10-K – 2026-02-20 – alab-20251231.htm

fabless company, global market trends such as shortage of capacity to fulfill our fabrication needs also may increase our raw material costs and thus decrease our gross margins.
Our customers rely on many different service providers and component suppliers to build their systems, and the frequency at which our products are purchased by our customers and incorporated into their systems may vary.
The success of our products is heavily dependent on the timely introduction, quality, and evolving technical requirements for our customers’ systems incorporating our products, which are impacted by factors beyond our control. Our customers’ systems are often very complex and require very specific components, and as a result our customers’ systems could be delayed due to incompatible deliverables from other service providers. Our customers may experience other difficulties with the supply of the various components of their products or testing and manufacturing of their products that are outside of our control. We incur significant design and development costs in connection with designing our products for customers’ systems that may not ultimately achieve market acceptance. If our customers experience changing market requirements, failed evaluations or field trials or incompatible deliverables from other service providers, they may delay, change or cancel a project, and we may have incurred significant additional development costs and may not be able to recoup our costs, which in turn would adversely affect our business, financial condition, and results of operations.
Risks Related to our Intellectual Property
Our failure to protect our intellectual property rights adequately could impair our ability to compete effectively or to defend ourselves from litigation, which could harm our business, financial condition, and results of operations.
Our success depends in part upon protecting our intellectual property. We rely primarily on patent, copyright, trademark, and trade secret laws, as well as intellectual property assignment and confidentiality and non-disclosure agreements and other methods, to protect and establish our rights in our proprietary technologies and know-how. As of December 31, 2025, we have been issued 26 patents in the United States and one patent in foreign jurisdictions. In addition, we have 35 patent applications pending in the United States, and five patent applications pending in foreign jurisdictions. We cannot guarantee that any pending or future patent applications will be issued to have the coverage originally sought, and even if the pending patent applications are granted, the rights granted to us may not be meaningful or provide us with any commercial advantage. Additionally, our patents could be opposed, contested, narrowed, circumvented, challenged, abandoned, or designed around by our competitors or be declared invalid or unenforceable in judicial or administrative proceedings. The patent prosecution process is expensive, time-consuming, and complex, and we may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output in time to obtain patent protection. Failure to timely seek patent protection on products or technologies generally precludes us from seeking future patent protection on these products or technologies. Even if we do timely seek patent protection, the coverage claimed in a patent application can be significantly reduced before a patent is issued, and its scope can be reinterpreted after issuance, and as a result we can give no assurance that any patents that have issued to may issue in the future will protect our current and future products, will provide us with any competitive advantage, or will not be challenged, invalidated or circumvented in the future.
The failure of our patents to adequately protect our products might make it easier for our competitors to offer similar products or technologies. To the extent we pursue any foreign patent protection, it is unlikely that such protection would be as comprehensive as our U.S. patent protection and may not protect our intellectual property in some countries where our products are sold or may be sold in the future. Many U.S.-based companies have encountered substantial intellectual property infringement in foreign countries, including countries where we sell products. Even if foreign patents are granted, effective protection and enforcement in foreign countries may not be available.
Monitoring unauthorized use of our intellectual property is difficult and costly. Although we are not aware of any material instances of unauthorized use of our intellectual property in the past, it is possible that unauthorized use of our intellectual property may have occurred or may occur in the future without our knowledge. Despite our efforts, our failure to effectively protect our intellectual property could reduce the value of our solutions, and could harm our business, results of operations, and financial condition. Further, we may in the future need to initiate infringement claims or litigation against third parties. Litigation, whether we are a plaintiff or a defendant, can be expensive, time-consuming, and may divert the efforts of our executives, technical staff, and managerial personnel, which could harm our business, whether or not such litigation results in a determination favorable to us.
Some of the software used within our products, as well as that of some of our customers, may be derived from and/or incorporate so-called “open source” software that is generally made available to the public by its authors and/or other third parties under open source licenses, which in some instances may subject us to certain unfavorable conditions, including
28

Table of Contents

requirements that we offer our proprietary software, which incorporates or links to such open source software, for no cost or that we make such proprietary software publicly available for free.
On occasion, companies that use open source software have faced claims challenging their use of open source software or compliance with open source license terms. There is evolving legal precedent for interpreting the terms of certain open source licenses, including the determination of which works are subject to the terms of such licenses. While we believe we have complied with our obligations under the various applicable licenses for open source software, in the event the copyright holder of any open source software were to successfully establish in court that we had or have not complied with the terms of a license for a particular work, we could be required to release the source code of that work to the public for free and/or stop distribution of that work. Any requirement to disclose our proprietary source code could have a material adverse effect on our business, financial condition, and results of operations, could result in negative publicity and could help our competitors develop products that are similar to or better than ours.
We utilize a significant amount of intellectual property in our business. If we are unable or fail to protect our intellectual property, our business could be adversely affected.
We rely on a combination of intellectual property rights, including patents, copyrights, trademarks, and trade secrets, as well as customary contractual protections with our customers, third-party manufacturing partners, employees, and consultants to protect our intellectual property rights. We spend significant resources to monitor and protect our intellectual property rights, including the unauthorized use of our products, usage rates of the software seat licenses and subscriptions that we sell, but even with significant expenditures, we may not be able to protect the intellectual property rights that are valuable to our business. In particular, we are unable to predict or assure that:
• our intellectual property rights will not lapse or be invalidated, circumvented, challenged, or, in the case of third-party intellectual property rights licensed to us, be licensed to others;
• our intellectual property rights will provide competitive advantages to us;
• rights previously granted by third parties to intellectual property licensed or assigned to us, including portfolio cross-licenses, will not hamper our ability to assert our intellectual property rights or hinder the settlement of currently pending or future disputes;
• any of our pending or future patent, copyright, or trademark applications will be issued or have the coverage originally sought;
• we will be able to enforce our intellectual property rights in certain jurisdictions where competition is intense or where legal protection may be weak; or
• we have sufficient intellectual property rights to protect our products or our business.
Effective intellectual property protection may not be available in every country in which we offer our products. The laws of certain jurisdictions where we do business or may do business in the future may not recognize intellectual property rights or protect them to the same extent as do the laws of the United States. Any changes in, or unexpected interpretations of, intellectual property laws may compromise our ability to enforce our trade secret and intellectual property rights. In addition, when patents expire, we lose the protection and competitive advantages they originally provided to us. Failure to obtain or maintain protection of our trade secrets or other intellectual property could harm our competitive position and could have a material adverse effect on our business, financial condition, and results of operations.
Further, we may acquire companies with intellectual property that is subject to licensing obligations to other third parties. These licensing obligations may extend to our own intellectual property following any such potential acquisition and may limit our ability to assert our intellectual property rights. From time to time, we may pursue litigation to assert our intellectual property rights, including, in some cases, against our customers and third-party manufacturing partners where we believe they have infringed, violated, or misappropriated our intellectual property. Claims of this sort could also harm our relationships with our customers and might deter future customers from doing business with us. Conversely, third parties have and may in the future pursue intellectual property litigation against us. An adverse decision in such types of legal action could result in material expense and limit our ability to assert our intellectual property rights and limit the value of our platform, which could otherwise negatively impact our business, financial condition, and results of operations.
We rely on third-party technologies for the development of our products and our inability to use such technologies in the future would harm our ability to remain competitive.
We rely on third parties for technologies that are integrated into our products. If we are unable to continue to use or license these technologies on reasonable terms, or if these technologies become unreliable, unavailable or fail to operate
29

Table of Contents

properly, we may not be able to secure adequate alternatives in a timely manner or at all, and our ability to offer our products and remain competitive in our market would be harmed. In addition, even if we are unable to successfully license technology from third-parties to develop future products, we may not be able to develop such products in a timely manner or at all. The operation or security of our products could be impaired if errors or other defects occur in the third-party technologies we use, and it may be more difficult for us to correct any such errors and defects in a timely manner, if at all, because the development and maintenance of these technologies is not within our control. Any impairment of the technologies or of our relationship with these third parties could harm our business.
We may face claims of intellectual property infringement, misappropriation or other violations, which could be time-consuming or costly to defend or settle, result in the loss of significant rights or harm our relationships with our customers or reputation in the industry.
From time to time, third parties may assert against us and our customers their patent and other intellectual property rights to technologies that are used in or are important to our business, which may be time consuming and costly to defend or settle. We may in the future, particularly as a public company with an increased profile and visibility, receive communications from others alleging our infringement, misappropriation or other violation of patents, trade secrets or other intellectual property rights. In addition, in the event that we recruit employees or contractors from other companies, including certain potential competitors, and these employees or contractors are involved in the development of products that are similar to the products they assisted in developing for their former employers, we may become subject to claims that such employees or contractors have improperly used or disclosed trade secrets or other proprietary information. We may also in the future be subject to claims by our third-party manufacturing partners, employees, or contractors asserting an ownership right in our patents, patent applications or other intellectual property, as a result of the work they performed on our behalf.
Claims that our products or processes infringe, misappropriate, or otherwise violate third-party intellectual property rights, regardless of their merit or resolution, could be time-consuming or costly to defend or settle and could divert the efforts and attention of our management and technical personnel. Infringement claims also could harm our relationships with our customers and might deter future customers from doing business with us. We do not know whether we will prevail in these proceedings given the complex technical issues and inherent uncertainties in intellectual property litigation. If any pending or future proceedings result in an adverse outcome, we could be required to:
• cease the manufacture, use or sale of the infringing products or processes;
• pay substantial damages for infringement, misappropriation or other violation;
• expend significant resources to develop non-infringing products or processes, which may not be successful;
• license certain components from the third-party claiming infringement, which license may not be available on commercially reasonable terms, or at all;
• cross-license our products to a competitor to resolve an infringement claim, which could weaken our ability to compete with that competitor; or
• pay substantial damages to our customers or end-users to discontinue their use of or to replace infringing product or process sold to them with non-infringing products or processes, if available.
Additionally, even if successful in such proceedings, our rights in our products or processes may be invalidated, or narrowed. Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Any of the foregoing results could have a material adverse effect on our business, financial condition, and results of operations.
Any potential dispute involving patents or other intellectual property could affect our customers, which could trigger our indemnification obligations to them and result in substantial expense to us.
In any potential dispute involving patents or other intellectual property, our customers could also become the target of litigation. Our agreements with customers generally include indemnification or other provisions under which we agree to indemnify or otherwise be liable to them for losses suffered or incurred as a result of third-party claims of intellectual property infringement. Large indemnity payments could harm our business, financial condition, and results of operations. From time to time, customers require us to indemnify or otherwise be liable to them for breach of confidentiality or failure to implement adequate security measures with respect to their intellectual property and trade secrets. Although we normally contractually limit our liability with respect to such obligations, certain of our customer agreements may not include
30

Table of Contents

maximum loss clauses, which may result in substantial liability. Any litigation against our customers could trigger indemnification obligations under some of our agreements, which could result in substantial expense to us, and which could materially and adversely affect our financial results.
Risks Related to the Ownership of Our Common Stock
Our IPO occurred in March 2024. As such, there has only been a public market for our common stock for a relatively short period of time. The market price of our common stock may continue to be volatile, which could cause the value of your investment to decline, and we may not be able to meet investor or analyst expectations.

The market prices of the securities of other newly public companies have historically been highly volatile and markets in general have been highly volatile. The trading price of our common stock is likely to continue to be volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control. These factors include:
• actual or anticipated changes in our results of operations, and variations between our actual or forecasted results of operations and the expectations of securities analysts, investors, and the financial community;
• any forward-looking financial or operating information we may provide to the public or securities analysts, any changes in this information, or our failure to meet expectations based on this information;
• actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet these estimates, or the expectations of investors;
• changes in operating the performance and stock market valuations of companies in our industry, including our competitors;
• general economic conditions and slow or negative growth of related markets;
• announcements by us or our competitors of design wins, acquisitions, new products, significant contracts, commercial relationships, or capital commitments;
• our ability to develop and market new and enhanced products on a timely basis;
• expectations of securities analysts, investors, and the financial community about the size or rate of growth of the cloud and AI infrastructure markets;
• commencement of, or our involvement in, litigation;
• disruption to our operations;
• the emergence of new sales channels in which we are unable to compete effectively;
• any major change in our board of directors or management;
• changes in governmental regulations; and
• other events or factors, including those resulting from political conditions, election cycles, government shutdowns, international or armed conflicts, war or incidents of terrorism, increased tariffs, or responses to these events.
In addition, the stock market in general has experienced extreme price and volume fluctuations. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our actual operating performance. This variability and unpredictability could also result in our failure to meet the expectations of industry or financial analysts or investors for any period. If our revenue or results of operations fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated revenue or earnings forecasts that we may provide.
Trading price fluctuations may also make it more difficult for us to use our common stock as a means to make acquisitions or to use options to purchase our common stock to attract and retain employees. In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.
31

Table of Contents

Our revenue and operating results can fluctuate from period to period, which could cause our share price to fluctuate.
Our revenue and operating results have fluctuated in the past and may fluctuate from period to period in the future due to a variety of factors, many of which are beyond our control. Factors relating to our business that may contribute to these fluctuations include the following factors, as well as other factors described elsewhere in this Annual Report on Form 10-K:
• the receipt, reduction or cancellation of orders by customers;
• the gain or loss of significant customers;
• market acceptance of our products and our customers’ systems;
• our ability to develop, introduce and market new products and technologies on a timely basis;
• the timing and extent of product development costs;
• new product announcements and introductions by us or our competitors;
• incurrence of research and development and related new product expenditures;
• cyclical fluctuations in our markets;
• significant warranty claims, including those not covered by our third-party manufacturing partners;
• changes in our product mix or customer mix;
• intellectual property disputes; and
• loss of key personnel or the inability to attract qualified personnel.
As a result of these and other factors, the results of any prior quarterly or annual periods should not be relied upon as indications of our future revenue or operating performance. Fluctuations in our revenue and operating results could cause our share price to decline. You should not rely on our past results as an indication of our future performance.
Sales of substantial amounts of our common stock in the public markets or the perception that sales might occur, could cause the trading price of our common stock to decline.
Sales of a substantial number of shares of our common stock into the public market, particularly sales by our directors, executive officers, and stockholders, or the perception that these sales might occur, could cause the trading price of our common stock to decline.
While shares held by directors, executive officers, and other affiliates are subject to volume limitations under Rule 144 under the Securities Act, and various vesting agreements, we are unable to predict the timing of the effect that such sales may have on the prevailing market price of our common stock.
In addition, as of December 31, 2025, we had (i) 2,721,076 options outstanding that, if fully exercised, would result in the issuance of 2,721,076 shares of common stock, (ii) 9,531,296 RSU and PSU awards outstanding that would result in the issuance of 9,531,296 shares of common stock upon settlement, and (iii) 2,442,360 warrants outstanding that, if fully exercised, would result in the issuance of 2,442,360 shares of common stock. All of the shares of common stock issuable upon the exercise of stock options, subject to RSU awards and the shares reserved for future issuance under our equity incentive plans have been registered on a registration statement on Form S-8 under the Securities Act. Accordingly, these shares can be freely sold in the public market upon issuance, subject to volume limitations under Rule 144 for our executive officers and directors and applicable vesting requirements.
Certain holders of our common stock have rights, subject to some conditions, to require us to file registration statements for the public resale of the common stock or to include such shares in registration statements that we may file for us or other stockholders. Any registration statement we file to register additional shares, whether as a result of registration rights or otherwise, could cause the trading price of our common stock to decline or be volatile.
Our issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans, or otherwise will dilute all other stockholders and could negatively affect our results of operations.
We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors, consultants, and advisors under our stock incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or
32

Table of Contents

investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline.
Any additional grants of equity awards under our stock incentive plans will also increase stock-based compensation expense and negatively affect our results of operations. For example, during the year ended December 31, 2025, stock-based compensation expense was $160.0 million . As a public company, our equity awards are primarily subject to time-based vesting, and accordingly we expect to continue to incur stock-based compensation expense as these awards vest.
Our executive officers, directors, and stockholders, if they choose to act together, have the ability to control or significantly influence all matters submitted to shareholders for approval.

As of December 31, 2025, our executive officers, directors, and greater than 5% stockholders, in the aggregate, beneficially owned approximately 37.9% of our outstanding common stock (assuming no exercise of outstanding options warrants or settlement of RSUs in shares upon vesting). As a result, such persons, acting together, have the ability to control or significantly influence all matters submitted to our board of directors or shareholders for approval, including the appointment of our management, the election and removal of directors and approval of any significant transaction, as well as our management and business affairs. In addition, this concentration of ownership may have the effect of delaying, deferring, or preventing a change in control, impeding a merger, consolidation, takeover or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our business, even if such a transaction would benefit other shareholders.
Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current board of directors, and limit the trading price of our common stock.
Provisions in our amended and restated certificate of incorporation and second amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated certificate of incorporation and our second amended and restated bylaws include provisions that:
• provide that our board of directors is classified into three classes of directors with staggered three-year terms;
• permit our board of directors to establish the number of directors and fill any vacancies and newly-created directorships;
• require super-majority voting to amend our amended and restated bylaws; provided, however, that majority voting shall be required to amend our amended and restated bylaws if our board of directors recommends that the stockholders approve such amendment;
• authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;
• prohibit stockholder action by written consent;
• provide that only our board of directors is authorized to call a special meeting of stockholders;
• provide that the board of directors is expressly authorized to alter or repeal our amended and restated bylaws; and
• contain advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Moreover, Section 203 of the Delaware General Corporation Law (“DGCL”) may discourage, delay, or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations, and other transactions between us and holders of 15% or more of our common stock.
If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the trading price of our common stock and trading volume could be adversely affected.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If few securities analysts cover us, or if industry analysts cease coverage of us, the trading price for our common stock would be negatively affected. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock trading price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us on a regular basis, demand for our common stock could decrease, potentially causing our common stock trading price and trading volume to decline.
33

Table of Contents

We do not expect to declare or pay any dividends on our common stock for the foreseeable future.
We do not intend to pay cash dividends on our common stock for the foreseeable future. Consequently, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking dividends should not purchase our common stock. Any future determination to pay dividends will be at the discretion of our board of directors and subject to, among other things, our compliance with applicable law, and depending on, among other things, our business prospects, financial condition, results of operations, cash requirements and availability, capital expenditure needs, the terms of any preferred equity securities we may issue in the future, covenants in the agreements governing any future indebtedness, other contractual restrictions, industry trends, and any other factors or considerations our board of directors may regard as relevant.
Our second amended and restated bylaws designate specific courts as the sole and exclusive forum for certain disputes that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Pursuant to our second amended and restated bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for state law claims for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of, or a claim based on, a breach of a fiduciary duty owed by any current or former director, officer or other employee of ours to us or our stockholders; (iii) any action asserting a claim pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our second amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (iv) any action asserting a claim governed by the internal affairs doctrine (collectively, the “Delaware Forum Provision”). The Delaware Forum Provision does not apply to any causes of action arising under the Securities Act or the Exchange Act, or to any claim for which the federal courts have exclusive jurisdiction. Our second amended and restated bylaws further provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act or the Exchange Act and the respective rules and regulations promulgated thereunder (the “Federal Forum Provision”). In addition, our second amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
We recognize that the Delaware Forum Provision and the Federal Forum Provision in our second amended and restated bylaws may impose additional litigation costs on stockholders in pursuing any such claims. Additionally, the forum selection clauses in our second amended and restated bylaws may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers, and employees, even though an action, if successful, might benefit our stockholders. In addition, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. While the Delaware Supreme Court and other state courts have upheld the validity of the federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court, there is uncertainty as to whether courts in other states will enforce our Federal Forum Provision. If the Federal Forum Provision is found to be unenforceable in an action, we may incur additional costs associated with resolving such an action. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.
General Risk Factors
We have incurred, and will continue to incur, increased costs as a result of operating as a public company, and our management is required to devote substantial time to support compliance with our public company responsibilities and corporate governance practices.
As a public company, we have incurred, and will continue to incur, significant finance, legal, accounting, and other expenses, including director and officer liability insurance, that we did not incur as a private company, and which we expect to further increase following our recent transition to large accelerated filer status. The Sarbanes-Oxley Act, the Dodd- Frank Act, stock exchange listing requirements, the reporting requirements of the Exchange Act and other applicable securities rules and regulations impose various requirements on public companies in the United States. As a
34

Table of Contents

large accelerated filer, we are subject to enhanced reporting, internal control, and compliance obligations, including auditor attestation of internal control over financial reporting, additional reporting obligations regarding executive compensation, and the requirement to hold nonbinding advisory votes on executive compensation, and our management and other personnel devote a substantial amount of time to support compliance with these requirements. Moreover, these rules and regulations have increased, and will continue to increase, our legal and financial compliance costs and make certain activities more time-consuming and costly. We cannot predict the amount or timing of these additional costs that we will incur as a public company, and the resulting strain on management resources could adversely affect our results of operations and financial condition. These enhanced obligations may also increase the risk of errors or delays in our financial and SEC reporting, and we may not be able to effectively manage these additional requirements, which could adversely affect investor confidence and the market price of our common stock.

35

Table of Contents

Item 1B. Unresolved Staff Comments
Not applicable.

Item 1C. Cybersecurity

Risk Management and Strategy
We have established policies and processes designed to identify, assess, and mitigate cybersecurity risks. These policies and processes are intended to protect the confidentiality, integrity, and availability of our critical information systems and our critical data, including intellectual property and confidential information that is proprietary, strategic, or competitive in nature. They include the deployment of third-party security solutions and tools designed to monitor, identify, and address cybersecurity risks, as well as the development of an incident response plan informed by the National Institute of Standards and Technology (“NIST”) framework that is designed to identify and manage significant events that may impact our information technology infrastructure, including those arising from or related to cybersecurity threats. As part of our cybersecurity risk management, we conduct periodic risk assessments designed to identify reasonably foreseeable potential internal and external risks, the likelihood of occurrence and any potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, controls, and other safeguards in place to manage such risks. We also maintain risk-based processes to assess and review the cybersecurity practices of certain of our third-party vendors and services providers prior to onboarding, including through review of System and Organization (SOC) reports provided by potential vendors and the inclusion of security requirements in contracts, as appropriate. Employees are required to complete annual cybersecurity awareness training designed to raise awareness of cybersecurity threats. While we have not, as of the date of this Form 10-K, experienced a cybersecurity threat or incident that resulted in a material adverse impact to our business or operations, there can be no guarantee that we will not experience such an incident in the future.
For more information about the risks from cybersecurity threats, see the risk factors entitled “ Cybersecurity risks, including cyber-attacks, data breaches, and system vulnerabilities could adversely affect our business and disrupt our operations ” and “ An impairment of the confidentiality, integrity, or availability of our IT systems, or those of one or more of our IT vendors could have a material adverse effect on our business .”

Governance
Our board of directors (“Board”) considers cybersecurity risk as part of its overall risk oversight function and has delegated to the Audit Committee of the Board (the “Audit Committee”) oversight of cybersecurity matters, cybersecurity risk management, disclosure obligations with respect to cybersecurity incidents, and compliance with SEC rules applicable to cybersecurity risk management.
The Audit Committee receives quarterly reports from management on our cybersecurity risks. In addition, management will update the Audit Committee, as necessary, regarding any significant cybersecurity incidents. The Audit Committee regularly reports to the full Board regarding its activities, including those related to cybersecurity risk.
Our Chief Executive Officer is currently serving as interim Chief Information Security Officer (“CISO”) while we conduct a search for a successor following the departure of our CISO in January 2026. Our CISO , in connection with our IT personnel, is responsible for day-to-day implementation, management and evaluation of our cybersecurity risk assessment and management processes. This team has primary responsibility for our overall cybersecurity risk management program, including monitoring the detection, prevention, mitigation, and remediation of cybersecurity incidents, and works in partnership with our other business leaders, including our Chief Financial Officer and General Counsel. Our CISO supervises both our internal cybersecurity personnel and any retained external cybersecurity consultants. Our interim CISO has over two decades of engineering and general management experience in various technical roles, including oversight of functions into which the CISO reported. Our interim CISO was also previously responsible for setting up our IT and our IT security from its founding until June 2022.
Our cybersecurity incident response process is designed to escalate significant cybersecurity incidents to a team of business leaders, including, but not limited to, our Chief Financial Officer and General Counsel. In the case of a cybersecurity incident, this team of business leaders will work with our incident response team to help determine the severity of the impact of a cybersecurity incident, as well as to help mitigate and remediate cybersecurity incidents of which they are notified. The incident response team will also work under the oversight of legal counsel and the Audit Committee to determine whether an incident is material for disclosure purposes under applicable law.
36

Table of Contents

Item 2. Properties
Our corporate headquarters is located in San Jose, California, where we currently lease approximately 154,231 square feet for office space, research and development, and testing, pursuant to a lease agreement that expires in November 2032. We also lease additional facilities in Irvine and Texas in United States, Canada, Germany, India, Singapore, and Vietnam for research and development, in China and Taiwan for local customer support and sales, and in Israel for research and development and local customer support.
We believe that our facilities are suitable to meet our current needs.

Item 3. Legal Proceedings
We are not currently a party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 4. Mine Safety Disclosures
Not applicable.
37

Table of Contents

Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock has been listed on the Nasdaq Global Select Market under the symbol “ALAB” since March 20, 2024, the first trading day following our IPO. Prior to that date, there was no public trading market for our common stock.

Holders
On January 31, 2026, there were 1,057 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our common stock repressed by these record holders.

Dividend Policy
We have never declared or paid any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not expect to pay any dividends on our capital stock in the foreseeable future. Any future determination relating to our dividend policy will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors considers relevant.

Share Price Performance Graph
This performance graph shall not be deemed “soliciting material” or to be “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference into any filings under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The graph below compares the cumulative total return on our common stock with the cumulative total return of the NASDAQ Composite Index and the Philadelphia Semiconductor Index (PHLX) during the period from March 20, 2024 to December 31, 2025. The graph compares a $100 investment on March 20, 2024 in our common stock with a $100 investment on March 20, 2024 in each index and assumes that any dividends were reinvested. Shareholder returns over the indicated periods should not be considered indicative of future share prices or shareholder returns.

38

Table of Contents

Recent Sales of Unregistered Securities
None.
Use of Proceeds from Our IPO
On March 19, 2024, our registration statement on Form S-1, as amended (File No. 333-277205), was declared effective by the SEC for our initial public offering. There has been no material change in the expected use of the net proceeds from our IPO as described in the final prospectus, dated March 19, 2024 and filed with the SEC on March 21, 2024 pursuant to Rule 424(b) of the Securities Act.
Issuer Purchases of Equity Securities
None.

Item 6. [Reserved]
39

Table of Contents

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes included in P art II, Item 8 in this Annual Report on Form 10-K . This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” i ncluded in Part I, Item 1A in this Annual Report on Form 10-K .

A discussion regarding our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below. A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on February 14, 2025. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview
Our mission is to innovate, design, and deliver semiconductor-based connectivity solutions that are purpose-built to unleash the full potential of cloud and AI infrastructure.
Building on years of experience with a singular focus on addressing connectivity challenges in data-centric systems, we have developed and deployed our Intelligent Connectivity Platform built from the ground up for cloud and AI infrastructure. Our Intelligent Connectivity Platform is comprised of semiconductor-based, high-speed, mixed-signal connectivity products that integrate a matrix of microcontrollers and sensors, and COSMOS, our software suite, which is embedded in our connectivity products and integrated into our customers’ systems.
Our Intelligent Connectivity Platform provides our customers with the ability to deploy and operate high-performance cloud and AI infrastructure at scale, addressing an increasingly diverse set of requirements. We provide our connectivity products in various form factors, including Integrated Circuits (“ICs”), boards, and modules.
Our patented software-defined platform approach delivers critical connectivity performance, enables flexibility and customization, and supports observability and predictive analytics. This approach is designed to efficiently address the data, network, and memory bottlenecks, scalability, and other unique infrastructure requirements of our hyperscaler and system OEM customers.
Based on trusted relationships with the leading hyperscalers and collaboration with data center infrastructure suppliers, our platform is designed to meet our customers’ unique cloud scale requirements. Our COSMOS software suite is foundational to our Intelligent Connectivity Platform and is designed to enable our customers to seamlessly configure, manage, monitor, optimize, troubleshoot, and customize functions in our IC, board, and module products.
Today, our connectivity solutions are at the heart of major AI platforms deployed worldwide featuring both commercially available Graphic Processing Units (“GPUs”) and proprietary AI accelerators. We offer our customers four product families across multiple form factors including ICs, boards, and modules, shipping millions of devices across leading hyperscalers. Our products, which include Aries PCIe®/CXL® Smart DSP Retimers, Aries PCIe®/CXL® Smart Cable Modules™, Taurus Ethernet Smart Cable Modules™, Leo CXL Memory Connectivity Controllers, and Scorpio Smart Fabric Switches, are built upon industry standard connectivity protocols such as Peripheral Component Interconnect Express (“PCIe”), Ethernet, and Compute Express Link (“CXL”), to address the growing demand for purpose-built connectivity solutions that solve critical data, network, and memory bottlenecks inherent in cloud and AI infrastructure.
Since our inception, we have created and commercialized first-to-market PCIe, Ethernet, and CXL products. We have become a trusted partner and a proven supplier to our hyperscaler and system OEM customers. We have experienced strong growth since the commercial launch of Aries in 2020. Our revenue grew from $34.8 million in 2021, $79.9 million in 2022, $115.8 million in 2023, $396.3 million in 2024, and to $852.5 million in 2025, driven by a sizable increase in demand for our products.

Summary of Financial Highlights

Our revenue for the year ended December 31, 2025, increased by 115% compared to the same period in 2024, primarily due to an increase in overall unit shipments driven by higher demand for our Aries, Scorpio, and Taurus products, as well as higher overall average selling prices resulting from an increased mix of hardware modules and Scorpio products.
40

Table of Contents

Gross margin decreased 70 bps to 75.7% for the year ended December 31, 2025 from 76.4% for the same period in 2024, primarily driven by product mix as we shipped more hardware modules.

Operating expenses increased by $53.1 million or 13%, for the year ended December 31, 2025 compared to the same period in 2024, primarily driven by a $75.6 million increase in personnel-related expenses resulting from a 75% increase in average headcount, a $31.4 million increase in expenses related to our R&D initiatives, a $10.8 million increase in other operating costs to support our business growth including expenses associated with additional office space, a $5.1 million increase in professional services fees primarily associated with the continued development of our public company infrastructure , and a $2.2 million increase in depreciation and amortization expenses. The increase was partially offset by a $74.8 million decrease in non-cash stock-based compensation expense, which resulted primarily from the recognition of time-based vesting of RSUs and the satisfaction of the liquidity event vesting condition in connection with our initial public offering (“IPO”) in the prior period.

Net income was $219.1 million for the year ended December 31, 2025 compared to a net loss of $83.4 million for the year ended December 31, 2024, representing a $302.6 million year-over-year increase.

Key Components of Results of Operations
Revenue
The vast majority of our revenue consists of product sales with an immaterial portion derived from engineering services. Product sales consist primarily of shipments of our Intelligent Connectivity Platform solutions. Engineering services revenue consists of engineering fees associated with customer-defined engineering services.
For product sales, we transact with customers primarily pursuant to standard purchase orders for delivery of products and generally do not allow customers to cancel or change purchase orders within limited notice periods. We recognize product sales when control transfers to the customer, generally at the time of product shipment from our facilities, in an amount that reflects the consideration we expect to receive in exchange for those goods, net of estimated sales returns, distributor price adjustments, rebates, and other customer incentives. Revenue is also recognized net of any taxes collected, which are subsequently remitted to governmental authorities.
Cost of Revenue
Cost of revenue includes cost of product sales and cost of engineering services. Cost of product sales includes the cost of materials, such as wafers processed by third-party foundries, costs associated with packaging, assembly, shipping, depreciation of equipment associated with manufacturing, cost of logistics and quality assurance, warranty cost, amortization of capitalized production equipment, royalties on our production products, personnel-related costs including salaries, non-cash stock-based compensation, employee benefits, write-down of inventories, and allocation of general corporate expenses.
We capitalize the costs of production equipment, which includes mask cost with alternative future use, and amortize these costs on a straight-line basis over the useful lives of the production equipment and include them in cost of revenue. To determine if production equipment has alternative future use or benefits, we evaluate the risks associated with developing new technologies and capabilities, and the related risks associated with entering new markets. Production equipment that do not meet the criteria for capitalization are expensed as research and development costs.
While amortization of capitalized production equipment has historically not been material, we expect to incur significant amortization costs in the future as we continue to increase the number of additional products and place them into production.
Gross Profit and Gross Margin
Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross profit has been, and may in the future be, primarily influenced by several factors, including sales volumes, pricing of our products and services, changes in product costs, contract manufacturing supplier pricing, amortization of capitalized production equipment, personnel costs, shipping and logistics costs, and inventory write-downs.
Research and Development
Research and development expenses consist of personnel-related costs including salaries, non-cash stock-based compensation expense, employee benefits, bonuses, pre-production engineering mask costs, software license and cloud
41

Table of Contents

hosting services costs, prototype costs, packaging and test costs, professional services fees, and allocated shared expenses. Research and development costs are expensed as incurred.
We believe that continued investments in our products are important to our future growth and, as a result, we expect our research and development expenses to continue to increase in absolute dollars.
Sales and Marketing
Sales and marketing expenses consist of personnel-related costs including salaries, non-cash stock-based compensation expense, employee benefits, bonuses, samples to potential customers, product marketing and conferences, travel and entertainment costs, and allocated shared expenses.
We expect that our sales and marketing expenses will increase in absolute dollars as we increase our sales and marketing personnel and continue to expand our customer engagement with more design activities and increased product offerings.
General and Administrative
General and administrative expenses consist primarily of personnel-related costs including salaries, non-cash stock-based compensation expense, employee benefits and bonuses related to corporate, finance, information technology, legal, and human resource functions, professional services fees, audit and compliance expenses, insurance costs, and general corporate expenses including allocated shared expenses.
We expect general and administrative expenses to increase in absolute dollars as we grow our operations and continue to incur additional expenses associated with operating as a public company.
Interest Income
Interest income primarily consists of interest income earned on our short-term investments included in cash and cash equivalents and marketable securities.
Income Tax (Benefit) Provision
Income tax (benefit) provision consists primarily of U.S. federal, state, and foreign income taxes. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized.

Results of Operations
Comparison of Years Ended December 31, 2025 and 2024
Revenue

Years Ended
December 31,

2025 2024 Change % Change
(in thousands, except percentages)

Revenue $ 852,525  $ 396,290  $ 456,235  115  %

Total revenue increased $456.2 million , or  115% , for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to an increase in overall unit shipments driven by higher demand for our Aries, Scorpio, and Taurus products, as well as higher overall average selling prices resulting from an increased mix of hardware modules and Scorpio products .
42

Table of Contents

Cost of Revenue, Gross Profit, and Gross Margin

Years Ended
December 31,

2025 2024 Change % Change
(in thousands, except percentages and bps)

Cost of revenue $ 207,264  $ 93,591  $ 113,673  121  %
Gross profit $ 645,261  $ 302,699  $ 342,562  113  %
Gross margin 75.7 % 76.4 % (70) bps

Total cost of revenue increased $113.7 million , or  121% , for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to higher overall unit shipments and a shift in product mix, resulting from an increased mix of hardware modules and Scorpio products .
Gross margin decreased 70 bps to  75.7% for the year ended December 31, 2025 compared to 76.4% for the same period in 2024. The decrease was primarily driven by product mix as we shipped more hardware modules.
Research and Development

Years Ended
December 31,

2025 2024 Change % Change
(in thousands, except percentages)
Research and development
$ 303,998  $ 200,830  $ 103,168  51  %
Percentage of revenue
36 % 51  %

Research and development expense increased $103.2 million , or  51% , for the year ended December 31, 2025 compared to the same period in 2024 . The increase was primarily due to a $61.5 million increase in personnel-related costs, including $5.4 million of non-cash stock-based compensation expenses resulting from a 97% increase in average headcount, a $31.4 million increase in overall spending to support our R&D initiatives, and a $7.4 million increase in other operating costs to support our business expansion.
Sales and Marketing

Years Ended
December 31,

2025 2024 Change % Change
(in thousands, except percentages)
Sales and marketing
$ 79,774  $ 123,652  $ (43,878) (35) %
Percentage of revenue
9 % 31  %

Sales and marketing expense de creased $43.9 million , or 35% , for the year ended December 31, 2025 compared to the same period in 2024 . T he de crease was primarily due to a $56.0 million d ecrease in non-cash stock-based compensation expense, which resulted primarily from the recognition of time-based vesting of RSUs and the satisfaction of the liquidity event vesting condition in connection with our IPO in the prior period. The decrease was partially offset by a $9.8 million increase in personnel-related expenses resulting from a 25% increase in average headcount.

General and Administrative

Years Ended
December 31,

2025 2024 Change % Change
(in thousands, except percentages)
General and administrative
$ 88,066  $ 94,283  $ (6,217) (7) %
Percentage of revenue
10 % 24  %

43

Table of Contents

General and administrative expense de creased $6.2 million , or  7% , for the year ended December 31, 2025 compared to the same period in 2024 . The de crease was primarily due to a $24.3 million de crease in non-cash stock-based compensation expense, which resulted primarily from the recognition of time-based vesting of RSUs and the satisfaction of the liquidity event vesting condition in connection with our IPO in the prior period. The decrease was partially offset by a $9.7 million increase in personnel-related expenses resulting from a 49% increase in average headcount, a $3.9 million increase in professional services fees associated with the continued development of our public company infrastructure, and a $3.8 million increase in other operating costs to support our business expansion.
Interest Income

Years Ended
December 31,

2025 2024 Change % Change
(in thousands, except percentages)
Interest income
$ 44,730  $ 34,288  $ 10,442  30  %

Fo r th e year ended December 31, 2025, interest income increased $10.4 million , o r 30%, compared to the same period in 2024. The increase in interest income was primaril y du e t o higher average balances of short-term investments and cash equivalents as a result of our IPO in the prior period and net cash inflow from operations.
Income Tax (Benefit) Provision

Years Ended
December 31,

2025 2024 Change % Change
(in thousands, except percentages)
Income tax (benefit) provision
$ (981) $ 1,643  $ (2,624) (160) %

Income tax (benefit) provision decreased $2.6 million , or  160% , for the year ended December 31, 2025 compared to the same period in 2024. The change in income tax (benefit) provision was primarily due to the increase in non-cash stock-based compensation tax deductions, partially offset by the decrease in foreign-derived intangible income deduction.

Non-GAAP Financial Measures
This Annual Report on Form 10-K contains certain financial measures that are not presented in accordance with generally accepted accounting principles in the United States (“GAAP”), which we use to supplement the performance measures in our consolidated financial statements, which are presented in accordance with GAAP. We refer to these measures as “non-GAAP financial measures.” These non-GAAP financial measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, and non-GAAP net income. We use these non-GAAP financial measures for financial and operational decision-making and as a means to assist us in evaluating period-to-period comparisons. By excluding certain items that may not be indicative of our recurring core operating results, we believe that non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, and non-GAAP net income provide meaningful supplemental information regarding our performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and they may be used by our institutional investors and the analyst community to help them analyze the health of our business. However, there are a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.
Non-GAAP Gross Profit and Non-GAAP Gross Margin
We define non-GAAP gross profit as gross profit presented in accordance with GAAP, adjusted to exclude non-cash stock-based compensation expenses. The non-GAAP gross margin is non-GAAP gross profit divided by revenue. We have presented non-GAAP gross profit because we consider non-GAAP gross profit to be a useful metric for investors and other users of our financial information in evaluating our operating performance as it excludes the impact of non-cash stock-based compensation, a charge that can vary from period to period for reasons that are unrelated to our core operating
44

Table of Contents

performance. This metric also provides investors and other users of our financial information with an additional tool to eliminate the effects of items that may vary for different companies for reasons unrelated to core operating performanc e .
A reconciliation of our GAAP gross profit and GAAP gross margin, the most directly comparable GAAP financial measures, to non-GAAP gross profit and non-GAAP gross margin is presented below:

Years Ended December 31,

2025 2024

(in thousands, except percentages)

GAAP gross profit $ 645,261  $ 302,699 
Stock-based compensation expense upon IPO (1)
—  516 
Stock-based compensation expense 1,123  329 

Non-GAAP gross profit $ 646,384  $ 303,544 

GAAP gross margin
75.7  % 76.4  %
Stock-based compensation expense upon IPO (1)
—  0.1 
Stock-based compensation expense 0.1  0.1 
Non-GAAP gross margin
75.8  % 76.6  %

(1) Non-cash stock-based compensation expense recognized in connection with the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO.
Non-GAAP Operating Income and Non-GAAP Operating Margin
We define non-GAAP operating income as operating income ( loss) presented in accordance with GAAP, adjusted to exclude non-cash stock-based compensation expenses, acquisition-related costs, and employer payroll taxes related to the time-based vesting and net settlement of RSUs with a liquidity event-based vesting condition that was satisfied in connection with the IPO. We define non-GAAP operating margin as non-GAAP operating income divided by revenue. We have presented non-GAAP operating income and non-GAAP operating margin because we consider them useful metrics for investors and other users of our financial information in evaluating our operating performance as it excludes the impact of non-cash stock-based compensation expense, acquisition-related costs, and employer payroll taxes related to the time-based vesting and net settlement of RSUs in connection with our IPO, a charge that can vary from period to period or are one time charges for reasons that are unrelated to our core operating performance. These metrics also provide investors and other users of our financial information with an additional tool to eliminate the effects of items that may vary for different companies for reasons unrelated to core operating performanc e .
45

Table of Contents

A reconciliation of our GAAP operating income (loss) and GAAP operating margin, the most directly comparable GAAP financial measures, to non-GAAP operating income and non-GAAP operating margin is presented below:

Years Ended December 31,
2025 2024

(in thousands, except percentages)

GAAP operating income ( loss)
$ 173,423  $ (116,066)
Stock-based compensation expense upon IPO (1)
—  88,873 
Stock-based compensation expense
160,033  145,715 
Acquisition-related costs (2)
950  — 
Employer payroll tax related to stock-based compensation from IPO (3)
—  1,072 
Non-GAAP operating income
$ 334,406  $ 119,594 

GAAP operating margin
20.3  % (29.3) %
Stock-based compensation expense upon IPO (1)
—  22.4 
Stock-based compensation expense
18.8  36.8 
Acquisition-related costs
0.1  — 
Employer payroll tax related to stock-based compensation from IPO (3)
—  0.3 
Non-GAAP operating margin
39.2  % 30.2  %

(1) Non-cash stock-based compensation expense recognized in connection with the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO.
(2) Acquisition-related costs include certain incremental expenses incurred to effect a business combination such as third-party costs: advisory, legal, accounting, valuation, and other professional fees.
(3) Employer payroll taxes related to the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO.
Non-GAAP Net Income
We monitor non-GAAP net income for planning and performance measurement purposes. We define non-GAAP net income as net income (loss) presented in accordance with GAAP on our consolidated statements of operations, excluding the impact of non-cash stock-based compensation expenses, acquisition-related costs, employer payroll taxes related to the time-based vesting and net settlement of RSUs with a liquidity event-based vesting condition that was satisfied in connection with our IPO, and the related tax impact on the adjustments. We have presented non-GAAP net income because we believe that the exclusion of these charges allows for a more relevant comparison of our results of operations to other companies in our industry and facilitates period-to-period comparisons as it eliminates the effect of certain factors unrelated to our overall operating performance.
46

Table of Contents

A reconciliation of our GAAP net income (loss), the most directly comparable GAAP financial measure, to our non-GAAP net income is presented below:

Years Ended December 31,

2025 2024

(in thousands)

GAAP net income ( loss)
$ 219,134  $ (83,421)
Stock-based compensation expense upon IPO (1)
—  88,873 
Stock-based compensation expense (2)
160,033  145,715 
Acquisition-related costs
950  — 
Employer payroll tax related to stock-based compensation from IPO (3)
—  1,072 
Income tax effect (4)
(49,102) (8,910)
Non-GAAP net income
$ 331,015  $ 143,329 

(1) Non-cash stock-based compensation expense recognized in connection with the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO.
(2) Acquisition-related costs include certain incremental expenses incurred to effect a business combination such as third-party costs: advisory, legal, accounting, valuation, and other professional fees.
(3) Employer payroll taxes related to the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO.
(4) Income tax effect is calculated based on the tax laws in the jurisdictions in which we operate and is calculated to exclude the impact of non-cash s tock-based compensation expense and one-off discrete tax adjustments that are unrelated to our core operating performance. We no longer maintain valuation allowance for non-GAAP purposes due to our profitability on a non-GAAP basis. For the years ended December 31, 2025, and 2024, the non-GAAP tax expense rate was 12.7% and 6.9%, respectively.

Liquidity and Capital Resources
Since our inception, we have financed our operations primarily through proceeds from equity issuances including net proceeds from our IPO, and cash generated from the sale of our products. As of December 31, 2025 , our principal sources of liquidity were cash, cash equivalents, and marketable securities of $1.2 billion . Our principal use of cash is t o fund our operations, invest in research and development, fund capital expenditures for production equipment, and to support our overall growth.
While we have generated $319.3 million in cash flow from operating activities for the year ended December 31, 2025, in prior years we generated significant losses from operations and negative cash flows from operating activities as reflected in our accumulated deficit a s of December 31, 2024 . We believe that our current cash, cash equivalents, and marketable securities will be sufficient to fund our operations for at least the next 12 months and beyond. Our future capital requirements, however, will depend on many factor s , including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, capital expenditures for production equipment, the continuing market acceptance of our product s , and the use of cash to fund potential mergers or acquisitions. In the event that additional financing is required from outside sources, we may seek to raise additional funds through equity, equity-linked arrangements, and debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition could be adversely affected.
47

Table of Contents

Cash Flows
The following table summarizes our cash flows for the periods presented:

Years Ended December 31,

2025 2024
(in thousands)

Net cash provided by operating activities
$ 319,306  $ 136,676 
Net cash used in investing activities
$ (241,469) $ (757,568)
Net cash provided by financing activities
$ 9,803  $ 655,838 

Change in Cash Flows from Operating Activities
Net cash provided by operating activities for the year ended December 31, 2025 was $319.3 million, compared to $136.7 million for the comparable period in 2024. The $182.6 million increase in net cash provided by operating activities was a result of a $302.6 million increase in net income, partially offset by both lower non-cash charges of $67.3 million and an unfavorable change of $52.7 million from changes in operating assets and liabilities. The lower non-cash charges of $67.3 million was primarily due to a $74.6 million decrease in non-cash stock-based compensation expense, partially offset by increased warrants contra revenue of $4.1 million and increased depreciation and amortization expense of $3.7 million. The unfavorable change of $52.7 million from changes in operating assets and liabilities was primarily attributable to (i) a $21.9 million unfavorable change in accounts payables and accrued other liabilities primarily due to the timing of payments, (ii) a $20.7 million increase in the changes of the prepaid expenses and other assets primarily due to prepayment for a research and development vendor and a higher income tax receivable from excess tax benefits related to equity compensation, and (iii) a $13.9 million unfavorable change in accounts receivable due to higher product sales and the timing of customer payments. These unfavorable changes were partially offset by a reduced inventory balance of $6.3 million.
Change in Cash Flows from Investing Activities
Net cash used in investing activities for the year ended December 31, 2025 was $241.5 million, compared to $757.6 million for the comparable period in 2024. The $516.1 million decrease in cash used in investing activities was primarily due to a $474.4 million increase in proceeds from sales and maturities of marketable securities, and a $72.8 million decrease in purchases of marketable securities, partially offset by a $28.8 million increase associated with acquisition of a business, and an increase of $3.3 million in purchase of property and equipment.
Change in Cash Flows from Financing Activities
Net cash provided by financing activities for the year ended December 31, 2025 was $9.8 million compared to $655.8 million for the comparable period in 2024. The $646.0 million decrease in cash provided by financing activities was primarily due to a decrease of $667.4 million related to proceeds received from the IPO net of underwriting discounts and commissions and deferred offering costs, a decrease of $3.6 million in proceeds from exercise of stock options, partially offset by a lower tax withholding related to net share settlement of RSUs of $20.1 million, and a $3.8 million increase in proceeds from employee stock purchase plan.

Material Cash Requirements
Operating lease commitments. Our operating lease commitments primarily include corporate offices. As of December 31, 2025 , we had fixed lease payment obligations of $31.0 million , with approximately $6.2 million t o be paid within 12 months and the remainder thereafter. For an additional discussion on our operating leases, see Note 7 - Leases in the Notes to the Consolidated F inancial S tatements set forth in Part II, Item 8 of this annual report on Form 10-K.
Purchase commitments. Our purchase commitments are primarily related to software licenses, cloud hosting services, or performance of certain services. As of December 31, 2025 , we had purchase commitments of $74.9 million , with $29.6 million to be paid within 12 months and the remainder thereafter. For an additional discussion on our purchase commitments, see Note 8 - Commitments and Contingencies in the Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of this Annual Report on Form 10-K.
48

Table of Contents

Indemnification Agreements
See Note 8 - Commitments and Contingencies in the Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of this Annual Report on Form 10-K.

Critical Accounting Estimates
We prepare our financial statements in conformity with GAA P . The preparation of financial statements in conformity with GAAP required certain estimates and assumptions to be made that may affect our consolidated financial statements. Accounting policies that have a significant impact on our results are described in Note 1 - to our consolidated financial statements included in Part II, Item 8 of this annual report . The accounting policies discussed in this section are those that we consider to be the most critical. We consider an accounting policy to be critical if the policy is subject to a material level of judgment and if changes in those judgments are reasonably likely to materially impact our results.
We base our estimates and judgments on reasonably available information. Our estimates and assumptions may 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 period. Actual results may differ from those estimates and such differences may be material to the financial statements.
We continue to monitor and assess our critical estimates in light of developments, and as new events occur and additional information is obtained, our estimates may change materially in future periods.
Revenue Recognition
We recognize revenue upon transfer of control of promised goods and services in an amount that reflects the consideration we expect to receive in exchange for those goods and services. Our policy is to record revenue net of any applicable sales, use or excise taxes.
We transact with customers primarily pursuant to standard purchase orders for delivery of products and do not allow customers to cancel or change purchase orders within limited notice periods. We recognize product sales when control transfers to the customer, generally at the time of product shipment from its facilities or at the time when products are received by customers depending on the shipping terms with our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods, net of estimated sales returns, distributor price adjustments (“DPA”), rebates, and other customer incentives.
Sales to most distributors are made under programs common in the semiconductor industry whereby distributors receive DPAs to meet individual competitive opportunities. These programs may include credits granted to distributors or price protection credits when our standard published prices are lowered from the price the distributor paid for product still in its inventory.
In determining the transaction price, DPAs are considered variable consideration that reduce the amount of revenue recognized. Our policy is to estimate such price adjustments based on our historical prices and contractual terms using the expected value method. To date, actual DPAs have been materially consistent with the provisions we have made, based on our historical estimates. However, because of the inherent nature of estimates, there is always a risk that there could be significant differences between actual amounts and our estimates. We also consider the constraint on estimates of variable consideration when estimating the total transaction price.
Our customer programs involve rebates, which are designed to serve as sales incentives to resellers of our products in various target markets. We account for rebates as a reduction to revenue and accrue for potential rebates based on the amount we expect to be claimed by customers.

We account for the warrants issued to a customer as consideration payable as we did not receive a distinct good or service in exchange for the warrants. The shares underlying the warrants vest upon the achievement of specified tranches of global payments by the customer and its affiliates. As it becomes probable that the performance-based vesting conditions underlying the warrants will be achieved and the related revenue is recognized, we recognize the related grant date fair value of the warrants as a reduction of revenue for each sales transaction in proportion to total expected cumulative sales volume resulting in achievement of the vesting conditions. For more information, see Note 10 - Common Stock Warrants in the Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of this Annual Report on Form 10-K.

49

Table of Contents

Stock-Based Compensation
We measure our stock-based compensation expense for restricted stock units (“RSUs”) based on the fair value of the underlying common stock on the date of grant; RSUs are recognized on a straight-line basis over the requisite service period of the awards.
We measure and recognize our stock-based compensation expense for performance stock units (“PSUs”) based on the fair value of the underlying common stock on the date of grant. Stock-based compensation expense is recognized based on the grant date fair value in the period in which vesting becomes probable, using the accelerated attribution method over the requisite service period for each separately vesting portion of the award.
We measure and recognize our stock-based compensation expense for our Employee Stock Purchase Plan (“ESPP”) based on the estimated fair value. We use the Black-Scholes-Merton pricing model to determine the grant date fair value of purchase rights granted under the ESPP. Stock-based compensation expense is recognized on a straight-line basis over the term of each ESPP offering period, which was six months.
The Black-Scholes-Merton assumptions are based on the following for each of the years presented:
• Expected volatility – since we do not have sufficient trading history of our common stock, we estimate a blended expected volatility by taking the average historical volatility of a group of comparable publicly traded companies and our common stock price over a period equal to the expected term of the awards.
• Expected term – expected term represents the period that our stock-based awards are expected to be outstanding. The expected term assumptions for options are determined based on the vesting terms, exercise terms, and contractual lives. The expected term of the ESPP represents the period of time that purchase rights are expected to be outstanding, which is generally six months.
• Risk-free interest rate – We use the U.S. Treasury yield for our risk-free interest rate that corresponds with the expected term.
• Dividend yield – We utilize a dividend yield of zero, as we do not currently issue dividends, nor do we expect to do so in the future.
We account for forfeitures as they occur.

Business Combination
We allocate the fair value of the purchase consideration of a business acquisition to tangible and intangible assets acquired, including in-process research and development (“IPR&D”), and liabilities assumed based upon their estimated fair values at the acquisition date. The excess of the fair value of purchase consideration over the fair values of assets acquired and liabilities assumed is recognized as goodwill. Our valuation of acquired assets and assumed liabilities requires significant estimates, especially with respect to intangible assets. The valuation of intangible assets, in particular, requires that we use valuation techniques such as the income approach. The income approach includes the use of a discounted cash flow model, which includes discounted cash flow scenarios and requires the following significant estimates: future expected revenue, expected average selling unit price, obsolescence curve and technology life, and discount rates. Although we believe the assumptions and estimates we have made are reasonable, they are based in part on historical experience, market conditions and information obtained from management of the acquired companies, and are inherently uncertain. Unanticipated events and circumstances may occur, which could affect the accuracy or validity of such assumptions, estimates or actual results.

Capitalized Production Equipment
We incur costs for the fabrication of masks used by our contract manufacturers to manufacture wafers that incorporate our products. We capitalize the costs of fabrication masks that are reasonably expected to be used during production manufacturing. These amounts are included within property and equipment and are depreciated over a period of five years to cost of revenue. If we do not reasonably expect to use the fabrication mask during production manufacturing, we expense the related mask costs to research and development in the period in which such determination is made.

Recent Accounting Pronouncements
For more information, see Note - 1 to our consolidated financial statements included in Part II, Item 8 of this Annual Report.
50

Table of Contents

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates.
Interest Rate Risk
As of December 31, 2025, we had cash and cash equivalents of $167.6 million and marketable securities of $1,021.2 million, which consisted of cash held in sweep accounts, checking accounts, money market funds, U.S. treasury and agency securities, commercial paper, and corporate debt securities. The cash and cash equivalents are held primarily for working capital purposes.
Such interest earning instruments carry a degree of interest rate risk. To date, fluctuations in interest income are primarily driven by increases in investment balances. The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A hypothetical 100 basis point change in interest rates would change the fair value of our investments in marketable securities by $11.0 m illion and $8.7 million as of December 31, 2025 and 2024, respectively.
Foreign Currency Exchange Risk
Our reporting currency and the functional currency of our wholly owned foreign subsidiaries is the U.S. dollar. All of our sales and the majority of our operating expenses are transacted in U.S. dollars, and therefore our revenue and expenses are not currently subject to significant foreign currency risk. Foreign exchange gains and losses were not material for the years ended December 31, 2025, 2024, and 2023. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, although we may choose to do so in the future. We do not believe that a hypothetical 100 basis point increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on our operating results.
51

Table of Contents

Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 238 )
53

Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2025 and 2024
55

Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2025, 2024, and 2023
56

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the years ended December 31, 2025, 2024, and 2023
57

Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023
58

Notes to Consolidated Financial Statements
59

52

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Astera Labs, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Astera Labs, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income (loss), of changes in redeemable convertible preferred stock and stockholders' equity (deficit) and of cash flows for the years then ended, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and
53

Table of Contents

directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Acquisition of aiXscale Photonics GmbH
As described in Notes 1 and 6 to the consolidated financial statements, on November 10, 2025, the Company completed the acquisition of aiXscale Photonics GmbH (“aiXscale”). The total purchase consideration was $31.1 million. The acquisition was accounted for as a business combination and the purchase consideration was allocated as follows: $14.5 million to an in‑process research and development (“IPR&D”) intangible asset, $(0.3) million to net identifiable assets acquired and liabilities assumed, and the excess of purchase consideration over fair value of $16.9 million recorded as goodwill, which was allocated to the Company’s single reporting unit and operating segment. The IPR&D intangible asset was valued based on an income approach. The income approach includes the use of a discounted cash flow model, which includes discounted cash flow scenarios and requires the following significant estimates: future expected revenue, expected average selling unit price, obsolescence curve and technology life, and discount rates.
The principal considerations for our determination that performing procedures relating to the accounting for the acquisition of aiXscale is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence relating to the Company’s acquisition accounting. As disclosed by management, a material weakness existed during the year that impacted this matter.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the acquisition accounting. These procedures also included, among others, (i) reading the purchase agreement; (ii) evaluating management’s identification of assets acquired and liabilities assumed; (iii) testing the purchase consideration transferred and the allocation of the purchase price to the acquired assets and liabilities; (iv) evaluating the tax impact associated with the acquisition; (v) assessing the related business combination disclosures included in the consolidated financial statements; and (vi) the use of professionals with specialized skill and knowledge to assist in evaluating the appropriateness of the discounted cash flow model used by management.
/s/ PricewaterhouseCoopers LLP
Phoenix, Arizona
February 20, 2026
We have served as the Company’s auditor since 2020, which includes periods before the Company became subject to SEC reporting requirements.

54

Table of Contents

ASTERA LABS, INC.,
CONSOLIDATED BALANCE SHEETS
(In thousands, except par values)

As of December 31,
2025 2024
Assets
Current assets
Cash and cash equivalents $ 167,611   $ 79,551  
Marketable securities 1,021,205   834,750  
Accounts receivable, net 83,202   38,811  
Inventory 58,979   43,215  
Prepaid expenses and other current assets 31,033   16,652  
Total current assets 1,362,030   1,012,979  
Property and equipment, net 92,038   35,651  
Other assets 77,755   5,878  
Total assets $ 1,531,823   $ 1,054,508  
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 42,362   $ 26,918  

Accrued expenses and other current liabilities 90,680   59,624  
Total current liabilities 133,042   86,542  
Other liabilities 35,147   3,167  
Total liabilities 168,189   89,709  
Commitments and contingencies (Note 8)

Stockholders’ equity
Common stock, $ 0.0001 par value; 1,000,000 shares authorized as of December 31, 2025 and 2024, respectively; 170,186 and 162,018 shares issued and outstanding as of December 31, 2025 and 2024, respectively
17   16  
Additional paid-in capital 1,348,969   1,173,153  
Accumulated other comprehensive income 4,310   426  
Retained earnings (accumulated deficit)
10,338   ( 208,796 )
Total stockholders’ equity 1,363,634   964,799  
Total liabilities and stockholders’ equity $ 1,531,823   $ 1,054,508  

The accompanying notes are an integral part of these consolidated financial statements.
55

Table of Contents

ASTERA LABS, INC.,
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)

Years Ended December 31,
2025 2024 2023
Revenue $ 852,525   $ 396,290   $ 115,794  
Cost of revenue 207,264   93,591   35,967  
Gross profit 645,261   302,699   79,827  
Operating expenses
Research and development 303,998   200,830   73,407  
Sales and marketing 79,774   123,652   19,992  
General and administrative 88,066   94,283   15,925  
Total operating expenses 471,838   418,765   109,324  
Operating income (loss) 173,423   ( 116,066 ) ( 29,497 )
Interest income 44,730   34,288   6,549  
Income (loss) before income taxes 218,153   ( 81,778 ) ( 22,948 )
Income tax (benefit) provision
( 981 ) 1,643   3,309  
Net income (loss) $ 219,134   $ ( 83,421 ) $ ( 26,257 )

Net income (loss) per share attributable to common stockholders:
Basic $ 1.32   $ ( 0.64 ) $ ( 0.71 )
Diluted $ 1.22   $ ( 0.64 ) $ ( 0.71 )
Weighted-average shares used in calculating net income (loss) per share attributable to common stockholders:
Basic 166,408 131,262 37,131
Diluted 179,551 131,262 37,131

Other comprehensive income

Unrealized gain on marketable securities, net of taxes
$ 3,884   $ 167   $ 488  
Total comprehensive income (loss) $ 223,018   $ ( 83,254 ) $ ( 25,769 )

The accompanying notes are an integral part of these consolidated financial statements.
56

Table of Contents

ASTERA LABS, INC.,
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
(In thousands)

Redeemable Convertible
 Preferred Stock Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
(Loss) Income Retained Earnings (Accumulated Deficit)
Total
Stockholders’ Equity (Deficit)
Shares Amount Shares Amount
Balances as of December 31, 2022 90,891 $ 255,127   40,629 $ 4   $ 14,051   $ ( 229 ) $ ( 99,118 ) $ ( 85,292 )
Issuance of common stock upon exercise of stock options and vesting of early exercised stock options — —  1,624 —  2,050   —  —  2,050  
Repurchase of common stock upon termination — —  ( 207 ) —  ( 174 ) —  —  ( 174 )
Stock-based compensation — —  — —  10,679   —  —  10,679  
Warrants contra revenue — —  — —  805   —  —  805  
Unrealized gains on marketable securities — —  — —  —  488   —  488  
Net loss — —  — —  —  —  ( 26,257 ) ( 26,257 )
Balances as of December 31, 2023 90,891 $ 255,127   42,046 $ 4   $ 27,411   $ 259   $ ( 125,375 ) $ ( 97,701 )
Conversion of redeemable convertible preferred stock into common stock in connection with initial public offering ( 90,891 ) ( 255,127 ) 90,891 9   255,118   —  —  255,127  
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions —  —  19,759 2   665,988   —  —  665,990  
Issuance of common stock upon exercise of stock options and vesting of early exercised stock options — —  4,682 —  5,670   —  —  5,670  
Issuance of common stock upon vesting of restricted stock units — —  5,103 1   —  —  —  1  
Shares issued under employee stock purchase plan — —  136   —  4,160   —  —  4,160  
Shares of common stock withheld related to net settlement of restricted stock units — —  ( 559 ) —  ( 20,111 ) —  —  ( 20,111 )
Repurchase of common stock upon termination — —  ( 40 ) —  ( 1,066 ) —  —  ( 1,066 )
Stock-based compensation — —  — —  234,588   —  —  234,588  
Warrants contra revenue — —  —  —  1,395   —  —  1,395  
Unrealized gains on marketable securities — —  — —  —  167   —  167  
Net loss — —  — —  —  —  ( 83,421 ) ( 83,421 )
Balances as of December 31, 2024 — $ —   162,018 $ 16   $ 1,173,153   $ 426   $ ( 208,796 ) $ 964,799  
Issuance of common stock upon exercise of stock options and vesting of early exercised stock options — —   2,454 —  2,292   —  —  2,292  
Issuance of common stock upon vesting of restricted stock units — —   5,572 1   ( 1 ) —  —  —  
Shares issued under employee stock purchase plan — —   106 —  7,978   —  —  7,978  
Shares issued related to acquisition
— —   36 —  —  —  —  —  
Stock-based compensation — —   — —  160,033   —  —  160,033  
Warrants contra revenue — —   — —  5,514   —  —  5,514  
Unrealized gains on marketable securities — —   — —  —  3,884   —  3,884  
Net income — —   — —  —  —  219,134   219,134  
Balances as of December 31, 2025 — $ —   170,186 $ 17   $ 1,348,969   $ 4,310   $ 10,338   $ 1,363,634  

The accompanying notes are an integral part of these consolidated financial statements.
57

Table of Contents

ASTERA LABS, INC.,
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended December 31,
2025 2024 2023
Cash flows from operating activities
Net income (loss) $ 219,134   $ ( 83,421 ) $ ( 26,257 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Stock-based compensation 160,033   234,588   10,679  
Depreciation and amortization 6,829   3,154   1,781  
Non-cash operating lease expense 2,933   2,428   1,232  
Warrants contra revenue 5,514   1,395   805  

Accretion of discounts on marketable securities ( 7,932 ) ( 8,436 ) ( 1,658 )
Other
( 1,241 ) 263   10,377  
Changes in operating assets and liabilities
Accounts receivable, net ( 44,343 ) ( 30,480 ) 2,386  
Inventory ( 12,950 ) ( 19,287 ) ( 5,564 )
Prepaid expenses and other assets ( 33,757 ) ( 13,031 ) ( 720 )
Accounts payable 14,194   20,887   ( 4,264 )
Accrued expenses and other liabilities 15,770   31,018   ( 167 )
Operating lease liability ( 4,878 ) ( 2,402 ) ( 1,346 )
Net cash provided by (used in) operating activities 319,306   136,676   ( 12,716 )
Cash flows from investing activities
Purchases of property and equipment ( 37,544 ) ( 34,245 ) ( 2,761 )
Purchases of marketable securities ( 857,753 ) ( 930,575 ) ( 126,225 )
Sales and maturities of marketable securities 683,114   208,665   111,214  
Payments for business combinations, net of cash acquired
( 28,786 ) —   —  
Other investment activities ( 500 ) ( 1,413 ) —  
Net cash used in investing activities ( 241,469 ) ( 757,568 ) ( 17,772 )
Cash flows from financing activities
Proceeds from issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions —   672,198   —  
Payment of deferred offering costs —   ( 4,801 ) ( 1,407 )
Proceeds from exercises of stock options 1,825   5,458   1,115  
Proceeds from employee stock purchase plan 7,978   4,160   —  
Tax withholding related to net share settlements of restricted stock units —   ( 20,111 ) —  
Repurchase of common stock upon termination —   ( 1,066 ) ( 210 )
Net cash provided by (used in) financing activities 9,803   655,838   ( 502 )
Net increase (decrease) in cash, cash equivalents, and restricted cash
87,640   34,946   ( 30,990 )
Cash, cash equivalents, and restricted cash (1)

Beginning of the year
80,044   45,098   76,088  
End of the year
$ 167,684   $ 80,044   $ 45,098  

(1) Restricted cash was not material and is included in Prepaid expenses and other current assets.
The accompanying notes are an integral part of these consolidated financial statements.
58

Table of Contents

ASTERA LABS, INC.,
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Principles of Consolidation
The 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.
Use of Estimates
The preparation of 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 of deferred tax assets, reserves for uncertain tax positions, useful life of tapeout masks, 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 (loss), balance sheets, or cash flows for any of the periods presented.
Revenue Recognition
The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to receive in exchange for those goods and services. Under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when, or as, a performance obligation is satisfied.
59

Table of Contents

The following table presents revenue disaggregated by type (in thousands):

Years Ended December 31,
2025 2024 2023
Product sales $ 852,525   $ 393,115   $ 111,889  
Engineering services —   3,175   3,905  
Total revenue $ 852,525   $ 396,290   $ 115,794  

Where an arrangement includes multiple performance obligations, the transaction price is allocated to each performance obligation on a relative standalone selling price (“SSP”) basis. The Company determines the SSP based on an observable standalone selling price when it is available, as well as other factors, including the price charged to customers and the Company’s overall pricing objectives, while maximizing observable inputs.
Accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional. The Company records deferred revenue when it has received consideration, or an amount of consideration is due from the customer, and the Company has a future obligation to transfer products or services. The Company had immaterial and no deferred revenue as of December 31, 2025 and 2024 . From time to time, the Company has contracts with initial terms that include performance obligations that extend beyond one year. As of December 31, 2025 , there were no unsatisfied performance obligations for contracts with an original expected term greater than one year.
Product Sales
The Company transacts with customers primarily pursuant to standard purchase orders for delivery of products and does not allow customers to cancel or change purchase orders within limited notice periods. The Company recognizes product sales when control transfers to the customer, generally at the time of product shipment from its facilities or at the time when products are received by customers depending on the shipping terms with the customers, in an amount that reflects the consideration the Company expects to receive in exchange for those goods, net of estimated sales returns, distributor price adjustments (“DPA”), rebates, and other customer incentives.
The Company sells its products to distributors at a fixed list price. Distributors are authorized to resell its products to their customers at a range of individually negotiated price points based on a variety of factors, including customer, product, quantity, geography, and competitive differentiation. The majority of the distributors’ resales are priced at a discount from list price (the original purchase price). After the resale transaction is completed, the Company issues credit memos to the distributor for the price adjustments.
Sales to most distributors are made under programs common in the semiconductor industry whereby distributors receive certain price adjustments, or DPA, to meet individual competitive opportunities. These programs may include credits granted to distributors or price protection credits when the Company’s standard published prices are lowered from the price the distributor paid for product still in its inventory.
In determining the transaction price, DPAs are considered variable consideration that reduce the amount of revenue recognized. The Company’s policy is to estimate such price adjustments based on the Company’s historical prices and contractual terms using the expected value method. To date, actual DPAs have been materially consistent with the provisions the Company has made, based on its historical estimates. However, because of the inherent nature of estimates, there is always a risk that there could be significant differences between actual amounts and the Company’s estimates. The Company also considers the constraint on estimates of variable consideration when estimating the total transaction price.
The Company’s customer programs involve rebates, which are designed to serve as sales incentives to resellers of the Company’s products in various target markets. The Company accounts for rebates as a reduction to revenue and accrues for estimated rebates based on the amount the Company expects to be claimed by customers.
Revenue is recognized net of taxes collected, which are subsequently remitted to governmental authorities. Shipping and handling fees are included in cost of revenue and are recognized as activities to fulfill the promise to transfer the good.
Consideration payable includes cash amounts that the Company pays, or expects to pay, to a customer, and is included in accrued expenses and other current liabilities. Consideration payable also includes credits or other items. The Company
60

Table of Contents

accounts for consideration payable as a reduction of the transaction price, and therefore, of revenue, unless the payment to the customer is in exchange for a distinct good or service that the customer transfers to the Company.
The Company issued to a customer warrants to purchase shares of the Company’s common stock. The Company accounts for the warrants as consideration payable to a customer as the Company did not receive a distinct good or service in exchange for the warrants. The shares underlying the warrants vest upon the achievement of specified tranches of global payments by the customer and its affiliates. As it becomes probable that the performance-based vesting conditions underlying the warrants will be achieved and the related revenue is recognized, the Company recognizes the related grant date fair value of the warrants as a reduction of revenue for each sales transaction in proportion to total expected cumulative sales volume resulting in achievement of the vesting conditions. See Note 10 - Common Stock Warrants .
The Company applies the practical expedient to not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company also applies the practical expedient to expense sales commissions when incurred because the amortization period would have been one year or less.
Product Warranties
The Company’s products are generally subject to a product warranty, which provides for the estimated future costs of replacement upon shipment of the products. The products carry a standard one-year warranty. The warranty accrual is estimated primarily based on historical claims compared to historical revenue and assumes that the Company will have to replace products subject to a claim. Warranty expenses were not material for the years ended December 31, 2025, 2024 and 2023 . Accrued warranty was not material as of December 31, 2025, and 2024.
The Company does not allow its distributors to return overstocked, obsolete, and discontinued products.
Cost of Revenue

Cost of revenue includes both cost of product sales and cost of engineering services. Cost of product sales includes the cost of materials, such as wafers processed by third-party foundries, costs associated with packaging, assembly, shipping, depreciation of equipment associated with manufacturing, warranty cost, amortization of capitalized production equipment, costs of logistics and quality assurance, write-downs for excess and obsolete inventory, royalties on our production products, allocation of general corporate expenses, and personnel costs including salaries, stock-based compensation expense, bonuses, and employee benefits.

Research and Development Expenses

Research and development expenses consist of costs incurred in performing research and development activities and include salaries, stock-based compensation expense, employee benefits, bonuses, pre-production engineering mask costs, software license and cloud hosting services costs, overhead costs and prototype costs, packaging and test costs, professional services fees, and allocated facilities expenses. Research and development costs are expensed as incurred.

Sales and Marketing Expenses

Sales and marketing expenses consist of personnel costs including salaries, stock-based compensation expense, employee bonus and benefits, samples to potential customers, product marketing and conferences, travel and entertainment costs, and allocation of general corporate expenses including allocated facilities expenses. Advertising costs are expensed as incurred and were not material for the years ended December 31, 2025, 2024 and 2023.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs including salaries, stock-based compensation, and employee benefits related to corporate, finance, legal and human resource functions, contractor and professional services fees, audit and compliance expenses, insurance costs, and general corporate expenses including allocated facilities expenses.
Stock-Based Compensation
The Company records stock-based compensation expense for all stock-based awards, including stock options, restricted stock units (“RSUs”) , performance stock units (“PSUs”), and purchase rights issued under the Employee Stock Purchase Plan (“ ESPP”), made to employees, non-employees, and directors based on the fair value at the date of grant. The fair value of
61

Table of Contents

RSUs and PSUs is based on the underlying common stock at the date of grant. The fair value of stock options granted and purchase rights issued under the ESPP for purposes of calculating stock-based compensation expense is estimated on the grant date using the Black-Scholes-Merton pricing model.

The Black-Scholes-Merton pricing model requires the Company to make assumptions and judgments about the inputs used in the calculation, including the expected term, the volatility of the Company’s common stock, risk-free interest rate, and expected dividend yield. The expected term represents the period that the Company’s stock options and purchase rights under the ESPP are expected to be outstanding. The expected term assumptions are determined based on the vesting terms, exercise terms, and contractual lives of the options and ESPP. For options, the Company estimates the expected volatility by taking the average historical volatility of a group of comparable publicly traded companies over a period equal to the expected term of the awards, as the Company does not have sufficient trading history of its common stock. For ESPP, the expected volatility is based on a blended simple average between historical volatility of a group of comparable publicly traded companies and our common stock price over a period equal to the expected term of the awards. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the options and ESPP. The Company’s expected dividend yield input is zero as it has not historically paid, nor does it expect in the future to pay, cash dividends on its common stock.

Stock-based compensation expense for options, service-based RSUs, and purchase rights issued under the ESPP Plan are recognized as expense on a straight-line basis over the requisite service or offering period. Stock-based compensation expense with performance condition is recognized in the period in which vesting becomes probable using the accelerated attribution method over the requisite service period for each separately vesting portion of the award. The Company accounts for forfeitures as they occur.
Cash and Cash Equivalents
The Company classifies all highly liquid instruments purchased, such as sweep accounts, checking accounts, U.S. treasury securities, money market funds, and commercial paper with an original maturity of three months or less at the date of purchase, to be cash and cash equivalents. Cash equivalents are carried at cost, which approximates their fair value.
Marketable Securities
Marketable securities consist of instruments with an original maturity of more than three months, primarily including U.S. treasury and agency securities, corporate debt securities, and commercial paper. The Company’s investments are all highly liquid and available for use in current operations, including those with maturity dates beyond one year, and therefore the Company classifies these securities within current assets on its consolidated balance sheet.
The Company classifies and accounts for its marketable securities as available-for-sale, and it carries such securities at fair value with unrealized gains and losses excluded from earnings and reported net of tax as a separate component of stockholders’ equity in accumulated other comprehensive income until the security is sold or matures. During the years ended December 31, 2025, 2024, and 2023, in connection with its available-for-sale securities, the Company recorded pretax unrealized gains of $ 3.9  million, $ 0.2 million, and $ 0.5 million, respectively, with no associated tax benefit in other comprehensive income or loss.
If an available-for-sale debt security’s fair value declines below its amortized cost basis, the Company evaluates whether it intends to sell the security, or whether it more-likely-than-not will be required to sell the security before the recovery of its amortized cost basis. If either condition is met, the Company records an impairment loss on the security. If neither condition is met, the Company evaluates whether the decline is the result of credit-related factors, in which case the Company records the credit-related portion of the impairment loss. There were no impairment charges for the years ended December 31, 2025, 2024, and 2023.
Accounts Receivable, Net
Accounts receivable are recorded at the invoiced amount, net of DPAs, and allowance for credit losses. The Company performs periodic credit evaluations of its customers’ financial condition and does not require collateral from them. Amounts considered uncollectible are charged against the allowance account in the period they are deemed uncollectible. As of December 31, 2025 and 2024, t he allowance for credit losses was not material to the consolidated financial statements. There was no impairment charges for the years ended December 31, 2025, 2024, and 2023 .
The Company regularly monitors collections and payments from customers and maintains an allowance for credit losses for estimated losses resulting from the inability of customers to make required payments. Management estimates its
62

Table of Contents

allowance for credit losses by considering factors including historical credit loss experience and current conditions, such as the length of time accounts receivable are past due, customer payment histories, any specific customer collection issues identified, current market conditions, which may affect customer financial condition, and reasonable and supportable forecasts of future credit losses. The Company writes off accounts receivable that have become uncollectible.
Inventory
The Company’s inventory, which includes raw materials, work-in-progress, and finished goods, is stated at the lower of cost or net realizable value. Inventory cost, which includes materials purchase cost, inbound freight and capitalized overhead, is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. Net realizable value is the estimated selling price of the Company’s products in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The carrying value of inventory is reduced for estimated excess and obsolete inventory. Excess and obsolete inventory reductions are determined based on assumptions about product expiration, future demand, and market conditions, and are included in cost of revenue in the consolidated statements of operations and comprehensive income (loss).
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets included prepayments for technology subscription service, cloud computing arrangements, insurance premiums, restricted cash, and accrued interest income. As of December 31, 2025 and 2024, the Company’s restricted cash balance was not material and is primarily associated with collateral for the Company’s credit card.
Property and Equipment, Net
Property and equipment is stated at cost, net of accumulated depreciation. Depreciation expense is recorded on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives of the Company’s property and equipment are as follows:

Asset Category Estimated Useful Life
Production equipment
5 years
Office furniture 5 years
Laboratory equipment 3 years
Servers and workstations 3 years
Leasehold improvements Lesser of asset useful life or remaining lease term

Business Combination
The Company accounts for business combinations using the acquisition method in accordance with ASC 805, Business Combinations . The Company allocates the fair value of the purchase consideration of a business acquisition to the tangible and intangible assets acquired, including in-process research and development (“IPR&D”), and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. IPR&D is initially capitalized at fair value of an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life.
The valuation of acquired assets and assumed liabilities requires significant estimates, especially with respect to intangible assets. The valuation of intangible assets, in particular, requires the use of valuation techniques such as the income approach. The income approach includes the use of a discounted cash flow model, which includes discounted cash flow scenarios and requires the following significant assumptions: future expected revenue, expected average selling unit price, obsolescence curve and technology life, and discount rates. The Company estimates the fair value based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed.
63

Table of Contents

The results of operations of an acquired business are included in the Company’s consolidated financial statements from the date of acquisition. Acquisition-related costs are expensed as incurred and are included in general and administrative expenses on the consolidated statements of operations.
Impairment of Goodwill, Intangible Assets, and Other Long-lived Assets
Goodwill is evaluated for impairment on an annual basis in the fourth quarter of the year, and whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. The Company has elected to first assess qualitative factors to determine whether it is more likely than not that the fair value of its single reporting unit is less than its carrying amount, including goodwill. If it is determined that it is more likely than not that the fair value is less than its carrying amount, the quantitative impairment test will then be performed. Under the quantitative impairment test, if the carrying amount exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. Goodwill is included in other assets on the consolidated balance sheets.
The Company assesses the impairment of intangible assets and other long-lived assets, which consist primarily of property and equipment, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. Events or changes in circumstances that may indicate that an asset is impaired include significant decreases in the market value of an asset, significant underperformance relative to expected historical or projected future results of operations, a change in the extent or manner in which an asset is utilized, significant declines in the estimated fair value of the overall Company for a sustained period, shifts in technology, loss of key management or personnel, changes in the Company’s operating model, or strategy and competitive forces.
If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is generally determined based on the present value of estimated expected future cash flows using a discount rate commensurate with the risk involved, quoted market prices or appraised values, depending on the nature of the asset.
There were no impairments charges of goodwill, intangible assets, and other long-lived assets for the years ended December 31, 2025, 2024, and 2023.
Leases
The Company determines at contract inception whether an arrangement is a lease based on its ability to control a physically distinct asset and determines the classification of the lease as either operating or finance. For all leases, the Company combines all components of the lease including related non-lease components as a single component. The Company’s operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments related to the lease. The Company has also elected to utilize the short-term lease recognition exemption and, for those leases that qualify, the Company has not recognized operating lease ROU assets or operating lease liabilities. The Company does not have any finance leases as of December 31, 2025 and 2024 . Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Operating lease ROU assets also include any initial direct costs and prepayments less lease incentives. As the Company’s leases do not provide an implicit rate, the Company uses its collateralized incremental borrowing rate based on the information available at the lease commencement date, including lease term, in determining the present value of lease payments.

Lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise the option. Lease expense is recognized on a straight-line basis over the lease term in the consolidated statements of operations and comprehensive income (loss). Certain lease agreements may contain variable costs such as utilities and common area maintenance. Variable lease costs are expensed when the cost is incurred.
Income Taxes
The Company is subject to income taxes in the United States and certain foreign jurisdictions. Significant judgment is required in determining the Company’s provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.
The Company uses the asset and liability method to account for income taxes. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases
64

Table of Contents

of assets and liabilities and net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company accounts for uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes . The Company recognizes the tax effects of an uncertain tax position only if such position is more-likely-than-not to be sustained based solely on its technical merits as of the reporting date and only in an amount more-likely-than-not to be sustained upon review by the tax authorities. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.
Net Income (Loss) per Share
The Company follows the two-class method when computing net income (loss) per common share when shares are issued that meet the definition of participating securities. The two-class method determines net income (loss) per share of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income (loss) for the period had been distributed. Prior to the automatic conversion into shares of common stock as a result of the Company’s IPO, the Company’s redeemable convertible preferred stock contractually entitled the holders of such shares to participate in dividends, but did not contractually require the holders of such shares to participate in the Company’s losses. Subsequent to the IPO, the Company has no participating securities.
Basic net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase. The diluted net income per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method. For periods in which the Company reports net losses, diluted net loss per common share is the same as basic net loss per common share, because all potentially dilutive securities are anti-dilutive.
Commitments and Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible. However, if the Company determines that a contingent loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the consolidated financial statements. Legal costs incurred in connection with loss contingencies are expensed as incurred.
Foreign Currency Transactions
The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. All foreign currency transactions are initially measured and recorded in U.S. dollars using the exchange rate on the date of the transaction. Foreign currency denominated monetary assets and liabilities are remeasured and recorded at the end of each reporting period using the exchange rate at that date. Foreign exchange gains and losses were not material for the years ended December 31, 2025, 2024, and 2023.
Fair Value Measurements
Fair value is defined 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. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1. Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified contractual term, a Level 2 input must be observable for substantially the full term of the asset or liability.
65

Table of Contents

Level 3. Inputs are unobservable and reflect the Company’s assumptions, consistent with reasonably available information, about the assumptions that market participants would use in pricing the asset or liability. These inputs are used when observable inputs are not available and require significant judgment.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.
Concentrations of Credit Risk and Major Customers
Revenue by location is determined by the billing address of the Company’s customers, which include distributors who purchase the Company’s products and resell them.

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

Years Ended December 31,
2025
2024
2023

Customer A
20   % * *
Customer B
20   % 11   % *
Customer C
17   % * *
Customer D
16   % 24   % 37   %
Customer E
11   % * *
Customer F
* 36   % 24   %
Customer G
* * 18   %

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

As of
December 31, 2025 December 31, 2024
Customer B
* 22   %
Customer C
14   % *
Customer D
27   % 13   %
Customer E
28   % 31   %
Customer F
* 24   %

*Less than 10% of total accounts receivable, net
Concentration of Supply Risk
The Company relies on a single manufacturing partner for integrated circuits. The Company also relies on a limited number of other manufacturing partners for its modules, boards, and integrated circuit substrates. While alternative providers could be identified, the Company is subject to supply and pricing risks.
Accounting Pronouncements Recently Adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update, 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The Company adopted ASU 2023-09 in the fourth quarter of 2025 and applied the amendments retrospectively to all prior periods presented in the consolidated financial statements (see Note 13 - Income Taxes). The adoption of ASU 2023-09 did not have a material impact on the Company's consolidated financial statements.
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
66

Table of Contents

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 or loss 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 or loss 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):

Years Ended December 31,
2025 2024 2023
Revenue $ 852,525   $ 396,290   $ 115,794  
Less:

Cost of revenue 207,264 93,591 35,967
Stock-based compensation (1)
158,910 233,743 10,655
Personnel-related expenses (1)
192,926 117,366 65,327

Other segment items (2)
74,291 35,011 30,102

Consolidated net income (loss)
$ 219,134   $ ( 83,421 ) $ ( 26,257 )

(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) provision, engineering design related costs , and professional and consulting services fees.
67

Table of Contents

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):

Years Ended December 31,
2025 2024 2023
Singapore $ 276,989   $ 29,056   $ —  
China 256,276   72,672   5,540  
Taiwan 247,448   269,935   72,174  
United States 27,428   11,296   30,664  
Other 44,384   13,331   7,416  
Total $ 852,525   $ 396,290   $ 115,794  

Property and equipment by geographic location is based on the location of the asset. As of December 31, 2025, 20 % and 73 % of the Company’s property and equipment was located in the United States and Taiwan, respectively. As of December 31, 2024, 17 % and 82 % of the Company’s property and equipment was located in the United States and Taiwan, respectively. As of December 31, 2023, substantially all of the Company’s property and equipment was located in the United States.  

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 December 31, 2025
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value
Cash equivalents

Money market funds $ 142,772   $ —   $ —   $ 142,772  

Commercial paper 5,496   —   ( 1 ) 5,495  
Total cash equivalents $ 148,268   $ —   $ ( 1 ) $ 148,267  
Marketable securities
U.S. treasury and agency securities $ 203,175   $ 630   $ ( 11 ) $ 203,794  
Commercial paper 11,459   4   ( 1 ) 11,462  
Corporate debt securities 802,261   3,800   ( 112 ) 805,949  

Total marketable securities $ 1,016,895   $ 4,434   $ ( 124 ) $ 1,021,205  

As of December 31, 2024
Amortized
Cost Gross Unrealized Gains Gross Unrealized Losses Fair
Value
Cash equivalents
Money market funds $ 59,595   $ —   $ —   $ 59,595  

Total cash equivalents $ 59,595   $ —   $ —   $ 59,595  

Marketable securities
U.S. treasury and agency securities $ 202,506   $ 338   $ ( 375 ) $ 202,469  
Commercial paper 103,219   51   ( 37 ) 103,233  
Corporate debt securities 512,531   1,351   ( 957 ) 512,925  

Asset-backed securities 16,068   63   ( 8 ) 16,123  
Total marketable securities $ 834,324   $ 1,803   $ ( 1,377 ) $ 834,750  

As of December 31, 2025 and 2024, 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.
68

Table of Contents

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

As of December 31, 2025
As of December 31, 2024

Amortized Cost Fair Value Amortized Cost Fair Value
Due within one year $ 463,417   $ 464,282   $ 425,733   $ 426,257  
Due after one year through five years 701,746   705,190   468,186   468,088  
Total available-for-sale securities $ 1,165,163   $ 1,169,472   $ 893,919   $ 894,345  

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 December 31, 2025 and 2024 or impairment charges for the years ended December 31, 2025, 2024 and 2023 .
There were no material realized gains or losses from available-for-sale securities that were reclassified out of accumulated other comprehensive income (loss) for the years ended December 31, 2025, 2024 , and 2023.

4. Fair Value of Assets and Liabilities
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 December 31, 2025
Level 1 Level 2 Total Fair
Value
Cash equivalents
Money market funds $ 142,772   $ —   $ 142,772  

Commercial paper —   5,495   5,495  
Total cash equivalents $ 142,772   $ 5,495   $ 148,267  
Marketable securities
U.S. treasury and agency securities $ —   $ 203,794   $ 203,794  
Commercial paper —   11,462   11,462  
Corporate debt securities —   805,949   805,949  

Total marketable securities $ —   $ 1,021,205   $ 1,021,205  

As of December 31, 2024
Level 1 Level 2 Total Fair
Value
Cash equivalents
Money market funds $ 59,595   $ —   $ 59,595  

Marketable securities
U.S. treasury and agency securities $ —   $ 202,469   $ 202,469  
Commercial paper —   103,233   103,233  
Corporate debt securities —   512,925   512,925  

Asset-backed securities —   16,123   16,123  
Total marketable securities $ —   $ 834,750   $ 834,750  

As of December 31, 2025 and 2024, 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, and property, plant and equipment, 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
69

Table of Contents

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 years ended December 31, 2025, 2024, and 2023.

As of December 31, 2025 and 2024 , the Company had no liabilities required to be measured at fair value on a nonrecurring basis.

Assets and Liabilities N ot Measured at Fair Value

The carryi ng 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. Consolidated Balance Sheet Components
Inventory
Inventory consists of the following (in thousands):

As of December 31,
2025 2024
Raw materials $ 84   $ 229  
Work-in-progress 35,752   26,695  
Finished goods 23,143   16,291  
Total inventory $ 58,979   $ 43,215  

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

As of December 31,

2025 2024
Construction in progress $ 40,510   $ 29,064  
Production equipment 28,171   —  
Laboratory equipment 21,603   10,467  
Leasehold improvements 11,439   1,159  
Other 2,037   794  
Property and equipment, gross 103,760   41,484  
Less: accumulated depreciation ( 11,722 ) ( 5,833 )
Total property and equipment, net $ 92,038   $ 35,651  

Depreciation and amortization expense for the years ended December 31, 2025, 2024 and 2023 was $ 6.8 million, $ 3.2 million, and $ 1.8 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.
70

Table of Contents

Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
As of December 31,
2025 2024
Accrued compensation and benefits $ 46,510   $ 29,516  
Construction in progress
13,500   —  
Customer deposits —   15,000  

Accrued software license costs 7,632   5,418  

Other current liabilities 23,038   9,690  
Total accrued expenses and other current liabilities $ 90,680   $ 59,624  

Supplemental Cash Flow Information
The following table provides supplemental non-cash activities (in thousands):

Years Ended December 31,
2025 2024 2023

ROU assets obtained in exchange for lease obligations $ 23,980   $ 2,542   $ 2,336  
Purchases of property and equipment in accounts payable, accrued expenses and other current liabilities $ 15,516   $ 173   $ 325  
Property and equipment acquired through tenant improvement allowance $ 8,483   $ —   $ —  

Conversion of redeemable convertible preferred stock into common stock in connection with initial public offering $ —   $ 255,127   $ —  

6. Business combination
On November 10, 2025, the Company acquired 100 % of the voting equity interest of aiXscale Photonics GmbH (“aiXscale”), a privately held company specializing in fiber-chip coupling technologies. The acquisition is expected to help enable the Company to further develop its products and solutions by integrating aiXscale’s technology. The total purchase consideration transferred, entirely in cash, was $ 31.1  million.
The acquisition was accounted for as a business combination and the purchase consideration was allocated as follows: $ 14.5  million to an in‑process research and development (“IPR&D”) intangible asset, $( 0.3 ) million to net identifiable assets acquired and liabilities assumed, and the excess of purchase consideration over fair value of $ 16.9  million recorded as goodwill, which was allocated to the Company’s single reporting unit and operating segment. Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating the technology into the Company's platforms. Goodwill recognized is not deductible for tax purposes.
The IPR&D intangible asset will not be amortized until the related projects are completed or abandoned and will be tested for impairment at least annually, or more frequently if events or changes in circumstances indicate impairment. The IPR&D intangible asset was valued based on an income approach.
Pro forma results of operations have not been presented because the effects of the acquisitions were not material to the Company’s consolidated statements of operations and comprehensive income (loss).
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.
71

Table of Contents

7. Leases
The Company has operating leases in various locations. 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.

On December 16, 2024, the Company entered into a lease agreement with a lessor to lease approximately 154,231 square feet of office space for its new headquarters located in San Jose, California. The lease has a term of approximately 7.5 years and commenced in June 2025. The Company has the option to extend the lease for up to two consecutive terms of 60 months each, subject to the terms therein. The option to renew the term was not included for purposes of determining the ROU and associated lease liabilities as the Company determined that the renewal of the lease is not reasonably certain to be exercised as of the lease commencement date.
Supplemental balance sheet information related to the Company’s operating leases is as follows (in thousands):

As of December 31,
2025 2024
Assets
Operating lease ROU assets, net $ 22,810   $ 2,983  
Liabilities
Operating lease liabilities, current $ 4,146   $ 1,286  
Operating lease liabilities, noncurrent 26,828   1,788  
Total lease liabilities $ 30,974   $ 3,074  

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 consolidated balance sheets.
The components of lease expense, included in operating expenses, were as follows (in thousands):

Years Ended December 31,
2025 2024 2023
Operating lease expense $ 5,879   $ 2,633   $ 1,640  
Short-term lease expense 368   229   200  
Variable lease expense 1,608   284   310  
Total lease expense $ 7,855   $ 3,146   $ 2,150  

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

As of December 31,
2025 2024
Weighted average remaining lease term (in years) 6.4 3.2
Weighted average discount rate 7.1 % 11.1 %

72

Table of Contents

The future minimum operating lease payments for each of the next five years and thereafter are as follows as of December 31, 2025 (in thousands):

Years ending December 31 Operating Leases
2026 $ 6,153  
2027 6,466  
2028 6,268  
2029 5,798  
2030 2,808  
Thereafter 10,924  
Total future minimum lease payments
38,417  
Less: Imputed interest ( 7,443 )
Total operating lease liabilities $ 30,974  

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 December 31, 2025 (in thousands):

Years ending December 31 Purchase Commitments
2026 $ 29,629  
2027 30,282  
2028 14,678  
2029 316  
2030 4  
Total purchase commitments $ 74,909  

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 had no liabilities recorded for these provisions as of December 31, 2025 and 2024.
73

Table of Contents

9. Undesignated Preferred Stock and Common Stock
Undesignated Preferred Stock
On March 22, 2024, in connection with the consummation of the IPO, the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, which authorized 100,000,000 shares of undesignated preferred stock with a par value of $ 0.0001 per share, with rights and preferences, including voting rights, designated from time to time by the Company’s Board of Directors. As of December 31, 2025 and 2024 , no undesignated preferred stock has been issued.
Common Stock
On January 22, 2024, the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, which resulted in an increase to the authorized shares of the Company’s Common Stock from 162,641,331 shares to 163,375,000 shares. On March 22, 2024, in connection with the consummation of the IPO, the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware that resulted in an increase to the authorized shares of the Company’s Common Stock from 163,375,000 shares to 1,000,000,000 shares. As of December 31, 2025 and 2024 , the Company had authorized 1.0  billion shares of Common Stock with a $ 0.0001 per share par value. Common stockholders are entitled to one vote for each share held.

10. Common Stock Warrants
In October 2022, the Company issued a warrant to Amazon NV Investment Holdings LLC (“Holder”) to purchase an aggregate of up to 1,484,230 shares of Common Stock at an exercise price of $ 20.34 per share (the “Customer Warrant”). The exercise period of the Customer Warrant is through the seven th anniversary of the issue date. Upon issuance of the Customer Warrant, 14,844 shares issuable underlying the Customer Warrant were immediately vested and exercisable. The remainder of the shares underlying the Customer Warrant may vest and become exercisable over the contract term, contingent upon the achievement of performance conditions, comprised of specified tranches of global payments by the Holder and its affiliates to the Company.
In October 2023, the Company amended the warrant agreement and issued an additional warrant to the Holder to purchase an aggregate of up to 831,945 shares of Common Stock at an exercise price of $ 20.34 per share (the “2023 Warrant”, and together with the Customer Warrant, the “Warrants”), 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 payments by the Holder and its affiliates to the Company. As of December 31, 2025 and 2024 , an aggregate of 1,165,513 shares and 474,029 shares, respectively, underlying the Warrants vested and are exercisable. Additionally, an aggregate of 30,589 and 50,439 shares were probable of vesting as of December 31, 2025 and 2024 , respectively. As of December 31, 2025, there was no exercise of the Warrants.
The grant date fair values of the Customer Warrant and the 2023 Warrant were determined to be $ 4.78 , and $ 10.04 , per share, respectively, using the Black-Scholes-Merton option pricing model, for maximum total Customer Warrant and 2023 Warrant fair values of $ 7.1  million and $ 8.4  million, respectively. The per share grant date fair values of the Customer Warrant and 2023 Warrant were estimated using the following assumptions:

Customer Warrant 2023 Warrant
Expected dividend yield
0.0 % 0.0 %
Risk-free interest rate
4.2   % 4.9   %
Expected volatility 55.0   % 60.0   %
Expected term (in years)
7.0 6.0
Per share fair value of common stock $ 10.64   $ 17.62  

The Company recognized $ 5.5 million, $ 1.4  million and $ 0.8 million for the years ended December 31, 2025, 2024 and 2023 , respectively, as a reduction of revenue in the consolidated statements of opera tions and comprehensive income (loss) 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 October 14, 2029.
74

Table of Contents

11. Stock-Based Compensation
Amended and Restated 2018 Equity Incentive Plan
Prior to the IPO, the Company historically granted stock-based compensation awards under its Amended and restated 2018 Equity Incentive Plan (as amended, “2018 Plan”). The 2018 Plan provided for the grant of incentive and nonqualified stock options and RSUs to qualified employees, nonemployee directors, and consultants. Options granted under the 2018 Plan generally expire within 10 years from the date of grant, vest over four years and are exercisable for shares of the Company’s Common Stock. The RSUs vest upon the satisfaction of both a service condition and a liquidity event condition. The service condition for the RSUs is generally satisfied over a four-year vesting period. The liquidity event vesting condition for the RSUs was satisfied in connection with the IPO.
The 2018 Plan was terminated in March 2024. Any shares of the Company’s Common Stock that would have otherwise returned to the 2018 Plan as a result of forfeiture, expiration, cancellation, termination or net issuances of awards thereunder, including, for the avoidance of doubt, any shares of Common Stock withheld by the Company to satisfy any tax withholding obligations that arose upon vesting or settlement of awards in connection with the IPO were returned to the share reserve under the 2024 Plan. All future equity grants will be made pursuant to the 2024 Plan.
2024 Stock Option and Incentive Plan
In March 2024, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2024 Stock Option and Incentive Plan (“2024 Plan”), which became effective on March 19, 2024, immediately prior to the effectiveness of the registration statement on Form S-1 related to the IPO. Under the 2024 Plan, the Company initially reserved 12,362,662 shares of the Common Stock for issuance thereunder. The 2024 Plan provides for annual automatic increases in the number of shares of the Company’s Common Stock reserved thereunder on January 1, 2025 and each January 1 thereafter, by up to 5 % of the issued and outstanding number of shares of Common Stock on the immediately preceding December 31, or such lesser number of shares as determined by the compensation committee of the Company’s board of directors . As of December 31, 2025 , 16.9 million shares remained available to be issued under the Plan.
2024 Employee Stock Purchase Plan
In March 2024, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2024 Employee Stock Purchase Plan, which became effective on March 19, 2024, immediately prior to the effectiveness of the registration statement on Form S-1 related to the IPO. The Company initially reserved 3,090,666 shares of the Common Stock for future issuance. The number of shares of the Common Stock reserved for issuance will automatically increase on January 1 of each calendar year, beginning on January 1, 2025 through January 1, 2034, by the lesser of (i) 3,090,666 shares of common stock, (ii) 1 % of the number of shares of Common Stock issued and outstanding on the immediately preceding December 31st, or (iii) such number of shares of Common Stock as determined by the compensation committee of the Company’s board of directors.
Under the ESPP, participants can purchase the Company’s Common Stock using payroll deductions, which may not exceed 15 % of their salary. Participants will be granted the right to purchase shares of Common Stock at a price per share that is equal to 85 % of the lesser of (i) the closing price on the first day of the applicable offering under the ESPP or, for the first offering period, the “Price to Public” set forth on the cover page for the Prospectus or (ii) the closing price on the last day of the applicable offering period under the ESPP. No participant has the right to purchase shares of Common Stock in an amount, when aggregated with purchase rights under all of the Company’s employee stock purchase plans that are also in effect in the same calendar year(s), that has a fair market value of more than $ 25,000 , determined as of the first day of the applicable offering period, for each calendar year in which that right is outstanding. In addition, no participant is permitted to purchase more than 3,000 shares during any applicable offering period. As of December 31, 2025, there was 0.2  million shares issued under the ESPP.
75

Table of Contents

Summary of Employee Stock-Based Compensation Expense
A summary of stock-based compensation expense recognized in the consolidated statements of operations and comprehensive income (loss) is as follows (in thousands):

Years Ended December 31,
2025 2024 2023
Cost of revenue $ 1,123   $ 845   $ 24  
Research and development 81,843   76,427   7,360  
Sales and marketing 39,903   95,887   2,067  
General and administrative 37,164   61,429   1,228  
 Total $ 160,033   $ 234,588   $ 10,679  

Stock Option
The estimated grant date fair values of the employee stock options granted during the years ended December 31, 2024 and 2023 were calculated using the Black-Scholes-Merton Option-pricing model, based on the following minimum and maximum assumptions:

Years Ended December 31,
2024 2023
Expected dividend yield 0.0   % 0.0   %
Risk-free interest rate 4.2   % 3.9 % - 4.7 %

Expected volatility 52.3   % 48.8 % - 49.1 %

Expected term (in years) 6.1 6.1

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

Number of
Shares Weighted-Average
Exercise Price
(per share) Weighted-Average
Remaining Contractual Term
(in years) Aggregate
Intrinsic
Value
Outstanding as of December 31, 2024 5,285 $ 0.83   6.5 $ 695,689  
Granted —   —  
Exercised ( 2,454 ) 0.75  
Cancelled and forfeited ( 110 ) 1.66  
Outstanding as of December 31, 2025 2,721 $ 0.86   5.5 $ 450,336  
Vested and expected to vest as of December 31, 2025
2,721 $ 0.86   5.5 $ 450,336  
Exercisable as of December 31, 2025 2,651 $ 0.86   5.5 $ 438,676  

The intrinsic value of a stock option is calculated as the difference between the per share exercise price of the underlying stock option award and the estimated per share fair value of the Company’s common stock at the measurement date. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024, and 2023 was $ 370.1 million , $ 379.3 million, and $ 25.8 million, respectively.
The weighted-average grant date fair value of stock options granted during the years ended December 31, 2024, and 2023 was $ 47.04 and $ 15.48 per share, respectively.
As of December 31, 2025 , there was approximately $ 1.0 million of total unrecognized compensation cost, related to unvested options, which is expected to be recognized over a weighted-average remaining requisite service period of 0.9 years, using the straight-line method.
ESPP
76

Table of Contents

The estimated grant date fair values of ESPP shares granted during the years ended December 31, 2025 and 2024 were calculated using the Black-Scholes-Merton Option-pricing model, based on the following minimum and maximum assumptions:
Year Ended December 31,

2025 2024
Expected dividend yield 0.0   % 0.0   %
Risk-free interest rate 3.8 % - 4.3 %
4.4 % - 5.2 %

Expected volatility 69.7 % - 83.9 %
46.6 % - 70.8 %

Expected term (in years) 0.5 - 0.5
0.5 - 0.7

During the year ended December 31, 2025, employees purchased 0.1 million shares of common stock through the ESPP at an average purchase price of $ 75.63 per share.
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):

Number of
Restricted Stock
Units Weighted-Average
Grant Date Fair
Value (per share)
Outstanding as of December 31, 2024 13,620   $ 33.49  
Granted 1,893   117.28  
Vested ( 5,572 ) 30.81  
Cancelled and forfeited ( 587 ) 43.91  
Outstanding as of December 31, 2025 9,354   $ 51.39  

The aggregate fair values of RSUs that vested and settled during the years ended December 31, 2025 and 2024 were $ 677.5 million and $ 241.0 million, respectively.
As of December 31, 2025 , there was $ 358.3  million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of 1.8 years.
Performance Stock Units (“PSUs”)
A summary of PSU activity under the 2024 Plan is as follows (in thousands, except per share data):

Number of
Performance Stock
Units
Weighted
Average Grant
Date Fair Value
Outstanding as of December 31, 2024
155   $ 125.28  
Granted 22   136.32  
Vested —   —  
Cancelled and forfeited —   —  
Outstanding as of December 31, 2025
177   $ 126.64  

The Company granted PSUs that vest on the satisfaction of continuous employment and achievement of certain financial and operational performance goals established by the Compensation Committee of the Company’s Board of Directors. As of December 31, 2025, there was $ 16.1 million of unrecognized stock-based compensation expense related to the PSUs, which is expected to be recognized over a weighted-average period of 2.9 years.
77

Table of Contents

12. Net Income (Loss) per Common Share
The following table sets forth the computation of basic and diluted net income (loss) per share attributable to the Company’s common stockholders (in thousands, except per share data):

Years Ended December 31,
2025 2024 2023

Net income (loss) attributable to common stockholders
$ 219,134   $ ( 83,421 ) $ ( 26,257 )

Shares used in net income (loss) per share computations:

Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic
166,408   131,262   37,131  
Effect of potentially dilutive equivalent shares 13,143   —   —  
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, diluted
179,551   131,262   37,131  

Net income (loss) per share attributable to common stockholders, basic
$ 1.32   $ ( 0.64 ) $ ( 0.71 )
Net income (loss) per share attributable to common stockholders, diluted
$ 1.22   $ ( 0.64 ) $ ( 0.71 )

Potentially dilutive securities include dilutive common stock from assumed exercise of stock options, RSUs, Warrants, and ESPP 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):

Years Ended December 31,
2025 2024 2023
Options to purchase common stock —   5,233   10,050  
Redeemable convertible preferred stock —   —   90,891  
Unvested RSUs
62   13,620   8,583  
Unvested PSUs
—   155   —  
Warrants for common stock —   2,442   2,442  
ESPP 6   60   —  
Total 68   21,510   111,966  

13. Income Taxes
The U.S. and non-U.S. components of income (loss) before income taxes consist of the following (in thousands):

Years Ended December 31,
2025 2024 2023
United States $ 217,937   $ ( 83,550 ) $ ( 23,655 )
International 216   1,772   707  
Income (loss) before incomes taxes
$ 218,153   $ ( 81,778 ) $ ( 22,948 )

78

Table of Contents

The income tax (benefit) provision consists of the following (in thousands):
Years Ended December 31,
2025 2024 2023
Current
U.S. Federal $ ( 2,051 ) $ 1,141   $ 3,144  
State ( 21 ) ( 8 ) 206  
International 1,072   510   ( 41 )
Total current tax expense ( 1,000 ) 1,643   3,309  
Deferred
U.S. Federal —   —   —  
State —   —   —  
International 19   —   —  
Total deferred tax expense 19   —   —  
Total income tax (benefit) expense $ ( 981 ) $ 1,643   $ 3,309  

The tax (benefit) expense differs from the U.S. federal statutory tax expenses as follows:

Years Ended December 31,
2025 2024 2023
(in thousands, except percentages)
Amount % Amount % Amount %
U.S. federal statutory income tax $ 45,812   21.0   % $ ( 17,163 ) 21.0   % $ ( 4,819 ) 21.0   %
Domestic federal
Tax credits
Research & development tax credits ( 65,713 ) ( 30.1 ) ( 50,306 ) 61.5   ( 3,369 ) 14.7  
Other —   —   —   —   ( 30 ) 0.1  
Nontaxable or nondeductible items
Non-deductible compensation (stock-based compensation and officer compensation limitation) 78,681 36.1   31,717 ( 38.8 ) ( 145 ) 0.6  
Excess tax benefits of stock-based compensation ( 171,198 ) ( 78.5 ) ( 75,491 ) 92.3   ( 4,472 ) 19.5  
Incentive stock options /ESPP disqualifying disposition ( 6,862 ) ( 3.1 ) ( 6,587 ) 8.1   —   —  
R&D credit add-back 12,625   5.8   —   —   —   —  
Capitalized US R&D costs —   —   2,585   ( 3.2 ) —   —  
Other nontaxable or nondeductible items ( 252 ) ( 0.1 ) 200   ( 0.2 ) 121   ( 0.5 )
Cross-border tax laws
Foreign-derived intangible income 3,624   1.7   ( 8,325 ) 10.2   —   —  
Other —   —   49   ( 0.1 ) 78   ( 0.4 )
Effect of changes in tax laws or rates enacted in the current period
Changes in valuation allowance 87,167   40.0   112,297   ( 137.3 ) 15,636   ( 68.1 )
Other ( 4 ) —   102   ( 0.1 ) —   —  
Domestic state and local income taxes, net of federal effect (1)
( 6,900 ) ( 3.2 ) ( 5,140 ) 6.3   ( 263 ) 1.1  
Foreign tax effects
Canada
Research and development tax credits ( 1,741 ) ( 0.8 ) ( 1,143 ) 1.4   ( 588 ) 2.5  
Other 1,411   0.6   922   ( 1.1 ) 442   ( 1.9 )
Other foreign jurisdictions 1,381   0.6   359   ( 0.5 ) ( 44 ) 0.2  
Changes in unrecognized tax benefits 20,988   9.6   17,567   ( 21.5 ) 762   ( 3.3 )
(Benefit) provision for income taxes/ effective tax rate
$ ( 981 ) ( 0.4 ) % $ 1,643   ( 2.0 ) % $ 3,309   ( 14.5 ) %