- 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
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.
Employer payroll taxes related to
stock-based compensation resulting from our IPO
We exclude employer payroll taxes related to the time-based
vesting and net settlement of restricted stock units in connection
with our initial public offering (the “IPO”), because this does not
correlate to the operation of our business. We believe that
excluding this item provides meaningful supplemental information
regarding operational performance given the amount of employer
payroll tax-related items on employee stock transactions was
immaterial prior to our IPO.
Income Tax effect
This represents the impact of the non-GAAP adjustments on an
after-tax basis in connection with the presentation of non-GAAP net
income (loss) and non-GAAP net income (loss) per diluted share.
This approach is designed to enhance investors’ ability to
understand the impact of our non-GAAP tax expense on its current
operations, provide improved modeling accuracy, and substantially
reduce fluctuations caused by GAAP to non-GAAP adjustments.
Pro-forma non-GAAP weighted-average shares
to compute non-GAAP net income (loss)
We present pro-forma non-GAAP weighted-average shares, assuming
the redeemable convertible preferred stock is converted from the
beginning of each respective periods presented, to provide
meaningful supplemental information regarding EPS trend on a
consistent basis. All of our outstanding redeemable preferred stock
converted into the equivalent number of shares of common stock in
connection with our IPO.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements based on
Astera Labs' current expectations. The words "believe", "estimate",
"expect", "intend", "anticipate", "plan", "project", "will", and
similar phrases as they relate to Astera Labs are intended to
identify such forward-looking statements. These forward-looking
statements reflect the current views and assumptions of Astera Labs
and are subject to various risks and uncertainties that could cause
actual results to differ materially from expectations. These
forward-looking statements include but are not limited to,
statements regarding our future operating results, financial
position and guidance, our business strategy and plans, our
objectives for future operations, including the success of our
global footprint expansion, our development or delivery of new or
enhanced products and anticipated results of those products for our
customers, our competitive positioning, technological capabilities
and plans, and macroeconomic trends in cloud and AI infrastructure.
A variety of risks and factors that are beyond our control could
cause actual results to differ materially from those in the
forward-looking statements including, without limitation: the
competitive and cyclical nature of the semiconductor industry; the
concentration of our customer base; the continued demand for AI;
the challenging macroeconomic environment, including disruptions in
the financial services industry; risks that demand and the supply
chain may be adversely affected, including by military conflict
(such as between Russia/Ukraine and Israel/Hamas), terrorism,
sanctions or other geopolitical events globally (including conflict
between Taiwan and China); quarterly fluctuations in revenues and
operating results; difficulties developing new products that
achieve market acceptance; risks associated with managing
international activities (including trade barriers, particularly
with respect to China); absence of long-term commitments from
customers; risks that Astera Labs may not be able to manage strains
associated with its growth; credit risks associated with its
accounts receivable; stock price volatility; information technology
risks, including cyber-attacks against Astera Labs' products and
its networks; and other risks and uncertainties that are detailed
under the caption “Risk Factors” and elsewhere in our Quarterly
Reports on Form 10-Q filed with the Securities and Exchange
Commission (the “SEC”) and the other SEC filings and reports Astera
Labs may make from time to time. Moreover, we operate in a very
competitive and rapidly changing environment, and new risks may
emerge from time to time. It is not possible for our management to
predict all risks, nor can we assess the impact of all factors on
our business or the extent to which any factor(s) may cause actual
results or outcomes to differ materially from those contained in
any forward-looking statements we may make. Accordingly, you should
not rely on any of the forward-looking statements. Astera Labs
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as required by law.
About Astera Labs
Our PCIe, CXL and Ethernet semiconductor-based connectivity
solutions are purpose-built to unleash the full potential of
accelerated computing at cloud-scale. Inspired by trusted
partnerships with hyperscalers and the data center ecosystem, we
are an innovation leader of products that are customizable,
interoperable, and reliable. Discover how we are transforming AI
and modern data-driven applications at www.asteralabs.com.
ASTERA LABS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
(In thousands)
June 30, 2024
December 31,
2023
Assets
Current assets
Cash and cash equivalents
$
421,076
$
45,098
Marketable securities
409,919
104,215
Accounts receivable, net
22,233
8,335
Inventory
28,572
24,095
Prepaid expenses and other current
assets
9,445
4,064
Total current assets
891,245
185,807
Property and equipment, net
21,821
4,712
Other assets
2,449
5,773
Total assets
$
915,515
$
196,292
Liabilities, Redeemable Convertible
Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable
$
14,595
$
6,337
Accrued expenses and other current
liabilities
49,478
28,742
Total current liabilities
64,073
35,079
Other liabilities
6,190
3,787
Total liabilities
70,263
38,866
Commitments and contingencies
Redeemable convertible preferred stock
—
255,127
Stockholders’ equity (deficit)
Common stock
16
4
Additional paid-in capital
1,071,504
27,411
Accumulated other comprehensive (loss)
income
(352
)
259
Accumulated deficit
(225,916
)
(125,375
)
Total stockholders’ equity (deficit)
845,252
(97,701
)
Total liabilities, redeemable convertible
preferred stock and stockholders’ equity (deficit)
$
915,515
$
196,292
ASTERA LABS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
Six Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Revenue
$
76,850
$
65,258
$
10,688
$
142,108
$
28,352
Cost of revenue
16,996
14,738
2,249
31,734
15,655
Gross profit
59,854
50,520
8,439
110,374
12,697
Operating expenses
Research and development
40,089
53,558
17,860
93,647
33,127
Sales and marketing
22,076
55,510
5,097
77,586
9,490
General and administrative
22,036
24,419
3,095
46,455
6,620
Total operating expenses
84,201
133,487
26,052
217,688
49,237
Operating loss
(24,347
)
(82,967
)
(17,613
)
(107,314
)
(36,540
)
Interest income
10,264
2,554
1,555
12,818
3,151
Loss before income taxes
(14,083
)
(80,413
)
(16,058
)
(94,496
)
(33,389
)
Income tax (benefit) provision
(6,537
)
12,582
3,946
6,045
4,069
Net loss
$
(7,546
)
$
(92,995
)
$
(20,004
)
$
(100,541
)
$
(37,458
)
Net loss per share attributable to common
stockholders:
Basic and diluted
$
(0.05
)
$
(1.77
)
$
(0.55
)
$
(0.97
)
$
(1.03
)
Weighted-average shares used in
calculating net loss per share attributable to common
stockholders:
Basic and diluted
155,199
52,532
36,567
103,865
36,199
ASTERA LABS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Six Months Ended
June 30, 2024
June 30, 2023
Cash flows from operating
activities
Net loss
$
(100,541
)
$
(37,458
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities
Stock-based compensation
140,835
4,669
Inventory write-downs
1,493
9,733
Depreciation
1,331
763
Non-cash operating lease expense
1,106
536
Warrants contra revenue
443
127
Accretion of discounts on marketable
securities
(1,637
)
(640
)
Changes in operating assets and
liabilities:
Accounts receivable, net
(13,898
)
9,081
Inventory
(5,970
)
1,374
Prepaid expenses and other assets
(5,396
)
223
Accounts payable
5,831
(7,745
)
Accrued expenses and other liabilities
10,930
(6,844
)
Operating lease liability
(1,062
)
(600
)
Net cash provided by (used in) operating
activities
33,465
(26,781
)
Cash flows from investing
activities
Purchases of property and equipment
(2,100
)
(1,014
)
Purchases of marketable securities
(345,756
)
(27,274
)
Maturities of marketable securities
20,776
18,000
Sales of marketable securities
20,358
54,749
Net cash (used in) provided by investing
activities
(306,722
)
44,461
Cash flows from financing
activities
Proceeds from issuance of common stock in
connection with initial public offering, net of underwriting
discounts and commissions
672,198
—
Payment of deferred offering costs
(4,801
)
—
Tax withholding related to net share
settlements of restricted stock units
(20,111
)
—
Proceeds (payments) from exercises of
stock options, net of repurchases
1,949
(87
)
Net cash provided by (used in) financing
activities
649,235
(87
)
Net increase in cash and cash
equivalents
375,978
17,593
Cash and cash equivalents
Beginning of the period
45,098
76,088
End of the period
$
421,076
$
93,681
ASTERA LABS, INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES (Unaudited)
(In thousands, except
percentages and per share amounts)
Three Months Ended
Six Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
GAAP gross profit
$
59,854
$
50,520
$
8,439
$
110,374
$
12,697
Stock-based compensation expense upon IPO
(1)
—
516
—
516
—
Stock-based compensation expense
84
12
2
96
7
Non-GAAP gross profit
$
59,938
$
51,048
$
8,441
$
110,986
$
12,704
GAAP gross margin
77.9
%
77.4
%
79.0
%
77.7
%
44.8
%
Stock-based compensation expense upon IPO
(1)
—
0.8
—
0.3
—
Stock-based compensation expense
0.1
—
—
0.1
—
Non-GAAP gross margin
78.0
%
78.2
%
79.0
%
78.1
%
44.8
%
GAAP operating loss
$
(24,347
)
$
(82,967
)
$
(17,613
)
$
(107,314
)
$
(36,540
)
Stock-based compensation expense upon IPO
(1)
—
88,873
—
88,873
—
Stock-based compensation expense
43,067
8,895
2,672
51,962
4,669
Employer payroll tax related to
stock-based compensation from IPO (2)
—
1,072
—
1,072
—
Non-GAAP operating income (loss)
$
18,720
$
15,873
$
(14,941
)
$
34,593
$
(31,871
)
GAAP net loss
$
(7,546
)
$
(92,995
)
$
(20,004
)
$
(100,541
)
$
(37,458
)
Stock-based compensation expense upon IPO
(1)
—
88,873
—
88,873
—
Stock-based compensation expense
43,067
8,895
2,672
51,962
4,669
Employer payroll tax related to
stock-based compensation from IPO (2)
—
1,072
—
1,072
—
Income tax effect (3)
(13,296
)
8,485
—
(4,811
)
—
Non-GAAP net income (loss)
$
22,225
$
14,330
$
(17,332
)
$
36,555
$
(32,789
)
Net (loss) income per share
attributable to common stockholders:
GAAP - basic and diluted
$
(0.05
)
$
(1.77
)
$
(0.55
)
$
(0.97
)
$
(1.03
)
Pro forma Non-GAAP - diluted
$
0.13
$
0.10
$
(0.14
)
$
0.23
$
(0.26
)
Weighted average shares used to compute
net loss per share attributable to common stockholders:
GAAP - basic and diluted
155,199
52,532
36,567
103,865
36,199
Pro forma Non-GAAP - diluted (4)
175,279
147,514
127,458
162,378
127,090
_______________________
(1) Stock-based compensation expense
recognized in connection with the time-based vesting and settlement
of RSUs that had previously met the time-based vesting condition
and for which the liquidity event vesting condition was satisfied
in connection with our IPO.
(2) Employer payroll taxes related to the
time-based vesting and settlement of RSUs, that had previously met
the time-based vesting condition and for which the liquidity event
vesting condition was satisfied in connection with our IPO.
(3) The income tax effect represents the
impact of the non-GAAP adjustments on an after-tax basis in
connection with the presentation of non-GAAP net income (loss) and
non-GAAP net income (loss) per diluted share. For the three months
ended June 30, 2024 and March 31, 2024, the non-GAAP tax rates were
approximately of 23% and 22%, respectively. For the six months
ended June 30, 2024, the non-GAAP tax rate was approximately 23%.
The adjustments for the three and six months ended June 30, 2023
were not material.
(4) We present the pro-forma non-GAAP
weighted average shares to provide meaningful supplemental
information of comparable shares for each periods presented. The
pro forma weighted average shares is calculated as follows:
Three Months Ended
Six Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Shares used to compute GAAP net loss per
share attributable to common stockholders - diluted
155,199
52,532
36,567
103,865
36,199
Weighted average effect of the assumed
conversion of redeemable convertible preferred stock from the
beginning of the periods
—
78,905
90,891
40,451
90,891
Effect of dilutive equivalent shares
20,080
16,077
—
18,062
—
Shares used to compute pro forma non-GAAP
net income (loss) per share- diluted
175,279
147,514
127,458
162,378
127,090
ASTERA LABS, INC.
SUPPLEMENTAL FINANCIAL
INFORMATION
STOCK-BASED COMPENSATION
EXPENSE (Unaudited)
(In thousands)
Three Months Ended
Six Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Cost of revenue
$
84
$
528
$
2
$
612
$
7
Research and development
12,971
30,007
1,672
42,978
3,351
Sales and marketing
15,758
49,258
694
65,016
695
General and administrative
14,254
17,975
304
32,229
616
Total stock-based compensation expense
(1)
$
43,067
$
97,768
$
2,672
$
140,835
$
4,669
____________________
(1) Stock-based compensation expense
recognized during the three months ended March 31, 2024 and six
months ended June 30, 2024 included $88.9 million of cumulative
stock-based compensation expense related to the time-based vesting
and settlement of RSUs that had previously met the time-based
vesting condition and for which the liquidity event vesting
condition was satisfied in connection with our IPO.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806374053/en/
IR CONTACT: Leslie Green leslie.green@asteralabs.com
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