Peraso Inc. (PRSO) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture: strong MMWave revenue growth and a solid customer engagement pipeline are positive, but declining gross margins and a significant GAAP net loss raise concerns. The Q&A reveals optimism in military applications and NRE deals, yet management's vague responses on acquisition offers and BEAD funding impact add uncertainty. Given these factors, the stock's reaction is likely to be muted, resulting in a neutral sentiment.
Key Financial Performance
Total Net Revenue $2.2 million for Q2 2025, compared to $3.9 million in the prior quarter and $4.2 million in Q2 2024. The decrease was due to the completion of EOL shipments of memory IC products during Q1 2025.
Product Revenue $2.2 million for Q2 2025, compared to $3.8 million in the prior quarter and $4.1 million in Q2 2024. The decline was attributed to the completion of EOL shipments of memory IC products.
Millimeter-Wave Product Revenue $2.2 million for Q2 2025, compared to $1.5 million in the prior quarter and $0.7 million in Q2 2024. This represents a significant increase due to ramped shipments to an expanding customer base.
GAAP Gross Margin 48.3% for Q2 2025, compared to 69.3% in the prior quarter and 55.5% in Q2 2024. The decrease was primarily due to revenue being entirely comprised of millimeter-wave products.
Non-GAAP Gross Margin 48.3% for Q2 2025, compared to 69.3% in the prior quarter and 68.8% in Q2 2024. The decline was for the same reasons as GAAP gross margin.
GAAP Operating Expenses $2.9 million for Q2 2025, compared to $3.2 million in the prior quarter and $6.8 million in Q2 2024. The year-over-year decrease was due to reduced stock-based compensation, amortization expenses, and severance costs.
Non-GAAP Operating Expenses $2.7 million for Q2 2025, compared to $3.1 million in the prior quarter and $5 million in Q2 2024. The decrease was due to cost reductions and ongoing cost containment initiatives.
GAAP Net Loss $1.8 million or $0.31 per share for Q2 2025, compared to $0.5 million or $0.08 per share in the prior quarter and $4.4 million or $1.88 per share in Q2 2024. The improvement year-over-year was due to reduced operating expenses.
Non-GAAP Net Loss $1.7 million or $0.28 per share for Q2 2025, compared to $0.4 million or $0.07 per share in the prior quarter and $2.1 million or $0.88 per share in Q2 2024. The improvement year-over-year was due to cost containment initiatives.
Adjusted EBITDA Negative $1.6 million for Q2 2025, compared to negative $0.3 million in the prior quarter and negative $1.9 million in Q2 2024. The year-over-year improvement was due to reduced operating expenses.
Cash and Equivalents $1.8 million as of June 30, 2025, with a net change of $1 million during the quarter, including $1.1 million of net proceeds from the company's at-the-market offering program.
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Operating Highlights
mmWave product revenue growth: Revenue from mmWave products increased 45% sequentially and over 200% year-over-year, surpassing 2 million cumulative shipments.
Fixed wireless access solutions: Tachyon Networks selected Peraso's mmWave modules for its 60 GHz fixed wireless solution, offering gigabit connectivity with over 3-kilometer range and supporting up to 48 client connections per sector.
Tactical defense applications: Delivered initial production shipments of 60 GHz wireless solutions for a tactical defense application, enhancing communication and situational awareness in high-risk environments.
Education market entry: Shipped 60 GHz wireless solutions for a classroom video system, marking the first production shipment tailored for education.
Customer base expansion: Doubled the number of customers in production from 7 to 14 over 18 months, with 7 additional engagements in preproduction.
Pipeline growth: Increased customer SKUs in production by 90% over 18 months, reflecting a more diversified product base.
Cost management: Reduced GAAP operating expenses to $2.9 million, down from $6.8 million a year ago, through cost containment initiatives.
Revenue outlook: Anticipates record revenue of $2.8 million to $3.1 million for Q3 2025, supported by a strong backlog.
Strategic alternatives exploration: Board of Directors is exploring potential strategic alternatives, including mergers, asset sales, or additional capital sources.
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Risk or Challenges
Revenue Decline: Total net revenue for Q2 2025 decreased to $2.2 million from $3.9 million in the prior quarter and $4.2 million in Q2 2024, primarily due to the completion of EOL shipments of memory IC products.
Gross Margin Reduction: GAAP gross margin dropped to 48.3% in Q2 2025 from 69.3% in the prior quarter and 55.5% in Q2 2024, attributed to revenue being entirely from millimeter-wave products.
Cash Position: The company had only $1.8 million in cash and equivalents as of June 30, 2025, raising concerns about liquidity and financial sustainability.
Strategic Alternatives Exploration: The Board of Directors is exploring strategic alternatives, including a merger or sale of assets, indicating potential financial or operational challenges.
Customer Diversification Challenges: While the customer base has expanded, the process of acquiring and advancing customer engagements remains time and resource-intensive, potentially limiting rapid growth.
Dependence on mmWave Products: Revenue is heavily reliant on mmWave products, which could pose risks if market demand or competitive dynamics shift.
Operating Losses: GAAP net loss for Q2 2025 was $1.8 million, compared to $0.5 million in the prior quarter, highlighting ongoing financial challenges.
Market Competition: The company faces competitive pressures in the fixed wireless access and tactical defense markets, which could impact its ability to maintain or grow market share.
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Guidance & Outlook
Revenue Expectations: The company expects total net revenue for the third quarter of 2025 to be in the range of $2.8 million to $3.1 million, driven by record revenue contribution from millimeter-wave solutions.
Market Trends and Growth: Peraso anticipates continued sequential growth in its millimeter-wave solutions, supported by a healthy pipeline of customer engagements and an expanding customer base. The company expects sustained growth in 2026 and beyond.
Fixed Wireless Access Market: The company sees fixed wireless access as the largest and fastest-growing market opportunity for millimeter-wave technology, with expectations of continued recovery in market demand and customer orders.
Tactical Communications and Defense Applications: Peraso is committed to expanding its market presence in tactical defense communications, with increasing interest in its millimeter-wave technology for mission-critical applications, including drone-related uses.
Adjacent Markets: The company is exploring incremental growth opportunities in adjacent markets such as transportation and professional video delivery, with recent production shipments supporting new applications like wireless video systems for education.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you provide more details on the number of engagements or opportunities in the military drone space?
A:The focus is on stealth communication, making signals undetectable. Currently, there is customer engagement for ground battalions and infantry, and the same concept is being extended to drones. This allows drones to determine whether a target is friend or foe.
Q:Does your precision in RF communication provide opportunities to avoid detection and targeting on the battlefield?
A:Yes, the company uses beamforming technology to create very narrow signals that are nearly impossible to detect. This capability is applied to both battlefield operations and standard signal communications.
Q:Can you confirm the legitimacy of the acquisition offer and provide updates on the business given the balance sheet constraints?
A:The acquisition offer is confirmed as legitimate. The company has extended its cash runway into the fourth quarter and is pursuing non-dilutive capital-raising opportunities, including nonrecurring engineering (NRE) agreements. They are also focused on improving their financial position and visibility for Q3.
Q:How do you see inventory levels trending, and have you resolved the inventory digestion issues from previous quarters?
A:Inventory levels have improved, with much of the inventory now spoken for in future shipments. Some customers are still working through their inventory, but the company has started replenishing certain products.
Q:Are there opportunities to drive near-term NRE or other revenue in the military sector?
A:Yes, NRE is a significant part of the strategy. The company is executing custom designs for military applications, leveraging their ability to adjust software, modules, and antennas. NRE will play a big role in the next 1.5 years.
Q:Can you provide more color on the 7 preproduction wins and their contribution to revenue?
A:Most of the wins are in the fixed wireless space, with some in the military sector. The company is becoming a dominant player in fixed wireless and is leveraging its stealth capabilities for military applications.
Q:How strong is the backlog for Q3, and what is the visibility for the remainder of the year?
A:The backlog for Q3 is strong, with excellent visibility. Not all orders have been shipped yet, but the company is confident in meeting its revenue guidance. They are still working on filling orders for Q4 and expect additional orders.
Q:How should we think about the implications of the nonrecurring engineering (NRE) deal?
A:The NRE deal will provide a steady revenue stream for at least 1.5 years. It does not require significant additional expenses and is expected to lead to production, which is the company's primary focus.
Q:Are there any updates on BEAD funding and its impact on fixed wireless access?
A:BEAD funding changes to be more technology-neutral are seen as beneficial for fixed wireless access. Fixed wireless has advantages over fiber in terms of cost and rollout time. Customers are optimistic about these changes.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the acquisition offer beyond confirming its legitimacy. They also did not provide precise figures or timelines for the NRE deal's revenue contribution or the exact impact of BEAD funding changes on the business.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
LLC
Peraso mmWave
Peraso technology
SKUs
Slide
Tachyon Networks
access market
attribute
broadband
category
collaboration
communication market
context
contribution
customer product
defense communication
delivery
ecosystem partner
end market
generation communication
gigahertz mmWave
gigahertz solution
infrastructure
market momentum
milestone
mmWave module
mmWave product
month
presence
production order
production shipment
production takeaway
proof concept
school
shipment mmWave
solution support
support solution
technology solution
versatility mmWave
video
wireless
PRSO Transcript
Peraso Inc. (PRSO) Q1 2026 Earnings Call Transcript
Unknown5-11
The earnings call summary lacks specific financial details, and the caution on forward-looking statements indicates potential risks. However, the strategic plan highlights growth in mmWave revenue and market expansion, which balances the sentiment. Without clear financial data or significant positive or negative news, the sentiment remains neutral.
Peraso Inc. (PRSO) Q4 2025 Earnings Call Transcript
Unknown3-16
The earnings call presents a mixed outlook. Positive aspects include improved full-year financial metrics, cost containment, and growth expectations in mmWave products. However, the Q4 results show declining margins and increased losses, and management's reluctance to provide specific guidance on key deals raises concerns. The Q&A highlights potential growth in new markets and partnerships, but the impact of delayed orders and uncertain revenue timelines tempers optimism. Overall, the sentiment is neutral as positive long-term prospects are offset by short-term challenges.
Peraso Inc. (PRSO) Q3 2025 Earnings Call Transcript
Positive11-10
The earnings call highlights strong growth in mmWave product revenue and an increase in gross margins, despite a slight year-over-year revenue decrease. The Q&A section reveals positive sentiment towards the company's OEM partnerships and fixed wireless access market potential. The company's strategic focus on expanding its market presence and managing working capital efficiently further supports a positive outlook. Although some management responses were vague, the overall sentiment remains positive, with optimistic guidance and strategic market expansion efforts likely to boost the stock price.
Peraso Inc. (PRSO) Q2 2025 Earnings Call Transcript
Unknown8-11
The earnings call presents a mixed picture: strong MMWave revenue growth and a solid customer engagement pipeline are positive, but declining gross margins and a significant GAAP net loss raise concerns. The Q&A reveals optimism in military applications and NRE deals, yet management's vague responses on acquisition offers and BEAD funding impact add uncertainty. Given these factors, the stock's reaction is likely to be muted, resulting in a neutral sentiment.
PRSO Report
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