CRDO

• Revenue is highly concentrated, with the top 10 customers accounting for approximately 90% of total revenue in fiscal 2026, and sales are made on a purchase order basis without long-term commitments.
• Evolving U.S. tariffs and trade tensions, particularly with China, could increase costs, disrupt the supply chain, and adversely affect the business.
• The company relies on a limited number of third parties, notably TSMC for all IC manufacturing, and has no long-term supply contracts, creating significant supply chain vulnerability.
• Intense competition from larger, well-resourced companies like Broadcom, Marvell, and Astera Labs could lead to price pressure, reduced profitability, and loss of market share.
• The lengthy, competitive 'design win' process requires substantial upfront investment with no guarantee of future revenue, and failure to secure wins can lock the company out of customer projects for a generation.
• The company faces risks from being a Cayman Islands holding company, including potential PFIC classification for U.S. investors and difficulties in enforcing U.S. legal judgments.

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. 58 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.

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.

• Total revenue grew $898.3M to $1.34B, with over 99% of the increase from higher AEC unit shipments to hyperscale data center customers.
• Gross margin expanded 3.2pp to 68.0%, primarily due to improved economies of scale as revenue scaled.
• Operating expenses rose but leveraged sharply: R&D increased 90% to $279.4M and SG&A rose 86% to $184.0M, yet combined they fell to 34.7% of revenue from 56.3%.
• Share-based compensation was a major cost driver, rising $60.9M in R&D and $44.4M in SG&A from new equity awards.
• Cash from operations reached $464.3M; the company raised $736.3M via an ATM equity offering, ending the year with $1.2B in cash and equivalents.
• Customer concentration remained high with two end customers (B and D) each accounting for over 30% of revenue.

• Most sales and expenses are in USD, but international operational costs in foreign currencies create exchange-rate exposure.
• A 10% weakening of the USD would have increased fiscal 2026 operating expense by approximately 1%, per the company's sensitivity analysis.
• The company has not used foreign currency derivatives to date but may use forwards and options in the future to hedge certain exposures.
• Excess cash is invested in money market funds and time deposits under a policy requiring minimum credit ratings and diversification.
• Fixed-rate securities face fair-value declines if interest rates rise, while floating-rate securities could generate less income if rates fall.

• Ernst & Young LLP audited the consolidated financial statements for the fiscal year ended May 2, 2026, and issued an unqualified opinion that they present fairly, in all material respects, the company's financial position and results of operations.
• The auditor also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of May 2, 2026.
• The critical audit matter identified relates to the valuation of inventories, which totaled $250.8 million, due to the subjective judgment required in estimating net realizable value for excess and obsolete inventory.
• The auditor's procedures to address the inventory valuation matter included testing internal controls, evaluating product demand assumptions, and performing sensitivity analyses on those assumptions.