Q1 '25 Earnings Preview

Peraso (PRSO) reports Q1 ’25 results after the market closes on Monday, May 12. We expect the results to be generally consistent with our estimates and consensus, both of which reflect revenue within management’s guidance. Recall that Q1 marks the final quarter of end-of-life (EOL) memory IC shipments, providing visibility into ~60% of projected revenue for the quarter. Moreover, mmWave sales in Q1 are expected to exceed the total generated in all of FY ’24 as the inventory overhang seen over the past two years has finally cleared. Looking forward, we believe the resumption of mmWave sales to large, existing wireless equipment customers coupled with initial production shipments to a defense contractor leveraging Peraso’s technology for battlefield communications will support continued sequential growth in mmWave revenue. We therefore expect Q2 revenue guidance at least in line with our estimates and consensus. We maintain our price target of $2.75 based on a FY ’25 EV/Sales multiple of 1x. 

Exhibit I: Our Estimates Versus Consensus

Sources: K. Liu & Company LLC; FactSet Estimates

Our Q1 projections include revenue of $3.8 million, adjusted EBITDA of $(0.7) million and non-GAAP EPS of $(0.16) versus the consensus of $3.6 million, $(0.5) million and $(0.16), respectively. Management’s guidance calls for revenue of $3.6-$4.0 million. Underlying our assumptions are memory IC sales of $2.3 million, representing the remaining backlog of EOL orders at the start of the quarter, and mmWave sales of $1.5 million. Reflecting a greater mix of mmWave revenue, we expect gross margin to decline sequentially and Y/Y to approximately 58%. Lastly, we model operating expense at levels consistent with the past two quarters and slightly lower than the year-ago period.

Turning to Q2, we remain comfortable with our revenue estimate and the consensus, which call for $2.0 million and $2.3 million, respectively. We note that the company’s recently announced win in the military and defense vertical has the potential to generate over $10 million in revenue over time with shipments commencing this quarter. Peraso also previously announced a $3.6 million purchase order for its mmWave devices from a wireless systems vendor with initial shipments expected in Q2. Given the orders in hand and a strong pipeline, we believe Peraso remains poised to supplant its EOL memory sales with new mmWave business in FY ’25 and beyond.

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.