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Astera Labs, Inc. (ALAB)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered record revenue of $159.4M (+13% QoQ, +144% YoY) with GAAP gross margin of 74.9% and non-GAAP diluted EPS of $0.33; Aries and Taurus drove strength while Scorpio P-Series and Aries 6 began preproduction shipments .
  • Results exceeded Wall Street consensus: revenue beat by ~$7.9M and EPS beat by ~$0.046; gross margin also topped consensus, reflecting favorable mix and disciplined pricing . Q1 consensus: revenue $151.6M*, EPS $0.284*, GM ~74.0%* (Values retrieved from S&P Global).
  • Guidance for Q2 2025 implies continued momentum: revenue $170–$175M, non-GAAP EPS $0.32–$0.33, non-GAAP gross margin ~74%, with Scorpio expected to contribute at least 10% of FY25 revenue as customized rack-scale systems ramp late in Q2 .
  • Strategic catalysts: first-to-market PCIe 6 portfolio ramp, expanding Scorpio fabric design wins, and UALink leadership positioning Astera as an “anchor socket” connectivity supplier for the AI rack; management highlighted multi-pronged growth across merchant GPU and custom ASIC platforms .

What Went Well and What Went Wrong

What Went Well

  • Non-GAAP EPS ($0.33) and gross margin (74.9%) exceeded guidance/consensus, supported by stable mix and strong Aries/Taurus demand: “Q1 results came in above guidance” .
  • Product milestones: PCIe 6 portfolio expanded to gearboxes and optics; demonstrated end-to-end PCIe 6 interoperability (NVIDIA Blackwell + Micron NVMe) in Cloud-Scale Interop Lab, underpinning portfolio leadership .
  • Strategic positioning: Management emphasized Scorpio X-Series as an “anchor socket” for rack-scale connectivity, enabling higher dollar content and COSMOS software synergies; “X-Series… anchor socket… around which we are able to now add a lot more products” .

What Went Wrong

  • China export restrictions created a modest headwind for retimer shipments attached to merchant GPU systems; end-customer China exposure is <10% of revenue, but visibility remains fluid .
  • DSOs rose to ~40 days versus mid-20s last year due to more balanced linearity; CFO expects 40 days to be a more typical level as product lines diversify .
  • Macro and policy risks (tariffs/export controls) remain key watch items; management has not seen material tariff impact yet, but rules are subject to change and factored into conservative guidance .

Financial Results

Consolidated Performance vs Prior Quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$113.1 $141.1 $159.4
GAAP Gross Margin %77.7% 74.0% 74.9%
Non-GAAP Gross Margin %77.8% 74.1% 74.9%
GAAP Operating Margin %(7.9%) 0.1% 7.1%
Non-GAAP Operating Margin %32.4% 34.3% 33.7%
GAAP Diluted EPS ($)($0.05) $0.14 $0.18
Non-GAAP Diluted EPS ($)$0.23 $0.37 $0.33

Q1 2025 Actuals vs Wall Street Consensus

MetricConsensusActual
Revenue ($USD Millions)$151.6*$159.4
Non-GAAP Diluted EPS ($)$0.284*$0.33
Gross Margin %74.0%*74.9%
Values retrieved from S&P Global.*

KPIs and Balance/Cash Flow Highlights (Q1 2025)

KPIQ1 2025
Cash, Cash Equivalents, and Marketable Securities ($USD Thousands)Cash $86,431 + Marketable Securities $838,295 = $924,726
Cash Flow from Operations ($USD Thousands)$10,504
Interest Income ($USD Thousands)$10,432
Non-GAAP Tax Rate (%)~7%
Weighted-Average Diluted Shares (Millions)178.1
DSOs (Days)~40 days (management commentary)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q1 2025 vs Q2 2025$151–$155 $170–$175 Raised sequentially
GAAP Gross Margin %Q1 2025 vs Q2 2025~74% ~74% Maintained
Non-GAAP Gross Margin %Q1 2025 vs Q2 2025~74% ~74% Maintained
GAAP OpEx ($USD Millions)Q1 2025 vs Q2 2025$113–$114 $113–$115 Maintained
Non-GAAP OpEx ($USD Millions)Q1 2025 vs Q2 2025$66–$67 $73–$75 Raised (R&D scaling)
GAAP Tax Expense/RateQ1 2025 vs Q2 2025~$3M ~21% rate Changed format (rate provided)
Non-GAAP Tax Rate (%)Q1 2025 vs Q2 2025~10% ~10% Maintained
GAAP Diluted EPS ($)Q1 2025 vs Q2 2025$0.03–$0.04 $0.10–$0.11 Raised sequentially
Non-GAAP Diluted EPS ($)Q1 2025 vs Q2 2025$0.28–$0.29 $0.32–$0.33 Raised sequentially

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
AI rack-scale connectivity (Scorpio P & X)Introduced Scorpio; preproduction; expanding market opportunities . Q4: “breakout year” with ramp across 4 product families .Scorpio P-Series preproduction shipments; X-Series positioned as anchor socket; volume ramp late 2025; 2026 larger contribution .Accelerating adoption and TAM expansion
PCIe 6 portfolio (retimer/gearbox/optics)Aries 6 retimers introduced; optical PCIe demo; first end-to-end PCIe 6 system demo .Expanded to gearboxes and optics; end-to-end interoperability demo with Blackwell + Micron; broader PCIe 6 ramp starting Q2 .Portfolio breadth and ecosystem validation growing
UALink leadershipJoined UALink Consortium board; outlines future scale-up connectivity .UALink 200G 1.0 ratified; multi-billion $ opportunity by 2029; first solutions targeted for 2026 .Formal standardization; long-term platform
Macro/tariffs/export controlsMacro uncertainties noted .Tariffs: no material impact yet; China restrictions modest headwind; baked into guidance .Managed risk; monitoring fluid policy
Revenue mix and diversificationIncreasing across products/customers/platforms .Diversifying across custom ASIC and merchant GPU, scale-up and scale-out; Scorpio to ≥10% FY25 revenue .Broader base; higher dollar content sockets
R&D scaling and OpExBuilding talent/portfolio .Non-GAAP OpEx rising (Q2: $73–$75) to fund R&D across PCIe, UALink, CXL, Ethernet, COSMOS .Investment up to sustain leadership

Management Commentary

  • “Astera Labs had a strong start to 2025, with Q1 results coming in above guidance… Aries… strong demand… Scorpio PCB switches and Aries 6 retimers… shift to volume production in the late Q2 time frame” .
  • “Our broad first-to-market PCIe 6 connectivity portfolio once again puts us in a leadership position to deliver the most reliable and widely interoperable solutions into the ecosystem” .
  • “Scorpio X-Series… will be central to next-generation AI racks… anchor socket… increase our silicon content opportunity to hundreds of dollars per accelerator” .
  • “We remain the sole connectivity provider that has demonstrated complete end-to-end PCIe 6 interoperability with NVIDIA’s Blackwell GPUs” .
  • CFO: “We expect Scorpio revenue to comprise at least 10% of our total revenue for 2025… non-GAAP gross margins ~74%… OpEx growth driven by R&D investment” .

Q&A Highlights

  • Macro/policy: Tariffs immaterial so far; China restrictions created modest retimer headwinds; guidance contemplates export limits and hyperscaler CapEx trajectories .
  • Scale-up opportunity: Management framed high-value content per accelerator for Scorpio X and Aries 6; UALink product sampling in 2026 with revenue thereafter .
  • Taurus roadmap: Shipping 50G today; broadening beyond lead customer; next technology jump to 100G speeds anticipated .
  • Ramp cadence and complexity: Rack-scale systems remain complex; Astera models conservatively, focusing on anchor connectivity sockets and COSMOS integration across copper/optical .
  • Financial discipline: DSOs at ~40 days now typical; gross margins trend toward ~70% longer term as portfolio diversifies and costs optimize over time .

Estimates Context

  • Q1 2025 beats: Revenue $159.4M vs $151.6M*; non-GAAP EPS $0.33 vs $0.284*; gross margin 74.9% vs ~74.0%* . Values retrieved from S&P Global.*
  • Guidance vs consensus (context): Q2 guidance revenue $170–$175M and non-GAAP EPS $0.32–$0.33 aligned with consensus ranges at the time*; management indicated Scorpio P-Series and Aries 6 shipments would accelerate in Q2 . Values retrieved from S&P Global.*
  • Implication: Sell-side models likely move up on Q1 beat and stronger Q2 revenue/EPS trajectory anchored by PCIe 6 and Scorpio ramps.

Key Takeaways for Investors

  • Beat-and-raise execution: Strong Q1 beat on revenue/EPS and sequentially higher Q2 guide signal durable demand in PCIe scale-up and Ethernet scale-out connectivity .
  • Portfolio breadth drives resilience: Aries/Taurus growth augmented by Scorpio P preproduction and X anchor socket strategy; diversified across merchant GPU and custom ASIC platforms .
  • PCIe 6 leadership: Demonstrated end-to-end interoperability and expanded portfolio (retimer, gearbox, optics) should sustain share gains as Blackwell-era systems ramp .
  • UALink optionality: Ratified 200G 1.0 standard and board-level role position Astera for structurally higher scale-up content; first solutions targeted for 2026 .
  • Watch risks: China export limits and policy/tariff changes remain fluid; DSOs normalizing to ~40 days as business scales; gross margins to trend toward ~70% over time .
  • Trading lens: Near-term catalysts include PCIe 6 ramp into customized racks (late Q2 onward) and Scorpio revenue mix progress toward ≥10% FY25; monitor Q2 print vs guide and incremental design-win disclosures .
Notes:
- All company-reported figures and quotes are sourced from ALAB’s Q1 2025 Form 8‑K press release and earnings call transcript, with citations.
- *Consensus/estimates values marked with an asterisk are retrieved from S&P Global.*

Source Citations

  • Q1 2025 8-K Earnings Release and Financials:
  • Q1 2025 Earnings Call Transcript:
  • Prior Quarter 8-Ks for Trend Analysis: Q4 2024 ; Q3 2024
  • S&P Global consensus estimates: Q1 and Q2 2025 revenue/EPS/gross margin (Values retrieved from S&P Global).*