Credo Technology: total assets grow sharply as revenue growth slows to 165.1%

Revenue growth itself is slowing even as it stays elevated. The 165.1% trailing-twelve-month rate is down 40.6 percentage points from the prior quarter's pace. Even at 165.1%, growth sits in the 73.33th percentile of Credo's own history, below the 226.1% peak it has reached and far above the −13.4% trough recorded in its weakest reported period.

Profitability improved sharply over the same twelve months. Operating margin reached 31.7%, up 13.0 percentage points year over year and in the 94.74th percentile of the company's own quarterly history, just below its historical high of 33.3%. Net margin reached 33.8%. Free-cash-flow margin, at 27.6% of revenue, sits in the 94.44th percentile, up 12.0 percentage points year over year and just under the historical maximum of 30.5%, having been as low as −58.8% earlier in Credo's reporting history.

Cash generation ran ahead of reported profit over the same period: free cash flow grew 369.2% year over year to $438.6 million, outpacing net income's 330.2% growth to $538.3 million. Diluted shares outstanding rose a comparatively modest 2.5% over the same twelve months.

What capex shows and doesn't show

Capital expenditure offers a partial clue. That gap suggests fixed-asset investment alone does not account for the scale of the increase, leaving cash, short-term investments or working capital as more likely contributors, though the filing data used here do not isolate which.

What the filings don't establish

Credo's quarterly filing does not isolate that breakdown in the data used for this analysis, and segment-level drivers are not covered by it either; the notes to the 10-Q and its results discussion would need to be read directly to attribute the increase to particular accounts. That is the detail later filings would need to resolve.

What it means for value

Our model's base case for Credo assumes first-stage growth of 20.0%, the highest rate our model's methodology permits for very fast-growing companies. Because the revenue growth feeding that assumption is itself decelerating, the sensitivity matters: a 5-percentage-point reduction in the growth assumption would lower model value by 22.9%, while a 5-point increase would raise it by 29.3%. Free-cash-flow margin also expanded over the same period, and our model estimates that if that margin move persists, model value would be 72.1% higher than if the margin had stayed at its year-ago level. These are model values under stated assumptions, not a comparison with the share price.

For the fuller financial history behind these figures, see Fundamentalytics' Credo Technology company page.