IPO details
Company intro
As per its regulatory filings, Credo provides secure, high-speed connectivity solutions that deliver improved power and cost efficiency within the data infrastructure market where data rates and bandwidth requirements continue to increase exponentially. Its solutions ease system bandwidth bottlenecks while improving on power, security and reliability.
The company’s connectivity solutions are optimized for optical and electrical Ethernet applications, including the emerging 100G, 200G, 400G and 800G port markets. Credo’s products are based on its proprietary Serializer/Deserializer (SerDes) and Digital Signal Processor (DSP) technologies. Its product families include integrated circuits, active electrical cables, and SerDes Chiplets. Its intellectual property solutions consist primarily of SerDes IP licensing.
Financials
Credo reported total revenue of $58.7 million in 2021 compared to $53.8 million in 2020. In 2021, 63% of the company’s revenue came from product sales and product engineering services while 37% came from IP license and IP license engineering services. In 2021, Credo reported a net loss of $27.5 million versus net income of $1.3 million in 2020 mainly due to higher operating expenses. Adjusted net loss amounted to $13.9 million during the year versus an income of $2.5 million last year.
Market opportunity
Data infrastructure is a multi-billion dollar market that is driven largely by hyperscale data centers, high performance computing and 5G infrastructure. The digital transformation in work, education and entertainment has increased the demand for higher bandwidth, more power and security, along with cost efficiency.
According to its regulatory filings, Credo targets the wired connectivity market as it relates to communication electronics within the data infrastructure ecosystem. Gartner forecasts this market will grow from $12 billion in 2020 to $17 billion in 2025. The market for high-speed connectivity products is estimated to grow from $2 billion in 2022 to $5 billion in 2025.