Peraso Inc. (PRSO)·Q4 2024 Earnings Summary

Executive Summary

• Q4 revenue was $3.68M, up 100% y/y and modestly down q/q (Q3: $3.84M), as EOL memory IC shipments continued; GAAP gross margin expanded to 56.3% (non-GAAP 71.6%), and GAAP net loss improved to ($1.56M); adjusted EBITDA was ($0.40M) .
• Management highlighted renewed mmWave momentum: a $3.6M purchase order expected to ship through 2025 and an upsized tactical defense order, with first defense revenue expected mid-2025; mmWave revenue in Q1’25 is expected to exceed FY’24 mmWave revenue .
• Guidance: Q1’25 total revenue $3.6–$4.0M; memory IC backlog fell to ~$2.3M at 12/31/24 (expected fulfilled in Q1’25), marking the transition toward mmWave-led growth .
• Consensus context: S&P Global Wall Street consensus for Q4’24 revenue/EPS was unavailable at query time; no beat/miss determination can be made (we attempted to retrieve S&P Global estimates but the request failed).

What Went Well and What Went Wrong

• What Went Well

  • Strong y/y growth and margin expansion: “Fourth quarter revenue represented strong year-over-year growth… Combined with expanded gross margin and reduced operating expenses, we delivered significant improvement” .
  • Demand re-acceleration in mmWave/FWA: “We recently received a $3.6 million purchase order for our mmWave devices, which we expect to fulfill during 2025” and “We anticipate significant growth of mmWave revenue throughout 2025” .
  • Defense traction: A customer “meaningfully upsized a previously secured purchase order… in a mission critical military application,” with first commercial revenue expected “in mid-2025” .

• What Went Wrong

  • Transition risk as EOL memory winds down: Memory IC backlog declined to ~$2.3M at 12/31/24, expected to fully ship in Q1’25; growth must increasingly come from mmWave .
  • Profitability still negative: GAAP net loss of ($1.56M) and adjusted EBITDA of ($0.40M) in Q4, though both improved y/y and q/q .
  • Funding/going-concern overhang: Forward-looking statements reiterate risks including ability to continue as a going concern and to raise capital; Q4 included ~$2.8M aggregate gross proceeds from financing activities to bolster liquidity .

Financial Results

Quarterly trend (oldest → newest)

Q4 year-over-year comparison

Revenue composition (no segments reported; product vs royalty/other)

KPIs and backlog

Notes on non‑GAAP: Q4 non‑GAAP gross margin excludes $0.564M intangibles amortization; non‑GAAP net loss excludes $0.252M SBC, $0.816M amortization, and $0.044M favorable warrant FV change among other items . Q3 margins were depressed by a $0.3M mmWave inventory write‑down, aiding Q4 sequential margin rebound .

Guidance Changes

No explicit guidance was provided for gross margin, OpEx, OI&E, tax rate, or dividends .

Earnings Call Themes & Trends

Management Commentary

• “Fourth quarter revenue represented strong year-over-year growth, driven by ongoing end-of-life (EOL) shipments for our memory IC products… We’ve recently begun seeing renewed demand and purchase orders from our leading customers for mmWave solutions… we recently received a $3.6 million purchase order… We anticipate significant growth of mmWave revenue throughout 2025… we expect mmWave revenue for the first quarter of 2025 to exceed comparable revenue for the full year 2024.” — Ron Glibbery, CEO .
• “Total net revenue for the fourth quarter was $3.7 million… GAAP gross margin increased to 56.3%… Non‑GAAP gross margin was 71.6%… GAAP operating expenses were $3.7 million… non‑GAAP operating expenses were $3.2 million… GAAP net loss… was $1.6 million… non‑GAAP net loss… was $0.5 million… Adjusted EBITDA… negative $0.4 million.” — Jim Sullivan, CFO .
• “We will complete shipments and fulfillment of these final [memory IC] orders during March” (backlog ~$2.3M at year‑end) .
• On defense: “One of our customers meaningfully upsized a previously secured purchase order… We expect to recognize our first commercial revenue from this customer in mid‑2025” .

Q&A Highlights

• $3.6M mmWave order cadence: Management expects a “reasonably linear” shipment through 2025 with slight second‑half weighting (July/August skew) due to shipping capacity .
• Customer diversification and inventory cycle: Customer base broadened ~5x vs two years ago; inventory correction “is over,” supporting optimism for 2025; first volume military components expected in Q2’25 .
• Gross margin normalization: Corporate long‑term GM target ~50%; near‑term ~40% as mmWave scales; benefit near term from shipping previously written‑down inventory; steady‑state production and device mix will drive improvement in 2H’25 .
• Defense pipeline timing: Additional defense programs are on traditional schedules; broader conversion more likely in 2026, with one accelerated program driving mid‑2025 revenue .
• BEAD timing: Management views policy shifts as aggressive and tech‑neutral; hopeful for 2025 impact, with some orders possibly influenced already (acknowledged as conjecture) .
• AI/edge networking: Early enterprise use cases (AI‑enabled laptops) needing multi‑Gbps connectivity cited as initial opportunity for mmWave .

Estimates Context

• Consensus status: S&P Global Wall Street consensus for PRSO Q4’24 revenue and EPS was unavailable at query time; we therefore cannot provide beat/miss figures relative to consensus. We attempted to retrieve S&P Global estimates, but the request failed due to API limits.
• Implications: Absent formal consensus, we anchor context on company guidance and sequential/y/y comparisons. Q4’24 revenue of $3.678M fell within prior guidance for $3.6–$4.0M, and management guided Q1’25 to $3.6–$4.0M .

Key Takeaways for Investors

• Q4 execution improved materially: revenue within range ($3.678M), GAAP GM 56.3%/non‑GAAP 71.6%, GAAP net loss ($1.56M), and adjusted EBITDA ($0.40M), setting a higher operating baseline into 2025 .
• Transition from EOL memory to mmWave is underway: memory backlog dropped to ~$2.3M at 12/31/24 and should be fully recognized in Q1’25; sustained growth will depend on mmWave orders ramping as indicated .
• Demand signals turning: $3.6M strategic mmWave PO (slightly 2H‑weighted) and broadened customer base (>60 products across 11 customers) suggest improving FWA demand and reduced concentration risk .
• Defense is an emerging second leg: Upsized order and first revenue expected mid‑2025, with broader applications under evaluation, providing diversification and potential higher‑quality revenue .
• Margin path: Near‑term gross margin likely lower than memory‑boosted levels as mix tilts to mmWave, but management targets ~40% initially, trending toward 50% longer‑term as production stabilizes and scale improves .
• Policy tailwind potential: NTIA/Commerce tilt toward tech‑neutral BEAD could accelerate FWA deployments; timing remains fluid but viewed as incrementally positive for mmWave .
• Liquidity watchlist: Q4 cash was $3.3M, aided by ~$2.8M financing in the quarter; filings reiterate going‑concern and capital‑raising risks—monitor working capital and capital access as orders convert .

Appendix: Additional Data Points

• Q4 non‑GAAP adjustments included $0.252M SBC and $0.816M amortization; the Q3 margin headwind from a $0.3M mmWave inventory write‑down did not recur in Q4, aiding sequential margin expansion .
• Company guided Q1’25 revenue to $3.6–$4.0M and reiterated expectations that mmWave revenue in Q1’25 will exceed the entire FY’24 mmWave revenue base, indicating a near‑term inflection in mix .