Astera Labs Inc

Previous wording

Building on years of experience with a singular focus on addressing connectivity challenges in data-centric systems, we have developed and deployed our leading Intelligent Connectivity Platform built from the ground up for cloud and AI infrastructure. Our Intelligent Connectivity Platform comprises:

Current wording

Building on years of experience with a singular focus on addressing connectivity challenges in data-centric systems, we have developed and deployed our leading 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.

Previous wording

Since our inception, we have created and commercialized first-to-market PCIe, Ethernet, and CXL products, and with more than 300 design wins, we have become a trusted partner and a proven supplier to our hyperscaler and system OEM customers. We have experienced strong growth since our founding in October 2017, and particularly since the commercial launch of Aries in 2020. Our revenue grew from $34.8 million in 2021 and $79.9 million in 2022 to $115.8 million in 2023, driven by a significant increase in demand for our products. We have made significant investments in the design and development of new products and platform enhancements, and, as a result, we have not yet achieved profitability on an annual basis. For the three months ended March 31, 2024 and 2023, our revenue was $65.3 million and$17.7 million, respectively, and ourgross profit was$50.5 million and $4.3 million, respectively. We incurred net losses of$93.0 million and $17.5 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

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 our founding in October 2017, and particularly since the commercial launch of Aries in 2020. Our revenue grew from $34.8 million in 2021 and $79.9 million in 2022 to $115.8 million in 2023, driven by a sizable increase in demand for our products. We have made significant investments in the design and development of new products and platform enhancements, and, as a result, we have not yet achieved profitability on an annual basis. Our revenue was $76.9 million and$10.7 million for the three months ended June 30, 2024 and 2023, respectively, and $142.1 million and$28.4 million for the six months ended June 30, 2024 and 2023, respectively. Ourgross profit was$59.9 million and $8.4 million for the three months ended June 30, 2024 and 2023, respectively, and $110.4 million and $12.7 million for the six months ended June 30, 2024 and 2023, respectively. We incurred net losses of$7.5 million and $20.0 million for the three months ended June 30, 2024 and 2023, respectively, and$100.5 million and $37.5 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

Our revenue for the three months ended March 31, 2024, increased by 269% compared tothe three months ended March 31, 2023, primarily driven by higher demand for our Aries product. Gross margin increased 53.3 percentage points to 77.4% for the three months ended March 31, 2024 from 24.1% for the three months ended March 31, 2023, primarily driven by a 20% increase in the overall average selling prices, partially offset by product mix compared to the three months ended March 31, 2023. The prior year quarter also includeda $9.7 million write down of inventory in excess of our sales forecast for a legacy customer system that did not occur during the three months ended March 31, 2024.

Current wording

Our revenue for the three months ended June 30, 2024 increased by 619% compared tothe three months ended June 30, 2023, primarily due to an increase in overall shipments driven by higher demand for our Aries products. Gross margin decreased by 110 basis points (“bps”) to 77.9% for the three months ended June 30, 2024 from 79.0% for the three months ended June 30, 2023, primarily driven by inventory write-downs partially offset by the higher gross margin as a result of the product mix.

Previous wording

Operating expense increased by $110.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily driven by an increase of $95.8 million in stock-based compensation expense resulting from the vesting and settlement of restricted stock units (“RSUs”) that had previously met the time vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO, and a $9.6 million increase in personnel-related expenses as a result of a 40%increase in headcount.

Current wording

Operating expenses increased by $58.1 million, or 223%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by an increase of $40.3 million in non-cash stock-based compensation expense resulting from the time-based vesting and settlement of restricted stock units (“RSUs”), and a $10.3 million higher in personnel-related expenses as a result of a 55%increase in headcount.

Previous wording

On March 22, 2024, we completed our initial public offering (the “IPO”) of 22,770,000 shares of our common stock, par value $0.0001 per share (our “Common Stock”), at a price to the public of $36.00 per share, which included 19,758,903 shares of Common Stock sold by us, inclusive of 2,970,000 shares sold by us pursuant to the full exercise of the underwriters’ over-allotment option, as well as 3,011,097 shares of Common Stock sold by certain of our existing stockholders. We received net proceeds of $672.2 million after deducting underwriting discounts and commissions of $39.1 million. In connection with the IPO, we recognized deferred offering costs of $6.2 million.

Current wording

On March 22, 2024, we completed our initial public offering (the “IPO”) of 22,770,000 shares of our common stock, par value $0.0001 per share (our “Common Stock”), at a price to the public of $36.00 per share, which included 19,758,903 shares of Common Stock sold by us, inclusive of 2,970,000 shares sold by us pursuant to the full exercise of the underwriters’ over-allotment option, as well as 3,011,097 shares of Common Stock sold by certain of our existing stockholders. We received net proceeds of $672.2 million, after deducting underwriting discounts and commissions of $39.1 million, and we did not receive any proceeds from the sale of our common stock by our existing shareholders in the IPO. In connection with the IPO, we recognized deferred offering costs of $6.2 million.

Previous wording

We recognized $88.9 million of stock-based compensation expense associated with vesting and settlement of RSUs that had previously met the time vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO. Based on our IPO price of $36.00 per share, our tax withholding obligation in connection with the vesting of these RSUs was $20.1 million, which we paid in the first quarter of 2024.

Current wording

We recognized $88.9 million of cumulative stock-based compensation expense associated 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. Based on our IPO price of $36.00 per share, our tax withholding obligation in connection with the vesting of these RSUs was $20.1 million, which we paid in the first quarter of 2024.

Previous wording

The vast majority of our revenue consists of product sales and a small portion is currently derived from engineering services. Product sales consists primarily of shipments of our Intelligent Connectivity Platform solution. Engineering services revenue consists of engineering fees associated with the development of certain custom features for some of our products. Engineering services revenue accounted for a small percentage of total revenue for thethree months ended March 31, 2023. There was no revenue attributable to engineering services for the three months ended March 31, 2024.

Current wording

The vast majority of our revenue consists of product sales and a small portion is currently derived from engineering services. Product sales consists primarily of shipments of our Intelligent Connectivity Platform solution. Engineering services revenue consists of engineering fees associated with customer-defined engineering services for some of our products. Engineering services revenue accounted for a small percentage of total revenue for each of the six months ended June 30, 2024 and 2023.

Previous wording

Cost of revenue includes cost of product sales revenue and cost of engineering services revenue. Cost of product sales revenue includes the cost of materials, such as wafers processed by third-party foundries, cost associated with packaging, assembly, shipping, depreciation of equipment associated with manufacturing, cost of logistics and quality assurance, warranty cost, amortization of capitalized production masks, cost of personnel including salaries, stock-based compensation, and employee benefits, write-down of inventories, and allocation of general corporate expenses.

Current wording

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, cost associated with packaging, assembly, shipping, depreciation of equipment associated with manufacturing, cost of logistics and quality assurance, warranty cost, amortization of capitalized production masks, cost of personnel including salaries, stock-based compensation, employee benefits, write-down of inventories, and allocation of general corporate expenses.

Previous wording

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, influenced by several factors, including sales volume and pricing of our products and services, changes in product costs, contract manufacturing, and supplier pricing, personnel costs, shipping, and logistics costs.

Current wording

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, influenced by several factors, including sales volume, pricing of our products and services, changes in product costs, contract manufacturing supplier pricing, personnel costs, shipping, logistics costs, and inventory write-downs.

Previous wording

We expect general and administrative expenses to increase in absolute dollars and moderately decline as a percentage of revenue over time as our revenue increases as we grow our operations and incur additional expenses associated with operating as a public company. These expenses as a result of operating as a public company include expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations and other professional services.

Current wording

We expect general and administrative expenses to increase in absolute dollars as we grow our operations and incur additional expenses associated with operating as a public company and moderately decline as a percentage of revenue over time as our revenue increases. These expenses as a result of operating as a public company include expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations, and other professional services.

Previous wording

Income tax 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 not more likely than not that the deferred tax assets will be realized.

Current wording

Income tax 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.

Previous wording

Comparison of the Three Months Ended March 31, 2024 and 2023

Current wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

Total revenue increased $47.6 million, or 269%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to a 293% increase in overall shipments driven by higher demand for our Aries product. The increase in revenue was also attributable to a 20% increase in the overall average selling prices driven by a higher mix of our current generation Aries retimers, which have a higher average selling price than our previous generation. The increase in revenue was partially offset by a decrease in engineering revenue, of which there was none for the three months ended March 31, 2024.

Current wording

Total revenue increased $66.2 million, or 619%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to a 555% increase in overall shipments driven by higher demand for our Aries products. The increase in revenue was also attributable to overall average selling prices driven by an increased mix of our second-generation Aries retimers, which have a higher average selling price than our first-generation.

Previous wording

Total cost of revenue increased $1.3 million, or 10%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to a 293% increase in overall shipments partially offset by a $9.7 million write down of inventory in excess of our sales forecast for a legacy customer system incurred in the three months ended March 31, 2023.

Current wording

Total cost of revenue increased $16.1 million, or 103%, for the six months ended June 30, 2024 compared to the sixmonths ended June 30, 2023, primarily due to a 399% increase in overall shipments partially offset by lower average unit cost andan$8.2 million decrease in inventory write-downs. The inventory write-downs during the six months ended June 30, 2023 were primarily due to inventory in excess of our sales forecast for a legacy customer product.

Previous wording

Gross profit increased $46.3 million, or 1,086%for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily due to a 293% increase in product shipments as well as a $9.7 million write down of inventory in excess of our sales forecast for a legacy customer system incurred in the three months ended March 31, 2023 that did not occur during the three months ended March 31, 2024.

Current wording

Gross profit increased $97.7 million, or 769%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to a 399% increase in product shipments as well as an $8.2 million decrease in inventory write-downs.

Previous wording

Research and development expense increased $38.3 million, or 251%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily due to a $28.3 million increase in stock-based compensation expense resulting from the vesting and settlement of RSUs that had previously met the time vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO, a $5.9 million increase in personnel-related expenses as a result of a 44%increase in headcount and a $2.9 million increase in cost of software licenses.

Current wording

Research and development expense increased $60.5 million, or 183%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was attributable to a$39.6 million increase in non-cash stock-based compensation expense primarily due 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. Additionally, there was a $12.2 million higher in personnel-related expenses as a result of a 47%increase in headcount and a $8.4 million increase in cost of software licenses and cloud hosting services related to our development projects.

Previous wording

Sales and marketing expense increased $51.1 million, or 1,164%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Theincrease was primarily due to a $49.3 million increase in stock-based compensation expense resulting from the vesting and settlement of RSUs that had previously met the time vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO, and a $1.6 million increase in personnel-related expenses as a result of a 18% increase in headcount.

Current wording

Sales and marketing expense increased $17.0 million, or 333%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Theincrease was primarily due to a$15.1 million increase in non-cash stock-based compensation expense resulting from the time-based vesting of RSUs after the liquidity event vesting condition was satisfied in connection with our IPO, and a $1.6 million higher in personnel-related expenses as a result of a 32% increase in headcount.

Previous wording

Interest income increased $1.0 million, or 60%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily due to higher average short-term investments and cash equivalents balances primarily as a result of our IPO and higher interest rates.

Current wording

For the three and six months ended June 30, 2024, interest income increased $8.7 million, or 560%, and $9.7 million, or 307%, compared to the three and six months ended June 30, 2023, respectively. The increase was primarily due to higher average short-term investments and cash equivalents balances primarily as a result of our IPO and higher interest rates.

Previous wording

Income tax provision increased $12.5 million, or 10,129%, for the three months ended March 31, 2024 compared tothree months ended March 31, 2023, primarily due to an increase in taxable income and capitalized research and development expenditures in accordance with Section 174 of the Internal Revenue Code.

Current wording

Income tax (benefit) provision increased $2.0 million, or 49%, for the six months ended June 30, 2024 compared to six months ended June 30, 2023, primarily due to an increase in revenue and capitalized research and development expenditures in accordance with Section 174 of the Internal Revenue Code.

Previous wording

This Quarterly Report on Form 10-Q 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 and gross margin, non-GAAP operating income (loss) and non-GAAP net income (loss). 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 and gross margin, non-GAAP operating income (loss) and non-GAAP net income (loss) 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 investors 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.

Current wording

This Quarterly Report on Form 10-Q 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 (loss), and non-GAAP net income (loss). 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 (loss), and non-GAAP net income (loss) 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.

Previous wording

We define non-GAAP gross profit as gross profit presented in accordance with GAAP, adjusted to exclude 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 asit excludes the impact of stock-based compensation, charge that can vary from period to period for reasons that are unrelated to our core operating performance. This metric also provides investors and other users of our financial information with an additional tool to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Current wording

We define non-GAAP gross profit as gross profit presented in accordance with GAAP, adjusted to exclude 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 asit excludes the impact of stock-based compensation, acharge that can vary from period to period for reasons that are unrelated to our core operating performance. This metric also provides investors and other users of our financial information with an additional tool to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Previous wording

A reconciliation of our GAAP gross profit and gross margin, the most directly comparable GAAP financial measure, to non-GAAP gross profit is presented below:

Current wording

A reconciliation of our GAAP gross profit and gross margin, the most directly comparable GAAP financial measure, to non-GAAP gross profit and non-GAAP gross marginis presented below:

Previous wording

We define non-GAAP operating income (loss) as operating loss presented in accordance with GAAP, adjusted to exclude stock-based compensation expenses and employer payroll taxes related to the vesting and net settlement of RSUs with a liquidity event-based vesting condition that was satisfied in connection with the IPO. We have presented non-GAAP operating income(loss) because we consider non-GAAP operating income (loss) 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 stock-based compensation and employer payroll taxes related to the vesting and net settlement of restricted stock units in connection with our IPO, charges that can vary from period to period for reasons that are unrelated to our core operating performance. This metric also provides investors and other users of our financial information with an additional tool to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Current wording

We define non-GAAP operating income (loss) as operating loss presented in accordance with GAAP, adjusted to exclude stock-based compensation expenses 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 have presented non-GAAP operating income(loss) because we consider non-GAAP operating income (loss) 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 stock-based compensation expense and employer payroll taxes related to the time-based vesting and net settlement of restricted stock units in connection with our IPO, a charge that can vary from period to period for reasons that are unrelated to our core operating performance. This metric also provides investors and other users of our financial information with an additional tool to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Previous wording

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

Current wording

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

Previous wording

We monitor non-GAAP net income (loss) for planning and performance measurement purposes. We define non-GAAP net income (loss) as net loss reported on our condensed consolidated statements of operations, excluding the impact of stock-based compensation expenses, employer payroll taxes related to the 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 (loss) 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.

Current wording

We monitor non-GAAP net income (loss) for planning and performance measurement purposes. We define non-GAAP net income (loss) as net loss reported on our condensed consolidated statements of operations, excluding the impact of stock-based compensation expenses, 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 (loss) 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.

Previous wording

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

Current wording

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

Previous wording

(3) For the three months ended March 31, 2024, the non-GAAP tax rate of approximately 22% is calculated based on the tax laws in the jurisdictions in which the Company operates and excludes the impact of stock-based compensation expense and associated employer payroll taxes. Such adjustment for the three months ended March 31, 2023 was not material.

Current wording

(3) The non-GAAP tax rate is calculated based on the tax laws in the jurisdictions in which we operate and excludes the impact of stock-based compensation expense and associated employer payroll taxes relate to stock-based compensation from our IPO. For boththe three and six months ended June 30, 2024, the non-GAAP tax rate was approximately 23%. Tax adjustments for the three and six months ended June 30, 2023 were not material.

Previous wording

Since our inception, we have financed our operations primarily through proceeds from theissuance of our redeemable convertible preferred stock, our IPO, and cash generated from the sale of our products. As of March 31, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $801.4 million and working capital of $808.9 million. Our principal use of cash is to fund our operations and invest in research and development to support our growth.

Current wording

Since our inception, we have financed our operations primarily through proceeds from theissuance of our redeemable convertible preferred stock, our IPO, and cash generated from the sale of our products. As of June 30, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $831.0 million and working capital of $827.2 million. Our principal use of cash is to fund our operations, invest in research and development, fund production mask capital expenditures and to support our overall growth.

Previous wording

We have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $218.4 million as of March 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 factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, the continuing market acceptance of our products, 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.

Current wording

We have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $225.9 millionas of June 30, 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 factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, capital expenditures for production masks, the continuing market acceptance of our products, 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.

Previous wording

Net cash provided by operating activities for thethree months ended March 31, 2024 of $3.7 million included net loss of $93.0 million, non-cash charges of $98.9 million primarily related to $97.8 million in stock-based compensation, a $10.2 million increase in accrued expenses and other liabilities primarily due to accrued income taxes, higher accrued pre-production engineering mask costs and timing of payments, and a $5.0 million increase in accounts payable primarily due to timing of payments. These cash flows provided by operating activities were partially offset by an increase of $8.4 million in accounts receivable due to higher product sales and timing of customer payments, a $5.9 million increase in inventory, primarily due to build up for anticipated demand, and a $2.7 million increase in prepaid expenses and other assets related to prepaid insurance.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2024 of $33.5 million included a net loss of $100.5 million, partially offset by non-cash charges of $143.6 million primarily related to $140.8 million in stock-based compensation expense, a $10.9 million increase in accrued expenses and other liabilities primarily due to accrued customer deposits and timing of payments, and a $5.8 million increase in accounts payable primarily due to timing of payments. These net cash flows provided by operating activities were partially offset by an increase of $13.9 million in accounts receivable due to higher product sales and timing of customer payments, a $6.0 million increase in inventory for anticipated future demand, and a $5.4 million increase in prepaid expenses and other assets primarily related to accrued interest receivable on our short-term investments.

Previous wording

Net cash used in operating activities for thethree months ended March 31, 2023 of $3.8 million included a net loss of $17.5 million, and non-cash charges of $11.9 million primarily related to $9.7 million in inventory write-down. Operating cash uses included a $5.7 million decrease in accounts payable primarily due to timing of payments, partially offset by a $7.0 million decrease in accounts receivable due to timing of customer payments, a $0.6 million increase in accrued expenses and other liabilities primarily due to higher accrued pre-production engineering mask costs and timing of payments.

Current wording

Net cash used in operating activities for the six months ended June 30, 2023 of $26.8 million included a net loss of $37.5 million, a $7.7 million decrease in accounts payable primarily due to timing of payments, and a $6.8 million decrease in accrued expense and other liabilities primarily due to timing of payments. These cash flow uses were partially offset by non-cash charges of $15.2 million primarily consisting of inventory write-downs and stock-based compensation expense, and a $9.1 million decrease in accounts receivable due to timing of customer payments.

Previous wording

Net cash used in investing activities for thethree months ended March 31, 2024 of $4.3 millionwas the result of $23.3 millionin purchases of marketable securities and $3.4 millionin purchases of property and equipment, partially offset by$13.1 million in proceeds from sales of marketable securities and $9.4 millionin maturities of marketable securities.

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 of $306.7 millionwas the result of $345.8 millionin purchases of marketable securities and $2.1 millionin purchases of property and equipment, partially offset by$20.8 millionin maturities of marketable securities and$20.4 million in proceeds from sales of marketable securities.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2023 of$35.3 million was the result of$45.1 million in proceeds from sales of marketable securities and$13.0 million in maturities of marketable securities. This was partially offset by$22.3 million in purchases of marketable securities and$0.4 million in purchases of property and equipment.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2023 of$44.5 million was the result of$54.7 million in proceeds from sales of marketable securities and$18.0 million in maturities of marketable securities. This was partially offset by$27.3 million in purchases of marketable securities and$1.0 million in purchases of property and equipment.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2024 of $651.6 million was the result of $672.2 million in proceeds from our IPO, net of underwriting discounts and commissions, and $1.2 million in proceeds from the exercise of stock options net of repurchases. This was partially offset by $20.1 million in tax withholding related to net share settlement of RSUs that had previously met the time vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO, and $1.8 million in payments of deferred offering costs.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2024 of $649.2 million was the result of $672.2 million in proceeds from our IPO, net of underwriting discounts and commissions, and $1.9 million in proceeds from the exercise of stock options net of repurchases. This was partially offset by $20.1 million in tax withholding related to net share 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, and $4.8 million in payments of deferred offering costs.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2023 was immaterial.

Current wording

Net cash used in financing activities for the sixmonths ended June 30, 2023 was immaterial.