Astera Labs Inc at Barclays Global Technology Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Tom O'Malley - Barclays - Analyst : <_ALACRA_META_ABSTRACT>So why don't we start from a 30,000-foot view here because it's been a crazy ride since the IPO. So you launched kind of talking about a PCIe retimer portfolio. You had three big product portfolios. Why don't we start with walking through each one of those and kind of maybe the Aries product line a little bit more because it is driving the growth today and then we can kind of dive into each.

Question: Tom O'Malley - Barclays - Analyst : All right. So we started at the 30,000-foot view, we're going to hop right into the hot topics now of each so we'll get right into it. So I guess on the Aries side first. So I guess, the big debate in the stock had been, look, with traditional HGX appointment, you had a HGPUs. They were talking to some x86 CPUs, and you had retimers that were sitting across those. There's a debate when you move to NVL systems, would you see the same content there? And you guys initially started saying, if you look at gen-over-gen, Hopper, and Blackwell, you would see increased content. Could you talk about certain ways in which you're seeing your retimer product enter certain applications and deployments when it's not sitting just in the traditional way that you saw with HGX?

Question: Tom O'Malley - Barclays - Analyst : Let me (inaudible)

Question: Tom O'Malley - Barclays - Analyst : So yeah, I'm going to have to Scorpio because I want to talk about the ecosystem and building the scale up and scale-out network. But when you talk about the P switch, X switch, the P switch is traditionally in a realm where you have competition for much larger players, and you're talking about that as a big driver going forward. Can you talk about your competitive advantages because of your success in the retiming market thus far and how you see yourself competitively positioned in that P switch into the next generation because that's obviously driving the year -- well, the generation over generation and content increases?

Question: Tom O'Malley - Barclays - Analyst : And can you talk about the value that the switching product brings to you? Obviously, there's a certain number of channel lanes that are handled by a retimer. When you move into the switching ecosystem, I would imagine that, that expands. Can you give us some form of numbers based or just ideological base and how much more those ASPs can increase there with the P series specifically, and we'll get to that.

Question: Tom O'Malley - Barclays - Analyst : And so then when we look at that, how do we think about the X series? So the X series obviously came in (inaudible) I think that was a surprising bit to some people, at least to me, when you think about, okay, you're really looking at a scale-up architecture and outside, I think you said of the NVL switch, you really didn't see anything like that in the market to date. So two things you're kind of talking about. You're talking about switches sitting in a rack with some PCIe cables that are sitting next to them. How far behind is the Ethernet PCIe world versus the NVL world today? Like when can those deployments start hitting the market? Because I would imagine they come very much in tandem because if you're scaling up, you obviously need the switching ecosystem as well as the PCIe cables.

Question: Tom O'Malley - Barclays - Analyst : And another hard question for Mike is, if you look at the added benefit for the X series even versus the series, like the way that I think about it in my head is you have like an Ethernet switch and then you have kind of a X switch and then you have a P switch, is that the right way to think about it from like a value perspective as well? Is the X switch going to do a lot more? Because you're obviously handling multiple servers potentially versus multiple lanes of a single server. How should we think about the added benefit there?

Question: Tom O'Malley - Barclays - Analyst : Are they not going to use like a proprietary PCIe or Ethernet standard when they settle on their ultimate design or will there be variables? I mean, the idea is that it's standard space, but this goes back to the question of like which way is the market moving? Is Ethernet going to come down with active electrical cables running Ethernet? Or are you going to see PCIe cables like do you guys have a preference for which way that world goes? Because you kind of serve both markets, right?

Question: Tom O'Malley - Barclays - Analyst : Super helpful. Why don't we switch over to the Taurus segment. So you've recently seen some evangelizing of that market. Marvell put out an announcement with Amazon talking about a large agreement including AECs, et cetera. You guys have talked about shipping to hyperscalers. Can you talk about -- this is more of a comment on the industry in your eyes, why have AECs seen this inflection point? Is it really the upbringing of custom silicon? And when you look at your product versus your competitors' product, just you've explained the form factor difference already, but what else gives you an advantage to kind of keep market share where you guys are at today?

Question: Tom O'Malley - Barclays - Analyst : When you guys look at your Aries portfolio and your Taurus portfolio, you guys have talked to the entire ramp about how you are exposed to all hyperscalers. Can you talk about different concentrations among those two? Is it more focused on one customer in the Taurus portfolio or is it still servicing kind of everywhere? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:20PM, ALAB.OQ - Astera Labs Inc at Barclays Global Technology Conference

Question: Tom O'Malley - Barclays - Analyst : Okay. Let's move to the last one in terms of Leo. So I think that this is oftentimes in my conversations is the most difficult one for investors to grasp just understanding how there's a memory wall and how we're knocking on that door today. And ultimately, people will just be [able to] looking towards memory pooling and AI. Could you talk about the first stage for you guys with CXL, how are you guys going to enter that market, and how is that differentiated from kind of the end state where you do look more like cooling, but what's that first step?

Question: Tom O'Malley - Barclays - Analyst : Got you. All right. So if I look at all these product portfolios back to Mike. You obviously, versus the IPO model when you guys first came out, you've introduced a new product family, and it's rather significant. I think you've talked about something about 10% of revenue or maybe even more going into the calendar year '25. It's a chip-based solution, so I would assume gross margins there are generally a bit better than if you're looking at an entire product. How does this change the gross margin trajectory into kind of '25? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 11, 2024 / 9:20PM, ALAB.OQ - Astera Labs Inc at Barclays Global Technology Conference And then going forward, obviously, it's a little different than you initially laid out. It seems more favorable. Is that the right way to think about it?

Question: Tom O'Malley - Barclays - Analyst : Got it. And then in terms of your ability to keep spend at a place where you get leverage in the model, can you talk about what you're doing in 2025 to make sure that this massive uptick in revenue kind of goes to the bottom line?

Question: Tom O'Malley - Barclays - Analyst : So in terms of capital priorities, investing in the business is one. In terms of your technology profile, it's so interesting, if you look at retiming in general, it cuts across optical, PCIe a variety of different form factors. The one area where you guys don't play is kind of like the optical DSP space, which is where there is an incumbent. In terms of your technology profile, do you think that there's any areas that you see kind of on the come still? You've surprised us twice already, so it's a little much to ask you for something else. But where do you kind of see the next direction of the business going? Do you feel like you've now kind of revealed all of your cards in terms of your technology profile or are there still more to come?

Question: Tom O'Malley - Barclays - Analyst : Well, it's been a great couple of months. Congratulations, and thanks for being here, and look forward to great 2025.