Astera Labs (ALAB) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $308.4 million, up 14% sequentially and 93% year-over-year, driven by strong demand for Scorpio, Aries, Taurus, and PCIe 6 products, as well as higher average selling prices.

• Net income rose to $80.3 million, a 152% increase from Q1 2025, with operating income up 448% to $61.8 million.

• AI infrastructure spending is accelerating, with strong demand from hyperscalers and AI labs, supporting long-term growth.

• Scorpio X-Series 320-lane AI fabric switch launched, ramping to production in H2 2026, with Scorpio expected to become the largest product line by year-end.

• Strategic investments in R&D, acquisitions, and manufacturing capacity to support growth in AI fabrics, optical interconnects, and custom solutions.

Financial highlights

• Q1 non-GAAP gross margin was 76.4%, up 70 bps sequentially; GAAP gross margin was 76.3%.

• Non-GAAP operating expenses were $123.9 million; R&D at $96.2 million, sales/marketing at $12 million, and G&A at $15.7 million.

• Non-GAAP operating margin was 36.2%; GAAP operating margin was 20.1%.

• Non-GAAP diluted EPS was $0.61; GAAP diluted EPS was $0.44; interest income was $11.6 million.

• Cash, cash equivalents, and marketable securities totaled $1.2 billion as of March 31, 2026.

Outlook and guidance

• Q2 2026 revenue expected between $355 million and $365 million, up 15%-18% sequentially.

• Q2 non-GAAP and GAAP gross margin expected at approximately 73%, with a 200 bps non-cash impact from a warrant agreement.

• Q2 non-GAAP operating expenses projected at $128 million-$131 million; non-GAAP diluted EPS expected between $0.68 and $0.70.

• Management expects current liquidity to be sufficient for at least the next 12 months and beyond.

• Continued strong growth anticipated through 2026 and into 2027, driven by AI fabrics and next-gen connectivity.