CRDO 10-K & 10-Q changes, risk factors and insider trading

In fiscal 2025,2026, we had onetwo customercustomers that accounted for 10% or more of our total revenue (such one customer accounting for 67% of total fiscal 2025 revenue).revenue. In addition, in fiscal 2025,2026, sales to our top 10 customers accounted for approximately 90% of our total revenue. We believe our operating results for the foreseeable future will continue to depend on sales to a relatively small number of customers. In the future, these customers may decide not to purchase our products or solutions at all, may purchase fewer products or solutions than they did in the past or may alter their purchasing patterns. For example, in February 2023, we announced that our largest customer at the time reduced its demand forecast for certain of our products for reasons we understand were unrelated to our performance, which negatively impacted our fiscal 2023 fourth quarter revenue and our fiscal 2024 revenue expectations. Further, the amount of revenue attributable to any single customer or our general customer concentration, may fluctuate in any given period.

Substantially all of our product sales to date have been made on a purchase order basis. We generally do not obtain long-term commitments with our customers or commitments for minimum purchases from our customers. Our arrangements with our customers permit our customers to cancel, change or delay their product purchase orders upon specified notice and subject to negotiated limitations. In some cases, our customers may cancel purchase orders on relatively short notice to us and without penalty to them. In addition, customers may delay delivery of orders to a subsequent fiscal quarter. Our revenue and operating results have, and could in the future, fluctuate materially and have, and could in the future, be materially and disproportionately impacted by the purchasing decisions of our customers, especially our larger customers. Our customers may decide to purchase fewer units than they have in the past, alter their purchasing patterns at any time with limited notice, change the terms on which they are prepared to do business with us or decide not to continue to purchase our products at all, any of which could cause our revenue to decline materially and materially harm our business, financial condition and results of operations. For example, in February 2023, we announced that that our largest customer reduced its demand forecast for certain of our products for reasons we understand are unrelated to our performance, which negatively impacted our fiscal 2023 fourth quarter revenue and our fiscal 2024 revenue expectations. Cancellations of, reductions in or rescheduling of customer orders could also result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses, as a substantial portion of our expenses are fixed at least in the short term. In addition, changes in forecasts or the timing of orders expose us to the risks of inventory shortages or excess inventory. Any of the foregoing events could materially and adversely affect our business, financial condition and results of operations.

Customer demand for our products may be impacted by weak economicmacroeconomic conditions, inflation, stagflation, recessionary or lower-growth environments, high or rising interest rates, equity market volatility, geopolitical tensions, war, trade restrictions, tariffs and sanctionsvolatility or other negative economic factors in the U.S. or other nations. For example, under these conditions or as a result of expectation of such conditions, our customers may cancel orders, delay purchasing decisions or reduce their use of our services. In addition, these economic conditions could result in higher inventory levels and the possibility of resulting excess capacity charges from our manufacturing partners if we need to slow production to reduce inventory levels. Further, in the event of a recession or threat of a recession our manufacturing partners, suppliers, distributors or other third-party partners may suffer their own financial and economic challenges and as a result they may demand pricing accommodations, delay payment or become insolvent, which could harm our ability to meet our customer demands or collect receivables or otherwise harm our business. Similarly, disruptions in financial and/or credit markets may impact our ability to manage normal commercial relationships with our manufacturing partners, customers, suppliers and creditors and might cause us to not be able to continue to access preferred sources of liquidity when we would like, and our borrowing costs could increase. Thus, if general macroeconomic conditions, conditions in the semiconductor industry, or conditions in our customer end markets deteriorate or experience a sustained period of weakness or slower growth, our business and financial results could be materially and adversely affected.

In addition, weWe are also subject to risk from inflation and increasing market prices of certain components, supplies and commodity raw materials, which are incorporated into our end products or used by our manufacturing partners or suppliers to manufacture our end products. These components, supplies, and commodities have from time to time become restrictedrestricted, andor general market factors and conditions (such as inflation or supply chain constraints) have in the past and may in the future affect the pricing of such components, supplies and commodities.commodities (such as inflation or supply chain constraints). As trade tensions escalate, our and our customers’ global supply chains may face disruptions, reducing international trade efficiency.

Changes in global trade policiespolicies, couldincluding havetariffs, asanctions materialand adversetrade effectbarriers onmay adversely affect our business.business, financial condition, results of operations and prospects.

Prior to fiscal 2025, we had a history of net losses. While we generated net income of $472.3 million and $52.2 million in fiscal 2026 and fiscal 2025, respectively, we incurred net losses of $28.4 million in fiscal 2024 primarily attributable to increased operating expenses, such as investments in research and development, including share-based compensation. As of May 3, 2025, we had an accumulated deficit of $83.2 million.

Our product sales are primarily generated on the basis of purchase orders with our customers rather than long-term purchase commitments. However, we place orders with our suppliers based on forecasts of customer demand and, in some instances, may establish buffer inventories to accommodate anticipated demand, which may not materialize. Due to our lengthy product development cycle, it is critical for us to anticipate changes in demand for our various product features and the applications they serve to allow sufficient time for product development and design. We have limited visibility into future customer demand and the product mix that our customers will require, which could adversely affect our revenue forecasts and operating margins. Moreover, because some of our target markets are relatively new, many of our customers have difficulty accurately forecasting their product requirements and estimating the timing of their new product introductions, which ultimately affects their demand for our products. Our failure to accurately forecast demand can lead to product shortages that can impede production by our customers and harm our customer relationships. Conversely, our failure to forecast declining demand or shifts in product mix can result in excess or obsolete inventory. InThe addition,risk of obsolescence and/or excess inventory is heightened for semiconductor solutions due to the rapidrapidly pacechanging market for these types of innovation in our industry could also render significant portions of our inventory obsolete.products. Excess or obsolete inventory levels could result in unexpected expenses or increases in our reserves that could adversely affect our business, financial condition and results of operations. In contrast, if we were to underestimate customer demand or if sufficient manufacturing capacity were unavailable, we could forego revenue opportunities, potentially lose market share and damage our customer relationships. In addition, any significant future cancellations or deferrals of product orders or the return of previously sold products due to manufacturing defects could materially and adversely impact our profit margins, increase our write-offs due to product obsolescence and restrict our ability to fund our operations.

Currently, our competitors range from large, international companies offering a wide range of semiconductor products to smaller companies specializing in narrow markets. Our principal competitors with respect to our products include Broadcom Ltd. (Broadcom),Ltd., Marvell Technology, Inc. (Marvell) and Astera Labs, Inc. (Astera), as well as various cable and optical transceiver suppliers. We expect competition will increase as our market grows, connectivity technology advances and existing competitors improve or expand their product offerings. In addition, new companies could enter our market, creating additional competition in the future. Some of our competitors may be better situated to meet changing customer needs and secure design wins. Increasing competition in the markets in which we operate may negatively impact our revenue and gross margins. For example, competitors with greater financial resources may be able to offer lower prices than us, or they may offer additional products, services or other incentives that we may not be able to match.

Our ability to compete successfully depends, in part, on factors that are outside of our control, including industry and general economic trends. Many of our competitors are substantially larger, have greater financial, technical, marketing, distribution, customer support, government supportsupport, and other resources,resources; are more established than we are; and have significantly better brand recognition and broader product offerings, and may be able to bundle their products to gain market share.offerings. This may enable them to better withstand downturns in the timing market in which we compete, as well as adverse economic or market conditions, such as those caused by uncertainty as a result of the recent macroeconomic environment, which has been characterized by rising interest rates and inflation, geopolitical instability, public health measures and supply chain uncertainty. These factors cause companies across the semiconductor industry to reduce spending and tighten inventory controls, which could negatively impact our business, financial condition and results of operations.conditions. Our ability to compete successfully will depend on a number of factors, including:

•our ability to deliver products in large volume on a timely basis at competitive prices;

•our ability to growbuild and maintainexpand international operations in a cost-effective manner;

Industry consolidation may lead to increased competition. Our competitors may also establish cooperative relationships among themselves or with third partiesthird-parties or may acquire companies that provide similar products to ours. As a result, new competitors or alliances may emerge that could capture significant market share. There has been a trend toward industry consolidation in our markets for several years. We expect this trend to continue as companies attempt to improve the leverage of growing research and development costs, strengthen or hold their market positions in an evolving industry or are unable to continue operations. Companies that are strategic alliance partners in some areas of our business may acquire or form alliances with our competitors, thereby reducing their business with us. Industry consolidation may result in stronger competitors that are better able to compete as sole-source vendors for customers.

Any of these factors, alone or in combination with others, could lead to an increase in pricing pressure, more variability inharm our operatingbusiness, results,financial condition, and results of operations and result in a loss of market share and couldan harmincrease ourin business,pricing financial condition and results of operations.pressure.

We operate an outsourced manufacturing business model. As a result, we rely on third-party foundry wafer fabrication and assembly and test capacity. We currently outsource all of our IC manufacturing to TSMC, with the assembly and testing processes outsourced to other subcontractors primarily in Asia. We also use third-party contract manufacturers for a significant majority of our assembly and test operations, including Amkor, ASE, KYEC and TeraPowerSigurd for our IC products, and BizLink for our AEC products. The failure to manage our relationships with our third-party contractors successfully could adversely affect our ability to market and sell our products and our reputation. Our revenue and operating results would suffer if these third parties fail to deliver products or components in a timely manner and at reasonable cost or if manufacturing capacity is reduced or eliminated, as we may be unable to obtain alternative manufacturing capacity.

We do not generally have long-term contracts with our suppliers and substantially all of our purchases are on a purchase order basis. Suppliers may extend lead times, limit supplies, place products on allocation or increase prices due to commodity price increases, capacity constraints or other factors that could lead to interruption of supply or increased demand in the industry. For example, public health crises, trade sanctions, the armed conflict in Ukraine and other factors have led to worldwide supply constraints, including with respect to wafers and substrates. Additionally, the supply of these materials may be negatively impacted by an unfavorable macroeconomic environment, including as a result of increased trade tensions between the U.S. and its trading partners, particularly the PRC.People’s Republic of China (PRC). In the event that we cannot timely obtain materials in sufficient quantities or at reasonable prices, the quality of the material deteriorates or we are not able to pass on higher materials costs to our customers, our business, financial condition and results of operations could be adversely impacted.

Our ability to receive timely payments from our customers could adversely impact our collection of accounts receivable, and, as a result, our revenue. We regularly review the collectability and creditworthiness of our customers to determine an appropriate allowance for credit losses. Based on our review of our customers, we had no reserve for credit losses as of May 3,2, 20252026 and AprilMay 27,3, 2024.2025. If our credit losses were to exceed our current or future allowance for credit losses, our business, financial condition and results of operations would be adversely affected.

Increasingly,Many customers, regulators, customers, investors, employeesemployees, and other stakeholders are focusing on sustainability matters. While we have certain sustainability initiatives at the Companyinitiatives, there can beis no assurance that customers, regulators, customers, investorsinvestors, and employees will determine that these programs are sufficientlysufficient. robust.Any In addition, there can be no assurance that we will be able to accomplish our announced goals related to our sustainability initiatives, as statements regarding our sustainability goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all. Actualactual or perceived shortcomings with respect to our sustainability initiatives and reporting can impact our ability to hire and retain employees,certain customers or increase our customer base, reelect our board of directors ordirectors, attract and retain certain types of investors.investors, Inor addition, many of our stakeholders are increasingly focused on specific disclosureshire and frameworksretain related to sustainability matters.employees. Collecting, measuringmeasuring, and reporting sustainability information and metrics can be costly, difficult and time consuming, is subject to evolving reporting standards, and can present numerous operational, reputational, financial, legallegal, and other risks, any of which could haveadversely aaffect materialour impactbusiness onas us,well includingas on our reputation and stock price. Inadequate processes to collect and review this information prior to disclosure could subject us to potential liability related to such information.

Changes in taxation, our tax rates or exposure to additional tax liabilities or assessments could affect our profitability, and audits by tax authorities could result in additional tax payments.

WeAdditionally, are affected by various taxes imposed in different jurisdictions, including direct and indirect taxes imposed on our global activities. Significantsignificant judgment is required in determining our provisions for taxes, and there are many transactions and calculations where the ultimate tax determination is uncertain. The amount of income tax we pay is subject to ongoing audits by tax authorities. If audits result in payments or assessments, our future results may include unfavorable adjustments to our tax liabilities, and we could be adversely affected. Any significant changes to the tax system in the jurisdictions where we operate could adversely affect our business, financial condition and results of operations.

CybersecuritySecurity breaches, cyberattacks and other disruptions to information technology systems owned or maintained by us or third parties, such as vendors or suppliers, could disrupt our operations, compromise the confidentiality of ourprivate customer data or our intellectual property, and adversely affect our business, reputation, operationsoperations, and financial results.

We rely on our information technology systems, and those of our vendors, suppliers and customers, including hardware, software, cloud services, infrastructure, networks and systems, for the effective operation of our business and for secure maintenance and storage of confidential data relating to our business. We also utilize AI tools to support process automation and improve operational efficiencies. The use of AI may increase exposure to cybersecurity risks, including through unauthorized or malicious use of AI tools, the inadvertent introduction of malicious code or vulnerabilities into AI generated outputs, and other security weaknesses arising from AI enabled systems. Further, AI technologies may be leveraged by threat actors to conduct or enhance cybersecurity attacks, potentially increasing the complexity and severity of security incidents. Additionally, in the ordinary course of business we collect, store and otherwise process sensitive data, including intellectual property and proprietary business information as well as personal information of our customers and employees, in data centers and on information technology systems, including systems that may be controlled or maintained by third parties. The secure operation of these information technology systems, and the processing and maintenance of the information processed by these systems, is critical to our business operations. To mitigate these risks, we maintain an AI policy that standardizes acceptable and safe use of AI tools and incorporates monitoring, data loss prevention, and user specific controls. These measures are designed to prevent security incidents, data leakage, or exploitation related to the use of AI technologies. While we striveand toothers implementhave implemented various controls and defenses, cybersecurity attacks and threats have continued to become more prevalent and sophisticated. These threats are constantly evolving, making it increasingly difficult to successfully defend against or implement adequate preventive measures. Geopolitical tensions or conflicts have in the past led to, and may in the future lead to, increased risk of cybersecurity attacks. Additionally, AI technologies also may be used to implement certain cybersecurity attacks or to increase their intensity, which may further increase risk. Notwithstanding defensive measures, experienced programmers, hackers, state actors or others may be able to penetrate our security controls, or those of our vendors, suppliers or customers, through attacks such as, but not limited to, phishing or other forms of social engineering, impersonating authorized users, ransomware, spyware, viruses, worms and other malicious software programs, software supply chain attacks, exploitation of compromised commercial software, bugs and other cybersecurity weaknesses and vulnerabilities, and covert introduction of malware to computers and networks. Any attack on the information technology systems of us or one of our vendors, suppliers or customers may be difficult to detect, designed to remain dormant until a triggering event or may continue undetected for an extended period of time. In addition, our information technology systems and those of our vendors, suppliers, and customers may be vulnerable to damage, disruptions or shutdowns due to errors, negligence or malfeasance by employees, contractors, or others.others who have access to these systems.

CybersecuritySecurity breaches, cyberattacks and other disruptions to our information technology systems or those of our vendors, suppliers or customers could compromise the confidentiality, operational integrity, and accessibility of our information technology systems, or those of our vendors, suppliers or customers, which could result in the compromisecompromise, unauthorized publication, or unauthorized access to, or publication, loss orof otherproprietary processing of, our data (including personal information) ordata, intellectual property, or personal information, as well as interruptions or delays in our business operations, loss of existing or future customers and damage to our reputation, which could adversely affect our business, reputation and financial results. In addition, such events could result in violations of privacy, data protection, cybersecurityprivacy or other laws or regulations, increase the risk of litigation or regulatory investigation, or cause us to incur losses,direct includinglosses if attackers initiate wire transfers or access our bank or investment accounts. We expect ongoing and increasing costs related to investments in technology, controls, processes and practices, however these investments may not be sufficient to shield us from significant losses or liability in the event of asecurity cybersecuritybreaches, breach, cyberattackcyberattacks or other disruptiondisruptions to our information technology systems.

Our ability to operate our business depends on the efficient operation of internal and third-party information technology systems, including cloud computing, data centers, hardware, softwaresoftware, and applications, to manage our company. We strive to use quality and secure systems, work with reputable system vendorsvendors, and implement procedures intended to enable us to protect our systems.

Our information technology systems and operations could be damaged or interrupted due to events such as natural or human-caused disasters, extreme weather, geopolitical events and security issues, computer viruses, cybersecurity breaches, cyberattacks, disruptions,incidents, telecommunication failuresfailures, and similar events, which could adversely affect our business, financial conditioncondition, and results of operations. In addition, our information technology systems may not support new business models and applications, including with respect to AI, and significant investments may be required in order to upgrade such systems. Our systems are not fully redundant and depending on the severity of the damage or interruption, our disaster recovery plan and proceduresplans may be inadequate or ineffective. These events could also damage our reputation, and result in increased costs or loss of sales.

The market demand for 100G/200G/400G/800G/I.6Tour semiconductor solutions may not sufficiently develop or may develop more slowly than expected.

We are currently investing significant resources to develop semiconductor solutions supporting 100G/200G/400G/800G/performance up to 1.6T data transmission rates in order to increase the number of such solutions in our product line.rates. If we fail to accurately predict market requirements or market demand for 100G/200G/400G/800G/1.6Tour semiconductor solutions, or if our 100G/200G/400G/800G/1.6T semiconductor solutions are not successfully developed or competitive in the industry, our business will suffer. If 100G/200G/400G/800G/networks up to 1.6T networks are deployed to a lesser extent or more slowly than we currently anticipate, we may not realize any benefits from our investment. As a result, our business, financial condition and results of operations would suffer.

We are subject to the cyclical nature of the semiconductor industry.industry which is undergoing significant change due to artificial intelligence.

We outsource the fabrication and assembly of all of our products to third parties that are primarily located in Asia. In addition, we conduct research and development activities in the United States, Canada, mainland China, Taiwan and Hong Kong. We also conduct marketing and administrative functions in the United States and mainland China. In addition, members of our sales force are located in the United States, mainland China, Taiwan, Japan and Canada. Accordingly, our business and operating results are impacted by worldwide economic conditions. Uncertainty about current global economic conditions, which has been characterized by rising interest rates and inflation, tariffs, geopolitical instability, public health crises, such as the COVID-19 pandemic and supply chain uncertainty, has caused, and may continue to cause, businesses to postpone or reduce spending. This in turn could have a material adverse effect on our supply chain or the demand for our products or the systems into which our products are incorporated. Multiple factors relating to our international operations and to particular countries in which we operate could negatively impact our business, financial condition and results of operations. These factors include:

•regional health issues and the impact of public health epidemics on employees and the global economy, such as the worldwide COVID-19 pandemiceconomy;

We service our customers around the world. We are subject to numerous, and sometimes conflicting, legal regimes of the United States and foreign national, state and provincial authorities on matters as diverse as anti-corruption, trade restrictions, tariffs, taxation, sanctions, immigration, internal and disclosure control obligations, environmental impact, securities regulation, anti-competition, data protection, cybersecurity, privacy, labor relations, wages and severance and health care requirements. For example, our operations in the United States are, and our operations outside of the United States may also be, subject to U.S. laws on these diverse matters. U.S. laws may be different in significant respects from the laws of the PRC or Taiwan, where we have significant operations, and jurisdictions where we seek to expand. U.S. laws could also directly conflict with PRC laws, forcing businesses to choose between compliance with conflicting legal regimes. For example, in January 2021, the Ministry of Commerce of the People’s Republic of China (MOFCOM) issued MOFCOM Order No. 1 of 2021 on Rules Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures (Order No. 1). MOFCOM’s Order No. 1 established a blocking regime aimed at counteracting the impact of foreign sanctions on Chinese persons and entities. It allows MOFCOM to prohibit Chinese persons and entities from complying with identified foreign laws and creates a private right of action for Chinese entities and persons affected by those laws to seek damages. In April 2026, the State Council of the People's Republic of China issued Order No. 835 of the State Council on the Regulations on Counteracting Unjustified Extraterritorial Jurisdiction (Order No. 835), according to which the State Council's legal administration department may issue public notices prohibiting the execution or assistance in executing foreign measures constituting unjustified extraterritorial jurisdiction, and any organization or individual violating such prohibition orders may face administrative penalties and civil liability. Order No. 1 and Order No. 835 will become operational once the Chinese government identifies the specific extraterritorial legislation and other measures to which it applies. These measures could include U.S. export controls and sanctions. We also may seek to expand operations in emerging market jurisdictions where legal systems are less developed or familiar to us.

The Outbound Investment Rule capturesrestricts investment by U.S. and U.S.-controlled persons in certain entities thatlinked areto notChina, basedincluding companies located in China or Chinese-ownedderiving ifmore certainthan 50% of various financial thresholdsmetrics arefrom met.covered activities in China. Certain of our subsidiaries that are organized and conduct substantial operations in China engage in certain covered activities under the Outbound Investment Rule. GivenWhile, based on our most recent audited financial statements, we do not believe that the breadthCompany ofas a whole triggers the notification50% requirement as applicable withintest, the semiconductor industry, weCompany will likely be subject to increased regulatory burden to engage in certain investments in China.China, Suchincluding acapital mechanisminvestments in the Company’s own subsidiaries to the extent they relate to covered activities. This could negatively impactaffect our ability to realize value from certain existing and future investments,investments includingand byto limiting ourraise capital expendituresfrom U.S. sources that might be directed to covered activities in ourChina. ChineseAdditionally, subsidiaries.it Moreover,is anticipated that the Outbound Investment Rule ostensiblywill appliesbe revised in 2027 and thereafter, and it is possible that future changes to “indirect”the investmentsOutbound byInvestment U.S.Rule personscould in entities that are persons ofhave a countrynegative ofimpact concern, which currently inhibitson our abilityChina-linked tobusiness. raiseAccordingly, capitalthe throughoutbound equityinvestment financingsreporting withrequirements U.S.and investorsprohibitions ascould adversely affect our Chinese subsidiaries meet the applicablebusiness, financial thresholdscondition, toand beoperating a covered foreign person.results.

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. We also rely on trade secret laws, as well as confidentiality and non-disclosure and other contractual protections, to protect our proprietary know-how.

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 3,2, 2025,2026, we had outstanding a total of 171.2185.4 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 3,2, 2025,2026, we also had outstanding a warrant to purchase up to 4.1 million of our ordinary shares and options and restricted stock units covering 13.010.8 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.

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 is presented below. A discussion regarding our results of operations for the fiscal year ended April 27, 2024 compared to the fiscal year ended April 29, 2023 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 AprilMay 27,3, 2024,2025, filed with the SEC on JuneJuly 24,2, 2024.2025.

At Credo, our mission is to redefine high-speed connectivity by delivering breakthrough solutions that enable the next generation of AI-driven applications. We are committed to enabling faster, more reliable, more energy-efficient, and scalable solutions that support the ever-expanding demands of AI, cloud computing and hyperscale networks. Our connectivity solutions are optimized for optical and electrical EthernetEthernet, PCIe and PCIeemerging UALink, ESUN and SUE applications, includingranging thein 100Gspeeds from 32G (or Gigabits per second), 200G, 400G, 800G and emerging 1.6T (or Terabits per secondlane) ethernetto markets and the 32G PCIe5 and upcoming 64G PCIe6 markets.200G. Our products are based on our own optimized Serializer/Deserializer (SerDes) and Digital Signal Processor (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.

DataArtificial Intelligence (AI) has bred a new generation hasof increaseddata dramaticallycenters over the past ten5 years,years creatingthat newdepend much more heavily on high speed, reliable communications for Front End, Scale Out, Scale Up and complicatedemerging challengesScale inIn both circuit and system design.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 partnerpartnered with MicrosoftOracle onto develop our HiWireZeroFlap Switch AEC and open-source implementationOptics that helps realizeaddress Microsoft’sthe visionreliability forissues aknown highlyas reliableLink network-managedFlap dual-Top-of-Rackwhich (ToR)plague architecturecommodity (a network architecture designoptions in whichAI computingdata equipmentcenters locatedenabling withinfaster theAI samecluster orturn anon adjacentand rack are, for redundancy, connectedtime to twofirst in-rack network switches, which are, in turn, connected to aggregation switches via fiber optic cables), overcome complex and slow legacy enterprise approaches, simplify deployment and improve connection reliability in the data center.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, AI/ML infrastructure, multi-service operators (MSOs)compute and mobiledata network operators (MNOs).centers. The demands for increased bandwidth, better reliability and improved power andefficiency costhave efficiencygrown as AI model sizes have increased from billions to trillions of parameters and heightenedthe securityworkload have simultaneously and dramaticallyhas expanded asfrom work,training educationto and entertainment have rapidly digitized across myriad endpoint users.inference.

During fiscal 20252026 and 2024,2025, we generated $436.8$1.3 millionbillion and $193.0$436.8 million in total revenue, respectively. ProductGeographically, sales58% and product15% engineeringof servicesour total revenue comprisedin 97%fiscal 2026 and 2025 was generated from customers in North America, and 42% and 85% of our total revenue in fiscal 20252026 and 2024, respectively, and IP license revenue represented 3% and 15% of our total revenue in fiscal 2025 and 2024, respectively. Geographically, 15% and 31% of our total revenue in fiscal 2025 and 2024 was generated from customers in North America, and 85% and 69% of our total revenue in fiscal 2025 and 2024 was generated from customers in the rest of the world, primarily in Asia. During fiscal 20252026 and 2024,2025, we generated $472.3 million and $52.2 million of net income and $28.4 million of net loss,income, respectively.

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:

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, ODMsODMs, CMs and optical module manufacturers to utilize our solutions.

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. Where an arrangement includes multiple performance obligations, the transaction price is allocated to these on a relative standalone selling price (SSP) basis. We also consider the constraint on estimates of variable consideration when estimating the total transaction price. 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.

Product Sales - 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 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. Costs of revenue includes cost of product sales revenue, cost of product engineering services revenue and cost of IP license revenue.

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 costscosts, acquisition and integration-related expenses and general corporate expenses including allocated facilities expenses.

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.

Years Ended May 2, 2026 and May 3, 2025 and April 27, 2024

Comparison of Years Ended May 2, 2026 and May 3, 2025 and April 27, 2024

TheRevenue increasefor infiscal product2026 salesincreased revenueby was$898.3 million as compared to fiscal 2025 primarily due to a significant increase in volume unit shipments for AEC productsproducts. 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 95%99% of the increase in product sales revenue.

Total costCost of revenue increased by $80.3$272.9 million primarily due to an $81.9 million increase in cost of product sales revenue. The increase was driven by the significant increase of unit shipments for our AEC products discussed above.

Gross margin increased by 2.93.2 percentage points in fiscal 20252026 primarily driven by ourthe productimproved saleseconomies business gainingof scale from the improvements in our operating leverage.revenue.

Research and development expenses for fiscal 20252026 increased by $50.5$132.5 million compared to fiscal 2024.2025. The increase was due primarily to a $20.6$60.9 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, aan $13.3$18.8 million increase in personnel costs primarily as a result of new hires for product development, a $10.0$35.4 million increase in design activities and higher engineering activities relating to testing and laboratory supplies for new product developmentdevelopment, a $5.1 million increase in acquisition and integration related costs relating to the business acquisitions and a $3.6$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 expenses for fiscal 20252026 increased by $38.7$85.0 million compared to fiscal 2024.2025. The increase was due primarily to a $17.7$44.4 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $10.3$15.1 million increase in personnel costs as a result of higher selling, general and administrative headcount and a $5.6$14.8 million increase in external consultationprofessional fees relating to general and administrative expenses.function.

Provision for income taxes in fiscal 20252026 decreasedincreased by $2.9$0.5 million compared to the same period in fiscal 2024.2025. The decreaseincrease was primarily duedriven by higher pre-tax income generated in tax-paying jurisdictions during the current year relative to the taxsame expense related to the establishment of a full valuation allowance in the U.S.period in fiscal 2024.2025.

Our activities consist primarily of selling our products, licensing our IP, providing IP customization services and conducting research and development of our products and technology.products. As of May 3,2, 20252026 and AprilMay 27,3, 2024,2025, we had cash and cash equivalents of $236.3$1.2 millionbillion and $66.9$236.3 million, respectively, and working capital of $605.8$1.8 millionbillion and $485.6$605.8 million, respectively. Our principal use of cash is to fund our operations and invest in research and development and acquisitions of complementary businesses or technologies to support our growth. See also Note 79 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.

Net cash provided by operating activities was $65.1$464.3 million for fiscal 2025.2026. The cash inflows from operating activities for fiscal 20252026 were primarily due to net income of $52.2$472.3 million adjusted for the following non-cash items: share-based compensation expense of $77.4$182.6 million, depreciation and amortization of $21.9$34.6 million, write-down for excess and obsolete inventory of $15.1 million and other non-cash items of $22.0$1.9 million. This was offset by $108.4$242.3 million of cash outflows for working capital purposes. The cash outflows from working capital for fiscal 20252026 were primarily driven by (a) an increase in accounts receivable of $102.5$70.8 million primarily due to increased sales in the fiscal 20252026 compared to fiscal 20242025 and timing of collection; (b) and an increase in inventory of $70.5$174.0 million to support unfulfilled backlog and related new product ramps.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 $41.9$48.8 million and accrued compensation and benefits, other current liabilities and other non-current liabilities of $15.9$25.1 million due to increased purchases of inventory to support growing demand for our products.

Net cash used in operating activities was $32.7$65.1 million for fiscal 2024.2025. The cash inflows from operating activities for fiscal 20242025 were primarily due to $28.4net millionincome of net$52.2 lossmillion adjusted for the following non-cash items: share-based compensation expense of $39.0$77.4 million, depreciation and amortization of $13.8$21.9 million and other non-cash items of $9.0$22.0 million. This was offset by $0.7$108.4 million of cash outflows for working capital purposes. The cash outflows from working capital for fiscal 20242025 were primarily driven by (a) an increase in accounts receivable of $10.1$102.5 million primarily due to increased sales in the fiscal 20242025 compared to fiscal 20232024 and timing of collection; (b) and an increase in contract assetsinventory of $12.1$70.5 million primarilyto drivensupport byunfulfilled certain IP licensingbacklog and engineeringrelated servicesnew arrangementsproduct where certain billing milestones had not yet been reached but the criteria for revenue had been met.ramps. This was offset by a decreaseincreases in inventoryaccount payable of $15.8$41.9 million primarilyand drivenaccrued by tightened production managementcompensation and increasedbenefits, productother salescurrent comparedliabilities and other non-current liabilities of $15.9 million due to fiscalincreased 2023.purchases of inventory to support growing demand for our products.

Net cash used in investing activities of $249.5$253.5 million for fiscal 20242026 was attributable to purchases of property and equipment of $15.7$57.3 millionmillion, and investmentinvestments in certificates of deposit of $403.6$393.3 million and acquisitions of Hyperlume and Comira for $112.9 million, partially offset by maturities of investment in certificates of depositsdeposit of $169.8$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.

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,to write-down for excess and obsolete inventories, variable consideration from revenue contracts, determination of the fair value of share awards, and the realization of tax assets and estimates of tax reserves.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.

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended May 3,2, 2025,2026, which could adversely affect our business, financial condition, results of operations, cash flows and the trading price of our ordinary shares. As of the date of this Quarterly Report on Form 10-Q there have been no material changes from the risk factors previously disclosed in our in the Annual Report on Form 10-K for the fiscal year ended May 3,2, 2025.2026.

At Credo, our mission is to transform connectivity at scale through fast, reliable and energy-efficient system solutions. The Company’s high-speed 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 PILOT diagnostic and analytics software platform. The CompanyCompany’s innovations enable our customers to connect the systems that connect the world.

DataArtificial Intelligence (AI) has bred a new generation hasof increaseddata dramaticallycenters over the past ten5 years,years creatingthat newdepend much more heavily on high speed, reliable communications for Front End, Scale Out, Scale Up and complicatedemerging challengesScale inIn both circuit and system design.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 partnerpartnered with MicrosoftOracle onto develop our HiWireZeroFlap Switch AEC and open-source implementationOptics that helps realizeaddress Microsoft’sthe visionreliability forissues aknown highlyas reliableLink network-managedFlap dual-Top-of-Rackwhich (ToR)plague architecturecommodity (a network architecture designoptions in whichAI computingdata equipmentcenters locatedenabling withinfaster theAI samecluster orturn anon adjacentand rack are, for redundancy, connectedtime to twofirst in-rack network switches, which are, in turn, connected to aggregation switches via fiber optic cables), overcome complex and slow legacy enterprise approaches, simplify deployment and improve connection reliability in the data center.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, AI/ML infrastructure, multi-service operators (MSOs)compute and mobiledata network operators (MNOs).centers. The demands for increased bandwidth, better reliability and improved power andefficiency costhave efficiencygrown as AI model sizes have increased from billions to trillions of parameters and heightenedthe securityworkload have simultaneously and dramaticallyhas expanded asfrom work,training educationto and entertainment have rapidly digitized across myriad endpoint users.inference.

We sell our products to hyperscalers, Neoclouds, original equipment manufacturers (OEMs), original design manufacturers (ODMs) 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 of 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 unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. 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 revenue based on end customer profile, rather than based on the contracting parties who place purchase orders or sign revenue contracts with us:

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 also develop IP solutions to address the specific and complex needs of our customers. We earn revenue from these IP solutions primarily through licensing fees and royalties.

Three and Nine Months Ended JanuaryAugust 31,1, 2026 and FebruaryAugust 1,2, 2025

Comparison of Three and Nine Months Ended JanuaryAugust 31,1, 2026 and FebruaryAugust 1,2, 2025

Revenue for the three and nine months ended JanuaryAugust 31,1, 2026 increased by $272.0$255.9 million and $631.4 million respectively,million, compared to the same period in fiscal year 2025.2026. The increase in revenue for the three and nine months ended JanuaryAugust 31,1, 2026, compared to the same periodsperiod in fiscal year 2025,2026, was primarily due to a significant increase in the volume of unit shipmentsshipment of AEC products.products which contributed over 90% of the increase in revenue. The sales increase was primarily driven by the ramp-up of our AEC solutions at our hyperscale data center customers during the three and nine months ended JanuaryAugust 31,1, 2026.

Cost of revenue for the three and nine months ended JanuaryAugust 31,1, 2026 increased by $79.1$97.2 million and $189.8 million, respectively, compared to the same periodsperiod in fiscal year 2025,2026, primarily due to the increased shipments of AEC products noted above.

Gross margin in the three and nine months ended JanuaryAugust 31,1, 2026 increaseddecreased by 4.9 and 4.72.9 percentage points, respectively, compared to the same periodsperiod in fiscal year 2025,2026, primarily driven by the improved economiesamortization of scaleacquired inintangible our revenue.assets.

Research and development expense for the three months ended JanuaryAugust 31,1, 2026 increased by $42.2$62.1 million compared to the same period in fiscal year 2025.2026. The increase was due primarily to a $21.8$25.8 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to employees, a $6.1$13.0 million increase in personnel costs as a result of new hires for product development, a $10.7$17.8 million increase in design activities and higher engineering activities relating to testing and laboratory supplies for new product development and a $1.1$2.5 million increase in depreciation and amortization expense associated with an increase in R&D equipment.equipment and amortization of acquired intangible assets.

Selling, general and administrative expense for the three months ended JanuaryAugust 31,1, 2026 increased by $27.3$36.7 million compared to the same period in fiscal year 2025.2026. The increase was primarily due to a $14.0$21.3 million increase in share-based compensation expense driven by increased amortization expense from new equity awards granted to executives and employees, a $5.3$5.9 million increase in personnel costs as a result of higher selling, general and administrative headcount, a $6.5$7.4 million increase in external consultation fees relating to general and administrative expenses and acquisition-related costs relating to the HyperlumeDustPhotonics acquisition.

Provision (benefit) for Income Taxes

Provision for income taxes for the three and nine months ended JanuaryAugust 31,1, 2026 increaseddecreased by $1.2 million and $2.6$1.9 million, respectively, compared to the same period in fiscal year 2025.2026. The increasedecrease was primarily driven by higher pre-tax income generated in tax-paying jurisdictions during the current year relativedue to the sametax periodimpact inof fiscalacquired yearintangible 2025.assets and related purchase accounting adjustments arising from the DustPhotonics acquisition.

Our activities consist primarily of selling our products, licensing our IP, providing product and IP engineering services and conducting research and development of our products and technology.products. As of JanuaryAugust 31,1, 2026 and May 3,2, 2025,2026, we had $1,220.5$466.9 million and $236.3$1.2 millionbillion in cash and cash equivalents, respectively, and working capital of $1,621.4$1.3 millionbillion and $605.8$1.8 million,billion, respectively. Our principal use of cash is to fund our operations, invest in research and development and acquisitions of complementary businesses or technologies to support our growth. See Note 89 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a further discussion of our cash requirements under non-cancelable purchase obligations.

During the nine months ended January 31, 2026, the Company received $736.3 million in net proceeds through the issuance of 4.8 million ordinary shares under the At-The-Market Offering. See Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a further discussion of our arrangement under the At-The-Market 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.

Net cash provided by operating activities was $282.1$90.2 million for the ninethree months ended JanuaryAugust 31,1, 2026. The cash inflows from operating activities for the ninethree months ended JanuaryAugust 31,1, 2026 were primarily due to net income of $303.2$129.4 million adjusted for the following non-cash items: share-based compensation expense of 132.9$88.0 million, depreciation and amortization of $18.8$8.6 million, amortization of acquired intangible assets of $11.6 million and write-downs for excess and obsolete inventory of $11.8$3.9 million, partially offset by $184.7$151.3 million of cash outflows from working capital purposes. The cash outflows from working capital for the ninethree months ended JanuaryAugust 31,1, 2026 were primarily driven by (a) an increase in accounts receivable of $81.1$54.5 million primarily due to largeincreased billings from customers not due yetsales in the ninethree months ended JanuaryAugust 31,1, 2026; (b) an increase in inventory of $127.9$61.5 million to support unfulfilled backlog and related new product ramps; and (c) an increase in other non-current assets of $20.8$25.3 million primarily relating to payments of refundable deposits for a manufacturing supply capacity reservation agreement; Theseand cash(d) outflowsa were offset by cash inflows relating to an increasedecrease in accounts payable and other current liabilities of $48.8$16.4 million due to timing of payments for inventory and IP license purchases.

Net cash provided by operating activities was $7.3$54.2 million for the ninethree months ended FebruaryAugust 1,2, 2025. The cash inflows from operating activities for the ninethree months ended FebruaryAugust 1,2, 2025 were primarily due to $15.6$63.4 million in net income adjusted for the following non-cash items: share-based compensation expense of $35.5 million, depreciation and $81.3amortization of $5.5 million ofand other non-cash items,items partiallyof $2.0 million. This was offset by $89.6$52.1 million of cash outflows for working capital purposes. The cash outflows from working capital for the ninethree months ended FebruaryAugust 1,2, 20252025, werewhich was primarily driven by (a) an increase in accounts receivable of $97.5$19.1 million primarily due to largeincreased billings from customers not due yetsales in the ninethree months ended FebruaryAugust 1,2, 2025; (b) an increase in inventory of $31.7$27.5 million to support unfulfilled backlog and related new product ramps.ramps These cash outflows were offset by cash inflows relating toand (ac) an increase in accounts payable of $22.3$9.0 million anddue (b)to an increase in accrued expensestiming of $13.0payment million,for bothpurchases relatingof toproperty increasedand inventory purchases.equipment.

Cash Flows (Used in) Provided by Investing Activities

Net cash used in investing activities of $21.1$762.0 million in the ninethree months ended JanuaryAugust 31,1, 2026 was primarily attributable to purchases of property and equipment of $52.5$7.3 million, purchases of certificates of deposit for $115.0$19.1 million,andmillion, and net cash payment for HyperlumeDustPhotonics acquisition of $82.6 million, offset by maturities of certificates of deposit for $229.0$735.6 million. Purchases of property and equipment primarily related to mask set costs capitalized relating to the Company’s products already introduced or to be introduced and third-party IP licenses andequipment, computer equipment and software used for research and development purposes.

Net cash providedused byin investing activities of $230.7$67.8 million in the ninethree months ended FebruaryAugust 1,2, 2025 was primarily attributable to maturitiespurchases of the certificates of deposit for $376.8 million, offset by purchases of the same for $113.7$115.0 million and purchases of property and equipment of $32.4$2.8 million, offset by maturities of certificates of deposit for $50.0 million. Purchases of property and equipment primarily related to mask sets costs capitalized relating to the Company’s products already introduced or in process of being introduced and third-party IP licenses and computer equipment and software used for research and development purposes.

Cash Flows Provided by (Used in) Financing Activities

Net cash used in financing activities of $5.8$26.7 million for the ninethree months ended FebruaryAugust 1, 20252026 was primarily attributable to $5.4$5.2 million in payments for long-term technology license obligations and $7.2$25.9 million tax withheld related to RSU settlement,settlement offset by $6.8$4.5 million in proceeds from exercises of employee share options.

Except for the accounting policy for business combinations that was updated as a result of our acquisition of the Hyperlume business, thereThere have been no material changes to our critical accounting estimates during the three and nine months ended JanuaryAugust 31,1, 2026, as compared to those disclosed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended May 3,2, 2025.2026. In the current macroeconomic environment, our estimates could require increased judgment and carry a higher degree of variability and volatility. We continue to monitor and assess our estimates in light of developments, and as events continue to evolve and additional information becomes available, our estimates may change materially in future periods.