ALAB - Earnings call transcript Q2 2024 | Astera Labs, Inc. Common Stock

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Operator

Good afternoon. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Astera Labs Q2 2024 Earnings Conference Call. [Operator Instructions]

I will now turn the call over to Leslie Green, Investor Relations for Astera Labs. begin. may you Leslie,

Leslie Green

and Conference the Call. everyone, Quarter Labs XXXX Earnings welcome afternoon, Astera to Second Good

Gajendra, Operating Joining Jitendra Tate, Officer Sanjay Mohan, on Chief Chief and us the Executive and call Financial Officer. Co-Founder; and and Co-Founder; Officer today are President Mike Chief and

expectations forward-looking differ results discussed implied. during those this actual the contained reflected those these from and statements actual an final have the which or about risks earnings and factors forward-looking file SEC, to Before time started, future and plans, discussed could and IPO. in that regarding, results, extent statements among In uncertainties like from current assumptions, things, not expected prospectus I or occur, forward-looking in could and markets risks, to and certain and and uncertainties the everyone differ which cause including predict call combination that beliefs, are the risks is materially the forward-looking in we from time the today's anticipated our management statements made may statements. in in reports assumptions factor we release any we are operations to company's may forward-looking the include to results, which to inherently relating that get the subject of forth on all financial future strategies reflect comments statements results these to detail light impact this not to would operate. that with the events circumstances set any events in remind materially possible or call or for uncertainties may risks in today and periodic future filings of It other These management's

to to the date our expectations, law. undertakes such this except future as today, or information, our call after by of to of result obligation the statements as as information of based a required to these no available new on are conform and events management company in statements All update changes of

in to measures discussion which Also of accordance consider we as and in financial why superior in portion refer and measures filings be we financial will during available be between our the this are to or A call, also a use GAAP. of non-GAAP and also important substitute we to accessible performance. measures website provided an financial non-GAAP our we through SEC, non-GAAP issued measure addition which not GAAP of accessed to which financial results portion reconciliations Investor with Relations of included the for our non-GAAP the be These website. certain U.S. company's measures, prepared in release be Relations will Investor and the financial today, the can our earnings is through with

like turn Labs. to would I over CEO to the call Jitendra? that, Jitendra Mohan, With of Astera

Jitendra Mohan

The AI customers. Good and look second creative productivity. for velocity as thanks nature generating everyone, investment continues our and conference to a cycle highly AI Leslie. you, infrastructure to call for challenges entire Thank afternoon, and diverse output XXXX. this quarter fiscal investment industries of is their complex drive expand strong dynamic our and for in overall joining

fast-paced, and developed up solutions flexible ground to these intelligent Lab's connectivity Astera are navigate deployments. complicated

developed that these and hyperscaler across internally challenges accelerators. are solve features We to them third-party with AI working our both closely help architectures diverse customers platform

rates. the growth product average A to are June Astera these technologies, quarter we multiple addition quarter, secular to strong the in silicon strong favorable content and us across ability form in resulted the record AI team will for outperforming also Labs in leadership our position company-specific confidence third gives from in industry outlook contribute our and great trends, execution also our per by higher of In growth supports new our revenue platform. to for continue which benefiting cycles

quarterly record non-GAAP Labs operating our consecutive setting cash margin revenue, strong first and results, strong delivered flows. QX Astera for positive operating

Our quarter up operating same XXXX. we the non-GAAP $XX.X margin from previous from was XX.X%, and QX up period diluted per in revenue share. the XXX% $X.XX XX% was in and earnings delivered of Non-GAAP million,

Operating growth by strong cash our momentum flow also we rapidly the at $XX.X in opportunities, the in scaling generation set broadening continued was quarter, customers With investing and during business organization. coming million. a are of

announced Interop Cloud-Scale Lab India. opening center During we new the quarter, and a of the to expanded in our Taiwan R&D

bringing the company. announced also leadership the additional Bethany We of to appointment our Directors, strategic of Board to Mayer

Today, and on Express, technology Link. X Astera core is standards: Ethernet, PCI Labs focused Compute Express

X shipping revenue of families adoption. these stages and separate in protocols, are different generating various supporting connectivity product We all

me the call over touch to architecture each our COSMOS and support with these how with families into deeper strategy. our turn Then of growth product them and suite. Let business we upon to I software differentiated will our dive Sanjay

details our and our results additional QX financial guidance. on Finally, Mike QX provide will

about talk PCI let's Express. First,

quarter, for PCI the During our reliable integrity AI by robust product X in family delivering drive continued to and saw demand Aries systems signal stability. link we connectivity strong Gen

While utilizing Gen programs into customers internally merchant we and AI new our the GPU developed year, X. upon seeing X are ramp accelerators now PCI suppliers systems drove based introduce over Gen past server hyperscaler early adoption real also of PCI their

incredible connectivity pace. creating Gen next link for the and evolution reach, accelerator PCI technology AI power doubles for an at reliability the which commercialization bandwidth AI new The increase AI within latency. is to the processing ahead, milestone is challenges of servers, continuing X, Looking

Our our deployed widely offering X challenges upgrade a Gen family seamless next retimer Aries to path field-tested X helps of solutions. architecture, and to these solve a PCI with the software-defined generation

and based preproduction X Gen including production initial our solution, developments forward shipping X. to quantities supporting ship more of We that of significant the started We quarters support ramps Aries customers GBXXX. our program have on PCIe platform, initial Blackwell hyperscaler orders Nvidia's We to in look come. are

Next Ethernet. about let's talk

connectivity XXX-gig lane enabling over with connectivity shifted by volume through relieve modules or XXXX. smart cables half we into to announce back portfolio copper overcoming expected pleased XXX-gig the Taurus are helps have Ethernet reach, AEC. our bandwidth by and production, SCMs of cable integrity bottlenecks ramp Our per of robust Today, that signal an Ethernet issues Taurus

ramp across platforms multiple both well This configurations, support we in partners working to will on multiple compute as general be XXX-gig expected scale purpose to and multiple with Taurus across volumes. platforms multitude the is cable applications as out systems. cable are connectivity of happening AI compute ramping a

rate breadth our and are We to forward. and the about wins accretive growth the product be of Taurus design corporate expect diversity to going our family excited

CXL. Compute Express is Link, Next or

use closely In QX, in CXL. Leo a shipped applications of preproduction to We for deployment cloud-scale continue material work cases on and with hyperscaler centers. our of we our volume customers for data variety products

utilize expansion to with in expect ramps using solve CXL to memory use targeting new our capacity broadly family production products. of are bottlenecks center see and starting architects XXXX bandwidth cases, are We deployments data memory The Leo CPUs CXL-capable technology platform when initial available.

Finally, on COSMOS, I software all moment brings families like is that to would together. product of which spend a our platform a

the our of our discussed have deliver chips, product optimization not customization, our fleet ROI solutions infrastructure with are ensure and able our eyes software We enables operating AI The efficiency in connectivity their managers generate COSMOS COSMOS helping infrastructure, monitoring. higher hardware how their and seamless downtime. and and customers only semiconductor at centers, cloud to become operating customers' the and of of our to combination on but is By peak to reduce ears to stacks data improving runs also utilization.

and platforms both AI GPU-based summarize, third-party confidence at across AI wins in trends internally outperform developed dollar in growth average us next-generation increasing gives diverse AI sustained hyperscalers, our platforms content To to secular industry featuring adoption, ability accelerators an design rates. in

to of long-term and recent strategy. announcements our let call the that, some and growth to turn Gajendra Sanjay discuss our me With our President product over COO,

Sanjay Gajendra

Thanks, everyone. Jitendra, afternoon, and good

volume We breadth believe even business term. robust results long outlook and X for are more about I we pleased to growth ahead. focus QX. lie we're help us industry the of our rates Today, grow over with that excited than the growth will strong line that faster on top opportunities QX vectors will and our But

unique multiple limitations optimize in of to our diverse accelerators and also while developed allows platform accelerators. internally business. fleet design is third-party developed using approach Labs workload wins capital to support hybrid infrastructure This with Astera featuring their efficiency. architectures investment position and paths to hyperscalers First, internally and This grow a improving us gives requirements both third-party AI across diversity unique

Our growth intelligent connectivity while platform families. and architecture all enables portability with software-based its platforms seamless flexible product opportunities our for between reuse creating

large also expect and incremental over we quarters platforms, see AI several Ethernet based developed GPU to production volume third-party accelerators on the PCIe us. and driving hitting few the internally deployments next for to volumes addition In

expect various based we on infrastructure wins platforms. workloads, AI compose GBXXX is increasing opportunities us power we for multiple architecture Nvidia's to Blackwell growth as for data across AI hyperscalers Blackwell see challenges, platform. next-generation including expect our variants particularly support GPU their GPU requirements, software, see this on deployment and Second, we solutions exciting based GPUs, content new cooling as infrastructure. center To design strong on

a silicon For our for Labs with presents our their earnings example, combination for can a Nvidia backbone content cited diversity harnessed our scenarios. COSMOS most This higher benefit products from complexity customize trend to ASPs. expect of Astera the in for business to connectivity opportunity be GPU, flexible increasing growing exciting of Overall, dollar introduction architecture volumes driven recent XXX an configurations as different higher we Blackwell per Blackwell call. set suite of software and by of deployment diverse the and average and

vector retimers in for the will generation transition battle-tested widely industry for industry. and represents third PCIe and a Gen for deployed X Aries catalyst PCIe is The is family. Astera. be for now the upon growth its Aries PCIe X introduction X the company's built the retimers increasing cases of in and use retimers the applications standard the retimer to PCIe content product gold new The next Aries broadening our and

last from Our years deploy several and wins PCIe the scale. us design at technology over production X quickly enables to hundreds learnings Gen of deployment

in of Aries we the of including hyperscaler meaningful initial servers noted, volume Nvidia's initial GBXXX. are and Jitendra deployment shipping to featuring Blackwell preproduction support now As X AI have currently GPUs for quantities backlog place

of a of the also expansion dynamic excited about within very Ethernet are incremental business, be limitations bottleneck clustered PCIe clustering. Similar multi-rack reach can the copper We're the GPU the cables to driven GPUs by connectivity market will together. number that for that PCIe AEC passive the be

stages the by family. PCIe the market integrity multi-rack and adoption and Our GPU monitoring opportunity and link longer rack opportunity and in application materially improving health. purpose-built solve modules Aries signal and new early smart as robust over clustering deployment stability product of growing actively is a distances airflow while these we cable our Aries This AEC issues link providing view for optimizing

of end-to-end provide unprecedented optical clusters. demonstration first we industry's June, PCIe connectivity In larger GPU announced the reach for to

our to PCIe to devices interconnects AI business scale high-bandwidth, demonstrating are complexity, This again PCIe as our links expect to interconnects between once our over broaden low-latency connectivity speeds to to and deliver we We over CXL retimer endpoints. and, proud optics. customers diversity per breakthrough retimer GPUs, result other expands leadership strong intelligent next-generation optical Aries and higher continue seamlessly growth PCI by robust in memory extend CPUs, platform increase and in on allow platforms. PCIe Overall, platform content average, GPU system PCIe

of the application ecosystem, back also the Taurus Ethernet the addition in about XXXX. meaningfully strong to is What profits across ramps in our growth is Aries Next of the our use PCIe cases. these for start the application contribute half seeing family AEC diversity to exciting product family growth in product are we to

product We platforms. are seeing compute general and Taurus demand both for family for our AI

straight, cables. the Y We cables with and are configurations, X supporting including multiple market cable

yet of volume shipping very our also is vendors to supply a Taurus be into growth we top diversifying becoming to family contributions. that about crucial supporting for Overall, engine cable will excited we look as We multiple chain product expand enable the hyperscalers. build-outs, while hyperscaler diverse line are another

bottlenecks and Last but compute not platforms. least, capacity CXL memory bandwidth solve technology in is to an important

preproduction Leo hyperscaler partners our demonstrate cases various for to CXL use with in in and our closely centers. data racks technology controllers working are this starting to deploy We

learnings, into requirements software security in robust, incorporated and the have the solution customization COSMOS the and industry. most cloud-ready have CXL We our

performance upgrades. in Controllers Memory compute We and remain applications. very Smart potential accomplish with of about TCO application-level reduce these can center Very gains we CXL many application or importantly, in changes we software have demonstrated X CXL performance that the of excited Overall, our Leo platforms. improve data

be new with Finally, close hyperscalers direction identify required believe our which us our long-term connectivity collaboration we connectivity seat continues front-row will valuable insights and engagement support is close compute intelligent strong, Astera. drive to This them. collaboration technologies across that to will additional product models business helping and platform AI and topologies growth for regarding opportunities yield and platform, providers and the of the entire

turn our will to results our our call discuss who over QX With Tate, and that, financial QX outlook. I the CFO, Mike will

Michael Tate

to presented Please financial financial press the section website our our Thanks, metrics this outlook as will thanks everyone related for of today's non-GAAP is Sanjay, of joining The results non-GAAP be on a for Astera our QX in measures refer available details QX to GAAP to a well non-GAAP on income Investor guidance as overview of our and release more compensation difference financial reconciliation its on and call. and Relations This call. QX stock-based Labs' tax basis. effects. the GAAP and both primary on non-GAAP

quarterly up in XXX% than million, revenue from the XXXX. $XX.X of previous QX the For record QX of XX% quarter Labs XXXX, and delivered was revenue of which Astera higher

quarter, AI product from revenue continued the major product of all hyperscalers the manufacturers. largest in is During families being That with We shipped accelerator platforms. our all momentum contributor. quarter, across products to X we the AI-based during Aries seen and the recognized

contributed systems into shift continued XXX-gig further In in to Ethernet-based quarter. ship systems, XXX-gig Ethernet-based into primarily third QX, revenue to we Taurus the Taurus and to we to volume revenues as -- now begin expect diversify

on development QX our were compute CPU for being server volumes Leo CXL-capable purchasing from their the preproduction with data refresh production revenues cycle. next-generation, launch largely timing customers center the dependent customers' platforms, of

in and XX basis of in margin our and down than guidance XX% and QX of guidance. compared was expenses and expenses, the million. and $XX.X our was non-GAAP was R&D general $XX.X consistent Within operating $X.X million, up was XX%. points marketing Non-GAAP administrative million; XX.X%. was margins million better gross Non-GAAP XX.X% were operating and non-GAAP $X.X to sales QX expenses QX QX previous XXXX for for was operating quarter expense $XX.X from expenses with million;

Interest QX $XX.X income million. was in

$XXX of Our diluted $XX.X tax rate shares for quarter, $X.X flow was Cash from for earnings and for and count non-GAAP tax non-GAAP million, XX% non-GAAP for which provision million. ended cash, quarter securities share XXX.X was was and over the per on QX we diluted activities the just the $X.XX. with cash million fully our Non-GAAP a million share was equivalents operating quarter represents marketable a QX basis. of

Now turning QX guidance fiscal for of to XXXX. our

to the within roughly continue million by quarter. be to in the driven will deployment revenue We largest AI range a $XX primary increase of of expect family our and customers' $XXX the sequential product and Aries to with revenue QX, QX prior believe of servers. million, XX% up XX% driver growth volume will be from our growing sequentially component We

systems growth our Taurus within expect to quarter-over-quarter production. drive also volume wins as solid XXX-gig We new Ethernet-based family design into ramp

shift the towards quarter. approximately be mix product by non-GAAP driven expected XX%. is solutions margins The hardware to in expect decline being We gross an margin sequential during

approximately operating million million non-GAAP remain head as R&D the our aggressive $XX be in of property. across in to intellectual and expect expenses resource range $XX to pool expanding count we We

approximately expected to Interest income million. be is $XX

$X.XX tax fully to of non-GAAP rate earnings non-GAAP is XX%, share our of non-GAAP should Our expected this per range diluted are be all Adding approximately we approximately diluted expecting approximately a and XXX up, be share million fully to shares. count $X.XX.

appreciative line once of prepared And questions. we This are concludes open remarks. everyone the Operator? call. will again, now very And we for the much joining the

Operator

Instructions] JPMorgan. our question Sur take We'll at Harlan first [Operator from

Harlan Sur

results. on Congratulations the strong

across that all of lots GBXXX. GPU prior-generation GPU versus dollar next-generation Blackwell SKUs, and rising quarter, GPU Glad that customer around could your is your team the their large content clarify Hopper. actually SKUs the the concerns of During one

customers of for are mentioned, accelerator But year, ASIC, AI as these mix actually And sort the XXX% right, this as the and accounting next many ASIC pointed rising, like the with ramp. PCIe year And you believe of guys is XX% next mix early right? stages year ASIC XPU it's GPUs in out, both of based. still rapidly we outgrowing of and you

solution, ramps the from your next maybe the driving quarters? growth product So given team's the level given on continued AEC here with new of and several visibility quarter-on-quarter confidence of this, some all what's over

Jitendra Mohan

we Harlan, question. confident here really we that in for be what believe early great as so thank here. to But is in feel today. place of you much are innings any the don't guidance. one about the that to don't It's so We Clearly, the we than very are more come. that quarter AI out, guide take we please

expected the the higher. XXx is are for All even compute that solve increasing be to XXXX targets CapEx year. model more hyperscalers of We of to that. the requires order the in rest their Llama heard

So driving radical basically are all shift of in these a trends technology.

seeing, a are their we our third-party we addition hyperscaler pleased We different lot internally developed have across these platforms. ramp are very customers of AI And wins deploying in all out, pointed you as of designed accelerators correctly that accelerators. to AI

are ramping and ramping Our their customers we product families. multiple are platforms

are into mentioned, and Sanjay As both ramping new platforms. Aries Taurus these

So about feel to the be will the long for the a store we future we good market very that and what GPU outpace the growth rising per term. with in content able basis, in is feel on

Harlan Sur

X finally strong today, starting SSDs to the opportunities servers, Gen aggressively is content retimer retimer which pulls, your penetration see ramps my market, trend general potentially the the to that. unlock flash the in PCIe still on vendors Gen servers of good model one the could in retimer appreciate And purpose haven't that top on baked guys where bringing is X demand new news X. we're finally the purpose today of of into bringing, AI the top right? I articulated And thing that technology product is to the I general you

there see team's some potential XXXX purpose maybe penetration be the And Do that us. that may if of you solutions what's outlook? into general could your opportunity for retimer you starting size in server? So

Sanjay Gajendra

hear here. Yes. Absolutely, to voice. Good your Sanjay Harlan.

So in general, that's a correct statement.

compute have We on design wins side. the several

for platforms. general dollars like the There factoring to has the Gen are at long Just for like reasons the of been point, fleet. fall servers slower-than-expected being being not highlighted, in But keep sort given rack saying, we some how growth X-ready or AI you SSDs going compute. at off into been point the the some a either they've on

to both of compute Rapids-based kind the start expect as to with So production the get Granite Turin we general picking and and the especially up, Intel do CPUs. AMD

the we start in terms platforms overall, XXXX, So noted, have do growth. of for retimers. do Aries expect that I Like will platform wins compute in meaningful figuring these being already we revenue design

like general would design we compute. Ethernet in wins application to I have add as also But do well our Taurus that for module

merchant So we story the driver AI, the go for being third-party along of should significant GPUs all or see to things and we the growth things we're now in seeing along shared growth. as meaningful our general that compute a the those X-engine accelerators, well of developed on a the internally with for is sort the big change as both ramp

Operator

Morgan next to Moore Joe Stanley. move We'll at

Joseph Moore

the the seeing wonder see start if have could number talk who in volume you Gen of when then in you you dynamics Gen And talk Are seeing PCI X China I there? and any prospects there? encroachment for Great. PCI qualified U.S.? in about Are competitive solutions can of about terms you you any within to X, the retimers. people

Sanjay Gajendra

Yes, absolutely.

Let me Joe. take that,

growing and market. overall, is a this So big

I of the represents. is mix fact into the you sort that retimer that larger names have jumping the mean market clear. that fact think validates I the

mind are tends PCI deployment is have at certain the becomes between is in which We're the it, always to Now volume, the networking device Express, couple high so that in that fact of in we points And especially a GPU, to a especially critical. middle. to storage, interoperation, products, on. and nuance connectivity keep cloud-scale

and providers So ensure really AI our what years is in shoulder interoperation deployment, to the have with the met, and is we to it X, that been is done operating management firmware -- hyperscaler whether last integrated management software all the platform-level shoulder including platform X of telemetry, work stack. provide a addressed, diagnostic, fleet we customers' capability. COSMOS management into Those diagnostic have from type our all that the is

also our the we that I'm a the is competitors. So knowledge picture tribal in silicon, we with built, significant advantage general, to penetration have that compared that but the have us software does just trying not the give paint to here

said that, having work will we to Now hard. continue

design like noted GPUs call publicly wins Gen today's several shared X Nvidia, support the have PCIe we I that Blackwell-based designed Gen which around We platform, in GPU are X. next-generation the to for all specifically from

So we'll continue work them. through to

including currently are volume some GBXXX-based preproduction to platforms. ramps, initial for of support shipping the We

good Gen of the overall, So position that X designs into platforms as are the X Gen and well about both we in, those transitioning terms feel we as develop in grow. as

Operator

Curtis LLC. at Jefferies move We'll next Blayne to

Blayne Curtis

But ramp. if some break strokes the But of I the to talked ask to I us is assuming segments. which know the that was just you because of out is point from gross revenue in coming it, in because think Aries kind of I just want just you the of growth September. much about mean the to mix, as AEC. how meaningful retimers September trying broad the I'm that give of versus outlook, you from terms can I other you size margin don't was

Michael Tate

sell the margins we extent to hardware Blayne, down the will Yes, silicon. more come versus

modules drivers. So those. and Aries both those of both -- growth Taurus is the of we Also on side, one we're seeing in definitely do

getting contribution And third into content we're of when from you X more going but on the Taurus, AI platform. the just at giving from modules also and Gen look seeing So lot the servers. you we're a platforms generally, of the you growth in incremental per new quarter, growth Aries lot platforms, are have have guidance Aries, a

you think those I between of growth, the X it's at So balanced kind largely. when look drivers,

Blayne Curtis

ask on market from main Gen then the to moving the GPU X production. want in And you. preproduction adoption I Got Gen to supports The X.

way. X are -- bit would I going Gen to think your way CPUs a the over of that a talk be

expect be of the you catalyst CPUs market there X even is or of to not that curious, the there, next kind in So Gen do if kind speak Gen X? just I'm

Jitendra Mohan

great observation. it's Blayne, a

as platform growing to gets Let keep more in get me platforms. these models, to fed, only AI more to more say data to GPUs and these compute address them powerful these these that is more out way utilized and the and keep of

past, of role played a for So the the do of in very the a an with control other CPUs architecture, terms all is being most information." part, central things. CPU the a in for But engine "can't few accelerated it this the new largely orchestration compute of it does do

But these in networks out Express, general, NVLink data up out you the seeing increased have. GPU more through improve the get and product largely these new the made and systems see And the using a scale GPU either up in Ethernet are are end And protocols. trying to faster we the it's faster, we we to of and GPU as on and demand scale these protocols result, or of go that that higher basis. get utilization per up content for more rates. data and as PCI deployed, us as for a

Sanjay Gajendra

if can Blayne, add more one point. I

be additional for asked look growth are directly can but forecasting not production things that quarter you September ramps other one for quite platforms, for growth sampling, do that we for the are what that of upon September accelerators. which I all September, power on internally didn't You we're quarter the point, driving third-party the that the clear at we just maybe the are developed the is the is growth. although want is based us but abundantly there and also highlighting That both overall stuff. seeing modeling is to

Operator

We'll O'Malley move Tom to at our next question Barclays. from

Thomas O'Malley

ask network wanted question. just to architecture I broader a

you that's about back that kind it in Could back improve time And I as you use efforts talk PCIe the NVLink. more end? further, the the market inflection it look when little over offering you kind there's I a the something the optical of they a talked kind being majority end You a today, of the with content when of the And Ethernet Is leader just when of PCIe see you of kind bit think compares to Just coming retiming to mentioned lot then you of point about sooner? at lot a with optical. frame the expand over additional explain comes of that cables. those think there. little as

Just have additional anything follow-up. a then I there, and

Jitendra Mohan

architectures This rapid I AI for at their me systems evolving. very say they're would actually, definitely are pace. take Let And architectures use The systems. customers Tom. a to Different that. is evolving craft Jitendra, different

you they Nvidia-based systems, look interface. is, proprietary course, which of If at a use NVLink, closed do

both. The how uses on are infrastructure Ethernet or dependent choice PCI deploy the of Express the and largely in protocols either rest that Express protocol are they is hyperscalers of world based have the or really play Ethernet. they technology. PCI choose particular and that And the to upon this Clearly, we

Smart to Express Aries Module we Taurus well. Ethernet. able Cable support our Modules, now And PCI our are Ethernet as Our support Cable with Smart

evolution, cables. mostly And started box passive connectivity over if within distance the the and connectivity retimers with you shorter about we driving Aries think for

needed these fiber. up to over you expands Aries that popular of to As cluster multiple into networking to further copper where as go with the cables. a connect GPU went cable allow of architecture running together, racks very together, you we even meters optical XX and we more meters And smart demonstrated distances, X we it modules into evolved GPUs optical

scale. of all center partners AI we for their tools at are solutions them the are available these data the deploy and our to that hyperscaler So to craft making

Thomas O'Malley

Helpful.

thoughts. a a confusion I appreciate question, a lot think but a this bit would is just of know As of out there's that do tougher I I follow-up, your there. And

it are the the million remarks of prepared certain Obviously, certain GBXXX. hyperscalers deployment entire in take types You different $XX are of $XX for hundreds hyperscalers mentioned the of million. kind going the then the way called so of their to what's and system, to styles going do

others would for your about goes content and think kind of use what talk full own of the percentage they hyperscalers kind that opportunities you assumptions that you will their the about be the kind Can the if towards towards methods and talk then maybe system but out in or I content. think historical, hyperscalers more for the what it talking that potentially means systems play architect and takes do systems of different X than about your those puts and just Nvidia scenarios? and are how upon

Jitendra Mohan

Yes. I Great here and we can pieces lot as But pointed what we obviously, what questions. comment on. And know moving think, a of right? is, out, you

to First based expect our well are merchant as do third-party accelerators accelerators. hyperscalers go deploying of content And platforms indeed are overall, the their new AI as all or that silicon retimer own all, up. on we

system, many Now the if it different you many, double-click in comes specifically flavors. on Blackwell Nvidia or

platform, If the complexities creating more technology whether delivery is is it is power overall that And or it's hyperscalers, the what Blackwell you or doing challenges for connectivity. thermals, it pushing is the software think about boundaries. really

run higher grow these basis. more need bigger, the retimer that up. for faster, As we drives think goes that our And on per become content complex, systems absolutely they a GPU

really can is these platform to be our what as particular we to deployed we our providers Now of share. as kind business to customers, make will have possible. sure well supporting which predict easily platform are as AI harder doing that high-tech as not kind our is hyperscalers That's What it of predict. are platforms

adopt will data creates have of to their technologies centers data adopt find technology their third-party multiple opportunity business GPUs. strongly. well these or grow And wins hyperscaler end to new GPUs great the what the to us. at is overall, new have And that We you to And across the factors exciting will form they'll hyperscalers for products. either day, to this to we as our of our continue Very expect times design a as already for have centers.

Operator

Svanberg Tore next Our from at question Nicolaus. comes Stifel,

Jeremy Kwan

outlook. quarter calling congratulations on of strong add A And for couple very Jeremy is Tore. questions. a let me also and This my

provide X was that segments if breakout revenue could I'm product at here? a sure First, not between you maybe the covered all.

Michael Tate

Yes. programs, and internally When revenue then product. our SCM specifically QX, as win growth heavily as don't our out broadening of X initial modules. AI broadening the by break we're But We the into ramp you -- said both accelerator out and into servers out with clustering the are well gig, it's portfolio. Gen by the for Taurus the main revenues were also call, back-end Gen like in doing driven the the AI QX we Aries X the design XXX of merchant on X for drivers look developed

X So mainly when in those drivers the that, giving at us are you QX. look growth

Jeremy Kwan

into you're looking more -- more Leo preproduction. understand of -- when are you material can expecting CXL. shipping I I And the guess then Great. Is maybe for the to see Leo? ramp a

Sanjay Gajendra

Yes.

ramp, of in available So a being function that it's supports X.X. of material CXL terms CPUs

Rapids. essentially of are, AMD in of announcements to second tracking we get for and Granite half Turin the Intel course, from year So this and to production the

things So terms a in those engineering little take will things time into in general, platforms. of these

is guiding when are is CXL. to on XXXX production we what So up we expect ramps pick

Jeremy Kwan

over you us one modules Great. in. and a break Can maybe Is at revenues and of revenue, And sense if way question it growth might in could time? a kind I stand-alone out to impact retimers? how between give your last that way that SAM how your of squeeze there can look

Michael Tate

we're it add-in the doing modules revenues once silicon. bulk Aries, ramps, but heavily modules. with Taurus the Leo, product predominantly, predominantly be the do cards that of is retimers is stand-alone silicon, GPUs back-end the we'll but they'll in and clustering family. towards Yes. skewed of

Operator

We'll move Needham Quinn Bolton Company. at to & next

Quinn Bolton

deemphasis been platforms. follow-up uses introduction that Express the looks and like GBXXXA it of in the just system-level recent Nvidia maybe PCI HGX a like connect guess the have with a at I Blackwell looks CPUs the or some of GPUs to the and there It changes architectural interconnect question. the PCI sort or perhaps on

Just about going other. then in favorable, if I've wash to wondering a platform any it's the follow-up. if you got a from And that's content, shifts see one if

Jitendra Mohan

What for to Yes. it's third-party of rumors full appropriate or whatever HGX comment or shoulder server are that to day. a on seems every Quinn. it's information we to will platform them committed are not kind between, very our circulating be is be and will it that us Thank you, around. we we want Unfortunately, something working say to an with deploy. Whether very, customers rack shoulder to closely, in

the As we already Blackwell design in family, including have GBXXX. Sanjay the mentioned, wins multiple

GBXXX. We we adopters. do Blackwell platform, preproduction early including of are that the in to serves shipping initial place have quantities the And backlog

Quinn Bolton

Got it.

a hyperscalers to broaden hyperscaler Aries as across lead other as then out expect you clarification Are by Okay. the just it ramping well Taurus into driven Are those initially SCM ramp XXX-gig as And they to we hyperscalers? XXXX? the ramps. a multiple and on move maybe would

Sanjay Gajendra

Yes. Good question.

Let that. me take

per AECs, XXX you you're if gig where applications. in about think case gig, running XXX broad use So AEC for general, the first lane is we that believe

on, case. tends on. topology, depends frankly, be than let's to say, case the on it If you by and look application very, lower XXX It and so rates that, at data so gig

drivers various wins from the beyond supporting platforms across highlighting thing becomes about broader XXX XQ supporting So general it that multiple standpoint requiring essentially With that have gig, compute we more the AECs. topologies. both and these we and good with is and is much customers revenue on different these AI design for several an the scale different based applications. are And essentially

Quinn Bolton

for for well? similar And as back-end clustering the is SCMs it Aries

Sanjay Gajendra

of it subsystems. It of Exactly. are the what In designed case on to the like retimer use of a depending to across component the depends type of networks broad case a cabling when are all array and scenarios. terms by exactly technology, multiple infrastructure that how active it together on general, for put is different topology being cases goes PCIe in how AI compared for it becomes across deployment comes -- the back-end a systems

the AEC nuance mind in you to at when markets. So that's look keep

scale right, are deployment at be infrastructures And put tends looking together. the broad, to and so volume being if you're the how very

things does variety those it applications, one up. address by of you as very to So a significantly as case. able look of where at add you're wide it is case long But

Operator

We'll take Bank. at Seymore from our question next Deutsche Ross

Ross Seymore

been one hit I to of Apologies nonetheless, topic that's of content if kind go it Blackwell on the me, a do I so and couple to topic. want back and the

You getting still the punchline up GPU average, like gave broad-based. very of is seems generation. the will generation it believe also your content, us go to across that on customization guys you're per It you that

has system just at be vanilla looking the And so might SKUs and misleading. itself reference design Nvidia

those content more and your across where places X down? board be others to the Or Are the skewed it same where of that equal question in belief get there'll was content Two-part where things in the this. way do Hopper? And configurations you you getting you'll in bit be a step between some are investors have significant step-up have confused. would and significant the might a where little a difference is

Sanjay Gajendra

more points a bit far. Q&A the already that. covered me Let data do that, X add try I so before to color remind me give in little let we've you and on But

our well that per standard will continue AI various this across merchant to retimer on developed internally applies third-party, GPUs GPUs. as And as content the let's GPU, be clear point, topologies. First to very PCIe average, scales systems as grow different like both

expect specifically kind The go we up. second to to content that per for note want Blackwell, that PCIe GPU of reminder I is our

deployment the the and you're But situation now Now have several that by those is and that what asking at right? is So different for GBXXX. hyperscalers, being is the design evolving, various specifically including considered composed moment. different evolving topologies, look is how offering you if which right scenarios, we about the wins Nvidia options at the are

higher deliver The is be content generation. PCIe key Hopper than that, is we to going the overall, our to that message want

wins ship our business PCIe to design far will We are meaningful us essentially -- we're we're preproduction standpoint to as see to and concerned. allow continue production starting a expect have a that starting that growth from retimer the robust that as to all is engine

Ross Seymore

market have in percentage as have this the past. your of in I share GPU key relative take share guess I itself accelerators there really Astera you in And across the will your get than commentary those And to catching ASIC call internally taking of that more side? a with to side to GPU guys trying things? as the a kind But calls and your been developed of from message you focused IPO. that get haven't Or too about growing components up across is and market realize many and mix, the its retimers that the that you since meant those the relative are are on are kind other penetrating significant of follow-up,

Sanjay Gajendra

to secret, Yes, it's it's you, see by it, accelerators, pursue. be I business sense both, the hyperscalers the their think own no probably do are the or doing in which models that many right? that with of they driven workloads we honest the are

a available hand Nvidia are will in accelerators others. of or macro think with terms I from that internally developed continue trend as hand AMD going in GPUs that or

that stay, approach. believe So that's the model that we here will hybrid to be

X same good time, have we point had we're designs really, a have we to us, the from to ramp course, been keep are has is major will thing the standpoint are have us, the reaching we now And significant expect And with up. the and least a the have that merchant accelerator years are we just last grown or both that do AI where at or on we the about, all from deployments continue the reserves us, positive parts our space. it for the supporting for happened. we the that doing. like business year Blackwell as is in that is a delivering of to believe And that But the can that platform, Nvidia's allow win at we highlighting starting And GPU gain come products architectures platforms major reason from also there. this retimer that, accelerator us volumes kind that CPU/GPU are design other out well as the we very news we're on for that business, a that to content of ones as service all the multiple grow to new to

Operator

Group. at Craig-Hallum We'll from take our question Capital Shannon next Richard

Richard Shannon

here. you market X here X to a has months. want X X of of characterize I the sense decided win of share help just some Gen more the grabs? -- that Express next talked designs in to being Obviously in got market to looking but Maybe next about backwards. much Maybe get Gen you've kind the forward of X X How you a for been to versus can months call, the obviously up here. months what's the wins, X, PCI to X already farther are of wins some on question Last months X on decided left

Sanjay Gajendra

I'm trying that question. to best to see how answer

GPUs me try production. looking become available, you're it's they whatever, these you to X provide design So got to to you're once windows win months go color. let looking is, The -- -- to some XX at for at platforms, before

as mind. thing doing So their think keep as possible. to is right how in that's to hyperscalers also go in quickly arms' now about But right? production Everyone about race also an getting one please stuff,

they the need, different many platforms number And happening is trying Meaning to or is They've situations, In engineers are from may it They've that And hardware built and many what these designed standpoint, engineers might X, also essentially that across they move. Gen how of is from given limited. a seamless our X standpoint, it. and now retimers. XX X familiar X Gen upgrade for of our everyone tools quickly to every just resources platforms. with are retimers a that multiple a standpoint. capabilities around have software software are

be And that resources at required. levels our with are risk available lowest the out So plays and it trying something path own does offer quickly that might fastest to the of well dealing to get objectives that and their customers. within not

And So gain these from everything we convert opportunities. starting space, things into are we the and design being the and essentially leader doing being to in we one that overall, first to those can is at revenue. the it, the we wins are are getting crack

Richard Shannon

Taurus simple follow-on want you're to My be looking and a of is XXXX. ramping Great. timing the Any later the here looks at don't too just think see looking to the I far nice XXX here. pretty of how talked the of is get kind question in half at and what update one, but a line Okay. year, on win the that so generation gig, about second ramp far? design XXX-gig you've pretty your Great I in to ahead ramp,

Jitendra Mohan

Good question. Yes.

to Right believe, of general for XXX-gig be seeing is timing, where top doing purpose well systems seeing traditional well actually for we connection. are to as the going the XXX-gig we are are is you the late server compute we as them what of in So as AI applications XXXX. now, the some rack

more that we will XXX of newer So et some XXX this get rest per And for hyperscalers to XXX broadening on of different continue gig of year XXX-gig the cetera, for deployments are across market the half platforms across where see and this in and then get capable of the try is different that XXXX. to lane, as gig we mix of deployments. latter

Operator

Suji We'll at go Capital. next ROTH to Desilva

Unknown Analyst

explicitly, [ or but is is developed can maybe content Or accelerators? internally this Jitendra, asked not average? may on developed congrats Mike, Is a higher it framework Andre versus third-party internally like ]. here. the question for processors hard progress give This generalize And have to on been you it that? relative us for

Jitendra Mohan

that little different I would hard you form say, to let's if custom factors. of getting at, HGX, varies content. if particular say have you Even NVLs, bit you deployed. one Blackwell, can you'll a it's It have generalize. you look racks find MGX, platform, a have of look you amount quite different one have Even have them, bit. you you each at are And

for but vary It they the is Number up of placed. retimers will is us. vary that overall where go will does content consistent get very -- what

their PCI but if Express is now only factor Ethernet, we retimers our proprietary product goes the for when shipping the Express-based which is back-end participate significantly if use of other cable a at not our example, look back-end smart do lines. Aries to Taurus of But our not also application. PCI modules you choice smart network. the will we that they the the connectivity, into interconnected NVLink, a standard, somebody because which protocol back-end family at cable Now closed consider benefit family, Again, Blackwell in. Similarly, are that uses -- up pretty then content or

factor platform really the varies what is architecture in. is the form on of it So greatly and deployed what getting

Unknown Analyst

was our kind Was of about. would platform made very like of kind something trying sophisticated it Any just and diversification Okay. the this Blackwell was helpful in color things transition inherent Great. architectures how possible? more proliferation do? to Hopper to availability the came this they're much And then there it of Or about color. getting there Or helpful here. of that from diversification be just products? as what Astera's a PCI hyperscalers follow-up That's quick

Jitendra Mohan

small packed problems, I mean that content to at look and a amount is create racks challenge. -- right? themselves those that if them, to of becomes There a is of you it They're does into the I that cool it's is incredible. CPUs being technology. power GPUs so challenge. delivering in The How earlier, marvel platform much other pushed compute to as those space. family, the mentioned Blackwell such the is And like

handle fact these the just not data many that centers are of issues. to modern And equipped

that's in it hyperscalers shoulder for that our the with opportunity these their we products, are is our trying talked lot customers. so platforms some what products see taking have And that we've to the we our ones new and a technology again, into where fits about, as been data adapt So doing centers. on they're broad well that air to of existing as shoulder platform and working hyperscaler it

platforms these see new AI rolled that platforms to including excited we will internal very there. and get Blackwell, hyperscaler have the out, So the content increased how including

Operator

to & Quinn Needham we'll Company. finally, Bolton And move at

Quinn Bolton

expiring a you morning. I follow-up. Thursday lockup for early just Guys, an a quick had potential know

of of sort that in expiration? early that does at that wanted release you Just looking period measuring lockup September Or quarter confirm, results now lockup? we're guys see still we to within you if and so could could are the XX-day trigger XX the period a second

Michael Tate

today that a -- on earnings release The up Yes. lockup Thursday. is opens releases our of

Quinn Bolton

Thursday. It opens on

Jitendra Mohan

long The early expired lockup already ago.

Operator

turn back no remarks. at will there time. Green call And Leslie the for closing this over further questions I are to

Leslie Green

on conference call this participation to for you, Thank later you everyone, forward earnings your and our QX progress during you. updating Thank We fall. look questions. our

Operator

And you your Thank for this concludes participation. conference today's call.

now disconnect. may You

Astera Labs, Inc. Common Stock (ALAB) 6 Aug 242024 Q2 Earnings call transcript