Astera Labs Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Astera Labs ALAB reported second-quarter 2025 non-GAAP earnings of 44 cents per share, surpassing the Zacks Consensus Estimate by 33.33%. The company reported earnings of 13 cents per share.

Net revenues surged 149.7% year over year to $192 billion, surpassing the Zacks Consensus Estimate by 11.1%. 

ALAB shares rose 17% in pre market trading. Year to date, Astera Labs shares climbed 2.4% underperforming the broader Zacks Computer and Technology sector’s 11.8%.

ALAB’s Top-Line Details

Astera Labs is ramping up production of its PCIe 6 product portfolio for customized rack-scale AI systems. Scorpio Fabric switches won multiple design wins in the reported quarter.

The company saw strong demand for its signal conditioning portfolio, driven by PCIe scale-up and Ethernet scale-out connectivity applications in custom ASIC platforms.

ALAB’s Operating Details

The non-GAAP gross margin was 76%, contracting 200 basis points (bps) year over year.

Research and development expenses surged 66.4% year over year to $66.7 million. 

Sales and marketing expenses decreased 15.7% year over year to $18.6 million. General and administrative expenses decreased 7.2% year over year to $20.5 million.

The non-GAAP operating margin was 39.2% compared with 24.4% in the year-ago quarter.

ALAB’s Balance Sheet Details

As of June 30, 2025, cash and cash equivalents were $1.07 billion compared with $924.7 million as of March 31.

ALAB Offers Q3 Guidance

Astera Labs expects third-quarter 2025 revenues between $203 million and $210 million. The Zacks Consensus Estimate for revenues is currently pegged at $181 million, indicating 60.1% growth from the year-ago reported quarter.

Non-GAAP gross margin is expected to be roughly 75%. Non-GAAP operating expenses are expected to be between $76 million and $80 million.

Earnings are expected between 38 cents and 39 cents per share for the second quarter. The consensus mark for third-quarter 2025 earnings is pegged at 34 cents per share, suggesting 47.8% growth from the year-ago reported quarter.

Zacks Rank & Stocks to Consider

Astera Labs currently carries a Zacks Rank #3 (Hold).

MKS Inc. MKSI, DoorDash DASH and Lumentum LITE are some better-ranked stocks in the broader Zacks Computer and Technology sector. Each of the three stocks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MKS shares have declined 11.8% year to date. MKS is set to report its second-quarter 2025 results on Aug. 6.

DoorDash shares have appreciated 52.3% year to date. DASH is set to report its second-quarter 2025 results on Aug. 6.

Lumentum shares are up 28.8% year to date. LITE is set to report its fourth-quarter fiscal 2025 results on Aug. 12.

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This article originally published on Zacks Investment Research (zacks.com).

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