Reports Q2 Results Slightly Ahead of Expectations

Peraso (PRSO) reported Q2 ’26 results slightly ahead of expectations. As anticipated, the shipment of a large fixed wireless access (FWA) order delayed from the prior quarter drove strong sequential growth. Gross margin compared favorably with our assumption, reflecting a favorable product mix and sales of previously written down inventory. Operating expenses were approximately in line with our forecasts, which combined with the upside in gross profit, yielded lower losses for adjusted EBITDA and non-GAAP EPS than we projected.

Thus far in FY ’26, visibility into the timing of orders from new and existing FWA customers has been limited. Per management, that has yet to change, and we surmise the ongoing uncertainty precluded the company from providing any specific revenue guidance for Q3. Beyond the current quarter, however, conversion of the existing pipeline appears promising. In this regard, management highlighted several emerging growth opportunities in defense driven by budding interest in Peraso’s mmWave technology due to its low probability of detection, anti-jamming capabilities, and favorable size, weight and power specifications. We believe a couple of these opportunities, including a potential six-figure non-recurring engineering deal and a new use case leveraging mmWave technology in secure ground communications, could contribute as soon as Q4. Further out, we see growth coming from the expansion of FWA into new markets like India and broader adoption of mmWave technology for use in unmanned aerial vehicles and other autonomous fleets. 

Given the pipeline of emerging defense applications and a potential recovery in Peraso’s core FWA business, we still expect a material revenue ramp in FY ’27 and thus leave our out-year estimates largely intact. However, we infer from the lack of guidance for Q3 that revenue could be as soft as it was to start the year. As such, we reduce our estimates for FY ’26 to reflect a trough in sales during the current quarter and a return to sequential revenue growth exiting the year. Even with the push-out in our expectations for a recovery, we believe the company’s present cash position provides sufficient liquidity through Q4, assuming the aforementioned deals highlighted come to fruition. We note, however, that should those deals slip, the company would still have a backstop of sorts given its committed equity facility with Roth Principal Investments. Our price target remains $1.25 based on an unchanged FY ’27 EV/Sales multiple of 1x.

Exhibit I: Reported Results and Guidance Versus Expectations

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

Q2 net revenue of $1.3 million was slightly ahead of management’s $1.2 million guidance and in line with our estimate. Product sales totaled $1.2 million while services and other revenue comprised the remaining $0.1 million.

Gross margin of 65.4% was well above our 50.5% assumption due to a favorable product mix and sales of previously written down inventory. Total operating expenses were nominally above our estimate, while losses on both the adjusted EBITDA and non-GAAP EPS lines compared favorably with our projections. Cash and investments at the end of Q2 totaled $3.3 million, up from $2.7 million at the end of the prior quarter due in part to $2.4 million of net proceeds from sales under the company’s ATM offerings.

Per management, memory shortages and the associated inflation in component costs continue to impact customer ordering patterns. Near-term visibility therefore remains limited, and we believe resulted in the decision to withhold revenue guidance for Q3.

Exhibit II: Estimate Revisions

Source: K. Liu & Company LLC

With the demand environment still challenging and no significant order slated to ship as in Q2, we are ratcheting down our Q3 estimates to levels more akin to Q1 and assuming a recovery from those depressed levels beginning in Q4. As such, our estimates are meaningfully lower for FY ’26 but remain largely intact for FY ’27 as we expect both new defense customers and existing FWA customers to contribute more significantly in the coming 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.