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]

Revenue Performance - For the three months ended June 30, 2024, product revenue increased to $4.1 million, an 84% increase from $2.2 million in the same period of 2023[129] - Revenue from memory ICs for the three months ended June 30, 2024, was $3.4 million, up from $1.6 million in the same period of 2023[130] - The company expects revenues to increase in 2024 compared to 2023, driven by anticipated sales of memory IC products based on EOL purchase orders[131] - Royalty and other revenue decreased to $129,000 for the three months ended June 30, 2024, a 23% decline from $168,000 in the same period of 2023[132] Profitability - The gross profit margin for the three months ended June 30, 2024, improved to 55% compared to 25% in the same period of 2023[134] - Gross profit for the three months ended June 30, 2024, was $2,351,000, a 287% increase from $608,000 in 2023, representing 55% of total net revenue[136] - Gross profit for the six months ended June 30, 2024, was $3,657,000, a 44% increase from $2,535,000 in 2023, representing 52% of total net revenue[136] Expenses - Research and development expenses for the three months ended June 30, 2024, were $2,644,000, a 28% decrease from $3,668,000 in 2023, representing 62% of total net revenue[137] - Research and development expenses for the six months ended June 30, 2024, were $5,457,000, a 28% decrease from $7,555,000 in 2023, representing 77% of total net revenue[137] - Selling, general and administrative expenses for the three months ended June 30, 2024, were $2,141,000, an 8% increase from $1,977,000 in 2023, representing 51% of total net revenue[139] - Selling, general and administrative expenses for the six months ended June 30, 2024, were $4,243,000, a 1% increase from $4,219,000 in 2023, representing 60% of total net revenue[139] Losses and Financial Position - The company incurred net losses of approximately $6.5 million for the six months ended June 30, 2024, and an accumulated deficit of approximately $173 million as of the same date[124] - The company incurred net losses of approximately $6.5 million for the six months ended June 30, 2024, and $16.8 million for the year ended December 31, 2023[146] - The company expects to continue incurring operating losses and will need to secure additional capital to sustain operations beyond 2024[147] - Cash and cash equivalents as of June 30, 2024, were $1.9 million, with working capital of $1.1 million[142] - Net cash used in operating activities for the first six months of 2024 was $3.2 million, primarily due to a net loss of $6.5 million[142] Corporate Actions - The company completed a 1-for-40 reverse stock split effective January 2, 2024, to consolidate its outstanding shares[125] - The company initiated an end-of-life (EOL) for its memory IC products in May 2023, with expected final shipments by March 31, 2025, and a non-cancelable purchase order backlog of $9.1 million as of June 30, 2024[131] - The company anticipates increased sales of mmWave products over the next 12 months as new customers are expected to commence production during 2024[131] Indemnification Agreements - The company has entered into contractual arrangements for indemnifications related to breaches of representations and warranties, with no material amounts reflected in the financial statements for the three and six months ended June 30, 2024[155] - Indemnification agreements have been established with the company's officers and directors, but no significant financial impact has been reported[155]

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $4.2 million, exceeding the high end of guidance, representing over 50% sequential growth and more than 70% year-over-year growth [6][16] - GAAP gross margin increased to 55.5% from 46.4% in the prior quarter and 25.3% year-over-year, while non-GAAP gross margin rose to 68.8% from 66.4% sequentially and 45.9% year-over-year [17] - GAAP net loss for Q2 2024 was $4.4 million or a loss of $1.88 per share, compared to a net loss of $2 million or $1.07 per share in the prior quarter and a net loss of $4.1 million or $6.68 per share in the same quarter a year ago [19] Business Line Data and Key Metrics Changes - Product revenue from memory integrated circuits and millimeter-wave products was $4.1 million, compared to $2.7 million in the prior quarter and $2.2 million in the same quarter last year, with approximately 80% from memory and 20% from millimeter-wave [16][33] - Shipments of end-of-life memory IC products increased to approximately $3.4 million from $2.4 million in the prior quarter, with a remaining backlog of approximately $9.1 million [7][16] Market Data and Key Metrics Changes - The company is focusing on expanding its millimeter-wave business across diverse geographies and end markets, with a current engagement pipeline of 95 total engagements, up more than 25% compared to the previous year [10][12] - The DUNE platform received its first volume production order from a South African service provider, indicating strong market interest and potential for future orders [11][12] Company Strategy and Development Direction - The company aims to convert existing customer engagements into production orders for millimeter-wave products and expects ongoing shipments of memory IC products to contribute to revenue and cash flow [15] - The anticipated guidance from the NTIA regarding funding for unlicensed spectrum fixed wireless access could significantly expand market opportunities for the company [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong design activity in millimeter-wave technology, particularly in fixed wireless access and military applications, indicating a robust pipeline for future growth [23][24] - The company expects total revenue for the second half of 2024 to increase over the first half, with Q3 2024 revenue projected between $3.8 million and $4.2 million [21] Other Important Information - GAAP operating expenses for Q2 2024 were $6.8 million, up from $4.9 million in the prior quarter, primarily due to severance and software license charges [18] - The company had $1.9 million in cash as of June 30, 2024, a decrease of approximately $0.6 million during the quarter [20] Q&A Session Summary Question: Can you talk about the expansion in your engagement pipeline and customer diversity? - Management noted strong design activity in millimeter-wave technology and increasing opportunities in fixed wireless access, with new opportunities arising almost weekly [22][23] Question: How do you view the Wi-Fi 8 opportunity and development? - The company is considering collaboration with existing players rather than significant capital investment, focusing on fixed wireless and military applications for now [25][26] Question: What is the size of the market opportunity for the DUNE platform? - Management indicated that deployment is ready, and the speed of service provider adoption will determine revenue generation [27][28] Question: What is the potential impact of BEAD funding on fixed wireless access? - Management estimated that around 20 million homes in North America could benefit from fixed wireless technology, with expectations for funding eligibility to be announced soon [30][31] Question: Can you elaborate on military engagements? - The company has ongoing proof of concept deals and is seeing strong interest due to the stealth capabilities of their technology [39][40]

Company Performance - Peraso reported a quarterly loss of $0.88 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.29, representing an earnings surprise of -203.45% [1] - The company posted revenues of $4.24 million for the quarter ended June 2024, exceeding the Zacks Consensus Estimate by 0.91%, and showing a year-over-year increase from $2.4 million [2] - Over the last four quarters, Peraso has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Movement and Outlook - Peraso shares have declined approximately 89% since the beginning of the year, contrasting with the S&P 500's gain of 12% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at -$0.09 on $5 million in revenues for the upcoming quarter and -$1.16 on $18.02 million in revenues for the current fiscal year [7] Industry Context - The Technology Services industry, to which Peraso belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable environment for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Group 1: Momentum Investing Overview - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] - Identifying the right entry point for trending stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] Group 2: Investment Strategy - A safer investment approach involves targeting bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [2] - The 'Fast-Paced Momentum at a Bargain' screen is effective in spotting fast-moving stocks that remain attractively priced [2] Group 3: Peraso (PRSO) Stock Analysis - Peraso (PRSO) has shown a four-week price change of 9.3%, indicating growing investor interest and positioning it well within the momentum investing framework [3] - Over the past 12 weeks, PRSO has gained 9.3%, demonstrating its ability to deliver positive returns over a longer timeframe [4] - PRSO has a beta of 1.82, suggesting it moves 82% more than the market in either direction, indicating fast-paced momentum [4] Group 4: Valuation and Earnings Estimates - PRSO has a Momentum Score of B, suggesting it is an opportune time to invest in the stock to leverage its momentum [5] - The stock has a Zacks Rank 2 (Buy) due to an upward trend in earnings estimate revisions, which typically attracts more investor interest [6] - PRSO is trading at a Price-to-Sales ratio of 0.36, indicating it is relatively cheap, as investors pay only 36 cents for each dollar of sales [6] Group 5: Additional Investment Opportunities - Besides PRSO, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [7]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-32929 PERASO INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer Incorpor ...

Peraso Inc. (NASDAQ:PRSO) Q1 2024 Earnings Call Transcript May 13, 2024 5:00 PM ET Company Participants Jim Sullivan - CFO Ron Glibbery - CEO Conference Call Participants David Williams - Benchmark Kevin Liu - K. Liu & Company Jon Hickman - Ladenburg Operator Good afternoon and welcome to Peraso Inc.'s first quarter 2024 conference call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded today, Monday, May 13th, 2024. I wou ...

Peraso (PRSO) came out with a quarterly loss of $0.83 per share versus the Zacks Consensus Estimate of a loss of $1.26. This compares to loss of $3.60 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 34.13%. A quarter ago, it was expected that this semiconductor technology company would post a loss of $3.41 per share when it actually produced a loss of $8.52, delivering a surprise of -149.85%. Over the last four quarters, the ...

EX-99.1 2 prso_ex991.htm PRESS RELEASE BY PERASO INC EXHIBIT 99.1 Peraso Announces First Quarter 2024 Results Total Revenue Increased 54% Sequentially; GAAP Gross Margin Expanded to 46.4%, Non-GAAP to 66.4% SAN JOSE, Calif., May 13, 2024 – Peraso Inc. (NASDAQ:PRSO) ("Peraso" or the "Company"), a global leader in mmWave technology for 60 GHz unlicensed and 5G licensed networks, today announced financial results for the first quarter ended March 31, 2024. Management Commentary "First quarter revenue increased ...

Financial Performance - The company incurred net losses of approximately $16.8 million and $32.4 million for the years ended December 31, 2023 and 2022, respectively, with an accumulated deficit of approximately $166.4 million as of December 31, 2023[85]. - The company recorded inventory write-downs of approximately $3.5 million and $0.4 million for the years ended December 31, 2023 and 2022, respectively[84]. - The company completed a public offering in February 2024 for net proceeds of approximately $3.4 million, which is expected to support capital needs through at least Q4 2024[76]. - Sustained inflation has led to increased costs, including labor, wafer, and transportation, which may adversely affect the company's financial condition and results of operations[138]. Revenue and Customer Concentration - The company intends to discontinue the production of its memory products, which represented over 60% of revenues for the year ended December 31, 2023[80]. - Revenue concentration is high, with the three largest customers accounting for approximately 75% of total revenue in 2023[109]. - Four customers represented about 83% of total trade receivables as of December 31, 2023, posing credit risks[111]. - The company’s revenue concentration among a small number of customers poses credit risks that could negatively affect cash flow and financial condition[75]. Operational Challenges - The company has implemented workforce reductions, eliminating five positions in February 2023 and three positions in November 2023, including a temporary lay-off of 16 positions in Canada[90]. - The company’s gross profit may fluctuate due to various factors, including customer and product mix, market acceptance, and competitive pricing dynamics[81]. - The semiconductor industry is cyclical, which can lead to significant fluctuations in revenue and profitability[108]. - Delays in product development and customer adoption can adversely affect anticipated revenues in upcoming years[103]. - The lengthy sales cycle, ranging from six to 24 months, complicates revenue forecasting and can lead to significant fluctuations[107]. - The company must continue to develop and enhance products to maintain customer engagement and competitive position[105]. Manufacturing and Supply Chain Risks - The company relies on contract manufacturers for a significant portion of its revenue, which could be adversely affected if these manufacturers face financial difficulties[116]. - As a fabless semiconductor company, the company depends on third-party foundries for manufacturing, and any disruptions in this supply chain could impact customer relationships and sales[117]. - The company has experienced disruptions in the global semiconductor supply chain, leading to increased customer order lead times and potential revenue impacts[120]. - Price increases from suppliers could adversely affect revenue or reduce margins, as the company may not be able to pass these costs onto customers[121]. - The company does not have long-term supply contracts with its suppliers, which could lead to challenges in securing necessary materials and timely production[117]. - The company’s vendors are located in regions at high risk for natural disasters, which could disrupt operations and impact product development and sales[118]. Future Outlook and Capital Needs - The company’s future success depends on its ability to raise additional capital and achieve sustainable revenues and profitable operations[78]. - Future revenue growth is highly dependent on design wins with existing and new customers, as well as retaining current customers[96]. - The design win process can take one to three years, and there is no guarantee of revenue even after incurring significant costs[97]. - The discontinuation of memory IC production will negatively impact future revenues and cash flows[101]. Compliance and Stock Performance - The company received a deficiency letter from Nasdaq due to the closing bid price of its common stock being below the minimum $1.00 per share for 30 consecutive business days[151]. - The company was initially given 180 calendar days to regain compliance with Nasdaq Listing Rule 5550(a)(2), which was extended by an additional 180 days[151]. - A reverse stock split was executed at a ratio of one post-split share for every 40 pre-split shares on January 2, 2024[151]. - The company regained compliance with Nasdaq Listing Rule 5550(a)(2) on January 18, 2024[151]. - The potential volatility of the company's common stock could negatively affect investment returns, as historical fluctuations have been significant[141]. - Future sales of common stock could adversely affect the market price and dilute existing stockholders' ownership[139]. Legal and Security Risks - The company may incur substantial litigation expenses related to potential claims of intellectual property infringement, which could adversely affect profitability[122]. - The company faces risks from potential unauthorized access to its network, which could compromise sensitive data and lead to significant costs and operational consequences[129]. - Future acquisitions may result in financial risks, including increased costs and potential economic dilution to gross and operating profit[133]. - The company may incur one-time charges related to acquisitions, which could impact its financial results[134].