Q1 ‘26 Results In Line with Pre-Announcement; Lack of Visibility Clouds Q2 Outlook
Peraso’s (PRSO) Q1 ’26 results were consistent with the pre-announced revenue range provided last month. Recall that we had adjusted our Q1 estimates at the time, and the reported results were in line with our revised projections. Per management, revenue was negatively impacted by a supply chain issue, which delayed the fulfillment of a significant order. The company has since received the requisite materials to complete production, and the order has already been shipped in full. Despite the order push-out, gross margin was surprisingly strong and exceeded our assumption due to a higher mix of non-recurring engineering revenue. This in turn helped to offset slightly higher operating expenses than we projected. All told, the magnitude of the losses on both the adjusted EBITDA and non-GAAP net income lines matched our estimates, but non-GAAP EPS came in below our projection as the loss was spread over a lower share count that we assumed.
Although the current quarter will benefit from the fulfillment of the large order pushed out from Q1, management noted that visibility into the timing of orders from new and existing fixed wireless access (FWA) customers remains murky to say the least. Orders originally anticipated in the first half of the year have been delayed as customers grapple with memory supply constraints and the corresponding rise in prices. While awards in newer markets such as defense have begun to move into production, the timing of follow-on orders is also difficult to predict. As such, management’s initial guidance for Q2 fell short of our estimate and consensus. We suspect that the current outlook is likely conservative as the company looks to avoid a repeat of missing expectations and to position itself for an upside surprise.
While we believe the future remains bright for Peraso based on its traction in the FWA market and recent wins in the defense vertical, the revenue shortfall in Q1 and soft guidance for Q2 prompt us to pare our forecasts for this year and next. Our price target declines in concert from $1.75 to $1.25 based on an unchanged FY ’27 EV/Sales multiple of 1x. We expect the stock to be in “show-me” mode for the foreseeable future as investors await another inflection in mmWave sales. Fortunately, Peraso’s operating cash burn was largely negated by stock sales under its ATM offering in Q1, which together with the significant order completed in Q2 provide sufficient liquidity to manage through the near-term uncertainty.
Exhibit I: Reported Results and Guidance Versus Expectations
Sources: Peraso; K. Liu & Company LLC; FactSet Estimates
Q1 net revenue of $1.0 million was in line with management’s preliminary guidance of $0.9-$1.0 million but below the initial outlook of $1.2 million. As noted earlier, the shortfall relative to management’s initial expectations was attributed to a supply chain issue that delayed fulfillment of a large order from Q1 to Q2. Within Q1, product sales totaled $0.7 million while services and other revenue comprised the remaining $0.3 million.
Gross margin of 61.5% was well above our 43.3% assumption due to a higher mix of non-recurring engineering services revenue than we projected, while total operating expenses were nominally above our estimate. Losses on both the adjusted EBITDA and non-GAAP net income lines mirrored our estimates, but non-GAAP EPS were $0.02 below our projection as the loss was spread over a lower share count than we assumed. Cash and investments at the end of Q1 totaled $2.7 million, down slightly from $2.9 million at the end of the prior quarter.
For Q2, management’s guidance calls for revenue of approximately $1.2 million. Prior to revisions, we were projecting revenue of $2.0 million in revenue while consensus, which was not fully revised following last month’s pre-announcement, stood at $2.5 million. Similar to last quarter, management’s commentary suggests near-term visibility remains limited. That said, we believe guidance is more likely to be met this time around considering the large order pushed from Q1 has already been recognized.
Exhibit II: Estimate Revisions
K. Liu & Company LLC
We lower our estimates for this year and next given the lack of visibility into renewed order growth among the company’s FWA customers and uncertainty over the potential contribution from new defense customers later in the year. That said, we continue to anticipate a meaningful inflection in mmWave sales exiting the year, and our FY ’27 forecasts reflect a return to the prior high watermark in revenue.
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.