Peraso Announces Third Quarter 2023 Results
- Total revenue increased significantly, reflecting positive sales performance.
- GAAP gross margin expanded sequentially to 45.4%, indicating improved profitability.
- Non-GAAP gross margin also increased to 58.0%, reflecting a positive product mix.
- Introduction of the latest PERSPECTUS mmWave module product, the PRM2144X, for 60GHz FWA applications in dense urban environments showcases innovation and market adaptation.
- Encouraging growth of sales engagement pipeline despite ongoing industry-wide inventory correction.
- The company had a net loss for the quarter, reflecting potential financial challenges.
- Cash and cash equivalents were approximately $0.7 million, indicating a need for additional capital to sustain operations.
- The ongoing industry-wide inventory correction may continue to impact customer demand and shipments into 2024.
Total Revenue Increased
GAAP Gross Margin Expanded Sequentially to
SAN JOSE, CA / ACCESSWIRE / November 13, 2023 / 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 third quarter ended September 30, 2023.
Management Commentary
"Our third quarter financial results marked a significant improvement over the prior quarter, as we commenced initial shipments against a large order backlog associated with the end-of-life for our memory integrated circuit products (memory IC products)," commented Ron Glibbery, CEO of Peraso. "The increased revenue contribution from our higher margin memory IC products, combined with a sequential increase in sales of our millimeter wave (mmWave) products, drove solid gross profit expansion, benefitting our bottom-line results.
"Recent customer demand and shipments continue to be impacted by an ongoing industry-wide inventory correction. That said, the overall market trends continue to be favorable with a growing number of wireless Internet service providers leveraging unlicensed 60GHz fixed wireless access (FWA) to deploy multi-gigabit connectivity, as the U.S. Federal Communications Commission has suggested an increase to 1 gigabit per second as the minimum future benchmark speed for broadband. Also, during the quarter, we introduced our latest PERSPECTUS mmWave module product, the PRM2144X, which is specifically designed for enabling 60GHz FWA applications in dense urban environments.
"Although we expect the inventory digestion in the market to extend into 2024, we are encouraged by the continued growth of our sales engagement pipeline. Separately, we continue to expect that total purchase orders for last time buys of our memory IC products will be in the range of
Third Quarter 2023 Financial Results
Total net revenue for the third quarter of 2023 was
GAAP gross margin for the third quarter of 2023 was
Total operating expenses on a GAAP basis for the third quarter of 2023 were
As of September 30, 2023, the Company had cash and cash equivalents of approximately
GAAP net loss for the third quarter of 2023 was
Non-GAAP net loss for the third 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.
Earnings Conference Call and Webcast Information
Ron Glibbery, CEO, and Jim Sullivan, CFO, will host a conference call and webcast with slides today, November 13, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).
Date: Monday, November 13, 2023
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: 441592
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 27, 2023, and can be accessed by calling 1-877-481-4010, and using passcode 49382. 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, and the change in fair value of warrant liability. 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 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 13, 2023, 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 2023 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;
- the process in which we engage to evaluate strategic alternatives;
- the terms, timing, structure, benefits and costs of any strategic transaction and whether one will be consummated at all;
- the impact of any strategic transaction on the Company;
- 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 | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net Revenue | ||||||||||||||||
Product | $ | 4,262 | $ | 3,060 | $ | 11,385 | $ | 10,384 | ||||||||
Royalty and other | 219 | 234 | 532 | 597 | ||||||||||||
Total net revenue | 4,481 | 3,294 | 11,917 | 10,981 | ||||||||||||
Cost of Net Revenue | 2,445 | 2,000 | 7,346 | 6,747 | ||||||||||||
Gross Profit | 2,036 | 1,294 | 4,571 | 4,234 | ||||||||||||
Operating Expenses | ||||||||||||||||
Research and development | 3,484 | 4,509 | 11,039 | 15,636 | ||||||||||||
Selling, general and administrative | 2,112 | 3,353 | 6,331 | 8,938 | ||||||||||||
Gain on license and asset sale | - | (2,557 | ) | (406 | ) | (2,557 | ) | |||||||||
Total operating expenses | 5,596 | 5,305 | 16,964 | 22,017 | ||||||||||||
Loss from operations | (3,560 | ) | (4,011 | ) | (12,393 | ) | (17,783 | ) | ||||||||
Change in fair value of warrant liability | 2,615 | - | 4,239 | - | ||||||||||||
Other income (expense), net | 322 | 3 | 297 | (22 | ) | |||||||||||
Net loss | $ | (623 | ) | $ | (4,008 | ) | $ | (7,857 | ) | $ | (17,805 | ) | ||||
Net loss | ||||||||||||||||
Basic and diluted | $ | (0.02 | ) | $ | (0.20 | ) | $ | (0.32 | ) | $ | (0.89 | ) | ||||
Shares used in computing net loss per share | ||||||||||||||||
Basic and diluted | 28,589 | 20,039 | 24,892 | 19,950 |
PERASO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
September 30, | December 31, | |||||||
2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and investments | $ | 689 | $ | 2,906 | ||||
Accounts receivable, net | 3,064 | 3,244 | ||||||
Inventories | 5,697 | 5,348 | ||||||
Deferred cost of net revenue | - | 600 | ||||||
Prepaid expenses and other | 780 | 615 | ||||||
Total current assets | 10,230 | 12,713 | ||||||
Property and equipment, net | 1,624 | 2,225 | ||||||
Intangible assets, net | 4,209 | 6,278 | ||||||
Right-of-use lease assets | 647 | 1,147 | ||||||
Other | 121 | 123 | ||||||
Total assets | $ | 16,831 | $ | 22,486 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,583 | $ | 1,844 | ||||
Deferred revenue | 74 | 332 | ||||||
Short-term lease liabilities | 348 | 687 | ||||||
Accrued expenses and other | 689 | 1,817 | ||||||
Total current liabilities | 3,694 | 4,680 | ||||||
Lease liabilities | 379 | 470 | ||||||
Warrant liabilities | 1,003 | 2,079 | ||||||
Total liabilities | 5,076 | 7,229 | ||||||
Stockholders' equity | 11,755 | 15,257 | ||||||
Total liabilities and stockholders' equity | $ | 16,831 | $ | 22,486 |
PERASO INC.
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
(In thousands, except percentages; unaudited)
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2023 | September 30, 2023 | ||||||||||
GAAP gross profit | $ | 2,036 | $ | 4,571 | |||||||
Reconciling items: | |||||||||||
- Amortization of intangibles | 564 | 1,417 | |||||||||
Non-GAAP gross profit | $ | 2,600 | $ | 5,988 | |||||||
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2022 | September 30, 2022 | ||||||||||
GAAP gross profit | $ | 1,294 | $ | 4,234 | |||||||
Reconciling items: | |||||||||||
- Amortization of intangibles | 358 | 1,074 | |||||||||
Non-GAAP gross profit | $ | 1,652 | $ | 5,308 |
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, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
GAAP net loss | $ | (623 | ) | $ | (4,008 | ) | $ | (7,857 | ) | $ | (17,805 | ) | ||||
Stock-based compensation expense | ||||||||||||||||
- Research and development | 775 | 854 | 2,309 | 2,575 | ||||||||||||
- Selling, general and administrative | 533 | 593 | 1,625 | 1,782 | ||||||||||||
Total stock-based compensation expense | 1,308 | 1,447 | 3,934 | 4,357 | ||||||||||||
Amortization of intangibles (1) | ||||||||||||||||
- Cost of net revenue | 564 | 358 | 1,417 | 1,074 | ||||||||||||
- Selling, general and administrative | 251 | 160 | 632 | 479 | ||||||||||||
Total amortization of intangible assets | 815 | 518 | 2,049 | 1,553 | ||||||||||||
Change in fair value of warrant liability | (2,615 | ) | - | (4,239 | ) | - | ||||||||||
Non-GAAP net loss | $ | (1,115 | ) | $ | (2,043 | ) | $ | (6,113 | ) | $ | (11,895 | ) | ||||
GAAP net loss per share | $ | (0.02 | ) | $ | (0.20 | ) | $ | (0.32 | ) | $ | (0.89 | ) | ||||
Reconciling items | ||||||||||||||||
- Stock-based compensation expense | 0.04 | 0.07 | 0.16 | 0.22 | ||||||||||||
- Amortization of intangible assets (1) | 0.03 | 0.03 | 0.08 | 0.08 | ||||||||||||
- Change in fair value of warrant liability | (0.09 | ) | - | (0.17 | ) | - | ||||||||||
Non-GAAP net loss per share | $ | (0.04 | ) | $ | (0.10 | ) | $ | (0.25 | ) | $ | (0.59 | ) | ||||
Shares used in computing non-GAAP net loss per share | ||||||||||||||||
Basic and diluted | 28,589 | 20,039 | 24,892 | 19,950 | ||||||||||||
(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 and Non-GAAP Financial Information
(In thousands; unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Reconciliation of GAAP loss and adjusted EBITDA | ||||||||||||||||
GAAP net loss | $ | (623 | ) | $ | (4,008 | ) | $ | (7,857 | ) | $ | (17,805 | ) | ||||
Stock-based compensation expense | ||||||||||||||||
- Research and development | 775 | 854 | 2,309 | 2,575 | ||||||||||||
- Selling, general and administrative | 533 | 593 | 1,625 | 1,782 | ||||||||||||
Stock-based compensation expense | 1,308 | 1,447 | 3,934 | 4,357 | ||||||||||||
Amortization of intangibles (1) | 815 | 518 | 2,049 | 1,553 | ||||||||||||
Change in fair value of warrant liability | (2,615 | ) | - | (4,239 | ) | - | ||||||||||
Non-GAAP net loss | (1,115 | ) | (2,043 | ) | (6,113 | ) | (11,895 | ) | ||||||||
EBITDA adjustments: | ||||||||||||||||
- Depreciation and amortization | 236 | 232 | 715 | 736 | ||||||||||||
- Interest expense | 5 | 5 | 17 | 11 | ||||||||||||
Adjusted EBITDA | $ | (874 | ) | $ | (1,806 | ) | $ | (5,381 | ) | $ | (11,148 | ) | ||||
(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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