$ALAB: Revenue +93%, Q2 guide far above estimates, and operating margin expanded 1,300 bps

Astera Labs delivered strong quarter. Revenue grew 93.4% YoY to $308M, ahead of the $292M estimate.

Gross profit grew even faster, up 96.9% YoY, while gross margin expanded 140 bps to 76%.

SG&A fell to 15% of revenue, down 1,190 bps YoY. Operating income grew 447.7% to $62M. Operating margin reached 20%, up 1,300 bps YoY. Free cash flow was $67M, with FCF margin expanding 1,800 bps to 22%.

The underlying driver remains AI infrastructure. PCIe 6.0 is now more than one-third of revenue. Scorpio is ramping, signal conditioning remains strong, and management expects the silicon content opportunity to exceed $1,000 per XPU inside AI racks.

Q2 guidance was also well ahead. Revenue is guided to $355M to $365M versus the $309M estimate, implying 85% to 90% YoY growth. EPS guidance of $0.68 to $0.70 also came in above the $0.55 estimate.

But, how much perfection is already embedded in the stock?

$ALAB trades around 36.8x EV/Sales and 89.3x forward earnings. Premium growth deserves a premium multiple, but the bar is high.

R&D remains heavy at 41% of revenue. Shares outstanding increased 1.7% YoY. Goodwill rose from $19M to $88M after acquisition activity. Q2 gross margin is expected near 73%, below Q1 levels, partly due to a warrant-related non-cash impact.

Overall, $ALAB is showing rare growth quality: revenue nearly doubling, high gross margins, expanding operating leverage, and strong exposure to AI connectivity buildouts.