We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Astera Labs Q3 Earnings Beat Estimate on Scorpio X-Series Strength
Read MoreHide Full Article
Key Takeaways
ALAB's Q3 earnings surged 169.4%, while revenues jumped 153.7%.
Scorpio X-Series growth drove strong AI connectivity demand.
ALAB expects Q4 revenues of $730M-$750M and EPS of $1.62-$1.66.
Astera Labs (ALAB - Free Report) reported third-quarter 2026 non-GAAP earnings of $1.32 per share, up 169.4% year over year. The figure beat the Zacks Consensus Estimate by 10.92%.
Revenues surged 153.7% year over year to $584.9 million, surpassing the Zacks Consensus Estimate by 6.27%. Broad-based demand across AI fabric and signal-conditioning products drove the upside, led by the high-volume production ramp of Scorpio X-Series switches. Scorpio became the company's largest product family, exceeding $1 billion in annualized revenues.
ALAB Posts Broad-Based Revenue Growth
The top line increased 49.1% sequentially, reflecting expanding deployments across multiple customers and AI infrastructure platforms. Management highlighted accelerating design activity as hyperscalers increased demand for high-bandwidth connectivity and larger accelerator clusters.
Scorpio X-Series revenues surpassed P-Series revenues during the quarter, supported by shipments across multiple platforms and switch configurations. X-Series products shipped to two customers, while P-Series expanded across additional platforms, including deployments at two U.S. hyperscalers.
Astera Labs, Inc. Price, Consensus and EPS Surprise
Scorpio’s growth benefited from increasing adoption of the 320-lane X-Series fabric switch, designed to support larger AI accelerator clusters. Its Hypercast and in-network compute capabilities improve collective communication performance by up to twofold, helping customers increase accelerator utilization.
Aries delivered record quarterly revenues, driven by PCIe 6 retimer adoption across scale-up and scale-out applications. ALAB also introduced Aries 7, expanding its signal-conditioning portfolio into PCIe 7 copper and optical connectivity. Initial sampling is expected to begin in the fourth quarter of 2026.
Taurus gained momentum as 400-gigabit and 800-gigabit solutions ramped across scale-out Ethernet applications. Its 800-gigabit products entered volume shipments to a lead customer, while 3.2-terabit retimers began sampling with multiple customers.
ALAB Broadens Memory and Optical Opportunities
Astera Labs expanded its Leo memory controller portfolio with Leo X-Series and Leo 2 E-Series and P-Series. These offerings support fabric-attached GPU memory and CPU memory expansion, addressing growing memory requirements across AI inference workloads.
Leo X-Series demonstrated up to 62% faster time-to-first-token and 22% higher token throughput in internal testing. Leo 2 products entered preproduction shipments, with volume production expected around mid-2027.
The company also advanced optical connectivity with Smart Optical Drivers and transimpedance amplifiers targeting near-packaged optics applications. Management expects initial optical revenues in the second half of 2027.
Custom silicon opportunities expanded to more than 10 active engagements, with initial shipments targeted for late 2027 and volume production anticipated in 2028.
Astera Labs’ Margin and Expense Details
Non-GAAP gross margin was 72.4%, contracting 400 basis points year over year and 130 basis points sequentially. However, the figure exceeded management’s guidance of approximately 72%.
Non-GAAP operating expenses totaled $162 million, increasing 19% sequentially. Research and development expenses surged 116.6% year over year to $171 million. Sales and marketing expenses increased 93.4% to $37.4 million, while general and administrative expenses rose 59.6% to $35.3 million. These expense figures are on a GAAP basis.
Non-GAAP operating margin expanded 300 basis points year over year and 560 basis points sequentially to 44.7%.
ALAB Strengthens Liquidity and Cash Generation
Astera Labs ended Sept. 30, 2026, with $1.38 billion in cash, cash equivalents, and marketable securities, increasing $125.3 million sequentially.
Cash from operating activities reached a quarterly record of $179.2 million, supporting continued investment in product development and portfolio expansion.
Astera Labs Issues Strong Q4 Outlook
For the fourth quarter of 2026, revenues are expected to be between $730 million and $750 million. The midpoint implies approximately 27% sequential growth, driven by continued Scorpio X-Series and P-Series expansion, Aries PCIe 6 retimer demand and Taurus 800-gigabit deployments.
Non-GAAP gross margin is projected to be approximately 72%. Non-GAAP operating expenses are expected to be between $194 million and $200 million, with operating margin forecasted to be roughly 45%.
Management projects non-GAAP earnings between $1.62 and $1.66 per share. The outlook assumes interest and other income of approximately $13 million, a 12% non-GAAP tax rate and approximately 187 million shares outstanding.
ALAB’s Zacks Rank & Stocks to Consider
Astera Labs currently carries a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Astera Labs Q3 Earnings Beat Estimate on Scorpio X-Series Strength
Key Takeaways
Astera Labs (ALAB - Free Report) reported third-quarter 2026 non-GAAP earnings of $1.32 per share, up 169.4% year over year. The figure beat the Zacks Consensus Estimate by 10.92%.
Revenues surged 153.7% year over year to $584.9 million, surpassing the Zacks Consensus Estimate by 6.27%. Broad-based demand across AI fabric and signal-conditioning products drove the upside, led by the high-volume production ramp of Scorpio X-Series switches. Scorpio became the company's largest product family, exceeding $1 billion in annualized revenues.
ALAB Posts Broad-Based Revenue Growth
The top line increased 49.1% sequentially, reflecting expanding deployments across multiple customers and AI infrastructure platforms. Management highlighted accelerating design activity as hyperscalers increased demand for high-bandwidth connectivity and larger accelerator clusters.
Scorpio X-Series revenues surpassed P-Series revenues during the quarter, supported by shipments across multiple platforms and switch configurations. X-Series products shipped to two customers, while P-Series expanded across additional platforms, including deployments at two U.S. hyperscalers.
Astera Labs, Inc. Price, Consensus and EPS Surprise
Astera Labs, Inc. price-consensus-eps-surprise-chart | Astera Labs, Inc. Quote
Astera Labs Expands Scorpio and Aries Momentum
Scorpio’s growth benefited from increasing adoption of the 320-lane X-Series fabric switch, designed to support larger AI accelerator clusters. Its Hypercast and in-network compute capabilities improve collective communication performance by up to twofold, helping customers increase accelerator utilization.
Aries delivered record quarterly revenues, driven by PCIe 6 retimer adoption across scale-up and scale-out applications. ALAB also introduced Aries 7, expanding its signal-conditioning portfolio into PCIe 7 copper and optical connectivity. Initial sampling is expected to begin in the fourth quarter of 2026.
Taurus gained momentum as 400-gigabit and 800-gigabit solutions ramped across scale-out Ethernet applications. Its 800-gigabit products entered volume shipments to a lead customer, while 3.2-terabit retimers began sampling with multiple customers.
ALAB Broadens Memory and Optical Opportunities
Astera Labs expanded its Leo memory controller portfolio with Leo X-Series and Leo 2 E-Series and P-Series. These offerings support fabric-attached GPU memory and CPU memory expansion, addressing growing memory requirements across AI inference workloads.
Leo X-Series demonstrated up to 62% faster time-to-first-token and 22% higher token throughput in internal testing. Leo 2 products entered preproduction shipments, with volume production expected around mid-2027.
The company also advanced optical connectivity with Smart Optical Drivers and transimpedance amplifiers targeting near-packaged optics applications. Management expects initial optical revenues in the second half of 2027.
Custom silicon opportunities expanded to more than 10 active engagements, with initial shipments targeted for late 2027 and volume production anticipated in 2028.
Astera Labs’ Margin and Expense Details
Non-GAAP gross margin was 72.4%, contracting 400 basis points year over year and 130 basis points sequentially. However, the figure exceeded management’s guidance of approximately 72%.
Non-GAAP operating expenses totaled $162 million, increasing 19% sequentially. Research and development expenses surged 116.6% year over year to $171 million. Sales and marketing expenses increased 93.4% to $37.4 million, while general and administrative expenses rose 59.6% to $35.3 million. These expense figures are on a GAAP basis.
Non-GAAP operating margin expanded 300 basis points year over year and 560 basis points sequentially to 44.7%.
ALAB Strengthens Liquidity and Cash Generation
Astera Labs ended Sept. 30, 2026, with $1.38 billion in cash, cash equivalents, and marketable securities, increasing $125.3 million sequentially.
Cash from operating activities reached a quarterly record of $179.2 million, supporting continued investment in product development and portfolio expansion.
Astera Labs Issues Strong Q4 Outlook
For the fourth quarter of 2026, revenues are expected to be between $730 million and $750 million. The midpoint implies approximately 27% sequential growth, driven by continued Scorpio X-Series and P-Series expansion, Aries PCIe 6 retimer demand and Taurus 800-gigabit deployments.
Non-GAAP gross margin is projected to be approximately 72%. Non-GAAP operating expenses are expected to be between $194 million and $200 million, with operating margin forecasted to be roughly 45%.
Management projects non-GAAP earnings between $1.62 and $1.66 per share. The outlook assumes interest and other income of approximately $13 million, a 12% non-GAAP tax rate and approximately 187 million shares outstanding.
ALAB’s Zacks Rank & Stocks to Consider
Astera Labs currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include ACI Worldwide (ACIW - Free Report) , Analog Devices (ADI - Free Report) and NVIDIA (NVDA - Free Report) . Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ACI Worldwide shares have gained 22.2% year to date. ACI Worldwide is set to report third-quarter 2026 results on Nov. 5.
Shares of Analog Devices have risen 54.8% year to date. Analog Devices is set to report fourth-quarter fiscal 2026 results on Nov. 24.
NVIDIA shares have gained 10.9% year to date. NVIDIA is set to report third-quarter fiscal 2027 results on Nov. 17.