Astera Labs Announces Financial Results for the First Quarter of Fiscal Year 2024

Employer payroll taxes related to stock-based compensation resulting from our IPO

We exclude employer payroll taxes related to the vesting and net settlement of restricted stock units in connection with our initial public offering (the “IPO”), because this does not correlate to the operation of our business, and we believe that excluding this item provides meaningful supplemental information regarding operational performance given the amount of employer payroll tax-related items on employee stock transactions was immaterial prior to our IPO.

Tax effect

This amount is used to present each of the adjustments described above on an after-tax basis in connection with the presentation of non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share. This approach is designed to enhance investors’ ability to understand the impact of our non-GAAP tax expense on its current operations, provide improved modeling accuracy, and substantially reduce fluctuations caused by GAAP to non-GAAP adjustments.

Pro-forma non-GAAP weighted-average shares to compute non-GAAP net income (loss)

We present pro-forma non-GAAP weighted-average shares, assuming the redeemable convertible preferred stock is converted from the beginning of each respective periods presented, to provide meaningful supplemental information regarding EPS trend on a consistent basis. All of our outstanding redeemable preferred stock converted into the equivalent number of shares of common stock in connection with our IPO.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements based on Astera Labs' current expectations. The words "believe", "estimate", "expect", "intend", "anticipate", "plan", "project", "will", and similar phrases as they relate to Astera Labs are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Astera Labs and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements include but are not limited to, statements regarding our future operating results, financial position and guidance, our business strategy and plans, our objectives for future operations, our development or delivery of new or enhanced products and anticipated results of those products for our customers, our competitive positioning, projected costs, technological capabilities and plans, and macroeconomic trends in cloud and AI infrastructure. A variety of risks and factors that are beyond our control could cause actual results to differ materially from those in the forward-looking statements including, without limitation, the following: the competitive and cyclical nature of the semiconductor industry; the challenging macroeconomic environment, including disruptions in the financial services industry; geographic concentration of manufacturers, assemblers, test service providers and customers in Asia that subjects Astera Labs' business and results of operations to risks of natural disasters, epidemics or pandemics, war and political unrest; risks that demand and the supply chain may be adversely affected by military conflict (including between Russia and Ukraine), terrorism, sanctions or other geopolitical events globally (including conflict between Taiwan and China); risks that Astera Labs may not be able to maintain its historical growth; quarterly fluctuations in revenues and operating results; difficulties developing new products that achieve market acceptance; risks associated with international activities (including trade barriers, particularly with respect to China); intellectual property litigation risks; risks associated with acquisitions and divestitures; product liability risks; difficulties managing and/or obtaining sufficient supply from Astera Labs' distributors, manufacturers and subcontractors; dependence on a limited number of products; absence of long-term commitments from customers; inventory-related risks; difficulties managing international activities; risks that Astera Labs may not be able to manage strains associated with its growth; credit risks associated with its accounts receivable; dependence on key personnel; stock price volatility; debt-related risks; capital-raising risks; the timing and scope of share repurchases and/or dividends; average selling prices of products may decrease significantly and rapidly; information technology risks; cyber-attacks against Astera Labs' products and its networks and other risks and uncertainties that are detailed under the caption “Risk Factors” and elsewhere in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, to be filed with the Securities and Exchange Commission (the “SEC”) and the other SEC filings and reports Astera Labs may make from time to time. Moreover, we operate in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor(s) may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. Accordingly, you should not rely on any of the forward-looking statements. Astera Labs disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

About Astera Labs

Our PCIe, CXL and Ethernet semiconductor-based connectivity solutions are purpose-built to unleash the full potential of accelerated computing at cloud-scale. Inspired by trusted partnerships with hyperscalers and the data center ecosystem, we are an innovation leader of products that are customizable, interoperable, and reliable. Discover how we are transforming AI and modern data-driven applications at www.asteralabs.com.

ASTERA LABS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands)

 

 

 

March 31,
2024

 

December 31,
2023

Assets

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

696,077

 

 

$

45,098

 

Marketable securities

 

 

105,314

 

 

 

104,215

 

Accounts receivable, net

 

 

16,757

 

 

 

8,335

 

Inventory

 

 

29,567

 

 

 

24,095

 

Prepaid expenses and other current assets

 

 

6,725

 

 

 

4,064

 

Total current assets

 

 

854,440

 

 

 

185,807

 

Property and equipment, net

 

 

7,581

 

 

 

4,712

 

Other assets

 

 

2,880

 

 

 

5,773

 

Total assets

 

$

864,901

 

 

$

196,292

 

 

 

 

 

 

Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

$

11,465

 

 

$

6,337

 

Accrued expenses and other current liabilities

 

 

34,122

 

 

 

28,742

 

Total current liabilities

 

 

45,587

 

 

 

35,079

 

Other liabilities

 

 

10,530

 

 

 

3,787

 

Total liabilities

 

 

56,117

 

 

 

38,866

 

Commitments and contingencies

 

 

 

 

Redeemable convertible preferred stock

 

 

 

 

 

255,127

 

Stockholders’ equity (deficit)

 

 

 

 

Common stock

 

 

16

 

 

 

4

 

Additional paid-in capital

 

 

1,027,197

 

 

 

27,411

 

Accumulated other comprehensive (loss) income

 

 

(59

)

 

 

259

 

Accumulated deficit

 

 

(218,370

)

 

 

(125,375

)

Total stockholders’ equity (deficit)

 

 

808,784

 

 

 

(97,701

)

Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

 

$

864,901

 

 

$

196,292

 

ASTERA LABS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

March 31,
2024

 

December 31,
2023

 

March 31,
2023

Revenue

 

$

65,258

 

 

$

50,514

 

 

$

17,664

 

Cost of revenue

 

 

14,738

 

 

 

11,489

 

 

 

13,406

 

Gross profit

 

 

50,520

 

 

 

39,025

 

 

 

4,258

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

Research and development

 

 

53,558

 

 

 

19,654

 

 

 

15,267

 

Sales and marketing

 

 

55,510

 

 

 

4,995

 

 

 

4,393

 

General and administrative

 

 

24,419

 

 

 

5,356

 

 

 

3,525

 

Total operating expenses

 

 

133,487

 

 

 

30,005

 

 

 

23,185

 

Operating (loss) income

 

 

(82,967

)

 

 

9,020

 

 

 

(18,927

)

Interest income

 

 

2,554

 

 

 

1,674

 

 

 

1,596

 

(Loss) Income before income taxes

 

 

(80,413

)

 

 

10,694

 

 

 

(17,331

)

Income tax provision (benefit)

 

 

12,582

 

 

 

(3,631

)

 

 

123

 

Net (loss) income

 

$

(92,995

)

 

$

14,325

 

 

$

(17,454

)

 

 

 

 

 

 

 

Net (loss) income per share attributable to common stockholders:

Basic and diluted

 

$

(1.77

)

 

$

 

 

$

(0.49

)

Weighted-average shares used in calculating net (loss) income per share attributable to common stockholders:

Basic

 

 

52,532

 

 

 

38,627

 

 

 

35,826

 

Diluted

 

 

52,532

 

 

 

47,636

 

 

 

35,826

 

ASTERA LABS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

 

 

 

Three Months Ended

 

 

March 31,
2024

 

March 31,
2023

Cash flows from operating activities

 

 

 

 

Net loss

 

$

(92,995

)

 

$

(17,454

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

 

 

 

 

Stock-based compensation

 

 

97,768

 

 

 

1,997

 

Inventory write-down

 

 

428

 

 

 

9,733

 

Depreciation

 

 

614

 

 

 

357

 

Non-cash operating lease expense

 

 

522

 

 

 

217

 

Warrants contra revenue

 

 

110

 

 

 

55

 

Accretion of discounts on marketable securities

 

 

(566

)

 

 

(411

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable, net

 

 

(8,422

)

 

 

7,048

 

Inventory

 

 

(5,900

)

 

 

458

 

Prepaid expenses and other assets

 

 

(2,666

)

 

 

(411

)

Accounts payable

 

 

4,973

 

 

 

(5,740

)

Accrued expenses and other liabilities

 

 

10,224

 

 

 

563

 

Operating lease liability

 

 

(438

)

 

 

(231

)

Net cash provided by (used in) operating activities

 

 

3,652

 

 

 

(3,819

)

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Purchases of property and equipment

 

 

(3,424

)

 

 

(439

)

Purchases of marketable securities

 

 

(23,308

)

 

 

(22,346

)

Maturities of marketable securities

 

 

9,365

 

 

 

13,000

 

Sales of marketable securities

 

 

13,116

 

 

 

45,082

 

Net cash (used in) provided by investing activities

 

 

(4,251

)

 

 

35,297

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds from issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions

 

 

672,198

 

 

 

 

Payment of deferred offering costs

 

 

(1,756

)

 

 

 

Proceeds from exercises of stock options, net of repurchases

 

 

1,247

 

 

 

31

 

Tax withholding related to net share settlements of restricted stock units

 

 

(20,111

)

 

 

 

Net cash provided by financing activities

 

 

651,578

 

 

 

31

 

Net increase in cash and cash equivalents

 

 

650,979

 

 

 

31,509

 

Cash and cash equivalents

 

 

 

 

Beginning of the period

 

 

45,098

 

 

 

76,088

 

End of the period

 

$

696,077

 

 

$

107,597

 

ASTERA LABS, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited)

(In thousands, except percentages and per share amounts)

 

 

 

Three Months Ended

 

 

March 31,
2024

 

December 31,
2023

 

March 31,
2023

GAAP gross profit

 

$

50,520

 

 

$

39,025

 

 

$

4,258

 

Stock-based compensation expense upon IPO (1)

 

 

516

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

12

 

 

 

8

 

 

 

5

 

Non-GAAP gross profit

 

$

51,048

 

 

$

39,033

 

 

$

4,263

 

 

 

 

 

 

 

 

GAAP gross margin

 

 

77.4

%

 

 

77.3

%

 

 

24.1

%

Stock-based compensation expense upon IPO (1)

 

 

0.8

%

 

 

 

 

 

 

Non-GAAP gross margin

 

 

78.2

%

 

 

77.3

%

 

 

24.1

%

 

 

 

 

 

 

 

GAAP operating (loss) income

 

$

(82,967

)

 

$

9,020

 

 

$

(18,927

)

Stock-based compensation expense upon IPO (1)

 

 

88,873

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

8,895

 

 

 

3,299

 

 

 

1,997

 

Employer payroll tax related to stock-based compensation from IPO (2)

 

 

1,072

 

 

 

 

 

 

 

Non-GAAP operating income (loss)

 

$

15,873

 

 

$

12,319

 

 

$

(16,930

)

 

 

 

 

 

 

 

GAAP net (loss) income

 

$

(92,995

)

 

$

14,325

 

 

$

(17,454

)

Stock-based compensation expense upon IPO (1)

 

 

88,873

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

8,895

 

 

 

3,299

 

 

 

1,997

 

Employer payroll tax related to stock-based compensation from IPO (2)

 

 

1,072

 

 

 

 

 

 

 

Income tax effect (3)

 

 

8,485

 

 

 

 

 

 

 

Non-GAAP net income (loss)

 

$

14,330

 

 

$

17,624

 

 

$

(15,457

)

 

 

 

 

 

 

 

Net (loss) income per share attributable to common stockholders:

GAAP - basic and diluted (4)

 

$

(1.77

)

 

$

 

 

$

(0.49

)

Pro forma Non-GAAP - diluted

 

$

0.10

 

 

$

0.12

 

 

$

(0.12

)

 

 

 

 

 

 

 

Weighted-average shares used to compute net (loss) income per share attributable to common stockholders:

GAAP - basic

 

 

52,532

 

 

 

38,627

 

 

 

35,826

 

GAAP - diluted

 

 

52,532

 

 

 

47,636

 

 

 

35,826

 

Pro forma Non-GAAP - diluted (5)

 

 

147,514

 

 

 

138,527

 

 

 

126,717

 


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