Peraso Announces Fourth Quarter and Full Year 2023 Results
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Insights
The recent financial results from Peraso Inc. reveal a company navigating through a challenging phase characterized by an inventory correction in the market for its mmWave products. The mention of non-linear timing of end-of-life shipments for memory IC products further underscores the transitionary state of the company's product lifecycle. However, the CEO's forward-looking statements hint at a potential rebound, with an anticipated resumption of revenue growth in the upcoming quarters.
Investors would be prudent to monitor the company's order backlog, which stands at over $12 million for memory IC products, as it provides a tangible measure of short-term financial health. Additionally, the new orders for mmWave products targeting fixed wireless access applications, particularly from the company's largest customer, could signal an inflection point for revenue growth and market adoption of their technology.
The public offering completed to strengthen the cash position and balance sheet is a strategic move to ensure liquidity and support ongoing operations. However, it's imperative to consider the dilutive effects of such offerings on existing shareholders. The company's optimism, supported by an expanding engagement pipeline and initial indications of renewed customer demand, should be weighed against the inherent risks of the highly competitive tech sector.
Peraso's engagement with wireless Internet service providers (WISPs) and the commercial order for the DUNE product platform are significant developments. These engagements, particularly in dense urban environments, suggest a strategic pivot towards markets with a high demand for gigabit wireless connectivity.
Understanding the market dynamics of FWA and WISP sectors is essential as these are rapidly evolving areas with significant growth potential. Peraso's entry into these markets with a product designed for urban settings could address a critical gap in providing affordable high-speed internet access. The success of the DUNE platform could position Peraso as a key player in this niche, potentially leading to increased market share and revenue.
The uptick in customer engagement activity with WISPs also indicates a broader industry trend where the demand for wireless connectivity solutions is on the rise, particularly in international markets. This could represent a larger shift in consumer and business preferences towards wireless solutions, which may have long-term implications for companies in the telecommunications and technology sectors.
The financial narrative of Peraso underscores the volatility and innovation-driven nature of the technology sector, especially within the mmWave technology space. The company's focus on 60 GHz unlicensed and 5G licensed networks places it at the forefront of a critical transition in wireless communication infrastructure.
mmWave technology is pivotal for the next generation of wireless networks due to its high bandwidth and speed capabilities. The memory IC product lifecycle and the strategic shift towards mmWave products for FWA applications reflect an industry-wide trend of evolving technology standards and consumer demand for faster connectivity.
Peraso's recent public offering to fund its business plan and the initial success of the DUNE platform in dense urban environments could be early indicators of the company's adaptability and potential growth trajectory. However, the technology sector's fast-paced environment means that Peraso must continuously innovate and adapt to maintain a competitive edge.
SAN JOSE, CA / ACCESSWIRE / March 18, 2024 / Peraso Inc. (NASDAQ:PRSO) ("Peraso" or the "Company"), a global leader in mmWave technology for 60 GHz unlicensed and 5G licensed networks, today announced financial results for the fourth quarter and full year ended December 31, 2023.
Management Commentary
"Consistent with our prior expectations, product revenue for the fourth quarter reflected the ongoing inventory correction in the market for our mmWave products, as well as the non-linear timing of end-of-life shipments for our memory IC products," commented Ron Glibbery, CEO of Peraso. "Since the beginning of the new year, these headwinds have begun to moderate, and we anticipate revenue growth to resume in the first quarter and for the full year. These expectations are supported by over
"Also notable, we have recently seen an uptick in customer engagement activity with wireless Internet service providers (WISPs) seeking to deploy affordable gigabit wireless connectivity in international markets. In January, we secured the first commercial order for Peraso's newly launched DUNE product platform designed specifically for dense urban environments, and we have since commenced proof-of concept engagements with multiple additional service providers.
"More recently, we took actions to strengthen our cash position and balance sheet by completing a public offering, which provides working capital to continue executing our business plan and focus on growing the customer base for our mmWave products. With the expanding engagement pipeline for our mmWave solutions and the initial indications of renewed customer demand, we are very optimistic about the Company's outlook for 2024."
Fourth Quarter 2023 Financial Results
Total net revenue for the fourth quarter of 2023 was
GAAP gross margin for the fourth quarter of 2023 was negative
Total operating expenses on a GAAP basis for the fourth quarter of 2023 were
GAAP net loss for the fourth quarter of 2023 was
Non-GAAP net loss for the fourth quarter of 2023 was
A reconciliation of GAAP to non-GAAP results and GAAP net loss to Adjusted EBITDA is provided in the financial statement tables following the text of this press release.
As of December 31, 2023, the Company had cash and cash equivalents of approximately
Full Year 2023 Financial Results
Total net revenue for 2023 was
GAAP gross margin for 2023 was
Total operating expenses on a GAAP basis for 2023 were
GAAP net loss for 2023 was
Non-GAAP net loss for 2023 was
Business Outlook
The Company expects total net revenue for the first quarter of 2024 to be in the range of
Strategic Action Update
In August 2023, the Company engaged an investment bank to assist with the exploration of strategic alternatives, including a merger, sale of assets or other similar transaction, with the intention to maximize stockholder value and further our business operations. In January 2024, the Company terminated such advisory agreement. The Company currently has no commitments or agreements and is not negotiating with any parties relating to a merger, sale of assets or other similar transaction.
Earnings Conference Call and Webcast Information
Ron Glibbery, CEO, and Jim Sullivan, CFO, will host a conference call and webcast with slides today, March 18, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).
Date: Monday, March 18, 2024
Time: 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time)
Conference Call Number: 1-888-506-0062
International Call Number: +1-973-528-0011
Passcode: 871343
Webcast and Slides: Click Here
For those unable to listen to the live Web broadcast, it will be archived on the Company's website, and can be accessed by visiting the Company's investor page at www.perasoinc.com. A replay of the conference call will also be available through March 25, 2024, and can be accessed by calling 1-877-481-4010, and using passcode 50105. International callers should dial 1-919-882-2331 and enter the same passcode at the prompt. Any supporting materials referenced during the live broadcast will be made available in the Investor Relations section of the Company's website following the conclusion of the conference call.
Use of Non-GAAP Financial Measures
To supplement Peraso's consolidated financial statements presented in accordance with GAAP, Peraso uses non-GAAP financial measures that exclude from the statement of operations the effects of stock-based compensation,amortization of reported intangible assets, goodwill impairment charges and the change in fair value of warrant liabilities. Peraso's management believes that the presentation of these non-GAAP financial measures is useful to investors and other interested persons because they are one of the primary indicators that Peraso's management uses for planning and forecasting future performance. The press release also makes reference to and reconciles GAAP net income (loss) and adjusted EBITDA, which the Company defines as GAAP net income (loss) before interest expense, income tax provision, and depreciation and amortization, as well as stock-based compensation, amortization of reported intangible assets, and the change in fair value of warrant liabilities. Management believes that the presentation of non-GAAP financial measures that exclude these items is useful to investors because management does not consider these charges part of the day-to-day business or reflective of the core operational activities of the Company that are within the control of management or that would be used to evaluate management's operating performance.
Investors are encouraged to review the reconciliations of these non-GAAP financial measures to the comparable GAAP results, which are provided in tables below the Condensed Consolidated Statements of Operations. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. For additional information regarding these non-GAAP financial measures, and management's explanation of why it considers such measures to be useful, refer to the Current Report on Form 8-K dated March 18, 2024, that the Company filed with the Securities and Exchange Commission.
Forward-Looking Statements
This press release may contain forward-looking statements about the Company, including, without limitation, the Company's expectations regarding growth prospects for the Company's products and the Company's 2024 revenue and gross margin trends. Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited, to the following:
- our ability to continue as a going concern;
- our ability to raise additional capital to fund our operations;
- annual expense savings expected from the Company's cost reduction initiatives;
- the timing of customer orders and product shipments;
- risks related to the COVID-19 pandemic that may have an adverse impact on the Company's business and financial results and result in component shortages and increased lead times that may negatively impact the Company's ability to ship its products;
- inflationary risks;
- customer concentrations and length of billing and collection cycles, which may be impacted in the event of a global recession or economic downturn;
- lengthy sales cycle;
- ability to enhance our existing proprietary technologies and develop new technologies;
- achieving additional design wins for our products through the acceptance and adoption of our technology by potential customers and their suppliers;
- difficulties and delays in the production, testing and marketing of our products;
- reliance on our manufacturing partners to assist successfully with the fabrication of our and production of our products;
- impacts of the end-of-life of our memory products;
- availability of quantities of our products supplied by our manufacturing partners at a competitive cost;
- level of intellectual property protection provided by our patents, the expenses and other consequences of litigation, including intellectual property infringement litigation, to which we may be or may become a party from time to time;
- vigor and growth of markets served by our customers and our operations; and
- other risks identified in the Company's public filings it makes with the Securities and Exchange Commission.
Peraso does not intend to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.
About Peraso Inc.
Peraso Inc. (NASDAQ: PRSO) is a pioneer in high-performance 60 GHz license free and 5G mmWave wireless technology, offering chipsets, modules, software, and IP. Peraso supports a variety of applications, including fixed wireless access, immersive video, and factory automation. In addition, Peraso's solutions for data and telecom networks focus on Accelerating Data Intelligence and Multi-Access Edge Computing, providing end-to-end solutions from the edge to the centralized core and into the cloud. For additional information, please visit www.perasoinc.com.
Company Contact:
Jim Sullivan, CFO
Peraso Inc.
P: 408-418-7500
E: jsullivan@perasoinc.com
Investor Relations Contacts:
Shelton Group
Brett L. Perry | Leanne K. Sievers
P: 214-272-0070| 949-224-3874
E: sheltonir@sheltongroup.com
PERASO INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts; unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Net Revenue | ||||||||||||||||
Product | $ | 1,468 | $ | 3,815 | $ | 12,853 | $ | 14,199 | ||||||||
Royalty and other | 364 | 72 | 896 | 669 | ||||||||||||
Total net revenue | 1,832 | 3,887 | 13,749 | 14,868 | ||||||||||||
Cost of Net Revenue | 4,531 | 2,168 | 11,877 | 8,915 | ||||||||||||
Gross Profit (Loss) | (2,699 | ) | 1,719 | 1,872 | 5,953 | |||||||||||
Operating Expenses | ||||||||||||||||
Research and development | 3,359 | 4,130 | 14,398 | 19,768 | ||||||||||||
Selling, general and administrative | 2,174 | 2,172 | 8,505 | 11,108 | ||||||||||||
Gain on license and asset sale | - | - | (406 | ) | (2,557 | ) | ||||||||||
Impairment of goodwill | - | 9,946 | - | 9,946 | ||||||||||||
Total operating expenses | 5,533 | 16,248 | 22,497 | 38,265 | ||||||||||||
Loss from operations | (8,232 | ) | (14,529 | ) | (20,625 | ) | (32,312 | ) | ||||||||
Change in fair value of warrant liabilities | (746 | ) | - | 3,493 | - | |||||||||||
Other income (expense), net | 40 | (64 | ) | 337 | (86 | ) | ||||||||||
Net loss | $ | (8,938 | ) | $ | (14,593 | ) | $ | (16,795 | ) | $ | (32,398 | ) | ||||
Net loss | ||||||||||||||||
Basic and diluted | $ | (12.48 | ) | $ | (28.45 | ) | $ | (26.00 | ) | $ | (64.41 | ) | ||||
Shares used in computing net loss per share | ||||||||||||||||
Basic and diluted | 716 | 513 | 646 | 503 | ||||||||||||
PERASO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
| December 31, | ||||||||
| 2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and investments | $ | 1,583 | $ | 2,906 | ||||
Accounts receivable, net | 731 | 3,244 | ||||||
Inventories | 2,606 | 5,348 | ||||||
Deferred cost of net revenue | - | 600 | ||||||
Prepaid expenses and other | 620 | 615 | ||||||
Total current assets | 5,540 | 12,713 | ||||||
Property and equipment, net | 1,156 | 2,225 | ||||||
Intangible assets, net | 3,280 | 6,278 | ||||||
Right-of-use lease assets | 615 | 1,147 | ||||||
Other | 123 | 123 | ||||||
Total assets | $ | 10,714 | $ | 22,486 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,448 | $ | 1,844 | ||||
Deferred revenue | 1,105 | 332 | ||||||
Short-term lease liabilities | 370 | 687 | ||||||
Accrued expenses and other | 611 | 1,817 | ||||||
Total current liabilities | 4,534 | 4,680 | ||||||
Lease liabilities | 349 | 470 | ||||||
Warrant liabilities | 1,748 | 2,079 | ||||||
Total liabilities | 6,631 | 7,229 | ||||||
Stockholders' equity | 4,083 | 15,257 | ||||||
Total liabilities and stockholders' equity | $ | 10,714 | $ | 22,486 | ||||
PERASO INC.
Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per Share
(In thousands, except per share amounts; unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
GAAP net loss | $ | (8,938 | ) | $ | (14,593 | ) | $ | (16,795 | ) | $ | (32,398 | ) | ||||
Stock-based compensation expense | ||||||||||||||||
- Research and development | 737 | 767 | 3,046 | 3,342 | ||||||||||||
- Selling, general and administrative | 542 | 606 | 2,167 | 2,388 | ||||||||||||
Total stock-based compensation expense | 1,279 | 1,373 | 5,213 | 5,730 | ||||||||||||
Amortization of intangibles (1) | ||||||||||||||||
- Cost of net revenue | 563 | 358 | 1,980 | 1,432 | ||||||||||||
- Selling, general and administrative | 252 | 160 | 884 | 639 | ||||||||||||
Total amortization of intangible assets | 815 | 518 | 2,864 | 2,071 | ||||||||||||
Impairment of goodwill | - | 9,946 | - | 9,946 | ||||||||||||
Change in fair value of warrant liabilities | 746 | (19 | ) | (3,493 | ) | (19 | ) | |||||||||
Non-GAAP net loss | $ | (6,098 | ) | $ | (2,775 | ) | $ | (12,211 | ) | $ | (14,670 | ) | ||||
GAAP net loss per share | $ | (12.48 | ) | $ | (28.45 | ) | $ | (26.00 | ) | $ | (64.41 | ) | ||||
Reconciling items | ||||||||||||||||
- Stock-based compensation expense | 1.78 | 2.68 | 8.07 | 11.39 | ||||||||||||
- Amortization of intangible assets (1) | 1.14 | 1.01 | 4.43 | 4.12 | ||||||||||||
- Impairment of goodwill | - | 19.39 | - | 19.77 | ||||||||||||
- Change in fair value of warrant liabilities | 1.04 | (0.04 | ) | (5.40 | ) | (0.04 | ) | |||||||||
Non-GAAP net loss per share | $ | (8.52 | ) | $ | (5.41 | ) | $ | (18.90 | ) | $ | (29.17 | ) | ||||
Shares used in computing non-GAAP net loss per share | ||||||||||||||||
Basic and diluted | 716 | 513 | 646 | 503 | ||||||||||||
(1) Non-cash charges for amortization of intangibles arising from aquired assets. These charges are included in cost of net revenue and selling, general and administrative expenses.
PERASO INC.
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
(In thousands, except percentages; unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2023 | December 31, 2023 | |||||||||||||||
GAAP gross profit (loss) | $ | (2,699 | ) | -147.3 | % | $ | 1,872 | 13.6 | % | |||||||
Reconciling items: | ||||||||||||||||
- Amortization of intangibles | 563 | 30.7 | % | 1,980 | 14.4 | % | ||||||||||
Non-GAAP gross profit (loss) | $ | (2,136 | ) | -116.6 | % | $ | 3,852 | 28.0 | % | |||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2022 | December 31, 2022 | |||||||||||||||
GAAP gross profit | $ | 1,719 | 44.2 | % | $ | 5,953 | 40.1 | % | ||||||||
Reconciling items: | ||||||||||||||||
- Amortization of intangibles | 358 | 9.2 | % | 1,432 | 9.6 | % | ||||||||||
Non-GAAP gross profit | $ | 2,077 | 53.4 | % | $ | 7,385 | 49.7 | % | ||||||||
PERASO INC.
Reconciliation of GAAP and Non-GAAP Financial Information
(In thousands; unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Reconciliation of GAAP loss and adjusted EBITDA | ||||||||||||||||
GAAP net loss | $ | (8,938 | ) | $ | (14,593 | ) | $ | (16,795 | ) | $ | (32,398 | ) | ||||
Stock-based compensation expense | ||||||||||||||||
- Research and development | 737 | 767 | 3,046 | 3,342 | ||||||||||||
- Selling, general and administrative | 542 | 606 | 2,167 | 2,388 | ||||||||||||
Stock-based compensation expense | 1,279 | 1,373 | 5,213 | 5,730 | ||||||||||||
Amortization of intangibles (1) | 815 | 518 | 2,864 | 2,071 | ||||||||||||
Impairment of goodwill | - | 9,946 | - | 9,946 | ||||||||||||
Change in fair value of warrant liabilities | 746 | (19 | ) | (3,493 | ) | (19 | ) | |||||||||
Non-GAAP net loss | (6,098 | ) | (2,775 | ) | (12,211 | ) | (14,670 | ) | ||||||||
EBITDA adjustments: | ||||||||||||||||
- Depreciation and amortization | 232 | 250 | 946 | 986 | ||||||||||||
- Interest expense | 4 | 5 | 21 | 16 | ||||||||||||
Adjusted EBITDA | $ | (5,862 | ) | $ | (2,520 | ) | $ | (11,244 | ) | $ | (13,668 | ) | ||||
(1) Non-cash charges for amortization of intangibles arising from aquired assets. These charges are included in cost of net revenue and selling, general and administrative expenses.
SOURCE: Peraso, Inc.
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FAQ
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