allowing it to focus on core competencies and control fixed costs and capital expenditures.
Revenue for Credo Technology consists of product sales, IP licensing, and providing engineering services related to its IP and products. The company recognizes revenue upon the transfer of control of promised goods and services and has a two-pronged sales strategy targeting both end users and suppliers of end users. Credo Technology also reported that a relatively small number of customers historically accounted for a significant portion of its revenue, and it anticipates continuing to derive a significant portion of its revenue from a limited number of customers in the foreseeable future.
In terms of expenses, the company's cost of revenue includes various components such as materials, packaging and assembly, testing and shipping, personnel costs, depreciation of equipment, logistics, and quality assurance, among others. Credo Technology also invests significantly in research and development, with expenses incurred in performing research and development activities, including salaries, benefits, and prototype costs. Additionally, the company incurs selling, general, and administrative expenses, including personnel costs, field application engineering support, shipping costs, travel and entertainment costs, and general corporate expenses.
Credo Technology's 10-K report provides a comprehensive overview of its financial condition, results of operations, and business model, shedding light on its revenue sources, expenses, and strategic focus. Today the company's shares have moved -0.7% to a price of $27.29. For more information, read the company's full 10-K submission here.
