Astera Labs (NASDAQ:ALAB) reported sharp growth in its fiscal fourth quarter of 2025, citing broad-based demand across its connectivity portfolio and continued momentum tied to AI infrastructure spending by hyperscalers. Management also outlined a higher investment posture to pursue what it described as an expanding market opportunity, and announced a CFO transition alongside a new warrant agreement with Amazon tied to future purchases.
Q4 and full-year results
CEO and co-founder Jitendra Mohan said Astera Labs delivered fourth-quarter revenue of $270.6 million, up 17% sequentially and 92% year-over-year. For the full fiscal year 2025, revenue was $852.5 million, up 115% from the prior year. Mohan said growth was “broad-based,” spanning signal conditioning, smart cable modules, and switch fabric products, supported by new design wins across multiple customers.
- Q4 non-GAAP gross margin: 75.7%, down 70 basis points sequentially due primarily to higher mix of hardware sales
- Q4 non-GAAP operating expenses: $96 million, up $16 million sequentially as the company expanded R&D and closed the Xscale acquisition during the quarter
- Q4 non-GAAP operating margin: 40.2%, down 150 basis points sequentially
- Non-GAAP diluted EPS: $0.58, on fully diluted shares of 181.2 million
- Operating cash flow: $95.3 million
- Cash, cash equivalents, and marketable securities: $1.19 billion at quarter end
Product commentary: Scorpio, Aries, Taurus, and Leo
Mohan highlighted continued ramping of the company’s Scorpio PCIe switching portfolio. He said Scorpio P-Series exceeded the company’s target of 10% of revenue in 2025 and described it as “the only PCIe 6 fabric shipping in volume” today. Looking to 2026, he said Astera expects continued growth for Scorpio P-Series at lead customers and expects to begin shipments into at least two additional major hyperscalers for next-generation AI platforms. In Q&A, management clarified those two new hyperscalers are U.S.-based and said production for those customers would begin later in 2026 with “meaningful revenue” expected in 2027.
On Scorpio X-Series, Mohan said the company expects incremental revenue growth in the first half of 2026, followed by a transition to high-volume production in the second half. Tate added Scorpio X shipped pre-production quantities in Q4 and is expected to contribute “initial volumes” in Q1 2026. Management reiterated engagement with more than 10 customers for the Scorpio X family, with initial quantities supporting new customer platforms in the second half of 2026 and volume ramps set for 2027.
In signal conditioning, Mohan said the Aries portfolio performed well, with PCIe 6 solutions contributing to growth and the overall Aries portfolio growing nearly 70% year-over-year in 2025. He characterized Aries Gen 6 as the only PCIe 6 DSP retimer solution shipping to customers in high volume today. In Q&A, management said PCI Express remains central to server connectivity and that Aries is benefiting from the transition from Gen 5 to Gen 6, along with rising use in cabled applications that lifts average selling prices.
Taurus was described as the strongest-performing product family in Q4, supported by volume shipments into new programs across AI and general-purpose systems. Mohan said Taurus revenue grew more than 4x year-over-year in 2025, driven by 400-gig designs, and positioned the transition to 800-gig switching platforms as a potential next catalyst. In Q&A, management noted Astera’s module-based approach in active electrical cables (rather than supplying complete cable assemblies) and said it expects to participate more as 800G volumes scale, with multiple cable suppliers using Astera modules for high-volume deployments.
For its Leo CXL memory expansion products, Mohan said the company made “good progress” in 2025 and announced a partnership with Microsoft, Intel, and SAP to allow customers to evaluate CXL memory expansion in Microsoft Azure M-Series virtual machines. Management called it the industry’s first publicly announced deployment of CXL-attached memory and said initial production volumes are expected to start in the second half of 2026.
AI infrastructure outlook, UALink and NVLink Fusion
Mohan pointed to strong AI infrastructure spending commentary from hyperscalers, saying Google and AWS alone guided to nearly $400 billion in total CapEx for 2026. He said Astera’s view of its self-addressable market has expanded significantly, with the company estimating that its self-addressable opportunity will grow more than 10x over the next five years to reach $25 billion, spanning copper-based families such as Aries and Taurus, Scorpio switches, Leo controllers, and custom scale-up connectivity solutions.
Management also discussed UALink, noting an active ecosystem with IP availability and compliance methodologies being finalized. Mohan cited public roadmap announcements from AWS and AMD indicating support for UALink in 2027 timeframes, and said Astera expects to be ready to meet initial platform ramps in 2027. In response to questions about competing approaches such as Ethernet-based scale-up and ESON, management said multiple scale-up solutions are likely to coexist, and Astera is focusing development where customers are asking it to—namely PCIe, UALink, and “increasingly” NVLink Fusion. Mohan added the company has the capability to design an ESON-based solution if customer demand shifts.
On NVLink Fusion, management described an opportunity to translate a customer’s native XPU/ASIC protocol into NVLink and said both Amazon and NVIDIA have selected Astera as a partner. Mohan said the company anticipates revenue potential “in line” with what it might achieve selling a UALink switched opportunity, though the mix of NVLink Fusion versus native UALink deployments remains uncertain.
Warrant agreement with Amazon and optical timing
During Q&A, Tate said the company filed an 8-K related to a warrant agreement with Amazon. Under the agreement, Astera is issuing 3.3 million warrant shares tied to performance conditions, comprising tranches based on payments to purchase up to $6.5 billion of Astera products, including smart fabric switches, signal conditioning products, and optical engine solutions. Tate called it a follow-on warrant, noting the company had a previous warrant agreement in place, and said warrants are earned as revenue milestones are achieved.
Tate also said the accounting treatment results in a non-cash charge that is recorded against revenue and effectively against gross margin. He said the company is modeling an approximately two-point quarterly non-cash gross margin impact starting around Q2 as the warrants are achieved, and noted the warrants have a seven-year life.
On optical connectivity, Mohan and Sanjay Gajendra said optical for scale-up is expected around 2028, while initial deployments of optical technology—particularly co-packaged optics—may begin in scale-out before scale-up. Management suggested copper and optical will coexist for a long period, with an evolution from pluggable optics to near-package optics and eventually co-packaged optics.
Investment, engineering expansion, and CFO transition
Gajendra said Astera plans to enhance its core portfolio and expand into new categories including custom connectivity solutions, products addressing inference memory bottlenecks, and optical engines for scale-up and scale-out networks. He also described the company’s software-defined architecture as a way to tailor fabric solutions to different hyperscaler needs without developing unique silicon for every opportunity, while still supporting customization in scale-up topologies.
Management repeatedly tied higher spending to expanded opportunity and customer demand. For Q1 fiscal 2026, Tate guided for non-GAAP operating expenses of $112 million to $118 million, up from Q4 levels, citing the Xscale acquisition and an additional acqui-hire that helped the company scale its recently announced Israel Design Center.
Separately, Mohan said Tate will transition from CFO to a full-time strategic advisor role reporting to the CEO. The company said Desmond Lynch will join as CFO effective March 2.
For Q1 2026, Astera guided revenue of $286 million to $297 million, with non-GAAP gross margin around 74% and non-GAAP EPS of $0.53 to $0.54 on an expected diluted share count of approximately 184 million.
About Astera Labs (NASDAQ:ALAB)
Astera Labs is a fabless semiconductor company that develops connectivity solutions for data center and cloud infrastructure. The firm focuses on addressing signal integrity and link management challenges that arise as server architectures incorporate higher-bandwidth processors and accelerators. Its technology is aimed at improving reliability and performance for high-speed interconnects used in servers, storage systems and compute accelerators.
The company’s product portfolio centers on silicon devices and accompanying firmware and software that enhance and manage high-speed links.
