Astera Labs, Inc. Common Stock (ALAB) 4 Nov 242024 Q3 Earnings call transcript

Hello, good afternoon. My name is Jeremy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Astera Labs Q3 2024 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Leslie Green, Investor Relations for Astera Labs. Leslie, you may begin.

good Quarter and XXXX and Astera to Jeremy, Third Labs Earnings you, afternoon, welcome everyone, the Thank Conference Call.

the Co-Founder; and on Executive Chief Financial Co-Founder; us call Jitendra Tate, are Joining Mohan, and Officer Mike and Operating Sanjay Chief President Officer. Gajendra, Officer and today Chief

is call those contained materially not uncertainties related differ those results, this the statements or implied. IPO. these events statements occur, expectations that future any everyone impact strategies forward-looking differ assumptions release and cause time forward-looking forth forward-looking things, these SEC, our including actual risks could are factors company's today In beliefs, and we forward-looking discussed or and current or file on may of could results forward-looking operations Before the remind extent from from statements have started, events and expected in results reflected possible to made management's risks which comments that to uncertainties regarding, with combination the These the all predict It would in I earnings today's we materially and may certain get to other factor and any the which subject are future time include and light during results, which of financial discussed and set in plans, inherently relating to circumstances in to may to uncertainties statements. an actual risks management not among or in operate. markets like that periodic this to and the call future prospectus assumptions, and the final anticipated in for the risks we reflect reports about from statements

over or earnings today, non-GAAP GAAP measures in to financial undertakes conform our the accordance discussion which U.S. these issued required refer of on after why result between and which are during by as CEO call is an portion based be call as These through prepared financial results of to of of new consider our be release Jitendra update as with obligation our and of as today, events and in available statements to non-GAAP our the or financial the this our the our also would will statements with to the the of we All website GAAP. A like date law. in are accessed management Relations website. information, no can and and expectations, future financial to I company of call, a to we use of of we reconciliations accessible measures substitute the in to information this to made such will through a measures financial measure superior the provided certain filings turn Investor performance. Also SEC, Labs. company's Astera important Relations will available except in not for addition non-GAAP non-GAAP measures, that, which Investor be also portion we included With to Mohan, be changes to

QX Thank year driving of Leslie. fiscal will into trends call deeper XXXX. delve a for to Today, Sanjay thanks afternoon, turn will by followed announcements, over strategic discussion growth conference the strategy. quarter several then our I market and the for a opportunity. call provide recent around product key company-specific secular you, joining our our to our everyone, third Good quick I overview, and financial discuss

Mike QX provide additional Finally, details our our on financial guidance. QX will results and

million, quarterly and which last at XX% up versus prior our $XXX setting consecutive for revenue delivered fifth the quarter XXX% from year. Labs Astera results, up strong was QX record the

across AI QX both sales guidance. ramping a new entered developed third-party accelerators, has drove and internally GPUs business our Our platforms, phase versus AI the product featuring families upside growth multiple which with

leverage with strong margin We $X.XX. during to expanding QX, of operating non-GAAP also delivered over operating demonstrated non-GAAP XX% EPS and

AI and AI to intelligent AI a momentum PCIe and fourth The start our performance up AI Series family, Summit, and Fabric opportunity customers. AI-specific to the and total expect functionality Scorpio AI and driven with mission and Looking the our modern the The modern our Scorpio we X platforms. for in X solving in clusters and connectivity XXXX. Scorpio productivity increasingly model more of for is Smart Astera with Switches X Labs' data our differentiated the purpose-built announced product demonstrated for than and PCIe software our delivers We opportunity cases continue, expand AI Fabric X fabric developments size the the Global At of by use grow solutions. keeping more with line, QX, At the Scorpio Switch our ever-increasing meaningfully Gen AI with with OCP partners. expands product and product improve the hardware at estimate reasoning into connectivity AI present hyperscaler with which efficiency and currently parameter switch, growing alignment to market scale-out the infrastructure to complex the lines. preproduction Aries of speeds scale AI head while which address Scorpio family platform sped large The our trillion Ethernet infrastructure. multistep devices we of enhance preproduction workloads faster, XXXX market to P-Series criticality out Series. tremendous retirement our complex the revenue These scale for Taurus continues Fabric that clustering models $XX server in from sizes, continuing for largely cloud value family The which our both first volumes note is current by within products families industry's GPU volumes. these was clusters. recent platform our Ethernet of higher accelerators. billion up beyond devices directly server QX, Extending shipping close AI and unlocks ground Express family connectivity across devices Smart a to accelerators for footprint we and Scorpio ship and will Switches, class challenge scale the for up P-Series memory, with of networks. class opportunity PCI CHL controller challenges applications

already We wins of Series ecosystem are strong X that happy product our accelerated recent launches further to report both have we P and design and interest. customer Series and Scorpio that

Labs expect of the platform member we and Link, open along platforms. further as customized GenX, providers. on Directors, important Further places at Consortium, Accelerator hyperscalers quarters, latency a family industry industry-leading joined promoting UALink of low high-speed, with interconnect Ultra the our the business an connectivity the opportunities and Scorpio accelerators. Board Astera scale coming forefront market our PCIe and us This expand the for platform-specific Over Gen up expanding X between advancing across developing product for to PCIe has AI connectivity opportunity, initiative

Astera Labs' initiative. along solutions, compelling uniquely track deep execution makes suited technology advanced expertise necessary and a to of connectivity with us industry developing silicon-based record contribute in strong to this

have execution unprecedented increasingly family. refresh Scorpio Aries, strong they their We trusted center will at in we pace cycles. shorter an scale. and new partners deploy with date, relying Hyperscalers their product LEO on Taurus, our demonstrated data To shift hardware AI and as infrastructure are towards platform now

to Fabric software hyperscaler necessary our Smart data, Gajendra position let products portfolio, memory with and me part discuss for additional of as our infrastructure, bandwidth system our their Sanjay tools the multiyear customers monitor customers new With Labs Switches Astera product to our some of hyperscaler the to cementing delivering over of our and provides turn and health call to and COO, including customer product Labs. unlocking and value capacity Scorpio to a To conclude, strategy. observe expensive growth President ensure our recent networking, Astera our announcements increase infrastructure maximum critical Our long-term the utilization. expanding AI and growth increased the trajectories connectivity that, is

good Jitendra, everyone. Thanks, afternoon, and

We factors: believe new the and First of entered outlook for company going we with In strong we business. new significantly to diversity is the diversified based Overall, high-volume form at product results factors increased on our and QX. financial our are business pleased key X XQ, have production. with a phase our QX lines

new also on multiple AI accelerators along continued platforms the These customers with momentum a on XQ. multiple growth together helped based achieve at internally to with sequential started record platforms. AI developed AI in go ramping We GPU-based third-party

for has Astera dollar Second, trajectories. opportunity Labs with an the value and higher our introduction our new additional of Scorpio increased smart significantly growth to expanded. unlocks fabric AI line customers multiyear hyperscaler delivers platforms in content product switches, market This

our Let drivers me more explain detail. in business

Taurus DSP cable smart This retimers and XXX-gig product As now factors Ethernet modules generations PCIe X.X modules for electrical noted, and Aries have cables. form XXX- multiple includes for we smart active and smart and in cable high-volume production. lines

fabric volumes preproduction solutions for controllers customers for therefore, products shipping times ASPs. deliver CXL and for also our new higher head LEO PCIe and Scorpio to memory switch are these node All value We command connectivity. increased PCIe X.X

data to Our predictable fabric opportunity connectivity switch per note delivers a multibillion-dollar addresses with incumbent performance ground-up Gen first a PCIe for solutions. and designed mixed-mode market PCIe head flows Scorpio X watt architecture compared AI maximum in

switches believe of X activity for GPU and wins dollar leverages PCIe platform-specific we introduced content architecture opportunities we for clustering suite larger connectivity and scale-up internal systems X our with market accelerator racks AI our fabric cost opportunities P-Series cases. customization bandwidth. accelerated which between accelerator features Scorpio a launch a of implementations Gen back-end include more variety to diverse across can support Overall, and accelerator platforms on GPUs. a AI its in Taurus based lines our unlocked Interest The new bullish even across differentiated currently is per software since for AI on with This in opportunity both Scorpio multiple portfolio valuable our Scorpio the product and preproduction with our opportunity former accelerator-based maximum GPU has scale-out P-Series for homogeneous are leading reach internally third-party the engaging and Scorpio spectrum customized PCIe we and built the developed extension hyperscalers flexibility. X Series upon are to Aries support be additional as for that We platforms. design very with upon entire and use These newly design increasing software-defined market series has provide X in to quantities product design third-party and for result, platforms. third-party shipping on given Gen GPU-based platforms qualification are and for within both Astera's

will developed Scorpio. ahead we product AI ramp to accelerator-based XXXX, across families, Astera As that Taurus multiple we will platforms designs and begin Labs to incorporate new Aries, look internally including

within on purpose focused dollar to in space requirements the general will across platforms, growing to faster we we laser continue PCIe, opportunities and result, product accelerator from our AI we families, within leading next-generation transition Though purpose continue substantial. a AI benefit large compute trails computing the As for bandwidth deployments. these market size increased general systems market AI and adoption while see the remains the to content CXL infrastructure remain per Ethernet

Our Intel and AMD. to introduction ADS compute the of business PCIe Gen within and transition CPU general peripherals of poised speeds the from from benefit purpose new X is to generations

of We also production volume networking friend platforms. our Taurus end are server general-purpose SCMs across for hyperscaler ramping

adoption ecosystem in through We we positioned are rates years. to capable Labs cloud entered coming cloud AI expansion tailwinds across believe new combination controllers a of opportunity Astera outpace of a server silicon industry in strong has content deployed are phase new well the expect our see summary, platforms. of CXL broadening over growth LEO as memory growth general-purpose to and the secular we and infrastructure In CXL CPUs the and

partner corporate the Fabric tested Smart programs connectivity for a solutions strategic our over strategic journey. introduction have Switch and trusted scale-up of and The next the our to across customers XX nearly major smart deployed globally. AI our the family become in We field is enrollment million with all step and Standard connectivity with widely UALink infrastructure Scorpio critical

within for optical that solutions our partners Astera's and accelerators connect to and solutions technologies We or across expand with that rack copper new are will fabric center. to the footprint work from at AI develop the connectivity data collaborating retimer identify hard

over energy discuss within will have we and financial results come for turn the our urgency company who call a Tate, way. to outlook. CFO, While It's lay our the opportunities I QX remarkable will Mike that long a With QX our and the that, ahead. sense of

press GAAP today's effects. for to and outlook on basis. stock-based reconciliation of joining non-GAAP to release everyone compensation metrics and our tax will Thanks, presented QX section a refer our non-GAAP income thanks Sanjay, of as financial well to our of overview Labs and for on website call. available and guidance on our be related its Please measures details results as financial The difference the This QX is in a on Relations call. the Investor primary both Astera QX financial more non-GAAP this GAAP non-GAAP

$XXX.X XXXX. QX the in For XXXX, revenue quarterly record was than XXX% previous the quarter million, of and versus Astera which QX of of up Labs revenue XX% higher delivered

we we all manufacturers, AI X and quarter, products hyperscalers revenue and accelerator the shipped During product across all to of recognize our families. major

multiple on ramp Aries diversify hyperscaler family the designed applications purpose gig and are customers' beyond preproduction featuring LEO our platforms. with be by XXX-gig to capable of and both platforms be as ramps XXX quarter. QX platforms production to continues their CXL new developed this our of which AI Aries driven internally third-party Our next-generation started upside revenue customers. contributor compute GPU-based for into general by to the CXL compute revenues with revenues revenues AI Ethernet-based product purchasing being continue AI drive initial in QX, systems development in largest an Taurus well sales our continued our systems. are from strong Also driven helped as accelerators momentum volumes

million, was with ship to than XX recently Lastly, up a mix. driven million family QX XX% during XX%, gross QX. and in driven for better $XX.X quarter, we of Interest non-GAAP general additional to announced operating began QX by expenses, Smart XX.X%, conversion XX.X% million. sales in Scorpio Switch non-GAAP volume greater-than-expected opportunities. Within our was up Non-GAAP $XX.X product QX hiring in basis of and were XXXX expenses expenses operating expenses was previous margins marketing $XX of preproduction from volumes pushed support was aggressively by and million outpaced compared expenses QX XX.X% points down sales million. was $XX.X margin higher QX demonstrates and and from operating favorable our the as during income Non-GAAP administrative operating the $X growth Fabric strong were higher and was leverage $X.X quarter expenses. revenue for operating QX we million, QX, commercial and as in guidance R&D

quarter, our tax XXX.X fully which non-GAAP tax Cash basis. Our QX was share $X.X million quarter provision earnings non-GAAP share QX of was the per million quarter from a million shares, $XX.X ended Non-GAAP and cash with cash, the for represented a $XXX on diluted flow for and non-GAAP securities XX% rate the for diluted and for $X.XX. was operating equivalents was of activities we marketable million. count

for our to turning Now of fiscal guidance XXXX. QX

QX to million, $XXX $XXX roughly quarter. prior a million XX% expect within We and range from revenue to the of to increase XX% up

applications, from are platforms, Aries we to XXX-gig our our P-Series set expect QX, growth switches. for which a preproduction and and additional For product family from Scorpio AI of continued across of diverse some of just strong starting shipments Taurus also SCM ramp our

XX%. solutions approximately margin the driven expected product is during sequential mix hardware by an to shift margins decline gross non-GAAP be towards expect The gross quarter. We in

non-GAAP of R&D property. operating expenses pool as a approximately Interest to to million We to expand million we in continue is $XX approximately headcount range million. across expect be $XX expected $XX our resource intellectual and to income be

line range our open of questions. Operator? And up up, appreciate all non-GAAP Adding XXX again, of diluted expected will the should XX% $X.XX. is approximately be non-GAAP fully million joining a shares. This our share per expecting now be share we to we this everyone and concludes Our call. And for count earnings approximately to diluted we fully tax and remarks. once prepared approximately non-GAAP rate $X.XX are the

JPMorgan. comes [Operator question Instructions] from Harlan Sur Our from first

On starting retimers, second year. in your year, got which strong And customer they're We've the strong I ramping new results. of lead products, strong your where looks based this share the are like shipments ASIC also your with retimer but SCM of first core, like products of Gen and Scorpio of is very think, year, merchant next I the firing. Switch XPU on your Gen the think somewhere still XX%. AEC in year. be is ramp ramping Majority this GPU to next both firing, business range customers, SKUs are your half half market looks now, going X X Congratulations still of,

for assume half activity, can all you your strong. if second sequential year given of versus Maybe your So growth least just visibility of sort year? next quarters this a first quite I over of next at articulate on half the driving is of this visibility qualitatively or several strong confidence

Yes. right right designs streams kind revenue is always where backlog our our of -- entering as of with the phase Yes, visibility also but we're of both Harlan. we breadth position, Thanks, growth diversifying. very really new strong, a our now, are now, clearly here have

the a that look If and now at we're ago, very we're year breadth excited in. designs lines you versus right of about product ramping

of back the ramping that are also continues tours programs incremental, very in just tours we're and half and the getting on has in that year, So been QX this Obviously, started.

tourists confidence the have you nicely we alluded story Gen X So that good into as continue lot legs. Aries, of XXXX. to still to, got will grow a

those front-end line been designs, as next in are of technologies starting of we but these shipments a both we're And our sight Gen of being have talking Gen merchant are about to year We an marketplace, in top the with Leo the these types lot first LEO, have the with on while, start that of well. are middle with products the Gen adopted and happy X of will that we've connectivity. boost Incrementally, for we we both then that. on connectivity new quite play starting. year. have the just production the And finally, with internal and X, X, GPUs, do ASIC report get to to but And the ASP also a out back-end

the has stack And some on with adopted that traction the how data silicon your switch your Okay. the your on have their systems differentiator software team center is the of you're of performance Scorpio it talked then level with your but into COSMOS chip which portfolio, for both now monitoring, management level, sort adoption, already retimer much current at and early getting Scorpio? benefits, familiarity, customers that switch linked performance, with the is you've big software stack, But parameters, same stack products, is so on traction stuff, into kind you've critical and of that products Aries the a your the enables managers. linked of telemetry, all up integrated software tuning data built differentiator center got

this Jiten. that is Marni, Scott There And absolutely things are differentiate you're right. family. Pure several

would I up built from say foremost, ground that and First this AI applications. we for

think of are that. server they different storage like you generally for from and quite If things switches, were Express PCI about applications deployments which historical built for AI.

for So the the put We AI designed these AI we required performance applications. applications. for chip that's in

factor such even ended addition, building In designed not high-speed the board. that you all than has so device -- a form for the are up large a over rather AI running building smaller been signals we these switch,

that of very AI. purpose-built for is all So

point your -- software, about are to approach. a Now our architecture as software-first you with remember, chips

other deployed data with families of provide can information. and we our the as a family, customization the is access more to can we GP information infrastructure especially view from collecting AI of Scorpio we lot something such our and connectivity. family lot GPU to the holistic in that which customers diagnostic have operators. based couple looking are X even Taurus deliver the hyperscaler for, Aries a more a center we deployed is the that to sits, Where So homogeneous which COSMOS, on that for are a to

the with for the So purpose-built as stack differentiator both devices hardware well is of nature side, that as software the comes it us. big the these of a from kind

next Our comes Moore of line the Stanley. Joe from question from Morgan

be for give terms the ramp an qualitative XXXX. a very a number. you could of I big of us would sense in helpful. gave Congratulations discussion about talk that could kind if it what you on like? how wonder of Any be in looks number Can Scorpio the business for you --

release, Thanks, what's Joe. excitement the incremental exciting is, Scorpio we're Yes. base. for of neat lot that family a designs public we're What's the diversity a getting since about Yes. is And of seeing. really customer our product

that first of X there's being the are well with we're backwards because X that there's clearly, as So But a a still capable addressing Gen interest in switch, X, a compatible. application. with opportunities lot of lot Gen Gen it's that developing

does both kind have and So us. opportunities design the connectivity, are as well. for of And then incrementally, open the greenfield that we opportunity back-end Series X a that's

little So customized these systems. more designs generally are a

bring qualification a bit up lot the in little is a the cycle more long. So

get do we always we XX% our -- ramp of they given overall, that as take production we of most rate Scorpio the deployments into a good conservative our during going the on revenues XXXX. a So to of and with we very view business. exit in the But and year year good XXXX. And into run at how like the course expect exceed momentum

And year of talked factor bandwidth. this LEO, that then maintain are particular, actually next count on a CPU in and talk as reduce well? the able the application? that application, you as great. this And about about memory to servers being you just seeing high-memory That's I ramps large Can there. of material these you some guess

Yes.

Yes. Sanjay here. is Joe, this So

maintaining So to I bit a of been time mature. technology, we new any for with little think have like it things takes

by CPUs. overall using additional get by standpoint, that is done you're have less adding higher for by But we to the case LEO capacity. significantly are use you at look enable TCO is of able what the server now, in-memory more cases past, the crawl than the only of CPUs stage. from use performance the memory right of box adding X transition an emerged to them CXL that the there, provide key But was noted, is large we additional channels. X more how memory stage And So not to becomes the is from it's one do into what the In this or it's added way the database There demonstrated One have sort a you applications. walk memory. which

that's that, said applications, been various So type that, disaggregation think of deployed year, of including for case key being you have applications, deployment platform one But from might standpoint. level seen some I that we having this solutions use OCP use our amount see of a videos and at of tremendous the high-bandwidth that cases. level there's all different were HPC some rack

So which different to that ways can there are any in develop. just requisite new software before will standpoint, technology, the take the time ecosystem like and technology some many it But is built.

So period we right expect getting those we XXXX when production are to now, that is the place, in volumes and pieces in begin.

comes of line question Curtis next Blayne Our Jefferies. the from from

wanted to the last of I you, ask September about you kind growth. quarter, talked

of it million was kind of think and was Taurus. the cabling like said I kind of and retimers, X/X you X/X $XX X/X loosely PCIe it

of not to you in us completely, expecting double I'm that. kind So dial but

between So if also, a I'm has the add obviously, not And GPUs, the just with a now. then seeing that's and you're vendor strength ramp just kind accelerators big of bit exactly curious, color. more you coming between AI little but your GPU products, could Blackwell,

strength So kind what's I'm in a September bit little the December of more. just and driving curious

with Yes. Yes. with of ramps of our from multiple both Taurus the big, really and In The not kind across well driven that contribution new And AI revenue, seeing strong multiple accelerators. lines. the consistent developed hyperscaler Aries' largely SCM And from one. were just platforms strong was Aries benefiting product Those business as both the quarters. the ramps to we're on really guidance strong also ramp but customers, internally our upside was third-party expectations. Thanks, Blayne. on so the QX, the for it's GPUs, is

revenue. largely that Aries was upside by driven the So

blend line. the And of modules on you ramp, of products then, you would of some it dilutive it or PCI how be of greater addition margins bit think Taurus about year? before you do about do to you it's Mike, we the Scorpio have How do switches talked product switch little sale. ask want margins when kind XX%, with How I next versus chip not if the the -- maybe a like But because than that a Aries? think to

Yes.

be So margins. a broader for Scorpio, will There's different cases. of use range there

and impact product are when margin depends set kind this of beyond overall, all But up the it not our just our targets. believe of seeing the Scorpio, margin though, at we long-term targets of XX% will was a profiles and Scorpio those So volume. wider on portfolio. we functionality contemplated we across point, I'd it range say gross

So perspective. mix But be a XX% contribute to about will still target. quarter-to-quarter feel from good important we the

Our next of Barclays. the O'Malley question from from Thomas line comes

My first one is for Series Scorpio. just on X the

bigger longer about opportunity competitive think seeing talk your for X P-Series? PCIe. the is you term, Just talk I would Series in you're seen first of switch? we've you back-end think you marketplace the kind the Could the And of are an a is this real dynamic there? expect switch kind you're than that ahead? that in P-Series And you where competitively? just from about the opportunity the far do positioning How you think perspective, same

Tom, question. take let the This is me Jitendra.

three there. So in you questions have

a get So you follow-up. don't

series let question, me first the P So first. the ask you

applicable So all P series is accelerators. of the to actually broadly

the to the connectivity NIC and the to accelerator of the or on. GPU so All or node head from accelerators the require

to supports is [indiscernible] us The X. P Gen So series applicable family them. for all of

as Gen So I that's But ASIC. internally that where socket. the we the X the the as already of the designs at X taking with well same also with developed of time, GPUs are estimate both ASIC, not family. There happen. third-party deployment what Gen should will now, are right the place mentioned some advantages are

of the the you're to double about over $X of outside bigger I that X. plus the think growing We that's that estimate to of longer that do specific with So of require many ex that side TAM. we billion require their for period, to of or have Nvidia count the see also opportunity start can exact Series for on requirements series that minus correct that used we the infrastructure. configuration hyperscalers P-Series. It's P-Series today we with be very and the in because do because we framework both today have. market expect starting not the family think commonly to this And many the they we X cater The X TAM time. and will deploying to TAM the we We is nearly to they ecosystem. over do which designs that a diagnostics and software-defined of architecture, the that the performance. to and able customize have. parts hyperscalers, our architecture on monitor the also the of this, the are But so

do become we to So larger. over X-Series expect time,

I mentioned also market, can play we where another during UALink and that we interconnect. joined that Now another the back-end with have us the opportunity remarks gives consortium,

Helpful.

me Let on I the broke just another there Taurus product rules second is one. one. on I But in sneak the first the know family. the

So proliferating you've that customers? kind when Or you about one that And see kind multiple? consolidated of you customer. to talk Can do your across as within customers? X you the engagements multiple going breadth of look there concentrated been Is out that next largely X or into of to year? historically, expanded to be

Yes. is Sanjay here. This

Let me take that. Yes.

year So we the that will XXXX business think a is get broader.

not it's active active is or meaning AEC every like said, a always electrical case-by-case cable we've electrical situation, hyperscaler cables. uses As

more right? as expect and that need terms XXX said, we do kinds configurations we diversified standpoint, of platforms. gig today. that compute into mean, what our much that business, market to to that higher or There are tourist with do go I modules our so data both it today, have and to So be different on, they at various AC AI in with of than is So if modules going look cables you support. different rates

increase, say will to and are So customer But to fairly the the expect evolve. in want business XXXX our We speeds that overall, as beyond. diversified continue with do today. I we bases

highlighted be the where used every that I With be that the hyperscalers. AEC differ like various note place the will infrastructure would different between will

Our next comes from question of Tore the Svanberg from line Stifel.

And results. Yes. strong on the congrats

be Would X to You year, first preproduction actual QX? do mentioned expect that next production? be the to it you half When in this an quarter. of be that going PCIe Gen is volume in

want time depends it I the say to on line. customers'

But that you communicating. of I RAC shared general, say the in what in past any though, So on with are to we've we are what design our want our customized customers the ins what to don't in speak for would they similar implementation.

wins be third-party to standpoint, of are with and as timing would we that. But based GPUs X engaging where developed opportunities, multiple GPUs. for are And the both and X. that both design we internally as to we between on initial the Gen where in qualification Gen deployment now the general, well had So for

Scorpio you be standpoint, that to in for suggested, Scorpio at like opportunities our to look expect grow. from Mike our excess XXXX, XX% And of our of continues revenue. do So we overall contribution to as overall on

I And in That's very follow-up PCIe to had a helpful. business. retimer question Scorpio relation on your

it switch, So where be meaning mean, I else's would pull pretty the customer other, with instances -- Or retimer fibers? each software? somebody go hand, PCIe do a in they could there's those hand typically a especially switch much given

Yes.

retimers our and snapshot from So look deployment at products match, with right, meaning it's an least industry if Gen today's vendors. at with you mix switch get other used standpoint, X, from

-- our configurations. We software-based because us optimize customize system-level to architecture, have for uniquely it and different allows gone of

today. what is is it that So

they've across see Going of feature customization is the advantage framework, do because we type an some and forward, have the very our if devices. of the all COSMOS, using run able for Meaning a products. optimization bring we of today with set COSMOS customer on management integrated framework to infrastructure already the a there. built of compared That's Aries, alternatives top to we out they the will advantage our that be unique easily Scorpio extend to

next from Bank. question Ross Our comes Deutsche Seymore from

results. on of [indiscernible] couple congrats a strong the questions, and

first and importance strongly. point point technology What was the the is Or driving that's the really something just market adopted about Jitendra, that's you there market something up and business penetrating Sanjay the the of ASIC where stronger? itself you being really that the side The that's question, inflection your the of with inflection faster? of ramping too, is mentioned getting

Yes.

doubled I public ASIC So knowledge investment own of think down terms programs. their the hyperscalers all ASIC for on now have I the doing in amount designs, the of it's they're think that internal fairly

done and but also have a AI use GPUs, hyperscalers cases starting realize terms money third-party where great workloads. of The are in is obviously, their job, the to

our standpoint, of And of their So from we increased hyperscalers those product been terms internal in seeing have investment an across course, we all to programs. addressing of are, that lines.

be, also note at have the we designs, -- have truly of you if platforms, the the point like caveat end, accelerator-based storage, in GPU that to back our CPU remarks, generally product network, call additional one series So the in several a of platforms. we Scorpio service tends GPU-based not I ramping only one look connectivity internal are internally the only with it, prepared line line. a entered of AI land phase that our like product to AI The and that like play the front-end our third-party connecting where are we business to these generally have requirements also on now, we with -- business, highlighted Aries, which the internally we is terms play get course, developed in fertile multiple developed AI would new we Taurus for And where overall I get in product we can today, then multiple lines X not we there to and our platforms. have

the a this as average per you talked but the a significant platforms follow-up, your pocket on form And ago, that on about these retimer debates shape as one of content quarter because average suppliers. not about I for and you -- especially up, bigger detail, Obviously, that just you or will still statements before that about way, or with we forward, couldn't is the had going back still having content Scorpio believe going Scorpio, us you most something content in were I some today about that's the your still GPU. that big if of be my obviously know third-party topic -- do now we call guess merchant about in revisit more tell

Yes.

were a we the can product like you an which to going from protocol uplift. X. So when two, higher new the PCIe it there because I ASP, Number course, at number generally it of at Gen as value highlighted. were a about That's we each imagine. generation speaking is There talked of line, with is X we Scorpio reasons ASP is of think One before, customers Gen X delivers to one. hinting

GPU wins So content look per overall, we before. today, one we've to up, way if have you at design goes the look at it the dollar that's based on what shared

also we like The of get look platform, that module. play based networks address some to to other Ethernet of we are scale-out terms in is the scale also the developed network, internally at I for it noted, also get way back-end to on Taurus using that

So more overall, AI if that increasing gain internally the the platforms, developed database you additional look more as the line platforms, at to product and are starting they as traction. sort fact speed, of well accelerated

at you is the all when on our look up. average, on So content an them, of

Our next Needham. Bolton question comes from from Quinn the line of

a back-end to cycle I revenues, from the designing the any just clarification networks. just Or family in is longer, Scorpio the scale-up X -- over maybe. being would XX% for the for XXXX P-Series? revenue wanted production Series of follow-up given that think, largely expect But I you

the contribute in for designs revenues. back -- we half but starting both well. to as generally X do have X will P see We the first, and P be of year will designs The both

would that P-Series and would framework provide then per think market it -- a and X the accelerator. can sense or you less rate or X:X, X:X? be GPU P-Series typical X the the expect you retimer Excellent. some Aries per give Is looked for sort for per us there us rates the generally I thoughts be X:X. it look Series GPU at P-Series accelerator, Any Series, be could than for higher the X-Series? any Would than of attach retimer, And you on on for can rate attach attach

Yes.

very question I'll probably to there. of out high are that implementations all there's because a level, points. it's So kinds X share broad

applicable. or is the note first GPU head from generally to it every third-party sense networking, accelerator as matter where P storage well The side, that to it Series In because for the developed could accelerator broadly connect SPU. internally includes comes needs the a work is an as which doesn't

our be it X Scorpio will That's Series. need would use, one that broadly of P-Series one. is device. standpoint, a every GPU very device. that when X:X, to it's used Number So And the number X meaning

really else generally that it that need to depending exposes and on to this Now build obviously keep built. to like these an again, back-end Series a a number the being number GPU is how on the with going Switch you of is depends the everyone Mike And So what NV ports And GPU are of standpoint, to devices device. interconnect, some X are used meaning one, X on it's Series fabric of truly our configuration function configuration, the noted, that of for kind built. is configurations standpoint, to right? and use a case, we device depends are the greenfield aside, if switching functionality, Nvidia is starting addressing how which that is

big general, in will rate dollar attach second and in what mind. we to time, I to for products then we're are pull-in at we're the like And of that where in same the continue that adding continue depending general, talking say to things additional is things both evolve. because are that the that's So building, to with how point grow But would Taurus on and we overall, a keep chip content the about and are functionality working on. devices Aries expected seeing Scorpio. is like And we're other more that

question Lipacis the from Mark next ISI. Evercore comes of Our line from

A question diversification. on the

think can just then product diversify If longer line. by base by you customer term, your and your you

to that? a follow-up. you're skew to I that that would each bucket line a us about you -- out one? would And have be years have Or product AI your would then type you what X XX%, you product still future between have expect merchant how you accelerator then expect If be lines. Is solution? in out? how like player your could be in something pick helpful. X to or X like GPU have years the X will years the think out, X I out, of So player let's versus you just think do help either product thinking diversification your split attached like to will like years time the And have custom out, say,

I of vectors growth will we you way. the Mark, sorry, like going a by that What we're I say much say, is be of too this mentioned. all the not is will to Jitendra, What help.

to with going grow GPUs. are We the third-party

We platforms. ASIC with internally seeing already are the developed significant growth

well over to families at our work Mike of new product product both families devices And contributing are fruit have to we that X the years. and are new will as bear X come of we hard revenue new as products, next said. the as generations already All Sanjay to building

predict will So less we more dominant, to need become or in fortunately, which of dominant that. don't terms

dollars infrastructure own What we are to We requirements. opportunities. Sanjay through over of those in with and customizing that earlier, our expect would to And happy their revenue. as are lot service are solutions is customers, the putting the into a portion interconnect because do to, them a able back-end own internal of and them hyperscalers larger mentioned we time, play deploying say, building both I very out their the become

a if very helpful. follow-up, Got Mike. you. may, I That's And for maybe

able chip inventory to You within deliver on Can the guys have test the originally an the you the fab understand and of package in help then upside order how have balance quarter. your a delivered then you that? necessarily assemble of Can kind Is upside? die -- you do get an order meet have sheet us to mechanics and to you that provided. outlook to of you're to this lot upside and to a the

met just upside how again potential about If you you to could going forward. help and us that think the the do

our customers' want supply that to component given always We to Yes. their in such to a critical able upside we're be to needs, systems.

carry of level weeks as you inventory. of a we look sheet, pretty our at typically So balance healthy

previous from that QX, see the if in well weeks those Now reasonably down quarter. you dropped

So into that the supply inventory that to upsides. was there was

inventory days of inventory to weeks either -- we've customers' in we in, We get our short we demands are to -- the term. seeing where meet up they But come for out increase want can't in in buys our be that position built started never that play QX, to a if already QX.

up they don't on end. their do need stock also that feel they to We so like

we So at channel time. try same the inventory to keep lean very a

have that from Astera's of folks the add volatile way is to the which the hyperscalers, hyperscaler to you would I designed in. early would type say days, terms Just will profile come customers chain designed the upsides one understand. supply service very a was expect of that what to demand from in how address It's is thing that, very, thing of

OSAT So made done if for what you of we one each is stuff. are will, all have and our sources, there multiple of products in terms that vendors that sure substrate and

So purpose profile ways expect it's markets. some been that we done for demand built of very very in in the thoughtfully, these kind

work of how and So initial we some to the gain chain that's from done part laid structure we the out. been stand of as supply have it

ROTH Our next of question comes from from Suji Desilva Capital. the line

quarter congrats the on here. Jitendra, Sanjay. strong Mike,

that a Taurus year, roughly does too next Does diversify to helps go or -- Taurus Aries curious year, Is revenues, minus? high? year? of of kind next the and to get Just how sense grows it looking how and diversify On where but I'm much to sure X/X plus the I'm this ahead that really of products? that not mix is

percentage of as increase a the for revenues. QX to Clearly, is going QX

for strong of don't company. as be of it percentage Beyond X growth what nice broadening I as contributors, the and a other of that, given could granular Scorpio to revenues. predict But the will we Aries, is as think represented our be drivers definitely

Okay. a a share Gen will versus clearly, the very Gen thoughts across what's just similar Aries strong Is understand and strong Gen X, share the expectation the Mike, that? just And guys very Gen on competitive here. situation be X that that's the Or that X share maintain on it you X trying to fares helpful. share share? then

What mean, we look this. biased I a -- obviously, have on

years And February by clearly, lot deployed been since several devices have AI platforms Gen sampling in year. X, our in being different We learned worldwide. X of last this X the a have we

customization accelerators. Gen with XX some the designed of the including the the are X that already Gen about deployed of taken our have how and been for a the learnings being it, times. we We've lot some we've engaged with various required learned So already systems market from are based

have that standpoint, start been from do So and to support to some and standpoint. that now we we backlog we We've preproduction have that. strong shipping a everything that believe a for time

believe no But There we we grounds. will do having to said expect continue a to make that overall, there is that, So front. surprises that in. do market on competition and big we come is

from Craig-Hallum. Shannon Our from line comes Richard final question the of

others capabilities Sanjay still either alluded for switch any press have and response in the for, either from seems one this maintain move here. that like But Jitendra to moving side maybe seems you're competitive their who or what you a you're response competitive market lot are Maybe seeing both? of your or to can talk a sure COSMOS. it I to in seeing And can about forward Maybe getting talk -- from I'm regarding to and Maybe [indiscernible] about obviously, direction. switching, this releases you're you there how retimer you're first-to-market guess, not from standing stickiness barrier trying have please?

great a It's question.

for we've about not we fairly have So year a COSMOS talking now. openly -- software been about our

on. other the Cosmos being is if of X trenches absolutely work understanding ecosystem gone is and and the also kind And the to them. people software by of It to and what realize There in how a around has into that over what lot ASICs other issues to knowledge X fair so what products is in us that some years, the have to software works that. they the we have to something not you assume try will last collection just of is copy similar. want But so a it's APIs of

that all the mentioned, they COSMOS as customers, reliable. in over sampling And that firsthand by And for very you've shoulder-to-shoulder months learnings this gone product Sanjay make make to very system it learnings with again into X So software of X to and seen have gone our -- have rich. all now. software of we've rich Gen been our our being Cosmos

so as So their anybody have time who to level wants of kind that in good. software make to of experience to come and will have

with even Scotia play for network the would to in it things all diagnostics enable customers to of with the what's going of somebody without with find components do. family, our uniquely more can launch on thing is interesting and congestion very other the difficult having we Now like the access that that, and these get we now

we we time. So to very differentiated and it software us, is continue a better and for believe over better COSMOS make

Cosmos, add to The is Jitendra in it part there to our said, a that to point a in in have is at just And trying runs got you've chip. developed that again, X approach. that chips runs defined ways. is within the hyperscalers, software-centric There or part look of make to tax been our what operating but also I'm the the

it make So chip just fundamental more the standpoint, to the of architecture not done to order the and uniquely it's been diagnostics, ship of it's requirements. in diagnostic in things that into various a the customization standpoint, about about that from hyperscalers our ears and making about of has different fleet are management also but eyes how and infrastructure in terms it of terms

CXL in the beginning I'll love at want while guess line, originally that the hyperscalers product another getting examine they're to ask obviously question maybe very made Okay. from, the think the a Wonderful. the that the one you get use on area that that the looking pace to sense developing to follow-on trying whether when Scorpio them My looking and year cases certainty interesting ask yet of back say, thought. you that line were is here. question, of or on I'd and kind LEO announced a in I on sense. year I ago your and general maybe time product of which frame

that think use then? those about next kind about talked design, obviously maybe you mid the of ramping the figuring a frame cases? back year. of expected out time talk by Or and I hyperscalers You experiences Is kind just

established The both, sense case that -- and believe, needs to at vendor the combination done we from have a based memory point, others in new have a work done right, the technology. a be use that, CSL this standpoint. get is we CPU and that is on starting to of There clear

becoming made maybe a I clear. years there now. a X think out. was clarified got those I on year been like that's things But of and So pooling have ago, others bit think probably that little or But overhype

CPU did it's to the dollars So compute of are of support and And CXL. launches, really the area, which, course, cases standpoint, matter use AMD flowing back much a general that real. recently into Intel with the more both for

the I starting add noted But I So like before. it's add all up. caution think will I to

we're to to crawl before with be and stage. running think more are walk we in that CXL. needs is There up in done I that full still some work speed

There are to over time. no further remarks. questions closing at I the call back turn Green Leslie this for

Thank you, everyone, participation questions, for look and to we your on progress. our forward updating and you

conference today's call. concludes This

You may now disconnect.