[Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted strong Q1 2025 mmWave revenue growth, offsetting memory IC EOL, and anticipates continued mmWave solution growth - First quarter **mmWave revenue** alone exceeded the total mmWave revenue for the entire full year of 2024[2](index=2&type=chunk) - The company completed the final **end-of-life (EOL) shipments** for its memory IC products during the quarter[2](index=2&type=chunk) - Achieved a major upgrade to PERSPECTUS modules for fixed wireless access (FWA), increasing supported users per access point by **50%**[3](index=3&type=chunk) - Secured a strategic contract with a leading specialized defense contractor, with initial production shipments expected in Q2[3](index=3&type=chunk) [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) Peraso reported **$3.9 million** total net revenue in Q1 2025, a **37%** increase, with improved gross margin and reduced net loss Q1 2025 Key Financial Metrics (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Net Revenue | $3.9 million | $2.8 million | +37% | | GAAP Gross Margin | 69.3% | 46.4% | +22.9 p.p. | | GAAP Operating Expenses | $3.2 million | $4.9 million | -34.5% | | GAAP Net Loss | ($0.5 million) | ($2.0 million) | +75% Improvement | | GAAP Net Loss Per Share | ($0.10) | ($1.07) | +90.7% Improvement | | Adjusted EBITDA | ($0.3 million) | ($1.4 million) | +78.6% Improvement | [Business Outlook](index=2&type=section&id=Business%20Outlook) The company projects Q2 2025 total net revenue between **$1.8 million** and **$2.0 million**, reflecting memory IC discontinuation - Expects total net revenue for Q2 2025 to be in the range of **$1.8 million** to **$2.0 million**[9](index=9&type=chunk) - The anticipated sequential decline in total revenue for Q2 is due to the planned roll-off of **EOL shipments** for memory IC products[4](index=4&type=chunk)[9](index=9&type=chunk) - Despite the Q2 total revenue outlook, the company anticipates solid sequential revenue growth for its core **mmWave solutions** throughout 2025[4](index=4&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2025, including operations and balance sheets [Condensed Consolidated Statements of Operations](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 total net revenue increased to **$3.87 million**, with gross profit doubling and operating loss significantly narrowing Statement of Operations (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total net revenue | $3,869 | $2,816 | | Gross Profit | $2,680 | $1,306 | | Total operating expenses | $3,194 | $4,937 | | Loss from operations | ($514) | ($3,631) | | Net loss | ($471) | ($2,031) | | Net loss per share | ($0.10) | ($1.07) | [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets were **$6.73 million**, liabilities decreased, and stockholders' equity increased Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,775 | $3,344 | | Total current assets | $5,959 | $6,293 | | Total assets | $6,729 | $7,206 | | Total current liabilities | $2,962 | $3,503 | | Total liabilities | $3,136 | $3,740 | | Stockholders' equity | $3,593 | $3,466 | [Reconciliation of GAAP to Non-GAAP Measures](index=5&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles GAAP to non-GAAP financial measures, adjusting for non-cash items to show core performance [Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per Share](index=5&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Net%20Loss%20and%20Net%20Loss%20Per%20Share) Q1 2025 non-GAAP net loss improved to **$0.38 million** (or **$0.08** per share) from **$1.59 million** in Q1 2024 GAAP to Non-GAAP Net Loss Reconciliation (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | GAAP net loss | ($471) | ($2,031) | | Stock-based compensation | $125 | $1,222 | | Amortization of intangibles | $0 | $815 | | Change in fair value of warrant liabilities | ($35) | ($1,591) | | **Non-GAAP net loss** | **($381)** | **($1,585)** | [Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit](index=5&type=section&id=Reconciliation%20of%20GAAP%20Gross%20Profit%20to%20Non-GAAP%20Gross%20Profit) Q1 2025 GAAP and non-GAAP gross profit were identical at **$2.68 million** (**69.3%** margin) due to no amortization GAAP to Non-GAAP Gross Profit Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP gross profit | $2,680 (69.3%) | $1,306 (46.4%) | | Amortization of intangibles | $0 (0.0%) | $563 (20.0%) | | **Non-GAAP gross profit** | **$2,680 (69.3%)** | **$1,869 (66.4%)** | [Reconciliation of GAAP Net Loss and Adjusted EBITDA](index=6&type=section&id=Reconciliation%20of%20GAAP%20net%20loss%20and%20adjusted%20EBITDA) Adjusted EBITDA for Q1 2025 improved to negative **$0.31 million** from negative **$1.40 million** in Q1 2024 Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | GAAP net loss | ($471) | ($2,031) | | Non-GAAP net loss | ($381) | ($1,585) | | EBITDA adjustments | $68 | $181 | | **Adjusted EBITDA** | **($313)** | **($1,404)** |

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year December 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 000-32929 PERASO INC. (Exact name of registrant as specified in its charter) Delaware 77-0291941 (State or other jurisdiction of incorporation or organization) (IRS Employer Identificatio ...

Financial Data and Key Metrics Changes - Fourth quarter revenue was $3.7 million, representing a 100% year-over-year growth compared to $1.8 million in Q4 2023 [10][36] - Full year 2024 total net revenue was $14.6 million, up from $13.7 million in 2023 [36] - GAAP gross margin increased to 56.3% in Q4 2024 from 47% in the prior quarter and negative 147.3% in Q4 2023 [38] - Non-GAAP gross margin for Q4 2024 was 71.6%, compared to 61.7% in the prior quarter and negative 116.6% in Q4 2023 [38] - GAAP net loss for Q4 2024 was $1.6 million, improving from a net loss of $8.9 million in the same quarter a year ago [40] Business Line Data and Key Metrics Changes - Product revenue from memory integrated circuits and millimeter wave products in Q4 was $3.7 million, compared to $1.5 million in Q4 2023 [36] - Full year product revenue was $14.2 million, up from $12.9 million in the prior year [37] - Operating expenses decreased by 20% year-over-year in Q4 2024, despite revenue doubling [11] Market Data and Key Metrics Changes - The demand for fixed wireless access (FWA) is projected to increase significantly, with global FWA connections expected to reach 280 million by 2028 [17][19] - North American FWA has become the majority of all broadband net additions, with major carriers adding approximately 10.4 million FWA connections since 2021 [18] Company Strategy and Development Direction - The company is focusing on diversifying its customer base for mmWave solutions, expanding into new geographies and applications [13][15] - The DUNE mmWave platform is gaining traction in dense urban environments, addressing the challenges of high-speed connectivity [22] - The company is optimistic about the impact of the BEAD program, which aims to improve access to high-speed internet through various technologies, including mmWave [25][27] Management's Comments on Operating Environment and Future Outlook - Management noted a positive shift in customer demand and purchase orders, indicating the end of the inventory correction impacting fixed wireless access customers [20] - The company expects mmWave revenue for Q1 2025 to exceed the total revenue for the full year 2024, driven by increasing order backlog [35] - Management expressed optimism about the military applications of mmWave technology, with initial production orders expected to commence in Q2 2025 [31][80] Other Important Information - The company had $3.3 million in cash and cash equivalents as of December 31, 2024, up from $1.3 million at the end of Q3 2024 [42] - Adjusted EBITDA for Q4 2024 was negative $0.4 million, an improvement from negative $5.9 million in Q4 2023 [41] Q&A Session Summary Question: Can you provide details on the $3.6 million order and its fulfillment timeline? - Management indicated that the order fulfillment will be reasonably linear, with a slight weighting towards the second half of the year [50] Question: How are other customers trending regarding inventory? - Management noted a significant increase in the customer base, reducing dependency on any single customer, and expressed optimism for 2025 [53] Question: Are there developments in military applications? - Management confirmed active engagements in various military applications, with some expected to convert to production by 2026 [80] Question: How will AI trends impact connectivity needs? - Management highlighted that there is growing interest in enterprise environments for high-speed data transfer, which aligns with the company's capabilities [62] Question: What is the expected contribution from the BEAD program? - Management expressed hope that the BEAD program will start showing effects this year, with a focus on technology-neutral approaches to broadband access [84]

Financial Data and Key Metrics Changes - Fourth quarter revenue was $3.7 million, representing a 100% year-over-year growth compared to $1.8 million in Q4 2023 [10][36] - Full year 2024 total net revenue was $14.6 million, up from $13.7 million in 2023 [36] - GAAP gross margin increased to 56.3% in Q4 2024 from 47% in the prior quarter and negative 147.3% in the year-ago quarter [38] - GAAP net loss for Q4 2024 was $1.6 million, a significant improvement from a net loss of $8.9 million in Q4 2023 [40] Business Line Data and Key Metrics Changes - Product revenue from memory integrated circuits and millimeter wave products in Q4 was $3.7 million, compared to $1.5 million in Q4 2023 [36] - Full year product revenue was $14.2 million, up from $12.9 million in the prior year [37] - Operating expenses decreased by 20% year-over-year in Q4 2024, despite revenue doubling [11] Market Data and Key Metrics Changes - The demand for fixed wireless access (FWA) is projected to grow significantly, with global FWA connections expected to reach 280 million by 2028 [17][19] - North American FWA has become the majority of all broadband net additions, with major carriers adding approximately 10.4 million FWA connections since 2021 [18] Company Strategy and Development Direction - The company is focusing on diversifying its customer base for mmWave solutions, having increased its customer count significantly over the past two years [53] - The DUNE mmWave platform is gaining traction in dense urban environments, addressing the challenges of high-speed connectivity [22] - The company is optimistic about the potential of the BEAD program to enhance funding for fixed wireless access technologies [25][27] Management's Comments on Operating Environment and Future Outlook - Management noted a positive shift in customer demand and purchase orders, indicating the end of the inventory correction impacting fixed wireless access customers [20] - The company expects mmWave revenue for Q1 2025 to exceed the total revenue for the full year 2024, driven by increasing order backlog [35] Other Important Information - The company had $3.3 million in cash and cash equivalents as of December 31, 2024, up from $1.3 million at the end of Q3 2024 [42] - Adjusted EBITDA for Q4 2024 was negative $0.4 million, an improvement from negative $5.9 million in Q4 2023 [41] Q&A Session Summary Question: Can you provide details on the $3.6 million order and its fulfillment timeline? - Management indicated that the order fulfillment will be reasonably linear, with a slight weighting towards the second half of the year [50] Question: How are other customers trending regarding inventory? - Management expressed optimism about a more diverse customer base and indicated that the inventory crisis is over [53] Question: Are there developments in military applications? - Management confirmed ongoing engagements in military applications, with some expected to convert to production by 2026 [80] Question: What is the expected contribution from the BEAD program? - Management is hopeful that the BEAD program will start to show effects this year, with a focus on technology-neutral funding [84]

Company Performance - Peraso reported a quarterly loss of $0.13 per share, better than the Zacks Consensus Estimate of a loss of $0.17, and a significant improvement from a loss of $8.52 per share a year ago, indicating an earnings surprise of 23.53% [1] - The company posted revenues of $3.68 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 3.21%, but showing growth from $1.83 million in the same quarter last year [2] - Over the last four quarters, Peraso has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Peraso shares have declined approximately 30.6% since the beginning of the year, contrasting with the S&P 500's decline of 4.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.30 on revenues of $3.38 million, and for the current fiscal year, it is -$1.60 on revenues of $13.25 million [7] Industry Outlook - The Technology Services industry, to which Peraso belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Peraso's stock performance [5]

Financial Data and Key Metrics Changes - Fourth quarter revenue was $3.7 million, representing a 100% year-over-year growth compared to $1.8 million in Q4 2023 [7][25] - Full year 2024 total net revenue was $14.6 million, up from $13.7 million in 2023 [25] - GAAP gross margin increased to 56.3% in Q4 2024 from 47% in the prior quarter and negative 147.3% in the year-ago quarter [26] - Non-GAAP gross margin for Q4 2024 was 71.6%, compared to 61.7% in the prior quarter and negative 116.6% in Q4 2023 [27] - GAAP net loss for Q4 2024 was $1.6 million, or a loss of $0.37 per share, compared to a net loss of $8.9 million, or $12.48 per share, in the same quarter a year ago [29] Business Line Data and Key Metrics Changes - Product revenue from memory integrated circuits and millimeter wave products in Q4 was $3.7 million, compared to $1.5 million in Q4 2023 [25] - Full year product revenue was $14.2 million, up from $12.9 million in the prior year [26] - Operating expenses decreased by 20% year-over-year in Q4 2024, despite revenue doubling [8] Market Data and Key Metrics Changes - The demand for fixed wireless access (FWA) is projected to increase significantly, with global connections expected to reach 280 million by 2028 [11][12] - North American FWA has become the majority of all broadband net additions since 2021, with major carriers adding approximately 10.4 million FWA connections [12] Company Strategy and Development Direction - The company is focusing on diversifying its customer base and expanding its market reach across new geographies and applications [9][10] - The introduction of the Dune MMA platform for dense urban applications is gaining traction, addressing the challenges of delivering reliable connectivity in populated areas [15] - The company is optimistic about the potential of its Wave technology in tactical defense and military applications, with initial production orders expected to commence in mid-2025 [20][22] Management's Comments on Operating Environment and Future Outlook - Management noted a positive shift in customer demand and purchase orders, indicating the end of the inventory correction impacting fixed wireless access customers [13][39] - The company anticipates significant growth in MMwave revenue throughout 2025, driven by increasing order backlog and ramping customer production [24] - Management expressed optimism regarding the BEAD program, which aims to improve access to high-speed Internet and could benefit the company's solutions [19][63] Other Important Information - The company had $3.3 million in cash and cash equivalents as of December 31, 2024, compared to $1.3 million at the end of Q3 2024 [31] - Adjusted EBITDA for Q4 2024 was negative $400,000, an improvement from negative $5.9 million in Q4 2023 [30] Q&A Session Summary Question: Inquiry about the $3.6 million order and its fulfillment timeline - Management indicated that the order fulfillment will be reasonably linear throughout the year, with some weight towards the second half [36][37] Question: Trends in customer inventory and potential new orders - Management confirmed a more diversified customer base and expressed optimism about new orders coming in 2025 [38][39] Question: Engagement in military applications - Management stated that they are currently focused on a third of the potential military applications and have ongoing engagements for tactical communication [40][41] Question: Impact of AI trends on connectivity needs - Management noted that there is a growing demand for high-speed data transfer in enterprise environments, which aligns with the company's capabilities [45][46] Question: Expectations for millimeter wave sales ramp-up - Management expects a good increase in millimeter wave sales year-over-year, with some lumpiness in revenue from quarter to quarter [52][54] Question: Timeline for military applications to convert to production - Management indicated that most military opportunities are expected to convert to production in 2026, with the first application moving quickly [59][60] Question: Anticipated contributions from the BEAD program - Management expressed hope that the BEAD program will start to show effects this year, aligning with the administration's push for high-speed Internet access [62][63]

Revenue Performance - Fourth quarter total revenue increased 100% year-over-year to $3.7 million, compared to $1.8 million in the same quarter a year ago[1][4] - Full year 2024 total net revenue was $14.6 million, compared to $13.7 million in 2023, driven by increased shipments of memory IC products[10] - Total net revenue for Q4 2024 was $3,678 million, a 100% increase from $1,832 million in Q4 2023[23] - The company expects total net revenue for Q1 2025 to be in the range of $3.6 million to $4.0 million[14] - The company anticipates significant growth in mmWave revenue throughout 2025, with Q1 2025 expected to exceed full year 2024 revenue[4] Profitability and Margins - GAAP gross margin for the fourth quarter expanded to 56.3%, up from 47.0% in the prior quarter and negative 147.3% a year ago; non-GAAP gross margin reached 71.6%[5] - GAAP gross margin for 2024 was 51.7%, significantly improved from 13.6% in 2023; non-GAAP gross margin was 67.2%[11] - Gross profit for Q4 2024 was $2,069 million, compared to a gross loss of $2,699 million in Q4 2023, marking a significant turnaround[23] Operating Expenses - Total operating expenses on a GAAP basis decreased to $3.7 million in Q4 2024, down from $4.5 million in the prior quarter and $5.5 million a year ago[6] - Total operating expenses on a non-GAAP basis for 2024 were $14.9 million, down from $16.4 million in 2023, reflecting cost reduction initiatives[12] - Total operating expenses for the twelve months ended December 31, 2024, were $19,968 million, down from $22,497 million in 2023, a reduction of 11%[23] - Research and development expenses for the twelve months ended December 31, 2024, were $9,232 million, down from $14,398 million in 2023, indicating a 36% reduction[23] Net Loss - GAAP net loss for Q4 2024 was $1.6 million, or ($0.37) per share, an improvement from a net loss of $2.7 million in the prior quarter and $8.9 million a year ago[7][8] - The net loss for Q4 2024 was $1,560 million, a decrease from a net loss of $8,938 million in Q4 2023, representing an 83% improvement[30] - Non-GAAP net loss for Q4 2024 was $536 million, compared to a non-GAAP net loss of $6,098 million in Q4 2023, reflecting a 91% improvement[30] - The company reported a basic and diluted net loss per share of $0.37 for Q4 2024, significantly improved from $12.48 in Q4 2023[30] Cash and Assets - Cash and cash equivalents increased to $3,344 million in 2024 from $1,583 million in 2023, showing a growth of 111%[25] - Total assets decreased to $7,206 million in 2024 from $10,714 million in 2023, a decline of 33%[25] Other Financial Metrics - The change in fair value of warrant liabilities resulted in a gain of $44 million in Q4 2024, compared to a loss of $746 million in Q4 2023[30] - A $3.6 million purchase order for mmWave devices was received, expected to be fulfilled in 2025, indicating renewed demand from leading customers[3]

Financial Performance - Net losses of approximately $9.2 million for the nine months ended September 30, 2024 and $16.8 million for the year ended December 31, 2023, with an accumulated deficit of approximately $175.6 million as of September 30, 2024[140] - The company incurred net losses of $9.2 million for the nine months ended September 30, 2024 and $16.8 million for the year ended December 31, 2023, raising substantial doubt about its ability to continue as a going concern[170][172] Revenue and Sales - Product revenue decreased by 11% to $3.811 million for the three months ended September 30, 2024, compared to $4.262 million in the same period of 2023[145] - Product revenue decreased by 7% to $10.596 million for the nine months ended September 30, 2024, compared to $11.385 million in the same period of 2023[145] - Memory IC product shipments increased to $3.677 million for the three months ended September 30, 2024, compared to $3.384 million in the same period of 2023[146] - mmWave IC product shipments decreased to $67,000 for the three months ended September 30, 2024, compared to $576,000 in the same period of 2023[146] - Non-cancelable purchase order backlog for memory IC products of $5.7 million as of September 30, 2024, with final shipments expected by March 31, 2025[147] - Royalty and other revenue decreased by 86% to $30,000 for the three months ended September 30, 2024, compared to $219,000 in the same period of 2023[149] - Royalty and other revenue decreased by 44% to $299,000 for the nine months ended September 30, 2024, compared to $531,000 in the same period of 2023[149] Cost and Expenses - Cost of net revenue decreased by 17% to $2.034 million for the three months ended September 30, 2024, compared to $2.445 million in the same period of 2023[150] - Cost of net revenue decreased by 26% to $5.431 million for the nine months ended September 30, 2024, compared to $7.346 million in the same period of 2023[150] - R&D expenses for the three months ended September 30, 2024 decreased by 38% to $2.2 million compared to $3.5 million in the same period of 2023, due to reduced salary and consulting costs[153][154] - R&D expenses for the nine months ended September 30, 2024 decreased by 31% to $7.6 million compared to $11.0 million in the same period of 2023[153] - SG&A expenses for the three months ended September 30, 2024 increased by 11% to $2.3 million compared to $2.1 million in the same period of 2023, primarily due to increased consulting and professional services costs[156][157] - SG&A expenses for the nine months ended September 30, 2024 increased by 4% to $6.6 million compared to $6.3 million in the same period of 2023[156] - The company recorded severance charges of approximately $0.4 million for each of the three and six months ended June 30, 2024, related to employee lay-offs[158] - The company expensed $1.6 million for non-cancelable software license commitments during the three months ended June 30, 2024[159] Gross Profit - Gross profit for the three months ended September 30, 2024 decreased by 11% to $1.8 million compared to $2.0 million in the same period of 2023, primarily due to decreased sales of mmWave IC and module products[152] - Gross profit for the nine months ended September 30, 2024 increased by 20% to $5.5 million compared to $4.6 million in the same period of 2023, driven by higher shipments of memory IC products[152] Liquidity and Capital Resources - As of September 30, 2024, the company had cash and cash equivalents of $1.3 million and working capital of $0.4 million[161] - The company's existing cash and cash equivalents as of September 30, 2024, along with proceeds from the warrant inducement offering and expected product sales, are projected to fund operating needs into Q2 2025[178] - Variability in the operating forecast, driven by product sales, customer licensing, NRE transactions, and timing of expenditures, could impact the company's cash runway[178] - The company may need to secure additional capital or financing, or significantly delay, defer, or reduce cash expenditures over the next two quarters to continue operations beyond the current forecast[179] Off-Balance Sheet Arrangements and Indemnifications - The company does not maintain any off-balance sheet arrangements that could materially affect its financial condition, results of operations, liquidity, or capital resources[180] - Indemnification agreements with officers and directors, as well as contractual indemnifications, are not reflected in the condensed consolidated financial statements for the three and nine months ended September 30, 2024[180]

Company Performance - Peraso reported a quarterly loss of $0.34 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.17, and a significant improvement from a loss of $1.60 per share a year ago, indicating a surprise of -100% [1] - The company posted revenues of $3.84 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.98%, and down from $4.48 million in the same quarter last year [2] - Over the last four quarters, Peraso has surpassed consensus EPS estimates only once, while it has topped consensus revenue estimates three times [2] Stock Performance - Peraso shares have declined approximately 90% since the beginning of the year, contrasting sharply with the S&P 500's gain of 25.8% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.10 on revenues of $4.38 million, and for the current fiscal year, it is -$1.33 on revenues of $15.43 million [7] Industry Outlook - The Technology Services industry, to which Peraso belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics - Total net revenue for Q3 2024 was $3.8 million, down from $4.2 million in Q2 2024 and $4.5 million in Q3 2023 [35] - Product revenue from memory ICs and millimeter-wave products was $3.8 million in Q3 2024, compared to $4.1 million in Q2 2024 and $4.3 million in Q3 2023 [35] - GAAP gross margin decreased to 47% in Q3 2024 from 55.5% in Q2 2024 and 45.4% in Q3 2023 [36] - Non-GAAP gross margin was 61.7% in Q3 2024, down from 68.8% in Q2 2024 and 58% in Q3 2023 [37] - GAAP operating expenses decreased to $4.5 million in Q3 2024 from $6.8 million in Q2 2024 and $5.6 million in Q3 2023 [38] - Non-GAAP operating expenses were $3.3 million in Q3 2024, down from $4.9 million in Q2 2024 and $4 million in Q3 2023 [38] - GAAP net loss for Q3 2024 was $2.7 million, or $0.98 per share, compared to a net loss of $4.4 million, or $1.88 per share, in Q2 2024 and a net loss of $0.6 million, or $0.87 per share, in Q3 2023 [39] - Non-GAAP net loss for Q3 2024 was $0.9 million, or $0.34 per share, compared to a net loss of $2.1 million, or $0.88 per share, in Q2 2024 and a net loss of $1.1 million, or $1.56 per share, in Q3 2023 [40] - Adjusted EBITDA was negative $0.8 million in Q3 2024, compared to negative $1.9 million in Q2 2024 and negative $0.9 million in Q3 2023 [42] Business Line Data and Key Metrics - Memory IC shipments increased sequentially to $3.7 million in Q3 2024 from $3.4 million in Q2 2024 [10] - The company has a remaining purchase order backlog of $5.7 million for memory ICs, expected to be fulfilled by Q1 2025 [10] - The company has 82 new funnel opportunities and 23 active engagements in the millimeter-wave solutions pipeline [14] - Nine prior design engagements have been converted to in-production wins [15] - Recent wins include SAF TEHNIKA's FreeMile 60 radio and Miliwave's MWC-932 product, both utilizing Peraso's millimeter-wave modules [16][17] - A follow-on purchase order of $1.4 million was secured from a South African WISP for the DUNE millimeter-wave platform [21] - Another DUNE order was announced from a WISP in Kenya, targeting improved internet services for 22.7 million users [23] Market Data and Key Metrics - The company is focusing on fixed wireless access and tactical military communications markets [9] - Recent customer wins have been announced in Africa, Asia, and other global regions [13] - The DUNE platform is being deployed in dense urban environments, particularly in Africa, where reliable low-power connectivity is essential [20][22] - The company is participating in the 2024 Africa Tech Festival to promote millimeter-wave solutions [25] - The company secured an initial purchase order from a military customer for millimeter-wave modules, with shipments expected in Q1 2025 [27][28] Company Strategy and Industry Competition - The company is focused on reducing costs and increasing efficiencies, resulting in a 20% year-over-year decrease in operating expenses [8] - The company is expanding its sales funnel across diverse geographies and applications, with a focus on converting engagements into production orders [12][33] - The company is leveraging the US government's BEAD program, which provides $42 billion in grants for high-speed internet infrastructure, to expand market opportunities for its millimeter-wave technology [31][32] - The company is targeting tactical defense and military applications, with a focus on secure, high-speed communication platforms [26][29] Management Commentary on Operating Environment and Future Outlook - The broader macro environment and prolonged inventory adjustments remain challenges, but the company is making progress in customer engagements [9] - The company expects total revenue for the second half of 2024 to increase over the first half and represent double-digit growth over the prior year period [33] - For Q4 2024, the company expects total net revenue to be in the range of $3.6 million to $4 million [48] Other Important Information - The company had $1.3 million in cash and equivalents as of September 30, 2024, with a cash burn of $0.6 million from the prior quarter [44] - The company raised $2.9 million through the exercise of Series B warrants [45] Q&A Session Summary Q: When will the design wins translate into revenue? - The company expects to see an inflection point in Q1 2025, with shipments resuming as backlog builds [50] Q: Is inventory being worked through in North America? - Inventory adjustments are being seen both in North America and with other customers, with green shoots expected in Q4 and new customers coming online in Q1 [52][53] Q: Are fixed wireless access deployments coming from existing providers or startups? - Over 95% of the company's engagements are with experienced WISPs, many of whom are replacing 5G systems due to congestion issues [55] Q: Will there be a transition from 5G to 60 GHz in North America? - The company believes the transition is likely, especially with the BEAD program potentially adopting a tech-neutral approach that includes millimeter-wave solutions [56][57] Q: Is BEAD funding being spent on fiber now? - BEAD funding is still in the early stages, with funds expected to trickle out in 2025 and 2026 [59] Q: What is the size of the military contract and when will shipments begin? - The military contract is material to the company's business, with volume shipments expected in Q2 2025 [61][63]