Astera Labs Q3 Earnings Beat Estimates, Revenues Rise Y/Y

Astera Labs ALAB reported third-quarter 2025 non-GAAP earnings of 49 cents per share, surpassing the Zacks Consensus Estimate by 25.64%. The company reported earnings of 23 cents per share in the year-ago quarter.

Net revenues surged 103.9% year over year to $230.58 million, surpassing the Zacks Consensus Estimate by 11.53%. Growth was driven by new AI platform ramps featuring multiple product families.

ALAB shares plunged 4.14% in pre-market trading.

ALAB’s Top-Line Details

Astera Labs is ramping up production of its PCIe 6 product portfolio for customized rack-scale AI systems. In the reported quarter, Scorpio P-Series fabric switches have won multiple design wins across various AI platforms, including those supported by merchant GPUs such as NVIDIA's GB300 and B300, as well as custom AI accelerators. 

Astera Labs, Inc. Price, Consensus and EPS Surprise

Astera Labs, Inc. price-consensus-eps-surprise-chart | Astera Labs, Inc. Quote

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 76.4%, contracting 140 basis points (bps) year over year.

Research and development expenses surged 55.8% year over year to $78.9 million. 

Sales and marketing expenses decreased 16.7% year over year to $19.4 million. General and administrative expenses decreased 3.3% year over year to $22.1 million.

The non-GAAP operating margin was 41.7% compared with 32.4% in the year-ago quarter.

ALAB’s Balance Sheet Details

As of Sept. 30, 2025, cash and cash equivalents and marketable securities were $1.13 billion compared with $1.07 billion as of June 30, 2025.

ALAB’s Q4 Guidance

Astera Labs expects fourth-quarter 2025 revenues between $245 million and $253 million. 

Non-GAAP gross margin is expected to be roughly 75%. Non-GAAP operating expenses are expected to be between $85 million and $90 million.

Earnings are expected to be approximately 51 cents per share for the fourth quarter.

Zacks Rank & Other Stocks to Consider

Astera Labs currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Computer and Technology sector are StoneCo STNE, Akamai Technologies AKAM, and Analog Devices ADI. While STNE sports a Zacks Rank #1 (Strong Buy), AKAM and ADI carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

StoneCo is set to report third-quarter 2025 results on Nov. 06. StoneCo shares have surged 136.1% year to date.

Akamai Technologies is slated to report third-quarter 2025 results on Nov. 06. AKAM shares have plunged 24.8% year to date.

Analog Devices is set to report fiscal fourth-quarter 2025 results on Nov. 25. ADI shares have gained 7.9% year to date.

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

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