Reports Q3 '25 Results Ahead of Expectations

Peraso (PRSO) reported Q3 ’25 results ahead of our estimates and consensus. Revenue exceeded the top end of management’s guidance driven by continued strong growth in sales of mmWave products and the initial fulfillment of an unexpected last-time buy of memory IC products. Consistent with the past few quarters, Peraso benefited from a steady recovery in orders from customers serving the fixed wireless access (FWA) market. The company also secured an initial volume order from a new global equipment manufacturer and now has two of the top OEMs serving wireless internet service providers. Reflecting a favorable product mix and benefits from the sale of previously written down inventory, gross margin outpaced our assumption and was above management’s targeted range. Operating expenses also remained well controlled and came in slightly below our forecast. As a result, both adjusted EBITDA and non-GAAP EPS handily beat our estimates and consensus.

Turning to guidance, management expects a modest sequential revenue decline in Q4, although mmWave sales will still be considerably higher than the year ago period. Prior to revisions, both our estimates and consensus called for a slight sequential increase. Regardless, we remain comfortable with our previous expectations for a sustained ramp in mmWave sales in FY ’26 and beyond. We note that Peraso’s pipeline now includes 12 customer SKUs in pre-production, the first time that figure has reached double-digits. Considering the company has 57 customer SKUs in production today, the pipeline points to meaningful growth in production SKUs within the next few quarters. As such, we raise our FY ’26 estimates slightly, and we introduce our FY ’27 projections, which call for revenue growth of 35% and positive EBITDA for the full year.

Shares of PRSO have now fallen back below Mobix Labs’ (MOBX) most recent offer price of $1.30 per share in cash. Per management, the company continues to evaluate a range of strategic alternatives. We continue to see multiple paths to value creation, including execution of the company’s mmWave growth initiatives in the communications and defense verticals, expansion into adjacent markets where Peraso’s technology can be leveraged in Edge AI use cases, or a sale of the company. Our price target remains $2.50 based on an unchanged FY ’26 EV/Sales multiple of approximately 1x.

Exhibit I: Reported Results and Guidance Versus Expectations

Sources: Peraso; K. Liu & Company LLC; FactSet Estimates

Q3 net revenue of $3.2 million (-15.8% Y/Y) was above our $3.1 million estimate and consensus of $3.0 million. The decline in revenue from the prior year was wholly attributable to the wind down of the memory IC business, which contributed $3.7 million in the year-ago quarter and only $75k in Q3 ‘25. Sales of mmWave products increased 45% sequentially to $3.0 million and were up significantly from $0.1 million in the prior year period.

Gross margin of 56.2% was well above our 47.0% assumption due to higher volumes, a favorable product mix and a benefit from the sale of previously written down inventory. Total operating expenses were slightly below our estimate, resulting in both adjusted EBITDA and non-GAAP EPS exceeding our estimate and consensus. Cash and investments at quarter-end totaled $1.9 million.

For Q4, management’s guidance calls for revenue of $2.8-$3.1 million. Prior to revisions, we were projecting $3.6 million in revenue, while consensus stood at $3.7 million. We attribute the variance to the timing of customer orders as management appears quite bullish on the company’s near- and long-term growth prospects.

Exhibit II: Estimate Revisions

Source: K. Liu & Company LLC

Although we lower our estimates slightly for Q4, our projections for FY ’26 increase slightly to reflect a greater number of customer SKUs entering production. We continue to expect Peraso to achieve positive adjusted EBITDA exiting FY ‘26. We also introduce our FY ’27 forecasts, which reflect a 35.1% Y/Y increase in revenue to $25.0 million and positive adjusted EBITDA for the full year. 

Our report with model and disclosures is available here.

Disclosure(s):

K. Liu & Company LLC (“the firm”) receives or intends to seek compensation from the companies covered in its research reports. The firm has received compensation from Peraso Inc. (PRSO) in the past 12 months for “Sponsored Research.”

Sponsored Research produced by the firm is paid for by the subject company in the form of an initial retainer and a recurring monthly fee. The analysis and recommendations in our Sponsored Research reports are derived from the same process and methodologies utilized in all of our research reports whether sponsored or not. The subject company does not review any aspect of our Sponsored Research reports prior to publication.