Skip to content
    ALAB
    Earnings call· Jun 2026(Q2 FY26)

    Astera Labs Q2 FY26 earnings call ALAB

    Aug 4, 2026 Source

    Executive summary

    Astera Labs Q2 FY26 — Record Revenue and Scorpio X-Series Volume Production

    Astera Labs delivered exceptional Q2 FY26 results, driven by record revenue and significant progress in its AI fabric and signal conditioning portfolios. The company's Scorpio X-Series entered volume production ahead of schedule, positioning it to become the largest product line in Q3. Astera Labs is strategically expanding its market opportunity through optical interconnects and custom solutions, while also seeing renewed momentum in CXL for memory-intensive AI applications.

    Highlights

    5

    • Achieved record revenue of $392.4 million, representing a 27% sequential increase and 104% year-over-year growth.

    • PCIe 6 products accounted for over 50% of total revenue in Q2, a significant increase from 1/3 in Q1, demonstrating market leadership.

    • Scorpio X-Series entered volume production and is projected to become the largest product family by revenue in Q3, one quarter ahead of prior expectations.

    • Reported non-GAAP diluted EPS of $0.80, an increase of over 30% from Q1.

    • Expanded non-GAAP operating margin to 39.1%, up 290 basis points sequentially, driven by strong revenue growth and operating leverage.

    Concerns

    1

    • While absolute revenues from China are expected to increase, they will likely remain in the single digits as a percentage of total revenue due to faster growth in other regions.

    Guidance & targets

    20
    CategoryTargetConfidence
    Revenue
    $540 million to $560 million
    high materiality
    High
    Non-GAAP Gross Margin
    approximately 72%
    medium materiality
    High
    Non-GAAP Operating Expenses
    $156 million and $160 million
    medium materiality
    High
    Non-GAAP Operating Margin
    approximately 43%
    medium materiality
    High
    Interest and Other Income
    approximately $12 million
    low materiality
    High
    Non-GAAP Tax Rate
    approximately 12%
    low materiality
    High
    Diluted Share Count
    approximately 185 million shares
    low materiality
    High
    Non-GAAP Diluted EPS
    $1.16 and $1.21
    high materiality
    High
    Scorpio X-Series volume production
    scale materially in the second half of this year
    high materiality
    High
    Scorpio X-Series shipments to additional customers
    ship Scorpio X-Series to additional customers by year-end
    medium materiality
    High
    Scorpio P-Series ramp
    expected to ramp more meaningfully in 2027
    medium materiality
    Medium
    Taurus growth
    continue its growth trajectory in the second half of the year
    medium materiality
    High
    Taurus portfolio market opportunity
    over $4 billion
    medium materiality
    High
    Leo CXL memory controllers volume shipments
    ship both standard and custom Leo CXL memory controllers in volume
    medium materiality
    Medium
    UALink-enabled Scorpio X-Series scale-up switches
    on track to deliver UALink-enabled Scorpio X-Series scale-up switches in 2027
    high materiality
    High
    Optical connectivity initial opportunity volume production
    expected to enter volume production in 2027
    medium materiality
    Medium
    Near packaged optics (NPO) chipsets production
    targeted for 2027 production
    medium materiality
    Medium
    Fully integrated Scorpio X-Series Fabric Switches with CPO optical engine module
    longer-term road map for 2028 and beyond
    medium materiality
    Low
    Custom solutions initial shipments
    expect initial shipments for these custom design wins to commence in 2027
    medium materiality
    Medium
    Long-term Non-GAAP Gross Margin
    78%
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Scorpio Product Family
    Driven by high-radix Scorpio X-Series scaling materially in H2 2026 and Scorpio P-Series expanding across hyperscalers and AI infrastructure providers.
    Scorpio X-Series: entered volume productionScorpio P-Series: expanding across multiple customersExpected to become largest product family by revenue: Q3 FY26 (1 quarter ahead of prior expectations)
    		strong Q2———
    Aries Product Family
    Driven by strong adoption of retimers and gearboxes across scale-up and scale-out topologies in AI and general-purpose compute platforms, fueled by increased AI system deployments and higher ASPs for PCIe 6.
    PCIe 6 retimer adoption: strongPCIe 5: continued expansion for inference applications
    		record quarterly revenue———
    Taurus Product Family
    Expected to continue growth trajectory in H2 2026 as 800-gig deployments expand, driving improved attach rates and higher ASPs. Expanded portfolio with new 3.2T Smart Retimers and Smart Redrivers supporting 200 gig per lane.
    Units shipped: increased across AI and general-purpose platformsPreproduction volume: 100 gig per lane Smart Cable Modules for 800-gig AECs shipped
    		strong revenue growth———
    Leo Product Family (CXL)
    Seeing renewed momentum as industry recognizes its potential for agentic AI applications, addressing memory capacity and utilization constraints.
    New design win: standard Leo memory controller at a U.S. hyperscaler closedVolume shipments expected: 2027 to 2 U.S. hyperscalers
    		————

    Operational metrics

    14
    Revenue
    $392.4 millionup 27% sequentially, up 104% year-over-year
    Q2 FY26

    Record revenue.

    PCIe 6 Revenue Share
    over 50%up from 1/3 in Q1
    Q2 FY26

    Across AI fabric and signal conditioning portfolios.

    Non-GAAP Gross Margin
    73.7%above guidance of 73%
    Q2 FY26

    Strong performance.

    Non-GAAP Operating Expenses
    $135.8 millionup 10% sequentially
    Q2 FY26

    Reflecting continued investment in roadmap.

    Non-GAAP Operating Margin
    39.1%up 290 basis points from Q1
    Q2 FY26

    Driven by strong revenue growth and operating leverage.

    Interest and Other Income
    $12.1 million
    Q2 FY26
    Non-GAAP Tax Rate
    12%
    Q2 FY26
    Non-GAAP Net Income
    $145.8 million
    Q2 FY26
    Non-GAAP Diluted EPS
    $0.80increase of more than 30% from Q1
    Q2 FY26
    Cash and investments balance
    $1.25 billionup $68.5 million from Q1
    Q2 FY26

    Driven by cash from operations.

    Scorpio X-Series dollar content per XPU
    well beyond $1,000
    future generations

    Expected to grow in future generations of AI platforms.

    Optical market opportunity
    tens of billions of dollarsadditional market opportunity beyond current copper connectivity TAM
    long-term

    Unlocked by expansion into optical connectivity.

    Scorpio X-Series engaged customers
    over 10
    current

    Many opportunities in preproduction or qualification.

    China revenue share
    single digit
    future

    Expected to remain in single digits as a percentage of total revenue, despite absolute growth, due to faster growth in other regions.

    Industry KPIs

    4
    MetricValueDetails
    Ai data center revenue$392.4 millionUSD
    Design wins socket pipelinenew design wincount
    Node platform ramp schedulePCIe 6
    End market segment revenue mixbroad-based strength across our entire product portfolio

    Product announcements

    1
    ProductTypeDetails
    3.2T Smart Retimers and Smart Redriverslaunch

    Deals & partnerships

    1
    aiXscale PhotonicsAcquisition to assemble capabilities spanning analog and mixed-signal design, DSP, electronic and photonic IC integration, and optical packaging.

    Acquired late last year, provides core technology for high-density fiber attach solutions.

    Risks & headwinds

    2
    Memory supply and pricing dynamicscurrent

    null

    Mitigation: CXL attached memory offers attractive cost performance relative to local HBM, and hyperscalers are looking to address these dynamics with CXL.

    China revenue growth as percentage of totalfuture

    single digit

    Mitigation: While absolute revenues from China will increase, the rest of the world is expected to grow faster, keeping China's share in the single digits.

    What to watch in Q3 FY26

    4

    Scorpio Product Family Revenue Contribution

    Q3 FY26
    Currentstrong Q2
    Targetlargest product line by revenue

    Why it matters

    This indicates the successful transition of Scorpio X-Series to volume production and its increasing importance to the company's top line, validating the AI fabric strategy.

    As Jitendra mentioned, we expect Scorpio to become our largest product line by revenue in the third quarter, marking an important milestone in our journey from smart signal conditioning products to mission-critical AI fabric solutions.

    Q&A highlights

    6

    Clarification on Scorpio X-Series ramp timing for different hyperscalers and whether Scorpio X revenue will exceed Scorpio P revenue in Q3.

    Scorpio X-Series is shipping for preproduction to multiple customers, with a lead opportunity ramping to high-volume production in Q3, expected to surpass Scorpio P revenue. Additional customers are expected to ramp to production by year-end or early next year.

    “We do expect Q3 for -- at least for a lead opportunity and lead customer to ramp to high-volume production in Q3 and essentially taking over the -- or surpassing the revenue from Scorpio P-Series.”

    asked by Harlan Sur · answered by Sanjay Gajendra

    2 min read6 chapters

    Detailed Narrative

    01

    AI Infrastructure Market Expansion

    The AI infrastructure market continues to accelerate, with industry forecasts projecting hyperscaler AI and cloud infrastructure spending to reach $1 trillion by 2027. This expansion, coupled with sovereign AI initiatives and enterprise adoption, is driving increased demand for intelligent connectivity solutions, significantly expanding Astera Labs' long-term growth opportunities.

    02

    Scorpio Product Family Momentum

    The Scorpio AI Fabric Switches are rapidly gaining traction, with the high-radix X-Series entering volume production and expected to become the largest product family by revenue in Q3 FY26, one quarter ahead of schedule. The P-Series is also expanding across multiple customers, with both series positioned for multi-year growth due to higher dollar content per XPU, an expanding customer base, and a rapidly growing greenfield TAM.

    03

    Signal Conditioning Strength

    The Aries signal conditioning business achieved record quarterly revenue in Q2, fueled by strong adoption of PCIe 6 retimers and gearboxes in AI and general-purpose compute platforms. Taurus also delivered strong growth, with preproduction volumes of 100-gig per lane Smart Cable Modules shipping for 800-gig AECs, and new 200-gig per lane Smart Retimers and Redrivers expanding its market opportunity to over $4 billion by 2030.

    04

    CXL and Memory-Intensive AI

    Astera Labs is seeing renewed momentum in CXL, particularly for memory-intensive inference and agentic AI applications, as hyperscalers seek solutions for memory capacity and utilization constraints. The company closed a new design win with its Leo memory controller at a U.S. hyperscaler and expects volume shipments to two U.S. hyperscalers in 2027 for both general-purpose compute and AI inferencing.

    05

    Strategic Expansion into Optical and Custom Solutions

    The company is strategically expanding into optical interconnects and custom silicon solutions, which are expected to unlock tens of billions of dollars in additional market opportunity. This includes high-density fiber attach solutions, near packaged optics (NPO) chipsets targeted for 2027 production, and fully integrated Scorpio X-Series Fabric Switches with CPO optical engine modules by 2028 and beyond. Custom solutions for hybrid rack architectures and specialized interfaces are also expected to commence shipments in 2027.

    06

    Software-Driven Differentiation

    Astera Labs' COSMOS software platform is evolving beyond basic fleet management to include advanced capabilities like hardware-accelerated Hypercast and In-Network Compute. These features, delivered through the Scorpio X-Series, provide up to 2x improvement in collective performance for large-scale training and inference workloads, enhancing stickiness and enabling direct orchestration of workloads by XPUs.

    AI-generated summary of the company’s earnings call. Not investment advice.