Credo Technology Group (CRDO) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue reached $72.0 million, up 21% sequentially and 64% year-over-year, driven by strong AI-related demand and record results across all main product lines.

• Product sales and engineering services accounted for 95.9% of total revenue, with IP license revenue declining due to fewer contracts.

• Management highlighted a revenue inflection point, with demand exceeding projections and expectations for continued growth into FY26.

• Customer concentration remains high, with a few customers representing a significant portion of revenue.

Financial highlights

• Q2 product revenue was $69.1 million, up 21% sequentially and 88% year-over-year; IP revenue was $3.0 million.

• Non-GAAP gross margin was 63.6%, near the high end of guidance and up 73 bps sequentially; GAAP gross margin was 63.2%.

• Non-GAAP operating income was $8.3 million (11.5% margin); GAAP operating loss was $(8.4) million.

• Non-GAAP net income was $12.3 million; GAAP net loss was $(4.2) million.

• Cash and equivalents ended at $383.0 million, with working capital of $488.6 million.

Outlook and guidance

• Q3 FY25 revenue expected between $115 million and $125 million, up 67% sequentially at midpoint.

• Q3 non-GAAP gross margin expected in the 61%-63% range; operating expenses between $42 million and $44 million.

• Double-digit sequential revenue growth expected from Q3 to Q4; FY25 revenue growth expected to exceed 100% year-over-year.

• FY26 growth anticipated at approximately 50% annually, with continued strong design activity across all product lines.

• Existing cash and working capital are expected to be sufficient for at least the next 12 months and longer term.