third quarter of fiscal year 2026
Filed Nov 3, 2026Astera Labs Reports Third Quarter 2026 Financial Results
Record quarterly revenue of $584.9 million rose 49% sequentially and 154% year-over-year, while GAAP operating income reached $179.1 million and the company guided fourth-quarter revenue to $730 million to $750 million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $584.9M | up 49% | up 154% |
| Cost of revenue, three months ended September 30, 2026GAAP | 162,147 | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $422.8M | – | – |
| Gross margin, three months ended September 30, 2026GAAP | 72.3 % | – | – |
| Gross profit, three months ended September 30, 2026non-GAAP | $423.6M | – | – |
| Gross margin, three months ended September 30, 2026non-GAAP | 72.4 % | – | – |
| Research and development expense, three months ended September 30, 2026GAAP | 170,957 | – | – |
| Sales and marketing expense, three months ended September 30, 2026GAAP | 37,432 | – | – |
| General and administrative expense, three months ended September 30, 2026GAAP | 35,307 | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | 243,696 | – | – |
| Operating income, three months ended September 30, 2026GAAP | $179.1M | – | – |
| Operating margin, three months ended September 30, 2026GAAP | 30.6 % | – | – |
| Operating income, three months ended September 30, 2026non-GAAP | $261.6M | – | – |
| Operating margin, three months ended September 30, 2026non-GAAP | 44.7 % | – | – |
| Interest and other income, three months ended September 30, 2026GAAP | 12,971 | – | – |
| Income before income taxes, three months ended September 30, 2026GAAP | 192,027 | – | – |
| Income tax (provision) benefit, three months ended September 30, 2026GAAP | (9,083) | – | – |
| Net income, three months ended September 30, 2026GAAP | $182.9M | – | – |
| Net income, three months ended September 30, 2026non-GAAP | $243.4M | – | – |
| Basic net income per share, three months ended September 30, 2026GAAP | $ 1.05 | – | – |
| Diluted net income per share, three months ended September 30, 2026GAAP | $ 0.99 | – | – |
| Diluted net income per share, three months ended September 30, 2026non-GAAP | $ 1.32 | – | – |
| Weighted-average diluted shares, three months ended September 30, 2026GAAP | 184,077 | – | – |
| Revenue, nine months ended September 30, 2026GAAP | $1.29B | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $945.5M | – | – |
| Gross margin, nine months ended September 30, 2026GAAP | 73.5 % | – | – |
| Operating income, nine months ended September 30, 2026GAAP | $330.1M | – | – |
| Operating margin, nine months ended September 30, 2026GAAP | 25.7 % | – | – |
| Net income, nine months ended September 30, 2026GAAP | $416.3M | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | 341,477 | – | – |
| Purchases of property and equipment, nine months ended September 30, 2026GAAP | (73,363) | – | – |
| Net cash used in investing activities, nine months ended September 30, 2026GAAP | (306,791) | – | – |
| Net cash provided by financing activities, nine months ended September 30, 2026GAAP | 7,096 | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Three Months Ending December 31, 2026 outlook
- Revenue$730 million to $750 million
- Gross marginGAAP gross margin of approximately 72%; Non-GAAP gross margin of approximately 72%
- Operating expensesGAAP operating expenses within a range of approximately $273 million to $279 million; Non-GAAP operating expenses within a range of approximately $194 million to $200 million
- Tax rateGAAP tax rate of approximately 20%; Non-GAAP tax rate of approximately 12%
- NoteGAAP diluted net income per share of approximately $1.13 to $1.17 on weighted-average diluted shares outstanding of approximately 187 million
- NoteNon-GAAP diluted net income per share of approximately $1.62 to $1.66 on weighted-average diluted shares outstanding of approximately 187 million
What drove it
- Scorpio fabric switches became the company's largest product family, led by volume production of the Scorpio X-Series 320-lane fabric switch.
- The company described broad-based growth led by Scorpio and said design activity accelerated with wins across a broad set of programs and applications at multiple customers.
- Astera Labs introduced Aries 7 for optical and copper signal conditioning, Leo 2 and Leo X-Series for memory expansion, and Orion rack-scale reference architecture.
- Aries 7 products are expected to begin sampling in Q4 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 Q1 2027.
Concerns
- GAAP gross margin was 72.3 % in the third quarter of 2026, compared with 76.2 % in the third quarter of 2025 and 73.3 % in the second quarter of 2026.
- The filing identifies concentration of the customer base, changes in demand for AI, quarterly revenue fluctuations, competitive and cyclical semiconductor conditions, and tariffs and geopolitical developments as risks.
- Accounts receivable, net, was 284,253 and inventory was 200,893 as of September 30, 2026.
- The company expects Aries 7 to begin sampling in Q4 2026, while Orion rack reference and system designs are expected to become available through partners beginning in Q1 2027.
What to watch
- Fourth-quarter revenue performance against the guided range of $730 million to $750 million.
- Whether GAAP and non-GAAP gross margins hold at the approximately 72% levels guided for the fourth quarter.
- Scorpio X-Series high-volume deployment and the expansion of the Scorpio P-Series customer base.
- Aries 7 customer sampling in Q4 2026 and Orion availability through OEM and ODM partners beginning in Q1 2027.
- Adoption of Leo X-Series fabric-attached memory and the Leo 2 E-Series and P-Series memory expansion products.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $ 209,396
- Marketable securities as of September 30, 2026: 1,168,847
- Accounts receivable, net, as of September 30, 2026: 284,253
- Inventory as of September 30, 2026: 200,893
- Total assets as of September 30, 2026: $ 2,300,333
- Total liabilities as of September 30, 2026: 300,865
- Total stockholders’ equity as of September 30, 2026: 1,999,468
- Net cash provided by operating activities for the nine months ended September 30, 2026: 341,477
- Cash, cash equivalents, and restricted cash at the end of the nine months ended September 30, 2026: $ 209,466
- Payments for business combinations, net of cash acquired, for the nine months ended September 30, 2026: (69,214)
Analysis
Astera Labs reported record third-quarter revenue of $584.9 million, up 49% sequentially and 154% year-over-year. GAAP gross profit was $422.8 million and GAAP operating income was $179.1 million. GAAP net income was $182.9 million, or $0.99 per diluted share, while non-GAAP net income was $243.4 million, or $1.32 per diluted share.
Scorpio was the principal stated growth driver. The company said Scorpio fabric switches became its largest product family, led by volume production of the Scorpio X-Series 320-lane fabric switch. Management also cited design wins across multiple customers and applications, while introducing Aries 7, Leo 2, Leo X-Series and Orion to extend its connectivity portfolio across signal conditioning, memory expansion and rack-scale systems.
Profitability remained substantial but gross margin declined versus both reported comparison periods. GAAP gross margin was 72.3 %, versus 73.3 % in the prior quarter and 76.2 % a year earlier. In contrast, GAAP operating margin expanded to 30.6 % from 22.7 % in the prior quarter and 24.0 % a year earlier. Non-GAAP operating margin reached 44.7 %, compared with 39.1 % in the prior quarter and 41.7 % a year earlier.
For the nine months ended September 30, 2026, Astera Labs generated 341,477 of net cash provided by operating activities and spent (73,363) on purchases of property and equipment. Cash and cash equivalents were $ 209,396 and marketable securities were 1,168,847 at September 30, 2026. The company also reported accounts receivable, net, of 284,253 and inventory of 200,893.
The fourth-quarter outlook calls for revenue of $730 million to $750 million, GAAP and non-GAAP gross margins of approximately 72%, and GAAP diluted net income per share of approximately $1.13 to $1.17. The company expects Aries 7 products to begin sampling in Q4 2026 and Orion rack reference and system designs to become available through OEM and ODM partners beginning in Q1 2027.
Management, verbatim
Astera Labs delivered outstanding Q3 2026 results, with record quarterly revenue of $584.9 million, up 49% sequentially and up 154% year-over-year, with broad-based growth led by Scorpio, which ramped to high-volume production and became our largest product family by revenue.
Jitendra Mohan, Astera Labs’ Chief Executive Officer
Not in the filing
stated, not guessed- Prior outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- Reportable segment revenue, segment growth rates and segment profitability were not provided.
- Capital return activity, including share repurchases and dividends, was not provided.
- Free cash flow was not provided.
- Debt was not separately reported.
- Quarterly operating cash flow and quarterly free cash flow were not provided.
- GAAP and non-GAAP tax rates for the third quarter were not provided as discrete figures.
- A revenue breakdown by product family, including Scorpio, Aries, Leo, Taurus and Orion, was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.