Solid Close to FY ’25 but Q1 Guidance Falls Short

Peraso (PRSO) capped off FY ’25 with a solid Q4 performance. Revenue was approximately in line with our estimate and consensus and reflected robust growth in mmWave product sales relative to the prior year period. Importantly, Peraso demonstrated continued progress in expanding its addressable market opportunity, completing initial field trials leveraging its technology for battlefield communications and collaborating with Virewirx to enable multi-gigabit wireless connectivity for robotaxis. Below the revenue line, gross margin was slightly ahead of our assumption, while operating expenses were lower than we projected. As a result, both adjusted EBITDA and non-GAAP EPS beat our estimates and consensus.

Thus far in the new year, Peraso has shown additional signs of traction in commercializing its 60GHz mmWave technology. In the fixed wireless access market, MikroTik has selected Peraso’s chipset for its next-generation nRAY point-to-point link solution. Moving to the defense space, the company recently announced an expansion of its relationship with InTACT, which selected Peraso’s mmWave products for use in a new drone Identification Friend or Foe (IFF) system. However, a supply chain snafu expected to be resolved shortly has resulted in the pushout of a significant order from Q1 to Q2. As such, management’s Q1 guidance fell short of our estimate and consensus.

Apart from the delayed order, visibility into the timing of new customer ramps as well as irregular ordering patterns from the company’s established fixed wireless access customers suggest FY ’26 is likely to be back-end loaded. With this in mind, we have reduced our estimates for the year. We now anticipate 1H results to be below year-ago levels with more material growth rates returning in 2H. For the full year, our revised estimates reflect only modest Y/Y growth, which we expect to accelerate in FY ’27. Between the reduction in our estimates and the dilution from the company’s ATM stock sales, our price target declines from $2.50 to $1.75 based on a FY ’27 EV/Sales multiple of 1x. We note that while the multiple used in deriving our price target is unchanged, we now roll it forward to our FY ’27 projections, which we believe better captures the impact of the wins Peraso has secured of late.

Exhibit I: Reported Results and Guidance Versus Expectations

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

Q4 net revenue of $2.9 million (-22.0% Y/Y) was approximately in line with our estimate and consensus of $3.0 million. The decline in revenue from last year was wholly attributable to the wind down of the memory IC business, which contributed $3.4 million in the year-ago period and only $0.4 million in Q4 ‘25. Sales of mmWave products totaled $2.4 million, representing a step-function increase from $0.2 million in the prior year period.

Gross margin of 52.2% was ahead of our 51.2% assumption. Total operating expenses were slightly below our estimate, resulting in both adjusted EBITDA and non-GAAP EPS beating our estimate and consensus. Cash and investments at quarter-end totaled $2.9 million.

For Q1, management’s guidance calls for revenue of approximately $1.2 million. Prior to revisions, we were projecting $3.1 million in revenue, while consensus stood at $3.4 million. Approximately $0.5 million of the shortfall was attributable to the delayed shipment of an order to a new customer. Management also intimated that visibility into the timing of orders from both new and existing customers remains limited, which we believe prompted the conservative posture at the outset of a new year.

Exhibit II: Estimate Revisions

Source: K. Liu & Company LLC

We reduced our estimates for this year and next, primarily reflecting a delay in the ramp up of more material mmWave sales until the latter half of FY ‘26. Reflecting the lower volumes, we also reduced our gross margin assumptions across our forecast horizon, which was partially offset by a modest cut to our operating expense projections. We now expect Peraso to return to more material revenue growth in Q3 ’26 with full year revenue growth accelerating in FY ’27. 

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.