10-K – 2026-06-15 – crdo-20260502.htm

law or regulation could result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations in certain jurisdictions and might adversely affect our business, results of operations or financial condition. In addition, we have internal ethics policies that we require our employees to comply with in order to ensure that our business is conducted in a manner that our management deems appropriate. If these anti-corruption laws or internal policies were to be violated, our reputation and operations could be substantially harmed.
Any failure to comply with foreign exchange registration requirements may expose us or our PRC resident beneficial owners or PRC participants of employee stock incentive plans to liability and penalties under PRC law.
In July 2014, the State Administration of Foreign Exchange of the PRC (SAFE) promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles (SAFE Circular 37). SAFE Circular 37 requires PRC residents (including PRC citizens, PRC corporate entities and other persons that are deemed PRC residents) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents. SAFE Circular 37 further requires amendment to the SAFE registrations in the event of any changes with respect to the basic information and material matters of the offshore special purpose vehicle, including an increase or decrease of capital contribution by the PRC residents, share transfer or exchange, or mergers or divisions. However, due to inherent uncertainty in the implementation of the regulatory requirements by the PRC authorities, such registration might not always be practically available in all circumstances as provided in those regulations. While it is uncertain whether we will be deemed a “special purpose vehicle” as regulated by SAFE Circular 37, our shareholders or beneficial owners who are PRC residents may be required to conduct the registration, which registrations are yet to be completed, sometimes due to reasons beyond their control.
Further, PRC citizens and certain PRC residents who participate in share incentive plans in overseas listed companies are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiaries of such overseas listed company, and complete certain other procedures. Our employees who are PRC citizens or residents and who have been or will be granted incentive shares or options may be subject to these regulations. Failure to complete the SAFE registrations may subject our PRC subsidiaries or our executive officers and other employees to fines and legal sanctions.
We may not at all times be fully informed of the identities of all the PRC residents holding direct or indirect interests in our company, and we cannot assure you that all of our shareholders or beneficial owners who are PRC residents or entities, or all of our executive officers and other employees who are PRC citizens or residents and who have been or will be granted incentive shares or options, have complied with, and will in the future make or obtain any applicable registrations or approvals required by, SAFE regulations. Failure or inability by our shareholders or beneficial owners who are PRC residents or by our executive officers and other employees who are PRC citizens or residents and who have been or will be granted incentive shares or options to comply with SAFE regulations, failure by us to conduct or amend the foreign exchange registrations of our PRC subsidiaries, or failure to disclose or a misrepresentation of the controller(s) or ultimate shareholders of the foreign invested enterprise that is established through round trip investment, could subject us to fines or legal sanctions, such as restrictions on our overseas or cross-border investment activities or our PRC subsidiaries’ ability to make distributions or pay dividends to us. As a result, our ability to contribute capital to fund our business operations in the PRC and our ability to receive distributions from our PRC subsidiaries could be materially and adversely affected. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.
We are subject to fluctuations in exchange rates between and among the currencies of the countries in which we do business.

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Our sales have been historically denominated in U.S. dollars and, in mainland China, the Renminbi. An increase in the value of the U.S. dollar or of the Renminbi relative to the currencies of the countries in which our customers operate could impair the ability of our customers to cost-effectively purchase or integrate our solutions into their product offerings, which may materially affect the demand for our products or solutions and cause these customers to reduce their orders, which in turn would adversely affect our business, financial condition and results of operations. If we increase operations in other currencies in the future, we may experience further foreign exchange gains or losses due to the volatility of other currencies compared to the U.S. dollar and the Renminbi. Certain of our employees are located in Hong Kong and Taiwan. Accordingly, a portion of our payroll as well as certain other operating expenses are paid in currencies other than the U.S. dollar and the Renminbi. Our results of operations are denominated in U.S. dollars, and the difference in exchange rates in one period compared to another may directly impact period-to-period comparisons of our results of operations. Furthermore, currency exchange rates have been especially volatile in the recent past, and these currency fluctuations may make it difficult for us to predict our results of operations.
We have not implemented any hedging strategies to mitigate risks related to the impact of fluctuations in currency exchange rates. Even if we were to implement hedging strategies, not every exposure can be hedged and, where hedges are put in place based on expected foreign exchange exposure, they are based on forecasts which may vary or which may later prove to have been inaccurate. Failure to hedge successfully or anticipate currency risks accurately could adversely affect our operating results.
Risks Related to Our Intellectual Property
We may face claims of intellectual property infringement, misappropriation or other violations, which could be time-consuming or costly to defend or settle, result in the loss of significant rights or harm our relationships with our customers or reputation in the industry.
The semiconductor and data infrastructure industries are characterized by companies that hold patents and other intellectual property rights and that vigorously pursue, protect and enforce intellectual property rights. From time to time, third parties may assert against us and our customers their patent and other intellectual property rights to technologies that are important to our business.
We may in the future, particularly as a public company with an increased profile and visibility, receive communications from others alleging our infringement, misappropriation or other violation of patents, trade secrets or other intellectual property rights. In addition, in the event that we recruit employees from other technology companies, including certain potential competitors, and these employees are involved in the development of products that are similar to the products they assisted in developing for their former employers, we may become subject to claims that such employees have improperly used or disclosed trade secrets or other proprietary information. We may also in the future be subject to claims by our suppliers, employees, consultants or contractors asserting an ownership right in our patents or patent applications, as a result of the work they performed on our behalf.
Claims that our products, processes or technology infringe, misappropriate or otherwise violate third-party intellectual property rights, regardless of their merit or resolution, could be time-consuming or costly to defend or settle and could divert the efforts and attention of our management and technical personnel. Infringement claims also could harm our relationships with our customers and might deter future customers from doing business with us. We do not know whether we will prevail in these proceedings given the complex technical issues and inherent uncertainties in intellectual property litigation. If any pending or future proceedings result in an adverse outcome, we could be required to:
• cease the manufacture, use or sale of the infringing products, processes or technology;
• pay substantial damages for infringement, misappropriation or other violation;
• expend significant resources to develop non-infringing products, processes or technology, which may not be successful;

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• license technology from the third-party claiming infringement, which license may not be available on commercially reasonable terms, or at all;
• cross-license our technology to a competitor to resolve an infringement claim, which could weaken our ability to compete with that competitor; or
• pay substantial damages to our customers or end-users to discontinue their use of or to replace infringing technology sold to them with non-infringing technology, if available.
Additionally, even if successful in such proceedings, our rights in our products, processes or technology may be invalidated, or narrowed. Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our ordinary shares. Any of the foregoing results could have a material adverse effect on our business, financial condition and results of operations.
Any potential dispute involving patents or other intellectual property could affect our customers and vendors which could trigger our indemnification obligations to them and result in substantial expense to us.
In any potential dispute involving patents or other intellectual property, our customers and vendors could also become the target of litigation. Our agreements with customers and vendors generally include indemnification or other provisions under which we agree to indemnify or otherwise be liable to them for certain losses suffered or incurred as a result of claims of intellectual property infringement. Large indemnity payments could harm our business, financial condition and results of operations. From time to time, customers require us to indemnify or otherwise be liable to them for breach of confidentiality or failure to implement adequate security measures with respect to their intellectual property and trade secrets. Although we normally contractually limit our liability with respect to such obligations, we may still incur substantial liability related to them. Any litigation against our customers could trigger technical support and indemnification obligations under some of our agreements, which could result in substantial expense to us.
In addition, other customers and vendors may ask us to indemnify them if a claim is made as a condition to awarding future design wins to us. Because some of our counterparts are larger than we are and have greater resources than we do, they may be more likely to be the target of an infringement claim by third parties than we would be, which could increase our chances of becoming involved in a future lawsuit. If any such claims were to succeed, we might be forced to pay damages on behalf of our customers or vendors that could increase our expenses, disrupt our ability to sell our solutions and reduce our revenue. Any dispute with a customer or vendor with respect to such obligations could have adverse effects on our relationship with such customer or vendor and other current and prospective customers or vendors and reduce demand for our solutions. In addition to the time and expense required for us to supply support or indemnification to our customers, any such litigation could severely disrupt or shut down the business of our customers or vendors, which in turn could hurt our relations with them and cause the sale of our products to decrease. Any of the foregoing could harm our business, financial condition and results of operations.
We face risks related to the protection of our intellectual property, particularly outside the United States. We use a significant amount of intellectual property in our business. Monitoring unauthorized use of our intellectual property can be difficult and costly and if we are unable to obtain, maintain and protect our intellectual property, our business could be adversely affected.
Our success depends in part upon our ability to obtain and maintain patent and other intellectual property protection with respect to our products and the technology we develop. To accomplish this, we rely on a combination of intellectual property rights, including patents, copyrights and trademarks in the United States and in selected foreign countries where we believe filing for such protection is appropriate.

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We also rely on trade secret laws, as well as confidentiality and non-disclosure and other contractual protections, to protect our proprietary know-how.
We cannot assure that any patents from any pending or future patent applications will be issued, and even if our pending patent applications are granted, the scope of the rights granted to us may not be meaningful, may not provide us with a commercial advantage and may be subject to reinterpretation after issuance. The patent prosecution process is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output in time to obtain patent protection. Failure to timely seek patent protection on products or technologies generally precludes us from seeking future patent protection on these products or technologies. Even if we do timely seek patent protection, the coverage claimed in a patent application can be significantly reduced before a patent is issued, and its scope can be reinterpreted after issuance. We cannot guarantee that:
• any of our present or future patents or patent claims will not lapse or be invalidated, narrowed, circumvented, challenged or abandoned;
• our intellectual property rights will provide competitive advantages to us;
• our ability to assert our intellectual property rights against others (including potential competitors) or to settle current or future disputes will not be limited by our agreements with third parties;
• any of our pending or future patent applications will be issued or have the coverage originally sought;
• our intellectual property rights will be enforced in jurisdictions where competition may be intense or where legal protections may be weak;
• any of the trademarks, copyrights, trade secrets or other intellectual property rights that we presently employ in our business will not lapse or be invalidated, narrowed, circumvented, challenged, abandoned or otherwise diminished or eliminated; or
• we will not lose the ability to assert our intellectual property rights against or to license our technology to others and collect royalties or other payments.
In addition, our competitors or others may design around our protected patents or other intellectual property rights. Effective intellectual property protection may be unavailable or more limited in foreign jurisdictions relative to those protections available in the United States, or may not be applied for in one or more relevant jurisdictions. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. The failure of our patents to adequately protect our technology might make it easier for our competitors to offer similar products or technologies, and our business, financial condition and operations could be adversely affected.
Monitoring unauthorized use of our intellectual property is difficult and costly. Unauthorized use of our intellectual property may have occurred or may occur in the future. Although we have taken steps to minimize the risk of this occurring, any such failure to identify unauthorized use and otherwise adequately protect our intellectual property would adversely affect our business. From time to time, we may need to commence litigation or other legal proceedings in order to:
• assert claims of infringement of our intellectual property rights;
• defend our products from piracy;
• protect our trade secrets or know-how; or
• determine the enforceability, scope and validity of the propriety rights of others.

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Lawsuits or other proceedings that we initiate to protect or enforce our patents or other intellectual property rights could be expensive, time consuming and unsuccessful. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their intellectual property or alleging that our intellectual property is invalid or unenforceable. Moreover, if we are required to commence litigation, whether as a plaintiff or defendant, we would also be forced to divert our attention and the efforts of our employees, which could, in turn, result in lower revenue and higher expenses. If we pursue litigation to assert our intellectual property rights, an adverse decision in any of these legal actions could limit our ability to assert our intellectual property rights, limit the value of our technology or otherwise negatively impact our business, financial condition and results of operations. Legal fees related to such litigation will increase our operating expenses and may reduce our net income.
In addition to patent protection, we also rely on other proprietary rights, including protection of trade secrets, and other proprietary information that is not patentable or that we elect not to patent. However, trade secrets can be difficult to protect and some courts are less willing or unwilling to protect trade secrets. We rely on contractual protections with our customers, suppliers, employees and consultants, and we implement cybersecurity measures designed to protect our trade secrets. We cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes. The semiconductor industry is generally subject to high turnover of employees, so the risk of trade secret misappropriation may be amplified. Unauthorized copying or other misappropriation of our trade secrets and other intellectual property could enable third parties to benefit from our technologies without paying us for doing so, which could harm our business. We cannot assure you that our contractual protections and cybersecurity measures have not been or will not be breached or that we will have adequate remedies for any such breach. Accordingly, we cannot guarantee that we have secured, or will be able to secure, effective protections for all of our trade secrets or other proprietary information that we use or claim rights to.
Many of our products include intellectual property licensed from third parties, and we are party to a number of third-party intellectual property license agreements. Some of these license agreements require us to make one-time payments or ongoing royalty payments. We cannot guarantee that the third-party patents and technology we license will not be licensed to our competitors or others in the semiconductor industry. As a result, we may not be able to prevent competitors from developing and commercializing competitive products in territories included in all of our licenses. In the future, we may need to obtain additional licenses, renew existing license agreements or otherwise replace existing technology. We are unable to predict whether these license agreements can be obtained or renewed or the technology can be replaced on acceptable terms, or at all. In that event, we may be required to expend significant time and resources to redesign our technology, products or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. Any disputes with our licensing partners with respect to such agreements could narrow what we believe to be the scope of our rights to the relevant intellectual property, increase our obligations under such agreements or restrict our ability to develop and market our current or new products and services. Any of these events could negatively impact our business, financial condition and results of operations.
Further, certain of our agreements contain provisions permitting the other party to become a party to, or a beneficiary of, a source code escrow agreement under which we place certain proprietary source code in escrow with a third party. Under these source code escrow agreements, our source code may be released to the party upon the occurrence of specified events, such as in situations of our bankruptcy or insolvency or our failure to support or maintain our source code. Disclosing the content of our source code may limit the intellectual property protection we can obtain or maintain for our source code or our software containing such source code and may facilitate intellectual property infringement, misappropriation or other violation claims against us.
In addition, from time to time, we enter into agreements with select customers, vendors and others to customize and otherwise develop technologies and intellectual property, and we expect to enter into new, similar arrangements from time to time in the future. Some of these agreements contain terms that

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allocate ownership of, and rights to use and enforce, technologies and intellectual property rights. As a result of these agreements, we may be required to limit use of, or refrain from using, certain of such related technologies and intellectual property rights in parts of our business. Determining inventorship and ownership of technologies and intellectual property rights resulting from development activities can be difficult and uncertain. Disputes may arise with customers, vendors and other third parties regarding ownership of and rights to use and enforce these technologies and intellectual property rights or regarding interpretation of our agreements with these third parties, and these disputes may result in claims against us or claims that intellectual property rights, which we believe we own, are not owned by us, are not enforceable, or are invalid. The cost and effort to resolve these types of disputes, or the loss of intellectual property rights if we lose these types of disputes, could harm our business and financial condition.
A breach of our information technology systems or physical security systems, or any actual or perceived violation of privacy, data protection or cybersecurity laws, could harm our business and operating results.
We rely on our information technology systems, as well as those of our vendors, suppliers and customers, to transmit, store and otherwise process electronic information (including sensitive data such as confidential business information and personal information relating to employees, customers and other business partners), and to manage or support a variety of critical business processes and activities. We and our vendors, suppliers and customers face various cybersecurity threats, including threats to our information technology infrastructure and attempts to gain access to our sensitive or proprietary information, denial-of-service attacks, requests for money transfers, ransomware, as well as threats to the physical security of our facilities and employees. In addition, we face cybersecurity threats from entities that may seek to target us through our customers, vendors, subcontractors, employees and other third parties with whom we do business. We may experience cybersecurity threats such as viruses and attacks by hackers targeting our information technology systems. We can provide no assurance that our current information technology systems, or those of the third parties upon which we rely, are fully protected against such cyber security threats. Although such events have not had a material impact on our financial condition, results of operations or liquidity or reputation to date, future threats could, among other things: cause harm to our business and our reputation; disrupt our operations; expose us to potential liability, regulatory actions and the loss of business; as well as impact our results of operations materially. We believe such attempts are increasing in number and in technical sophistication. In some instances, we, our customers, and the users of our products and services might be unaware of an incident or its magnitude and effects. Due to the evolving nature of these cybersecurity threats, we cannot predict the potential impact of any future incident.
While we take measures to protect the security of, and prevent unauthorized access to, our information technology systems and personal and proprietary information, the cybersecurity controls for our information technology systems, or those of our vendors, suppliers or customers, as well as other cybersecurity practices we follow, may not prevent unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, destruction of or loss of our data or the data of others (including personal information and proprietary information). Any actual or perceived cybersecurity incident could harm our business and operating results and could result in, among other things, unfavorable publicity, governmental inquiry and oversight, difficulty in marketing our services, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties including our customers and possible financial obligations for damages related to the theft or misuse of such information or inventory, any of which could negatively impact our business, financial condition and results of operations.
Furthermore, privacy, data protection and cybersecurity are subject to frequently changing and complex laws and regulations, which sometimes conflict among the various jurisdictions and countries in which we provide services. We are subject to a variety of local, state, national and international laws and regulations that apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal information in the different jurisdictions in which we operate. Privacy, data

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protection and cybersecurity laws and regulations, including the European Union’s General Data Protection Regulation and the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (CPRA) (collectively, CCPA), pose increasingly complex compliance challenges, which may increase compliance costs, and any failure to comply with privacy, data protection or cybersecurity laws and regulations could result in significant penalties. Compliance with U.S. and international privacy, data protection and cybersecurity laws and regulations could cause us to incur substantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business. Any inability or perceived inability to adequately address privacy, data protection or cybersecurity concerns, even if unfounded, or to successfully negotiate privacy, data protection or cybersecurity contractual terms with customers, or to comply with applicable laws and regulations relating to privacy, data protection or cybersecurity, could result in additional cost and liability to us, harm our reputation and brand, and could negatively impact our business, financial condition and results of operations. Furthermore, the PRC regulatory authorities have promulgated the Personal Information Protection Law of the PRC and the PRC Data Security Law, to ensure cybersecurity, data and personal information protection. The PRC Data Security Law is a comprehensive data security legislation in mainland China and aims to regulate a wide range of issues in relation to the collection, storage, processing, use, provision, transaction and publication of any kind of data. There is significant uncertainty in how PRC regulators will interpret and enforce these cybersecurity and data privacy laws, but they contain provisions that allow substantial government oversight and include fines for failure to obtain required approval from or complete required filing procedures with China’s cyber and data protection regulators for certain cross-border personal data-related data transfers.
The laws outlined above are only a sample of the governmental laws, regulations and other legal obligations related to privacy, data protection and cybersecurity to which we may be subject. Various aspects of these laws, including their interpretation and enforcement, remain unclear, resulting in further uncertainty and potentially requiring us to modify our data practices and policies and to incur substantial additional costs and expenses in an effort to comply. Because the interpretation and application of many such laws and regulations, remain uncertain and continue to evolve, it is possible that these laws and regulations may be interpreted and applied in a manner that is inconsistent with our data management practices or the features of our products or solutions, and we could face fines, lawsuits, regulatory investigations and other claims and penalties, and we could be required to fundamentally change our products or our business practices, all of which could have a material adverse effect on our business. Any inability, or perceived inability, to adequately address privacy and data protection concerns, or to comply with applicable laws, regulations, policies, industry standards, contractual obligations or other legal obligations, even if unfounded, could result in additional cost and liability to us, damage our reputation, inhibit sales and have a material adverse effect on our business, results of operations and financial condition.
We use certain software governed by open-source licenses, which under certain circumstances could materially adversely affect our business, financial condition, operating results and cash flow.
Certain of our software, as well as that of our customers and vendors, may be derived from so-called “open source” software that is generally made available to the public by its authors and/or other third parties. Open-source software is made available under licenses that impose certain obligations on us in the event we were to distribute derivative works of the open-source software. These obligations may require us to make source code for the derivative works available to the public and/or license such derivative works under a particular type of license, rather than the forms of license we customarily use to protect our intellectual property. In the event that the copyright holder of any open-source software were to successfully establish in court that we had not complied with the terms of a license for a particular work, we could be required to release the source code of that work to the public and/or stop distribution of that work if the license is terminated, which could adversely impact our business and results of operations.
While we take steps to monitor the use of all open-source software in our products, processes and technology and try to ensure that no open-source software is used in such a way as to require us to

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disclose the source code to the related product, processes or technology when we do not wish to do so, such use could inadvertently occur. Additionally, if a third party software provider has incorporated certain types of open-source software into software we license from such third party for our products, processes or technology, we could, under certain circumstances, be required to disclose the source code to our products, processes or technology. This could harm our intellectual property position and have a material adverse effect on our business, results of operations and financial condition.
Further, although some open-source vendors provide warranty and support agreements, it is common for such software to be available “as‐is” with no warranty, indemnity or support. Although we monitor our use of such open-source code to avoid subjecting our products to unintended conditions, such use, under certain circumstances, could materially adversely affect our business, financial condition and operating results and cash flow, including if we are required to take remedial action that may divert resources away from our development efforts.
Risks Relating to Investments in Cayman Islands Companies
We are a Cayman Islands exempted company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under U.S. law, you may have less protection for your shareholder rights than you would under U.S. law.
Our corporate affairs are governed by our memorandum and articles of association, as amended from time to time, the Cayman Islands Companies Act (as amended) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.
The Cayman Islands Companies Act provides that a shareholder of a Cayman company shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation. However, such rights are not available in respect of the shares of any class for which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent where, upon the merger or the consolidation, the shareholder receives, amongst other things, either:
(a) shares of a surviving or consolidated company, or depository receipts in respect thereof; or
(b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognized interdealer quotation system or held of record by more than two thousand holders.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as shareholders of a corporation incorporated in a jurisdiction in the United States.
The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as that from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly defined as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less prescriptive body of corporate laws than most jurisdictions in the United States. In addition, some U.S. states, such as Delaware, have more fulsome and judicially interpreted bodies of corporate law than the Cayman Islands.

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Because we are incorporated under the laws of the Cayman Islands, you may find it difficult to enforce a judgment of U.S. courts for civil liabilities under U.S. federal securities laws against us in the Cayman Islands or against our PRC or Hong Kong subsidiaries.
Credo Technology Group Holding Ltd is a holding company incorporated as an exempted company under the laws of the Cayman Islands. We conduct substantially all of our operations through our indirect, wholly-owned subsidiaries in the United States and internationally. As such, it may be difficult for investors to enforce judgments obtained in the United States courts against our directors or officers. The courts of the Cayman Islands are unlikely:
(i) to recognize or enforce against the Company judgments of courts of the United States predicated upon certain civil liability provisions of the securities laws of the United States or any state; and
(ii)    in original actions brought in the Cayman Islands, to impose liabilities against the Company predicated upon the civil liability provisions of the securities laws of the United States or any State, so far as liabilities imposed by those provisions are penal in nature.
In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and/or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders may have more difficulty protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a U.S. company.
Provisions in our amended and restated memorandum and articles of association may have the effect of discouraging lawsuits against our directors and officers.
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, breach of fiduciary duty, unconscionable behavior or behavior which falls within the broad stable of conduct identifiable as ‘equitable’ fraud on the part of the director or officer in question. Our amended and restated memorandum and articles of association provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful neglect or willful default. Our indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

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Risks Related to Ownership of Our Ordinary Shares
Our share price may be volatile and may decline, resulting in a loss of some or all of your investment.
The trading price and volume of our ordinary shares is likely to be volatile and could fluctuate significantly in response to numerous factors, many of which are beyond our control, including but not limited to:
• actual or anticipated fluctuations in our results of operations due to, among other things, changes in customer demand, product life cycles, pricing, ordering patterns and unforeseen operating costs;
• the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
• failure of securities analysts or industry analysts to initiate or maintain coverage of us, publish negative research or reports, changes in financial estimates or ratings by any securities analysts who follow us or our failure to meet these estimates or the expectations of investors;
• announcements by our significant customers of changes to their product offerings, business plans or strategies;
• announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;
• changes in operating performance and stock market valuations of other technology companies generally, or those in the data infrastructure or semiconductor industry;
• timing and seasonality of the end-market demand;
• cyclical fluctuations in the data infrastructure market and semiconductor industry;
• price and volume fluctuations in the overall stock market from time to time, including as a result of trends in the economy as a whole;
• actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally;
• new laws or regulations or new interpretations of existing laws, or regulations applicable to our business;
• changes in our management;
• general economic and market conditions;
• lawsuits threatened or filed against us; and
• other events or factors, including those resulting from war, incidents of terrorism or responses to these events.
In addition, the market for technology stocks and the stock markets in general have experienced extreme price and volume fluctuations. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and adversely affect our business, financial condition, and results of operations.

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Substantial future sales of our ordinary shares could cause the market price of our ordinary shares to decline.
The market price of our ordinary shares could decline as a result of substantial sales of our ordinary shares, particularly sales by our directors, executive officers and significant shareholders, or the perception in the market that holders of a large number of shares intend to sell their shares. As of May 2, 2026, we had outstanding a total of 185.4 million ordinary shares. All of these shares are freely tradable in the public market without restriction, except for any shares held by one of our existing “affiliates,” as that term is defined in Rule 144 under the Securities Act. As of May 2, 2026, we also had outstanding options and restricted stock units covering 10.8 million of our ordinary shares. All of the ordinary shares that are issuable upon exercise of the outstanding options and restricted stock units have been registered for public resale under the Securities Act. The warrants and ordinary shares will become eligible for sale in the public market to the extent such warrants and options are vested and exercised or such restricted stock units are settled, subject to compliance with applicable securities laws. Moreover, certain of our shareholders have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or our shareholders.
Our actual operating results may not meet our guidance and investor expectations, which would likely cause our share price to decline.
From time to time, we may release guidance in our earnings releases, earnings conference calls or otherwise, regarding our future performance that represent our management’s estimates as of the date of release. If given, this guidance, which will include forward-looking statements, will be based on projections prepared by our management. Projections are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. The principal reason that we expect to release guidance is to provide a basis for our management to discuss our business outlook with analysts and investors. With or without our guidance, analysts and investors may publish expectations regarding our business, financial condition and results of operations. We do not accept any responsibility for any projections or reports published by any such third parties. Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results. If our actual performance does not meet or exceed our guidance or investor expectations, the trading price of our ordinary shares is likely to decline.
If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our results of operations could fall below expectations of securities analysts and investors, resulting in a decline in the market price of our ordinary shares.
The preparation of financial statements in conformity with generally accepted accounting principles in the United States, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, inventory valuation, income taxes, impairment of long-lived assets, share-based compensation, operating leases and fair value of ordinary shares. If our assumptions change or if actual circumstances differ from those in our assumptions, our results of operations may be adversely affected and may fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our ordinary shares.

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Our executive officers, directors and their affiliates, if they choose to act together, have the ability to control or significantly influence all matters submitted to shareholders for approval.
As of May 2, 2026, our executive officers, directors and their affiliates, in the aggregate, beneficially owned approximately 9% of our outstanding ordinary shares. As a result, such persons, acting together, will have the ability to control or significantly influence all matters submitted to our board of directors or shareholders for approval, including the appointment of our management, the election and removal of directors and approval of any significant transaction, as well as our management and business affairs. This concentration of ownership may have the effect of delaying, deferring or preventing a change in control, impeding a merger, consolidation, takeover or other business combination involving us, or discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of our business, even if such a transaction would benefit other shareholders.
Anti-takeover provisions in our organizational documents may discourage our acquisition by a third party, which could limit shareholders’ opportunity to sell their ordinary shares at a premium.
Our amended and restated memorandum and articles of association include provisions that could limit the ability of others to acquire control of us, modify our structure or cause us to engage in change of control transactions. These provisions include, among other things:
• a classified board of directors with staggered three-year terms;
• the authorization of the issuance of “blank check” preferred shares that our board of directors could use to implement a shareholder rights plan;
• restrictions on the ability of our shareholders to call meetings or make shareholder proposals;
• our amended and restated memorandum and articles of association may only be amended by a vote of shareholders representing at least two-thirds of the outstanding ordinary shares or by a unanimous written consent;
• shareholders are not permitted to increase the size of our board, fill vacancies on our board or remove directors without cause; and
• the ability of our board of directors, without action by our shareholders, to issue 50,000,000 preferred shares and to issue additional ordinary shares that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change in control.
These provisions could deter, delay or prevent a third party from acquiring control of us in a tender offer or similar transactions, even if such transaction would benefit our shareholders. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our ordinary shares if they are viewed as discouraging future takeover attempts.
If a United States person is treated as owning 10% or more of our outstanding equity, such holder may be subject to adverse U.S. federal income tax consequences.
If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our outstanding equity, such person may be treated as a “United States shareholder” with respect to each controlled foreign corporation, or CFC, in our group. Because our group includes a U.S. subsidiary, certain of our non-U.S. subsidiaries will be treated as CFCs (regardless of whether we are treated as a CFC). A United States shareholder of a CFC may be required to report annually and include in its U.S. taxable income its pro rata share of such CFC’s “Subpart F income,” “global intangible low-taxed income,” and investments in U.S. property, regardless of whether we make any distributions to the United States shareholder. An individual that is a United States shareholder with respect to a CFC generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. Failure to comply with these reporting obligations may subject a United States shareholder to significant monetary penalties and may

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prevent the statute of limitations with respect to such shareholder’s U.S. federal income tax return for the year for which reporting was due from starting. We are not required to assist investors in determining whether we are or any of our non-U.S. subsidiaries is treated as a CFC or whether any investor is treated as a United States shareholder with respect to us or our non-U.S. subsidiaries or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. The United States Internal Revenue Service has provided limited guidance on situations in which investors may rely on publicly available information to comply with their reporting and tax paying obligations with respect to foreign-controlled CFCs. A United States investor should consult its advisors regarding the potential application of these rules to an investment in our ordinary shares.
General Risk Factors
We have pursued, and may in the future pursue, mergers, acquisitions, investments in other companies and dispositions, which could adversely affect our results of operations.
Our growth strategy includes acquiring or investing in businesses that offer complementary products, services and technologies, or enhancing our market coverage, business strategy or technological capabilities. Any acquisitions we may undertake, including the acquisitions of Hyperlume, Inc. (Hyperlume) and CoMira Solutions Inc. (Comira), and their integrations involve risks and uncertainties, which could impede the execution of our business strategy, such as:
• U.S. and non-U.S. regulatory approval may take longer than anticipated, not be forthcoming or contain burdensome conditions, including due to U.S.-international relationships and other geopolitical events;
• market volatility impacting our ability or the cost to fund acquisitions or investments;
• unexpected delays, challenges and related expenses, and disruption of our business;
• diversion of management’s attention from daily operations and the pursuit of other opportunities;
• incurring significant restructuring charges and amortization expense, assuming liabilities and ongoing or new lawsuits, potential impairment of acquired goodwill and other intangible assets, and increasing our expenses and working capital requirements;
• the potential for deficiencies in internal controls of the acquired business, as well as implementing our own management information systems, operating systems and internal controls for the acquired business;
• our due diligence process may fail to identify significant issues with the acquired business’ products, financial disclosures, accounting practices, legal, tax and other contingencies, compliance with local laws and regulations (and interpretations thereof) in the U.S. and multiple international jurisdictions;
• difficulties integrating the acquired business or company and managing and retaining acquired employees, vendors and customers; and
• inaccuracies in our original estimates and assumptions used to assess a transaction, which may result in us not realizing the expected financial or strategic benefits of any such transaction.
For all these reasons, our pursuit of an acquisition, investment, divestiture, or merger could cause our actual results to differ materially from those anticipated.

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We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract or retain highly skilled employees could adversely affect our business.
Our success depends largely upon the continued services of our executive officers and other key employees, including our engineering and sales and marketing personnel. From time to time, there may be changes in our executive management team or other key personnel, which could disrupt our business. We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time and with little or no notice. The loss of one or more of our executive officers or other key employees could have an adverse effect on our business, financial condition and results of operations.
In addition, to execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel in the San Francisco Bay Area, where our headquarters is located, and in other locations where we maintain offices, is intense, especially for engineers with applications, or analog circuit technology design expertise. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources. In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. If the perceived value of our equity awards declines, it may adversely affect our ability to recruit and retain highly skilled employees. Further, changes in immigration policies may negatively impact our ability to attract and retain personnel, including personnel with specialized technical expertise. If we fail to attract new personnel or fail to retain or motivate our current personnel, our business, financial condition and results of operations could be adversely affected.
Catastrophic events may disrupt our business.
Our corporate headquarters, our foundry vendor and some of our suppliers are located in areas that are in active earthquake zones or are subject to power outages, natural disasters, political, social or economic unrest and other potentially catastrophic events, any or all of which may increase as the result of climate change. In the event of a major earthquake, hurricane, flooding or other catastrophic event such as fire, power loss, telecommunications failure, cyber-attack, war, terrorist attack, political, social or economic unrest or disease outbreak, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our product development, cybersecurity breach or loss or other unauthorized processing of data, any of which could have an adverse effect on our business, financial condition or results of operations.
Litigation and other legal proceedings may adversely affect our business.
From time to time we may become involved in legal proceedings relating to patent and other intellectual property matters, product liability claims, employee claims, tort or contract claims, federal regulatory investigations, securities class action and other legal proceedings or investigations, which could have an adverse impact on our business, financial condition and results of operations and divert the attention of our management from the operation of our business. Litigation is inherently unpredictable and can result in excessive or unanticipated verdicts and/or injunctive relief that affect how we operate our business. We could incur judgments or enter into settlements of claims for monetary damages or for agreements to change the way we operate our business, or both. There may be an increase in the scope of these matters or there may be additional lawsuits, claims, proceedings or investigations in the future, which could have a material adverse effect on our business, financial condition and results of operations. Adverse publicity about regulatory or legal action against us could damage our reputation and brand

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image, undermine our customers’ confidence and reduce long-term demand for our products, even if the regulatory or legal action is unfounded or not material to our operations.
Market conditions and changing circumstances, some of which may be beyond our control, could impair our ability to access our existing cash, cash equivalents and investments and to timely pay key vendors and others.
Market conditions and changing circumstances, some of which may be beyond our control, could impair our ability to access our existing cash, cash equivalents and investments and to timely pay key vendors and others. For example, on March 10, 2023, Silicon Valley Bank (SVB) was placed into receivership with the Federal Deposit Insurance Corporation (FDIC), which resulted in all funds held at SVB being temporarily inaccessible by SVB’s customers. While we did not maintain any accounts with SVB, if other banks and financial institutions with whom we have banking relationships enter receivership or become insolvent in the future, we may be unable to access, and we may lose, some or all of our existing cash, cash equivalents and investments to the extent those funds are not insured or otherwise protected by the FDIC. In addition, in such circumstances we might not be able to timely pay key vendors and others. We regularly maintain cash balances that are not insured or are in excess of the FDIC’s insurance limit. Any delay in our ability to access our cash, cash equivalents and investments (or the loss of some or all of such funds) or to timely pay key vendors and others could have a material adverse effect on our operations and cause us to need to seek additional capital sooner than planned.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the applicable listing standards of Nasdaq. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We have developed and continue to refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the Securities and Exchange Commission (SEC) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and will continue to expend, significant resources, including accounting-related costs and significant management oversight. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. In addition, changes in accounting principles or interpretations could also challenge our internal controls and require that we establish new business processes, systems and controls to accommodate such changes. If these new systems, controls or standards and the associated process changes do not give rise to the benefits that we expect or do not operate as intended, it could adversely affect our financial reporting systems and processes, our ability to produce timely and accurate financial reports or the effectiveness of internal control over financial reporting. Moreover, our business may be harmed if we experience problems with any new systems and controls that result in delays in their implementation or increased costs to correct any post-implementation issues that may arise.
Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our business or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any

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failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in our periodic reports that are filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our ordinary shares. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the Nasdaq.
Section 404 of the Sarbanes-Oxley Act requires us to include in our annual reports on Form 10-K an assessment by management of the effectiveness of our internal controls over financial reporting. In addition, we are required to have our independent public accounting firm attest to and report on management’s assessment of the effectiveness of our internal control over financial reporting because we ceased to qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act (JOBS Act) as of April 29, 2023. In the future, if we are unable to conclude that we have effective internal control over financial reporting or, if our independent auditors are unable to provide us with an attestation and an unqualified report as to the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our financial statements, which could result in a decline in the trading price of our ordinary shares.

Item 1B. Unresolved Staff Comments
None.

Item 1C. Cybersecurity
Risk Management and Strategy
We have established policies and processes for assessing, identifying and managing material risk from cybersecurity threats. These policies and processes are intended to protect the confidentiality, integrity and availability of our critical information systems and our critical data, including intellectual property and confidential information that is proprietary, strategic or competitive in nature.
We conduct periodic risk assessments to identify cybersecurity threats. These risk assessments include identifying reasonably foreseeable potential internal and external risks, the likelihood of occurrence and any potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, controls and other safeguards in place to manage such risks. We also use third-party service providers from time to time in connection with our risk assessment processes.
As part of our overall risk management program, we provide training to employees at all levels on cybersecurity awareness and the protection of confidential information. In addition, we have established a cybersecurity incident response process that includes procedures for detecting and responding to cybersecurity incidents. The Company also participates in a cybersecurity risk insurance policy.
As of the date of this Annual Report on Form 10-K, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. See Item 1A, “Risk Factors,” in this annual report on Form 10-K , including the risk factors entitled “Security breaches, cyberattacks and other disruptions to information technology systems owned or maintained by us or third parties, such as vendors and suppliers, could disrupt our operations, compromise the confidentiality of private customer data or our intellectual property, and adversely affect our business, reputation, operations and financial results” and “Our business may be impacted by information technology system failures or network disruptions and lack of redundancy” in this Annual Report on Form 10-K for additional information about our cybersecurity-related risks.

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Cybersecurity Governance
Our Board considers cybersecurity risk as part of its overall risk oversight function and has delegated to the Nominating and Corporate Governance Committee of the Board (the NCG Committee) overall oversight of cybersecurity matters and other policies and internal controls regarding cybersecurity risks. The Audit Committee of the Board (the Audit Committee) is responsible for oversight of disclosure controls with respect to potential cybersecurity incidents as well as the Company’s compliance with SEC rules applicable to cybersecurity risk management.
In fiscal 2026 the Audit Committee and the NCG Committee received reports on our cybersecurity risk management initiatives. In addition, our management team updates the Board with respect to the Company’s overall cybersecurity risk posture and initiatives in order to improve our cybersecurity risk controls. As necessary, the Audit Committee will oversee management’s responses to any significant cybersecurity incidents including any disclosures required by law. The full Board also receives a briefing from management on our cyber risk management program at least annually.
Our management team, which includes our IT management team , is responsible for day-to-day implementation, management and evaluation of our cybersecurity risk assessment and management processes. The IT management team has primary responsibility for our overall cybersecurity risk management program, including monitoring the prevention, detection, mitigation and remediation of cybersecurity incidents, and works in partnership with our other business leaders, including our Chief Legal Officer, Chief of Staff and internal audit function, as needed. Our IT management team supervises both our internal cybersecurity personnel and any retained external cybersecurity consultants. Our Director of IT has served in various roles in information technology and information security for over 15 years.
Our cybersecurity incident response process is designed to escalate significant cybersecurity incidents to a team of business leaders, including, but not limited to, our Chief of Staff, Chief Legal Officer and Chief Financial Officer. In the case of a cybersecurity incident, this team of business leaders will work with our incident response team to help determine the severity of the impact of a cybersecurity incident, as well as to help mitigate and remediate cybersecurity incidents of which they are notified. The incident response team will also work under the oversight of legal counsel and the Audit Committee to determine whether an incident is material for disclosure purposes under applicable law.

Item 2. Properties
The following table presents the approximate square footage of our significant leased facilities as of May 2, 2026:

(Square Feet)
Locations Primary Use Leased Facilities (1)
United States Research and design, sales and marketing, administration and operations 143,945 
Mainland China Research and design, administration and operations 99,088 
Taiwan Research and design, administration and operations 56,259 
Canada Research and design, administration and operations 8,200 
Hong Kong Research and design, administration and operations 7,083 
Singapore Administration and operations 2,874 
Total 317,449 

(1) Lease terms expire in various years from 2026 through 2033, and generally include renewals at our option.

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We also lease smaller facilities in various domestic and international locations, which are occupied by administrative and sales personnel. We believe that our existing facilities are sufficient for our current needs. We intend to add new facilities and expand our existing facilities as we continue to add employees and grow our business. We believe that new spaces will be available at reasonable terms in the future in order to meet our needs.

Item 3. Legal Proceedings
From time to time, we are involved in various legal proceedings arising in the ordinary course of our business. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on us. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
The information set forth under “Note 9 - Commitments and Contingencies” in our notes to the consolidated financial statements set forth in Part II, Item 8 of this Annual Report on Form 10-K is incorporated herein by reference. For a discussion of certain risks associated with legal proceedings, please see Part I, Item 1A, “Risk Factors” above.

Item 4. Mine Safety Disclosures
Not Applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Since our initial public offering in January 2022, our ordinary shares have been traded on the Nasdaq Global Select Market under the symbol “CRDO”. Prior to that time, there was no public market for our ordinary shares.
Holders
On June 8, 2026, there were 47 shareholders of record holding our ordinary shares. We cannot estimate the number of beneficial owners since many brokers and other institutions hold our ordinary shares on behalf of shareholders.
Dividends
We have never declared or paid any cash dividends on our ordinary shares and do not currently intend to do so in the foreseeable future.
Share Price Performance Graph
This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference into any filings under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The graph below compares the cumulative total return on our ordinary shares with the cumulative total return of the NASDAQ Composite Index and the Philadelphia Semiconductor Index during the period from January 27, 2022 to May 2, 2026. The graph compares a $100 investment on January 27, 2022 in our ordinary shares with a $100 investment on January 27, 2022 in each index and assumes that any dividends were reinvested. Shareholder returns over the indicated periods should not be considered indicative of future share prices or shareholder returns.

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Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
None.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in those forward-looking statements. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors.”
A discussion regarding our financial condition and our results of operations for the fiscal year ended May 2, 2026 compared to the fiscal year ended May 3, 2025 is presented below. A discussion regarding our results of operations for the fiscal year ended May 3, 2025 compared to the fiscal year ended April 27, 2024 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended May 3, 2025 , filed with the SEC on July 2, 2025.

Overview
At Credo, our mission is to transform connectivity at scale through fast, reliable and energy-efficient system solutions. 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 Company’s product portfolio includes ZeroFlap (ZF) Active Electrical Cables (AECs) and ZF optical transceivers, OmniConnect memory solutions and a suite of retimers and Digital Signal Processors (DSPs) for optical and copper Ethernet and PCIe, all leveraging the PILOT diagnostic and analytics software platform. Our innovations enable our customers to connect the systems that connect the world.
Our connectivity solutions are optimized for optical and electrical Ethernet, PCIe and emerging UALink, ESUN and SUE applications, ranging in speeds from 32G (or Gigabits per second per lane) to 200G. Our products are based on our own optimized Serializer/Deserializer (SerDes) and DSP technologies. Our product families include integrated circuits (ICs), Active Electrical Cables (AECs) and SerDes Chiplets. Our intellectual property (IP) solutions consist primarily of SerDes IP licensing.
Artificial Intelligence (AI) has bred a new generation of data centers over the past 5 years that depend much more heavily on high speed, reliable communications for Front End, Scale Out, Scale Up and emerging Scale In Networks. Our proprietary SerDes and DSP technologies enable us to achieve similar performance to leading competitors’ products but at a lower cost and more highly available legacy node (n-1 advantage). Beyond power and performance, Credo continues to innovate to address customers’ system level requirements. We partnered with Oracle to develop our ZeroFlap Optics that helps address the reliability issues known as Link Flap which plague commodity options in AI data centers enabling faster AI cluster turn on and time to first revenue.
The multibillion-dollar data infrastructure market that we serve is driven largely by hyperscale data centers (hyperscalers) and emerging NeoClouds building AI/Machine Learning (ML) Infrastructure as well as general compute and data centers. The demands for increased bandwidth, better reliability and improved power efficiency have grown as AI model sizes have increased from billions to trillions of parameters and the workload has expanded from training to inference.

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We design, market and sell both product, software and IP solutions. We help define industry conventions and standards within the markets we target by collaborating with technology leaders and standards bodies. We contract with a variety of manufacturing partners to build our products based on our proprietary SerDes and DSP technologies. We develop standard solutions we can sell broadly to our end markets and also develop tailored solutions designed to address specific customer needs. Once developed, these tailored solutions can generally be broadly leveraged across our portfolio and we are able to sell the part or license the IP to the broader market.
During fiscal 2026 and 2025, we generated $1.3 billion and $436.8 million in total revenue, respectively. Geographically, 58% and 15% of our total revenue in fiscal 2026 and 2025 was generated from customers in North America, and 42% and 85% of our total revenue in fiscal 2026 and 2025 was generated from customers in the rest of the world, primarily in Asia. During fiscal 2026 and 2025, we generated $472.3 million and $52.2 million of net income, respectively.
We derive the substantial majority of our revenue from a limited number of customers. We anticipate we will continue to derive a significant portion of our revenue from a limited number of customers for the foreseeable future. We expect that as our products are more widely adopted and as our number of customers increase, customer concentration will decrease.
We sell our products to hyperscalers, Neoclouds, original equipment manufacturers (OEMs), original design manufacturers (ODMs), contract manufacturers (CM) and optical module manufacturers, as well as to companies in the enterprise and HPC markets. We work closely and have engagements with industry-leading companies across these segments. A relatively small number customers have historically accounted for and continue to account for a significant portion of our revenue. We report revenue by customer in our financial statement disclosure based on the contracting parties who place purchase orders or sign revenue contracts with us. See Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. However, certain of our end customers have their contract manufacturing partners place orders with us. As a result, the contract manufacturers, rather than the end customers, are reported as our customers for financial reporting purposes. As a supplement to our financial statement footnote disclosure, and to provide further insight into our end customer concentration, the following table summarizes our revenue by customer as a percentage of total revenue based on end customer profile, rather than based on the contracting parties who place purchase orders or sign revenue contracts with us:

Year Ended
May 2, 2026 May 3, 2025
Revenue:
Customer B 32  % *
Customer D 33  % 63  %
Customer E 19  % *

* Less than 10% of total revenue.

Our Business Model
We are a product-focused business with a strong foundation in IP, pioneering comprehensive connectivity solutions that deliver bandwidth, scalability and end-to-end signal integrity for next-generation platforms.
We utilize a fabless business model, working with a network of third parties to manufacture, assemble and test our connectivity products. This approach allows us to focus our engineering and design resources on our core competencies and to control our fixed costs and capital expenditures.

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We employ a two-pronged sales strategy targeting both the end users of our products, as well as the suppliers of our end users. By engaging directly with the end user, we are able to better understand the needs of our customers and cater our solutions to their most pressing connectivity requirements.
This strategy has enabled us to become the preferred vendor to a number of our customers who, in turn, in some cases, require their suppliers, OEMs, ODMs, CMs and optical module manufacturers to utilize our solutions.

Components of Our Operating Results
Revenue
Our revenues primarily consist of shipments of our AEC and ICs products. Our customers are primarily hyperscalers, NeoClouds and other cloud infrastructure providers. Our revenue is driven by various trends in these markets.
We recognize revenue upon transfer of control of promised goods and services in an amount that reflects the consideration we expect to receive in exchange for those goods and services. Our policy is to record revenue net of any applicable sales, use or excise taxes. Changes in our contract assets and contract liabilities primarily result from the timing difference between our performance and the customer’s payment. We fulfill our obligations under a contract with a customer by transferring products or services in exchange for consideration from the customer. We recognize a contract asset when we transfer products or services to a customer and the right to consideration is conditional on something other than the passage of time. Accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional. We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer and we have a future obligation to transfer products or services.
We transact with customers primarily pursuant to standard purchase orders for delivery of products and generally allow customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment date. We offer standard performance warranties of twelve months after product delivery and offer limited product return rights to certain distributors. We recognize product sales when we transfer control of promised goods in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods, net of accruals for estimated sales returns and rebates.
Cost of Revenue
Cost of revenue includes cost of materials, such as wafers processed by third-party foundries, cost associated with packaging and assembly, testing and shipping, cost of personnel, including share-based compensation, depreciation of equipment associated with manufacturing support, logistics and quality assurance, warranty cost, amortization of intellectual property purchased from third parties, write-down of inventories and amortization of production mask costs.
Research and Development Expenses
Research and development expenses consist of costs incurred in performing research and development activities and includes salaries, share-based compensation, employee benefits, occupancy costs, pre-production engineering mask costs, overhead costs and prototype wafer, packaging and test costs. Research and development costs are expensed as incurred.
We believe that continued investments in our products are important to our future growth and, as a result, we expect our research and development expenses to continue to increase in absolute dollars.

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Selling, General and Administrative Expenses
Selling expenses consist of personnel costs including salaries, benefits and share-based compensation expense, field application engineering support, samples to customers, shipping costs and travel and entertainment costs.
General and administrative expenses consist primarily of personnel costs including salaries, benefits and share-based compensation, related to corporate, finance, legal and human resource functions, contractor and professional services fees, audit and compliance expenses, insurance costs, acquisition and integration-related expenses and general corporate expenses including allocated facilities expenses.
Other Income and Expense, Net
Other income and expense, net consists primarily of interest income from cash and cash equivalents and short-term investments and interest expense relating to certain purchases of computer equipment and software.
Provision for Income Taxes
Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. The Company uses the asset and liability method to account for income taxes. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
We account for uncertain tax positions in accordance with ASC 740‑10, Accounting for Uncertainty in Income Taxes . We recognize the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and only in an amount more likely than not to be sustained upon review by the tax authorities. Interest and penalties related to uncertain tax positions are classified in the consolidated financial statements as income tax expense.

Results of Operations
Years Ended May 2, 2026 and May 3, 2025

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The following table sets forth information derived from our consolidated statements of operations expressed as a percentage of total revenue:

Year Ended
May 2, 2026 May 3, 2025
Revenue 100.0  % 100.0  %
Cost of revenue 32.0  % 35.2  %
Gross margin 68.0  % 64.8  %
Operating expenses:
Research and development 20.9  % 33.6  %
Selling, general and administrative 13.8  % 22.6  %
Total operating expenses 34.7  % 56.3  %
Operating income 33.3  % 8.5  %
Other income, net 2.3  % 4.1  %
Income before income taxes 35.6  % 12.6  %
Provision for income taxes 0.2  % 0.7  %
Net income 35.4  % 11.9  %

Comparison of Years Ended May 2, 2026 and May 3, 2025
Revenue

Year Ended % Change
May 2, 2026 May 3, 2025
(in thousands, except percentages)
Revenue $ 1,335,116  $ 436,775  205.7  %

Revenue for fiscal 2026 increased by $898.3 million as compared to fiscal 2025 primarily due to significant increase in volume unit shipments for AEC products. The sales increase was primarily driven by the ramp-up of our AEC solutions at our hyperscale data center customers during fiscal 2026 which contributed over 99% of the increase in revenue.
Cost of Revenue

Year Ended % Change
May 2, 2026 May 3, 2025
(in thousands, except percentages)
Cost of revenue $ 426,767  $ 153,866  177.4  %

Cost of revenue increased by $272.9 million primarily due to significant increase of unit shipments for our AEC products discussed above.
Gross Profit and Gross Margin

Year Ended % Change
May 2, 2026 May 3, 2025
(in thousands, except percentages)
Gross profit $ 908,349  $ 282,909  221.1  %
Gross margin 68.0  % 64.8  %

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Gross margin increased by 3.2 percentage points in fiscal 2026 primarily driven by the improved economies of scale in our revenue.
Research and Development

Year Ended % Change
May 2, 2026 May 3, 2025
(in thousands, except percentages)
Research and development $ 279,381  $ 146,867  90.2  %
% of total revenue 20.9  % 33.6  %

Research and development expenses for fiscal 2026 increased by $132.5 million compared to fiscal 2025. The increase was due primarily to a $60.9 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, an $18.8 million increase in personnel costs primarily as a result of new hires for product development, a $35.4 million increase in design activities and higher engineering activities relating to testing and laboratory supplies for new product development, a $5.1 million increase in acquisition and integration related costs relating to the business acquisitions and a $4.0 million increase in depreciation expense driven by increased computer equipment and software and laboratory equipment utilized in research and development activities.
Selling, General and Administrative

Year Ended % Change
May 2, 2026 May 3, 2025
(in thousands, except percentages)
Selling, general and administrative $ 183,963  $ 98,918  86.0  %
% of total revenue 13.8  % 22.6  %

Selling, general and administrative expenses for fiscal 2026 increased by $85.0 million compared to fiscal 2025. The increase was due primarily to a $44.4 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $15.1 million increase in personnel costs as a result of higher selling, general and administrative headcount and a $14.8 million increase in external professional fees relating to general and administrative function.
Provision for Income Taxes

Year Ended % Change
May 2, 2026 May 3, 2025
(in thousands, except percentages)
Provision for income taxes
$ 3,156  $ 2,687  17.5  %
% of total revenue 0.2  % 0.7  %

Provision for income taxes in fiscal 2026 increased by $0.5 million compared to the same period in fiscal 2025. The increase was primarily driven by higher pre-tax income generated in tax-paying jurisdictions during the current year relative to the same period in fiscal 2025.

Liquidity and Capital Resources
Our activities consist primarily of selling our products. As of May 2, 2026 and May 3, 2025, we had cash and cash equivalents of $1.2 billion and $236.3 million, respectively, and working capital of $1.8 billion and $605.8 million, respectively. Our principal use of cash is to fund our operations and invest in

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research and development and acquisitions of complementary businesses or technologies to support our growth. See also Note 9 to our consolidated financial statements included in this Annual Report on Form 10-K for a further discussion of our cash requirements under non-cancelable purchase obligations.
During fiscal 2026, the Company received $736.3 million in net proceeds through the issuance of 4.8 million ordinary shares under the ATM Offering (defined below). See Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a further discussion of our arrangement under the ATM Offering. We believe our existing cash and cash equivalents and other components of working capital will be sufficient to meet our needs for at least the next 12 months and in the longer term. Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, customer demand and the continuing market acceptance of our solutions. In the event that we need to borrow funds or issue additional equity, we cannot be assured that any such additional financing will be available on terms acceptable to us, if at all. If we are unable to raise additional capital when we need it, our business, results of operations and financial condition would be adversely affected.
The following table summarizes our cash flows for the periods indicated.

Year Ended
May 2, 2026 May 3, 2025
(in thousands)
Net cash provided by operating activities
$ 464,292  $ 65,083 
Net cash provided by (used in) investing activities $ (253,528) $ 111,990 
Net cash provided by (used in) financing activities
$ 717,629  $ (7,728)

Cash Flows Provided by Operating Activities
Net cash provided by operating activities was $464.3 million for fiscal 2026. The cash inflows from operating activities for fiscal 2026 were primarily due to net income of $472.3 million adjusted for the following non-cash items: share-based compensation expense of $182.6 million, depreciation and amortization of $34.6 million, write-down for excess and obsolete inventory of $15.1 million and other non-cash items of $1.9 million. This was offset by $242.3 million of cash outflows for working capital purposes. The cash outflows from working capital for fiscal 2026 were primarily driven by (a) an increase in accounts receivable of $70.8 million primarily due to increased sales in the fiscal 2026 compared to fiscal 2025 and timing of collection; (b) an increase in inventory of $174.0 million to support unfulfilled backlog and related new product ramps; (c) an increase in other current and non-current assets of $71.3 million of payment for refundable deposits to the suppliers in exchange for reserved manufacturing production capacity. This was offset by increases in accounts payable of $48.8 million and accrued compensation and benefits, other current liabilities and other non-current liabilities of $25.1 million due to increased purchases of inventory to support growing demand for our products.
Net cash used in operating activities was $65.1 million for fiscal 2025. The cash inflows from operating activities for fiscal 2025 were primarily due to net income of $52.2 million adjusted for the following non-cash items: share-based compensation expense of $77.4 million, depreciation and amortization of $21.9 million and other non-cash items of $22.0 million. This was offset by $108.4 million of cash outflows for working capital purposes. The cash outflows from working capital for fiscal 2025 were primarily driven by (a) an increase in accounts receivable of $102.5 million primarily due to increased sales in the fiscal 2025 compared to fiscal 2024 and timing of collection; (b) and an increase in inventory of $70.5 million to support unfulfilled backlog and related new product ramps. This was offset by increases in account payable of $41.9 million and accrued compensation and benefits, other current liabilities and other non-current liabilities of $15.9 million due to increased purchases of inventory to support growing demand for our products.
Cash Flows Provided by (Used in) Investing Activities

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Net cash used in investing activities of $253.5 million for fiscal 2026 was attributable to purchases of property and equipment of $57.3 million, investments in certificates of deposit of $393.3 million and acquisitions of Hyperlume and Comira for $112.9 million, offset by maturities of investment in certificates of deposit of $310.0 million. Purchases of property and equipment primarily relate to mask sets purchases for new products introduced or in process of being introduced and computer equipment and software used for research and development purposes. The acquisitions were primarily intended to expand the Company’s comprehensive portfolio of end-to-end system-level connectivity solutions.
Net cash used in investing activities of $112.0 million for fiscal 2025 was attributable to maturities of investment in certificates of deposit of $406.8 million, partially offset by purchases of property and equipment of $36.1 million and investment in certificates of deposit of $258.7 million. Purchases of property and equipment primarily relate to mask sets purchases for new products introduced or in process of being introduced and computer equipment and software used for research and development purposes.
Cash Flows Provided by (Used in) Financing Activities
Net cash provided by financing activities of $717.6 million for fiscal 2026 was primarily attributable to $736.3 million in proceeds from the ATM Offering and $7.1 million in proceeds from exercises of employee share options and the issuance of shares under our employee share purchase plan, offset by $19.2 million tax withheld related to RSU settlement and $6.6 million in payments for long-term technology license obligations.
Net cash used in financing activities of $7.7 million for fiscal 2025 was primarily attributable to $9.3 million tax withheld related to RSU settlement and $6.3 million in payments for long-term technology license obligations, offset by $7.8 million in proceeds from exercises of employee share options and the issuance of shares under our employee share purchase plan.

Critical Accounting Estimates
We prepare our financial statements in conformity with GAAP. The preparation of financial statements in accordance with GAAP requires certain estimates, assumptions and judgments to be made that may affect our consolidated financial statements. Accounting policies that have a significant impact on our results are described in Note 2 to our consolidated financial statements included elsewhere in this filing. The accounting policies discussed in this section are those that we consider to be the most critical. We consider an accounting policy to be critical if the policy is subject to a material level of judgment and if changes in those judgments are reasonably likely to materially impact our results.
We base our estimates and judgments on our historical experience, knowledge of current conditions and our beliefs of what could occur in the future, given the available information. Estimates are used for, but not limited to write-down for excess and obsolete inventories. Actual results may differ from those estimates and such differences may be material to the financial statements. See Note 2 Significant Accounting Policies included in Part II, Item 8 of this Annual Report on Form 10-K for further information on use of estimates.
We continue to monitor and assess our critical estimates in light of developments, and as events continue to evolve and additional information becomes available, our estimates may change materially in future periods.
Inventory Valuation
We value our inventory, which includes raw materials, assembly and test, and other manufacturing costs, at the lower of cost and net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Net realizable value is the estimated selling price of our products in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We regularly review inventory quantities on hand and non-cancellable purchase commitments and record write-downs for excess and obsolete inventory based primarily on the shipment

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history and our estimated forecast of product demand. These factors are impacted by market and economic conditions, technology changes, new product introductions and changes in strategic direction. If the future demand for our products is less favorable than our forecasts, the value of the inventories may be required to be reduced, which could result in additional expense to us and affect our results of operations. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that we use to calculate our inventory reserve. However, if estimates regarding customer demand are inaccurate or changes in technology affect demand for certain products in an unforeseen manner, we may be exposed to losses or gains that could be material.
Recent Accounting Pronouncements
For more information, see Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Foreign Currency Exchange Risk
The majority of our sales and expenses are denominated in U.S. dollars. Since we operate in many countries, a portion of our international operational expenses is denominated in foreign currencies and exchange volatility could positively or negatively impact those operating expenses. Increases in the value of the U.S. dollar relative to other currencies could make our products more expensive, which could negatively impact our ability to compete. Conversely, decreases in the value of the U.S. dollar relative to other currencies could result in our suppliers raising their prices to continue doing business with us. Additionally, we may hold certain assets and liabilities, including potential tax liabilities, in local currency on our consolidated balance sheets. These tax liabilities would be settled in local currency. Foreign exchange gains and losses from remeasuring the tax liabilities are recorded to interest and other income, net. We do not believe that foreign exchange volatility has had a material impact on our current business or results of operations. However, fluctuations in currency exchange rates could have a greater effect on our business or results of operations in the future to the extent our expenses increasingly become denominated in foreign currencies.
Although we have not entered into foreign currency derivatives to hedge our foreign currency exposure to date, in the future, we may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. However, we may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures.
To provide an assessment of the foreign currency exchange risk associated with our foreign currency exposures within operating expense, we performed a sensitivity analysis to determine the impact that a hypothetical adverse change in exchange rates would have had on our financial statements, with all other variables held constant. If the U.S. dollar weakened by 10%, our operating expense in fiscal 2026 would have increased by approximately 1%.
Interest Rate Risk
We maintain an investment policy that requires minimum credit ratings and diversification of credit risk. We invest our excess cash primarily in money market mutual funds and time deposits. These investments are recorded on our consolidated balance sheets at fair market value with their related unrealized gain or loss reflected as a component of accumulated other comprehensive income (loss). Investments in both fixed-rate and floating-rate interest-earning securities carry a degree of interest rate risk. The fair market value of fixed-rate securities may be adversely impacted due to a rise in interest rates, while floating-rate securities may produce less income than predicted if interest rates fall.

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Item 8. Financial Statements and Supplementary Data
CREDO TECHNOLOGY GROUP HOLDING LTD
CONSOLIDATED FINANCIAL STATEMENTS
Content

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
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Consolidated Balance Sheets
75

Consolidated Statements of Operations
76

Consolidated Statements of Comprehensive Income (Loss)
77

Consolidated Statements Shareholders’ Equity
78

Consolidated Statements of Cash Flows
79

Notes to Consolidated Financial Statements
80

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Credo Technology Group Holding Ltd
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Credo Technology Group Holding Ltd (the Company) as of May 2, 2026 and May 3, 2025, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended May 2, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at May 2, 2026 and May 3, 2025, and the results of its operations and its cash flows for each of the three years in the period ended May 2, 2026, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of May 2, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated June 15, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

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Inventory Valuation

Description of the Matter

The Company’s inventories totaled $250.8 million as of May 2, 2026, representing 10.9% of total assets. As explained in Note 2 to the consolidated financial statements, the Company values inventories at the lower of cost and net realizable value in each reporting period. Excess and obsolete inventory is written down to its estimated net realizable value if less than cost.     

Auditing management’s estimates for net realizable value of excess and obsolete inventory involved subjective auditor judgment because management’s assessment of whether a write down is required and the measurement of any excess of cost over net realizable value is judgmental and considers qualitative factors that are affected by market and economic conditions outside the Company’s control. In particular, the excess and obsolete inventory calculations are sensitive to significant assumptions, including demand for the Company’s products, which considers adjustments to sales forecasts for specific product considerations, including but not limited to new product launches.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's excess and obsolete inventory write-down process. This included controls over management’s assessment of net realizable value, including the determination of forecasted usage of inventories.

Our audit procedures included, among others, evaluating the product demand assumptions stated above and testing the completeness and accuracy of the underlying data used in management’s excess and obsolete inventory valuation assessment. We evaluated inventory levels compared to forecasted product demand, historical sales and specific product considerations. We also assessed the historical accuracy of management’s estimates and performed sensitivity analyses over the product demand assumptions to evaluate the changes in the excess and obsolete inventory estimates that would result from changes in the underlying assumptions.

/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2018.
San Jose, California
June 15, 2026

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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Credo Technology Group Holding Ltd
Opinion on Internal Control Over Financial Reporting
We have audited Credo Technology Group Holding Ltd’s internal control over financial reporting as of May 2, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Credo Technology Group Holding Ltd (the Company) maintained, in all material respects, effective internal control over financial reporting as of May 2, 2026, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 2, 2026 and May 3, 2025, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended May 2, 2026, and the related notes and our report dated June 15, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

73

/s/ Ernst & Young LLP
San Jose, California
June 15, 2026

74

Credo Technology Group Holding Ltd
Consolidated Balance Sheets
(in thousands, except per share amounts)

May 2, 2026 May 3, 2025
Assets
Current assets:
Cash and cash equivalents $ 1,164,952   $ 236,328  
Short-term investments 278,334   195,010  
Accounts receivable 233,377   162,144  
Inventories 250,831   90,029  
Other current assets 73,576   30,023  
Total current assets
2,001,070   713,534  
Property and equipment, net 101,605   63,631  
Right of use assets 24,640   15,234  
Goodwill 92,798   —  
Intangible assets, net 29,262   —  
Other non-current assets 46,244   16,858  
Total assets
$ 2,295,619   $ 809,257  
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 107,345   $ 56,158  
Accrued compensation and benefits 21,626   16,097  
Other current liabilities 68,120   35,456  
Total current liabilities 197,091   107,711  
Non-current operating lease liabilities 20,617   12,693  
Other non-current liabilities 14,299   7,271  
Total liabilities 232,007   127,675  
Commitments and contingencies (Note 9)
Shareholders' equity:
Ordinary shares, $ 0.00005 par value; 1,000,000 shares authorized; 185,419 and 171,169 shares issued and outstanding at May 2, 2026 and May 3, 2025, respectively
9 8
Additional paid in capital 1,672,060   765,173  
Accumulated other comprehensive income (loss) 2,426   ( 437 )
Retained earnings (accumulated deficit) 389,117   ( 83,162 )
Total shareholders' equity 2,063,612   681,582  
Total liabilities and shareholders' equity $ 2,295,619   $ 809,257  

The accompanying notes are an integral part of these consolidated financial statements.

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Credo Technology Group Holding Ltd
Consolidated Statements of Operations
(in thousands, except per share amounts)

Year Ended
May 2, 2026 May 3, 2025 April 27, 2024
Revenue $ 1,335,116   $ 436,775   $ 192,970  
Cost of revenue 426,767   153,866   73,539  
Gross profit 908,349   282,909   119,431  
Operating expenses:
Research and development 279,381   146,867   96,296  
Selling, general and administrative 183,963   98,918   60,193  
Total operating expenses 463,344   245,785   156,489  
Operating income (loss) 445,005   37,124   ( 37,058 )
Other income, net 30,430   17,746   14,313  
Income (loss) before income taxes 475,435   54,870   ( 22,745 )
Provision for income taxes 3,156   2,687   5,624  
Net income (loss) $ 472,279   $ 52,183   $ ( 28,369 )
Net income (loss) per share:
Basic
$ 2.65   $ 0.31   $ ( 0.18 )
Diluted
$ 2.51   $ 0.29   $ ( 0.18 )
Weighted-average shares used in computing net income (loss) per share:
Basic
178,538   167,505   155,091  
Diluted
188,232   181,158   155,091  

The accompanying notes are an integral part of these consolidated financial statements.

76

Credo Technology Group Holding Ltd
Consolidated Statements of Comprehensive Income (Loss)
(in thousands)

Year Ended
May 2, 2026 May 3, 2025 April 27, 2024
Net income (loss) $ 472,279   $ 52,183   $ ( 28,369 )
Other comprehensive income (loss):
Foreign currency translation income (loss) 2,863   82   ( 328 )
Total comprehensive income (loss) $ 475,142   $ 52,265   $ ( 28,697 )

The accompanying notes are an integral part of these consolidated financial statements.

77

Credo Technology Group Holding Ltd
Consolidated Statements of Shareholders’ Equity
(in thousands)

Ordinary Shares Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Shareholders’ Equity
Number of Shares Amount
Balances at April 29, 2023 148,651 $ 7   $ 454,795   $ ( 191 ) $ ( 106,976 ) $ 347,635  
Issuance of ordinary shares in connection with secondary public offering, net of offering costs 10,440 1   173,415   —  173,416  
Ordinary shares issued under equity incentive plans 5,329 —  7,055   —  —  7,055  
Tax withheld related to RSU settlement ( 115 ) —  ( 2,158 ) —  —  ( 2,158 )
Share-based compensation — —  39,022   —  —  39,022  
Warrant contra revenue — —  3,925   —  —  3,925  
Total comprehensive loss — —  —  ( 328 ) ( 28,369 ) ( 28,697 )
Balances at April 27, 2024 164,305   $ 8   $ 676,054   $ ( 519 ) $ ( 135,345 ) $ 540,198  
Ordinary shares issued under equity incentive plans 7,057 —  7,831   —  —  7,831  
Tax withheld related to RSU settlement ( 194 ) —  ( 9,253 ) —  —  ( 9,253 )
Share-based compensation
— —  77,355   —  —  77,355  
Warrant contra revenue — —  13,186   —  —  13,186  
Total comprehensive income — —  —  82   52,183   52,265  
Balances at May 3, 2025 171,169 $ 8   $ 765,173   $ ( 437 ) $ ( 83,162 ) $ 681,582  
Ordinary shares issued under At-The-Market Offering, net of issuance costs 4,820 —  736,327   —  —  736,327  
Ordinary shares issued upon exercise of Customer Warrant 3,761 —  —  —  —  — 
Ordinary shares issued under equity incentive plans 5,835   1   7,083   —  —  7,084  
Tax withheld related to RSU settlement ( 166 ) —  ( 19,161 ) —  —  ( 19,161 )
Share-based compensation — —  182,638   —  —  182,638  
Total comprehensive income — —  —  2,863   472,279   475,142  
Balances at May 2, 2026 185,419 $ 9   $ 1,672,060   $ 2,426   $ 389,117   $ 2,063,612  

The accompanying notes are an integral part of these consolidated financial statements.

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Credo Technology Group Holding Ltd
Consolidated Statements of Cash Flows
(in thousands)

Year Ended
May 2, 2026 May 3, 2025 April 27, 2024
Cash flows from operating activities:
Net income (loss) $ 472,279   $ 52,183   $ ( 28,369 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 34,637   21,938   13,771  
Amortization of acquired intangible assets 400   —   —  
Share-based compensation 182,638   77,355   39,022  
Warrant contra revenue —   13,186   3,925  
Write-downs for excess and obsolete inventory 15,116   7,952   4,354  
Impairment of assets 1,500   873   765  
Changes in operating assets and liabilities
Accounts receivable ( 70,798 ) ( 102,482 ) ( 10,121 )
Inventories ( 174,036 ) ( 70,470 ) 15,762  
Other current assets ( 44,801 ) 4,596   ( 19,836 )
Other non-current assets ( 26,453 ) 2,089   ( 654 )
Accounts payable 48,752   41,930   8,806  
Accrued compensation and benefits, other current liabilities and other non-current liabilities 25,058   15,933   5,312  
Net cash provided by operating activities 464,292   65,083   32,737  
Cash flows from investing activities:
Purchases of property and equipment ( 57,296 ) ( 36,061 ) ( 15,652 )
Purchases of short-term investments ( 393,334 ) ( 258,726 ) ( 403,587 )
Maturities of short-term investments 310,010   406,777   169,754  
Business acquisitions, net of cash acquired ( 112,908 ) —   —  
Net cash provided by (used in) investing activities ( 253,528 ) 111,990   ( 249,485 )
Cash flows from financing activities:
Proceeds from issuance of ordinary shares in connection with public offerings, net of offering costs 736,327   —   173,431  
Payments on technology license obligations ( 6,624 ) ( 6,306 ) ( 3,052 )
Proceeds from equity incentive plans 7,083   7,831   7,055  
Tax withheld related to RSU settlement ( 19,157 ) ( 9,253 ) ( 2,158 )
Net cash provided by (used in) financing activities 717,629   ( 7,728 ) 175,276  
Effect of exchange rate changes on cash 231   41   ( 169 )
Net increase (decrease) in cash and cash equivalents 928,624   169,386   ( 41,641 )
Cash and cash equivalents at beginning of the year 236,328   66,942   108,583  
Cash and cash equivalents at end of the year $ 1,164,952   $ 236,328   $ 66,942  
Supplemental cash flow information:
Income taxes paid $ 2,472   $ 1,447   $ 1,054  
Purchases of property and equipment included in accounts payable, other current liabilities and other non-current liabilities $ 16,106   $ 8,877   $ 8,287  

The accompanying notes are an integral part of these consolidated financial statements.

79

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

1. Description of Business and Basis of Presentation
Credo Technology Group Holding Ltd was formed as an exempted company under the laws of the Cayman Islands in September 2014. Credo Technology Group Holding Ltd directly owns Credo Technology Group Ltd., which owns, directly and indirectly, all of the shares of its subsidiaries in the United States (U.S.), Singapore, mainland China, Hong Kong, Taiwan and Canada. References to the “Company” in these notes refer to Credo Technology Group Holding Ltd and its subsidiaries on a consolidated basis, unless otherwise specified.
The Company’s mission is to transform connectivity at scale through fast, reliable and energy-efficient system solutions. 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 Company’s product portfolio includes ZeroFlap (ZF) Active Electrical Cables (AECs) and ZF optical transceivers, OmniConnect memory solutions and a suite of retimers and DSPs for optical and copper Ethernet and PCIe, all leveraging the Company’s PILOT diagnostic and analytics software platform. The Company’s innovations enable our customers to connect the systems that connect the world.
Basis of Presentation
These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The consolidated financial statements include the results of Credo Technology Group Holding Ltd and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The Company’s fiscal year is a 52- or 53-week period ending on the Saturday closest to April 30. The additional week in a 53-week year is added to the first quarter, making such quarter consist of 14 weeks. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The fiscal years ended May 2, 2026 (fiscal year 2026) and April 27, 2024 (fiscal year 2024) were both 52-week fiscal years. The fiscal year ended May 3, 2025 (fiscal year 2025) was a 53-week fiscal year.
Reclassifications
Certain prior period balances were reclassified to conform to the current period’s presentation. None of these reclassifications had an impact on reported net income (loss) or cash flows for any of the periods presented.
ATM Offering
In October 2025, the Company entered into an equity distribution agreement with Goldman Sachs & Co. LLC related to the sale from time to time of the Company’s ordinary shares for an aggregate offering price of up to $ 750 million (the ATM Offering). During the fiscal year ended May 2, 2026, the Company completed the ATM Offering and received $ 736.3 million in net proceeds through an issuance of 4.8 million ordinary shares. The total issuance costs were $ 13.7 million.

2. Significant Accounting Policies
Use of Estimates
The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes.
The Company bases its estimates and judgments on historical experience, knowledge of current conditions and beliefs of what could occur in the future, given the available information. Estimates are used for, but not limited to, write-down for excess and obsolete inventories, variable consideration from

80

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Notes to Consolidated Financial Statements

revenue contracts, determination of the fair value of share-based awards, the realizability of tax assets and estimates of tax reserves, valuation of acquired intangible assets, impairment of long-lived assets and goodwill (as applicable) and incremental borrowing rate used in the Company’s operating lease calculations. Actual results may differ from those estimates and such differences may be material to the financial statements. As new events continue to evolve and additional information becomes available, any changes to these estimates and assumptions will be recognized in the consolidated financial statements as soon as they become known.
Foreign Currency
All of the Company’s subsidiaries use U.S. dollars as their functional currency, except for its entities located in Taiwan, Canada and mainland China. The functional currencies of these entities are their respective local currency. Foreign currency assets and liabilities are remeasured into the functional currencies at the end-of-period exchange rates except for non-monetary assets and liabilities, which are remeasured at historical exchange rates. Revenue and expenses are remeasured at the exchange rates in effect during the period the transactions occurred, except for those expenses related to balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency transactions are included in the consolidated statements of operations as part of ‘other income, net’. Translation gains and losses are recorded in accumulated other comprehensive income as a component of shareholders' equity.
Cash, Cash Equivalents and Short-term Investments
Cash and cash equivalents are highly liquid investments with insignificant interest rate risk and maturities of three months or less at the time of acquisition. Cash and cash equivalents consist primarily of cash balances in the Company’s bank checking and savings accounts, and government and institutional money market funds.
Investments not considered cash equivalents and with maturities of one year or less from the consolidated balance sheet date are classified as short-term investments. Short-term investments consist of certificates of deposit with original maturity dates between three and twelve months.
The classification of our short-term investments is determined at the time of purchase, and such determination is reevaluated at each balance sheet date. Our short-term investments include certificates of deposit, which are classified as held-to-maturity. These investments are recorded at amortized cost basis. If the cost of an individual investment exceeds its fair value, we evaluate, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and our intent and ability to hold the investment. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established.
Business Combinations
The Company allocates the fair value of the purchase consideration of its business acquisitions to the tangible assets, liabilities and intangible assets acquired, including developed technology and in-process research and development (IPR&D), based on their estimated fair values under the acquisition method of accounting. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The estimates and assumptions used in valuing intangible assets include, but are not limited to, the amount and period involved in recreating the acquired intangible assets, discount rate used to determine the present value and asset lives. These estimates are inherently uncertain and, therefore, actual results may differ from the estimates made. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Accounts Receivable
Accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The Company performs periodic credit evaluations of its customers’ financial condition and does not require

81

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Notes to Consolidated Financial Statements

collateral from them. The Company assesses the collectability by reviewing accounts receivable on a customer-by-customer basis. To manage credit risk, management performs ongoing credit evaluations of the customers’ financial condition, monitors payment performance, and assesses current economic conditions, as well as reasonable and supportable forecasts of future economic conditions, that may affect collectability of the outstanding receivables. Management does not believe that an allowance for credit losses is needed as of May 2, 2026 or May 3, 2025 based on review of credit worthiness of the customers and their payment histories.
Inventory
The Company values its inventory, which includes raw materials, assembly and test, and other manufacturing costs, at the lower of cost and net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Net realizable value is the estimated selling price of the Company’s products in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company regularly reviews inventory quantities on hand and records write-downs for excess and obsolete inventory based primarily on the shipment history and its estimated forecast of product demand. These factors are impacted by market and economic conditions, technology changes, new product introductions and changes in strategic direction. If the future demand for the Company’s services and products is less favorable than the Company’s forecasts, the value of the inventories may be required to be reduced, which could result in additional expense to the Company and affect its results of operations. Once inventory is written down, its new value is maintained until it is sold, scrapped, or written down for further valuation losses.
Property and Equipment, Net
Property and equipment are stated at cost, net of accumulated depreciation and amortization. Additions, improvements and major renewals are capitalized, and maintenance, repairs and minor renewals are expensed as incurred. Assets are held in construction in progress until placed in service, upon which date, the Company begins to depreciate these assets. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of income in the period realized. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Useful lives by asset category are as follows:

Asset Category Useful Life (in years)
Computer equipment and software 3
Laboratory equipment 5
Production equipment 2 - 7

Leasehold improvements
5 or remaining lease term

Leases
The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (ROU) assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Operating lease ROU assets also include any initial direct costs and prepayments less lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. As the Company's leases do not provide an implicit rate, the Company uses its collateralized incremental borrowing rate based on the information available at the lease commencement date, including lease term, in determining the present value of lease payments. Lease expense for these leases is recognized on a straight line basis over the lease term.
Goodwill

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Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

Goodwill is recorded when the consideration paid for a business acquisition exceeds the fair value of net tangible and intangible assets acquired. Goodwill is measured and tested for impairment annually on the last business day of the fiscal fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount or the Company may determine to proceed directly to the quantitative impairment test.
If the Company assesses qualitative factors and concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount or if the Company determines not to use the qualitative assessment, then a quantitative impairment test is performed. The quantitative impairment test requires comparing the fair value of the reporting unit to its carrying value, including goodwill. The Company has identified that its business operates as a single operating segment and as a single reporting unit for the purpose of goodwill impairment testing. An impairment exists if the fair value of the reporting unit is lower than its carrying value. If the fair value of the reporting unit is lower than its carrying value, the Company would record an impairment loss in the fiscal quarter in which the determination is made.
Impairment of Long-lived Assets
The Company assesses the impairment of long-lived assets, which consist primarily of property and equipment and intangible assets whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. Events or changes in circumstances that may indicate that an asset is impaired include significant decreases in the market value of an asset, significant underperformance relative to expected historical or projected future results of operations, a change in the extent or manner in which an asset is utilized, significant declines in the estimated fair value of the overall Company for a sustained period, shifts in technology, loss of key management or personnel, changes in the Company’s operating model or strategy and competitive forces.
If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based on the present value of estimated expected future cash flows using a discount rate commensurate with the risk involved, quoted market prices or appraised values, depending on the nature of the asset.
Revenue Recognition
The Company’s customers are primarily original equipment manufacturers who design and manufacture end market devices for the communications and enterprise networks markets. The Company’s revenue is driven by various trends in these markets.
The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to receive in exchange for those goods and services. The Company also considers the constraint on estimates of variable consideration when estimating the total transaction price. The Company’s policy is to record revenue net of any applicable sales, use or excise taxes. Changes in the Company’s contract assets and contract liabilities primarily result from the timing difference between the Company’s performance and the customer’s payment. The Company fulfills its obligations under a contract with a customer by transferring products or services in exchange for consideration from the customer. The Company recognizes a contract asset when it transfers products or services to a customer and the right to consideration is conditional on something other than the passage of time. Accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional other than the passage of time. The Company recognizes deferred revenue when it has received consideration or an amount of consideration is due from the customer and it has a future obligation to transfer products.

83

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

The Company transacts with customers primarily pursuant to standard purchase orders for delivery of products and generally allows customers to cancel or change purchase orders within limited notice periods prior to the scheduled shipment date. The Company offers standard performance warranties of twelve months after product delivery and offers limited product return rights to certain distributors. The Company recognizes product sales when it transfers control of promised goods in an amount that reflects the consideration to which it expects to be entitled to in exchange for those goods, net of accruals for estimated sales returns and rebates. As of May 2, 2026 and May 3, 2025, the sales returns and rebate reserves were not material.
Customer Warrant
The Company accounts for the warrant issued to Amazon.com NV Investment Holdings LLC as an equity instrument, based on the specific terms of the warrant agreement. When management determines that it is probable that a tranche of the warrant will vest and we recognize the related revenue, the grant date fair value of the associated tranche will be recognized in shareholders’ equity and the underlying expense amortized as a reduction of revenue in proportion to the amount of related revenue recognized.
Cost of Revenue
Cost of revenue includes cost of materials, including wafers processed by third-party foundries, cost associated with packaging and assembly, testing and shipping, cost of personnel, including share-based compensation, depreciation of equipment associated with manufacturing support, logistics and quality assurance, warranty cost, amortization of intellectual property purchased from third-parties, write-down of inventories, and amortization and impairment of production equipment no longer in use.
Shipping and Handling Costs
Shipping and handling costs incurred for delivery to customers are expensed as incurred and are included in selling, general and administrative expenses in the Company’s consolidated statements of operations.
Research and Development
Research and development expenses consist of costs incurred in performing research and development activities and includes salaries, share-based compensation, employee benefits, occupancy costs, pre-production engineering mask costs, and prototype wafer, packaging and test costs. Research and development costs are expensed as incurred.
Share-Based Compensation
The Company records compensation expense in connection with share-based awards granted to employees and non-employees in accordance with guidance related to share-based payments. This guidance requires that all share-based compensation be recognized as an expense in the consolidated financial statements and that such cost be measured at the fair value of the award. The Company generally amortizes share-based compensation expense under the straight-line attribution method over the vesting period of the share-based award. For performance-based awards, the Company amortizes share-based compensation expense under the graded vesting method over the vesting period of the award. The Company has elected to use the Black-Scholes option pricing model to determine the fair value of ordinary share options on the dates of grant. Calculating the fair value of share options using the Black-Scholes model requires inputs and assumptions, including the fair value of the Company’s ordinary shares, the expected term of share options and share price volatility. The Company estimates the expected life of options granted based on the simplified method. The Company estimates the volatility of its ordinary shares on the date of grant based on the Company’s historical stock price volatility. The Company has not paid and has no current plans to pay dividends. The Company accounts for forfeitures as they occur.

84

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

The fair value of each restricted share unit is estimated based on the market price of the Company’s ordinary share on the date of grant. The fair value of each share issued under the Company’s employee share purchase plan is estimated based on the Black-Scholes option pricing model.
Income Taxes
The Company is subject to income taxes in the United States and certain foreign jurisdictions. Significant judgment is required in determining the Company’s provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.
The Company uses the asset and liability method to account for income taxes. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and net operating loss and credit carryforward. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company accounts for uncertain tax positions in accordance with ASC 740‑10, Accounting for Uncertainty in Income Taxes . The Company recognizes the tax effects of an uncertain tax position only if such position is more likely than not to be sustained based solely on its technical merits as of the reporting date and only in an amount more likely than not to be sustained upon review by the tax authorities. Interest and penalties related to uncertain tax positions are classified in the consolidated financial statements as income tax expense.
Net Income (Loss) Per Share
Basic net income (loss) per share is computed using the weighted average number of ordinary shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of ordinary and potentially dilutive shares outstanding during the period using the treasury stock method. Under the treasury stock method, the effect of equity awards outstanding is not included in the computation of diluted net income (loss) per share for periods when their effect is anti-dilutive.
Segment Information
Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker (CODM) in deciding resource allocation and assessing performance. The Company’s Chief Executive Officer is its CODM. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operating decisions, allocating resources and evaluating financial performance. Consequently, the Company has determined it operates and manages its business in one operating and one reportable segment. See “Note 15. Segment and Geographic Information” for the Company’s revenue by country and location of long-lived assets.
Accounting Pronouncement Recently Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures , which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. This standard is effective for fiscal years beginning after December 15, 2024, and may be applied on a retrospective or prospective basis. The Company adopted this guidance in the fiscal year 2026 on a prospective basis. The adoption did not have a material impact to the Company’s consolidated financial statements. Refer to ‘Note 13. Income Taxes’ for further details.

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Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

Recent Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures , which requires disclosure of, in interim and annual reporting periods, additional information about certain expenses in the financial statements. This standard is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027 and may be applied on a retrospective or prospective basis. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets , providing all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. This ASU is effective for annual reporting periods beginning after December 15, 2025. The Company is currently evaluating the impact of electing the practical expedient and the impact it may have on its consolidated financial statements and disclosures.

3. Concentrations
Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. Cash is placed in major financial institutions around the world. The Company’s cash deposits exceed insured limits. Short-term investments are subject to counterparty risk up to the amount presented on the balance sheet.
Historically, a relatively small number of customers have accounted for a significant portion of the Company’s revenue. The particular customers which account for revenue concentration have varied from period to period as a result of the volumes and prices at which the customers have recently bought the Company’s products. These variations are expected to continue in the foreseeable future.
The following table summarizes the significant customers’ accounts receivable and revenue as a percentage of total accounts receivable and total revenue, respectively:

Accounts Receivable May 2, 2026 May 3, 2025
Customer A 53   % 86   %
Customer B 20   % *
Customer C 19   % *

Year Ended
Revenue May 2, 2026 May 3, 2025 April 27, 2024
Customer A 49   % 67   % 39   %
Customer B 32   % * *
Customer C * * 15   %

* Less than 10% of total accounts receivable or total revenue.
The Company believes that the concentration of credit risk in its trade receivables is substantially mitigated by the high level of credit worthiness of its customers and the relatively short collection terms. The Company performs ongoing credit evaluations of its customers’ financial conditions and limits the amount of credit extended when deemed necessary based upon payment history and the customer’s current credit worthiness, but generally require no collateral.
The Company currently outsources all of its integrated circuit manufacturing to Taiwan Semiconductor Manufacturing Company Limited with the remaining assembly and testing processes

86

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

outsourced to other subcontractors primarily in Asia. Any disruption of or interference with the Company’s access to the goods or services from these subcontractors would impact the Company’s operations.

4. Revenue Recognition
Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. The contracted but unsatisfied performance obligation was approximately $ 31.9 million which the Company expects to recognize over the next fiscal year.
Customer Warrant
During fiscal year 2022, the Company issued a warrant to Amazon.com NV Investment Holdings LLC (Holder) to purchase an aggregate of up to 4.1 million of our ordinary shares at an exercise price of $ 10.74 per share (the Customer Warrant). The exercise period of the Customer Warrant is through the seven th anniversary of the issue date. The shares issuable vest in tranches over the contract term based on the amount of global payments by Holder and its affiliates to the Company, up to $ 201.0 million in aggregate payments. A total of 4.1 million Customer Warrant shares were vested as of May 3, 2025. As of May 2, 2026, the Holder has exercised all Customer Warrant shares, resulting in a net issuance of 3.8 million shares after 0.3 million shares withheld for exercise price.
During the fiscal years ended May 3, 2025 and April 27, 2024, the Company recognized $ 13.2  million and $ 3.9  million, respectively, as contra revenue within the product sales revenue on the consolidated statements of operations. The contra revenue impact associated with the Customer Warrant has been fully amortized as of May 3, 2025.

5. Business Combination
Hyperlume
On September 29, 2025, the Company acquired 100 % of the equity interest of Hyperlume, Inc. (Hyperlume), a developer of miniature light-emitting diode (microLED)-based optical interconnect technology for chip-to-chip communication, for a total purchase consideration of $ 92.0 million. Total purchase consideration is attributable to cash consideration of $ 88.7 million and cash settlement of vested share-based payment awards of $ 3.3 million by Hyperlume. This acquisition was primarily intended to expand the Company’s comprehensive portfolio of end-to-end system-level connectivity solutions with Hyperlume’s cutting-edge microLED technology to address the future of artificial intelligence-driven data infrastructure deployments.
The factors contributing to the recognition of goodwill were based upon the Company’s conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill recorded for the Hyperlume acquisition is not expected to be deductible for tax purposes. The Company has one reportable segment and accordingly, there is no goodwill assignment based on reporting units.
The following table summarizes the total purchase consideration (in thousands):

87

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

Cash consideration $ 88,698  
Cash settlement of Hyperlume share-based payment awards 3,319  
Total purchase consideration
92,017  
Less: Cash and cash equivalents acquired
( 9,453 )
Net cash payment for acquisition
$ 82,564  

IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable intangible asset and amortized over the asset’s estimated useful life. The functional currency of the acquired business is Canadian dollars, and the assets and liabilities are translated into U.S. dollars at each fiscal quarter-end period. The differences for goodwill and intangible asset between purchase price allocation and balance sheet result from currency translation rate changes.
The purchase price allocation is as follows (in thousands):

Cash and other assets $ 11,084  
Goodwill 69,134  
Intangible asset
17,200  
Deferred tax liabilities
( 4,558 )
Other current liabilities and non-current operating lease liabilities
( 843 )
$ 92,017  

Comira
On February 25, 2026, the Company acquired 100 % of the equity interest of CoMira Solutions, Inc. (Comira), a high-speed connectivity IP innovator, for a total cash consideration of $ 35.1 million. This acquisition was primarily intended to bring specialized link layer, error correction and security semiconductor IP to support the development of new and advanced system-level solutions for scale-up and scale-out AI architectures.
The factors contributing to the recognition of goodwill were based upon the Company’s conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition. Goodwill recorded for the Comira acquisition is not expected to be deductible for tax purposes.
The following table summarizes the total purchase consideration (in thousands):

Cash consideration $ 35,073  
Less: Cash and cash equivalents acquired
( 4,729 )
Net cash payment for acquisition
$ 30,344  

The purchase price allocation is as follows (in thousands):

Cash and other assets $ 5,167  
Goodwill 21,789  
Intangible asset
12,000  
Deferred tax liabilities
( 2,714 )
Other current liabilities and non-current operating lease liabilities
( 1,169 )
$ 35,073  

Acquisition-related costs are expensed in the periods such costs are incurred and were not material for the periods presented for Hyperlume and Comira acquisitions. Pro forma results of operations for both

88

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

acquisitions have not been presented because the effect of the acquisitions was not material to the Company’s financial results.

6. Goodwill and Intangible Assets, Net
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in business combinations. Goodwill is not subject to amortization but is tested for impairment annually during the fourth fiscal quarter, as well as whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company performed the required annual goodwill impairment test as of May 2, 2026 and concluded that goodwill was not impaired. As a result of the qualitative assessments, the Company determined that it was not necessary to perform a quantitative assessment at that time.
Intangible Assets, Net
As of May 2, 2026, the net carrying amounts are as follows (in thousands, except for weighted-average remaining amortization period):

May 2, 2026
Gross Carrying Amounts
Accumulated Amortization
Foreign Currency Translation Net Carrying Amounts
Weighted-Average Amortization Period (Years)
Developed technology
$ 12,000   $ ( 400 ) $ —  $ 11,600   5
IPR&D
17,200   —  462   17,662   N/A
Total intangible assets $ 29,200   $ ( 400 ) $ 462   $ 29,262  

Amortization for acquired intangible assets was $ 0.4 million during the year ended May 2, 2026 and charged to research and development expenses.
The aggregate future amortization expense for acquired amortizable intangible assets as of May 2, 2026 are as follows (in thousands):

Fiscal Year Amount
2027 $ 2,400  
2028 2,400  
2029 2,400  
2030 2,400  
2031 2,000  
$ 11,600  

7. Fair Value Measurements
Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1 - Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

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Notes to Consolidated Financial Statements

Level 2 - Other inputs that are directly or indirectly observable in the marketplace.
Level 3 - Unobservable inputs that are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The Company measures the fair value of money market funds using Level 1 inputs. The Company’s certificates of deposit are classified as held to maturity securities as the Company intends to hold until their maturity dates. The certificates of deposit are valued using Level 2 inputs. Pricing sources may include industry standard data providers, security master files from large financial institutions, and other third -party sources used to determine a daily market value.
The following tables present the fair value of the financial instruments measured on a recurring basis, or measured at amortized cost which approximates fair value, as of May 2, 2026 and May 3, 2025 (in thousands).

May 2, 2026
Level 1 Level 2 Level 3 Total
Cash equivalents:
Money market funds $ 1,073,486   $ —   $ —   $ 1,073,486  
Certificates of deposit
—   77,864   —   77,864  
Short-term investments:
Certificates of deposit
—   278,334   —   278,334  
Total cash equivalents and short-term investments $ 1,073,486   $ 356,198   $ —   $ 1,429,684  

May 3, 2025
Level 1 Level 2 Level 3 Total
Cash equivalents:
Money market funds $ 148,036   $ —   $ —   $ 148,036  
Certificates of deposit
—   65,137   —   65,137  
Short-term investments:
Certificates of deposit
—   195,010   —   195,010  
Total cash equivalents and short-term investments $ 148,036   $ 260,147   $ —   $ 408,183  

The carrying amount of the Company’s financial instruments, including cash equivalents, short-term investments, accounts receivable and accounts payable, approximate their respective fair values because of their short maturities. As of May 2, 2026 and May 3, 2025, there were no unrealized loss or gains associated with the Company’s financial instruments. The interest income recognized during the years ended May 2, 2026, May 3, 2025 and April 27, 2024 was $ 31.3 million, $ 18.8 million and $ 15.3 million, respectively.

90

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

8. Supplemental Financial Information
Inventories
Inventories consisted of the following (in thousands):

May 2, 2026 May 3, 2025
Raw materials $ 64,357   $ 12,734  
Work in process 34,296   24,583  
Finished goods 152,178   52,712  
$ 250,831   $ 90,029  

Property and Equipment, Net
Property and equipment consisted of the following (in thousands):

May 2, 2026 May 3, 2025
Production equipment $ 63,214   $ 44,789  
Computer equipment and software 48,924   27,901  
Laboratory equipment 36,933   21,944  
Leasehold improvements 4,096   3,513  
Construction in progress 27,027   9,687  
180,194   107,834  
Less: accumulated depreciation and amortization ( 78,589 ) ( 44,203 )
$ 101,605   $ 63,631  

Depreciation and amortization expense, excluding the asset impairment charges, for the years ended May 2, 2026, May 3, 2025 and April 27, 2024, was $ 34.6  million, $ 21.9 million, and $ 13.8  million, respectively. Construction in progress and production equipment primarily includes mask set costs capitalized relating to the Company’s products.
Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):

May 2, 2026 May 3, 2025
Accruals relating to inventory purchases $ 7,193   $ 10,164  
Current payables relating to purchases of property and equipment 12,179   8,420  
Current portion of operating lease liabilities 4,831   3,342  
Other 43,917   13,530  

$ 68,120   $ 35,456  

9. Commitments and Contingencies
Non-Cancelable Purchase Obligations
Total future non-cancelable purchase obligations as of May 2, 2026 were as follows (in thousands):

91

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

Fiscal Year  Purchase Commitments to Manufacturing Vendors and Foundry Partners  Technology License Fees Total
2027 $ 333,503   $ 12,555   $ 346,058  
2028 4,243   6,803   11,046  
2029 —   2,850   2,850  
Total unconditional purchase commitments $ 337,746   $ 22,208   $ 359,954  

Technology license fees include the liabilities under agreements for technology licenses between the Company and various vendors. Under the Company’s manufacturing relationships with its foundry partners, cancellation of outstanding purchase orders is allowed but requires payment of all costs and expenses incurred through the date of cancellation.
As of May 2, 2026, the total value of non-cancelable inventory purchase orders payable within the next one year that were committed with the Company’s foundry partners and third-party subcontractors was approximately $ 149.2 million. Such purchase commitments are included in the preceding table.
The Company has three manufacturing supply capacity reservation agreements with assembly subcontractors as of May 2, 2026. Under these arrangement, the Company has paid refundable deposits to the supplier in exchange for reserved manufacturing production capacity over the remaining term of the agreements, which range from two to five years . In addition, the Company committed to certain purchase levels that were in line with the capacity reserved. If the Company does not meet the purchase level commitment, the agreement requires the Company to pay a fee equal to the difference between the actual purchase and the purchase commitment, up to the value of refundable deposits made.
The Company currently estimates that it has made purchase level commitments of at least $ 188.6 million for the fiscal year 2027 through fiscal year 2028 under the capacity reservation agreement. Such purchase commitments are included in the preceding table. In addition, the Company had refundable deposits of $ 71.0  million as of May 2, 2026, of which $ 39.8  million was recorded in other current assets and $ 31.2  million was recorded in other non-current assets on the consolidated balance sheets.
Subsequent to May 2, 2026, the Company entered into a manufacturing supply capacity reservation agreement with an assembly subcontractor and will pay $ 13.1 million of refundable deposits. The total inventory purchase within the next two years that was committed with the subcontractor was approximately $ 43.7 million.
Warranty Obligations
The Company has contractual commitments to various customers, which could require the Company to incur costs to repair an epidemic defect with respect to its products outside of the normal warranty period if such defect were to occur. The Company’s products generally carry a standard one-year warranty. The Company’s warranty expense has not been material in the periods presented.
Indemnifications
In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, investors, directors, officers, employees and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnifications. Accordingly, the Company has no liabilities recorded for these agreements as of May 2, 2026 and May 3, 2025.

92

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

Legal Proceedings
From time to time, the Company may be a party to various litigation claims in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with legal counsel, the need to record a liability for litigation and contingencies. Accrual estimates are recorded when and if it is determined that such a liability for litigation and contingencies are both probable and reasonably estimable. As of the date of issuance of the consolidated financial statements, the Company was not subject to any litigation. Accruals for loss contingencies or recognition of actual losses were not material in any of the periods presented.

10. Ordinary Shares
The Company filed the Amended and Restated Memorandum of Association with Cayman Islands, which authorized 1  billion ordinary shares, par value $ 0.00005 per share and 50  million preferred shares.
Each ordinary share is entitled to one vote per share. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available and when declared by the Company’s board of directors, subject to the prior rights of holders of all other classes of shares outstanding.

11. Share Incentive Plan
2015 Stock Plan
The Company adopted the 2015 Stock Plan (the 2015 Plan) in February 2015. The 2015 Plan was an equity incentive program under which employees of the Company or its subsidiary corporations (including officers), non-employee members of the Company’s board of directors, and consultants to the Company or its subsidiary corporations were offered an opportunity to acquire the Company’s ordinary shares. The 2015 Plan provided both for the direct award or sale of ordinary shares (RSAs) and for the grant of options to purchase ordinary shares. Options granted under the 2015 Plan were Incentive Stock Options (ISOs) intended to qualify under Title 26 U.S. Code Section 422 or Non-qualified Stock Options (NSOs) which were not intended to so qualify. Only employees, outside directors and consultants of either the Company or a subsidiary of the Company, were eligible for the grant of NSO or the direct award or sale of ordinary shares. Only employees of either the Company or of a subsidiary of the Company, were eligible for the grant of ISOs.
As of January 27, 2022, the 2015 Plan has ceased to be available for grants of new awards. Both RSAs and options granted generally vest over four years and vest at a rate of 25 % upon the first anniversary of the issuance date and 1/48th per month thereafter.

93

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

A summary of information related to share option activity, excluding options early exercised, is as follows:

Outstanding Share Options (in millions) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in millions)
Balances as of April 29, 2023 8.9 $ 2.02   6.22 $ 0.1  
Options exercised and vested ( 2.3 ) $ 1.98  
Options canceled/ forfeited ( 0.2 ) $ 4.64  
Balances as of April 27, 2024 6.4 $ 1.97   5.30 $ 106.5  
Options exercised and vested ( 2.9 ) $ 1.64  
Options canceled/ forfeited — $ 4.58  
Balances as of May 3, 2025 3.5 $ 2.23   4.79 $ 162.8  
Options exercised and vested ( 1.4 ) $ 2.23  
Options canceled/ forfeited — $ 2.33  
Balances as of May 2, 2026 2.1 $ 2.24   3.96 $ 383.4  
Vested or expected to vest as of May 2, 2026 2.1 $ 2.24   3.96 $ 383.4  
Exercisable as of May 2, 2026 2.1 $ 2.24   3.96 $ 383.4  

During the years ended May 2, 2026, May 3, 2025 and April 27, 2024, the total intrinsic value of options exercised was $ 162.9 million, $ 130.5 million and $ 36.2  million, respectively. The weighted-average grant date fair value of options vested was $ 1.78 , $ 1.64 and $ 1.52 per share for the years ended May 2, 2026, May 3, 2025 and April 27, 2024, respectively.
The total grant date fair value of share options that vested was $ 6.3 million, $ 6.8 million and $ 13.3  million as of May 2, 2026, May 3, 2025 and April 27, 2024, respectively. As of May 2, 2026, there was no unrecognized compensation cost related to share options.
2021 Long-Term Incentive Plan
In December 2021, the Company adopted the 2021 long-term incentive plan (the 2021 Plan). Upon the adoption, the 2021 Plan had 19.9 million ordinary shares reserved for issuance and additional 35.4 million ordinary shares reserved thereafter. Awards granted under the 2021 Plan may include, but are not limited to, options, time-based restricted share units (RSUs) and performance-based restricted share units (PSUs). RSU and PSU awards are denominated in ordinary shares, but may be settled in cash or shares upon vesting, as determined by the Company at the time of grant. None of the awards granted under the 2021 Plan as of May 2, 2026 allowed cash settlement. RSU awards under the 2021 Plan generally vest over 4 years. As of May 2, 2026, 34.8 million shares remained available for future issuance under the 2021 Plan.

94

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

A summary of RSU activity is as follows:

Number of shares (in millions)
Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in millions)

Balances as of Balance as of April 29, 2023 7.8   $ 11.66   1.65 $ 63.2  
Granted 5.4   $ 20.08  
Vested ( 2.6 ) $ 11.98  
Canceled/ forfeited ( 0.4 ) $ 11.49  
Balances as of Balances as of April 27, 2024 10.1   $ 16.11   1.52 $ 188.2  
Granted 3.9   $ 59.10  
Vested ( 4.0 ) $ 15.53  
Canceled/ forfeited ( 0.6 ) $ 20.05  
Balances as of Balances as of May 3, 2025 9.5   $ 33.88   1.39 $ 458.1  
Granted 2.2   $ 112.72  
Vested ( 4.2 ) $ 29.64  
Canceled/ forfeited ( 0.3 ) $ 32.40  
Balances as of Balances and expected to vest as of May 2, 2026 7.2   $ 58.43   1.18 $ 1,319.6  

As of May 2, 2026, unamortized compensation expense related to RSUs was $ 367.9 million. The unamortized compensation expense for RSUs will be amortized on a straight-line basis and is expected to be recognized over a weighted-average period of 2.28 years.
A summary of PSU activity is as follows:

Number of shares (in millions)
Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in millions)

Balances as of April 27, 2024
—   $ —   0.00 $ —  
Granted 0.2   $ 43.70  
Balances as of May 3, 2025
0.2   $ 43.70   2.53 $ 10.1  
Granted 1.3   $ 92.57  
Balances as of Balances and expected to vest as of May 2, 2026 1.5   $ 85.33   2.15 $ 272.1  

During fiscal year 2025, the Company granted 0.2 million PSUs to certain named executive officers which will be eligible to become earned between 0 % and 200 % of target levels based on the Company’s achievement of specified revenue goals for the fiscal year ended May 2, 2026. The PSUs became earned at 200 % of target levels based on the Company’s achievement of specified revenue goals and will be vested subsequent to May 2, 2026.
During fiscal year 2026, the Company granted 1.3 million PSUs to certain named executive officers and employees which will be eligible to become fully earned or unearned at 100 % of target levels based on the Company’s achievement of stock price, product qualification and specified revenue goals.
The Compensation Committee will measure the achievement of such goals and determine the number of refresh PSUs that have become earned based on performance. The PSUs will then be subject to a service-based vesting requirement over an additional three to four-year period.

95

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

As of May 2, 2026, unamortized compensation expense related to PSUs was $ 37.0 million. The unamortized compensation expense for PSUs will be amortized on a straight-line basis and is expected to be recognized over a weighted-average period of 2.15 years.
Employee Stock Purchase Plan
In January 2022, the Company adopted the Employee Stock Purchase Plan (ESPP). Under the ESPP, a total of 3.8  million shares have been authorized for the grant of shares and participants can purchase the Company’s ordinary shares using payroll deductions, which may not exceed 15 % of their total cash compensation. Pursuant to the terms of the ESPP, the “look-back” period for the share purchase price is 24 months. Offering and purchase periods begin on January 1 and July 1 of each year. Participants will be granted the right to purchase ordinary shares at a price per share that is 85 % of the lesser of the fair market value of the shares at (i) the participant’s entry date into the two-year offering period or (ii) the end of each six-month purchase period within the offering period.
During the years ended May 2, 2026, May 3, 2025 and April 27, 2024, 0.2  million, 0.2  million and 0.3 million shares were issued under the ESPP, respectively. As of May 2, 2026, 7.5  million shares remained available for future issuance under the ESPP.
The following weighted-average assumptions to calculate the fair value of ordinary shares to be issued under the ESPP on the date of grant using the Black-Scholes option pricing model in the periods presented:

Year Ended
May 2, 2026 May 3, 2025 April 27, 2024
Grant date fair value $ 27.64 $ 10.51 $ 6.04
Expected volatility 78.62 % 74.99 % 56.13 %
Expected term (in years) 1.27 1.18 1.33
Risk-free interest rate 4.29 % 4.74 % 3.40 %
Expected dividend yield — % — % — %

Summary of Share-based Compensation Expense
The following table summarizes share-based compensation cost included in the consolidated statements of operations (in thousands).

Year Ended
May 2, 2026 May 3, 2025 April 27, 2024
Cost of revenue $ 1,416   $ 1,194   $ 1,131  
Research and development 102,576   41,930   21,359  
Selling, general and administrative 78,646   34,231   16,532  
$ 182,638   $ 77,355   $ 39,022  

In connection with the Hyperlume acquisition, the Company issued 87 thousand RSUs under its 2021 long-term incentive plan in replacement for the unvested options under Hyperlume’s equity incentive plan. The RSUs retain the same vesting conditions as the unvested options that they replaced. The Company also issued 132 thousand restricted shares of the Company to one of the founders of Hyperlume and 132 thousand restricted shares of a newly formed subsidiary of the Company that are exchangeable into restricted shares of the Company to the other founder of Hyperlume. The restricted shares were issued in exchange for the founders’ outstanding equity interests in Hyperlume and vest on a quarterly basis, subject to continued employment with the Company over the next 4 years.
Both RSUs and restricted shares were measured at the acquisition date’s fair value of $ 146.01 per share and the fair value of those shares represent post-acquisition share-based compensation expense

96

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

that will be recognized as these employees provide service over the remaining vesting periods of up to 4 years.

12. Leases
The Company's leases include office space located in the United States and other international locations, which are all classified as operating leases. The Company’s leases have remaining lease terms generally between 1 year and 7 years. Operating leases are included in right of use assets, other current liabilities, and non-current operating lease liabilities on the Company’s consolidated balance sheets. The Company does not have any finance leases.
Lease expense and supplemental cash flow information are as follows (in thousands):

Year Ended
May 2, 2026 May 3, 2025
Operating lease expenses $ 5,077   $ 4,186  
Cash paid for amounts included in the measurement of operating lease liabilities $ 4,716   $ 3,961  
Right-of-use assets obtained in exchange for lease obligation $ 12,787   $ 5,178  

The aggregate future lease payments for operating leases as of May 2, 2026 are as follows (in thousands):

Fiscal Year Operating leases
2027 $ 6,092  
2028 6,377  
2029 5,843  
2030 4,971  
2031 3,014  
Thereafter 3,364  
Total lease payments 29,661  
Less: Interest ( 4,212 )
Present value of lease liabilities $ 25,449  

As of May 2, 2026, the weighted average remaining lease term for the Company's operating leases was 5.11 years and the weighted average discount rate used to determine the present value of the Company's operating leases was approximately 6.27 %.
In December 2025, the Company entered into multiple leasing agreements for additional office spaces to expand the corporate headquarter buildings in the United States. The lease that has not yet commenced has an initial lease term of 6 years and an annual base rent of approximately $ 1.5 million. The lease arrangements further extend headquarter office spaces through calendar year 2036.

97

Credo Technology Group Holding Ltd
Notes to Consolidated Financial Statements

13. Income Taxes
Income (loss) before provision (benefit) for income taxes consists of the following (in thousands):