Astera Labs Announces Financial Results for the Second Quarter

Astera Labs Announces Financial Results for the Second Quarter of Fiscal Year 2024

Record quarterly revenue of $76.9 million, up 18% QoQ and up 619% YoY
Multiple secular trends, design wins across diverse AI platform architectures, and increasing average dollar content position the Company to outpace industry growth

SANTA CLARA, Calif. — (BUSINESS WIRE) — August 6, 2024 — Astera Labs, Inc. (Nasdaq: ALAB), a global leader in semiconductor-based connectivity solutions for cloud and AI infrastructure, today announced preliminary financial results for the second quarter of fiscal 2024, ended June 30, 2024.

“Astera Labs achieved robust top-line growth during Q2, and we expect even stronger sequential growth in the September quarter, fueled by the production ramp of new AI platforms at hyperscalers featuring both third-party and internally developed accelerators,” said Jitendra Mohan, Astera Labs’ Chief Executive Officer. “Sustained secular trends in AI adoption, design wins across diverse AI platform architectures, and increasing average dollar content in next generation GPU-based AI platforms give us confidence in our ability to outperform industry growth rates. Our close collaboration with hyperscalers and AI platform providers continues to yield valuable insights, unlocking new product and business opportunities for our Intelligent Connectivity Platform, which we believe will drive strong, long-term growth.”

Second Quarter of Fiscal 2024 Financial Highlights

GAAP Financial Results:

Revenue of $76.9 million, up 18% sequentially and up 619% year-over-year
GAAP gross margin of 77.9%
GAAP operating loss of $24.3 million
GAAP net loss of $7.5 million
GAAP diluted net loss per share of $0.05

Non-GAAP Financial Results (excluding the impact of stock-based compensation expense and the income tax effects of non-GAAP adjustments):

Non-GAAP gross margin of 78.0%
Non-GAAP operating income of $18.7 million
Non-GAAP net income of $22.2 million
Non-GAAP diluted earnings per share of $0.13

Second Quarter of Fiscal 2024 and Recent Business Highlights

Demonstrated the industry’s first end-to-end PCIe optical connectivity link to provide extended reach for larger, disaggregated GPU clusters. PCIe over optics expands Astera Labs’ widely deployed and field-tested Aries family of Smart DSP retimers and Smart Cable Modules (SCMs) to deliver robust PCIe and CXL connectivity in chip-to-chip, box-to-box, and rack-to-rack topologies throughout the data center.
Announced the expansion of PCIe 6.x testing capabilities with a new Cloud-Scale Interop Lab in Taiwan, accelerating time-to-market for PCIe 6.x AI servers optimized with the recently launched Aries 6 Smart DSP retimers. The new Interop Lab will facilitate closer collaboration with key ODM customers to test Aries 6 in complex PCIe topologies with a broad variety of hosts and endpoints interconnected over varying channel insertion loss budgets in real systems.
Announced the intention to expand operations into India with a new R&D site to further scale the organization and strengthen the Company’s global footprint. The new site will open in Bangalore later this year and we believe it will help to attract the region’s rich engineering talent and resources to support the next phase of growth for Astera Labs.
Appointed Bethany Mayer to the Board of Directors, bringing over 30 years of experience as a visionary leader and board member across multiple networking, cybersecurity, and semiconductor companies.

Third Quarter of Fiscal 2024 Financial Outlook

Based on current business trends and conditions, we estimate the following:

GAAP Financial Outlook:

Revenue within a range of $95 million to $100 million
GAAP gross margin of approximately 75%
GAAP operating expenses of within a range of approximately $92 million to $93 million
GAAP tax rate of approximately (22%)
GAAP diluted loss per share within a range of approximately $0.06 to $0.08 on weighted-average diluted shares outstanding of approximately 155 million

Non-GAAP Financial Outlook (excluding the impact of approximately $46 million of stock-based compensation and including $5.5 million of additional income taxes):

Non-GAAP gross margin of approximately 75%
Non-GAAP operating expenses within a range of approximately $46 million to $47 million
Non-GAAP tax rate of approximately 20%
Non-GAAP diluted earnings per share within a range of approximately $0.16 to $0.17 on weighted-average diluted shares outstanding of approximately 177 million

Earnings Webcast and Conference Call

Astera Labs will host a conference call to review its financial results for the second quarter of fiscal 2024 and to discuss our financial outlook today at 1:30 p.m. Pacific Time. Interested parties may join the conference call by dialing 1-800-715-9871 and using conference ID 8761024. The call will also be webcast and can be accessed at the Astera Labs website at https://ir.asteralabs.com/. The webcast will be recorded and available for replay on our website for the next six months.

Discussion of Non-GAAP Financial Measures

We use certain non-GAAP financial measures to supplement the performance measures in our consolidated financial statements, which are presented in accordance with GAAP. A reconciliation of these non-GAAP measures to the closest GAAP measure can be found later in this release. These non-GAAP financial measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP tax rate, non-GAAP net income (loss), non-GAAP diluted earnings (loss) per share, and non-GAAP weighted-average share count. We use these non-GAAP financial measures for financial and operational decision-making and as a means to assist us in evaluating period-to-period comparisons. By excluding certain items that may not be indicative of our recurring core operating results, we believe that, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP tax rate, non-GAAP net income (loss), pro forma non-GAAP diluted earnings (loss) per share, and pro forma non-GAAP weighted-average share count provide meaningful supplemental information regarding our performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and they may be used by our institutional investors and the analyst community to help them analyze the health of our business. However, there are a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures. No reconciliation is provided with respect to the forward-looking non-GAAP financial measures included in our non-GAAP financial outlook, as the GAAP measures are not accessible on a forward-looking basis. As a result, we cannot reliably predict all necessary components or their impact to reconcile such financial measures without unreasonable effort. The events necessitating a non-GAAP adjustment are inherently unpredictable and may have a significant impact on our future GAAP financial results.

We adjust the following items from one or more of our non-GAAP financial measures:

Stock-based compensation expense

We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. In particular, companies calculate non-cash stock-based compensation expense using a variety of valuation methodologies and subjective assumptions. Moreover, stock-based compensation expense is a non-cash charge that can vary significantly from period to period for reasons that are unrelated to our core operating performance, and therefore excluding this item provides investors and other users of our financial information with information that allows meaningful comparison of our business performance across periods.

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