Q3 2025 Peraso Inc Earnings Call
Speaker #1: Good afternoon and welcome to Peraso Inc.'s third quarter 2025 conference call. At this time, all participants are in a listen-only mode. If anyone needs assistance at any time during the conference call, please press the star key followed by the zero key on your touch-tone phone.
Speaker #1: As a reminder, this conference call is being recorded today, Monday, November 10th, 2025. I would now like to turn the call over to your host for today's conference call, Mr. Jim Sullivan.
Speaker #1: Please go ahead.
Speaker #2: Good afternoon and thank you for joining today's conference call to discuss Peraso's third quarter 2025 financial results. I'm James Sullivan, CFO of Peraso, and joining me today is Ronald Glibbery, our CEO.
Speaker #2: Today, after the market closed, we issued a press release and related Form 8-K, which was filed with the Securities and Exchange Commission. The press release and Form 8-K are available on Peraso's website, at www.perasoinc.com/investorrelations section.
Speaker #2: There is also a slide presentation that we will be using in conjunction with today's call that can also be accessed through the webcast link on the Investor Relations website.
Speaker #2: As a reminder, comments made during today's conference call may include forward-looking statements. All statements other than statements of historical fact could be deemed as forward-looking.
Speaker #2: Peraso advises caution in reliance on forward-looking statements. These statements include without limitation any projections of revenue, margins, expenses, non-gap gross profit, non-gap gross margin, non-gap operating expenses, adjusted EBITDA, non-gap net loss, cash flows, or other financial items, including anticipated cost savings.
Speaker #2: As well as any statements concerning the expected development, performance, and market share or competitive performance of our products and technologies. As well as any potential statements related to prospective future financing arrangements or capital transactions and the evaluation or pursuit of strategic alternatives.
Speaker #2: forward-looking statements are based on information available to Peraso on the date hereof. These statements involve known and unknown risks, uncertainties, and other All factors that may cause Peraso's actual results to differ materially from those implied by the forward-looking statements.
Speaker #2: Including unexpected changes in the company's business. More detailed information about these risk factors and additional risk factors are set forth in Peraso's public filings with the Securities and Exchange Commission.
Speaker #2: Peraso expressly disclaims any obligation to update or alter its forward-looking statements. Whether as a result of new information, future events, or otherwise, except as required by applicable law.
Speaker #2: Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in terms of gap and non-gap.
Speaker #2: With respect to remarks on today's call involving non-gap numbers, unless otherwise indicated, reference the amounts exclude stock-based compensation expense, amortization of intangible assets, severance costs, and the change in fair value of warrant liabilities.
Speaker #2: These non-gap financial measures definitions and the reconciliation of the differences between them and comparable gap measures are presented in our press release and related Form 8-K, which provides additional details.
Speaker #2: For those of you unable to listen to the entire call at this time, a recording will be available on the Investor Relations page of our website.
Speaker #2: Now, I would like to turn the call over to our CEO, Ronald Glibbery, for his prepared remarks. Ron?
Speaker #3: Thank you, Jim. Good afternoon and welcome to everyone on the phone and webcast. We appreciate you joining today's conference call. We had a notably strong third quarter, highlighted by growing orders and shipments of Peraso's industry-leading 60 gigahertz wireless solutions.
Speaker #3: Total revenue increased more than 45% sequentially driven by record quarterly revenue from our millimeter wave products. Gross margin also increased significantly over the previous quarter, achieving our targeted gross margin level in the mid-50% range.
Speaker #3: Consistent with prior recent quarters, we continue to exercise prudent cost management and drive operational efficiencies across the organization. Collectively, these metrics contribute to improved operating and bottom-line results as well as reduced cash burn from operations in the third quarter.
Speaker #3: Turning to slide four, beyond it being our largest and longest served end market, fixed wireless access also continues to represent the most immediate and substantial growth opportunity for Peraso's 60 gigahertz millimeter wave solutions.
Speaker #3: As such, we have welcomed the steady recovery throughout the year in market demand and customer orders both of which are reflected in our third quarter results.
Speaker #3: We believe that fixed wireless access markets' renewed momentum is sustainable, particularly for our 60-gigahertz wireless solutions. As there continues to be growing recognition of millimeter wave's ability to enable reliable high-speed and low-latency broadband connectivity to homes and businesses, without the time and cost burdens associated with fiber infrastructure.
Speaker #3: For further evidence of fixed wireless access and millimeter wave broadening market traction, I would encourage you to our investors to take a look at Verizon's recently announced acquisition of Starry, a fixed wireless access service provider with a strong background in millimeter wave technology.
Speaker #3: Underpinning our record quarterly revenue from millimeter wave products were multiple prominent wins in fixed wireless access. The first of these wins was one of our leading partners, Tachyon Networks, which we announced in early July and covered on a previous conference call.
Speaker #3: To briefly recap, Tachyon Networks chose to incorporate one of our prospective series modules with an integrated 16-element based array antenna to power its latest outdoor 60 gigahertz fixed wireless solution.
Speaker #3: Subsequent to our Q2 conference call, we announced our renewed collaboration with Wheeling Communications to accelerate the deployment of high-speed broadband access across dense urban areas and multiple major U.S. cities in the U.S.
Speaker #3: More specifically, Wheeling's mesh-based fixed wireless access architecture is leveraging Peraso's 60 gigahertz technology to deliver reliable, multi-gigabit connectivity for both businesses and consumers in dense urban neighborhoods.
Speaker #3: Also notable, they are successfully rolling out this high-speed wireless broadband service at a fraction of the cost and implementation time of typical fiber deployments.
Speaker #3: Most recently, in September, we secured an initial volume order totaling approximately 900,000 dollars from a leading global equipment supplier to the fixed wireless access market.
Speaker #3: I want to highlight that this order for our prospective millimeter wave modules was not only received from a first-time OEM customer, but they are a well-established equipment supplier to service providers.
Speaker #3: As a result, this new OEM customer has the potential to facilitate broader use of our millimeter wave solutions by an expanded number of fixed wireless service providers; many of which may not have previously been aware of our experience to benefit of Peraso's industry-leading technology.
Speaker #3: In addition to these recent wins, we are continuously supporting a broad number of proof-of-concepts with wireless internet service providers utilizing Peraso's millimeter wave technology.
Speaker #3: With the majority of customers at or approaching more normalized inventory levels, we expect to see additional production orders as successful proof-of-concepts are completed. Together with our ongoing efforts to convert other existing customer engagements into production, we anticipate fixed wireless access to remain the dominant driver of our sustained year-over-year growth.
Speaker #3: Turning to slide five, as discussed on previous quarterly update calls, we are continuing to see increased market awareness of 60 gigahertz technology that extends beyond fixed wireless to access completely new end markets.
Speaker #3: The most notable among these new emerging markets for Peraso's millimeter wave solutions has been what we refer to as tactical communications, which includes diverse mission-critical military defense applications.
Speaker #3: During the course of exploring inbound interest and prospective engagements with potential customers and ecosystem partners, the substantial value proposition of 60 gigahertz wireless for tactical communications has become unmistakably clear.
Speaker #3: The everyday performance benefits that have made millimeter wave the go-to technology in fixed wireless access, such as high data rates, ultra-low latency, and power efficiency, are also ideal for enabling next-generation solutions for tactical communications.
Speaker #3: Additionally, millimeter waves inherently stealthy attributes and low probability of intercept represent a unique and unmatched advantage over potential wireless technologies. While all of these benefits look good on paper, we took the first step earlier this year to prove that Peraso's millimeter wave technology was not only viable but uniquely equipped to overcome the mission-critical communication challenges encountered in tactical defense environments.
Speaker #3: This included securing a strategic contact with a specialized defense contractor who we've subsequently continued to collaborate with on a jointly developed system solution that leverages Peraso's 60 gigahertz technology for a first-of-its-kind tactical defense application.
Speaker #3: This new mobile system solution is designed to provide heightened communications situational awareness to help save military personnel and non-combatants such as medics and humanitarian responders operating in high-risk environments.
Speaker #3: As a reminder, we announced the delivery of initial production shipments of our advanced 60 gigahertz wireless solutions in support of this jointly developed solution in the June timeframe.
Speaker #3: Today, I'm pleased to report the recent and successful completion of initial field trials of this innovative solution. Upon the completion of additional trials, we expect a jointly developed solution with our lead customer to represent a significant long-term revenue opportunity for Peraso.
Speaker #3: In addition to the successful initial field trial validating the robot's capabilities of Peraso's millimeter wave technology, we believe it represents and will serve as a foundation for further commercial expansion into the tactical defense communications market over the coming quarters.
Speaker #3: In fact, despite our lead customer's understandable sensitivity to bring being named or publishing additional details about our jointly developed solution, we are confident that this engagement is contributing to the increased dialogue and engagement that we are fielding within the tactical communications market.
Speaker #3: Moving to slide six, on our previous conference call, I addressed how we generally think about adjacent market opportunities. Then, I also highlighted a recently secured production order to incorporate our 60 GHz technology in a customer's video system targeted for use in the educational market.
Speaker #3: Although the revenue contribution from these adjacent market opportunities is often smaller relative to our fixed wireless business, the purpose of my commentary around adjacent markets last quarter was to demonstrate the true versatility of Peraso's millimeter wave technology.
Speaker #3: Following a series of recent ongoing discussions and expressed interest from multiple prospective future customers about potentially utilizing our 60-gigahertz technology in various markets, I wanted to circle back again on today's call and dig a little deeper into adjacent markets.
Speaker #3: While each of these prospective discussions was focused on completely different end markets, they all shared a common use case; namely, overcoming the challenges associated with processing massive amounts of high-bandwidth video for edge AI applications.
With that, I'll turn the call back over to Jim, to review the financials and provide our Revenue outlook for the fourth quarter.
Thank you, Ron. Turning now to the results for the third quarter of 2025, total net revenue for the third quarter was $3.2 million compared with $2.2 million for the prior quarter and $3.8 million for the third quarter of 2024.
Product Revenue, in the third, quarter was 3.1 million compared with 2.2 million in the prior quarter and 3.8 million in the third quarter of 2024.
The decrease in product revenues for the third quarter of 2025, from the comparable period of 2024 was primarily attributable to the reduction in shipments of memory IC products, due to the previously announced end of life of the products.
Specific to sales of millimeter wave products revenues were million dollars in the third quarter of 2025 compared with 2.2 million in the prior quarter and 0.1 million in the third quarter of 2024.
Consolidated, gaap gross margin increased to 56.2% in the third quarter from 48.3 in the prior quarter and compared with 47% in the year ago quarter.
The increase in gaap gross margin for the third quarter of 2025, from the prior comparable periods was primarily attributable to a more favorable Revenue mix of millimeter wave, products, and solutions, as well as shipments of inventory, written down in Prior periods on a non-gaap basis. Gross margin for the third quarter was also 56.2% compared with 48.3% in the prior quarter. And compared with 61.7% in the third quarter of 2024, which was primarily attributable to the shipments of memory IC products.
Gap. Operating expenses for the third quarter of 2025 were $2.9 million compared with $2.9 million in the prior quarter, which included a $0.2 million recruiter reversal for software license obligations.
And 4.5 million in the third quarter of 2024.
The decrease in operating expenses on a gap basis from the comparable period of 2024 was primarily attributable to reduce stock based compensation expense and amortization expense related to intangible assets. Fully advertised in 2024
Non-gaap operating expenses. Which excludes stock-based compensation, where 2.9 Million in the third quarter, compared with 2.7 million in the prior quarter which included a 0.2 million approval reversal for software licence obligations and 3.3 million in the third quarter of 2024.
The decrease in operating expenses on a non-gaap basis from the comparable period of 2024 was primarily attributable to previously implemented, cost, reductions and ongoing Cost Containment initiatives.
Gaap. Net loss for the third quarter of 2025, was 1.2 million or loss of 17 cents per share, compared within that loss of 1.8 million or a loss of 31 cents per share in the prior quarter.
Non-gaap net loss. Which excludes stock-based compensation amortization of intangibles and changes in fair. Value of Warrant, liabilities for the third quarter of 2025 was 1.1 million or a loss of 15 cents per share.
This compares with a non-GAAP net loss of $1.7 million, or a loss of 28 cents per share, in the prior quarter, and a net loss of $0.9 million, or a loss of 34 cents per share, in the same quarter a year ago.
The weighted average number of basic and diluted shares outstanding for purposes of calculating both, gaap and non-gaap EPS for the third quarter of 2025 was approximately 7.3 million shares.
Adjusted EBITDA, which we define as GAAP net income or losses reported excluding stock-based compensation, amortization of intangible assets, costs change in fair value of warrant liabilities, interest expense, depreciation, and amortization, and the provision for income taxes, was negative $1 million in the third quarter of 2025 compared with negative $1.6 million in the prior quarter and negative $0.8 million in the third quarter of 2024.
With regards to the balance sheet, as of September 30th, 2025 the company had approximately 1.9 million of cash.
Compared with 1.8 million as of June 30th 2025.
The net positive change or approximately 0.1 million in the company's cash balance for the third quarter included approximately 0.9 million of net. Proceeds from a warrant inducement offering of certain series C, warrants and approximately 0.7 million dollars of net. Proceeds, from the company companies at the market offering program. During the quarter,
As of today's call, the company has approximately 8.98 million shares of common stock and exchangeable shares outstanding.
As previously disclosed, the company has been exploring potential strategic Alternatives, including a merger sale of assets or other similar transactions as well as various potential sources of additional Capital. Aside from confirming that the Strategic review process continues to be ongoing in coordination with the company's financial adviser. There are no related updates to share on today's call from what we have previously disclosed.
Now, turning to our Outlook as Ron previously, discussed we are encouraged by the continued Market momentum and our expanding pipeline of engagements for process, 60 gigahertz wireless Solutions.
Based on current backlog. The company expects total, net revenue for the fourth quarter of 2025 to be in the range of 2.8 million to 3.1 million.
This concludes our prepared remarks and we thank you for your time. This afternoon, operator, please commence the Q&A session.
Yeah. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You may press start to. If you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star Keys 1 moment, please while we pull for questions.
Hey, good afternoon gentlemen and uh thanks for taking my questions here, congrats on the the solid quarter.
Thanks Dave.
Obviously, this is probably the most upbeat quarter that we've heard from you in some time, just from your tone.
positioning, so that clearly is
confident, but, but it sounds like you're making a a lot of of momentum here. So I, I guess maybe on my first question is on the, the, the new OEM that you announced or or yeah, I spoke to
Can you give a little more color on that? And it sounds like that's a very upper uh you're very optimistic about that. What is that opportunity to look like and and what does that mean? Do you think?
Well, it's the, uh, and we we feel the number 2 OEM in the space. Uh, so they're, they're very sensitive to confidentiality so, we can't really specifics, but from our perspective, it's just yet another validation. And, you know, something I didn't mention on the call. My, um, so David that I should, is that, um, these oems now, uh, historically have been using like other. And I won't say which competitors, but other competitors, uh, who are who now, we're beating out because we have better performance. That's exactly what happened in this case. So, you know, a couple of things are happening. Obviously the inventory, uh, you know, kind of the correction is coming to an end, but I think more importantly, we're starting to see all of these, uh, you know, oems who are using other chipset vendors, uh, come over to Verizon and I think we're going to continue to see that over the coming quarters.
Um, I also want to talk about uh, maybe the the acquisition by Verizon and what does that mean? Do you think for for you, obviously a signals uh, growing demand in that fixed wireless access. But does that specifically speak to, uh, anything from from your perspective and either positive or negative?
Well, um, broadly, it's positive. I mean not you know, I think star made no bones about their use of millimeter waves. So I think it's another great validation of of the technology, um, you know, you you'll have to infer whether they were using for us or not. But but I would say generally it's been a very positive endorsement for pzo. Um, but uh, but but yeah, I mean these, you know, the story was a real advocate of its and and what's interesting actually, is that using it for mdus multiple multiple uh dwelling units. So uh it's turning out millimeter wave is a is a really nice technology for for satisfying that market as well and what's to know you know in other jurisdictions but we we think the real kind of more Catalyst in that situation was the support for mdus. If you will
Okay, great. And just a couple,
Customer production schedules—you talked about your funnel and your gaining some momentum there. Is there any way to kind of think about your customer typical design cycles? Now that we're through this inventory, do you get a sense that they're coming to market more quickly? Or will there still be an elongated kind of design cycle before we see them turn into production?
Yeah, I mean, I think it's Case by case, but here here's here's how I would look at it. Uh, Dave, like, excuse me in the, uh, in the fixed Wireless space, you know, let's try
Um, you know? Well, well, well, an oiled machine, like a 9 to 12-month period, uh, you know, to kind of move from engagement to kind of mass production. Um, new opportunities, like in the military, you know, you're looking at probably 12 to 15 months, obviously because there's more work that has to be done, more customization. So, you know, it really depends if it's an existing market or a new market. And again, like, um, you know, we're seeing these opportunities now in Edge AI. And that may take, again, 12 to 15 months would be my estimate. Um, but that's kind of the time frames that we're looking at normally.
Jim, on the balance sheet.
Both up. Uh pretty. Yeah, sharply sequentially and anything to speak to their or sort of maybe how should we think about the your working capital going forward?
Yeah, no. The, you know, the area was, you know, really a timing of functioning of, um, sales. And I know certainly as of today, we've collected I think over 70% of it. Um, and the remaining amount is, um, you know, one customer which has a little bit longer terms. Um, so nothing, you know, unusual in there, just a function of the higher product revenues.
And then from, um, you know, inventory, um, we've actually, you know, used a fair amount of the inventory for certain products, um, that we had on hand. So we've actually been building more inventory on certain products.
Um you know to meet anticipated you know demand looking out for q1 and Q2 so you know the good news is we you know continue to sell what we have. And in those cases where we've depleted it, we've actually, you know, gone out and built more Wafers. Um, so you know, we're we're going to continue to tightly manage the um,
You know, the working capital looking, um, you know, looking forward. And, um, you know, we're really kind of managing the builds based on uh, you know what, we what we see in the backlog,
We want the orders placed, um, you know, so we're not too, you know, don't lean too far forward on inventory.
Wanted to ask you kind on, the gross margin, given that you've uh, some of that was from written down previously. Obviously the millimeter wave doing better. How should we think about the kind of the, the balance on the, the gross margin as we kind of go forward from here?
You know, we're still, we're still trying to keep it in that, you know, right around 50% range. Um, it was a little bit higher here in the third quarter because of the, um, you know, it's certainly benefited from product mix. Um,
You know with the the mix of customers and then uh as well as you pointed out the sales of Reserve, you know inventory which you know we still have some of that we're going to move through in the next you know, few quarters. You know 50 there was also a very small contribution from our memory products you know like 75k or so Revenue that you know also contributed as well as the um you know the NRE Revenue um that we brought in um
Fantastic. Well, thanks for all the time and the best of luck on the quarter gentlemen. Thank you. Thanks a lot. Thanks for your time.
Thank you. The next question is coming from Kevin Lou, from cow and Company. Cavan Airline is live.
Hey, good afternoon guys maybe just to follow on to some of the production schedules mentioned earlier. Um, you know, you have that double digit number of customers in your pipeline that are in pre-production mode. Uh, once they get to that lead stage, you know, how long does it typically take before you start to see them uh contribute more meaningfully to your oh 1. Yeah, 1 Wednesday, they get to pre-production. Kevin. So pre-production is is quite a long way. I mean, a lot of the a lot of it's a very strong part of the pipeline process, a pipe cleaning process. So, typically that's about 3, 3 3, 3 months away. I think it's a 1 1 quarter away at the most, once a customer gets to that point, they're, they're well done on the path. But, you know, the thing, you know, it's like some, some more fundamental things like, for example, regulatory approval by then, they've normally got it, you know, they've got like, if there's any late parts and they're, you know, kind of in their building material. So there are a few things, but typically once you see a customer at at pre-production it's it's about 3 months away.
Sounds good. Um, and I know you can only say so much about kind of that lead tactical defense customer, you have, um, but you did mention some additional trials before they get to more meaningful. Long-term revenues for you guys. Um, you know, how long do you expect some of these trials to go before you get to that? You know? Yeah, they've got trials. Um, I mean there's there's trials coming up at Christmas. I think we'll see a real production from these guys. I mean what they're telling us now Z looks like um you know, we'll start to see the real production for that in the second half of 26. Um but you know obviously they'll have to place the orders before then, but that's kind of the time in working at which you know net net is is is about that 15 to kind of like call it 5 to 6 quarter, you know lag from the time we engage with the time and in full production,
So pretty typical. But but Frankly Speaking that was, you know, it's a it's a very complex product, uh, you know, but we put a lot of effort into it, but I mean just to give you a like a, you know, quick example. I mean it's our power consumption was cut down like, you know, 20 times from our standard power consumption. So you know, when we see these new opportunities, so once in a while we have to make a contribution to to get that, you know, get that product to Market as well. In that case, it took some time but that'll be about a 5 to 6 quarter lag time from the time we engage. But I, you know, where where it seems for that customer second half of 26.
Excited. Uh, and with some of the adjacent Market opportunities, uh, you pointed out and these customers evaluating your products. Um, can you talk a little bit about kind of the pipeline of NRE opportunities and, and how much, if any sort of additional research or customization might need to occur to win these customers.
Well, uh, it turns out, there's there's kind of 2 buckets, uh, and and just to clarify, I mean, I I, you know, I tried to clarify on the call Kevin, but you know, we really. What's, what's interesting about these opportunities is historically, you know, we we're very good at doing video, but this is really, let's take a VR headset. You know, that was video going to the VR headset. The change on the examples that we gave are, is like cameras within the device, like, either in a self-driving car, or maybe in, in, in in, you know, like, like, uh, our glasses that's video coming out of the device and it turns out there's no good way to do that wirelessly today except except for pzo. Uh, so it turns out there's there's 2. Different buckets. 1 bucket is with our existing chips. Uh again still requires some some Nore to get those things to Market but you know they want to move very very quickly. The other bucket is is actually you know Custom Custom customization of chips that'll that'll take longer but kind of a
Much bigger deal. So I would say that those are the 2 categories. We're looking at, in terms of n is kind of with our existing ship but also almost more exciting but not as more exciting. But as exciting uh is is the opportunity to do uh you know, silicon spins for for these specific applications as well. We wouldn't do it unless it was a big deal.
Yep. Understood um, and then just, lastly maybe for Jim for your Q4 guidance. Curious, how much more memory Revenue there is from that deal? You guys announced last quarter. Um and if because of that higher margin Revenue, we should assume kind of gross margin increases on the sequential basis.
yeah, there's still um, you know, we had press release uh, those memory orders um
A couple weeks back, there's still about um, 375k of memory shipments um in this um, current fourth quarter.
Um, which will be pretty uh pretty high margin.
um,
kind of around where they were, you know, in the third quarter, but that memory benefits
Uh, coming in.
All right, sounds good. Uh, I'll leave it there. Congrats again on on the quarter and thanks for taking the questions.
Thanks a lot. Kevin
Thanks. Kevin.
Thank you. And there were no other questions at this time, that does conclude today's Q&A session, and this also does conclude today's conference, you may disconnect your lines after this time. Thank you for your participation.
Thank you.