Astera Labs Forecasts Revenue Acceleration as Product Mix Shifts
The connectivity company projected third-quarter revenue between $540 million and $560 million following a record second quarter.
Astera Labs (ALAB) reported record second-quarter revenue of $392.4 million.
The semiconductor company is seeing a rapid shift in its product composition. The timeline for Scorpio fabric switches to become its largest product family has accelerated, reaching that milestone one quarter ahead of prior expectations.
Revenue rose 104% year-over-year from $191.9 million in the second quarter of 2024. The result also represented a 27% sequential increase from the $308.4 million reported in the first quarter of 2025.
Profitability metrics showed diverging trends. Non-GAAP operating margin expanded to 39.1%, up from 36.2% in the prior quarter. GAAP operating income rose to $89.2 million, compared to $61.8 million in the first quarter and $39.8 million in the second quarter of 2024.
However, margins on a gross basis compressed. Non-GAAP gross margin fell to 73.7%, down from 76.4% in the first quarter and 76.0% in the second quarter of 2024.
The company expanded its Taurus signal conditioning portfolio during the quarter, adding 3.2T Smart Retimers and Smart Redrivers designed for 224G Ethernet and UALink connectivity.
Astera Labs expects further margin pressure as it scales. GAAP gross margin for the third quarter is projected at approximately 72%, a decline from the 73.3% achieved in the second quarter.