Astera Labs (ALAB) J.P. Morgan 54th Annual Global Technology, Media and Communications Conference summary

Financial performance and outlook

• Achieved $308 million in revenue last quarter, a 14% sequential and 93% year-on-year increase, with EPS rising to $0.61, reflecting a 5x revenue and 6x EPS growth since IPO in March 2024.

• Guidance for the next quarter is $360 million in revenue, up 17% at the midpoint, with broad-based growth across all product lines.

• Calendar 2025 revenue grew 115% and earnings 140%; 2026 outlook revised higher by 70% for revenue and 55% for EPS.

• Three-year revenue and earnings CAGR projected at 40%-50%, with 80% total revenue growth expected this year.

• Long-term operating model targets 70% gross margin and 40% operating margin, with current performance slightly above target but expected to normalize due to product mix and warrant impacts.

Product and technology developments

• Scorpio X-Series and P-Series switches are ramping, with Scorpio expected to become the largest product family by year-end; PCIe Gen 6 now over one-third of revenue.

• Aries and Taurus product families continue to grow, with Taurus diversifying from a single customer at 400G to multiple at 800G.

• Leo CXL memory controller is expanding into new use cases, including KV Cache offload for hyperscalers.

• Custom silicon programs, including NVLink Fusion and custom Leo, are in development, with NVLink Fusion expected to ramp in 2027.

• Optical engine development is underway, with NPO and CPO solutions targeting rack-to-rack links and first NPO revenues expected in 2027.

Market trends and customer engagement

• AI inferencing workloads have overtaken training, driving new silicon, storage, and memory opportunities, especially for PCIe and CXL-based solutions.

• Custom ASIC XPU adoption by hyperscalers is expected to reach 50% of the market by 2028, increasing reliance on standard protocols and expanding content opportunities.

• Scorpio P-Series is on track to ramp with two additional hyperscaler customers in the second half of the year, targeting a $4 billion market by 2030.

• Scorpio X-Series has 10+ customer engagements, with design wins expected by year-end and revenue opportunities in 2027.

• UALink adoption is growing, with AWS and AMD as flagship customers; product development is on track for 2027 deployments.