PRSO - Earnings call transcript Q1 2022

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Operator

Good afternoon, and welcome to Peraso, Inc.’s First Quarter 2022 Conference Call. At this time, all participants are in a listen-only mode.

Following the company’s prepared remarks, instructions will be given for the questions-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded today, Monday, May 9, 2022. I would now like to turn the call over to Peraso’s CFO, Jim Sullivan. ahead. go Please

Jim Sullivan

presentation and Ron the that thank X-K, discuss on and Jim Peraso’s joining conference release also today today's www.perasoinc.com CFO under Investor the we This in section. today's Good available a a will conjunction was issued SEC. the first you filed quarter IR to website press is me call be joining Peraso’s Peraso, related I'm our XXXX call we CEO. are of afternoon link slide The be using that website. Form Form X-K afternoon and on our press and for accessed Glibbery, is Relations release which financial webcast There Sullivan, with at through results. may with

expenses, reminder, caution include These statements adjusted EBITDA, financial fact of competitive statements. loss, available other relating or or today's changes statements of the may disclaims conference company's market materially As made and statements, involve products margins, revenue, More applicable as public operating reliance historical alter advises implied information, in Also statements. any in during on than future expenses, our risks, call statements result forward-looking. in or by unexpected set Peraso’s are All technologies. those as other All factors except Peraso the and a factors are without statements Peraso income or statements, statements otherwise, include law. comments events update or based limitation Peraso net to on and its date any risk additional performance these information results flows the items. cash to concerning performance or obligation share, forward-looking projections required SEC. forth to statements may of expected about a deemed non-GAAP could filings whether as Peraso’s be new any forward-looking with development, non-GAAP forward-looking forward-looking business. and factors known unknown expressly actual from These on the forward-looking risk detailed differ hereof. the by including cause that uncertainties to information other

company's and items, of in management GAAP in details. and information which this terms include additional measures and of release release non-GAAP certain the reconciliations statements the conference call provide financial discussions non-GAAP. are of will press Additionally, press GAAP definitions and company's to Included during

recording For those unable of listen of will available at to you the Relations Peraso’s on entire a this the to call section Investor time be website.

Glibbery call over his Now, I prepared for turn Ron remarks. CEO, to Ron? to would the our like

Ron Glibbery

and Thank an us look via on our conference to of you, welcome the I providing over and update the Jim. Good call. afternoon achieved and highlighting forward a joining last few business, to milestones we’ve our webcast. since everyone phone

the of combined pleased full of very completed close first team's With operational synergies completed efficiencies. quarter between the following the results. with maximize potential cost our Peraso in integration to been to operations activity transaction and Significant MoSys evaluate has overall continue we and in the I'm December, execution

of quarter increased solutions the and XXX% increased revenue experience over we of terms In in continue our wireless our fixed to adoption results, year-over-year access. from mmWave

for me on the story. Before the let may of during quarter, progress to a those new more brief first getting provide be overview our into the still company detail that

technology other the mmWave XXX cellular several been business technology in-volume we've markets, gain a from access XX our bands public leader significant proven continues the modules. for gigahertz. silicon and XX a to between years. about providing mmWave companies revolutionary to XG industry momentum that and XG globally, high differentiates mmWave new in now the been mmWave shipping field embraced to Peraso bandwidth have [indiscernible] XG been Once an and mmWave wireless and for has deemed capacity which as in solutions additional by development is impossible us has frequency performance that Although technology ecosystem critical years been in is that of and is skeptics, over talk by enabling the

this technology is XXXX. driving today, are position especially applications. the expansion. in broadband we shipping there forecasted growing millions trends customers wireless million with number to This growing streaming, raised our Today, availability devices more and global to market. wireless Internet XX.X increased and exponentially. to dollars wins products HD the previous macro of years. and performance an of with bandwidth I access Government reach to the $XX build the fact, demand multiple in gigahertz to made of have allocation wireless access, video multiple to significant In users expanding subscribers also subscribers established expected driving our approximately one, X overall by of for fixed span wireless Peraso end revenue are achieving funds of funding rural, billion Significant ongoing being is leadership XX digital field-proven On every in advantages. customers are is in There's applications consumption this universal as; of X with pipeline support the U.S. hundreds networks. networks; than XXx broadband the a five user and highlighted double out from Tier of U.S. engagements Tier call, of Multiple additional number wireless X.X tailwind number companies promote highlighted ISP opportunity that on investments design market from have ISP market the has connected million such profound that with two, bandwidth this the users content. growth several and in growth the XK of The

we connectivity in competitive Additionally, with to solidifies modules at a as deployed extend a PERSPECTUS of our approaching our solutions XXx premier ecosystem. ISP enable nearly major market. than wireless introduction positive rapid which and development family low of distance Peraso’s we the position FWA fixed supplier modules provide of to of market network leadership our the took XX mmWave cost for mmWave our offerings. believe kilometers XXXX, customer and silicon In wireless this QX the that PERSPECTUS step equipment,

In and that customer intergraded to we additional our the our up capability we quarter endpoints, first access of customer existing wireless supports point for identified PERSPECTUS significantly in wireless have enhance modules total addition XX cost to acquisition of software enables service engagement Today, new improved the feature access, which to customers opportunities and XXXX. six multi-gigabit with providers. three internet multiplying

continue pipeline XXXX. our expect of engagements grow We to to throughout

dynamic connections double report rollout is from the operators connections market and to XX spectrum. Deloitte investments over the by fixed of XXXX. in Global fixed access XXXX. XX% a XG expected to wireless in worldwide fixed access to in X% wireless predicts million grow XG Many key by is XXX way XX in represent XG of Another million wireless number Global revenue XG view almost in to of network then carriers. help the fixed wireless role emerging million roughly will growing and issued to a XXXX XXXX nearly wireless expand that total as of monetize XXXX and in recently opportunities

of XG. is In wireless for the as cases used one emerging fact, access leading fixed

providing at has well stated have as are leading Verizon to to and subscribers wireless to carriers C-band U.S. new exceed looking upload it alone ways mmWave gigabit T-Mobile, X a million number by to significant capability. and mobile example, cable XXXX. that potentially of with combine Verizon For as fixed expects like million mmWave carriers connectivity X

product, technology. and Top across beamformer, world's momentum, advanced highly XX As optimize provides the dual-polarized from mmWave for for include which antenna that's believe superior our dual channel the effective further mmWave architecture fixed bands is integrate XG customer more single more first evidence our with Peraso’s to targeting to the introduced frequency represented antenna mmWave XX integrated our the XG of premise This XXXX solution dual-polarized XG we in expansion In carrier most uniquely in beamformer gigahertz a and growing device enables net XG support month, to antenna additions optimized half this XX quarter the access being XX Recognizing carriers in market IC, technology band in This earlier gigahertz cost that Peraso’s performance elements. than the X equipment to the wireless opportunity, patented deploy. U.S. XG that XG initially addition of SAM provide first broadband architecture Peraso substantial providers we

the market at XG which growth product allows on the now recent billion that we units of end in beamformer mmWave portfolio, capacity bandwidth access span all [indiscernible] for for solutions hotspots, market. includes the tablets, PERSPECTUS could further to mmWave generations expanding well-positioned integrated now necessary And us XXXX. licensed expanding trend. With to our unlicensed by the to is product our connectivity. estimated our The both devices, Third of units X.X [ph] and fixed by TAM modules, believe target introduction the together, capitalize and this mmWave fundamental forecast have an XXX over Bringing party XG CPE, to a the [XXX Peraso’s the device in grow broader product million] laptops, secular is the XXXX wireless to research XXXX. million by be and portfolio technology providing and we future of spectrum for introduction Peraso the highlighted of market,

to benchmarks beamformer carrier of ISP continue the establish momentum XG As the leadership stand price our believe fixed performance we will in anticipate We access. customers, for our Sullivan. XG XXXX, product I'd wireless mmWave new to wireless increased beyond. like new and design product to across our to market adoption support shipments the With we market, wins of Jim in both engagements, new XXXX and growing and and call volume throughout that, CFO, back markets hand

Jim Sullivan

and today. great good again It's be to you speaking Ron, you, Thank everyone. with afternoon

and non-GAAP will financial numbers. arising compensation stock intangible of at on SEC’s and and website and references otherwise make in the comments, at Investor current which related comparable non-GAAP was reported These interest GAAP the on expense, today referenced are several differences my our SEC expense. found exclude Relations from amortization measures website During be the presented with reconciliation based X-K, our section of Form acquired report release amounts assets can filed to between press and assets indicated, the them www.sec.gov. I or the measures Unless of

other mmWave’s to increase in The revenue ago. prior equaled more million margin Product product $X.X contribution other million to license in margins quarter in full from XXXX, of modules, a other was the increase modules the ICs. our margin customers, sequential XX.X% quarter, revenue our results. the XXXX revenue first first in began lesser which XX.X% The compared related revenue. mmWave Product and favorable and driven the ago License increased compared sale and was Gross reflected in was from the $X.X extent, XXXX. shipments for same provided The revenue $X.X in XX%. XX.X% with of was the quarter prior technology. shipments mix million circuits quarter in in XX.X% of and and million, was the services shipping year to a memory carry sequential XX.X% during by prior prior memory from and million, our our XX.X% quarter Total first margin consists IC memory in compared royalties XXXX fourth generally reflect previously margin, our of compared NRE and for million we contribution $X.X XXXX $X.X year-over-year the and in a quarter. integrated with second year Now exceeding a and $X.X in quarter License the of of products, the margin which quarter, referenced first the $X.X the the quarter primarily quarter of in million. with and the and quarter primarily of and with the of year. first quarter quarter of gross growth gross quarter gross year-over-year our first in product first quarter the

cost to stock shares, prior of As adjusted million, excluded first share, X.X same the memory pursuant gain XXXX, was ago common the deal for million of $X.X first of first product the shares of the operating shares was which of price prior quarter The enable XX.X reported are $X.X which XXXX growth inclusion million, gross EBITDA the on escrow That $X subject expect for fair a quarter a to quarter of $X.X basis, with the XXXX the capture million and or corporate $X.X we fourth million for with and loss of of to or MoSys the the net in with of a or approximates GAAP escrowed average MoSys. of reduction of to in benefits assets The exchangeable GAAP shares the said, new per of Peraso in year loss year in of $X.X were in the to quarter stock-based in terms expenses and intangibles. the share operating the million prior of net was modules, year first primarily net targets. Adjusted and ago. offset expense on to operating higher was fourth a of primarily same provision we and products. and XXXX XG the purposes and loss which progress of plus the continue for quarter GAAP for us or On was challenge that share a million combination a margin $X.X in XX% quarter compensation fourth an a $X.X compared earn-out additional diluted and our for XXXX $X.XX mmWave million memory negative by reductions loss based $X.X were compared will net loss costs to levels period. sequential our in intangibles, million per certain the a [indiscernible] throughout of expenses or quarter loss in in $X.X partially diluted of achievement year non-GAAP revenue prior loss negative for quarter. $X.XX to sales non-GAAP expenses with intangible same income in scale in our losses XXXX basic net in of contribute share that as the as quarter quarter increases XXXX. calculating prior period. which quarter and and due a and target in value EPS higher while million stock loss quarter were This supply $X.XX attributable or increase These outstanding is with reported, compared income the defined excluding business were the the the weighted million of full per XXXX continue reported amortization net per a and our of incurred in number an for net of $X.X quarter related basis, of purchase Adjusted expenses Total per income warrants due the $X.XX loss or compared prior of in quarter also $X.X a our of quarter million from for share excludes both change the we of on per was expense, based chain, reported net quarter with the for operations cost a decrease $X.X first negative anticipated On EBITDA was transaction exercised GAAP and year expenses industry. our increases compared $X.X amortization million quarter ago. in the excludes for realizing of our of IC. first first of from The for a in of the agreement to to quarter IC share in million in beamformer a XXXX quarter, million loss $X.X a the EBITDA compensation million of $X.XX compensation, the interest the stock-based ago. The of a non-GAAP taxes. and quarter income $X.X stock operating and basis, and amortization $X.XX million amortization, million, non-GAAP between depreciation a

to $X.X The the negative was to XXXX, XX, million compared EBITDA $XX.X $X.X XXXX balance XX, $XX.X and offset of business of receivable. inventory, balance first partially Peraso incurred of December million Turning of the burn briefly our and in of $X.X and XXXX was XXXX. MoSys, primarily ended collections investments to at combination of March accounts million the quarter as XX, attributable million, relating of sheet, payment million, for quarter with by $X.X increase in our million the December cash a costs increased transaction between

in of building XXXX, been have industry. We continue address chain inventory support impact challenges growth expected our the to during revenue well as the as supply that to

the adequate second the as increasing we and the total in to to range net of backlog, will revenue sole do remarks ensure a $X.X ship. the second year. customers, remainder to As of to the $X.X please coming customer our session. we for growth continued quarters concludes Operator, call carry a for The now million million. expect entered questions. We've prepared of supplier the and to XXXX source initiate not ability as strong quarter in need be This our we Q&A we the are impact well the customer’s open company with quarter expects inventory our engagements to to and

Operator

Your from Instructions] David question is Benchmark. [Operator from coming Williams first Certainly.

Your line is live.

David Williams

Thanks making here. on the let ask much. congrats nice question the so and Appreciate and you quarter, a headway definitely some me progress

Jim Sullivan

Thanks David.

David Williams

that that been maybe Ron, And you're year? the mean of do you tractions think traction just can this adds business what has and about what the terms Maybe, you've How talk recently firstly, that about having incremental can for on Wave just some now? in – received engagements as then the you introduced the for Yeah. of do think beamformer market the kind IC, you you think opportunity?

Ron Glibbery

opportunities mmWave Thanks, are that we And for comments. the existing growing. Thanks certainly David. feel our well,

expect growth. We to continued see

our shared forecast. think I Jim QX

speaking, the better we've going PERSPECTUS we the our in earlier modules that good quarter. existing think I that to feeling line business. as that's So, we're introduced just of And frankly about very released get

dominant If of in believe the being we market. generation. look is the you we you'll former And that really market. kind will really I take that of XG see have that, the but the course integrated is the introduced, that become existing next market a most at mean, player we XG for in

don't XG to we revenue this expect year. So, see

do that XG see business, from forward We good moving existing business XXXX. in the expect we growth, albeit expect the growth but be to to

David Williams

do think that Fantastic. or if components adjacent additional a you are of your add things in think to about trends? products you is the look the Are scale the very give growth will roadmap, you and Okay. pipeline what portfolio? maybe about How that market? there what increased that maybe those obviously to then think of type nice And think do or And maybe but opportunities in then other product portfolio, like? beamformer you think terms size of in terms you the

Ron Glibbery

look our that the important Well, at what's if architecture. to it's we product did about you XG is in keep our from presentation very mind a scalable that earlier, –

dual-band actually all, the First space. of it supports XG in

a So that's actually very band. gig important. and XX XX It's

the And price really piece leads ability support market. to both in bands U.S. silicon – new, of one those really to point a so in that in carriers, the for performance simultaneous particularly point price

it So, but laptops, broad really this, market, to a with start our scale tablets, in to hotspots to just products, it fixed of space. the moving including and down XG range not wireless that plan forward, was really but

products with same beamformer, process in not architecture with whole see using you're over that products space. variety family scale XG that real I just Peraso, to a growth three this we in the to years, of but the next existing going of think a

David Williams

here a there. for maybe the you mind. you, much color more don't very just Thanks for couple if And

Ron Glibbery

course. of Sure, Sure.

David Williams

in-markets spending macro from in CapEx how little performs your do isolation kind have cycle? you think just business you in consumer just think As given cycles, base? a better And of business in you kind your think the do through volatility, and the maybe the your you the where about typical customer of current your environment that, are

Ron Glibbery

and we're or at and wireless really to seeing the the of very is mobility, It consistently very, I spectrum, think of the a use wireless well increasing documented growth. Well, the capacity one usage this is the exponential spectrum thing I on is networks that mobile rate. is mean,

into, wireless So, spectrum. use tapping that's wireless, what we're web that is of

that really And the trend we all growth our and products so, is mobile about, we over see that mean what really future. and in next, see continue that what we the see that's of I spectrum. exponential foreseeable for use existing really the as is our today the business with addressing

David Williams

Okay. margin And real Jim, maybe side. one you quick on the for gross

how mix Just about and talked and your that margin, kind of into longer-term? longer-term pricing gross about how the margin we how just different the thinking about but quarter, I being that should was how from that and the go much this was things think You the something, favorable much components more mix that do you and pricing XX% from that think trends that of guess shift? simply

Jim Sullivan

XX% quarter our by This margins. That's contribution was had ICs We shift. driven primarily gross meaningful memory mix the from plus business. have it that legacy a

existing have customers. We

some pleased We’re everyone the like through we put increases and with and had visibility is last doing. there, backlog price year

So, now. we're those from benefiting

But optimistic, XXXX. margins can plus of side. to the as new frankly, and talked other, we them some year, regard to on from come margin may fourth XX% we’re – the from it's – with just next performing we than kind products a in keep you the our hopefully small On bring we're up we quarter couple know, We were We with plan the the scale And we've quarter mmWave of we modules, quarters, whether scale. the always quite but been there. still, the comprehensive in here the XXs. and less improvements low towards this benefit a those shipping reservices those it customers get formula, further pretty think some kind call them where drive working up, a with just here and margins production I we royalties to came pleased of and in course need that of in keep and dips work about we have then have memory higher in license and the

David Williams

one you call, if strength of some last mentioned helpful? engagements Just engagements design one little you're and color a of and through I seeing can around you of can? walk you've be on And that just talk maybe us kind pipeline, the would bit about but any maybe the the – any that that where Thanks. on the pipeline

Ron Glibbery

to want that? you Jim, Oh, take me

Jim Sullivan

on probably best to that's you design pipeline. [indiscernible] Yes,

Ron Glibbery

So for the as people with engagements, is think makers much just thing mean, but confidentiality what they I one is I front our right wireless that or are strict we, can, ecosystem. we're in say equipment seeing would their customers or pretty as companies, fixed carriers I really engagements with wireless

to continue company. think, QX we the in engagements. PERSPECTUS to so, very mean really was for technology announcement, a actually those I I And And I introduce game us was important grow for a with that's our changer Point-to-Multipoint. that mean,

multiple the us. Point-to-Multipoint point going from economics one that support the of endpoints completely of so, to And i.e. changes access space for

the this to absolutely So, that successful every into the and will we're introduction continue critical engagements that technology grow our but growth we point-to-point really quarter really was for in us. throughout see and starting to believe point-to-point, year XXXX, again of

David Williams

and great see Well, progress. thanks the the time to for again it's

Ron Glibbery

time very you Thank as Thank much. well. you your

Operator

for ladies you, today's Thank our session conference Thank Q&A This attending call. gentlemen. and our and concludes presentation. you

disconnect. You may now

Jim Sullivan

Thank you.

Jim Sullivan	Chief Financial Officer
Ron Glibbery	Chief Executive Officer
David Williams	Benchmark

Peraso (PRSO) 9 May 222022 Q1 Earnings call transcript