Peraso, Inc. ((PRSO)) has held its Q4 earnings call. Read on for the main highlights of the call.
Peraso Inc. has reported a positive sentiment during its latest earnings call, highlighting robust revenue growth and significant improvements in gross margins. The company attributes this success to the strong demand for its mmWave technology and effective cost reduction strategies. However, challenges persist as the company transitions away from memory IC products and continues to face net losses, albeit reduced from previous levels.
Record Revenue Growth
Peraso Inc. achieved a remarkable 100% year-over-year increase in fourth-quarter revenue, with full-year 2024 revenue reaching $14.6 million compared to $13.7 million in 2023. This growth underscores the company’s successful strategies in expanding its market presence and capitalizing on emerging opportunities.
Improved Gross Margins
The company’s gross margins saw substantial improvement, with GAAP gross margin rising to 56.3% in Q4 2024 from 47% in the previous quarter, and non-GAAP gross margin reaching 71.6%. This marks a significant turnaround from the negative margins experienced in Q4 2023, reflecting a favorable product mix and reduced inventory write-downs.
mmWave Technology Momentum
Peraso’s mmWave technology continues to gain traction, evidenced by a $3.6 million purchase order from a strategic customer. This renewed demand and increasing production orders highlight the growing market acceptance and potential of mmWave solutions.
Military Application Growth
The company has seen growth in military defense applications, with an upsized production order and additional engagements for tactical communication applications. This expansion into military applications represents a strategic diversification of Peraso’s market offerings.
Cost Reductions and Efficiency Improvements
Peraso has successfully reduced its operating expenses by 20% year-over-year, benefiting from previous cost reduction actions. This efficiency improvement has contributed to the company’s enhanced operating performance and financial stability.
Memory IC Product Transition
The company has completed the end-of-life shipments for its memory IC products, with a remaining backlog of $2.3 million to be fulfilled. This transition marks a strategic shift in focus towards more profitable and sustainable product lines.
Decreased Royalty Revenue
Royalty and other revenue for 2024 decreased to $0.3 million from $0.9 million in 2023, primarily due to a reduction in memory royalties and nonrecurring engineering services. This decline reflects the company’s strategic pivot away from less lucrative revenue streams.
Net Loss Continued
Despite improvements, Peraso reported a GAAP net loss of $1.6 million for Q4 2024, an improvement from the $8.9 million loss in Q4 2023. This ongoing net loss underscores the challenges the company faces as it continues to restructure and optimize its operations.
Forward-Looking Guidance
Peraso Inc. provided optimistic forward-looking guidance during the earnings call. The company anticipates first-quarter 2025 revenue to range between $3.6 million and $4 million, with mmWave revenue expected to surpass full-year 2024 levels. The company also highlighted broader market dynamics, such as the U.S. government’s BEAD program, as potential growth drivers for their mmWave solutions. These projections reflect the company’s confidence in its strategic direction and market opportunities.
In summary, Peraso Inc.’s earnings call conveyed a positive outlook, driven by strong revenue growth, improved gross margins, and strategic advancements in mmWave technology. Despite ongoing challenges, the company’s efforts in cost reduction and market diversification position it well for future growth. Investors and market observers will be keenly watching Peraso’s progress as it navigates its strategic transition and capitalizes on emerging opportunities.