Astera Labs, Inc.

1. Nature of Business and Summary of Significant Accounting Policies

Description of Business

Astera Labs, Inc. (the “Company”) offers an Intelligent Connectivity Platform, comprised of semiconductor-based, high-speed, mixed-signal connectivity products that integrate a matrix of microcontrollers and sensors, and COSMOS, the Company’s software suite, which is embedded in its connectivity products and integrated into its customers’ systems.

The Company’s patented software-defined platform approach delivers critical connectivity performance, enables flexibility and customization, and supports observability and predictive analytics. This approach aims to efficiently address the data, network, and memory bottlenecks, scalability, and other unique infrastructure requirements of its hyperscalers and system original equipment manufacturers (“OEMs”) customers.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial information. Certain information and disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. The unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes as of and for the year ended December 31, 2025, included in its Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 20, 2026.

In the opinion of management, all adjustments, including normal recurring adjustments, that are considered necessary for a fair presentation of results of operations and financial position, have been included. Operating results for the periods presented herein are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Astera Labs, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies during the three months ended March 31, 2026 compared with the significant accounting policies described in its Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 20, 2026.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The Company’s significant estimates include, but are not limited to, revenue recognition, the valuation of acquired intangible assets, the valuation and realizability of deferred tax assets, reserves for uncertain tax positions, useful life of production equipment, the valuation of warrants, and the valuation and assumptions underlying stock-based compensation. By their nature, estimates are subject to an inherent degree of uncertainty and actual results could differ from those estimates.

The Company assessed certain accounting matters and estimates that generally require consideration of forecasted information available to the Company. Management is not aware of any specific event or circumstance that would require an update to estimates or judgments or a revision to the carrying value of assets or liabilities. These estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the Company’s consolidated financial statements in future periods, and actual results could differ from these estimates.

Reclassifications

Certain prior period balances were reclassified to conform to the current period’s presentation. None of these reclassifications had an impact on reported net income, balance sheets, or cash flows for any of the periods presented.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosure (“ASU 2024-03”), and in January 2025, the FASB issued Accounting Standard Update No. 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosure (Subtopic 2020-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosures of the nature of expenses included in the income statement and disclosures about specific expense categories included in the expense captions presented in the statements of operations. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these new standards will have on its consolidated financial statements and related disclosures.

In May 2025, the FASB issued Accounting Standards Update No. 2025-04, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”). ASU 2025-04 reduces diversity in practice and improves the decision usefulness and operability of the guidance for share-based consideration payable to a customer in conjunction with selling goods or services. The ASU is effective for annual reporting periods beginning after December 15, 2026 with updates to be applied on a retrospective or modified retrospective basis. Early adoption is permitted. The Company is evaluating the impact that this new standard will have on the Company’s consolidated financial statements and related disclosures.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06, Intangibles - Goodwill and Other -Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software(“ASU 2025-06”). ASU 2025-06 removes all references to project stages throughout Subtopic 350-40 and clarifies the threshold that the entities must meet to begin capitalizing costs. The ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is evaluating the impact that this new standard will have on the Company’s consolidated financial statements and related disclosures.

2. Segment and Geographical Information

The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer (“CEO”), who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. The CODM uses net income to evaluate the return on assets and to determine investment opportunities related to product development, platform enhancements, and new technologies. The CODM also uses net income to monitor budget versus actual results. The Company manages its operations and allocates resources as a single operating segment.

The following table includes the significant expense categories and amounts that are regularly provided to the CODM (in thousands):

(1) Stock-based compensation and personnel-related expenses presented in the above table are related to operating expenses and exclude amounts included in the cost of revenue.

(2) Other segment items included are primarily related to interest income, income tax benefit, engineering design related costs, andprofessional and consulting services fees.

Revenue by location is determined by the billing address of the Company’s customers, which includes the Company’s end customers’ manufacturing partners and the Company’s distributors.

The following table sets forth revenue by geographic area (in thousands):

The Company had the following customers that individually comprised 10% or more of its revenue:

*Less than 10% of total revenue

Certain of the customers listed above are manufacturing partners that purchase the Company's products on behalf of the Company’s end customers. As end customers may shift production volumes among their manufacturing partners from period to period, the revenue concentration percentages attributable to individual direct customers may fluctuate in a manner that is not necessarily representative of changes in underlying end-customer demand.

The Company had the following customers that individually comprised 10% or more of its accounts receivable, net:

*Less than 10% of total accounts receivable, net

The Company did not recognize any material allowance for credit losses as of March 31, 2026 and December 31, 2025.

Property and equipment, net by geographic location is based on the location of the asset. As of March 31, 2026,23% and 69% of the Company’s property and equipment, net was located in the United States and Taiwan, respectively. As of December 31, 2025,20% and 73% of the Company’s property and equipment, net was located in the United States and Taiwan, respectively.

3. Marketable Securities

The amortized cost, gross unrealized gains and losses, and fair value of available-for-sale securities by major security type are as follows (in thousands):

As of March 31, 2026 and December 31, 2025, the Company’s marketable securities that were in a continuous loss position for 12 months or more, as well as the unrealized losses on those marketable securities, were not material. Unrealized losses have not been recognized into income as the Company neither intends to sell, nor anticipates that it is more likely than not that the Company will be required to sell, the securities before recovery of their amortized cost basis. The decline in fair value is due primarily to changes in market interest rates, rather than credit losses.

The contractual maturities of cash equivalents and marketable securities classified as available-for-sale are as follows (in thousands):

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The Company did not recognize any material allowance for credit losses as of March 31, 2026 and December 31, 2025 or impairment charges for the three months ended March 31, 2026 and 2025.

There were no material realized gains or losses from available-for-sale securities that were reclassified out of accumulated other comprehensive income for the three months ended March 31, 2026 and 2025.

4. Fair Value Measurements

Fair Value of Assets and Liabilities

The Company considers fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis based on the fair value hierarchy as follows (in thousands):

As of March 31, 2026 and December 31, 2025, there were no marketable securities with Level 3 fair value hierarchy measurement.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Goodwill, intangible assets, property, plant and equipment, and certain equity investments without readily determinable fair values are not required to be measured at fair value on a recurring basis. However, if the Company is required to evaluate these assets for impairment, whether due to certain triggering events or because of the required annual impairment test, and a resulting impairment is recorded to reduce the carrying value to the fair value, these assets are measured at fair value during such period. There was no impairment on these assets during the three months ended March 31, 2026 and 2025.

As of March 31, 2026 and December 31, 2025, the Company had no liabilities required to be measured at fair value on a nonrecurring basis.

Assets and Liabilities Not Measured at Fair Value

The carrying amount of the Company’s financial instruments, including cash equivalents, accounts receivable, and accounts payable, approximates their respective fair values because of their short maturities.

5. Condensed Consolidated Balance Sheet Components

Inventory

Inventory consists of the following (in thousands):

Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):

Depreciation and amortization expense for the three months ended March 31,2026 and 2025 was$3.7 million and $1.1 million, respectively. Construction in progress primarily includes production equipment costs capitalized relating to the Company’s future products and will be placed in service and begin to depreciate when related manufacturing commences. Production equipment has been placed into service for the manufacturing of released products.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

Supplemental Cash Flow Information

The following table provides supplemental non-cash investing and financing activities (in thousands):

6. Business Combinations

On February 9, 2026, the Company acquired certain assets of a privately held company that develops data center acceleration solutions designed to make data storage and processing faster, more efficient, and more cost-effective. In connection with the acquisition, the Company added highly skilled workforce and technology to enable development of its products and solutions. The total purchase consideration was $74.0 million, which consisted of $65.0 million in cash, $5.0 million in holdback for general indemnities, and $4.0 million in share-based consideration. The transaction has been accounted for as a business combination.

Thepurchase price was allocated on a preliminary basis to goodwill of $68.4 million and animmaterial amount to intangible assets and net identifiable assets acquired. Goodwill primarily relates to expected synergies and assembled workforce and is not deductible for U.S. federal income tax purposes.

Additional information related to the acquisition, such as that related to income tax and other contingencies, existing as of the acquisition date may become known during the remainder of the measurement period, not to exceed 12 months from the acquisition date, which may result in changes to the amounts and allocations recorded.

During thethree months ended March 31,2026, the Company had immaterial measurement period adjustments to goodwill.

7. Leases

The Company has entered into operating leases primarily for office real estate in the United States and internationally. From time to time, the Company entered into a new leases and renewed existing leases in the ordinary course of business to support its ongoing operations and growth. The Company’s lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms for all leases.

Supplemental balance sheet information related to the Company’s operating leases is as follows (in thousands):

Operating lease ROU assets, net are included in other assets; operating lease liabilities, current are included in accrued expenses and other current liabilities; and operating lease liabilities, non-current are included in other liabilities, on the condensed consolidated balance sheets.

The weighted-average remaining lease term and discount rates were as follows:

The future minimum operating lease payments for each of the next five years and thereafter are as follows (in thousands):

As of March 31, 2026, the Company had entered into lease agreements associated with the exercise of an existing expansion option at its headquarters in San Jose, California. These agreements result in total estimated future undiscounted lease obligations of $14.8 million. The lease terms are expected to commence at various dates between April 2026 and March 2027 and will expire in November 2032.

8. Commitments and Contingencies

Purchase Commitments

The Company depends upon third-party subcontractors to manufacture wafers and other inventory parts or to perform certain services. The Company’s subcontractor relationships typically allow for the cancellation of outstanding purchase orders but require payment of all expenses incurred through the date of cancellation. The Company’s purchase commitments also include payments for software licenses and cloud services when there is a fixed, non-cancellable payment schedule or when minimum payments are due according to a delivery schedule. The Company is committed to make the following minimum payments under its purchase commitments as of March 31, 2026 (in thousands):

Legal Proceedings

From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company is not currently a party to any material legal proceedings or claims, nor is the Company aware of any other pending or threatened legal proceedings or claims that could reasonably be expected to have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such legal proceedings or claims be resolved unfavorably.

Indemnification Obligations

In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with its members, partners, suppliers and vendors. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its service, breach of representations or covenants, intellectual property infringement or other claims made against such parties. These provisions may limit the time within which an indemnification claim can be made. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. The Company has not in the past incurred significant expense defending its licensees against third party claims, nor has it incurred significant expense under its standard service warranties or arrangements with its members, partners, suppliers, and vendors. Accordingly, the Company hadno liabilities recorded for these provisions as of March 31, 2026 and December 31, 2025.

9. Common Stock Warrants

In October 2022, the Company issued a warrant to a customer (“Holder”) to purchase an aggregate of up to 1,484,230 shares of Common Stock (the “Customer Warrant”). The exercise period of the Customer Warrant is through theseventh anniversary of the issue date.

In October 2023, the Company amended the Customer Warrant and issued an additional warrant to the Holder to purchase an aggregate of up to 831,945 shares of Common Stock (the “2023 Warrant”), with the same exercise period as the Customer Warrant. The 2023 Warrant will vest and become exercisable over the contract term, contingent upon the achievement of performance conditions, comprised of specified tranches of purchases by the Holder and its affiliates to the Company.

In February 2026, the Company issued a warrant to the Holder to acquire up to an aggregate of 3,262,299 shares of common stock at an exercise price of $142.82 per share (the “2026 Warrant”, and together with the Customer Warrant and the 2023 Warrant, the “Warrants”). The 2026 Warrant will vest and become exercisable over the contract term, contingent upon the achievement of performance conditions, comprised of specified tranches of purchases by the Holder and its affiliates to the Company.

The grant date fair value of the 2026 Warrant were determined to be $85.83 per share, using the Black-Scholes-

Merton option pricing model, for maximum total 2026 Warrant fair value of $280.0 million. The per share grant date fair values of the 2026 Warrant were estimated using the following assumptions:

As of March 31, 2026 and December 31, 2025, an aggregate of 1,331,902 shares and 1,165,513 shares, respectively, of the underlying Warrants were vested and exercisable. Additionally, an aggregate of 73,085 and 30,589 shares were probable of vesting as of March 31, 2026 and December 31, 2025, respectively. There wereno warrant exercises as of March 31, 2026.

The Company recognized $2.1 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively, as a reduction of revenue in the condensed consolidated statements of operations and comprehensive income related to the Warrants. The remaining grant date fair values of the Warrants that are probable of vesting will be recognized as a reduction of revenue in proportion to the amount of related product sales, which could occur until January 2, 2033.

10. Stock-Based Compensation

A summary of stock-based compensation expense recognized in the condensed consolidated statements of operations and comprehensive income is as follows (in thousands):

(1) Stock-based compensation expense for the three months ended March 31, 2026 did not include the $4.0 million in share-based consideration related to acquisitions, see Note 6 - Business Combinations for further details.

Stock Options

A summary of stock option activity under the 2018 Plan and 2024 Plan is as follows (in thousands, except years and per share data):

As of March 31, 2026, there was approximately $0.6 million of total unrecognized compensation cost, related to unvested stock options, which is expected to be recognized over a weighted-average remaining requisite service period of 1.3 years, using the straight-line method.

Restricted Stock Units (“RSUs”)

A summary of RSU activity under the 2018 Plan and 2024 Plan is as follows (in thousands, except per share data):

As of March 31, 2026, there was $457.6 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.9 years.

Performance Stock Units (“PSUs”)

A summary of PSU activity under the 2024 Plan is as follows (in thousands, except per share data):

As of March 31, 2026, there was $43.1 million of unrecognized stock-based compensation expense related to these PSUs, which is expected to be recognized over a weighted-average period of 2.4 years.

11. Net Income per Common Share

The following table sets forth the computation of basic and diluted net income per share attributable to the Company’s common stockholders (in thousands, except per share data):

Potentially dilutive securities include dilutive common stock from assumed exercise of stock options, RSUs, Warrants, and Employee Stock Purchase Plan shares using the treasury stock method. Under the treasury stock method, potential shares outstanding are not included in the computation of diluted net income per share if their effect is anti-dilutive. Anti-dilutive potential shares are as follows (in thousands):

12. Income Taxes

The Company's income tax benefit recognized for the three months ended March 31, 2026 and 2025 is as follows (in thousands, except percentages):

On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was signed into law. The legislation includes a broad range of tax reform provisions affecting businesses including, but not limited to, the reinstatement of 100% bonus depreciation, immediate expensing of domestic research and development costs, and revisions to the U.S. taxation of profits derived from international operations. The legislation has multiple effective dates, with certain provisions were effective in 2025 and others becoming effective through 2027. The Company has assessed the effects of the new tax legislation, including immediate expensing of domestic research and development expenditures and revisions to foreign-derived intangible income provision for the calendar year, and the results have been reflected in its condensed consolidated financial statements for the three months ended March 31, 2026.

The Company accrues for income taxes during interim periods based on the estimated effective tax rate for the year. The effective tax rate for the three months ended March 31, 2026 is different than the statutory federal tax rate primarily due to the valuation allowance in the United States and the excess tax benefits related to equity compensation, foreign derived intangible income deduction and U.S. research and development credits, which results in current tax benefits. The determination of the realizability of deferred tax assets requires significant judgment in assessing if there is sufficient positive evidence to support a conclusion that it is more likely than not the deferred tax assets will be realized. If the Company continues to achieve positive operating results, it may release the valuation allowance associated with its U.S. deferred tax assets in future periods. A release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and may result in a material decrease to income tax expense for the period the release is recorded.

The effective tax rate for the three months ended March 31, 2025 is different than the statutory federal tax rate primarily due to the valuation allowance in the United States and the excess tax benefits related to equity compensation, foreign derived intangible income deduction and U.S. research and development credits, which results in current tax benefit. This is offset by the current tax expense from the capitalization of research and development expenditures under Section 174 of the Internal Revenue Code.