Astera Labs, Inc. (ALAB.US), often referred to as a "small Nvidia," reported fourth-quarter earnings and revenue that surpassed expectations. However, its stock price fell sharply by up to 10% after hours because the revenue failed to meet the high expectations of some analysts.
The financial report shows that Astera Labs' Q4 revenue increased by 92% year-over-year to $271 million. Nevertheless, some analysts had previously projected the company's revenue for the period would exceed $280 million. The company reported earnings per share of $0.58 for the fourth quarter, beating the market expectation of $0.51. Net profit was $45 million, an 82% increase from $24.7 million in the same period last year.
The company stated it expects first-quarter 2026 revenue to be between $286 million and $297 million, above Wall Street's expectation of $259 million. Adjusted earnings per share are forecasted to be in the range of $0.53 to $0.54, compared to the market consensus of $0.52.
Astera Labs CEO Jitendra Mohan attributed the better-than-expected performance to growth in its Scorpio structured switching chip and Taurus Ethernet cable products, which together accounted for 30% of total revenue. Mohan stated, "The bottleneck is increasingly shifting from compute to connectivity, which is our primary battlefield. This provides us with many opportunities for sustained growth and to outperform the overall market growth rate in the AI sector."
Concurrently with the earnings release, the company announced that Chief Financial Officer Mike Tate will be stepping down. Desmond Lynch, currently the CFO of semiconductor company Rambus, will succeed Tate on March 2. Tate will remain at Astera Labs as a strategic advisor to the CEO.
Additionally, Astera Labs announced on Tuesday that it has issued a new warrant to Amazon, allowing it to purchase approximately $466 million worth of company stock. According to a regulatory filing, as of December 31, Amazon held $43 million worth of shares in Astera Labs.
Astera Labs also announced the establishment of a research and development center in Israel. "More than any other factor, our biggest constraint currently is the availability of resources," Mohan said. "Therefore, opening a design center in Israel is a crucial step to access the local talent pool."
Founded in 2017 by former executives of Texas Instruments, Astera Labs went public in 2024 and has chip supply agreements with customers including Nvidia, AMD, Intel, and Amazon.