Good afternoon, and welcome to Peraso Inc. Third Quarter 2025 Conference Call. At this time, participants are in a listen-only mode. As a reminder, this conference call is being recorded today, Monday, November 10, 2025. I would now like to turn the call over to your host for today's conference call, Mr. Jim Sullivan. Please go ahead.

Good afternoon, and thank you for joining today's conference call to discuss Peraso Inc.'s third quarter 2025 financial results. I'm Jim Sullivan, CFO of Peraso Inc., and joining me today is Ron Glibbery, our CEO. Today, after the market closed, we issued a press release and related Form 8-K, which was filed with the Securities and Exchange Commission. The press release and Form 8-Ks are available on Peraso Inc.'s website at www.perasoinc.com under the investor relations section. There is also a slide presentation that we will be using in conjunction with today's call, which can also be accessed through the webcast link on the Investor Relations website. 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. Peraso Inc. advises caution and reliance on forward-looking statements. These statements include, without limitation, any projections of revenue, margins, 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. As well as any statements concerning the expected development, performance, and market share or competitive performance of our products and technologies. As well as any potential statements related to prospective future financing arrangements or capital transactions and the evaluation or pursuit of strategic alternatives. Actual results may 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 Peraso Inc.'s public filings with the Securities and Exchange Commission. Peraso Inc. 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 statements during this conference call will include discussions of certain measures and financial information in terms of GAAP and non-GAAP. With respect to remarks on today's call involving non-GAAP numbers, unless otherwise indicated, referenced amounts exclude stock-based compensation expense, amortization of intangible assets, severance costs, 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 would like to turn the call over to our CEO, Ron Glibbery, for his prepared remarks.

We appreciate you joining today's conference call. We had a notably strong third quarter highlighted by growing orders and shipments of Peraso Inc.'s industry-leading 60 gigahertz wireless solutions. Total revenue increased more than 45% sequentially, driven by record quarterly revenue from our millimeter wave products. Gross margin also increased significantly from the previous quarter, achieving our targeted gross margin level in the mid-fifty percent range. Consistent with prior recent quarters, we continue to exercise prudent cost management and drive operational efficiencies across the organization. Collectively, these metrics contribute to improved operating and bottom-line results as well as reduced cash burn from operations in the third quarter.

Turning to Slide four.

Beyond the 60 gigahertz millimeter wave solutions, we have welcomed a steady recovery throughout the year in market demand and customer orders, both of which are reflected in our third quarter results. We believe that fixed wireless access markets' renewed momentum is sustainable, particularly for our 60 gigahertz wireless solutions, as there continues to be growing millimeter wave adoption to enable reliable high-speed and low-latency broadband connectivity to homes and businesses without the time and cost burdens associated with fiber infrastructure. For further evidence of fixed wireless access and millimeter wave broadening market traction, with a strong background in millimeter wave technology, we had good quarterly revenue for millimeter wave products with multiple prominent wins in fixed wireless access. The first of these wins was with one of our leading partners, Tachyon Networks, which we announced in early July and covered on a previous conference call.

To briefly recap,

Tachyon Networks chose to incorporate one of our prospective series modules with an integrated 16-element base array antenna to power its latest outdoor 60 gigahertz fixed wireless solution. On a previous conference call, we announced a renewed collaboration with Wheeling Communications to accelerate the deployment of high-speed broadband access across dense urban areas in multiple major U.S. cities. More specifically, Wheeling's mesh-based fixed wireless access architecture is leveraging Peraso Inc.'s 60 gigahertz technology for both businesses and consumers in dense urban neighborhoods. Also notable, they are successfully rolling out this high-speed wireless broadband service at a fraction of the cost and implementation time of typical fiber deployments. Most recently, in September, we secured an initial volume order.

Market.

I want to highlight that this order for our prospective millimeter wave modules was not only received from a first-time OEM customer, but they are a well-established equipment supplier to service providers. As a result, this new OEM customer has the potential to facilitate broader use of our millimeter wave solutions by an expanded number of fixed wireless service providers, many of which may not have previously been aware of or experienced the benefit of Peraso Inc.'s industry-leading technology. Listening to these recent wins, we are continuously supporting a broad number of proof of concepts with wireless Internet service providers utilizing Peraso Inc.'s millimeter wave technology. With the majority of customers at or approaching more normalized inventory levels, we expect to see additional production orders as successful proof of concepts are completed. Together with our ongoing efforts to convert other existing customer engagements into production, we anticipate continued year-over-year growth. Turning to slide five. As discussed on previous quarterly update calls, we are continuing to see increased market awareness of 60 gigahertz technology that extends beyond fixed wireless to access completely new markets. New emerging markets for Peraso Inc.'s millimeter wave solutions include what we refer to as tactical communications, which includes diverse mission-critical military defense applications. During the course of exploring inbound interest and prospective engagements with potential customers and ecosystem partners, the substantial value proposition of 60 gigahertz wireless for tactical communications has become unmistakably clear. The everyday performance benefits that have made millimeter wave the go-to technology in fixed wireless access, such as high data rates, ultra-low latency, and power efficiency, are also ideal for enabling next-generation solutions for tactical communications. Additionally, millimeter wave's inherently stealthy attributes and low probability of intercept represent a unique and unmatched advantage over potential wireless technologies for overcoming critical communication challenges encountered in tactical defense environments. This included securing a strategic contact with a specialized defense contractor with whom we have subsequently continued to collaborate on a jointly developed system solution that leverages Peraso Inc.'s 60 gigahertz technology for a first-of-its-kind tactical defense application. This new mobile system solution is designed to provide heightened communications situational awareness to help safeguard military personnel and noncombatants such as medics and humanitarian responders operating in high-risk environments. As a reminder, we announced the delivery of initial production shipments of our advanced 60 gigahertz wireless solutions in support of this jointly developed solution in the June timeframe. Today, I'm pleased to report the recent and successful completion of initial field trials of this innovative solution. Upon the completion of additional trials, we expect the jointly developed solution with our lead customer to represent a significant long-term revenue opportunity for Peraso Inc. In addition to the successful initial field trial validating the robust capabilities of Peraso Inc.'s millimeter wave technology, we believe it represents and will serve as a foundation for further commercial expansion into the tactical defense communications market over the coming quarters. In fact, despite our lead customer's understandable sensitivity to being named or publishing additional details about our jointly developed solution, we are confident that this engagement is contributing to the increased dialogue and engagement that we are fielding within the tactical communications market.

Moving to slide six.

On our previous conference call, I addressed how we secured a production order to incorporate our 60 gigahertz technology in a customer's video system targeted for use in the educational market. Although the revenue contribution from these adjacent market opportunities is often smaller relative to our fixed wireless business, the purpose of my commentary around adjacent markets last quarter was to demonstrate the true versatility of Peraso Inc.'s millimeter wave technology. Like the future customers about potentially utilizing our 60 gigahertz technology in various markets, I wanted to circle back on today's call and dig a little deeper into adjacent markets. While each of these prospective discussions were focused on completely different end markets, they all shared a common use case, namely overcoming the challenges associated with processing massive amounts of high-bandwidth video for edge AI applications. A few natural examples of these edge AI applications would include last-mile delivery services, autonomous vehicles, and drones.

Stepping back for a second, what's really compelling is that the same inherent

high performance and advanced capabilities that millimeter wave brings to fixed wireless and tactical communications, the same attributes can be critical enablers for high-bandwidth video for edge AI. More specifically, 60 gigahertz millimeter wave readily supports multi-gigabit data rates for streaming or transferring high-resolution video. Additionally, ultra-low latency enables near-instantaneous data transfer for real-time applications. And lastly, 60 gigahertz millimeter wave is also inherently and exceptionally power efficient. This is especially critical for edge AI devices, many of which are battery-powered. High-resolution video at multi-gigabit data rates. We'll keep you posted with our progress over the coming quarters. Turning to slide seven. This is an updated snapshot showing the evolution of our engagements pipeline over roughly the past two years. The figures on this slide represent the different SKUs or distinct device models at each stage of engagement. And then at the bottom is the cumulative number of SKUs that customers have released to production. For those that may be familiar with previous versions of this slide, you might notice that the current number of funnel opportunities is smaller than in the past. This is the result of a recently completed effort. To narrow the total pool of identified opportunities down to those our team believes have the most commercial potential and highest probability of formal engagements. As such, you can consider the currently greater than 30 funnel opportunities shown at the top as qualified opportunities. We chose to do this for two reasons. First, it better reflects the number of realistic near to intermediate opportunities we are actively cultivating. And then second, it also reflects our heightened focus internally towards advancing the most attractive and highest probability opportunities into formal engagements with customers.

I can continue to like using this slide,

because it clearly demonstrates not only the progress that we made over time, but also provides near real-time insight into the literal pipeline of potential new incremental business that we are currently working on. In addition to briefly mentioning that all of the pictures shown here are actual customers and products, I want to call out a couple of key takeaways. First, we have nearly doubled the number of customer SKUs in production over the last two years, contributing to a meaningful diversification of our customer base as well as end market applications. Then lastly, this is the first time that Peraso Inc. has had a double-digit number of new customer devices in preproduction at any single point in time. This is a testament to our team's focus and dedication as these preproduction SKUs represent line of sight to new potential revenue streams once released to commercial production by customers. In closing, we had a great third quarter and we are pleased with the continued progress of our growth initiatives highlighted by the record revenue contribution of our millimeter wave product.

Look

of engagements into additional design-ins and production orders spanning both millimeter wave fixed wireless access as well as adjacent new market opportunities for our 60 gigahertz solutions. We believe that today we are well-positioned to deliver continued year-over-year growth from our millimeter wave products in the fourth quarter and into 2026. Coupled with this anticipated growth, we are remaining committed to disciplined expense management with the goal of driving steady improvement in our quarterly operating results. With that, I'll turn the call back over to Jim to review the financials and provide our revenue outlook for the fourth quarter.

Thank you, Ron. Turning now to the results for 2025. Total net revenue for the third quarter was $3.2 million, compared with $2.2 million for the prior quarter and $3.8 million for 2024. Product revenue from the comparable period in 2024 was primarily attributable to the reduction in shipments of memory IC products due to the previously announced end of life of the products. Specific to sales of millimeter wave products, revenues were $3 million in 2025, compared with $2.2 million in the prior quarter and $100,000 in 2024. Consolidated GAAP gross margin increased to 56.2% in the third quarter from 48.3% in the prior quarter and compared with 47% in the year-ago period. The increase in GAAP gross margin for 2025 from the prior comparable periods was primarily attributable to a more favorable revenue mix of millimeter wave products and solutions as well as shipments of inventory written down in prior periods. On a non-GAAP basis, gross margin for the third quarter was also 56.2%, compared with 48.3% in the prior quarter and compared with 61.7% in 2024, which was primarily attributable to shipments of memory IC products.

GAAP operating expenses for 2025 were $3 million, full reversal for software license obligations, and $4.5 million in 2024. The decrease in operating expenses on a GAAP basis from the comparable period of 2024 was primarily attributable to reduced stock-based compensation expense and amortization expense related to intangible assets fully amortized in 2024. Non-GAAP operating expenses, which exclude stock-based compensation, were $2.9 million in the third quarter compared with $2.7 million in the prior quarter, which included a $200,000 accrual reversal for software license obligations, and $3.3 million in 2024. The decrease in operating expenses on a non-GAAP basis from the comparable period of 2024 was primarily due to containment initiatives.

Per share in the prior quarter and compared with a net loss of $2.7 million or a loss of $0.98 per share in the same quarter a year ago.

And changes in fair value of warrant liabilities, for 2025 was $1.1 million or a loss of 15¢ per share.

This compared with a non-GAAP net loss of $1.7 million or a loss of $0.28 per share in the prior quarter and a net loss of $900,000 or a loss of 34¢ per share in the same quarter a year ago.

The weighted shares. The and fair value of warrant liabilities. Interest expense, depreciation and amortization, and the provision for income taxes. Was negative $1 million in 2025, compared with negative $1.6 million in the prior quarter and negative $800,000 in 2024. With regards to the balance sheet, as of 09/30/2025, the company had approximately $1.9 million of cash.

compared with $1.8 million as of 06/30/2025.

The net positive change of approximately $100,000 in the company's cash balance for the third quarter included approximately $900,000 of net proceeds from a warrant inducement offering of certain series C warrants and approximately $700,000 of net proceeds from the company's at-the-market offering program.

during the quarter. As of today's call, the company has approximately 8,980,000 shares of common stock Transaction.

As well as various potential sources of additional capital. Aside from confirming that the strategic review process continues to be ongoing, in coordination with the company's financial advisor, there are no related updates to share on today's call from what we have previously disclosed. Now turning to our outlook.

As Ron previously discussed, we are

process sixty gigahertz wireless solutions. Based on current backlog, the company expects total net revenue for 2025 to be in the range of $2.8 million to $3.1 million. This concludes our prepared remarks. We thank you for your time this afternoon.

Operator, please commence the Q&A session. You may press 2 if you would like to remove your question from the queue.

Confident. But it sounds like you're making a lot of momentum here. So I guess maybe on my first question is on the new OEM that you announced or spoke to. Can you give a little more color on that? And it sounds like you're very optimistic about that. What does that opportunity look like and what does that mean, you think?

Well, it's the

and we feel the number two OEM in the space.

So they're very sensitive to confidentiality. So we can't really the specifics. But from our perspective, it's just to get another validation. You know, something I didn't mention on the call might sorry, Dave, that I should have said, these OEMs now, historically have been using, like, other and I won't say which competitors, but other competitors, who are who now we're beating out because we have better performance. That's exactly what happened in this case. So, you know, a couple of things are happening. Obviously, the inventory, you know, kind of correction is coming to an end. But I think more importantly, we're starting to see all of these, you know, OEMs who are using other chipset vendors come over to Peraso Inc., and I think we're gonna continue to see that over the coming quarters.

For you, obviously, it signals grand and that fixed wireless access, but does that specifically speak to, anything from your perspective in either positive or negative?

Well, broadly, it's positive. I mean, that you know, I think Starry made no bones about their use of millimeter waves, so I think it's another great validation of the technology. You know, you they'll have to infer whether they were using for us or not, but I would say, generally, it's been a very positive endorsement for Peraso Inc. But yeah. I mean, he's you know, Starry was a real advocate of and what's interesting actually is they're using it for MBUs. Multiple, dwelling units. So it's turning out millimeter wave is a really nice technology for satisfying that market as well. And we're still now, you know, in other jurisdictions. But we think the real kind of catalyst in that situation was support for MBUs, if you will.

Okay. Great. And just a couple more quick ones. But I wanted to ask about the timing customer production schedules. You talked about your funnel. You're obviously gaining some momentum there. There any way to kind of think about your customer's typical design cycles now that we're through this inventory? You get a sense they're coming to market more quickly, or will there still be an elongated, kind design cycle before we see them turn into production?

Yeah. I mean, I think it's case by case, but here's how I would look at it, Dave. Like, excuse me, in the fixed wireless space, you know, that's tried true, you know, well-oiled machine. In nine to twelve month period, you know, kind of from an engagement to kind of mass production. New opportunities like military, you know, you're looking at probably twelve to fifteen months, obviously, because there's more work that has to be done, more customization. So, you know, it really depends if it's an existing market or a new market. And, again, like, you know, we're seeing these opportunities now in Edge AI, and that may take again, twelve to fifteen months would be my estimate. But that's kind of the time frames that we're looking at normally.

Okay. Great. And then maybe just, Jim, on the balance sheet, it looks like, you've got inventory and the AR were both up, pretty sharply sequentially. And anything to speak to there, or should maybe how should we think about, your working capital going forward?

Yeah. No. The, you know, the AR was, you know, really a timing of functioning of sales. And I know, certainly, as of today, we've collected, I think, over 70% of it and the remaining amount is.

you know, one customer which has a little bit longer terms.

So nothing, you know, unusual in there. Just a function of the higher product revenues. And then from, you know, inventory, we've actually used a fair amount of the inventory for certain products. That we had on hand. So we've actually been building more inventory on certain products.

You know, to meet anticipated, you know, demand looking out for Q1 and Q2. So you know, the good news is we, know, continue to sell what we have and in those cases where we've depleted it, we've actually, you know, gone out and, built more wafers. So, you know, we're gonna continue to tightly manage the.

you know, the working capital looking, you know, looking forward.

And, yeah, we're really kind of managing the bills based on, you know, what we see in the backlog.

We want the orders placed, know, so we're not too you know, don't lean too far forward on inventory.

Alright. And just one last one if I can. Sorry to take up time here. But wanted to ask just on the gross margin given that you've some of that was written down. Previously, obviously, millimeter wave doing better. How should we think about kind of the balance on the gross margin as we kind of go forward from here?

You know, we're still trying to keep it in.

you know, right around 50% range. It was a little bit higher here in the third quarter because of the you know, it certainly benefited from product mix.

You know, with the mix of customers. And then, as well, I've as you pointed out, the sales reserve, you know, inventory, which you know, we still have some of that we're gonna move through in the next few quarters. You know, 50 there was also a very small contribution from our memory products, you know, like 75 k or so revenue that.

you know, also contributed as well as the, you know, the NRE revenue that we brought in.

On the millimeter wave side. You know, I think, you know, more realistic here in the short term is we're still kind of working through things. It's kind of in that you know, we're still targeting kind of that 50% you know, on the low side kind of high forties. But kind of right around 50 is where we're targeting.

Fantastic. Well, thanks, for all the time, and the best of luck on the quarter, gentlemen. Thank you.

Thanks a lot, David. Thanks for your time.

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

Hey, good afternoon, guys. Maybe just a follow on to some of the production schedules I mentioned earlier. You know, you have that double-digit number of customers in your pipeline that are in preproduction mode. Once they get to that late stage, how long does it typically take, before you start to see them to see them, in more meaningfully to your Oh, one yeah, once they get to preproduction, Kenneth. So preproduction is quite a long way. I mean, a lot of a lot of it's a very strong part of the pipeline process. Pipe cleaning process. Typically, that's about three months away, I think. One quarter away at the Once a customer gets to that point, they're well down the path. But, you know, the thing thing you know, it's like some more fundamental things, like, for example, regulatory approval. By then, they've normally got it. You know, they've got like, if there's any late parts in their, you know, kind of in their billing material. So there are a few things. But, once you see a customer at preproduction, it's about three months away. Sounds good. And I know you can only say so much about kind of that lead tactical defense customer you have, but you did mention some additional trials before they get to more meaningful long-term revenue for you guys. You know, how long do you expect some of these trials, to go before, you get to that?

Know? Yeah. They've got trials. I mean, there's trials coming up at Christmas. I think we'll see real production from these guys. I mean, what they're telling us now, it looks like you know, we'll start to see the real production for that in 2026. But, you know, obviously, they'll have to place the orders before then, but that's kind of the time we're working at, which, you know, net net is about that fifteen to kind of, like, call it five to six quarter, you know, lag from the time we engage to the time they're in full production. So pretty typical. But frankly speaking, now it's, you know, it's a very complex product. You know, but we put a lot of effort into it. But, I mean, just to give you a, like, a quick example. I mean, our power consumption was cut down, like, you know, 20 times from our standard power consumption. So you know, when we see these new opportunities once in a while, we have to make a contribution to get that, you know, get that product to market as well.

Got it. And what's some of the adjacent market opportunities, you pointed out and these customers evaluating your products, Can you talk a little bit about kind of the pipeline of NRE opportunities and how much, if any, sort of additional research or customization might need to occur, to win these customers?

Well, it turns out that this there's kind of two buckets. And just to clarify, I mean, I tried to clarify on the call, Kevin, but, you know, really what's interesting about these opportunities is historically, you know, we're very good at doing video, but this is really let's take a VR headset. You know, that was video going to the VR headset. The change on the examples that we gave are is, like, cameras within the device, like, either in a self-driving car or maybe in like, AR glasses, that's video coming out of the device. And it turns out there's no good way to do that, honestly, today. Except for Peraso Inc. So it turns out there's two different buckets. One bucket is with our existing chips. Again, still requires some NRE to get those things to market, but, you know, they want to move very, very quickly. The other bucket is actually, you know, customization of chips. That'll take longer, but kind of a much bigger deal. So I would say that those are the two categories we're looking at in terms of NREs. Of with our existing chip, but also almost more exciting. Well, not as more exciting, but as exciting, is the opportunity to do, you know, silicon spins for these specific applications as well. We wouldn't do it unless it was a big deal.

Yep. Understood. And then just lastly, maybe for Jim. For your Q4 guidance, curious how much more memory revenue there is from that deal you guys announced last quarter, and if, because of that higher margin revenue, we should assume kind of gross margin increases on a sequential basis?

Yeah. There's still, you know, we had press release those memory orders.

a couple weeks back. There's still about, 375 k memory shipments. In this current fourth quarter.

Which will be pretty high margin.

You know, we'll definitely, you know, definitely need some improvement there.

The memory benefit. Coming in, you know, kind of mid-fifties.

Alright. Sounds good. I'll leave it there. Congrats again on the quarter, and thanks for taking the questions. Thanks a lot, Kevin.

Thank you. And there were no other questions at this time. That does conclude today's Q&A session. And this also does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Thank you.