Astera Labs, Inc.

25 earnings conference call. All lines have been placed on mute to prevent any background noise. After the management remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star and the number one. Thank you.

is now my pleasure to turn the call over to leslie green investor relations with astera labs leslie you may begin thank you amy good afternoon everyone and welcome to the astera labs first quarter 2025 earnings conference call joining us on the call today are jitendra mohan chief executive officer and co-founder sanjay gajendra president and chief operating officer and co-founder and mike kate chief financial officer before we get started i would like to remind everyone that certain comments made in this call today may include forward-looking statements regarding, among other things, the expected future financial results, strategies and plans, future operations, and the markets in which we operate. These forward-looking statements reflect management's current beliefs, expectations, and assumptions about future events, which are inherently subject to risks and uncertainties that are discussed in detail in today's earnings release and the periodic reports and filings We file from time to time with the SEC, including our risks set forth in our most recent annual report on Form 10-K and our upcoming filing on Form 10-Q. It is not possible for the company's management to predict all risks and uncertainties that could have an impact on these forward-looking statements or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. In light of these risks, uncertainties, and assumptions, the results, events, or circumstances reflected in the forward-looking statements discussed during this call may not occur, and actual results could differ materially from those anticipated or implied. All of our statements are based on information available to management as of today, and the company undertakes no obligation to update such statements after the date of this call except as required by law. Also during this call, we will refer to certain non-GAAP financial measures, which we consider to be an important measure of the company's performance. These non-GAAP financial measures are provided in addition to and not as a substitute for financial results prepared in accordance with U.S. GAAP. A discussion of why we use non-GAAP financial measures and reconciliations between our GAAP and non-GAAP financial measures is available in the earnings release we've issued today, which can be accessed through the investor relations portion of our website. With that, I would like to turn the call over to Jitendra Mohan, CEO of Acera Labs. Jitendra?

Thank you, Leslie. Good afternoon, everyone, and thanks for joining our first quarter conference call for fiscal year 2025. Today, I'll provide an overview of our Q1 results, followed by a high-level discussion around our long-term growth strategy. I will then turn the call over to Sanjay to walk through the key AI and cloud infrastructure applications that are driving our market opportunity. Finally, Mike will give an overview of our Q1 2025 financial results and provide details regarding our financial guidance for Q2. Accera Labs had a strong start to 2025, with Q1 results coming in above guidance. Quarterly revenues of $159.4 million was up 13% from the prior quarter, and up 144% versus Q1 of last year. Our Aries product family continues to see strong demand and is diversifying across both GPU and custom ASIC-based systems for a variety of applications, including scale-up and scale-out connectivity. Our Taurus product family also demonstrated strong growth given by continued deployment on AI and general-purpose systems that are leading hyperscaler customers. UO continues to shift in pre-production volumes as customers progress through the qualification of their next generation systems, leveraging new CSL-capable data center server CPUs. Finally, we expect our Scorpio P-series switches and 86 retimers to shift from pre-production builds to volume production in the late Q2 timeframe to support the ramp of customized GPU-based that scale AI system design. On the organizational front, we are very excited to announce the appointment of Dr. Craig Barrett as an addition to our board of directors. Craig brings a wealth of experience across execution and innovation that will help Astera Labs expand our connectivity leadership position in cloud and AI infrastructure. Our vision is to provide a broad portfolio of connectivity solutions for the entire AI rack through purpose-built silicon, hardware, and software, to support computing platforms based on both custom ASICs and merchant GPUs. Significant progress towards this vision began in the second half of 2024 as the company transitioned from primarily supplying PCIe retimers for NVIDIA AI servers to now becoming an integral supplier for AI rack-level connectivity topologies. We are in an ideal position to enable these new rack-level connections with our broadening portfolio of Scorpio fabric switches Ethernet and PCIe active cable modules, retimers, CXL memory expansion, optical interconnects, and other products under development. Our revenue is diversifying across multiple AI platforms based on both custom ASICs and merchant GPUs across different product families, thereby enhancing our revenue profile and delivering increasing value across the AI rack. We are well positioned to continue to deliver above-market growth over the long term, and we will continue to increase our investments in R&D to support our vision to own the connectivity infrastructure within the AI RAC. On the product front, we recently expanded our market-leading PCIe 6 connectivity portfolio to now also include gearboxes and optical connectivity technology to complement our existing fabric switches, retimers, and smart cable modules. The new 86 PCIe smart gearbox is purpose-built to bridge the speed gap between the latest generation PCI-6 devices and the existing PCI-5 ecosystem. Multiple hyperscalers are designing a gearbox into both AI and general purpose compute platforms. We also demonstrated our PCI-6 over optics technology to enable AI accelerator scale-up clustering across racks. This holistic portfolio approach is essential given the increasing complexity of PCI-6 topology. Point solutions are no longer sufficient. Our broad first-to-market PCI 6 connectivity portfolio once again puts us in a leadership position to deliver the most reliable and widely interoperable solutions into the ecosystem. Increasing our market opportunity also remains a crucial focus for Astera Labs. We believe we are in a great position to address the large emerging opportunity associated with the scale of connectivity open industry standard Ultra Accelerator Link, or UA-Link. Last month, the UA-Link 1.0 specification was released to enable 200 gigs per lane connections by supporting up to 1024 accelerators. UA-Link combines the best of two worlds, natively offering memory semantics of PCIe and the fast speed of Ethernet, but without the software complexity and performance limitations of Ethernet. The adoption of UA-Link will enable the industry to move beyond proprietary solutions towards a scalable and interoperable AI ecosystem. With broad industry support and adoption, the proliferation of UA-Link can represent a multibillion-dollar additional market opportunity for Astera Labs by 2029. Beyond UA-Link, we look for next-generation standards, including PCIe Gen 7, 800-gig Ethernet, and CXL3 to drive additional market opportunity for Astera Labs to increase unit shipments and higher dollar content per platform. Scaling our platform approach is another important strategic priority for the company. Our RackScale connectivity focus encompasses our complete product portfolio spanning standalone silicon, hardware solutions, and the Cosmos software suite. The Sterilabs Intelligent Connectivity Platform provides technology breadth to our hyperscaler customers while also enhancing performance and productivity driven by a better together product portfolio design approach. As an example, Our customers can integrate Scorpio and ARIES solutions in combination to obtain even more advanced diagnostics and telemetry capabilities. While ARIES can track the reliability and robustness of PCIe 6 links, Scorpio provides packet-level visibility for increased observation of data center traffic. The synergy between our products, underpinned by Cosmos, ensures comprehensive support and seamless connectivity to drive system efficiency and performance across various applications. In summary, we continue to take advantage of robust secular trends and strong business momentum by accelerating the pace of our R&D investment to access new and emerging market growth opportunities to service the entire AI rack. With that, let me turn the call over to our president and COO, Sanjay Gajendra, to discuss our growth strategy in more detail.