Release Date: May 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Peraso Inc (PRSO, Financial) reported a sequential increase in first quarter revenue, surpassing the midpoint of their guidance due to improved customer demand for mmWave products and increased shipments of memory IC products.
- The company has a significant remaining backlog of non-cancelable purchase orders for end-of-life memory IC products, expected to provide meaningful revenue and cash flow through the first quarter of 2025.
- Peraso Inc (PRSO) has secured multiple new customer engagements for its mmWave solutions, indicating potential for growth and market expansion.
- The company successfully launched the DUNE platform, addressing network access issues in densely populated urban areas, with initial positive feedback and proof-of-concepts shipped to multiple WISPs in Africa.
- Peraso Inc (PRSO) has achieved notable design wins, including Panasonic's adoption of their X710 mmWave chipset, validating their leading technology in the industry.
Negative Points
- Despite improvements, Peraso Inc (PRSO) reported a GAAP net loss of $2 million for the first quarter of 2024, indicating ongoing financial challenges.
- The company faces intense competition in the mmWave market, particularly in international markets like Africa and India, where local competitors may also be present.
- There are uncertainties in the memory IC segment, as it is nearing its end-of-life with final shipments expected by the first quarter of 2025, which could affect future revenue streams.
- The gross margin, although improved, is affected by inventory write-downs and the mix of product sales, which could fluctuate depending on the product mix and market conditions.
- Peraso Inc (PRSO) is dependent on the successful ramp-up and expansion of new products like the DUNE platform and mmWave solutions, which involve risks related to customer acceptance and technical challenges.
Q & A Highlights
Q: What are the expected volumes for millimeter wave products as Peraso ramps up, particularly looking into next year?
A: Ron Glibbery, CEO of Peraso, mentioned that based on third-party research, the market could see about 4 million units per year in fixed wireless, and Peraso aims to capture about a quarter of that market. This goal is set for the next 12 to 18 months.
Q: Can you discuss the competitive landscape, especially in markets like Africa and India?
A: Ron Glibbery highlighted Peraso's dominant position in the 60 GHz technology sector, particularly emphasized by the Panasonic design win, which he believes significantly validates their technology and market position.
Q: What is Peraso's go-to-market strategy, especially considering new sectors like aerospace and defense?
A: Ron Glibbery explained that Peraso's strategy is focused on fixed wireless broadband and military applications, where millimeter wave technology offers advantages due to its focused transmissions, which are beneficial in stealth operations. He also noted emerging opportunities in consumer electronics for high-performance video applications.
Q: How are inventory levels at major customers affecting the millimeter wave business?
A: Ron Glibbery acknowledged a buildup of inventory but sees improvement, expecting momentum to pick up in the latter part of the year as sales of 60 GHz products increase.
Q: What are the expectations for gross margin sustainability given the high mix of memory sales?
A: James Sullivan, CFO of Peraso, indicated that gross margins would benefit from memory sales, targeting over 50% margins, with memory products potentially reaching up to 70% at times.
Q: Could you provide more details on the revenue breakdown between millimeter-wave and memory products?
A: James Sullivan specified that in the first quarter, out of $2.68 million in product revenue, approximately $2.38 million was from memory products and around $300,000 from millimeter wave ICs and modules.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
