Credo Technology Group Holding Ltd - $CRDO - Earnings Analysis: Significant revenue growth driven by the AEC product line.

Business Model

Credo Technology Group Holding Ltd generates revenue primarily through product sales (ICs, AECs, SerDes Chiplets), product engineering services, and IP licensing.

Revenue Sources

• Product Sales: $129.371 million in Q3 2025 (Exhibit 99.1)
• Product Engineering Services: $2.667 million in Q3 2025 (Exhibit 99.1)
• IP License: $2.964 million in Q3 2025 (Exhibit 99.1)

Income Statement Analysis

• Total revenue increased significantly by 87.4% from Q2 2025 to Q3 2025, driven by strong growth in product sales. (Exhibit 99.1)
• Gross profit increased by 88.8% from Q2 2025 to Q3 2025, indicating improved profitability. (Exhibit 99.1)
• Operating income increased significantly in Q3 2025 compared to operating loss in Q2 2025, due to increased revenue and gross profit. (Exhibit 99.1)
• Net income increased significantly in Q3 2025 compared to net loss in Q2 2025, reflecting overall improved financial performance. (Exhibit 99.1)
• Basic and diluted net income per share improved significantly in Q3 2025 compared to Q2 2025, reflecting overall improved financial performance. (Exhibit 99.1)

Balance Sheet Analysis

• Cash and cash equivalents increased significantly, indicating strong cash flow generation. (Exhibit 99.1)
• Short-term investments decreased significantly. (Exhibit 99.1)
• Total assets increased, reflecting overall growth in the company's resources. (Exhibit 99.1)
• Total liabilities increased, indicating a higher level of debt or other obligations. (Exhibit 99.1)
• Total shareholders' equity increased, reflecting the growth in the company's net worth. (Exhibit 99.1)
• Total Liabilities increased, indicating a higher level of debt or other obligations. (Exhibit 99.1)

Capital Allocation

Credo is prioritizing customer programs on the product side and continues to invest in growth opportunities while maintaining a substantial cash buffer. The company aims to expand its net margin throughout the year.

Management Commentary

Credo achieved record revenue in Q3 as we saw the expected inflection point in our business.

Going forward, we expect continued growth across our product lines and customer base as market demand for innovative connectivity solutions continues to grow.

Overall Sentiment: Positive, with a focus on executing strategy, delivering value, and driving growth.

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results. Investing in securities involves risks, including potential loss of principal. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.