- Record quarterly revenue of $65.3 million driven by expanding
AI infrastructure build-out, up 29% QoQ and up 269% YoY
- Sampling third generation Aries Smart DSP Retimers for PCIe 6.x
connectivity to leading AI platform providers to support
next-generation cloud infrastructure
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
Earnings Webcast and Conference Call
Astera Labs will host a conference call to review its financial
results for the first 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 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. These non-GAAP
financial measures include non-GAAP gross profit, non-GAAP gross
margin, non-GAAP operating income (loss) and 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
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 certain forward-looking non-GAAP
financial measures as the GAAP measures are not accessible on a
forward-looking basis. 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 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 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, and 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.
Tax effect
This amount is used to present each of the adjustments described
above 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, our development or delivery of
new or enhanced products and anticipated results of those products
for our customers, our competitive positioning, projected costs,
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 following: the competitive and cyclical
nature of the semiconductor industry; the challenging macroeconomic
environment, including disruptions in the financial services
industry; geographic concentration of manufacturers, assemblers,
test service providers and customers in Asia that subjects Astera
Labs' business and results of operations to risks of natural
disasters, epidemics or pandemics, war and political unrest; risks
that demand and the supply chain may be adversely affected by
military conflict (including between Russia and Ukraine),
terrorism, sanctions or other geopolitical events globally
(including conflict between Taiwan and China); risks that Astera
Labs may not be able to maintain its historical growth; quarterly
fluctuations in revenues and operating results; difficulties
developing new products that achieve market acceptance; risks
associated with international activities (including trade barriers,
particularly with respect to China); intellectual property
litigation risks; risks associated with acquisitions and
divestitures; product liability risks; difficulties managing and/or
obtaining sufficient supply from Astera Labs' distributors,
manufacturers and subcontractors; dependence on a limited number of
products; absence of long-term commitments from customers;
inventory-related risks; difficulties managing international
activities; risks that Astera Labs may not be able to manage
strains associated with its growth; credit risks associated with
its accounts receivable; dependence on key personnel; stock price
volatility; debt-related risks; capital-raising risks; the timing
and scope of share repurchases and/or dividends; average selling
prices of products may decrease significantly and rapidly;
information technology risks; 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 Report on Form 10-Q for the quarter ended March 31, 2024,
to be 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)
March 31, 2024
December 31,
2023
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, 2024
December 31,
2023
March 31, 2023
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, 2024
March 31, 2023
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, 2024
December 31,
2023
March 31, 2023
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, 2024
December 31,
2023
March 31, 2023
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, 2024
December 31,
2023
March 31, 2023
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20240507206649/en/
IR CONTACT: Leslie Green leslie.green@asteralabs.com
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