Astera Labs shares fall 4.6% despite Q3 profit and sales beat
Astera Labs (ALAB) shares fell 4.6% in regular trading despite Q3 revenue of $584.9 million and non-GAAP EPS of $1.32, above the $561.82 million and $1.21 consensus estimates.
Key takeaways
- Astera Labs (ALAB) reported third-quarter revenue of $584.9 million and non-GAAP diluted earnings of $1.32 per share, both above consensus estimates of $561.82 million and $1.21 per share. The company expects fourth-quarter revenue of $730 million to $750 million. Its shares fell 4.6% in regular trading on Nov. 4.
Astera Labs (ALAB) said on Nov. 3 that third-quarter revenue reached $584.9 million and non-GAAP diluted earnings reached $1.32 per share, topping consensus estimates. Shares fell 4.6% in regular trading as of 3:59 p.m. ET on Nov. 4, from a regular-session close of $233.62.
The company makes semiconductor-based connectivity solutions for rack-scale AI infrastructure. It works with hyperscalers and ecosystem partners.
Here's how the company did:
- Revenue: $584.9 million vs. $561.82 million expected, and $230.6 million a year earlier
- Non-GAAP diluted EPS: $1.32 vs. $1.21 expected
- GAAP diluted EPS: $0.99 vs. $0.50 a year earlier
- Non-GAAP operating margin: 44.7%
Revenue grew 49% from the second quarter and 154% from a year earlier.
Revenue has risen in each of the last three quarters, from $230.6 million in the third quarter of 2025 to $392.4 million in the second quarter of 2026, according to its SEC filings.
Chief Executive Officer Jitendra Mohan said the Scorpio line "ramped to high-volume production" and became the company's largest product family by revenue.
Fourth-quarter outlook
The company expects fourth-quarter revenue of $730 million to $750 million.
It forecasts non-GAAP gross margin of approximately 72% and non-GAAP operating expenses of $194 million to $200 million.
For the fourth quarter, the company expects GAAP diluted EPS of $1.13 to $1.17 and non-GAAP diluted EPS of $1.62 to $1.66, on about 187 million weighted-average diluted shares.
Product and platform updates
The company said Aries 7 products are expected to begin sampling in the fourth quarter of 2026 to select hyperscale, OEM and NPO customers.
Orion rack reference and system designs are on track for availability through OEM and ODM partners beginning in the first quarter of 2027.
The Leo 2 E-Series and P-Series support CPU-attached DDR4 and DDR5 memory expansion, according to the company's press release.
Costs and balance sheet
Stock-based compensation expense was $82.6 million in the quarter, compared with $40.7 million a year earlier.
As of Sept. 30, accounts receivable stood at $284.3 million, up from $83.2 million on Dec. 31, 2025, and marketable securities totaled $1.17 billion.