Peraso(US:PRSO)2022-08-16 01:30Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $4.3 million, up from $3.4 million in Q1 2022 and $0.7 million in Q2 2021, representing a 25% sequential increase and nearly 30% year-over-year growth [10][26] - Product revenue was $4.1 million, compared to $3.2 million in the previous quarter and $0.6 million in the same quarter last year [26] - GAAP gross margin was 34.7% in Q2 2022, down from 42.8% in Q1 2022 and 37.6% in Q2 2021; non-GAAP gross margin was 43%, compared to 53.3% in Q1 2022 [27][28] - GAAP net loss for Q2 2022 was $7 million, or a loss of $0.33 per share, compared to a net loss of $6.8 million in Q1 2022 [33] Business Line Data and Key Metrics Changes - The growth in revenue was primarily driven by the ramp-up of mmWave ICs and modules for the fixed wireless access market [10][26] - Product gross margin was 32.1% in Q2 2022, down from 39.2% in Q1 2022, reflecting increased volume shipments of mmWave modules [28] Market Data and Key Metrics Changes - The fixed wireless access market is expected to see over 100 million connections in 2022, doubling by 2027, with Verizon and T-Mobile reporting over 550,000 new fixed wireless customers in Q2 2022 [19][20] - The Rural Digital Opportunity Fund is set to provide $20 billion to incentivize broadband deployment in rural areas across the U.S. [20] Company Strategy and Development Direction - The company entered into a technology license and patent assignment agreement with Intel, expected to generate up to $3.5 million in gross proceeds, which will reduce operating expenses going forward [11][12][38] - The company aims to target the end device market with its new 5G mmWave product, expanding its total addressable market by an estimated $1.5 billion by 2025 [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fixed wireless market's growth, indicating that the company is well-positioned for continued momentum into Q3 and Q4 2022 [44][59] - The company anticipates total net revenue for Q3 2022 to be in the range of $4.3 million to $4.5 million, supported by a significant backlog extending into 2023 [39] Other Important Information - The company is navigating inflationary costs in the supply chain, experiencing increased prices from suppliers, but has managed to keep delivery timelines relatively stable [30][56] - The company has a cash and investments balance of $6 million as of June 30, 2022, down from $12.2 million at the end of Q1 2022 [36] Q&A Session Summary Question: What are the trends in fixed wireless access deployment? - Management noted significant momentum in fixed wireless access, with major carriers gaining subscribers and the company seeing strong bookings [44] Question: What benefits does the Intel agreement provide? - The agreement is a nondilutive source of capital, expected to reduce operating expenses by $2.7 million annually, while also potentially opening new opportunities for memory products [48][51] Question: How is the company managing its balance sheet and working capital? - The company is focused on maintaining adequate inventory and leveraging nondilutive transactions to strengthen its balance sheet, with a positive outlook on backlog and customer relationships [56][59]