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CRDO, Credo Technology Group Holding Ltd
A semiconductor business, riding a brutal capacity cycle on the edge of Moore's Law.
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 business
What it sells, where the money comes from, the kind of company it is.
Next report Est. 8/31–9/9 · the 10-Q for the quarter ended early August · due within 40 days of period end · has filed ~33 days after · the wire records it on arrival
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- Situation
- Net current asset value. Current assets alone exceed every liability combined, and the surplus is most of the balance sheet: the shape Graham called a net-net.
- What moves the needle
- Operating margin has reached 33% at its best but run negative through the cycle (median −12%) on a 65% gross margin — so the question is which reading is truer: whether the median was pulled below zero by one-off charges, by the cycle, or by spending it is still growing into, and whether it settles back at a profit. Inventory runs near 19% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on process leadership and the capex cycle. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median −6%, above 15% in 1 of 5 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →42% of revenue comes from outside the United States.
- United States58%$768M
- Hong Kong SAR China28%$378M
- Rest of World6%$85M
- China6%$81M
- Taiwan2%$23M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2020–2026
realized figures from each filing · older years to the left| 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | 2026’26 | TTMTTMMay 2026 | |
|---|---|---|---|---|---|---|---|---|
| Income statement | ||||||||
| $54M | $59M | $106M | $184M | $193M | $437M | $1.3B | $1.3B | RevenueRevenue |
| $46M | $38M | $64M | $106M | $119M | $283M | $908M | $908M | Gross profitGross prof. |
| 86% | 65% | 60% | 58% | 62% | 65% | 68% | 68% | Gross marginGross mgn |
| 31% | 49% | 33% | 26% | 31% | 23% | 14% | 14% | SG&A / revenueSG&A/rev |
| 51% | 59% | 45% | 42% | 50% | 34% | 21% | 21% | R&D / revenueR&D/rev |
| $2M | ($25M) | ($22M) | ($21M) | ($37M) | $37M | $445M | $445M | Operating incomeOp. inc. |
| 3.8% | −43.0% | −20.6% | −11.5% | −19.2% | 8.5% | 33.3% | 33.3% | Operating marginOp. mgn |
| $2M | ($25M) | ($22M) | ($18M) | ($23M) | $55M | $475M | — | Pretax incomePretax |
| $1M | ($28M) | ($22M) | ($17M) | ($28M) | $52M | $472M | $472M | Net incomeNet inc. |
| 37% | — | — | — | — | 5% | 1% | 1% | Effective tax rateTax rate |
| Cash flow & returns | ||||||||
| ($10M) | ($42M) | ($31M) | ($25M) | $33M | $65M | $464M | $464M | Operating cash flowOp. cash |
| $2M | $2M | $5M | $10M | $14M | $22M | $35M | $35M | Depreciation & amortizationD&A |
| ($15M) | ($20M) | ($23M) | ($41M) | $8M | ($86M) | ($225M) | ($225M) | Working capital & otherWC & other |
| $9M | $6M | $18M | $22M | $16M | $36M | $57M | $57M | CapexCapex |
| 16.4% | 10.3% | 16.5% | 11.8% | 8.1% | 8.3% | 4.3% | 4.3% | Capex / revenueCapex/rev |
| ($12M) | ($45M) | ($36M) | ($34M) | $17M | $43M | $430M | $430M | Owner earningsOwner earn. |
| −22.4% | −75.9% | −33.5% | −18.5% | 8.9% | 9.9% | 32.2% | 32.2% | Owner earnings marginOE mgn |
| ($19M) | ($48M) | ($48M) | ($46M) | $17M | $29M | $407M | $407M | Free cash flowFCF |
| −35.5% | −82.5% | −45.5% | −25.2% | 8.9% | 6.6% | 30.5% | 30.5% | Free cash flow marginFCF mgn |
| — | — | — | — | $0 | $0 | $113M | $113M | AcquisitionsAcquis. |
| $0 | $23M | $0 | $0 | — | — | — | — | BuybacksBuybacks |
| ($9M) | ($6M) | ($18M) | ($131M) | ($249M) | $112M | ($254M) | — | Investing cash flowInv. cash |
| $61M | $78M | $204M | $5M | $175M | ($8M) | $718M | — | Financing cash flowFin. cash |
| $30K | $378K | ($204K) | ($68K) | ($169K) | $41K | $231K | — | Exchange-rate effectFX |
| $42M | $30M | $156M | ($151M) | ($42M) | $169M | $929M | — | Change in cashΔ cash |
| — | — | -23% | -7% | -6% | 8% | 49% | 49% | ROICROIC |
| — | — | -7% | -5% | -5% | 8% | 23% | 23% | Return on equityROE |
| — | — | −7% | −5% | −5% | 8% | 23% | 23% | Retained to equityRetained/eq |
| Balance sheet | ||||||||
| $74M | $104M | $259M | $218M | $410M | $431M | $1.4B | $1.4B | Cash & investmentsCash+inv |
| — | $14M | $30M | $50M | $60M | $162M | $233M | $233M | ReceivablesReceiv. |
| — | $7M | $27M | $46M | $26M | $90M | $251M | $251M | InventoryInvent. |
| — | $4M | $8M | $6M | $13M | $56M | $107M | $107M | Accounts payablePayables |
| — | $17M | $48M | $89M | $72M | $196M | $377M | $377M | Operating working capitalOper. WC |
| — | $138M | $332M | $328M | $530M | $714M | $2.0B | $2.0B | Current assetsCur. assets |
| — | $13M | $26M | $31M | $45M | $108M | $197M | $197M | Current liabilitiesCur. liab. |
| — | 11.0× | 12.5× | 10.6× | 11.9× | 6.6× | 10.2× | 10.2× | Current ratioCurr. ratio |
| — | $14M | $22M | $40M | $44M | $64M | $102M | — | Net PP&ENet PP&E |
| — | — | — | — | — | $0 | $93M | $93M | GoodwillGoodwill |
| — | $155M | $376M | $397M | $602M | $809M | $2.3B | $2.3B | Total assetsAssets |
| ($74M) | ($104M) | ($259M) | ($218M) | ($410M) | ($431M) | ($1.4B) | ($1.4B) | Net debt / (cash)Net debt |
| — | $13M | $42M | $50M | $62M | $128M | $232M | — | Total liabilitiesTotal liab. |
| $99M | $198M | $0 | $0 | — | — | — | — | Redeemable interestsRedeemable |
| ($9M) | ($55M) | $334M | $348M | $540M | $682M | $2.1B | $2.1B | Shareholders’ equityEquity |
| 2.3% | 4.4% | 8.6% | 12.8% | 20.2% | 17.7% | 13.7% | 13.7% | Stock comp / revenueSBC/rev |
| Per share | ||||||||
| 71.7M | 69.1M | 88.4M | 147M | 155M | 181M | 188M | 188M | Shares out (diluted)Shares |
| $0.75 | $0.85 | $1.20 | $1.26 | $1.24 | $2.41 | $7.09 | $7.09 | Revenue / shareRev/sh |
| $0.02 | $-0.40 | $-0.25 | $-0.11 | $-0.18 | $0.29 | $2.51 | $2.51 | EPS (diluted)EPS |
| $-0.17 | $-0.65 | $-0.40 | $-0.23 | $0.11 | $0.24 | $2.28 | $2.28 | Owner earnings / shareOE/sh |
| $-0.27 | $-0.70 | $-0.55 | $-0.32 | $0.11 | $0.16 | $2.16 | $2.16 | Free cash flow / shareFCF/sh |
| $0.12 | $0.09 | $0.20 | $0.15 | $0.10 | $0.20 | $0.30 | $0.30 | Cap. spending / shareCapex/sh |
| $-0.13 | $-0.80 | $3.78 | $2.37 | $3.48 | $3.76 | $10.96 | $10.96 | Book value / shareBVPS |
The diluted share count moved ×1.66 into 2023 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
| 6-yr | 5-yr | |
|---|---|---|
| Revenue / share | +45.4%/yr | +52.9%/yr |
| EPS | +126.6%/yr | — |
| Capital spending / share | +16.3%/yr | +28.3%/yr |
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2026 the business earned $430M of owner earnings, the operating cash left after the $35M it takes just to hold its position. It put $23M more into growth; free cash flow, after that spending, was $407M.
| FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|---|
| Reported net income | $472M | $52M | ($28M) | ($17M) | ($22M) |
| Depreciation & amortizationnon-cash charge added back | +$35M | +$22M | +$14M | +$10M | +$5M |
| Stock-based compensationreal costnon-cash, but a real cost | +$183M | +$77M | +$39M | +$24M | +$9M |
| Working capital & othertiming of cash in and out, other non-cash items | −$225M | −$86M | +$8M | −$41M | −$23M |
| Cash from operations | $464M | $65M | $33M | ($25M) | ($31M) |
| Maintenance capital expenditurethe spending needed just to hold position and volume | −$35M | −$22M | −$16M | −$10M | −$5M |
| Owner earnings | $430M | $43M | $17M | ($34M) | ($36M) |
| Growth capital expenditurediscretionary; spent to get bigger, not to stand still | −$23M | −$14M | — | −$12M | −$13M |
| Free cash flow | $407M | $29M | $17M | ($46M) | ($48M) |
| Owner-earnings marginowner earnings ÷ revenue | 32% | 10% | 9% | -19% | -33% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $35M, roughly its depreciation, the rate its assets wear out). The other $23M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $183M), owner earnings is nearer $247M.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- No meaningful interest burdenLittle or no interest expense reported
What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
- Net cash, debt-freeCash $1.2B + ST investments $278M − debt $0
What this means
Cash and short-term investments exceed every dollar of debt by $1.4B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Long (60+ days)DSO 64 + DIO 215 − DPO 92 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Not enough dataIndustry peers: median 7%
What this means
The filing data didn't include the inputs for this check.
- High, recently turned positivelatest $430M = operating cash $464M − maintenance capex $35M; positive each of the last 3 years, after an earlier loss stretch (7-yr median -19%)Industry peers: median 8%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 32% of revenue this year, a -19% median across 7 years. Treating stock comp as the real expense it is (less $183M of SBC) leaves $247M.
- Mostly cash-backedCash from ops $464M ÷ net income $472M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 1.65×ExpandingCapex $57M ÷ depreciation & amortization as filed $35M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
The promise and the pay packet
- Is the buyback buying ownership, or mopping up? 13.7%Stock pay, share count unreadStock compensation $183M (fiscal 2026), 13.7% of revenue · no repurchases · the share count is not comparable across these years (a split or a first listing sits in the record), so the drift is withheld
What this means
Stock handed to employees is a real cost paid in the owner's own currency: it is charged against profit, but the shares it creates are permanent. Many companies repurchase stock at the same time, which looks like a return of capital and often is not — if the count barely moves, the cash merely cancelled the pay packet and bought the owner nothing. The three states worth telling apart are a count genuinely shrinking, a count standing still despite large repurchases, and a count rising because the issuance was never offset at all.
Graham’s defensive tests · 1 of 3 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size NearRevenue ≥ $2B · $1.3B
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 10.15×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Earnings stability MissA profit every year (7-yr record) · 4 loss years
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record —Uninterrupted dividends · no dividend line tagged in the data
What this means
An unbroken dividend was Graham's mark of durability. This record carries no dividends-paid line in any year — common for partnerships, whose distributions file under tags the chain doesn't read — so the criterion is withheld rather than judged on silence.
- Earnings growth —Earnings +33% over the record · —
What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.89/share (latest year $2.53), the averaged base the calculator's gate runs on, and book value is $11.07/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2020–2026
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 3 of 7
What this means
Lost money in 4 year(s), look at what happened there before trusting the average.
- Operating margin −20% → 8% (3-yr avg ends)
What this means
Through the cycle the operating margin widened — about −20% early to 8% lately, median −12% — pricing power intact or improving.
- Worst year 2021 · −43.0% op. margin
What this means
Operations went underwater in 2021, understand why before trusting the good years.
- How management talks about it Promotional
What this means
The record is compounding, but the filing leans on a promoter’s vocabulary rather than the per-share, return-on-capital terms an owner uses. The results back the talk here; the register is still worth noting.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, May 2, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investments$1.4B
- Receivables$233M
- Inventory$251M
- Other current assets$74M
- Accounts payable$107M
- Other current liabilities$90M
From the company's latest filing.
How the cash was used, 2020–2026
Over the record, the business generated $454M of operating cash; how management split it reads as a cash builder, a large share of cash simply built up on the balance sheet.
- Reinvested$163M · 36%
- Buybacks$23M · 5%
- Retained (debt / cash)$268M · 59%
- Returned to owners$23M
6% of the owner earnings the business produced over the span, $0 as dividends and $23M as buybacks.
- Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span cash and short-term investments rose $1.4B.
- Average price paid for buybacks—
Buybacks ran $23M over the span, but the filings don't tag the share count needed to deduce the average price paid.
- Net change in share count162.4%
The diluted count rose from 72M to 188M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
- Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
- Return on what it retained48%
Of the earnings it kept rather than paid out ($408M over the span), annual owner earnings (first three years vs last three) grew $194M, so each retained $1 added about 0.48 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Chief executive | Pay, as filed | “Actually paid” | Owner earnings |
|---|---|---|---|---|
| 2023 | William (Bill) Brennan | $3.9M | $2.3M | ($34M) |
| 2024 | William (Bill) Brennan | $6.1M | $8.0M | $17M |
| 2025 | William (Bill) Brennan | $6.1M | $13.9M | $43M |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.
- Insider ownership11.8%
The stake all directors and executive officers hold together, per the 2025 proxy: skin in the game, the first thing Munger reads.
- CEO pay ratio25:1
What the chief earns for every dollar the median employee makes, per the 2025 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
- Stock-based compensation$183M
The slice of the business handed to employees in shares in fiscal 2026, 13.7% of revenue, equal to 41.0% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What an owner would ask, FY2026
read the 10-K →- How much of the revenue rides on one buyer?≈$1.2B · 90% of revenue on the largest customers (TTM)
“In fiscal 2026, sales to our top 10 customers accounted for approximately 90% of our total revenue.”verify →
- Which reported numbers are a judgment call?Management names Inventory as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Semiconductors
The same industry, side by side on owner economics, research and the inventory cycle. Each column names the period it is read over; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record | R&D / revenuelatest FY | Capex / revenuelatest FY | Inventory dayslatest FY |
|---|---|---|---|---|---|---|---|---|
| VIAVViavi Solutions Inc. | $1.5B | 58% | 6.4% | 5% | 8% | 17.3% | 2.0% | 88 |
| DIODDiodes | $1.5B | 35% | 11.8% | 11% | 9% | 10.9% | 5.3% | 169 |
| ENPHEnphase Energy | $1.5B | 41% | 13.2% | 16% | 22% | 12.8% | 2.8% | 134 |
| PENGPenguin Solutions Inc. | $1.4B | 23% | 4.0% | 7% | 5% | 5.8% | 0.7% | 96 |
| CRDOCredo Technology Group Holding Ltd | $1.3B | 63% | -11.5% | -6% | -19% | 20.9% | 4.3% | 215 |
| ARRYArray Technologies Inc. | $1.3B | 23% | -1.7% | -2% | 7% | 0.8% | 1.7% | 56 |
| SYNASynaptics | $1.2B | 45% | 1.7% | 3% | 11% | 31.9% | 4.0% | 86 |
| SEDGSolarEdge Technologies Inc. | $1.2B | 31% | 10.2% | 14% | 8% | 18.7% | 2.0% | 204 |
| Group median | — | 38% | 5.2% | 6% | 8% | 15.1% | 2.4% | 115 |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Credo Technology Group Holding Ltd has delivered.
—
9.0% = the 4.65% 10-year Treasury (Aug 19, 2026) + 4.35 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Prefilled with the 10-year Treasury (4.65%, as of Aug 19, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Free cash flow $407M on 186M shares outstanding, per the 10-K cover, as of 2026-06-08; net cash $1.4B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($57M) runs well above depreciation ($35M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $430M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Manual order: ← CRCT its page in the Manual CRGY →
Industry order: ← CEVA the Semiconductors chapter CRUS →