ALAB - Earnings call transcript Q4 2024 | Astera Labs, Inc. Common Stock

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Operator

Good afternoon. My name is Jale, and I will be your conference operator today. At this time, I would like to welcome everyone to the Astera Labs Q4 Earnings Call. [Operator Instructions]

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

Leslie Green

Good quarter and XXXX Jale. Astera to Labs fourth earnings afternoon, you, welcome everyone, the Thank conference call.

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

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

statements except which addition or substitute Also on undertakes are of after available measure by made discussion earnings financial our obligation which website new can provided These website. to accessible through Investor of statements certain management non-GAAP law. with to to to we issued portion such information, company future measures events be changes conform as the our the Relations superior and the to this today, A portion based of update no measures financial be of filings important this and included these today, also release the call non-GAAP as accordance result will an of GAAP and information a and to company's All use non-GAAP in the financial available will which in also prepared we the SEC, our reconciliations our we accessed expectations, financial Relations the through refer a or our in with performance. as is in U.S. call, why results be to our in as non-GAAP to measures be financial Investor of measures, and GAAP. we will not required consider of during date between of are

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

Jitendra Mohan

everyone, afternoon, Good conference and XXXX. year Leslie. for joining you, for call Thank our fiscal fourth quarter thanks

more strategy I will around growth QX a results, of beyond. in secular the by Today, Labs our in long-term company-specific turn I'll the the Astera followed above-industry and Sanjay to discuss will help our drivers that XXXX overview medium- year growth call and provide over then and full an detail. discussion and trends to XXXX key deliver

XXXX. will financial Finally, QX QX provide our of addition Mike XXXX financial guidance for results our details in to of

during of the revenue families. cable QX million, up quarter was quarterly XX% versus sixth record driven Revenue XXX% from product results for QX and which was strong consecutive last smart Aries Ethernet growth PCIe delivered Labs Taurus retimer, our and Astera primarily QX set module up at $XXX prior by and year.

driven for we demand customers' with additional the to in Scorpio preproduction quarter Within families, of across both saw product and a qualifications diversification, also both products by volumes platforms scale-out AI these shipping momentum during continued strong for variety connectivity. support use first cases. scale-up Leo our multiple and

software at in Looking expanding gross increase margin $XXX saw robust our the year, of in fiscal of our our The hardware year-over-year XXXX strong year QX XXXX, product to culminated across finish outstanding both full million. sales XXX% value full which was and reflected an XX.X%. non-GAAP portfolio by

R&D connectivity In also provide holistic connectivity closed solutions our acquisition technology help development, group our and QX, strategic included head of to the talented Over at customers scale. by capabilities challenges. small, and foundational our that rack a engineers in product our we but architects organization XXX a next-generation our IP past count successfully aggressively strengthen broadened accelerate capability investing solve to a employees. hyperscaler for We XXXX our have nearly by infrastructure XX in full-time to XX% we months, increased

revenue fourth in along growth of was by products, the quarter. strong Taurus XXXX Our largely driven ramp a in Aries with

the and be and retimers breakout are phase In expected support revenue by diverse XXXX, driven families volume trajectory. key Also, we all proliferation XXXX family of to of poised be to product production half platforms. Astera Taurus LEO years to 'XX. enabler of as several Labs growth, to expect ramp a continue from a start year a in their of growth to X track our of We new second with on Aries next over CXL set of enter our a strong customers is the

broader switches scale applications complexity. will switches our the return for with P-Series up time, Recent have on scale engagements year and opportunity increased Finally, and enable require AI cases business underlying up Across innovations are The potential driven by AI fabric and capacity algorithmic models fabrics. AI shown larger CapEx higher by are the with more infrastructure allows our throughput and internal ASIC-based with for in scale XXXX, our to faster and compute need AI AI our deploying secular pushing Scorpio become the that projected hyperscalers trends In and out better many system in to optimizations grow drives large growing to for industry, to line, for the in of a broadening this hyperscalers language we are of This networks the for cloud investment expect to switches. every with These be for improvements the connect X-Series data AI in product our nonblocking growth Scorpio of performance providers. our fabric network size Hyperscalers latency investments boundaries more such with use across accelerator every scale servers to scale the robust high to with infrastructure. deliver The deliver fully pipes. innovations. and clusters. begin accelerator other adoption efficient and market continue of that and rack-scale use homogeneity ramping largest end-to-end interconnects new and smart given low support industry.

are scale are X Series a innovative PCIe-based perfectly solution. family up suited Scorpio Our retimer Aries and clusters provide custom-built to interconnect

expanded XXXX, the to include AI next-generation fabric provide including scale-up Board recently high-speed potentially to been industry up or PCIe-based [indiscernible] about entire by interconnect Ultra an the market. next This the clusters. for with of Accelerator has broader UALink UALInk. for addition scale with a AI of are interconnect opportunity initiative and advancing develop technology we is Early Alibaba industry excited the more significant to progress Consortium Directors made The Link, leaders, scale-up Cloud In open several development its in UALink and the to opportunities, Apple.

for Given Lab's standard, Astera solutions. our within accelerate next-generation we open engagement activity high-speed intimate involvement seeing overall this are

for take interconnect these summary, anticipate protocols across our trends In with hardware full underlying advantage and of We multiple increase media. connective software robust by the we faster broadening to high-speed than at product market solutions rate to shipments. look accelerator existing AI and portfolio opportunity differentiated a

of are by our our driven We products new market pace growing level deliver opportunity the us. of customers to that and address ahead rapidly accelerating development

let in Gajendra discuss and me over call COO, detail. growth turn President our the With strategy more to Sanjay to our that,

Sanjay Gajendra

Jitendra, Thanks, afternoon, good and everyone.

X Labs for Taurus we our launched modules. Scorpio cable Astera transitioned as into vectors. across multiple and for and all high-volume year diversified smart switches our lines significant fabric a from of business production was our revenue Aries generated XXXX We product

at platforms. new quarter continued This AI We multiple platforms on developed accelerators internal the based AI GPU-based go internally in for growth to AI and to customers a along with third-party our platforms also multiple new the started expansion us fourth took ramping third establish baseline business revenue with momentum in accelerator-based quarter. continued with off helped

rates for and across that As of see spent AI Labs. we broadening more we efficient should strong models the our infrastructure AI by driven industry, by into look catalysts secular growth deployment customers, CapEx above-market XXXX, drive company-specific higher by trends Astera supported

internally for continued developed including drivers: XXXX, and One X that we Aries, expect families, Scorpio. is of product AI platforms business accelerator multiple incorporate the Specifically Taurus key Astera Labs deployment

result, a systems. Gen continue customers, multiple Aries, we'll in see content design continued AI increased X on to benefit products in growth of dollar infrastructure per forecast Based from from next-generation backlog accelerator our wins we this and As known XXXX. strong PCIe

rack, solutions in cluster module see drive the Aries meaningful accelerator and with cable size formats. retimer rack to and to opportunities both onboard AI reach rack we scale extension As within our smart chip

XXXX. way family past growth contributions over revenue the product paving for Taurus demonstrated has the Our quarters, strong in several solid

our see compute smart to general-purpose modules, for Taurus' continue demand applications. utilizing cable both XXX-gig for and infrastructure ethernet solutions We AI good

Looking the Ethernet XXXX opportunity XXX a event in late transition for ahead, at the we XXXX. view market gig to broader

for suite our exciting in we a upon broaden as which next-generation The valuable Scorpio software enables flexibility showing activity Scorpio is continue and and our our leverages architecture design momentum accelerator COSMOS software-defined X-Series built architectures is scale-up X-Series support across of engagements. platforms customization, variety customer a for Additionally, also customers. platform-specific products AI to

orders pleased report received family. X-Series Scorpio are for have We we preproduction our first to the product that

GPUs. ramp custom second is on business the third-party picked AI The XXXX our racks for industry-leading expected production of driver

Aries higher programs X Astera year. These preproduction customers' are utilizing and per of We a and volume second content shipping dollar expect and while begin opportunities solutions in networking Gen of the and half on PCIe our we GPU this Scorpio driving basis, Labs throughput to leveraging deployments design, our maximize for hardware software per internal to P-Series rack accelerator support quantities own qualification are capabilities. to

Together into issues provides Better retimer show, PCIe to At topologies, COSMOS telemetry combination while the deeper our XXX-gig integration retimer solutions demonstrated of the software operating stack. suite. we trade levels pinpoint tighter customers' switch, APIs ethernet connectivity our COSMOS and of complex XXXX fabric per utilizing in PCIe lane of DesignCon This enabling

performance our the the highlighted growing maturity SSDs. demonstration by switches, of of the and PCIe throughput Micron's Gen today between This PCIe X setting ecosystem first PCIe showcased interoperability and X possible a X also retimers and end-to-end public benchmark. our Scorpio new leadership solutions, Aries fabric demonstration We Gen doubling storage maximum Gen industry

data third our is driver XXXX for The in business center. compute the general

general platform a smaller of SCM and We servers, our to retimers, cards CXL expect Though growth multiple business the CPUs, compute layers Taurus new Leo the network opportunities, is from featuring we Aries new revenue general diversity with Ethernet families. SSDs PCIe compared benefit product of AI compute-based with portion our and from growth.

many and by maps. new and Overall, by platform opportunities partners, support drive front of opening for revenues. customers encouraged increasing the our product new trends and opportunities their trust we their XXXX in road to in us us to We're are also secular lines excited

work and robust result, software a scale invest capabilities comprehensive connectivity technology As to market. product and increase capital our performance, address continue our utilization efficiency. upon hardware system and to to in ensure total our rack to build further we semiconductor, aggressively we'll a portfolio addressable to maximum at as R&D We'll solutions expand

to focused XXXX beyond, we and playbook execution. with closely three, look As on and continue one, customers and partners. to Two, exponentially laser we same: do; in technology product and the our stay innovate remains our aligned everything be

this will back-end estimate Our retimers, aggressively applications attack strategy fabric for market help With solve expands nature. and eliminate capabilities, with to connectivity and $XX as software our opportunity long-term networking across dollar opportunity portfolio tomorrow. market high-speed technology higher. controllers market. switches a scale-up by in greenfield drive address XXXX. system-level proposition to diverse fabric increasingly solutions growth value of large key is growing By memory portions AI such bottlenecks, and solutions and and and billion Significant our the we connectivity We of hardware are players difficult to data interconnect content broad will our AI challenges a helping of the set partnering ecosystem are of

investing customers continue we support our in strengthening by us capabilities the are lies In motivated meaningful conclusion, our opportunity technology by the future. that and and before to passionately will

customers, to for Before and our financial outlook, to want I Tate, our to thank our most take turn the our XXXX. moment CFO, QX and great to a to a I quick call QX Mike team families over results importantly discuss and partners

With that, Mike?

Michael Tate

thanks Thanks, everyone the call. to Sanjay, joining and for

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

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

growth strong scale scale configurations. supporting up our ethernet Aries of During the AI we and smart module quarter, both out both and connectivity rack-level and enjoyed Taurus products revenue for PCIe cable

Aries was and For It shift fabric R&D million scale our from quarter volumes switches, levels gross both hardware-based in we QX deployments and were to QX smart expand and smart to $XX.X the market a product towards in from to we our mix as previous expenses our continue broaden solutions for later long-term ship Leo the modules. million, margins $XX.X cable Non-GAAP down up opportunity. non-GAAP was organization operating XX.X%. with XXXX. Taurus CXL due preproduction as production customers quarter September products to their Scorpio qualify for work our

As previously small contributed of slightly call, latter the mentioned quarter, acquisition the half which period. during spending to we on a closed toward also this higher the

QX increased marketing Sales operating $X.X demonstrated general non-GAAP million Within was which QX, QX, strong for million. administrative as expenses XX.X% revenue $XX.X was million. leverage and $XX.X margin from expenses. up I'm and expense operating XX.X%, expenses, outpaced operating Non-GAAP sorry, R&D was -- operating expense was in and growth

was basis, be we $XX.X accounting longer Interest QX, non-GAAP income a cumulative QX valuation on our a of history in assets. allowance our tax given no in deferred non-GAAP million. profitability, starting for On will full

I'm a million result, income compares in As income this change, quarter, the benefit resulting realized QX fourth the for $X.X share rate count rate tax XX%, benefit an to which QX quarter million non-GAAP previous of XX%. per fully Non-GAAP for income sorry, our guidance earnings was a we tax an expense an and of tax was of $XXX.X tax diluted for diluted in $X.XX. benefit -- shares of and share our

noted and activities million, XX% the cash, tax during Excluding equivalents $X.XX. and of just based tax $XX.X the from as on would income operating QX ended QX impact quarter, of EPS guided, non-GAAP with for a had non-GAAP cash $XXX was Cash benefit previously been the marketable quarter rate securities million. flow we and the

guidance our to turning fiscal Now for XXXX. of QX

prior within to revenues from million X% the expect roughly quarter. a $XXX up increase XX% range million, to to $XXX and QX We of

from QX, AI We broad for to family the for Aries multiple revenue our platforms. in across a our QX. contribution range applications we top Taurus provide strong to For product SCM of expect customers continued over line also look XXX-gig growth

Our Leo will preproduction support ahead of CXL of second in in ramp shipping XXXX. family ongoing the quantities continue controller to volume half qualification

systems. expect driven rack we in preproduction QX of revenue grow growing volumes our scale designs for to Finally, by Scorpio product sequentially

XXXX revenue of year. least acceleration to Scorpio revenue expect the XX% to continue our with We comprise total for at exiting

QX. the silicon We between with approximately hardware and remain and to expect our XX% non-GAAP margins gross be modules as consistent mix

continued expenses headcount property; in and largely in operating X the resource will we range expect two, is a QX payroll increases QX. Operating of $XX labor part associated seasonal full step-ups latter approximately three, annual with our driven and across resets; performance merit expense intellectual pool a grow million. of by momentum first We to expanding R&D factors: non-GAAP expenses be strategic and in to the executed tax contribution of million acquisition one, in quarter $XX quarter

with We business new and cloud AI term approximately projects. to be next-generation while revenue opportunities the the income million. operating is reinvesting long $XX over to our continue Interest via expected to to growth strong leverage support be market associated infrastructure committed into driving

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

concludes open the joining This again, for remarks. our now we And questions. call. prepared Operator? once And everyone will we appreciate the line

Operator

question comes the line of Harlan first Sur Instructions] [Operator Your of from JPMorgan.

Harlan Sur

AI, [ actually in program on future. in ASIC like a execution. of you've in the Meta, The MTI also a growing Tranium not-too-distant AI looks ramps at you ramp SPU It the inflection strong X the Congratulations like ] EPU, the mentioned, compute GPU Google, are overall numerous got multiple at big you than results as is and faster accelerated programs merchant Amazon, new customer these programs and market.

question the ASIC-based percentage came I you exiting systems that ASIC versus year? programs say, where systems. GPU to your on from be, AI expect is, a trajectory. growth business So And faster to mean, year merchant seem last of what this do be mix

just you a strong very, me have mentioned. wondering if agrees your I'm on here this across products team the with view. as very You attach guys

Michael Tate

those very programs. programs Yes. internal GPU way. of meaningful to a in the up right Also, now. designs in addition unit these AI see volumes the connectivity, the excited compared the we to you're that doing merchant about particular, We're accelerator the extent on scale-up

quarter with was full predominantly year and a SCM quarter. the QX internal business the GPU was up. quarter see lines. XXXX, accelerators, since and tourist the was then QX, then we our AI our our first product the that a first look into with Aries that adopt inflecting QX really As partial up And to inflected the of first it [indiscernible] half you especially, that's was in

So it baseline really of revenues. sets up nice a

growth. if look XXXX, into Now you see both contributing we

The content the be be accelerator AI year us. for of in internal AI into that's the rack we see strong dollar with year, and first see half Scorpio This ramp. will is very to a get GPUs more predominantly where the to if the GPU But custom will also deploy, transition merchant you'll where our on we increase big of the start starting the back the programs. configurations half per

Harlan Sur

sequentially the inventories XX% sheet, on high I balance an team. in almost for up appreciate that. all-time And That's quarter. the the December were

up think strong board the X level inventory in level of last over a Is of it overall XX% average the more both? of is your or solutions, maybe a of step-up significant versus across shipment or I it's the a quarters. portfolio step reflective of reflective the combination profile kind multi-quarter

Michael Tate

in Well, you XX% that were QX, We up remember, A during sequentially. of strength strong. were developed quarter. if very our the lot revenues

So significantly QX. pretty we down drew inventories our in

build to Now to QX, had time in back more our level. we normalized

this most our a reflects of are level the So customers. we feel And because business growth level our always from now. comfortable. sourced. support where in inventory sole most want of position our to We programs is This actually in to be upsides

Operator

Your next question Blayne from the line of Jefferies. Curtis of

Blayne Curtis

I as with this customer you're Mike, kind to it's the how the curious for for just December. wanted strength I'm was a shifts strength don't then, that gross know on big had about think multiple in of I seeing I what basic Scorpio margin ask in know you're are least you was mentioned I and going there shape of mix of if I impacts how [indiscernible] ramps, you year? 'XX mix X. your and hardware, at products. margin. the And maybe curious, of gross to kind on just Taurus. that as

Michael Tate

Yes.

module a and did So particular, Aries did factors revenues tick We the you from as for of the well. upside the see the grew and form in as highlight the was, percentage total in Taurus quarter QX, margins our Taurus in down.

is that's what So expected. down the reasonably XX.X%, we margin to going which to had close

are see XXXX, year, the as But and positive a modules. Aries good the contribution on Scorpio from chip Taurus as well. you it and SCM through Leo go us for as Now Aries as still as into make we board we well

we it hardware depends QX, down should highlighted, in longer-term -- consistent the margin profile of margins XX%, XX%. but mix closer around will a of model as QX all on versus our we've think have we silicon. trending to So be And the

Blayne Curtis

launching kind curious just a And you then I removed that now was Scorpio. if could -- of quarter from you're

scale terms those seeing with of in design there Just up of the What had the [ terms competing products? of out you're And ] else of that is from just comment you're that number kind I'm kind curious of competitive a you've momentum engagements. on for in EmbyLink? against outside of landscape-wise,

Sanjay Gajendra

this Blayne, Sanjay is here.

answer Let me that. help

us, case, clustering for broad. is series, know, as on head So be pretty which you PCIe for side. and then X the has use X to [indiscernible] back-end for Scorpio got tends GPU the P-Series And series

expect since we series. up to P-Series sort to tends into So P-Series half design-in this and it's this the at just what as the second launched, end. meaningful both take of opportunities pick Series start point, X is to for because back-end for we side, as off. design production overall, longer well front year the more we multiple of continue starting a qualification volumes as going revenue GPU a be but contributing The

preproduction And started preproduction receiving orders. our already. we have shipping for X-series, first been We for then P-Series

for to So and largely cases. connectivity implemented, we by to where been have Scorpio definitely PCIe want is for first fabric more devices of up back-end AI developed that expected, we the what set ground that is been than set that's share has Scorpio use that feature I standpoint, the momentum driven what on the

standpoint, and we're to features in performance the we So the customers the delivering. value that that have see the

Jitendra Mohan

Blayne, this is Jitendra.

question Your what else out on is there.

deployed within scale-up that, used scale network about. standard widely it And not is difference just networks. than X ethernet-based there. alternative and for between NVIDIA course, clearly, very did commonly scale NVLink the And the designed deployed most is of up. the talked that but that the Sanjay other really was Of PCIe-based Ethernet Other the there a is is, X we is commonly of course, play is ecosystem, most the

Ethernet, are this PCIe-based is quite of the suited gravitate you which systems, better application. latencies which customers see many get of performance high the don't for towards we and why our quite inherently So are

Now excited get what standard the developing both in of about. ethernet as with the speeds is to memory-based the which try latency get the we And the that future are IO benefit we well UALink, as might and is behind you the of a PCA like happening industry see UALink, lower the protocols. very

the we over to interconnect of do Now time, for just because line Scorpio largest market expect product our scale become is so large.

So very in space. excited coming about what's this

Operator

Your Moore from Morgan next question comes the of of Stanley. line Joe

Joseph Moore

a you inflationary that Seek I on as saw know there's regards ago. with to the of seen, Just innovations the would you you would couple how what a your to attention it position you've opportunity love Do to get AI? about that seen? that we've lot Deep on long-term see innovations weeks other in we talk Can of perspective this.

Jitendra Mohan

Joseph, is Jitendra again. this

start let that. So on me

lot a there First articles that about discussion, of a written been have Deep lot you're is right, of of all, Seek.

our able will about add. to gone they I'm the face But what matters is is that the announcement, spending. point what And not what hyperscalers So they what and have exactly of in sure most want be Seek. do think Deep increased out all customers, the CapEx to I

on for that why and And continued really that to likely can the is. I of and believe is continue. future GPUs shows demand AI my kind So perspective accelerators hyperscalers that the of give the you in

for algorithmic goes get these will of will X, again that virtualization lower. will similar kicked models. over even looking and trajectory, that that the and the quality embracing when for when beneficial like has is time then happened we look inference, if we of phones. break of PCs. for just goes shown It drive some consumers into improvements the from has in, follow adoption. have seen the ecosystem. inference, training, you you with down results down, Deep a results think happened better the by look It you the It I, Seek at up. go adoption first, put models And these do more cost happened inference you Seek are at it the so we and innovations Deep up if from And with AI AI If And servers with overall it forward, team again that all cost

So our the And that we the well as enabling focus trends. both dynamic as exchange, with of platforms. from extent stand has AI the on to infrastructure any the always been AC benefit third-party GPUs to

Joseph Moore

helpful. you a very of my in year. capabilities. second seeing in ramp of half kind for second memory the quite us in how interest talked It's I And you kind then bandwidth boosting be of you're follow-up, of Leo size half? the could bit help the important about know Can that

Michael Tate

Yes.

as compute applications. CPUs market. high come we've initially support high-performance been that So to a type customers working CXL going These with our applications, are to next-generation [indiscernible] be very memory data

back half general the term, be longer those technology in of very for beneficial we Ultimately, do to start expect the compute. deploy year. CXL the see we'll mainstream to So more

hope So to see play we in XXXX 'XX. to out that

Jitendra Mohan

quite just the that CEO with or have too, time at closely to working this add become some vendors are X yes, broader picture fact based bit for driving cases that, sort the to hyperscalers little there to think applications the the are -- pretty and now. on give the been we that that -- add It's to you to CXL. clear of a And are there or I what use for point, ROI X Mike

beyond. deployed the second XXXX of year, is use point, opportunities that one additional probably the So the and we do this expect half and getting cases first in we this understand to at associated in come along

Operator

the from Stifel. question Svanberg Your Tore of line next comes of

Tore Svanberg

a on Scorpio. Congrats on question I the strong results. had

still you from already going calendar you 'XX. now X-Series than contribution said or predominantly Obviously, 'XX? you Is number in going higher. think get P-Series, I to more the some XX% be to in of expect are that it calendar that revenues to is be

Michael Tate

for expect The part in both. We the do be first contribution P-Series latter X-Series and the of the expect will then we to year. contribution launch

Tore Svanberg

the about you obviously, greater then right about And versus Taurus, first half revenue it just first customer a in as if be the will Because follow-up than the that how there? diversified half? nature, base case? business use second now. And Great. talk even revenue do profile diversified of half. could and that obviously, How you is maybe bit just more think yes, profile little by some second it is But on a

Michael Tate

Yes.

gig, different So also relatively and have XXX QX. we're both we XXX QX designs set here form limited XXX-gig still there. across launched and support opportunity types of The is factors. in really And what XXX configurations, multiple different is shipping different gig opportunity and and providers out we cable gig

So lead continue our in AI XXX should then provide purpose. primarily driven we market to general the focusing of start gig. been good to for in by latter XXXX both transition year, both to part see strong growth the customer. then And we've This the on and

Operator

next Barclays. of Your O'Malley Tom question from comes the line of

Thomas O'Malley

your that down was thought Scorpio is as time about My could product that remarks, prepared be about frame or product why that seeing that should think we in Scorpio XXXX. understanding taking biggest some thinking just your perhaps talk some first you you Is you over line. coming of to made potentially early line extent, the faster the the than a areas just Perhaps this had mentioned before. you become growing in originally And function would as preamble. mentioned time, that that don't over? I you've comment

Jitendra Mohan

Yes.

also we the means device are lot play And we profile that back the tends ASP adding the retimer other. Back do add content deployed, we bigger many the actually customized some have like switch will out to switches many we What having does retimer evolve end in device developing, away. for products a of a road tends far. some feel per significant seeing, rate the the the each GP to obviously see the in go there. revenue the a scale be TAM meaning at to then tends able a AI opportunities much continue given will up. and simply we the ways attach given And end. And It both socket. much talking and and that forward, with TAM to of we're technology not mean Scorpio momentum configuration. PCs the higher to ASP. front and with different, racks be go I so high more that get have at, very be to that the a go being in get significantly end ASP flagship with that the a any So benefit and socket to is you that of in color from switch become side, released CXL you larger. that's dog a general, them GPUs standpoint. compared And is products if But deployed on product, to from switch that we and including class a device going we're are think CPO that, to least address along confident look to going that or being we a we're map the that exit are to market are It to because more And fertile both a controllers retimers

Thomas O'Malley

was And first on I then of helpful. was call. it just, here think Mike's the on my the follow-up one Super commentary, questions

half was being large through comment now merchant customer Aries to more That bit XXXX of the of a product AI the big going surprising of talking GPU. on more how the first the given the You transition of kind followed the year, we're at a talked by in the me you would about year about internal half year side. see efforts second yours.

any ramp behind year? any me is did where versus would before? bit a the those Just stronger comments in the I you you So have earlier that the in guard. change a being anticipated maybe that of way off caught merchant GPU reason there see the XXXX little

Michael Tate

Sure. all, Yes, so the GPU first -- and Aries. drives both the of Scorpio merchant

merchant incremental all field big the score us. are of the designs So have content piece new all GPUs for they're The in we nature, new. is is that the which complex

in productize and at ramp These the of the the year's to So to looking half of custom start all first the now, for half we're them configuration. back that Right in off -- get the year. -- preproduction. are to

time So rates. bit the lead the little a of adds volume to customization

Operator

comes Ross of line Seymore Your next Bank. of Deutsche the question from

Ross Seymore

of questions. couple A

bit higher And level. is a First one it's on diversification. little

Scorpio of view concentrated your You of point concentration. customer with guys batch also the there's forward. talked also a there's of product an being diversification hyperscalers, But admittedly from XX% over going revenues

side So customer will both? XXXX give from Anyway, can you how framework and diversification the bit or little a or be you differ on lens? side of whether product XXXX it the us a of think how ended,

Jitendra Mohan

Yes.

hyperscalers the XXXX, in we that XXXX, overall, are sets all multiple shipping product we as to fact, across have. different will, So

that. with are or nuances data be are dealing So doubt in said not market. when there mind any that, that keep about should you're But some to having important center there question the

is first the an are handful just like there market customer because a The concentration of occupation only always in data thing, hyperscalers. hazard center we say,

The are mind accelerator it is more of maturity others. comes development, than that the keep when to differ internal terms second advanced in thing in hyperscalers chip to some the their

revenue program, a play when to us obviously, where programs accelerator as we we hyperscalers opportunity. to well silicon data from between the compared where Excel as both get For on are only we the counting designing difference be and internal internal merchant there the hyperscalers have will merchant

that is one. there no So

from one technology is the deployment hyperscaler that The hyperscaler. also true for new other appetite to that differs is

terms be there take some some So new hyperscalers of in deploying that Others time. pretty are will technology. aggressive

time sure not reflects given just and cloud in in own expect that share that terms hyperscaler share. is are make similar then their hyperscaler hyperscaler and our a But a something deploy tracking. that that be is the we get given our you for not It that they take given to potential So be in It second from window the coming customer other. where expect that would more can does time, means a more situation there given mean a simply a the of revenue will versus hyperscale us. of has, our of contribution workloads seeing the market that we percentage the services, things got to if revenue other overall, meaning numbers certain goal we each a they're has

Ross Seymore

Mike, you. for X very That's helpful.

you go second shift from to the a like hardware It you You your like in gross that the of towards little of hardware Does or fourth more does in flat that back first. little mentioned would stays was half? as quarter, sounds mix away it second any on chip the helpful. kind sounded bit down margin, well. said that in flat in earlier module correct, the side a below the guide be sort stayed about that it from It level. the why bit hearing what the update said Was I

Michael Tate

the We as hardware, stay level at Yes. in should growth it see business. the but should do a rest of similar

So it's not the growing in half of as first the a revenue year. percentage the of

Operator

the Quinn Your Needham. next question of of line Bolton comes from

Quinn Bolton

the historically more come to for connectivity AI inferencing. we've need back as entrancing a probably we negative large are side. on question of the Seek. don't training one greater size. if towards shift positive sort guys as of if we wanted of TAM? deployment but I Do side, benefits And greater inferencing a the adoption see Is obviously, of models smaller on -- the that Deep And Joe's seen to clusters any you for that means a is see of or clusters,

Jitendra Mohan

that. So crack let me at take a

first say not business those. We stand level, of training. the at to strongly benefit our think, on can of So high that I all, dependent is versus from inferencing both I

don't you are other chain as said Deep made thought for need even Now required Seek a matter, look or historically. this more as models training. of cluster folks for they you than large that that that that, the that valid compute which well, need announcing if require have Having as far point actually you is you announcement of the inference at for

go server. be time, the now level. And year of be challenges we a with product X year level are when different up that connective doing level, will positioned come X at will of over become you rack a of as compute very many a to lines. to AI to What kind So with different a well that expect unit a address do rack you rack we are server a typically used these we our

in Scorpio retimer and P see opportunity. all of all, participating in unit already rack We this Aries compute will higher goes form as type we level, to our products. other with So factors are

just we overall, don't those. tend of as to so And from a headwind this benefit both a see tailwind. or We

Quinn Bolton

Got it. That's family. And second P is Scorpio the very helpful. question just on then

platforms. for mentioned P merchant by that, custom platforms growth on sort do GP-based guys the well? Scorpio that engagements Wondering, driven you of versions the You of really have ASIC as

Sanjay Gajendra

Yes, absolutely.

node as now, back themselves. storage interconnected see engage CPU, do X-Series P-Series both GPUs we So X-Series to we are P-Series interconnect the end more it connectivity to and right to -- for is we with opportunities ASIC the relates for head networking platforms. the and for customers and that GPU for

Operator

Your comes next of Malik from Atif line question of the Citi.

Atif Malik

on and thoughts and could in is question Can its bit Jitendra, timing. of co-packaged first discussion opportunity? on what of My Sanjay, your optics. there's PCI it your retimer a that volume you terms on of the impact have share

Jitendra Mohan

start. So let me

type even copper lot reliability components per that largely the we remain industry of high serviceability at negatively go to we that products think current fact, aspects. as will is we optical all, is as hard have. I percent used as specifically our a XXX well to work what activity very CPO that deploy. you gigabit at at prefer will which reason level, customers impact keep a The for lane we CPO of expect own it copper. to don't products generation to it be reason the or into we And reduce rack XXX at silicon-based a its of has solutions, our copper. is pack, future. second. gigabit additional purely The near look way at the challenges When of for really it the the per easier The matter in business First to level, the at have even The for next that

they bandwidths co-package is optics. to will if will do general, with do they with stay so go what to copper, can on, in in only from customers seen stay not cannot If So too you copper. then our are they we plug they the high become feasible, because have And copper optics and when go pluggable optics. with stay

the optics happen the rates ethernet the which are highest, co-package instance speeds first of line and when highest, result, the of interconnect in see the data density switches. highest are the the happens As typically a with we

an that play view area deployed get that's will in we our and not that's where So is CP that today. first,

not to likely types continue the explore term, space for watching we longer different medium-term like it's customers So near- impact to And the us. to from that our keep will our might for solutions revenues. and media the

Atif Malik

should think about Great. the And we you Mike, how talk year? OpEx about can for

Michael Tate

the for aggressively Yes. we're we the we We acquisition highlighted, QX business. outlined, to in we invest going continue including reasons to step-up -- bigger like small did. the given a difficult is

R&D. normalize that rate and do now, little So our a operating But really hopefully margin time advantage to of more bit. will We driven hitting margins. in investment a long-term the we invest And believe inflections press it's our by controlling a business. in in model will right versus growth operating of have goal of be revenue XX% the growth our the

Operator

Roth of question Capital. the Suji next line from comes Your of Desilva

Sujeeva De Silva

emerging focus. large doesn't the the established, know if that in by First clear business fit companies or to question, your just on I'm versus almost the be if it's model? trying to curious just approached engage I AI hyperscale. you've been customer entirely

Jitendra Mohan

what terms integrating emerging very enterprise systems the from that because now of and that's something are also the it, OEM as right? providing So in level that AI a generation absolutely now as the we company, of well we talk are space fits. application And but take for players that OEM both [indiscernible] are company right be directly tracking as boxes. folks big are clear, training just are believe right, so about they hyperscalers rolled But that we or a being out on. different available that's formats, the the into is right are ones to that tracking It deploying we AI infrastructure GPUs first

will sort more customization bit future little a Probably hardware generation. with that before probably So the in that start made Gen we X decisions is more in being generations. of seeing continue first level

we the now procure or about. base at But we right that that's building that's are that's and They of where us, the providers. So fact components buying but servers. TAM AI there available same the either it, time, the directly is is of tracking through from are matter out GPU hyper talked the boards through bulk overall, OEM every skills, they platform from

Sujeeva De Silva

just other for or there. content And color on question impacts my most And gaining what shared the importantly, Astera, the I'm UALink Ethernet, from you implication, then of is challenges UALink? the over timing cutting what's think traction? UALink. wondering biggest Appreciate Okay. PCIe, uplift maybe

Jitendra Mohan

a question. great it's No,

the for to be promises cluster. of very to initiative scale everybody industry UALink So a for to good a try together bring standardized

a Astera that a level, of board. connectivity the lot develop Lab see because for benefit of that Over address our full time, will we position portfolio we So UALink prominent on requirement our will at to the customers have.

specification release the the is terms happen the to the end to is group timing, of the standard, supposed In that standards QX. at final working of

to hit of the products which sometime expect to So earliest the when market in instance UALink. see we start will we first is XXXX,

Operator

line comes Your the Craig-Hallum. Richard of next of Shannon from question

Richard Shannon

a another into as of of products. a who's you've generally COMOS, market guess, Coming kind the And of there, a got software while more very in got the strong P-Series, we've competitor secure are kind chip. the switch dynamics position P-Series thought switches the switching of there. are barriers a in strong here, with going and question competitive really Ask between kind retimer have to your obviously, I retimers. you of

what see how to kind And so rate we the dynamics play I'm to the an out the anytime seeing Do soon? similar here. you're areas in P-Series wondering attach of competitive

Sanjay Gajendra

Yes.

market. big is So first all, this of a

Scorpio playing seeing So keep many the there that The and is retimers so Gen architected, switches socket. on, competitors that Scorpio, right? there. for thinking a have is about that is and and most fleet lot that. how taken, you start incumbent type in our storage all that in of of several we different telemetry go. software mind products, point the switch Gen there that traction you seeing you scales which a sockets, management are X is the the when type But do, made, X, areas designed why that we across bigger brings applicants. were of There across angle folks is it's features, we ultimately right? surely, can And diagnostic are reason have of market a that are and So everything let's gaining And

time that are data So drives. capabilities flows that addressing is first obviously, optimization device the the set created to incorporated are bandwidth traffic, for to What GPU tuned done we were where other a feature created needed. and more the and SSD GPU for were attaching have the for an essentially

the only X aspect itself timing portfolio, Gen itself, on we as the build functionality be So a that windows a in so being as appreciated better, timing continue here, of customers. there in obviously, PCIe far will And do And that and we the market. now general, playing to is we ones our role mean, -- is expect terms X yes, based on I in we are a know, in that's we by market providing that, significant in lot switches. the and the

go a way competitive Those So connectivity, provide things getting is solid scaling terms times qualified. vendor happens in many maintaining of and what barrier. the and a is a long in first building product to that

Richard Shannon

here today, remember the of on do. looking about that is looking can't I the picture question scale-up Scorpio second of exact you us My the domains can X-Series. are if Excellent. forward the Wondering Okay. give number the to at hyperscalers kind a size degree size eventually up bit product largest going does play does but to being And to what what a time. line the [indiscernible] theirs commentary about your for your a Scorpio the here. into NVIDIA go quite

Jitendra Mohan

This a that. play Jitendra. at crack is I

mentioned it be or $X.X And have the NVLink nearly what market we X. billion X you family, is to the counting NVIDIA, So look [indiscernible] previously if effectively at expect that XXXX. it's than that we by today, not more for

So the of on very is have, prospects line our it's it's we why growing stone rapidly time. largest that very, of we product a TAM largest one the the and which over TAM, bullish -- are becoming

Operator

for are back call remarks. turn Green no closing over the There to I further questions. Leslie

Leslie Green

questions. and and for We Jale, on look thank to updating you our forward you, your progress. participation everyone, you, Thank

Operator

This conference concludes today's call.

now You may disconnect.

Astera Labs, Inc. Common Stock (ALAB) 10 Feb 252024 Q4 Earnings call transcript