Announces Preliminary Q4 ’22 Revenue Results and Cost Reduction Initiatives
Earlier this morning, Peraso (PRSO) pre-announced Q4 ’22 revenue of $3.9 million, in line with management’s guidance for $3.8-$4.1 million and our estimate of $3.9 million. Importantly, the company also confirmed that approximately $1.5 million of the $1.6 million in outstanding receivables from WeLink Communications was successfully collected in the quarter. Recall that in Q3, revenue recognition associated with a portion of these receivables was deferred due to a delay in collections. We continue to believe that once the full amount is collected, new orders and shipments will commence.
Aside from the revenue results, Peraso also announced that operating expenses are expected to decline by approximately $5.0 million on an annualized basis following the implementation of certain cost reduction initiatives. The spending reduction is primarily related to headcount with much of the savings likely to be seen in R&D. Per management, projects with a longer term path to generating returns were deprioritized. In our view, the reduction in operating expenses provides a clearer path to profitability and combined with the company’s registered direct offering completed late last year, reinforces our confidence in Peraso’s ability to operate as a going concern.
We expect Peraso to report its Q4 ’22 results and provide its usual quarterly revenue guidance next month. As revenue in Q4 was consistent with our estimate, we will await the upcoming earnings release prior to revising our model. At this juncture, we believe our outlook for continued strong growth in FY ’23 remains intact, which combined with the $5.0 million in annualized savings announced today, would bring our estimated adjusted EBITDA loss down from $(8.3) million to $(3.3) million. Our price target remains $2.75, reflecting an unchanged FY ’23 EV/Sales multiple of approximately 3x.
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.”
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