Peraso Inc. Q4 FY2024 earnings call

• End-of-life memory IC: Completed $3.4M shipments in Q4 2024 against remaining backlog, with full year 2024 memory IC shipments at ~$12.9M and remaining backlog of ~$2.3M to be completed in March 2025. • mmWave progress: Diversified customer base with over 100 engagements, 60+ commercial products in production across 11 customers, $3.6M purchase order received from a strategic customer, DUNE mmWave platform gaining traction, and military defense application with a lead customer upsizing an order. • Market trends: FWA market growing with 5G fixed wireless access projected to capture significant share, BEAD program showing potential for tech-neutral funding benefiting mmWave, and tactical defense applications expanding with mmWave's stealth and bandwidth capabilities.

Product segments include memory IC and mmWave. Fourth quarter 2024 total net revenue was $3.7M, with product revenue from memory IC and mmWave at $3.7M. Full year 2024 total net revenue was $14.6M, with product revenue at $14.2M. Memory IC shipments in Q4 2024 were $3.4M, full year 2024 $12.9M. mmWave is seeing growing momentum with new orders, including a $3.6M purchase order received in Q4 2024. Memory IC contributed significantly in prior quarters, while mmWave is expanding its revenue contribution.

• Anticipate total revenue to increase year-over-year in Q1 2025, with total net revenue expected in the range of $3.6M to $4M. • Expect mmWave revenue to grow throughout 2025, with Q1 2025 mmWave revenue expected to exceed full year 2024 mmWave revenue. • The $3.6M purchase order from a strategic customer is expected to be fulfilled during 2025, with revenue expected to be reasonably linear throughout the year, slightly weighted to the second half.

• Previous inventory correction impacting fixed wireless access customers, though indications of turning tide. • Uncertainties in BEAD program execution and its impact on mmWave adoption. • Timeline risks for military application engagements converting to production. • Market competition and evolving technology trends affecting mmWave market share.

Q: Regarding the $3.6 million purchase order received, is the revenue from it fairly linear throughout 2025 and any indication of when in the year it will be recognized?

A: Ron Glibbery stated it's reasonably linear, a little weighted to the second half, with customer wanting linear and aiming for as linear as possible, with second half referring to July, August etc.

Q: How do you think margins will normalize once the bulk of sales are mmWave and memory runoff is complete?

A: James Sullivan mentioned corporate target is 50% gross margin, initially expecting margins in 40% range, with moving pieces on the new order regarding which devices are shipped and inventory write-downs providing some short-term margin benefit.

Q: On the military side, when do you expect some of the pipeline engagements to convert to production?

A: Ron Glibbery classified them more as 2026 events, with military generally moving slow but first application moved quickly, and other opportunities in traditional time scale.

Q: Expectations for BEAD program contributing more in 2025?

A: Ron Glibbery mentioned new administration's desire for tech-neutral BEAD funding and acceleration, hoping to see effects this year as administration aims to get high-speed Internet to masses.