SANTA CLARA, CA, U.S. – May 7, 2024 – Astera Labs (Nasdaq: ALAB), a global leader in semiconductor-based connectivity solutions for cloud and AI infrastructure, today announced preliminary financial results for the first quarter of fiscal 2024, ended March 31, 2024.
“Astera Labs started the year strong, achieving record revenue in the first quarter, driven by the accelerating deployment of AI infrastructure,” said Jitendra Mohan, Astera Labs’ Chief Executive Officer. “As hyperscalers embark on a significant transformation of their data centers to support AI applications with increased capital investment, we’re witnessing the emergence of a multi-year growth cycle. Our Intelligent Connectivity Platform, comprising of the COSMOS software suite and semiconductor-based PCIe, Ethernet, and CXL solutions, is uniquely positioned to support this growth and is foundational to deploying AI infrastructure at scale. In the first quarter, we further extended our connectivity platform and started sampling our third generation of Aries Retimers with support for PCIe 6.x and the industry’s first PCIe/CXL Smart Cable Modules for Active Electrical Cable applications to enable multi-rack GPU clustering.”
Q1 Financial Highlights
GAAP Financial Results:
Revenue of $65.3 million, up 29% sequentially and up 269% year-over-year
GAAP gross margin of 77.4%
GAAP operating loss of $83.0 million
GAAP net loss of $93.0 million
GAAP basic and diluted net loss per share attributable to common stockholders of ($1.77) on weighted-average shares outstanding of 52.5 million
Non-GAAP Financial Results (excluding the impact of stock compensation, employer payroll tax related to stock-based compensation from our IPO, income tax effects of non-GAAP adjustments, and certain other items):
Non-GAAP gross margin of 78.2%
Non-GAAP operating income of $15.9 million
Non-GAAP net income of $14.3 million
Pro forma non-GAAP diluted earnings per share of $0.10
Q1 and Recent Business Highlights
Expanded the widely deployed and field-tested Aries PCIe/CXL Smart DSP Retimer portfolio with the sampling of Aries 6 Retimers, the industry’s lowest power PCIe 6.x/CXL 3.x Retimer solution, to achieve higher bandwidth and extended reach across complex AI and compute topologies. Through collaboration with the industry’s leading GPU and CPU providers such as AMD, Arm, Intel, and NVIDIA, Aries 6 is being rigorously tested at Astera Labs’ Cloud-Scale Interop Lab and in customer platforms to minimize interoperation risk, lower system development costs, and reduce time to market. Aries 6 was demonstrated at NVIDIA GTC during the week of March 18th.
Announced sampling of Aries PCIe/CXL Smart Cable Modules for Active Electrical Cable applications to enable multi-rack GPU clustering and low-latency memory fabric connectivity within AI infrastructure. The solution drives an industry-leading seven meters of channel reach over flexible copper cables to seamlessly interconnect clusters of GPUs across rack enclosures.
Announced the pricing and closing of an initial public offering of 22,770,000 shares of Astera Labs common stock at a price to the public of $36.00 per share. Net proceeds to Astera Labs from the offering were $672.2 million after deducting underwriting discounts and commissions. The shares began trading on the NASDAQ Global Select Market under the ticker symbol “ALAB” on March 20, 2024.
Second Quarter Fiscal 2024 Financial Outlook
Based on current business trends and conditions, Q2 revenue is expected to increase within a range of 10% to 12% compared with the prior quarter. We also estimate the following:
GAAP Financial Outlook:
GAAP gross margin of approximately 77%
GAAP operating expenses of approximately $79 million
GAAP interest income of approximately $9 million
GAAP tax rate of approximately (20%)
GAAP diluted loss per share of approximately ($0.11) on weighted-average diluted shares outstanding of approximately 155 million
Non-GAAP Financial Outlook (excluding the impact of approximately $39 million of stock-based compensation and including $3 million of additional income taxes):
Non-GAAP gross margin of approximately 77%
Non-GAAP operating expenses of approximately $40 million
Non-GAAP tax rate of approximately 23%
Non-GAAP diluted earnings per share of approximately $0.11 on weighted-average diluted shares outstanding of approximately 180 million
ASTERA LABS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
March 31, | December 31, | |||
Assets | ||||
Current assets | ||||
Cash and cash equivalents | $ 696,077 | $ 45,098 | ||
Marketable securities | 105,314 | 104,215 | ||
Accounts receivable, net | 16,757 | 8,335 | ||
Inventory | 29,567 | 24,095 | ||
Prepaid expenses and other current assets | 6,725 | 4,064 | ||
Total current assets | 854,440 | 185,807 | ||
Property and equipment, net | 7,581 | 4,712 | ||
Other assets | 2,880 | 5,773 | ||
Total assets | $ 864,901 | $ 196,292 | ||
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) | ||||
Current liabilities | ||||
Accounts payable | $ 11,465 | $ 6,337 | ||
Accrued expenses and other current liabilities | 34,122 | 28,742 | ||
Total current liabilities | 45,587 | 35,079 | ||
Other liabilities | 10,530 | 3,787 | ||
Total liabilities | 56,117 | 38,866 | ||
Commitments and contingencies | ||||
Redeemable convertible preferred stock | — | 255,127 | ||
Stockholders’ equity (deficit) | ||||
Common stock | 16 | 4 | ||
Additional paid-in capital | 1,027,197 | 27,411 | ||
Accumulated other comprehensive (loss) income | (59) | 259 | ||
Accumulated deficit | (218,370) | (125,375) | ||
Total stockholders’ equity (deficit) | 808,784 | (97,701) | ||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ 864,901 | $ 196,292 |
ASTERA LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
Three Months Ended | ||||||
March 31, | December 31, | March 31, | ||||
Revenue | $ 65,258 | $ 50,514 | $ 17,664 | |||
Cost of revenue | 14,738 | 11,489 | 13,406 | |||
Gross profit | 50,520 | 39,025 | 4,258 | |||
Operating expenses | ||||||
Research and development | 53,558 | 19,654 | 15,267 | |||
Sales and marketing | 55,510 | 4,995 | 4,393 | |||
General and administrative | 24,419 | 5,356 | 3,525 | |||
Total operating expenses | 133,487 | 30,005 | 23,185 | |||
Operating (loss) income | (82,967) | 9,020 | (18,927) | |||
Interest income | 2,554 | 1,674 | 1,596 | |||
(Loss) Income before income taxes | (80,413) | 10,694 | (17,331) | |||
Income tax provision (benefit) | 12,582 | (3,631) | 123 | |||
Net (loss) income | $ (92,995) | $ 14,325 | $ (17,454) | |||
Net (loss) income per share attributable to common stockholders: | ||||||
Basic and diluted | $ (1.77) | $ — | $ (0.49) | |||
Weighted-average shares used in calculating net (loss) income per share attributable to common stockholders: | ||||||
Basic | 52,532 | 38,627 | 35,826 | |||
Diluted | 52,532 | 47,636 | 35,826 | |||
ASTERA LABS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Three Months Ended | ||||
March 31, | March 31, | |||
Cash flows from operating activities | ||||
Net loss | $ (92,995) | $ (17,454) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||
Stock-based compensation | 97,768 | 1,997 | ||
Inventory write-down | 428 | 9,733 | ||
Depreciation | 614 | 357 | ||
Non-cash operating lease expense | 522 | 217 | ||
Warrants contra revenue | 110 | 55 | ||
Accretion of discounts on marketable securities | (566) | (411) | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | (8,422) | 7,048 | ||
Inventory | (5,900) | 458 | ||
Prepaid expenses and other assets | (2,666) | (411) | ||
Accounts payable | 4,973 | (5,740) | ||
Accrued expenses and other liabilities | 10,224 | 563 | ||
Operating lease liability | (438) | (231) | ||
Net cash provided by (used in) operating activities | 3,652 | (3,819) | ||
Cash flows from investing activities | ||||
Purchases of property and equipment | (3,424) | (439) | ||
Purchases of marketable securities | (23,308) | (22,346) | ||
Maturities of marketable securities | 9,365 | 13,000 | ||
Sales of marketable securities | 13,116 | 45,082 | ||
Net cash (used in) provided by investing activities | (4,251) | 35,297 | ||
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 | (1,756) | — | ||
Proceeds from exercises of stock options, net of repurchases | 1,247 | 31 | ||
Tax withholding related to net share settlements of restricted stock units | (20,111) | — | ||
Net cash provided by financing activities | 651,578 | 31 | ||
Net increase in cash and cash equivalents | 650,979 | 31,509 | ||
Cash and cash equivalents | ||||
Beginning of the period | 45,098 | 76,088 | ||
End of the period | $ 696,077 | $ 107,597 | ||
ASTERA LABS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited)
(In thousands, except percentages and per share amounts)
Three Months Ended | ||||||
March 31, | December 31, | March 31, | ||||
GAAP gross profit | $ 50,520 | $ 39,025 | $ 4,258 | |||
Stock-based compensation expense upon IPO (1) | 516 | — | — | |||
Stock-based compensation expense | 12 | 8 | 5 | |||
Non-GAAP gross profit | $ 51,048 | $ 39,033 | $ 4,263 | |||
GAAP gross margin | 77.4 % | 77.3 % | 24.1 % | |||
Stock-based compensation expense upon IPO (1) | 0.8 % | — | — | |||
Non-GAAP gross margin | 78.2 % | 77.3 % | 24.1 % | |||
GAAP operating (loss) income | $ (82,967) | $ 9,020 | $ (18,927) | |||
Stock-based compensation expense upon IPO (1) | 88,873 | — | — | |||
Stock-based compensation expense | 8,895 | 3,299 | 1,997 | |||
Employer payroll tax related to stock-based compensation from IPO (2) | 1,072 | — | — | |||
Non-GAAP operating income (loss) | $ 15,873 | $ 12,319 | $ (16,930) | |||
GAAP net (loss) income | $ (92,995) | $ 14,325 | $ (17,454) | |||
Stock-based compensation expense upon IPO (1) | 88,873 | — | — | |||
Stock-based compensation expense | 8,895 | 3,299 | 1,997 | |||
Employer payroll tax related to stock-based compensation from IPO (2) | 1,072 | — | — | |||
Income tax effect (3) | 8,485 | — | — | |||
Non-GAAP net income (loss) | $ 14,330 | $ 17,624 | $ (15,457) | |||
Net (loss) income per share attributable to common stockholders: | ||||||
GAAP – basic and diluted (4) | $ (1.77) | $ — | $ (0.49) | |||
Pro forma Non-GAAP – diluted | $ 0.10 | $ 0.12 | $ (0.12) | |||
Weighted-average shares used to compute net (loss) income per share attributable to common stockholders: | ||||||
GAAP – basic | 52,532 | 38,627 | 35,826 | |||
GAAP – diluted | 52,532 | 47,636 | 35,826 | |||
Pro forma Non-GAAP – diluted (5) | 147,514 | 138,527 | 126,717 | |||
____________________
(1) Stock-based compensation expense recognized in connection with the vesting and settlement of RSUs that had previously met the time vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO.
(2) Employer payroll taxes related to the vesting and settlement of RSUs, that had previously met the time vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO.
(3) For the three months ended March 31, 2024, the non-GAAP tax rate of approximately 22% is calculated based on the tax laws in the jurisdictions in which we operate and exclude the impact of stock-based compensation expense and associated employer payroll taxes. The adjustments for the three months ended December 31, 2023 and March 31, 2023 were not material.
(4) GAAP basic and diluted net income per share attributable to common stockholders for the three months ended December 31, 2023 was zero as all net income was attributable to preferred stockholders.
(5) Reconciliation of GAAP weighted-average shares to pro forma Non-GAAP weighted-average shares. 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 | ||||||
March 31, | December 31, | March 31, | ||||
Shares used to compute GAAP net (loss) income per share attributable to common stockholders – diluted | 52,532 | 47,636 | 35,826 | |||
Weighted-average effect of the assumed conversion of redeemable convertible preferred stock from the beginning of the quarter | 78,905 | 90,891 | 90,891 | |||
Effect of potentially dilutive equivalent shares | 16,077 | — | — | |||
Shares used to compute pro forma non-GAAP net income (loss) per share- diluted | 147,514 | 138,527 | 126,717 | |||
ASTERA LABS, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
STOCK-BASED COMPENSATION EXPENSE (Unaudited)
(In thousands)
Three Months Ended | |||||
March 31, | December 31, | March 31, | |||
Cost of revenue | $ 528 | $ 8 | $ 5 | ||
Research and development | 30,007 | 2,303 | 1,679 | ||
Sales and marketing | 49,258 | 681 | 1 | ||
General and administrative | 17,975 | 307 | 312 | ||
Total stock-based compensation expense (1) | $ 97,768 | $ 3,299 | $ 1,997 | ||
____________________
(1) Stock-based compensation expense recognized during the three months ended March 31, 2024 included $88.9 million cumulative stock-based compensation expense related to the vesting and settlement of restricted stock units that had previously met the time vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO.