Financial Data and Key Metrics - Q3 2024 revenue reached a record $113 million, up 47% sequentially and 206% year-over-year [9] - Non-GAAP operating margin expanded to over 32%, with non-GAAP EPS of $0.23 [9] - Q4 2024 revenue guidance is between $126 million and $130 million, representing an 11% to 15% sequential increase [32] - Non-GAAP gross margin for Q4 is expected to be approximately 75%, with operating expenses projected between $54 million and $55 million [33] - Cash flow from operating activities in Q3 was $63.5 million, with cash, cash equivalents, and marketable securities totaling $887 million at the end of the quarter [31] Business Line Data and Key Metrics - Aries product family remains the largest revenue contributor, driven by third-party GPU-based AI platforms and internally developed AI accelerators [28] - Taurus revenue diversified beyond 200-gig applications, with initial production ramp of 400-gig Ethernet-based systems [29] - Leo CXL revenues are driven by preproduction volumes for next-generation CXL-capable compute platforms [29] - Scorpio Smart Fabric Switch family began shipping in preproduction volumes during Q3, with design wins for both P-Series and X-Series [29][13] Market Data and Key Metrics - The Scorpio Smart Fabric Switch family is expected to expand the total market opportunity for the company's four product families to over $12 billion by 2028 [11] - Scorpio P-Series addresses a multibillion-dollar opportunity with a ground-up architecture designed for AI data flows [20] - The X-Series is expected to have a larger total addressable market (TAM) over the long term, with a current TAM of nearly zero [50] Company Strategy and Industry Competition - The company has joined the Ultra Accelerator Link (UALink) Consortium, positioning itself at the forefront of developing high-speed, low-latency interconnects for scale-up connectivity between accelerators [14] - The Scorpio Smart Fabric Switch family is designed to address the increasing complexity of connectivity challenges within AI infrastructure, both for scale-out and scale-up networks [11][12] - The company's COSMOS software stack provides hyperscaler customers with tools to monitor and optimize their infrastructure, enhancing the value of its hardware solutions [15][38] Management Commentary on Operating Environment and Future Outlook - Management highlighted the criticality of connectivity in modern AI clusters, driven by trillion-parameter model sizes and faster, more complex AI accelerators [10] - The company expects to benefit from shorter AI platform refresh cycles and increased reliance on trusted partners by hyperscalers [15] - Management is optimistic about the market opportunity for internally developed AI accelerator platforms, which could be larger than third-party GPU-based systems [21] Other Important Information - The company demonstrated the industry's first PCIe Gen 6 fabric switch at the 2024 OCP Global Summit, with preproduction volumes already shipping [13] - Non-GAAP financial measures are used to evaluate performance, with reconciliations provided in the earnings release [6] Q&A Session Summary Question: Confidence in sequential growth and visibility for the first half of next year [35] - The company has strong visibility due to a diversified revenue stream, with Taurus and Aries product lines expected to grow into 2025 [36] Question: Differentiators for Scorpio switch portfolio, particularly the COSMOS software stack [37] - The Scorpio family is purpose-built for AI applications, with a software-first approach and integration with COSMOS providing a holistic view of AI infrastructure [38] Question: Ramp timeline for Scorpio business and potential size in 2025 [40] - Scorpio is expected to exceed 10% of revenues in 2025, with production volumes ramping throughout the year [41] Question: Leo CXL memory controller applications and potential impact in 2025 [42] - Leo CXL is transitioning from the "crawl" to "walk" stage, with production volumes expected to begin in 2025 [42] Question: Product mix and strength in Q3 revenue [44] - Aries revenue, driven by third-party GPUs and internally developed AI accelerators, was the primary driver of Q3 upside [45] Question: Margin impact of Scorpio product line [46] - Scorpio is not expected to impact long-term gross margin targets of 70%, with a wide range of margin profiles across the product portfolio [46] Question: Competitive positioning and opportunity for Scorpio X-Series [49] - The X-Series is expected to have a larger TAM over time, with customization capabilities through the company's software-defined architecture [50] Question: Diversification of Taurus product family across customers [51] - The Taurus business is expected to broaden in 2025, with increased diversification as data rates go higher [52] Question: Timeline for PCIe Gen 6 volume production [53] - Volume production for PCIe Gen 6 will depend on customer timelines, with opportunities growing across Gen 5 and Gen 6 implementations [53] Question: Relationship between Scorpio and PCIe Retimer business [54] - The company's software-based architecture and COSMOS integration provide a unique advantage in optimizing system-level configurations [54] Question: Inflection point for ASIC business growth [56] - Hyperscalers are increasing investments in internal ASIC programs, driving growth for the company's product lines [57] Question: Average content per GPU and impact of Scorpio [59] - The average content per GPU is increasing due to ASP uplifts with new protocol generations and the introduction of Scorpio [60] Question: Revenue contribution from Scorpio P-Series and X-Series in 2025 [62] - Both P-Series and X-Series are expected to contribute to revenues in 2025, with X-Series ramping in the back half of the year [63] Question: Attach rates for Scorpio P-Series and X-Series [64] - P-Series attach rate is 1:1 per GPU, while X-Series attach rate depends on the configuration of the back-end fabric [65] Question: Long-term diversification between merchant GPU and custom AI accelerator players [68] - The company expects to see a diversified revenue stream across merchant GPU and custom AI accelerator platforms, with multiple product lines contributing to growth [68]

Table of Contents Securities registered pursuant to Section 12(b) of the Act: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __ to __ Commission file number 001-41979 Astera Labs, Inc. (Exact name of r ...

Financial Performance - Record quarterly revenue of $113.1 million, up 47% QoQ and up 206% YoY[1] - GAAP gross margin of 77.7% and GAAP operating loss of $8.9 million[3] - Non-GAAP operating income of $36.6 million with a non-GAAP operating margin of 32.4%[3] - Revenue for the three months ended September 30, 2024, was $113,086 thousand, a 206% increase from $36,928 thousand in the same period last year[17] - Gross profit for the nine months ended September 30, 2024, was $198,251 thousand, compared to $40,802 thousand for the same period in 2023, representing a 386% increase[17] - Operating loss for the three months ended September 30, 2024, was $(8,896) thousand, an improvement from $(24,347) thousand in the previous quarter[19] - Net loss for the nine months ended September 30, 2024, was $(108,134) thousand, compared to $(40,582) thousand for the same period in 2023[18] - Non-GAAP gross profit for the three months ended September 30, 2024, was $87,979 thousand, up from $28,114 thousand in the same period last year[19] - Non-GAAP operating income for the nine months ended September 30, 2024, was $71,232 thousand, compared to a loss of $(31,137) thousand in the same period last year[19] Cash and Assets - Total current assets increased to $945.6 million from $185.8 million year-over-year[14] - Cash and cash equivalents rose to $126.1 million from $45.1 million[14] - Cash and cash equivalents at the end of the period were $126,117 thousand, up from $37,722 thousand at the end of the same period last year[18] - Cash flows from operating activities for the nine months ended September 30, 2024, provided $96,973 thousand, a significant recovery from $(27,115) thousand in the same period last year[18] - The company raised $672,198 thousand from the issuance of common stock in connection with its initial public offering[18] Expenses - The company reported stock-based compensation expense of $186,370 thousand for the nine months ended September 30, 2024, compared to $7,380 thousand in the same period last year[18] - Research and development expenses for the three months ended September 30, 2024, were $14.64 million, up from $1.71 million in the same period last year[22] - Sales and marketing expenses for the nine months ended September 30, 2024, totaled $81.22 million, compared to $1.39 million for the same period in 2023[22] - General and administrative expenses for the nine months ended September 30, 2024, were $46.82 million, compared to $0.92 million for the same period in 2023[22] - The total stock-based compensation expense for the nine months ended September 30, 2024, was $186.37 million, an increase from $7.38 million for the same period in 2023[22] - The total stock-based compensation expense for the three months ended September 30, 2024, included $16.20 million in sales and marketing expenses[22] Future Outlook - Fourth quarter revenue outlook estimated between $126 million to $130 million[5] - Non-GAAP diluted earnings per share projected between $0.25 to $0.26[5] - For the three months ended September 30, 2024, the non-GAAP tax rate was approximately 15%, compared to 23% for the three months ended June 30, 2024[20] Shares and Stock - The weighted average shares used to compute non-GAAP pro forma net income per share for September 30, 2024, were 173.83 million, compared to 128.36 million for September 30, 2023[21] - The weighted average effect of the assumed conversion of redeemable convertible preferred stock for the nine months ended September 30, 2024, was 25.81 million shares[21] - The shares used to compute GAAP net loss per share attributable to common stockholders for September 30, 2024, were 156.83 million, compared to 37.47 million for September 30, 2023[21] Strategic Initiatives - Introduced Scorpio Smart Fabric Switches, enhancing AI infrastructure connectivity[4] - Joined the Ultra Accelerator Link (UALink) Consortium to advance high-speed connectivity for AI workloads[4]

Part I - Financial Information Comprehensive financial data including statements, management's analysis, market risks, and internal controls [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Presents Astera Labs' unaudited financial statements and notes, detailing revenue growth, operating expenses, and post-IPO liquidity [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, highlighting assets, liabilities, and equity at specific dates | Metric | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (YoY) | | :---------------------------------- | :----------------------------- | :------------------------------- | :----------- | | Cash and cash equivalents | $421,076 | $45,098 | +$375,978 | | Marketable securities | $409,919 | $104,215 | +$305,704 | | Total current assets | $891,245 | $185,807 | +$705,438 | | Total assets | $915,515 | $196,292 | +$719,223 | | Total current liabilities | $64,073 | $35,079 | +$28,994 | | Total liabilities | $70,263 | $38,866 | +$31,397 | | Total Stockholders' Equity (Deficit) | $845,252 | $(97,701) | +$942,953 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details the company's revenues, expenses, and net loss over specific reporting periods | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :---------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Revenue | $76,850 | $10,688 | $142,108 | $28,352 | | Gross profit | $59,854 | $8,439 | $110,374 | $12,697 | | Total operating expenses | $84,201 | $26,052 | $217,688 | $49,237 | | Operating loss | $(24,347) | $(17,613) | $(107,314) | $(36,540) | | Net loss | $(7,546) | $(20,004) | $(100,541) | $(37,458) | | Basic and diluted net loss per share | $(0.05) | $(0.55) | $(0.97) | $(1.03) | [Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Redeemable%20Convertible%20Preferred%20Stock%20and%20Stockholders%27%20Equity%20%28Deficit%29) Outlines changes in equity, including preferred stock conversion and stock-based compensation impacts - Conversion of **90,891 thousand shares** of redeemable convertible preferred stock into common stock, eliminating preferred stock, and issuance of **19,759 thousand shares** of common stock in connection with IPO, resulting in **$665,990 thousand** in additional paid-in capital[19](index=19&type=chunk) - Total Stockholders' Equity (Deficit) shifted from **$(97,701) thousand** as of December 31, 2023, to **$845,252 thousand** as of June 30, 2024[19](index=19&type=chunk) - Recognized **$140,835 thousand** in stock-based compensation for the six months ended June 30, 2024[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities | Metric | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | Change (YoY) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :----------- | | Net cash provided by (used in) operating activities | $33,465 | $(26,781) | +$60,246 | | Net cash (used in) provided by investing activities | $(306,722) | $44,461 | $(351,183) | | Net cash provided by (used in) financing activities | $649,235 | $(87) | +$649,322 | | Net increase in cash and cash equivalents | $375,978 | $17,593 | +$358,385 | | Cash and cash equivalents, End of period | $421,076 | $93,681 | +$327,395 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the financial statements [1. Nature of Business and Summary of Significant Accounting Policies](index=11&type=section&id=1.%20Nature%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) Describes Astera Labs' business, its Intelligent Connectivity Platform, and significant accounting policies, including IPO details - Astera Labs, Inc. offers an Intelligent Connectivity Platform, comprising semiconductor-based, high-speed, mixed-signal connectivity products and the COSMOS software suite, embedded in its products and integrated into customer systems[23](index=23&type=chunk) - The platform addresses data, network, and memory bottlenecks, scalability, and infrastructure requirements for hyperscalers and system OEMs[23](index=23&type=chunk) - On March 22, 2024, the Company completed its IPO, selling **19,758,903 shares** of common stock at **$36.00 per share**, generating net proceeds of **$672.2 million**[28](index=28&type=chunk) - Immediately prior to the IPO, all **90,890,650** outstanding shares of Preferred Stock were converted into common stock and cancelled[29](index=29&type=chunk) [2. Segment and Geographical Information](index=13&type=section&id=2.%20Segment%20and%20Geographical%20Information) Provides insights into the company's operating segments, geographical revenue distribution, and asset locations - The CEO reviews financial information on a consolidated basis, and the company manages operations as a single operating segment[33](index=33&type=chunk) | Region | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :-------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Taiwan | $63,955 | $569 | $123,528 | $10,303 | | United States | $4,499 | $6,222 | $5,356 | $11,592 | | Netherlands | $- | $2,412 | $- | $4,919 | | Other | $8,396 | $1,485 | $13,224 | $1,538 | | Total | $76,850 | $10,688 | $142,108 | $28,352 | | Customer | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :----------------------------- | | Customer A | **41%** | **44%** | | Customer B | **24%** | **30%** | | Customer C | **18%** | **13%** | - As of June 30, 2024, **25%** of property and equipment was located in the United States and **73%** in Taiwan, a shift from substantially all in the US as of December 31, 2023[38](index=38&type=chunk) [3. Marketable Securities](index=15&type=section&id=3.%20Marketable%20Securities) Details the composition, fair value, and maturity profile of the company's marketable securities portfolio | Security Type | Amortized Cost (June 30, 2024) | Fair Value (June 30, 2024) | Amortized Cost (Dec 31, 2023) | Fair Value (Dec 31, 2023) | | :--------------------------- | :----------------------------- | :------------------------- | :---------------------------- | :-------------------------- | | Money market funds | $141,349 | $141,349 | $757 | $757 | | U.S. treasury & agency securities | $268,000 | $267,988 | $60,328 | $60,475 | | Corporate debt securities | $239,793 | $239,678 | $23,552 | $23,639 | | Commercial paper | $145,161 | $145,069 | $8,763 | $8,758 | | Foreign government bonds | $498 | $498 | - | - | | Asset-backed securities | $21,822 | $21,803 | $12,059 | $12,065 | | **Total Marketable Securities** | **$816,737** | **$816,385** | **$105,459** | **$105,694** | - The majority of marketable securities mature within **one year** (**$554.5 million** fair value as of June 30, 2024)[42](index=42&type=chunk) - The company uses a three-level fair value hierarchy, with most assets valued using Level **1** (money market funds) and Level **2** (other marketable securities) inputs[44](index=44&type=chunk)[46](index=46&type=chunk) [4. Condensed Consolidated Balance Sheet Components](index=18&type=section&id=4.%20Condensed%20Consolidated%20Balance%20Sheet%20Components) Breaks down key balance sheet items, including inventory, property and equipment, and various liabilities [Inventory](index=18&type=section&id=Inventory) Details the composition and changes in raw materials, work-in-progress, and finished goods inventory | Inventory Type | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | Change | | :--------------- | :----------------------------- | :------------------------------- | :----- | | Raw materials | $1,664 | $2,247 | $(583) | | Work-in-progress | $10,915 | $11,780 | $(865) | | Finished goods | $15,993 | $10,068 | +$5,925 | | **Total inventory** | **$28,572** | **$24,095** | **+$4,477** | [Property and Equipment, Net](index=19&type=section&id=Property%20and%20Equipment%2C%20Net) Outlines the company's fixed assets, including construction in progress and laboratory equipment | Asset Type | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | Change | | :-------------------------- | :----------------------------- | :------------------------------- | :----- | | Construction in progress | $16,013 | $0 | +$16,013 | | Laboratory equipment | $8,367 | $6,470 | +$1,897 | | **Total property and equipment, net** | **$21,821** | **$4,712** | **+$17,109** | - Construction in progress primarily includes capitalized production mask costs, which will depreciate upon manufacturing commencement[48](index=48&type=chunk) [Accrued Expenses and Other Current Liabilities](index=19&type=section&id=Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Presents short-term obligations such as compensation, production mask costs, and customer deposits | Liability Type | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | Change | | :---------------------------------- | :----------------------------- | :------------------------------- | :----- | | Accrued compensation and benefits | $16,325 | $14,923 | +$1,402 | | Production mask costs | $13,509 | $0 | +$13,509 | | Customer deposits | $5,000 | $0 | +$5,000 | | **Total accrued expenses and other current liabilities** | **$49,478** | **$28,742** | **+$20,736** | [Other Liabilities](index=19&type=section&id=Other%20Liabilities) Details non-current liabilities, including income taxes and other long-term obligations | Liability Type | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | Change | | :--------------- | :----------------------------- | :------------------------------- | :----- | | Income taxes | $4,890 | $1,394 | +$3,496 | | Other | $1,300 | $2,393 | $(1,093) | | **Total other liabilities** | **$6,190** | **$3,787** | **+$2,403** | [5. Commitments and Contingencies](index=19&type=section&id=5.%20Commitments%20and%20Contingencies) Covers the company's contractual obligations, legal proceedings, and indemnification agreements [Purchase Commitments](index=19&type=section&id=Purchase%20Commitments) Summarizes future contractual obligations for purchases and cloud services | Year | Purchase Commitments (in thousands) | | :----------- | :-------------------------------- | | Remainder of 2024 | $600 | | 2025 | $4,341 | | **Total** | **$4,941** | - The company has a cloud service agreement with a vendor for **$2.0 million** annually from **2024** through **2025** for R&D cloud hosting services[52](index=52&type=chunk) [Legal Proceedings](index=21&type=section&id=Legal%20Proceedings) Confirms the absence of material legal proceedings or claims against the company - The company is not currently a party to any material legal proceedings or claims that could have a material adverse effect on its business[53](index=53&type=chunk) [Indemnification Obligations](index=21&type=section&id=Indemnification%20Obligations) Describes the company's standard indemnification provisions and historical experience - The company includes standard indemnification provisions in agreements but has not incurred significant expenses from these obligations in the past[54](index=54&type=chunk) [6. Redeemable Convertible Preferred Stock, Undesignated Preferred Stock, and Common Stock](index=21&type=section&id=6.%20Redeemable%20Convertible%20Preferred%20Stock%2C%20Undesignated%20Preferred%20Stock%2C%20and%20Common%20Stock) Details changes in the company's capital structure, including preferred stock conversion and common stock authorization [Redeemable Convertible Preferred Stock](index=21&type=section&id=Redeemable%20Convertible%20Preferred%20Stock) Details the conversion of all outstanding preferred stock into common stock prior to the IPO - All **90.9 million** outstanding shares of convertible Preferred Stock were automatically converted into common stock and cancelled immediately prior to the IPO[55](index=55&type=chunk) [Undesignated Preferred Stock](index=21&type=section&id=Undesignated%20Preferred%20Stock) Reports the authorization of undesignated preferred stock with no shares issued - **100,000,000 shares** of undesignated preferred stock were authorized in connection with the IPO, with no shares issued as of June 30, 2024[56](index=56&type=chunk) [Common Stock](index=21&type=section&id=Common%20Stock) Describes the increase in authorized common stock in connection with the IPO - Authorized common stock increased from **162.6 million shares** to **1 billion shares** in connection with the IPO[57](index=57&type=chunk) [7. Common Stock Warrants](index=22&type=section&id=7.%20Common%20Stock%20Warrants) Provides information on warrants issued to a customer, including vesting conditions and revenue impact - Warrants were issued to a customer in October **2022** (**1,484,230 shares**) and October **2023** (**831,945 shares**) at an exercise price of **$20.34 per share**, vesting contingent on global payments by the customer[58](index=58&type=chunk) - As of June 30, 2024, **290,355 shares** underlying the warrants were vested and exercisable, with an additional **42,693 shares** probable of vesting[58](index=58&type=chunk) - The company recognized **$0.3 million** and **$0.4 million** as a reduction of revenue for the three and six months ended June 30, 2024, respectively, related to these warrants[58](index=58&type=chunk) [8. Stock-Based Compensation](index=22&type=section&id=8.%20Stock-Based%20Compensation) Details the company's equity incentive plans, stock options, restricted stock units, and related compensation expenses | Expense Category | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Cost of revenue | $84 | $2 | $612 | $7 | | Research and development | $12,971 | $1,672 | $42,978 | $3,351 | | Sales and marketing | $15,758 | $694 | $65,016 | $695 | | General and administrative | $14,254 | $304 | $32,229 | $616 | | **Total** | **$43,067** | **$2,672** | **$140,835** | **$4,669** | - Stock-based compensation expense for the six months ended June 30, 2024, included **$88.9 million** related to the cumulative vesting and settlement of RSUs upon the IPO[65](index=65&type=chunk) [Amended and Restated 2018 Equity Incentive Plan](index=22&type=section&id=Amended%20and%20Restated%202018%20Equity%20Incentive%20Plan) Details the termination of the 2018 plan and transition to the 2024 plan - The **2018** Plan, which granted stock options and RSUs, was terminated in March **2024**, with future grants under the **2024** Plan[59](index=59&type=chunk)[60](index=60&type=chunk) [2024 Stock Option and Incentive Plan](index=22&type=section&id=2024%20Stock%20Option%20and%20Incentive%20Plan) Outlines the new equity incentive plan, including reserved shares and effective date - The **2024** Plan, effective March **19**, **2024**, initially reserved **12,362,662 shares** of common stock for issuance, with annual automatic increases[61](index=61&type=chunk) [2024 Employee Stock Purchase Plan](index=22&type=section&id=2024%20Employee%20Stock%20Purchase%20Plan) Describes the ESPP, including reserved shares and participant purchase terms - The ESPP, effective March **19**, **2024**, initially reserved **3,090,666 shares**, with annual automatic increases[62](index=62&type=chunk) - Participants can purchase shares at **85%** of the lesser of the fair market value on the first or last trading day of the offering period[64](index=64&type=chunk) [Stock Option](index=23&type=section&id=Stock%20Option) Provides details on outstanding stock options, exercise prices, and unrecognized compensation costs | Metric | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :---------------------------------- | :----------------------------- | :------------------------------- | | Number of Shares Outstanding | 9,182 | 10,059 | | Weighted Average Exercise Price | $0.86 | $0.84 | | Aggregate Intrinsic Value | $547,676 | $175,790 | - Unrecognized compensation cost for unvested options was **$14.1 million** as of June 30, 2024, to be recognized over **1.2 years**[66](index=66&type=chunk) [Restricted Stock Units](index=24&type=section&id=Restricted%20Stock%20Units) Presents information on outstanding RSUs, their fair value, and unrecognized compensation expense | Metric | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :---------------------------------- | :----------------------------- | :------------------------------- | | Number of Restricted Stock Units Outstanding | 12,782 | 8,583 | | Weighted Average Grant Date Fair Value | $24.30 | $13.34 | - The aggregate fair value of RSUs that vested and settled during the six months ended June 30, 2024, was **$128.1 million**[67](index=67&type=chunk) - Unrecognized stock-based compensation expense for unvested awards was **$222.1 million** as of June 30, 2024, to be recognized over **1.7 years**[68](index=68&type=chunk) [9. Net Loss per Common Share](index=24&type=section&id=9.%20Net%20Loss%20per%20Common%20Share) Calculates basic and diluted net loss per common share, considering potentially dilutive securities | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------------------------------------------------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders (in thousands) | $(7,546) | $(20,004) | $(100,541) | $(37,458) | | Weighted-average shares used in computing net loss per share, basic and diluted (in thousands) | 155,199 | 36,567 | 103,865 | 36,199 | | Net loss per share, basic and diluted | $(0.05) | $(0.55) | $(0.97) | $(1.03) | - Potentially dilutive securities (options, RSUs, warrants, ESPP) were excluded from diluted EPS calculations as they were anti-dilutive due to the net loss position[69](index=69&type=chunk)[70](index=70&type=chunk) [10. Income Taxes](index=25&type=section&id=10.%20Income%20Taxes) Analyzes the company's income tax provision, effective tax rate, and deferred tax assets | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Income tax (benefit) provision | $(6,537) | $3,946 | $6,045 | $4,069 | | Effective tax rate | **46.4%** | **(24.6)%** | **(6.4)%** | **(12.19)%** | - The effective tax rate differs from the statutory rate due to a valuation allowance on federal and state deferred tax assets and the capitalization of R&D expenditures under Section **174**, which results in current tax expense despite pre-tax losses[71](index=71&type=chunk)[72](index=72&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Astera Labs' financial performance, focusing on revenue growth, IPO impact, R&D, liquidity, and non-GAAP measures [Overview](index=26&type=section&id=Overview) Introduces Astera Labs' mission, Intelligent Connectivity Platform, key products, and financial performance trends - Astera Labs' mission is to innovate and deliver semiconductor-based connectivity solutions for cloud and AI infrastructure, addressing data, network, and memory bottlenecks[76](index=76&type=chunk)[79](index=79&type=chunk) - The company's Intelligent Connectivity Platform includes semiconductor products (ICs, boards, modules) and the COSMOS software suite, supporting high-performance cloud and AI infrastructure[77](index=77&type=chunk)[78](index=78&type=chunk)[80](index=80&type=chunk) - Products like Aries PCIe/CXL Smart DSP Retimers, Taurus Ethernet Smart Cable Modules, and Leo CXL Memory Connectivity Controllers are at the heart of major AI platforms[81](index=81&type=chunk) - Revenue grew significantly from **$34.8 million** in **2021** to **$115.8 million** in **2023**, driven by demand for products like Aries, but the company has not yet achieved annual profitability due to R&D investments[81](index=81&type=chunk) [Summary of Financial Highlights](index=28&type=section&id=Summary%20of%20Financial%20Highlights) Summarizes key financial performance metrics, including revenue growth, gross margin, and operating expense changes - Revenue for Q2 **2024** increased by **619%** YoY, and for the six months ended June 30, 2024, by **401%** YoY, primarily due to higher demand for Aries products[83](index=83&type=chunk)[84](index=84&type=chunk) - Gross margin decreased by **110 bps** to **77.9%** for Q2 **2024** due to inventory write-downs, but increased by **3,290 bps** to **77.7%** for the six months ended June 30, 2024, due to increased shipments, product mix, and reduced inventory write-downs[83](index=83&type=chunk)[84](index=84&type=chunk) - Operating expenses increased by **223%** for Q2 **2024** and **342%** for the six months ended June 30, 2024, largely driven by **$40.3 million** and **$135.6 million**, respectively, in non-cash stock-based compensation expense from RSU vesting and increased personnel-related expenses[85](index=85&type=chunk)[86](index=86&type=chunk) [Initial Public Offering](index=28&type=section&id=Initial%20Public%20Offering) Details the net proceeds from the IPO and its impact on stock-based compensation and tax obligations - The IPO on March 22, 2024, generated net proceeds of **$672.2 million** for the company[87](index=87&type=chunk) - In connection with the IPO, **$88.9 million** of cumulative stock-based compensation expense was recognized due to RSU vesting, and a **$20.1 million** tax withholding obligation was paid[87](index=87&type=chunk) [Key Components of Results of Operations](index=28&type=section&id=Key%20Components%20of%20Results%20of%20Operations) Explains the primary components influencing the company's financial results, including revenue and various expenses [Revenue](index=28&type=section&id=Revenue) Explains the primary sources of revenue, mainly product sales - The vast majority of revenue comes from product sales (Intelligent Connectivity Platform solutions), with a small portion from engineering services[88](index=88&type=chunk) [Cost of Revenue](index=29&type=section&id=Cost%20of%20Revenue) Details the components contributing to the cost of goods sold - Cost of revenue includes materials (wafers), packaging, assembly, shipping, depreciation, logistics, quality assurance, warranty, amortization of production masks, personnel costs (including stock-based compensation), and inventory write-downs[90](index=90&type=chunk) [Gross Profit and Gross Margin](index=29&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Defines gross profit and factors influencing gross margin - Gross profit is revenue less cost of revenue, and gross margin is influenced by sales volume, pricing, product costs, contract manufacturing, personnel, shipping, and inventory write-downs[91](index=91&type=chunk) [Operating Expenses](index=29&type=section&id=Operating%20Expenses) Describes the categories of operating expenses, with personnel costs as a key component - Operating expenses comprise research and development, sales and marketing, and general and administrative expenses, with personnel costs (salaries, stock-based compensation, benefits, bonuses) being the most significant component[92](index=92&type=chunk) [Research and Development](index=29&type=section&id=Research%20and%20Development) Outlines R&D expenditures and future expectations - R&D expenses include personnel costs, pre-production engineering mask costs, software licenses, prototype costs, and allocated facilities[93](index=93&type=chunk) - These costs are expensed as incurred, except for production masks with alternative future use[93](index=93&type=chunk) - The company expects R&D expenses to increase in absolute dollars but moderately decline as a percentage of revenue over time[94](index=94&type=chunk) [Sales and Marketing](index=29&type=section&id=Sales%20and%20Marketing) Details S&M expenses and anticipated trends - S&M expenses include personnel costs, samples, travel, and allocated facilities[95](index=95&type=chunk) - S&M expenses are expected to increase in absolute dollars with expanded personnel and customer engagement but moderately decline as a percentage of revenue[95](index=95&type=chunk) [General and Administrative](index=30&type=section&id=General%20and%20Administrative) Explains G&A expenses and expected changes as a public company - G&A expenses include personnel costs for corporate, finance, legal, and HR, professional services, audit, compliance, insurance, and allocated facilities[96](index=96&type=chunk) - G&A expenses are expected to increase in absolute dollars due to public company operations but moderately decline as a percentage of revenue[97](index=97&type=chunk) [Interest Income](index=30&type=section&id=Interest%20Income) Describes income generated from short-term investments and cash balances - Interest income is earned on short-term investments, cash, and cash equivalents[98](index=98&type=chunk) [Income Tax Provision](index=30&type=section&id=Income%20Tax%20Provision) Covers U.S. federal, state, and foreign income taxes and valuation allowances - Income tax provision includes U.S. federal, state, and foreign income taxes[99](index=99&type=chunk) - A full valuation allowance is maintained on federal and state deferred tax assets[99](index=99&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Provides a detailed analysis of the company's financial performance for the reported periods [Revenue](index=30&type=section&id=Revenue) Analyzes the drivers of revenue changes for the reported periods | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Change (Amount) | Change (%) | | :------ | :-------------------------------------------- | :-------------------------------------------- | :-------------- | :--------- | | Revenue | $76,850 | $10,688 | $66,162 | 619% | | **Six Months Ended June 30, 2024 vs 2023** | | | | | | Revenue | $142,108 | $28,352 | $113,756 | 401% | - Revenue increases were primarily due to a **555%** (three months) and **399%** (six months) increase in overall shipments, driven by higher demand for Aries products and an increased mix of second-generation Aries retimers with higher average selling prices[100](index=100&type=chunk)[101](index=101&type=chunk) [Cost of Revenue](index=30&type=section&id=Cost%20of%20Revenue) Examines the factors contributing to changes in cost of revenue | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Change (Amount) | Change (%) | | :-------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------- | :--------- | | Cost of revenue | $16,996 | $2,249 | $14,747 | 656% | | **Six Months Ended June 30, 2024 vs 2023** | | | | | | Cost of revenue | $31,734 | $15,655 | $16,079 | 103% | - Cost of revenue increased due to higher shipments and inventory write-downs (three months), partially offset by lower average unit cost[102](index=102&type=chunk) - For the six months, the increase was also offset by an **$8.2 million** decrease in inventory write-downs compared to the prior year[104](index=104&type=chunk) [Gross Profit and Gross Margin](index=32&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Discusses the trends and reasons for changes in gross profit and margin | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Change (Amount) | Change (%) | | :----------- | :------------------------------- | :------------------------------- | :-------------- | :--------- | | Gross profit | $59,854 | $8,439 | $51,415 | 609% | | Gross margin | **77.9%** | **79.0%** | **(110) bps** | | | **Six Months Ended June 30, 2024 vs 2023** | | | | | | Gross profit | $110,374 | $12,697 | $97,677 | 769% | | Gross margin | **77.7%** | **44.8%** | **3,290 bps** | | - Gross margin decreased for the three months due to inventory write-downs but increased significantly for the six months due to increased shipments, product mix, and reduced inventory write-downs[107](index=107&type=chunk)[108](index=108&type=chunk) [Research and Development](index=32&type=section&id=Research%20and%20Development) Analyzes the increases in R&D expenses, including stock-based compensation | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Change (Amount) | Change (%) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------- | :--------- | | R&D expense | $40,089 | $17,860 | $22,229 | 124% | | Percentage of revenue | **52%** | **167%** | | | | **Six Months Ended June 30, 2024 vs 2023** | | | | | | R&D expense | $93,647 | $33,127 | $60,520 | 183% | | Percentage of revenue | **66%** | **117%** | | | - R&D expense increases were driven by **$11.3 million** (three months) and **$39.6 million** (six months) in non-cash stock-based compensation from RSU vesting, higher personnel costs due to headcount increases (**54%** for three months, **47%** for six months), and increased software licenses/cloud hosting[109](index=109&type=chunk)[110](index=110&type=chunk) [Sales and Marketing](index=33&type=section&id=Sales%20and%20Marketing) Examines the increases in S&M expenses, including stock-based compensation | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Change (Amount) | Change (%) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------- | :--------- | | S&M expense | $22,076 | $5,097 | $16,979 | 333% | | Percentage of revenue | **29%** | **48%** | | | | **Six Months Ended June 30, 2024 vs 2023** | | | | | | S&M expense | $77,586 | $9,490 | $68,096 | 718% | | Percentage of revenue | **55%** | **33%** | | | - S&M expense increases were primarily due to **$15.1 million** (three months) and **$64.3 million** (six months) in non-cash stock-based compensation from RSU vesting, and higher personnel costs due to headcount increases (**32%** for three months, **17%** for six months)[111](index=111&type=chunk)[112](index=112&type=chunk) [General and Administrative](index=33&type=section&id=General%20and%20Administrative) Analyzes the increases in G&A expenses, including stock-based compensation and public company costs | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Change (Amount) | Change (%) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------- | :--------- | | G&A expense | $22,036 | $3,095 | $18,941 | 612% | | Percentage of revenue | **29%** | **29%** | | | | **Six Months Ended June 30, 2024 vs 2023** | | | | | | G&A expense | $46,455 | $6,620 | $39,835 | 602% | | Percentage of revenue | **33%** | **23%** | | | - G&A expense increases were mainly due to **$14.0 million** (three months) and **$31.6 million** (six months) in non-cash stock-based compensation from RSU vesting, higher personnel costs due to headcount increases (**108%** for three months, **72%** for six months), and increased professional services fees for public company infrastructure[113](index=113&type=chunk)[114](index=114&type=chunk) [Interest Income](index=33&type=section&id=Interest%20Income) Discusses the significant increase in interest income due to IPO proceeds and rates | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Change (Amount) | Change (%) | | :-------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------- | :--------- | | Interest income | $10,264 | $1,555 | $8,709 | 560% | | **Six Months Ended June 30, 2024 vs 2023** | | | | | | Interest income | $12,818 | $3,151 | $9,667 | 307% | - Interest income increased significantly due to higher average short-term investments and cash equivalents balances, primarily resulting from the IPO proceeds, and higher interest rates[116](index=116&type=chunk) [Income Tax (Benefit) Provision](index=34&type=section&id=Income%20Tax%20%28Benefit%29%20Provision) Explains the changes in income tax benefit/provision and effective tax rates | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Change (Amount) | Change (%) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------- | :--------- | | Income tax (benefit) provision | $(6,537) | $3,946 | $(10,483) | (266)% | | **Six Months Ended June 30, 2024 vs 2023** | | | | | | Income tax (benefit) provision | $6,045 | $4,069 | $1,976 | 49% | - The three-month period saw an income tax benefit due to increased excess tax benefits from exercised stock options, foreign derived intangible income deduction, and U.S. R&D credits[117](index=117&type=chunk) - The six-month period's increase was due to higher revenue and capitalized R&D expenditures under Section **174**[118](index=118&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) Presents non-GAAP financial metrics to provide a clearer view of core operating performance - The company uses non-GAAP financial measures (gross profit, gross margin, operating income/loss, net income/loss) to supplement GAAP results, excluding stock-based compensation and related payroll taxes, to provide a clearer view of core operating performance and facilitate period-to-period comparisons[119](index=119&type=chunk) [Non-GAAP Gross Profit and Non-GAAP Gross Margin](index=34&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Non-GAAP%20Gross%20Margin) Reconciles GAAP and Non-GAAP gross profit and margin, excluding stock-based compensation - Non-GAAP gross profit excludes stock-based compensation expenses from GAAP gross profit[120](index=120&type=chunk) | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | GAAP gross profit | $59,854 | $8,439 | $110,374 | $12,697 | | Stock-based compensation expense | $84 | $2 | $96 | $7 | | IPO Stock-based compensation expense | - | - | $516 | - | | **Non-GAAP gross profit** | **$59,938** | **$8,441** | **$110,986** | **$12,704** | | GAAP gross margin | **77.9%** | **79.0%** | **77.7%** | **44.8%** | | **Non-GAAP gross margin** | **78.0%** | **79.0%** | **78.1%** | **44.8%** | [Non-GAAP Operating Income (Loss)](index=35&type=section&id=Non-GAAP%20Operating%20Income%20%28Loss%29) Reconciles GAAP and Non-GAAP operating income (loss), adjusting for stock-based compensation and payroll taxes - Non-GAAP operating income (loss) excludes stock-based compensation expenses and employer payroll taxes related to RSU vesting from GAAP operating loss[122](index=122&type=chunk) | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :------------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | GAAP operating loss | $(24,347) | $(17,613) | $(107,314) | $(36,540) | | IPO Stock-based compensation | - | - | $88,873 | - | | Stock-based compensation | $43,067 | $2,672 | $51,962 | $4,669 | | Employer payroll tax related to IPO stock-based compensation | - | - | $1,072 | - | | **Non-GAAP operating income (loss)** | **$18,720** | **$(14,941)** | **$34,593** | **$(31,871)** | [Non-GAAP Net Income (Loss)](index=36&type=section&id=Non-GAAP%20Net%20Income%20%28Loss%29) Reconciles GAAP and Non-GAAP net income (loss), adjusting for stock-based compensation, payroll taxes, and tax effects - Non-GAAP net income (loss) excludes stock-based compensation, related employer payroll taxes from IPO RSU vesting, and the related tax impact from GAAP net loss[125](index=125&type=chunk) | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :------------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | GAAP net loss | $(7,546) | $(20,004) | $(100,541) | $(37,458) | | IPO Stock-based compensation expense | - | - | $88,873 | - | | Stock-based compensation expense | $43,067 | $2,672 | $51,962 | $4,669 | | Employer payroll tax related to IPO stock-based compensation | - | - | $1,072 | - | | Income tax effect | $(13,296) | - | $(4,811) | - | | **Non-GAAP net income (loss)** | **$22,225** | **$(17,332)** | **$36,555** | **$(32,789)** | - The non-GAAP tax rate for both the three and six months ended June 30, 2024, was approximately **23%**[126](index=126&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet short-term and long-term obligations, including cash flows and capital structure - As of June 30, 2024, principal liquidity sources were **$831.0 million** in cash, cash equivalents, and marketable securities, and **$827.2 million** in working capital[127](index=127&type=chunk) - The company has an accumulated deficit of **$225.9 million** as of June 30, 2024, but believes current liquidity is sufficient for at least the next **12 months**[127](index=127&type=chunk) [Cash Flows](index=38&type=section&id=Cash%20Flows) Summarizes the net cash provided by or used in operating, investing, and financing activities | Cash Flow Type | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by (used in) operating activities | $33,465 | $(26,781) | | Net cash (used in) provided by investing activities | $(306,722) | $44,461 | | Net cash provided by (used in) financing activities | $649,235 | $(87) | [Operating Activities](index=38&type=section&id=Operating%20Activities) Details the components and drivers of cash flow from operating activities - Net cash provided by operating activities for the six months ended June 30, 2024, was **$33.5 million**, driven by non-cash charges (stock-based compensation) and increases in accrued expenses and accounts payable, partially offset by increases in accounts receivable, inventory, and prepaid expenses[129](index=129&type=chunk) - Net cash used in operating activities for the six months ended June 30, 2023, was **$26.8 million**, primarily due to net loss and decreases in accounts payable and accrued liabilities, partially offset by non-cash charges and a decrease in accounts receivable[130](index=130&type=chunk) [Investing Activities](index=38&type=section&id=Investing%20Activities) Explains the cash flows related to purchases and sales of marketable securities and property and equipment - Net cash used in investing activities for the six months ended June 30, 2024, was **$306.7 million**, mainly due to **$345.8 million** in purchases of marketable securities and **$2.1 million** in property and equipment, partially offset by maturities and sales of marketable securities[131](index=131&type=chunk) - Net cash provided by investing activities for the six months ended June 30, 2023, was **$44.5 million**, primarily from sales and maturities of marketable securities, partially offset by purchases of marketable securities and property and equipment[132](index=132&type=chunk)[133](index=133&type=chunk) [Financing Activities](index=39&type=section&id=Financing%20Activities) Describes cash flows from financing, primarily IPO proceeds and stock option exercises - Net cash provided by financing activities for the six months ended June 30, 2024, was **$649.2 million**, primarily from **$672.2 million** in IPO proceeds, net of underwriting discounts and commissions, and stock option exercises, partially offset by tax withholding for RSU settlements and deferred offering costs[134](index=134&type=chunk) - Net cash used in financing activities for the six months ended June 30, 2023, was immaterial[135](index=135&type=chunk) [Contractual Obligations and Commitments](index=39&type=section&id=Contractual%20Obligations%20and%20Commitments) Notes the absence of material changes to previously disclosed contractual obligations - No material changes to contractual obligations (operating lease commitments, purchase commitments for software licenses and engineering services) since the Prospectus[136](index=136&type=chunk)[137](index=137&type=chunk) [Indemnification Agreements](index=39&type=section&id=Indemnification%20Agreements) Refer to Note **5** for details on indemnification obligations[138](index=138&type=chunk) [Critical Accounting Estimates](index=39&type=section&id=Critical%20Accounting%20Estimates) States no material changes to critical accounting policies and estimates - No material changes to critical accounting policies and estimates since the Prospectus[140](index=140&type=chunk) [Recent Accounting Pronouncements](index=39&type=section&id=Recent%20Accounting%20Pronouncements) Refer to Note **1** for information on recent accounting pronouncements[141](index=141&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate and foreign currency fluctuations, holding short-term cash and marketable securities [Interest Rate Risk](index=39&type=section&id=Interest%20Rate%20Risk) Assesses the company's exposure to interest rate fluctuations on its cash and marketable securities - As of June 30, 2024, the company held **$421.1 million** in cash and cash equivalents and **$409.9 million** in marketable securities[143](index=143&type=chunk) - A hypothetical **100 basis point** change in interest rates would change the fair value of marketable securities by **$4.7 million** as of June 30, 2024, and **$0.9 million** as of December 31, 2023[144](index=144&type=chunk) - The company does not use derivative financial instruments to manage interest rate risk and does not anticipate material risks due to the short-term nature of investments[144](index=144&type=chunk) [Foreign Currency Exchange Risk](index=40&type=section&id=Foreign%20Currency%20Exchange%20Risk) Evaluates the company's exposure to foreign currency exchange rate fluctuations, noting limited impact - The company's reporting and functional currency is the U.S. dollar, and all sales and operating expenses are transacted in U.S. dollars, limiting foreign currency risk[145](index=145&type=chunk) - A hypothetical **100 basis point** change in the U.S. dollar's value is not expected to have a material effect on operating results[145](index=145&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management found disclosure controls ineffective due to material weaknesses in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=40&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Reports on the effectiveness of disclosure controls and procedures, noting material weaknesses - As of June 30, 2024, the CEO and CFO concluded that disclosure controls and procedures were not effective at a reasonable assurance level due to material weaknesses in internal control over financial reporting[146](index=146&type=chunk) - Despite weaknesses, management believes the interim condensed financial statements fairly present the company's financial condition, results of operations, and cash flows[147](index=147&type=chunk) [Previously Reported Material Weaknesses in Internal Control Over Financial Reporting](index=40&type=section&id=Previously%20Reported%20Material%20Weaknesses%20in%20Internal%20Control%20Over%20Financial%20Reporting) Details specific material weaknesses identified in internal controls - Identified material weaknesses include inadequate design and maintenance of an effective risk assessment process, particularly regarding segregation of duties over journal entries and account reconciliations[148](index=148&type=chunk) - Ineffective IT general controls for financial reporting systems were also identified, specifically concerning program change management, user access, computer operations, and program development controls[150](index=150&type=chunk) [Remediation Efforts to Address Previously Identified Material Weaknesses](index=41&type=section&id=Remediation%20Efforts%20to%20Address%20Previously%20Identified%20Material%20Weaknesses) Outlines the steps taken to address and remediate identified material weaknesses - Remediation efforts include engaging external consultants, formalizing accounting policies, hiring additional staff for segregation of duties, and designing controls for significant accounts and disclosures[153](index=153&type=chunk) - A formal Disclosure Committee has been formed for oversight[153](index=153&type=chunk) - Material weaknesses are not yet remediated as of June 30, 2024, as controls need to be effectively designed, operational, and tested for a sufficient period[154](index=154&type=chunk) [Changes in Internal Control Over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Confirms no material changes to internal control over financial reporting during the quarter - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control during the quarter ended June 30, 2024[155](index=155&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=42&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) Acknowledges inherent limitations in the effectiveness of control systems - Control systems provide reasonable, not absolute, assurance and can be subject to inherent limitations such as faulty judgments, simple errors, circumvention by individuals, collusion, or management override[156](index=156&type=chunk) Part II - Other Information Additional disclosures covering legal proceedings, risk factors, equity sales, and insider trading arrangements [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material pending legal proceedings - The company is not currently a party to any material pending legal proceedings[158](index=158&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Prospectus - No material changes to risk factors disclosed in the Prospectus as of the date of this report[159](index=159&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There has been no material change in the expected use of net proceeds from the IPO as described in the final prospectus - No material change in the expected use of net proceeds from the IPO[160](index=160&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities - None[161](index=161&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[161](index=161&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) Directors and officers adopted Rule 10b5-1 trading arrangements in May 2024, covering shares for RSU tax withholding [Insider Adoption or Termination of Trading Arrangements](index=43&type=section&id=Insider%20Adoption%20or%20Termination%20of%20Trading%20Arrangements) Details the adoption of Rule 10b5-1 trading arrangements by directors and officers | Name | Title | Action | Date Adopted | Character of Trading Arrangement | Aggregate Number of Shares | Expiration Date | | :---------------- | :----------------------- | :------- | :----------- | :------------------------------- | :------------------------- | :-------------- | | Jitendra Mohan | CEO, Director | Adoption | 5/31/2024 | Rule 10b5-1 Trading Arrangement | 900,000 | 8/29/2025 | | Sanjay Gajendra | President, COO, Director | Adoption | 5/31/2024 | Rule 10b5-1 Trading Arrangement | 1,000,000 | 7/31/2025 | | Manuel Alba | Director | Adoption | 5/31/2024 | Rule 10b5-1 Trading Arrangement | 1,040,000 | 8/30/2025 | | Jack Lazar | Director | Adoption | 5/22/2024 | Rule 10b5-1 Trading Arrangement | 52,500 | 5/22/2025 | | Michael Tate | CFO | Adoption | 5/30/2024 | Rule 10b5-1 Trading Arrangement | 500,000 | 7/31/2025 | | Philip Mazzara | General Counsel | Adoption | 5/24/2024 | Rule 10b5-1 Trading Arrangement | 125,000 | 5/24/2025 | - Shares subject to these arrangements include those for tax withholding obligations upon RSU vesting, with the exact number varying based on market price and withholding taxes[166](index=166&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications, amended corporate documents, and XBRL interactive data files - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits **31.1**, **31.2**, **32.1**, **32.2**), amended corporate documents (**3.1**, **3.2**), and Inline XBRL documents (**101.INS**, SCH, CAL, DEF, LAB, PRE, **104**)[169](index=169&type=chunk) - Certifications under Exhibits **32.1** and **32.2** are "furnished" not "filed" for Section **18** of the Exchange Act[170](index=170&type=chunk)

Exhibit 99.1 IR CONTACT: Leslie Green leslie.green@asteralabs.com Astera Labs Announces Financial Results for the Second Quarter of Fiscal Year 2024 • Record quarterly revenue of $76.9 million, up 18% QoQ and up 619% YoY • Multiple secular trends, design wins across diverse AI platform architectures, and increasing average dollar content position the Company to outpace industry growth SANTA CLARA, CA, U.S. – August 6, 2024 – Astera Labs, Inc. (Nasdaq: ALAB), a global leader in semiconductor-based connectivi ...

Table of Contents Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.0001 per share ALAB Nasdaq Global Select Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 1 ...

Exhibit 99.1 IR CONTACT: Leslie Green leslie.green@asteralabs.com Astera Labs Announces Financial Results for the First Quarter of Fiscal Year 2024 • Record quarterly revenue of $65.3 million driven by expanding AI infrastructure build-out, up 29% QoQ and up 269% YoY • Sampling third generation Aries Smart DSP Retimers for PCIe 6.x connectivity to leading AI platform providers to support next-generation cloud infrastructure SANTA CLARA, CA, U.S. – May 7, 2024 – Astera Labs (Nasdaq: ALAB), a global leader in ...