Astera Labs, Inc. Q4 FY2024 earnings call

Key Points

• Q4 2024 revenue was $141 million, sixth consecutive record, up 25% QoQ and 179% YoY, driven by Aries, Taurus, Leo, and Scorpio.
• Full year 2024: Sales increased 242% YoY to $396 million, non-GAAP gross margin 76.6%.
• 2024: Headcount increased by nearly 80% to 440, and a strategic acquisition was closed to accelerate product development.
• 2025 Outlook: Breakout year with production revenue from all four product families. Aries and Taurus to continue growth, Leo volume ramp in H2 '25, Scorpio ramping with new engagements.

Sanjay's Insights

• 2025 drivers: Deployment of internal AI accelerator platforms, production ramp of custom AI racks based on third-party GPUs, and growth in general compute in the datacenter.

Astera Labs delivered record Q4 2024 revenue of $141 million, up 25% from the previous quarter and 179% versus Q4 of the prior year. The growth was driven by the Aries PCIe Retimer and Taurus Ethernet Smart Cable Module product families. Full year 2024 sales reached $396 million, a 242% year-over-year increase. The non-GAAP gross margin for fiscal 2024 was 76.6%. Revenue growth in 2024 was largely from Aries products and the strong ramp of Taurus in Q4. In 2025, the company expects growth from all four product families, with Aries and Taurus continuing to grow, Leo ramping in the second half of 2025, and Scorpio starting to ramp with new engagements.

Q1 2025 Guidance

• Revenue expected to be in the range of $151 million to $155 million, up 7%-10% QoQ.
• Continued growth from Aries, Taurus 400 gig, Leo pre-production, and Scorpio sequential growth.
• Non-GAAP gross margin expected to be approximately 74%.
• Non-GAAP operating expenses预计在$66 million到$67 million之间.
• Non-GAAP fully diluted EPS expected in the range of $0.28 to $0.29.

Risks

• Forward-looking statements subject to risks detailed in SEC filings, including uncertainties in market adoption and competitive dynamics.
• Customer concentration in the datacenter market, with variances in hyperscalers' adoption of new technologies affecting revenue timing.

Q: Good afternoon and congratulations on the strong results and execution. You know the one big inflection in accelerated compute and AI as you mentioned is the ramp of numerous AI ASIC XPU programs or is that GPU and Google Trainium at Amazon MTIA as META, also multiple new programs in the not too distant future. It looks like these custom add program ramps are growing as we factored in the overall merchant GPU markets. The question is what percentage of your business last year came from Merchants GPU AI systems versus ASIC-based systems and where do you expect that mix to be say, exit the industry or ASIC programs seem to be on a faster growth trajectory. You have a very, very strong attach here across higher product as you guys mentioned.

A: Yeah, we're very excited about the addition of the internal AI accelerator programs. Also in particular, on those programs to set you doing the scale up connectivity. The unit volume steps up to a meaningful way compared to the merchant GPU designs that we see right now. As we look into 2024, the first half of the year was predominantly merchant GPUs. So that was the first to really adopt our product lines. And then in Q3, that's the first quarter it inflected up with the internal AI accelerators especially, you see that with our Taurus and our Aries SCM business inflecting up. Q3 was a partial quarter and then Q4 was a full quarter. So that it really set the nice baseline of revenues. Now, if you look into 2025, we see both contributing growth. The first half of the year will be more predominantly the AI - internal AI accelerator programs. But if you get into the back half of the year, the transition on the merchant GPUs will also be very strong for us. This is where you'll see the custom rack configurations start to deploy and that’s where we see a big dollar increase in our contemporary GPU with Scorpio starting to ramp.

Q: Hey, good afternoon, thanks for taking my question. I have two. I was just kind of curious you mentioned the strength in Taurus. I don't know if you're going to delve into how maybe big that was in December. And then Mike, I wanted to ask on gross margin. I know it’s a mix of hardware and you are seeing strength from – your ASIC customer there with multiple products. I am just kind of curious as you think about ‘25 as Scorpio ramps, how that mix shifts and what the impacts are shape of gross margins for this year?

A: Yeah. So for Q4 you see the margins, they ticked down and we did highlighted Taurus and Aries which are in the module form factors grew as a percentage of our total revenues and the upside in the quarter was in particular from Taurus, as well. So, that’s the margin going down to 74.1% which is we have very close to what we had expected. Now, if you go into 2025, we still see good contribution from Taurus and Aries SCM modules. But as we make it through the year, the Aries board and chips as well as Leo and Scorpio are a positive for us as well. So, we think Q1 and Q2, we should have a consistent margin profile of around 74%. And as we highlighted, margins will be trending down closer to the longer term model of 70%, but it all depends on the mix of our hardware versus silicon.