Astera Labs Announces Financial Results for the Third Quarter of

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

Record quarterly revenue of $113.1 million, up 47% QoQ and up 206% YoY
Expanding market opportunities with new Scorpio Fabric Switches, driving higher dollar content in AI platforms

SANTA CLARA, Calif. — (BUSINESS WIRE) — November 4, 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 third quarter of fiscal year 2024, ended September 30, 2024.

“Astera Labs delivered strong Q3 results, setting our fifth consecutive quarterly revenue record and grew 47% versus the previous quarter,” said Jitendra Mohan, Astera Labs’ Chief Executive Officer. “Our business has now entered a new growth phase with multiple product families ramping across AI platforms based upon both third-party GPUs and internally developed AI accelerators. With expanding product portfolio including the new Scorpio Fabric Switches, we are cementing our position as a critical part of AI connectivity infrastructure, delivering increased value to our hyperscaler customers, and unlocking additional multi-year growth trajectories for Astera.”

Third Quarter of Fiscal 2024 Financial Highlights

GAAP Financial Results:

Revenue of $113.1 million, up 47% sequentially and up 206% year-over-year
GAAP gross margin of 77.7%
GAAP operating loss of $8.9 million
GAAP operating margin of (7.9%)
GAAP net loss of $7.6 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 77.8%
Non-GAAP operating income of $36.6 million
Non-GAAP operating margin of 32.4%
Non-GAAP net income of $40.3 million
Non-GAAP diluted earnings per share of $0.23

Third Quarter of Fiscal 2024 and Recent Business Highlights

Introduced new portfolio of Scorpio Smart Fabric Switches purpose-built for AI infrastructure at cloud-scale. The Scorpio Smart Fabric Switch family features two application-specific product lines with a multi-generational roadmap, including the P-Series for GPU-to-CPU/NIC/SSD PCIe Gen 6 connectivity and the X-Series for platform-specific, back-end GPU clustering. Scorpio is currently shipping in pre-production quantities.
Joined the Ultra Accelerator Link (UALink) Consortium as a promoting member on the Board of Directors. UALink technology will be used to enable efficient high-speed scale-up connectivity between AI accelerators within large and growing cluster sizes for AI workloads. Astera Labs is well positioned to quickly contribute to this new and compelling industry initiative to develop and advance UALink technology.
Demonstrated current and next-generation product families in collaboration with over a dozen customers and partners at the 2024 OCP Global Summit, including the industry’s first live end-to-end PCIe Gen 6 system leveraging the Scorpio P-Series Fabric Switch and Aries 6 Smart DSP Retimer. Showed live demonstrations of CXL Memory Controllers seamlessly operating with next-generation data center server CPUs. Showcased Aries Smart Cable Modules for both Active Electrical Cable and Active Optical Cable applications to extend reach in multi-rack GPU clustering use-cases, and Taurus Smart Cable Modules to enable high-speed connectivity over Ethernet for front and back-end networking.
Won the Future of Memory and Storage (FMS) 2024 Most Innovative Technology Award for the ‘AI Inferencing with CXL solution’ category alongside ecosystem partners. The joint demonstration showed AI inferencing benefit gains by using CXL-attached memory. Astera Labs is now a two-time winner at FMS having won the award at FMS 2023 by demonstrating high-performance OLTP (Online Transaction Processing) with CXL-attached memory.

Fourth Quarter of Fiscal 2024 Financial Outlook

Based on current business trends and conditions, Astera Labs estimates the following:

GAAP Financial Outlook:

Revenue within a range of $126 million to $130 million
GAAP gross margin of approximately 75%
GAAP operating expenses within a range of approximately $101 million to $102 million
GAAP taxes in a range of $3 million to $5 million tax benefit
GAAP diluted earnings per share within a range of approximately $0.04 to $0.06 on weighted-average diluted shares outstanding of approximately 179 million

Non-GAAP Financial Outlook (excluding the impact of approximately $47 million of stock-based compensation and including a range of $8 million to $10 million of additional income taxes):

Non-GAAP gross margin of approximately 75%
Non-GAAP operating expenses within a range of approximately $54 million to $55 million
Non-GAAP tax rate of approximately 10%
Non-GAAP diluted earnings per share within a range of approximately $0.25 to $0.26 on non-GAAP weighted-average diluted shares outstanding of approximately 179 million

Earnings Webcast and Conference Call

Astera Labs will host a conference call to review its financial results for the third 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 5908687. 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 the company’s 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 expenses, non-GAAP operating income (loss), non-GAAP operating margin, 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 expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP tax rate, non-GAAP net income (loss), non-GAAP pro forma diluted earnings (loss) per share, and non-GAAP pro forma 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 comparisons of our business performance across periods.

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