Astera Labs, Inc.

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 Estera Labs first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After 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, press star one again. I will now turn the call over to Leslie Green, Investor Relations for Astera Labs.

Please go ahead. Good afternoon, everyone, and welcome to Astera Labs' first quarter 2026 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 Desmond Lynch, 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, 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 in the periodic reports and filings we file from time to time with the SEC, including the risks set forth in our most recent annual report on Form 10-K. 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 statement. In light of these risks, uncertainties, and assumptions, all 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 made 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 the call, we will refer to certain non-GAAP financial measures, which we consider to be an important measure of the company's performance. For example, the overview of our Q1 financial results and Q2 financial guidance are on a non-GAAP basis. 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 whose difference is primarily stock compensation, acquisition-related costs, and related income tax effects. And reconciliations between our GAAP and non-GAAP financial measures and financial outlook are available in the earnings release we issued today, which can be accessed from our website through the investor relations portion of our website. With that, I'd like to turn the call over to Jitendra Mohan, CEO of Astera Labs. Jitendra?

Thank you, Leslie. Good afternoon, everyone, and thanks for joining our first quarter conference call for fiscal year 2026. Today I'll update you on AI infrastructure market trends, our Q1 results, and recent announcements. I'll then turn the call over to Sanjay to discuss Astera Labs' growth profile. I'd also like to welcome Des, our CFO, joining this call for the first time. Des will cover our Q1 financials and Q2 guidance. Since our last earnings call, AI infrastructure spending has clearly accelerated. Hyperscalers, AI labs, and sovereign entities are signaling the industry's build-out is still in its early stages, underpinned by strong monetization and ROI. We expect these strong secular trends to be a tailwind for Astera Labs' growth over the long term. Astera Labs delivered strong results in Q1 with revenue and non-gap EPS above our outlook. Revenue for the quarter was $308 million. up 14% from the prior quarter and up 93% versus Q1 of last year. Revenue growth was broad-based, spanning across our signal conditioning and fabric switch product portfolios as we continue to diversify our business profile with new design wins across multiple customers and product categories. Our PCI-6 business across both AI fabric and signal conditioning was strong in Q1, with revenue expanding to more than one-third of our total revenue. We have now shipped millions of PCIe Gen 6 ports to date, demonstrating the robustness and maturity of our PCIe portfolio. Taurus smart cable modules for Ethernet AECs continue to perform well as new program designs ship in volume while others ramp to mature levels across GPU, XPU, and general-purpose systems. On the scale of fabric front, our initial design wins with Scorpio X series in smaller Radix configurations shifted from pre-production shipments to initial volume ramp during the first quarter. Building on this momentum, today we announced the expansion of our Scorpio product line of AI fabric switches for both scale-up and scale-out use cases. Scorpio X-Series portfolio now supports up to 320 lanes for high radix scale-up networking, and Scorpio P-Series PCI-6 portfolio now spans 32 to 320 lanes for diverse system topologies. making it the broadest in the industry. A new flagship Scorpio X series 320 lane has been purpose-built to maximize AI economics by leveraging hardware-accelerated hypercast and in-network compute engines to boost collective operations by up to 2x. In-network compute offloads critical accelerator-to-accelerator communication and computation directly onto the switch. dramatically reducing the networking overhead during large-scale training and inference. These hardware capabilities are delivered through enhancements to our Cosmos software, which can now integrate deeper into our customer software stacks, providing not only diagnostics and telemetry, but also directly improving AI platform performance. Corpio's advanced hardware and software capabilities are a result of Estera Labs' deep system-level understanding of AI architectures and close customer collaborations, creating a durable competitive mode. We are excited to report that we are now shipping initial volumes of our new C20 Lane Scorpio X with production volumes ramping the second half of 2026. Scorpio X series also has a widening interest in design activity with hyperscalers, edge AI inference providers, and enterprise infrastructure builders to address high bandwidth AI clustering use cases. Corvio P-Series continues to grow through 2026, and we expect initial shipments to at least two additional major hyperscalers towards the end of 2026, with broader deployment in 2027. On the optical front, we made good progress during the quarter as we continue to work through the qualification process at a large AI platform provider with our ultra-high precision optical fiber coupler product, which we expect to ship in volume starting in 2027. We are actively expanding our volume manufacturing capabilities to support the ramp of both scale-out and scale-up CPO applications. Beyond the early commercial traction of our merchant connectors, our high-density fiber coupler technology will be a critical piece of our long-term optical roadmap for NPO and CPO applications. Finally, our LEO memory controller is on track for an early ramp of CXL-attached memory with Microsoft Azure M-series virtual machines. And during the quarter, we captured a new custom design win for a KVCash offload application with shipments expected in 2027. As we look to the second half of 2026, robust demand reflects secular AI infrastructure spending, deep customer partnerships, and expansion towards higher value solutions within our portfolio. This trend is quickly increasing our silicon dollar content opportunity beyond $1,000 per XPU within AI racks. and positions Estera Labs to outperform our end-market growth rates. As a result, we expect strong revenue growth to continue through 2026 and into 2027, driven by the proliferation of AI fabrics and the industry's transition to PCIe 6, 800 gig, and 1.60 Ethernet connectivity. Based on the momentum you are seeing in 2026, we are strategically investing to drive strong continued growth. Our acquisition of XScale Photonics has created immediate design opportunities, and our Israel Design Center is fully integrated and working with customers on new programs. We have expanded our product portfolio and increased dollar content per accelerator while diversifying our customer base with additional design-ins. We are making progress within large market opportunities, including optical engines and interconnects, ULing fabrics, and custom solutions for NVLink and AI inferencing. Most of all, I'm proud of the stellar team we have built through worldwide hiring and thoughtful acquisitions, the progress we have made, and the results we are delivering together. With that, let me turn the call over to our president and COO, Sanjay Gajendra, to outline our vision for growth over the next several years.