Peraso Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 13, 2024

There are 8 speakers on the call.

Operator

Good afternoon, and welcome to Pareso Inc. First Quarter 2024 Conference Call. At this time, all participants are in a listen only mode. As a reminder, this conference call is being recorded today, Monday, May 13, 2024. I would now like to turn the call over to the host for today's program, Mr.

Operator

Jim Sullivan. Please go ahead.

Speaker 1

Good afternoon, and thank you for joining today's conference call to discuss Parasso's Q1 2024 financial results. I'm Jim Sullivan, CFO of Parasa and joining me today is Ron Glovery, our CEO. Today, after the market closed, we issued a press release and related Form 8 ks, which was filed with the SEC. The press release and Form 8 ks are available on Proraso's website at www.parasoinc.com under the Investor Relations section. There is also a slide presentation that we will be using in conjunction with today's call that may be accessed through the webcast link on the Investor Relations website.

Speaker 1

As a reminder, comments made during today's conference call may include forward looking statements. All statements other than statements of historical fact could be deemed as forward looking. Proraso advises caution and reliance on forward looking statements. These statements include, without limitation, any projections of revenue, margin, expenses, non GAAP gross profit, non GAAP gross margin, non GAAP operating expenses, adjusted EBITDA, non GAAP net loss, cash flows or other financial items, including anticipated cost savings. Also, any statements concerning the expected development, performance and market share or competitive performance of our products or technologies.

Speaker 1

All forward looking statements are based on information available to Parasto on the date hereof. These statements involve known and unknown risks, uncertainties and other factors that may cause Parasto's actual results to differ materially from those implied by the forward looking statements, including unexpected changes in the company's business. More detailed information about these risk factors and additional risk factors are set forth in Pareto's public filings with the SEC. Pareto expressly disclaims any obligation to update or alter its forward looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additionally, the company's press release and management's statements during this conference call will include discussions of certain measures and financial information in terms of GAAP and non GAAP.

Speaker 1

With respect to remarks on today's call involving non GAAP numbers, unless otherwise indicated, referenced amounts exclude stock based compensation expense, amortization of reported intangible assets and the change in fair value of warrant liabilities. These non GAAP financial measures, definitions and the reconciliation of the differences between them and comparable GAAP measures are presented in our press release and related Form 8 ks, which provide additional details. For those of you unable to listen to the entire call at this time, a recording will be available on the Investor Relations page of our website. Now I'd like to turn the call over to our CEO, Ron Glibbery for his prepared remarks. Ron?

Speaker 2

Thank you, Jim. Good afternoon and welcome to everyone on the phone and webcast. We appreciate you joining us. I want to start with a few brief comments on the Q1 and our current outlook, then I'll get into more detail on the key developments and progress we've been making since our last conference call. 1st quarter revenue increased sequentially and was above the midpoint of our guidance.

Speaker 2

As customer demand for our MMA products improved and we had increased shipments of our memory IC products in fulfillment of our backlog and end of life orders. Combined with positive market indicators, we began to see our MMA business were increasingly confident in our expectation for 2024 to be a year of solid growth for PIRASO. Turning to Slide 4, I want to provide a brief update on the end of life of our memory IC products. Shipments against backlog orders increased to $2,400,000 in the Q1. We also received an additional $2,900,000 end of life order late in the quarter, which increased our total remaining purchase order backlog to approximately $12,600,000 at March 31, 2024.

Speaker 2

We anticipate shipments of our memory IC products to increase sequentially in the second quarter and we expect to fulfill in support of in support of the continued execution of our growth initiative to expand our mmWave customer base. Flipping to Slide 5, as I've stated in the past, one of our key strategic initiatives continues to be building a larger and more diversified customer base for our Wave business. And again, we're approaching this both from a geographical perspective and in terms of end market applications. Although it's been a relatively short period since our last earnings call, we continue to make progress on culminating new engagements while advancing existing opportunities in the sales funnel. A number of these new engagements continue to be targeted outside of North America to further expand Parezza's global reach.

Speaker 2

I'll discuss a few of our most recent successes and secure design wins in the next few slides. Turning to Slide 6, I want to profile 1 of Prezi's more notable recent design wins. In April, we announced Panasonic's adoption of our X710 Wave chipset in its newly introduced 60 gigahertz WLAN solution. This was a significant win for our team and it serves as further validation of our leading mmWave technology. Panasonic's wireless LAN solution achieves high speed, low latency communications that's equivalent to wired LAN performance over distances of 100 of meters.

Speaker 2

The solution is easy to install and operate thanks to its use of unlicensed interference 360 gigahertz band coupled together with Parrazzo's narrow beam directional antenna control. As I've discussed on previous calls, the 60 gigahertz unlicensed band provides extensive RF spectrum, which is ideal for fixed wireless applications delivering multi gigabit data service. Now looking at Slide 7, as further proof points of our focused efforts and initial success towards diversification, I want to briefly highlight some of our examples of our recent activity. 1st, Paraza's Wave solutions are now a key enabler of a 60 gigahertz radio for high speed, trained at station communications for a Chinese rail system. More specifically, our partner Jaguar Wave is deploying a 60 gigahertz MMWave radio system that utilizes Paraaso's X720 chipset to provide up to 2 gigabits per second for high speed data communications as trains approach 1 kilometer of a station.

Speaker 2

Separately, we have now shipped proof of concepts of our new DUNE platform to multiple WISP providers targeting deployments across Africa. Additionally, Millaway, a South Korean equipment manufacturer recently announced a new fixed wireless product line using Parralza's X720 chipset. Lastly, we also continue to gain traction in defense applications with the introduction of our new mmWave solutions for battlefield communication, which I'll expand on in a minute. Collectively, these examples demonstrate the progress we continue to make expanding our market reach both geographically and by application. Turning to Slide 8, I wanted to go a layer deeper on Dune, our dense urban network environment platform for fixed wireless access that we launched earlier this year.

Speaker 2

Dune addresses the network access problems experienced in sprawling urban neighborhoods where conventional connectivity solutions are too costly, physically impractical or saturated. Many technologies simply weren't designed to work well in densely concentrated population centers, especially those found in emerging markets such as India, South America and Africa. As previously mentioned, in recent months, we have shipped proof of concepts to multiple wisps in Africa. Parazo's DUNE platform originated from our first hand engagement with numerous wisps equipment suppliers to understand the specific deployment challenges they face in these environments. In addition to significant upfront infrastructure and deployment costs, Wi Fi technology for example struggles with the wireless congestion and interference resulting from high numbers and the density of connected devices.

Speaker 2

Moreover, electricity can often be limited and less reliable in these emerging markets. In order to avoid service interruptions, infrastructure equipment must be able to remain operational for extended periods or utilize alternative power sources such as solar and battery. Having said that, I want to emphasize the need for dense urban environments solutions is not exclusive to emerging markets. Dune's benefits and the challenges that it solves are equally relevant in other geographies, including here in North America. As one prominent example and potential use case, Los Angeles County has announced plans to deploy its own high speed wireless broadband service targeted assuming low income residents.

Speaker 2

Los Angeles recently contracted a well known WIS to lead the project, which is expected to leverage 60 gigahertz millimeter wave fixed wireless solution to deliver 2 gigabits per second wireless connectivity to qualify residents for as low as $25 per month. Regardless of this geography, these types of urban TIG wireless deployments are exactly what DUNE was designed to enable. Broadly speaking, we're very encouraged by the initial positive feedback of our Dune platform and we expect further engagements and expansions of these opportunities in the coming quarters. Shifting to Slide 9, I wanted to briefly touch on our recent success in the aerospace and defense sector as we believe it's a market that is ideally suited for Wave technology solutions. Our advanced integrated antenna technology allows for communications using unique, narrow and focused beams, which make it more difficult to intercept and even detect sensitive data communications.

Speaker 2

In March, we released our PRM-two thousand one hundred and thirty six platform for stealthy tactical communications. This platform solution offers support for high bandwidth, low latency applications using unlicensed Wave spectrum and guarantees a reliable high throughput connection between users. All of Paraza 60 gigahertz modules enable multi gigabit data transfer rates, which can be mission critical in military operations that require sharing data in real time. Additionally, the PRM-two thousand one hundred and thirty 6 incorporates a proprietary adaptive beamforming and narrow pencil beams capability that allow for highly directional communications, which are inherently stealthy and lower probability of interception and detection, acknowledging that it takes some additional time to cultivate and realize material revenue in the market due to typically longer evaluation and design in cycles, it's clear that mmWave dispense applications represent an incremental market opportunity with significant potential. In closing, with our expanding engagement pipeline for mmWave solutions across an increasingly diverse customer base and market applications, as well as initial indications of renewed customer demand for fixed wireless access, we feel highly confident in the company's outlook for strong growth in 2024.

Speaker 2

Additionally, we expect the backlog of our EOL shipment IC products to provide meaningful revenue and cash flow to improve our financial position and outlook as we continue to execute on our strategic initiatives to expand the customer base for our MMA products, we believe there is a large opportunity to realize significant growth over the coming years. With that, I'll turn the call back to Jim to review the Q1 financials as well as our revenue expectation for the Q2 of 2024.

Speaker 1

Thank you, Ron. Turning to the results for the Q1 of 2024. Total net revenue was $2,800,000 and above the midpoint of our guidance compared with $1,800,000 in the prior quarter $5,000,000 during the same quarter a year ago. Product revenue from the sale of our memory integrated circuits and millimeter wave integrated circuits and antenna modules in the Q1 was $2,700,000 compared with $1,500,000 in the prior quarter and $4,900,000 in the Q1 of 2023. Royalty and other revenue for the Q1 of 2024 was $100,000 compared with $400,000 in the prior quarter and $100,000 in the same quarter a year ago.

Speaker 1

GAAP gross margin increased to 46.4 percent in the Q1 compared with a negative 147.3 percent in the prior quarter, which reflected the impact of 3 $1,000,000 of inventory write downs and gross margin of 38.3% in the year ago quarter. On a non GAAP basis, excluding amortization of acquired intangible assets, gross margin for the Q1 was 66.4% compared with negative 116.6 percent in the prior quarter, which again reflected the previously mentioned inventory write down and non GAAP gross margin of 45.4 percent in the Q1 of 2023. The improvement in gross margin for the Q1 of 2024 was attributable to increased revenue contribution from memory IC products. GAAP operating expenses for the first quarter of 2024 were $4,900,000 compared with $5,500,000 in the prior quarter, which included $200,000 of asset write downs and $5,700,000 in the Q1 of 2023. Non GAAP operating expenses, which excludes stock based compensation and amortization of the tangible assets were $3,500,000 compared with $4,000,000 in the prior quarter and $4,300,000 in the same quarter a year ago.

Speaker 1

The sequential and year over year reduction in 1st quarter operating expenses were the result of previously implemented cost reductions and cost containment actions taken by the company beginning in the second half of twenty twenty two. GAAP net loss for the Q1 of 2024 was $2,000,000 or a loss of $1.07 per share, compared with a net loss of $8,900,000 or $12.48 per share in the prior quarter and a net loss of $3,100,000 or $5.54 per share in the same quarter a year ago. On a non GAAP basis, net loss for the Q1 of 2024 was $1,600,000 or a loss of $0.83 per share, which excluded stock based compensation, amortization of acquired intangibles and the change in fair value of warrant liabilities. This compared with non GAAP net loss of $6,100,000 or a loss of $8.52 per share in the prior quarter and a net loss of $2,000,000 or a loss per share of $3.49 per share in the same quarter a year ago. The weighted average number of basic and diluted shares outstanding for purposes of calculating both GAAP and non GAAP EPS for the Q1 of approximately 1,900,000 shares, which excludes approximately 45,000 shares of our common stock and exchangeable shares that are currently escrowed.

Speaker 1

Adjusted EBITDA, which we define as GAAP net income or loss as reported, excluding stock based compensation, amortization of acquired intangibles, change in fair value of warrant liabilities, interest expense, depreciation and amortization and the provision for income taxes was negative $1,400,000 in the Q1 compared with negative $5,900,000 in the prior quarter and negative $1,800,000 in the prior year period. From an equity perspective, in February, we completed an underwritten public offering of common stock and warrants generating net proceeds of approximately 3,400,000 dollars As of today May 13, 2024, the company has 2,690,236 shares of common stock and exchangeable shares outstanding. In addition, as of today, 116,190 prefunded warrants with an exercise price of $0.001 per share remained outstanding from the public offering completed in February 2024. Turning to our outlook. As Ron discussed, we have begun gaining traction on multiple new customer engagements for our millimeter wave solutions, which we expect to incrementally ramp throughout the year.

Speaker 1

We also have a significant remaining backlog of non cancelable purchase orders for our end of life memory IC products. The company currently expects total net revenue for the Q2 of 2024 to be in the range of $3,700,000 to $4,000,000 This concludes our prepared remarks. And I'll now turn the call back over to the operator to assist with the Q and A session. Operator?

Operator

Thank you. At this time, we will be conducting a question and answer First question today is coming from David Williams from Benchmark. David, your line is live.

Speaker 3

Good afternoon, gentlemen, and congrats on progress here. It's really great to see the development on millimeter wave side and the memory side. So congrats.

Speaker 4

Thanks, David.

Speaker 5

Thanks, David.

Speaker 3

Yes. So I guess, Ron, maybe first, if you think about the magnitude of demand that's being generated within millimeter wave and kind of the proof of concepts that you're shipping to today and maybe what you have coming up the pipeline. What do you think the volumes could look like as you get ramped here? Just trying to think about maybe not even this year, but maybe more so for next year. What should we think about those volumes looking like?

Speaker 4

Thanks, Dave. Good to have you on the call. We've got 3rd party research reports that indicate the overall market of let's say focus on certainly on fixed wireless of about 4,000,000 units a year. And we're really trying to ramp our business to at least a quarter of that. So our goal is to really take a quarter of the market share in terms of unlicensed fixed wireless is really what the simple metrics boils down to frankly.

Speaker 4

So this is all just basically based on market research. And so it gives us but it gives us some nice metrics in terms of what our goals are over the next 12 to 18 months. I don't know if that helps answer your question.

Speaker 3

No, it absolutely does. Thanks for the quantification there. I guess if I look across the landscape, there doesn't seem to be a lot of competitors, at least domestically. What are you seeing in terms of your competitive or your competition in these other markets as we think about Africa and India? Are there any others that are out there that you're maybe locally that you're competing with?

Speaker 4

Well, in the 60 gigahertz specifically, I think we really are taking on a dominant position. And it's from my perspective, what gives me comfort is the more we win, the stronger we get because people just get more and more comfortable with the technology in the company. And I think, frankly, the Panasonic design win underscores that. I mean, Panasonic is a very conservative old Japanese company. So for them to go to market with our technology, I think speaks volumes.

Speaker 4

I mean, in terms of just the confidence they have and it took a long time, but due to the confidence they have in our technology and the company itself. So I think from a competitive perspective, what you'll find is every quarter, you're going to find that we really are the absolute dominant player in 60 gigahertz technology. And just sorry, one final follow-up comment on that. I mean, certainly over the last year, Dave, what we found is that compared to maybe another competitor, which is like 5 and 6 gigahertz technology, where we're winning there, where we won in places like Africa and now we've seen 60 gigahertz penetrate Los Angeles is against this concept of dense urban environments, right? Like this idea that in large cities with very, very high dense populations, 60 gig is a superior technology than traditional Wi Fi technology because of its ability to handle that density.

Speaker 4

So I think Bose on within 60 gigahertz market and within the unlicensed market generally, we're really taking on a dominant position, if you will.

Speaker 3

Okay, great. And just one last one here, if I may, and then I'll jump back in the queue. But just kind of wondering if you could talk through your go to market strategy. It seems like you have a lot of shots on gold here that have developed here fairly quickly, especially thinking about the aerospace and defense and that's historically been a challenging market to penetrate. But just kind of curious how you're thinking about your go to market strategy, how that's developing and maybe what other opportunities are out there today that maybe as an investor we're not yet seeing?

Speaker 4

Well, I mean, look, I mean, I think we've talked about fixed wireless. So just basically gigabit broadband Internet for a long time. And that's really our bread and butter frankly right now. The military, I mean, unfortunately, what's been driving that over the last couple of years is real conflicts where militaries have discovered that traditional wireless technology is easy to triangulate. And so that really has been a function of actual war zone feedback, which says the beauty or the advantage of millimeter wave technology is the very focused transmissions that allow it to be stealthy, if you will, in those environments.

Speaker 4

So that we've always kind of liked military, but now we're really the is in the pudding where we're seeing these design wins because of regional very specific conflicts. And I think another if you will, another aspect to our growth is and again, it comes down to the same concept versus Wi Fi is in consumer electronics, we are seeing some really nice traction in video and wireless video. And the problem we're solving there again is congestion. Every phone in the world has Wi Fi on it. And so there's a lot of people using Wi Fi.

Speaker 4

But when you want to have kind of mission critical specific applications, like video, it's a very challenging environment with traditional Wi Fi. So we're seeing some so I think, specifically high performance video in consumer electronics is kind of the 3rd pillar, if you will, that we see over the next 12 months to 18 months.

Speaker 3

Lots of great color there. Thanks so much, gentlemen.

Speaker 4

My pleasure.

Operator

Thank you. The next question is coming from Kevin Liu from K. Liu and Company. Kevin, your line is live.

Speaker 6

Hi, good afternoon guys and good to see the sequential improvement in the business here. Maybe just starting on the millimeter wave side, can you talk about kind of the inventory levels you think still persist at your largest customers? Has that largely been absorbed and you're now capable of seeing sequential improvement there or is there still some sort of overhang that you have to get through?

Speaker 4

Yes. I mean, there was a lot of inventory buildup. So we're certainly seeing green shoots of improvement. We're starting to get some orders. We really think that momentum, Kevin, will be late Q3 into Q4 this year, just in terms of kind of what we're seeing and kind of what we're hearing from our customers.

Speaker 4

I mean, I think the good news again though is our historic customers are actually it's not like it really is an inventory situation. I mean, actually they're seeing terrific sales, which they're feeding back to us. So we really see it as the second half of twenty twenty four. But I guess what helps our outlook is that the sales of 60 gig from what we're hearing from our customers is actually improving significantly. So that's so we hope to bleed into out of that inventory and into new orders later this year.

Speaker 6

Yes. And I mean you alluded to one of your customers winning a deal in LA County. I mean, would you assume that's kind of incremental to your business this year? Or is that product that they may have had already that they can ship as they start to ramp up against that engagement?

Speaker 4

Well, I mean, that customer is actually I mean, there's really no public information on who the ship supplier is for that deal. But speculation from a speculation perspective, I would say, certainly later this year and but very much so into 2025.

Speaker 6

Understood. And then maybe this one is for Jim, but looking at the gross margin, that improved quite a bit. I know you guys pointed to the memory side of the business there. So I wanted to understand how sustainable the gross margin is as we go into Q2 and the back half of the year, given you'll continue to see a high mix of memory sales there?

Speaker 4

Yes, Kevin. Thank you for

Speaker 5

the question. Certainly, we our gross margin profile will benefit from that. Our corporate targets 50% and higher. Obviously, the memory stuff runs in the high 60s, maybe even pop 70 at times. So that will certainly help the keep the margins higher as we look at a higher level as we move forward through 2024.

Speaker 5

As we've said on the call, we'll see the expect current expectation is to complete those memory shipments by the Q1 of 2025. But we obviously expect continued ramping in our millimeter wave business. And frankly, on the millimeter wave side, it's just been the stops and starts associated with the inventory correction, just not having a consistent production flow have made it challenging to kind of get over that 50% level. But we're obviously pushing towards that and obviously have the benefit of the memory stuff for the next year to kind of help us on that front.

Speaker 6

Yes, sounds good. And then just lastly, with the ramp up that you guys will have on the memory business, as well as just the improvements on millimeter wave. I'm just curious if we should expect you guys to start to build more inventory here or if the current inventory levels you have on the balance sheet should be able to sustain your current business or revenue levels?

Speaker 5

Yes. We should be able to sustain with what we have. There was a slight increase at March 31 up from December 31, which was all memory related. We obviously have a fair amount of millimeter wave inventory on the books. Some of that's at different stages of production needs to be built out.

Speaker 5

On the memory side, we've got some more wafers to order and the exact number is a function of yields, etcetera. So we are we did have a couple at least a couple of wafer purchases in Q1. I think we've already done one here in May. There's probably another one coming. So definitely to fulfill those orders, we'll be building more on the memory.

Speaker 5

On the millimeter wave side, it's really we build based on the specific order on some of the new customers.

Speaker 6

Yes, understood. Thanks for taking the questions and good luck here in Q2.

Speaker 5

Thank you. Thanks, Kevin.

Operator

Thank you. And we did have a follow-up come in from David Williams from Benchmark. David, your line is live.

Speaker 3

Hey, Hey, guys. Thanks again. I felt like I should have asked Jim a question on previously,

Speaker 5

I just

Speaker 3

want to come back and get one into you. But just kind of thinking about the cash flow as we work our way through the memory, is there do you expect some of that memory to be maybe more back end loaded maybe into the Q1? Will it be more linear you think through the year?

Speaker 5

I think it'll be fairly linear for the rest of 2024 and then Q1 2025 will go down. Right now, we booked that new order here in late March, the $2,880,000 order. Right now, I'd say of that order, 25% to 30% of it will be shipped in the 4th quarter and the rest would or at least the dollar equivalent value, maybe it's not that specific customer would ship in Q1. So I think we'll be pretty linear on the memory side across the next 3 quarters or so. And then it will decline in Q1.

Speaker 5

And right now, we're projecting subject receipt of additional orders, which is still in play, we'll expect a decline in Q1 2025.

Speaker 3

Okay. And do you think there's if you were going to try to handicap the potential for additional EOL orders, do you think there's a good chance or just a moderate chance there?

Speaker 5

I think there's a good chance at least in the $1,000,000 range. We've right now the foundry, I think the orders don't need to be in until the end of August or September, somewhere in that late summer timeframe. So there's still time here and obviously, so we saw that additional large order in March and the customer is just wants to be certain on its design and we're optimistic we would see that come in. And that's for that one that I'm at least very optimistic on is for up there with Engine 3 products for which we have adequate inventory to fulfill against. So, it might be frankly tickle pink because I wouldn't have to go build it, buy anything, just complete some build out.

Speaker 5

But we'll wait and see. We've got time.

Speaker 3

Fantastic. Well, Ron, Jim, thanks again for the time and the best of luck on the quarter.

Speaker 4

Thank you so much, Dave.

Operator

Thank you. And the next question is coming from Jon Hickman from Ladenburg. Jon, your line is live.

Speaker 7

Hey, I might have missed this and maybe you didn't even say it, but did you break down the product revenue between millimeter wave and memory?

Speaker 5

We did not. We generally break that out in the tables in the 10 Q, which we're going to file probably after market close, maybe before market open tomorrow. On a high level, we had in the Q1 about $2,680,000 of product revenue, about $2,380,000 of that was memory and the remaining 300 ks or so was millimeter wave ICs and modules.

Speaker 7

Okay. Thank you. And then could you give us an idea of on the millimeter wave side, kind of current number of customers you've shipped to recently and what the pipeline looks like as far as numbers of different widths for separate customers?

Speaker 5

Yes. I think in the Q1, we shipped, I want to say in the range of kind

Speaker 1

of 8 to 10 customers.

Speaker 5

Okay. Different vibe, but obviously none of

Speaker 1

them were too big based on the revenue number I gave you. And looking forward,

Speaker 5

I think we'd expect to stay kind of in that range run. Maybe I mean, we had to one of the new Dune, what I consider kind of on the Dune front, we had an initial shipment to that customer and are targeting a larger one in June. But is that kind of a fair way to put it, Ron?

Speaker 4

I think we've got 5 Dune customers that proof of concept. So we expect to be shipping those in the second half. So there's 5 additional there, right? So yes, I mean, we hope to grow from 8 to 10, maybe from 10 to over to 10 to 15 in the second half. But yes, I mean, I think we're obviously trying to diversify that customer base for sure.

Speaker 7

So and then the LA thing that you mentioned, is that an RFP or did you win that business?

Speaker 4

Well, just to be clear, like the we can't really say, John, but I mean, but it is public information. I mean, it is available if you want to look it up. It's like highly visible. But what we don't know is like the ISP uses various vendors. But one thing that is public for sure is that it's a 60 gigahertz design win.

Speaker 4

And what's important about that in our mind is that it's again emphasizing this advantage that 60 gigahertz has in urban environments. It's just this ability to really speak to well, I think that what some of the analysts say is that the number of past residences is about 280,000. So I mean so that's really the advantage of our 60 gigahertz technology is its ability to provide advantages in those dense urban environment because of the beamforming technology. So I think 1st and foremost, that's an important message for that program. But it's not an RFP, it's been awarded by the way.

Speaker 7

Okay. It's been awarded. Okay. Yes. So I have to do some digging.

Speaker 7

And then on the military side, is the technology mobile? Like, can I put this on a truck and go from one battlefield to the next or a mile away and set it back up?

Speaker 4

So the use case that we've described is soldiers connecting to their Humvees. And so typically the range there is call it maybe at the most I don't think the soldiers want to be too far away from their Humvees, so call it 100 to 200 meters. So and then the Humvee itself would probably be backhauled through a satellite link. But there's a lot of information on the Humvee itself in a server on the Humvee. So let's say they want to download maps of an area, the 1 gigabit links that we have with our using our technologies can quickly get those maps downloaded to the essentially the mobile.

Speaker 4

So the devices the soldiers use are mobile actually. So they're mobile and they can lead their Humvee and be within, let's call it, 200 meters of the Humvee, but that is the use case for that application that we've described.

Speaker 7

Okay. And then are you one last question, sorry.

Speaker 4

No problem.

Speaker 7

Panasonic deal, are you currently shipping to them or is that to come?

Speaker 4

No, we're shipping to them. Yes. No, absolutely. Like we've been working on I don't want to say how long we've been working on it, but it's been several years. I mean these guys are very, very careful.

Speaker 4

So but we are actually shipping. That's in full production. Okay. Well, thank you for the information. Appreciate it.

Speaker 4

Our pleasure. And thank you for joining the call today.

Operator

Thank you. There were no other questions in queue at this time. And this does conclude today's conference. Thank you for your participation. You may disconnect your lines at this time.

Speaker 4

Thank you.

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Key Takeaways

  • First quarter net revenue rose to $2.8 million, surpassing the midpoint of guidance, driven by sequential increases in MMA and memory IC shipments.
  • Memory IC end-of-life orders remain robust with a backlog of ~$12.6 million at March 31 and anticipated higher sequential shipments in Q2 2024.
  • Broadening design-win momentum for its mmWave chipset, including Panasonic’s selection of the X710 for 60 GHz WLAN and wins in Chinese rail, African WISPs, a South Korean OEM and defense applications.
  • GAAP gross margin improved to 46.4% and non-GAAP margin to 66.4% in Q1 versus steep losses last quarter, reflecting increased high-margin memory IC revenue and cost controls.
  • The company expects Q2 2024 net revenue of $3.7 million–$4.0 million with ongoing mmWave ramps and memory shipments, underscoring confidence in full-year growth.
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Earnings Conference Call
Peraso Q1 2024
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