Astera Labs, Inc. Q1 FY2025 earnings call

• Jitendra Mohan highlighted strong Q1 results, Aries and Taurus demand, addition of Dr. Craig Barratt to the board, product expansion including PCIe 6 connectivity and UALink, and increased R&D investments.
• Sanjay Gajendra discussed AI and cloud infrastructure applications: scale-up connectivity with growing demand for reach extension solutions and Scorpio X-Series preproduction, scale-out connectivity with Scorpio P-Series and Aries 6, and general purpose compute growth with Aries, Taurus, and CXL product families. Emphasized the platform approach with COSMOS software for integrated connectivity.

Astera Labs had a strong Q1 2025 with quarterly revenues of $159.4 million, up 13% from the prior quarter and 144% vs Q1 2024. The Aries product family saw strong demand across GPU and custom ASIC-based systems for various applications. The Taurus product family demonstrated strong growth driven by AI and general purpose systems at leading hyperscalers. Scorpio PCB switches and Aries 6 retimers are shifting to volume production in late Q2 to support customized GPU-based rack-scale AI system design. Revenue contribution details: Aries and Taurus products are key drivers, with Scorpio set to increase its contribution in the future.

• Q2 revenue expected to be in the range of $170 million to $175 million, up ~7-10% from prior quarter.
• Aries and Taurus revenues to grow sequentially in Q2.
• Leo CXL controller family to continue preproduction shipments.
• Scorpio revenue to grow sequentially, with expectation to comprise at least 10% of total revenue in 2025.
• Non-GAAP gross margins expected to be approximately 74%.
• Q2 non-GAAP operating expenses expected $73M-$75M.
• Non-GAAP fully diluted earnings per share expected $0.32-$0.33.

• Tariffs and export restrictions: Fluid nature with no material impact yet, but monitored closely.
• China impact: Restrictions on GPU procurement have affected retimer programs, with China revenues less than 10% of total, but manageable.

Q: On overall AI and data center spending, changes in customer programs or demand outlook?

A: Mike Tate noted tariffs have no material impact yet, but China restrictions affected retimer programs. Sanjay Gajendra discussed revenue drivers across product lines and quarters.

Q: On scale up, progression and timing?

A: Jitendra Mohan said scale up is a rich opportunity, with Scorpio X-Series preproduction starting, and UALink as a future multibillion-dollar opportunity.

Q: On Taurus growth and customer base?

A: Mike Tate mentioned 50-gig solution growth, multiple designs at lead customer, and plans to broaden beyond lead customer.

Q: On ASIC vs merchant GPU, competition?

A: Sanjay Gajendra said competition exists, but technology differentiation, risk management, and COSMOS software give Astera advantage.

Q: On China impact on sales?

A: Mike Tate said China revenues <10% of total, impact manageable through other product lines.

Q: On inference vs training impact and Scorpio ramp?

A: Jitendra Mohan said inference and training use same products, Scorpio-based inference system for smaller-scale, Sanjay Gajendra discussed holistic AI rack approach.

Q: On Aries 6 gearbox and use cases?

A: Sanjay Gajendra explained gearbox matches PCIe generations, multiple engagements, and adds to ASP.

Q: On DSOs and Scorpio sales?

A: Mike Tate said DSOs more balanced, Scorpio sales contributing to growth.

Q: On Scorpio X-Series ramp and TAM?

A: Jitendra Mohan said X-Series TAM growing rapidly, expected to contribute more in 2026-2027.

Q: On PCIe over optics?

A: Jitendra Mohan said focus on copper now, but working on optical for higher data rates.

Q: On Scorpio product pricing and mix?

A: Sanjay Gajendra said X-Series has higher ASP due to greater value in interconnecting GPUs.