Executive Summary

Q2 2025 delivered material upside: revenue $191.9M (+20% QoQ, +150% YoY), GAAP diluted EPS $0.29, and non‑GAAP diluted EPS $0.44; operating cash flow reached a record $135.4M, establishing a higher base led by PCIe 6 and Scorpio fabric switch ramp .
Results beat Wall Street: revenue beat by ~$19.5M and non‑GAAP EPS beat by ~$0.12 versus consensus; strength driven by Scorpio P-Series volume production and signal conditioning across PCIe scale‑up and Ethernet scale‑out on custom ASIC platforms; both revenue and EPS beats are significant *.
Guidance: Q3 revenue $203–$210M, GAAP GM ~75%, GAAP EPS $0.23–$0.24; non‑GAAP GM ~75%, non‑GAAP EPS $0.38–$0.39; OpEx rising on R&D investment for next‑gen fabrics (including UALink) .
Strategic catalysts: Scorpio exceeded 10% of total revenue in Q2, with 10+ customers engaged on X-Series scale‑up fabrics; management reiterated Scorpio’s path to be the largest product line over the next several years; expanding ecosystem with NVIDIA (NVLink Fusion), AMD (Advancing AI), Alchip (ASIC integration) .

Note: Values with asterisk are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

Scorpio ramp and mix: Scorpio exceeded 10% of revenue, ramping P‑Series into volume production for PCIe 6 scale‑out; 10+ engagements on X‑Series for scale‑up fabrics, positioning anchor sockets and higher per‑accelerator dollar content .
Beat on revenue and EPS: Sequential growth +20% to $191.9M with non‑GAAP EPS $0.44; strength from PCIe 6 portfolio (retimers, fabric switches) and signal conditioning across custom ASIC platforms .
Margin execution and cash generation: Non‑GAAP gross margin 76.0% and operating margin 39.2%; operating cash flow $135.4M, ending cash and securities at ~$1.065B .

Management quotes:

“Strong sequential revenue growth of 20 percent, driving meaningful upside to earnings and cash flow from operations.” – CEO Jitendra Mohan .
“Scorpio exceeded 10% of total revenue…fastest ramping product line in the history of Astera Labs.” – CEO Jitendra Mohan .

What Went Wrong

Gross margin expected to ease near‑term: Q3 guide to ~75% reflects growing Taurus hardware module contribution (lower margin vs standalone silicon); long‑term target remains ~70% GM .
Tax rate volatility: Non‑GAAP tax rate jumps to ~20% in Q3 due to a law change catch‑up, normalizing to ~15% in Q4 and ~13% longer‑term; near‑term EPS impact versus prior lower rate .
Scale‑up timing: X‑Series scale‑up shipments largely preproduction in 2025; full volume production expected through 2026, pushing out the largest-dollar attach opportunity .

Financial Results

Core P&L vs Prior Periods and YoY

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$141.1	$159.4	$191.9
GAAP Gross Margin (%)	—	74.9%	75.8%
GAAP Operating Income ($M)	—	$11.3	$39.8
GAAP Diluted EPS ($)	—	$0.18	$0.29
Non-GAAP Gross Margin (%)	74.1%	74.9%	76.0%
Non-GAAP Operating Margin (%)	34.3%	33.7%	39.2%
Non-GAAP Diluted EPS ($)	$0.37	$0.33	$0.44

Metric	Q2 2024	Q2 2025
Revenue ($USD Millions)	$76.9	$191.9
GAAP Gross Margin (%)	77.9%	75.8%
GAAP Diluted EPS ($)	$(0.05)	$0.29
Non-GAAP Diluted EPS ($)	$0.13	$0.44

Actual vs Wall Street Consensus (S&P Global)

Metric	Q2 2025 Consensus	Q2 2025 Actual
Revenue ($USD)	$172,459,310*	$191,925,000
Non-GAAP Diluted EPS ($)	$0.32416*	$0.44

Values retrieved from S&P Global.

KPIs and Operating Metrics

KPI	Q2 2025
Operating Cash Flow ($USD Millions)	$135.4
Cash and Cash Equivalents ($M)	$162.3
Marketable Securities ($M)	$902.8
Total Cash + Securities ($M)	~$1,065.1
Interest Income ($M)	$10.9
SBC Expense (Total, $000s)	$35,474
Non-GAAP OpEx ($M)	$75.2 (implied from reconciliations)

Segment breakdown: the company does not report formal segment revenue; management cites strength across Aries (retimers), Taurus (Ethernet AEC modules), Leo (CXL controllers preproduction), and Scorpio (fabric switches), with Scorpio exceeding 10% of revenue in Q2 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q3 2025	N/A	$203–$210	New
GAAP Gross Margin (%)	Q3 2025	N/A	~75%	New
GAAP OpEx ($M)	Q3 2025	N/A	~$116–$120	New
GAAP Tax Rate (%)	Q3 2025	N/A	~10%	New
GAAP Diluted EPS ($)	Q3 2025	N/A	$0.23–$0.24	New
Non-GAAP Gross Margin (%)	Q3 2025	N/A	~75%	New
Non-GAAP OpEx ($M)	Q3 2025	N/A	~$76–$80	New
Non-GAAP Tax Rate (%)	Q3 2025	N/A	~20% (law change catch-up)	New
Non-GAAP Diluted EPS ($)	Q3 2025	N/A	$0.38–$0.39	New

Context: CFO noted the non‑GAAP tax rate increase in Q3 is due to a law change; expects ~15% in Q4 and ~13% longer‑term .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Scorpio fabrics (P & X)	Launched; P ramp expected 2H25; X preproduction; Scorpio to become largest product line over time	P ramped to volume; >10% revenue; 10+ X-Series customers engaged; X preproduction in 2025, high-volume through 2026	Accelerating adoption; expanding customer engagements
PCIe 6 portfolio	Aries 6 retimers/gearboxes first‑to‑market; interoperability demos; late Q2 volume timing	PCIe 6 ramp drove top-line upside; continued demand for signal conditioning on custom ASIC platforms	Execution delivered revenue upside
UALink (open scale-up standard)	Spec released; 2026 sampling; multibillion market opportunity by 2029	Strong interest among hyperscalers; natural progression from PCIe; broad open ecosystem; AMD endorsement noted	Building momentum; medium-term catalyst (2026–2027)
NVLink Fusion (NVIDIA)	Ecosystem collaboration emerging	Expanded collaboration to support NVLink Fusion scale-up networks	Strengthening proprietary scale-up path alongside open standards
Taurus (Ethernet AEC)	400G growth in 2H24; 800G broader adoption targeted in 2026	Growth in Q3/Q4 expected; near-term 50G/lane, diversification to 100G/lane in 2026	Stable near-term; larger ramp with 800G in 2026
CXL (Leo controllers)	Preproduction; volume ramps in 2H25; multiple high‑memory use cases	Preproduction shipments continue toward platform qualifications	On track for 2H25
Taxes and margins	Q1 non‑GAAP tax 7.1%; long‑term GM ~70% target	Q2 non‑GAAP tax ~9.4%; Q3 tax ~20% (law change), normalizes later; GM ~75% guide	Near-term tax headwind; margins stable around 75% guide

Management Commentary

CEO: “Scorpio exceeded 10% of total revenue…fastest ramping product line…we won new designs across multiple new customers during the quarter” .
COO: “We are engaged with over 10 unique AI platform and cloud infrastructure providers…Scorpio X Series to begin shipping for customized scale up architectures in late 2025 with high volume in 2026” .
CFO: “Non‑GAAP EPS $0.44; operating cash flow $135.4M; Q3 revenue $203–$210M; non‑GAAP GM ~75%; non‑GAAP tax rate ~20% given recent law change” .
Strategy: Expanded NVIDIA NVLink Fusion collaboration; AMD keynote participation; partnership with Alchip to integrate compute and connectivity; leading role in UALink Consortium .

Q&A Highlights

Scorpio as anchor socket: Management emphasized Scorpio X’s role interconnecting GPUs with lower latency/higher throughput, leveraging COSMOS for diagnostics; attach drives additional Aries/Taurus sockets .
UALink vs NVLink vs Ethernet: UALink highlighted for open ecosystem, memory semantics, low latency and high utilization; NVLink remains widely deployed; Ethernet scale‑up attempts face latency/efficiency tradeoffs; UALink expected broader adoption over time .
Margin/tax trajectory: Q3 non‑GAAP tax ~20% due to catch‑up; normalizes ~15% in Q4 and ~13% longer‑term; gross margin trending toward long‑term ~70% as hardware module mix grows .
Taurus ramp: Near‑term 50G/lane; diversification to 100G/lane and broader multi‑vendor supply chain with volume from 2026; business model targets ramp scale via cable vendors .
Scale‑up timing: 2025 predominantly preproduction; volume scale‑up connectivity ramps across 2026; X‑Series expected to outgrow P‑Series given higher-dollar sockets .

Estimates Context

Q2 beat: Revenue $191.9M vs $172.5M consensus; non‑GAAP EPS $0.44 vs $0.324 consensus — both significant beats driven by PCIe 6 and Scorpio P ramp on custom racks and robust signal conditioning demand on ASIC platforms *.
Q3 alignment: Guidance revenue $203–$210M and non‑GAAP EPS $0.38–$0.39 broadly in line with consensus of $206.4M and $0.39*, noting tax rate step‑up could temper EPS optics near‑term *.