Record quarterly revenue of $141.1 million, up 25% QoQand up 179% YoY
Fiscal 2024 record revenue of $396.3 million, up 242% versus the prior year
Ramping across diverse set of customers and platforms with four product families in fiscal 2025
SANTA CLARA, Calif., Feb. 10, 2025 (GLOBE NEWSWIRE) – Astera Labs, Inc. (Nasdaq: ALAB), a global leader in semiconductor-based connectivity solutions for cloud and AI infrastructure, today announced preliminary financial results for the fourth quarter and full fiscal year 2024, ended December 31, 2024.
“Astera Labs delivered strong Q4 results, with revenue growing 25% versus the previous quarter, and capped off a stellar 2024 with 242% revenue growth year-over-year,” said Jitendra Mohan, Astera Labs’ Chief Executive Officer. “The revenue growth in 2024 was largely driven by Aries PCIe Retimer products, with Taurus Smart Cable Modules for Ethernet coming in strongly in Q4. We expect 2025 to be a breakout year as we enter a new phase of growth driven by revenue from all four of our product families to support a diverse set of customers and platforms. This includes our flagship Scorpio Fabric products for head-node PCIe connectivity and backend AI accelerator scale-up clustering.”
The report looks good to me so far -
Gross Margin is down slightly to 74% from 78%, and there is 13% dilution from the previous Q, but all the other numbers look good. Guidance is a little low though, so maybe that is why it is being knocked down in the AH.
Yes, but this is only 8% sequential growth - when they have been doing much more recently - 47% sequential and then 25% sequential. But having said this I am sure they will beat it as they have just done so with their Q4 guidance. And they have just done a rather amazing 242% YoY annual growth change! So there is much to like. The AH market is now turning positive again too.
I recently started a 2.3% position in ALAB following the DeepSeek dip. I’m just getting to know the company - expensive stock trading at 27 X NTM sales going into earnings but growing like wildfire! Hopefully it can ride the massive data center Capex spend to glory. Gartner forecast the global wired connectivity market will rise to $23 billion and the CXL memory market will grow to $4.4 billion in 2027. This gives a total of $27 billion TAM by 2027 of which ALAB have currently secured $115.8 million, only 0.4% of the potential long-term opportunity.
I’m not sure what their MOAT is exactly, just a NVDA supplier riding the wave? Someone please enlighten me.
Looked like a solid beat and raise quarter to me as well, perhaps the market was expecting a little more, stock is up only 2% AH.
>Analysts were looking for $128M in Q4 and $132M in Q1 >For full year 2025 they’re looking for $615M which would be 60% YoY growth
Record quarterly revenue of $141.1 million, up 25% QoQand up 179% YoY
Fiscal 2024 record revenue of $396.3 million, up 242% versus the prior year
Ramping across diverse set of customers and platforms with four product families in fiscal 2025
They really ramped up on inventory because it was drawn down so far. They are saying that the inventory they are at right now is where they feel comfortable in order to supply their customers.
None that I can really see from the last 13 Q’s on my spreadsheet. I think, as has been pointed out, that they are being conservative. And as has also been pointed out, they have clearly beaten analyst estimates for the next Q - so I’m not entirely sure why the market is pushing it down in the AH. I’ll read the conference call notes in the morning to see if there is anything further in there.
They have mixes of hardware and chips that make GM fluctuate. There is nothing wrong with their business and they are selling into both the Asic and GPU markets. I can’t believe that this stock will be down tomorrow but who knows. I was surprised they sold today.
Revenue 126-130M → actual 141m (+179% yoy, +25% qoq)
adj EPS 0.25 - 0.26 → actual 0.37 (one time benefit here, would be 0.30 otherwise)
GAAP EPS 0.04 - 0.06 → actual 0.14 (probably more like 0.08 or 0.07 without the benefit)
Q1 2025 guide
revenue 151-155M, +138% yoy
adj EPS 0.28-0.29
GAAP EPS 0.03 - 0.04 (slightly concerned here they are guiding for lower EPS sequentially when revenue will be up)
Reviewing their earnings call, these points stood out to me,
first quarter of GAAP profitability, OpEx grew only 5.1M while revenue was up 28M sequentially
Taurus has ramped up to be a major revenue contributor
Both head count and inventories were up 80% as a result of scaling up the business (I’m generally fine with this, but there could be some growing pains)
Scorpio is projected to be their biggest revenue contributor and this surprised some analysts (very positive sign, management conviction on Scorpio TAM is increasing)
UALink consortium is progressing, underlying secular trends for 2025 continue to be robust
2025 business will also be driven by general compute, not just AI (makes me wonder if the TAM increases further)
they said they work with all the hyperscalers, and named specific Google, Amazon, and Meta chips where they have design wins
cash flow from operating activities of 39.7M
cash 914M (cash has been steadily increasing for the last year)
question regarding DeepSeek with the answer that all hyperscalers have increased CapEx spending
three or four specific CXL use cases driving the ROI (nice to see they already have design wins and can look ahead)
on Scorpio, “the switch is a much bigger TAM out there”
“we really believe it’s the time to press our advantage and invest in the business”
I would have expected the market to like this report as Astera reached profitability for the first time this quarter, and the revenue number was a strong beat. It doesn’t sound like DeepSeek will have much of a negative impact on their business, and customer spend still seems to be ramping. There is a lot to like in this report from my viewpoint as the growth story continues. With the company still off nearly a third from its highs on DeepSeek fears, this seems like a compelling investment.
I am showing on the previous quarter they expected 179M shares outstanding, and it came in at 177.6M, meaning they may have done some small buyback. However, they do project next quarter shares outstanding to be 180M. I believe the increase quarter to quarter is from hiring and offering competitive pay packages. Their head count went up 80% yoy but is still fairly small company by employee count.
On the margins, Astera mentioned their long term target is 70%. Some of the newer designs have a heavier hardware component to them which is lower margins than the software side. The company has mentioned repeatedly they expect gross margin to drift down in the short term so I’m okay to give them a pass on that point.
I think ALAB’s revenue growth is slowing down, and we don’t know where it will stabilize at, which can panic investors.
Q2 → Q3, they grew revenue QoQ by $36.2M while Q3 → Q4 was $28M. Guidance for Q1 25 was $155M. If they beat it by 8%, which is the same as their Q4 beat, the QoQ growth will be flat at ~$28M. And I’d not expect an as large beat as 8% just to be conservative, since this company does not have a long-enough track record to model their conservativity in the guidance.
I don’t know whether this business has any seasonality. But I tend to be cautious when the topline growth of a “growth company” is slowing down, especially when it’s a company with extremely high valuation premium.
What is the competitive moat of CRDO over ALAB? The products offered seem have a lot of overlap. I own ALAB and an considering some CRDO to hedge my bets. Metrics are very comparable. Will all boats float?
NVDA is growing slower than ALAB QoQ at the moment. Last Quarter NVDA grew 17% QoQ from Q2 to Q3. ALAB Did 47% Q2 to Q3 and slowed down to 25% QoQ. NVDA guided at a 7% growth for Q4 vs Q3 which is still below what ALAB guided this quarter and even less than what ALAB guided the previous quarter. There are plenty of reasons why people would invest in NVDA over ALAB but revenue growth is not one of them.
Please compare guidance to guidance and performance to performance when comparing companies, otherwise the data is irrelevant.
Sequentially 25% is significant larger than 17%, because that turns into annually a difference of 144% and 87%. Both of those are extremely high growth companies, which is what this board invests in. And I guess the market has been spoiled that they are complaining about companies that are only growing 25% sequentially.
Why are you comparing Astera’s Q4 to Nvidia’s Q3 when you know that Nvidia reports in two weeks? If you are trying to make a comparison between two companies in the same industry, then at least align the quarters so it is accurate.
There is no objective way to look at these two companies and conclude that they are growing at the same growth rate.