Peraso Announces Third Quarter 2022 Results
Peraso Inc. (NASDAQ:PRSO) reported a 63% year-over-year revenue increase, reaching $3.3 million for Q3 2022, despite lower-than-expected results due to delayed revenue recognition on certain orders. The company maintains a record order backlog and strong demand for its mmWave solutions, particularly in the fixed wireless access market. GAAP gross margin improved to 39.3%, while total operating expenses dropped significantly. The outlook for Q4 2022 anticipates revenues between $3.8 million and $4.1 million, excluding $1.1 million from prior shipments.
- Total revenue increased 63% year-over-year to $3.3 million.
- Record order backlog indicates strong future demand.
- Improved GAAP gross margin of 39.3% versus 34.7% in the previous quarter.
- Significant reduction in total operating expenses to $5.3 million from $8.5 million in Q2 2022.
- Revenue for Q3 2022 was lower than expected due to delayed revenue recognition from certain orders.
- Net loss of $4.0 million, though improved from $7.0 million in the prior quarter.
Total Revenue Increased
SAN JOSE, CA / ACCESSWIRE / November 14, 2022 / Peraso Inc. (NASDAQ:PRSO) ("Peraso" or the "Company"), a leader in mmWave technology, today announced financial results for the third quarter ended September 30, 2022.
Management Commentary
Peraso's CEO, Ron Glibbery, stated, "We've continued to experience strong customer demand for our mmWave solutions, which contributed to another quarter of year-over-year growth. However, third quarter revenue was lower than we previously expected, as we were unable to recognize revenue on certain orders that shipped to a customer late in the quarter. We are working closely with this customer and expect to recognize the associated revenue in the fourth quarter.
"Beyond this customer-specific issue, we continue to benefit from incremental traction in the fixed wireless access market, which has demonstrated sustained momentum despite the current macroeconomic environment. We also see strong interest from multiple customer prospects for our recently introduced 5G mmWave solution targeting customer premise applications with carriers. During the quarter, we demonstrated this highly integrated, dual-band 5G beamformer IC, at multiple prominent industry events. Moreover, we recently made key additions to the Peraso team in support of further expanding commercial engagements with both prospective customers and partners. Together with our existing order backlog, we have good visibility into future demand and expect to resume sequential growth in the fourth quarter."
Third Quarter 2022 Financial Results
Total net revenue for the third quarter of 2022 was
GAAP gross margin for the third quarter of 2022 was
Total operating expenses on a GAAP basis for the third quarter of 2022 were
GAAP net loss for the third quarter of 2022 was
Non-GAAP net loss for the third quarter of 2022 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.
Business Outlook
The Company expects total net revenue for the fourth quarter of 2022 to be in the range of
Earnings Conference Call and Webcast Information
Ron Glibbery, CEO, and Jim Sullivan, CFO, will host a conference call and webcast with slides today, November 14, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).
Date: Monday, November 14, 2022
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
Pass Code: 360522
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 November 28, 2022, and can be accessed by calling 1-877-481-4010, and using passcode 46803. 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, business combination transaction costs, the change in fair value of warrant liability, a deemed dividend on inducement of conversion of Class C preferred shares, accretion of preferred shares presented as dividends, and the effect of foreign exchange on preferred shares. 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) attributable to common stockholders 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, business combination transaction costs and the change in fair value of warrant liability. 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 Form 8-K dated November 14, 2022, 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 2022 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:
- the timing of customer orders and product shipments;
- risks related to the COVID-19 pandemic, including public health requirements in response to the outbreak of COVID-19 and the impact on the Company's business and operations, which is evolving and beyond the Company's control, members of the Company's management team or a significant number of its employee base becoming ill with COVID-19, changes in government regulations and mandates to address COVID-19 that may adversely impact the Company's ability to continue to operate without disruption, a significant decline in global macroeconomic conditions that have an adverse impact on the Company's business and financial results and 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 IC and module products through the acceptance and adoption of our architecture and interface protocols by potential customers and their suppliers;
- difficulties and delays in the production, testing and marketing of our ICs and modules;
- reliance on our manufacturing partners to assist successfully with the fabrication of our ICs and production of our modules;
- availability of quantities of ICs and components for our modules 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 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
Leanne K. Sievers | Brett Perry
P: 949-224-3874 | 214-272-0070
E: sheltonir@sheltongroup.com
PERASO INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts; unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Net Revenue | ||||||||||||||||
Product | $ | 3,060 | $ | 1,389 | $ | 10,384 | $ | 3,016 | ||||||||
Royalty and other | 234 | 629 | 597 | 800 | ||||||||||||
Total net revenue | 3,294 | 2,018 | 10,981 | 3,816 | ||||||||||||
Cost of Net Revenue | 2,000 | 919 | 6,747 | 1,973 | ||||||||||||
Gross Profit | 1,294 | 1,099 | 4,234 | 1,843 | ||||||||||||
Operating Expenses | ||||||||||||||||
Research and development | 4,509 | 2,696 | 15,638 | 8,375 | ||||||||||||
Selling, general and administrative | 3,353 | 1,746 | 8,936 | 4,852 | ||||||||||||
Gain on license and asset sale | (2,557 | ) | - | (2,557 | ) | - | ||||||||||
Total operating expenses | 5,305 | 4,442 | 22,017 | 13,227 | ||||||||||||
Loss from operations | (4,011 | ) | (3,343 | ) | (17,783 | ) | (11,384 | ) | ||||||||
Other income (expense), net | 3 | (478 | ) | (22 | ) | (2,023 | ) | |||||||||
Net loss | $ | (4,008 | ) | $ | (3,821 | ) | $ | (17,805 | ) | $ | (13,407 | ) | ||||
Net loss per share | . | |||||||||||||||
Basic and diluted | $ | (0.20 | ) | $ | (0.73 | ) | $ | (0.89 | ) | $ | (2.55 | ) | ||||
Shares used in computing net loss per share | ||||||||||||||||
Basic and diluted | 20,039 | 5,258 | 19,950 | 5,250 | ||||||||||||
PERASO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and investments | $ | 3,923 | $ | 15,160 | ||||
Accounts receivable, net | 1,636 | 2,436 | ||||||
Inventories | 5,271 | 3,824 | ||||||
Tax credits and receivables | 1,076 | 1,099 | ||||||
Deferred cost of net revenue | 600 | - | ||||||
Prepaid expenses and other | 918 | 1,159 | ||||||
Total current assets | 13,424 | 23,678 | ||||||
Long-term investments | - | 2,928 | ||||||
Property and equipment, net | 2,058 | 2,349 | ||||||
Intangible assets, net | 6,803 | 8,355 | ||||||
Goodwill | 9,946 | 9,946 | ||||||
Right-of-use lease assets | 1,181 | 617 | ||||||
Other | 129 | 78 | ||||||
Total assets | $ | 33,541 | $ | 47,951 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,744 | $ | 1,937 | ||||
Deferred revenue | 219 | 375 | ||||||
Short-term lease liability | 633 | 379 | ||||||
Accrued expenses and other | 1,867 | 2,903 | ||||||
Total current liabilities | 4,463 | 5,594 | ||||||
Lease liabilities | 554 | 288 | ||||||
Total liabilities | 5,017 | 5,882 | ||||||
Stockholders' equity | 28,524 | 42,069 | ||||||
Total liabilities and stockholders' equity | $ | 33,541 | $ | 47,951 | ||||
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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
GAAP net loss | $ | (4,008 | ) | $ | (3,821 | ) | $ | (17,805 | ) | $ | (13,407 | ) | ||||
Stock-based compensation expense | ||||||||||||||||
-Research and development | 854 | 704 | 2,575 | 2,151 | ||||||||||||
-Selling, general and administrative | 593 | 444 | 1,782 | 1,310 | ||||||||||||
Total stock-based compensation expense | 1,447 | 1,148 | 4,357 | 3,461 | ||||||||||||
Amortization of intangibles (1) | ||||||||||||||||
-Cost of net revenue | 358 | - | 1,074 | - | ||||||||||||
-Selling, general and administrative | 160 | - | 479 | - | ||||||||||||
Total amortization of intangible assets | 518 | - | 1,553 | - | ||||||||||||
Business combination transaction costs (2) | - | 505 | - | 1,137 | ||||||||||||
Change in fair value of warrant liability | - | (324 | ) | - | (113 | ) | ||||||||||
Non-GAAP net loss | $ | (2,043 | ) | $ | (2,492 | ) | $ | (11,895 | ) | $ | (8,922 | ) | ||||
GAAP net loss per share | $ | (0.20 | ) | $ | (0.73 | ) | $ | (0.89 | ) | $ | (2.55 | ) | ||||
Reconciling items | ||||||||||||||||
-Stock-based compensation expense | 0.07 | 0.22 | 0.22 | 0.66 | ||||||||||||
-Amortization of intangible assets (1) | 0.03 | - | 0.08 | - | ||||||||||||
-Business combination transaction costs (2) | - | 0.10 | - | 0.22 | ||||||||||||
-Change in fair value of warrant liability | - | (0.06 | ) | - | (0.02 | ) | ||||||||||
Non-GAAP net loss per share | $ | (0.10 | ) | $ | (0.47 | ) | $ | (0.59 | ) | $ | (1.69 | ) | ||||
Shares used in computing non-GAAP net loss per share | ||||||||||||||||
Basic and diluted | 20,039 | 5,258 | 19,950 | 5,250 | ||||||||||||
(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.
(2) Business combination transaction costs are included in selling, general and administrative expenses.
PERASO INC.
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin
(In thousands, except percentages; unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||
GAAP gross profit | $ | 1,294 | 39.3 | % | $ | 4,234 | 38.5 | % | |||||
Reconciling items: | |||||||||||||
-Amortization of intangibles | 358 | 10.9 | % | 1,074 | 9.8 | % | |||||||
Non-GAAP gross profit | $ | 1,652 | 50.2 | % | $ | 5,308 | 48.3 | % | |||||
PERASO INC.
Reconciliation of GAAP and Non-GAAP Financial Information
(In thousands; unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Reconciliation of GAAP loss and adjusted EBITDA | ||||||||||||||||||
GAAP net loss | $ | (4,008 | ) | $ | (3,821 | ) | $ | (17,805 | ) | $ | (13,407 | ) | ||||||
Stock-based compensation expense | ||||||||||||||||||
-Research and development | 854 | 704 | 2,575 | 2,151 | ||||||||||||||
-Selling, general and administrative | 593 | 444 | 1,782 | 1,310 | ||||||||||||||
Stock-based compensation expense | 1,447 | 1,148 | 4,357 | 3,461 | ||||||||||||||
Amortization of intangibles (1) | 518 | - | 1,553 | - | ||||||||||||||
Business combination transaction costs (2) | - | 505 | - | 1,137 | ||||||||||||||
Change in fair value of warrant liability | - | (324 | ) | - | (113 | ) | ||||||||||||
Non-GAAP net loss | (2,043 | ) | (2,492 | ) | (11,895 | ) | (8,922 | ) | ||||||||||
EBITDA adjustments: | ||||||||||||||||||
Depreciation and amortization | 232 | 250 | 736 | 783 | ||||||||||||||
Interest expense (3) | 5 | 870 | 11 | 2,170 | ||||||||||||||
Adjusted EBITDA | $ | (1,806 | ) | $ | (1,372 | ) | $ | (11,148 | ) | $ | (5,969 | ) | ||||||
(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.
(2) Business combination transaction costs are included in selling, general and administrative expenses.
(3) Includes amortization of debt discount.
SOURCE: Peraso, Inc.
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