Credo Technology Reports Adjusted Profit of $236 Million but Free Cash Flow Remains at Just $83 Million
Credo Technology Group (NASDAQ:CRDO) reported an adjusted profit of $236.3 million for its fiscal first quarter, despite generating only $82.9 million in free cash flow. The discrepancy is largely attributed to stock-based compensation add-backs and a significant use of cash due to inventory buildup. Management highlighted that operating working capital consumed a large portion of the cash generated during the period. The company's revenue increased by 114.7% year-over-year, with management forecasting Q2 revenues between $525 million and $535 million. However, investors have reacted negatively to these figures; shares fell nearly 42% in a month as of September 16, trading at $150.39 despite an average analyst price target of $281.47. Credo's top two customers account for over half (61%) of its revenue, raising concerns about potential demand shortfalls if either customer delays orders.
Tickers: $CRDO