Q2 '23 Earnings Preview

Peraso (PRSO) reports Q2 ’23 results after the close next Monday, August 14. We expect the print to be largely in line with our projections, which are slightly above consensus. Recall that management refrained from providing guidance for the quarter due to uncertainty over the timing and revenue recognition surrounding two potentially significant transactions. As such, both our estimates and the Street’s reflect expectations that the inventory correction affecting the semiconductor industry reduced revenue on a sequential basis while leaving room for upside in the event Peraso secured one or more of the aforementioned opportunities. Our Q2 estimates include revenue of $4.5 million, adjusted EBITDA of $(1.7) million and non-GAAP EPS of $(0.08), slightly above consensus of $4.3 million, $(1.9) million, and $(0.10), respectively. We assume gross margin declines slightly on a sequential basis due to a lower mix of memory sales, while operating expenses also moderate as Peraso realizes the full benefit of cost actions taken earlier in the year.

Exhibit I: Our Estimates Versus Consensus

Sources: K. Liu & Company LLC; FactSet Estimates

Since June, Peraso has announced product wins with Tachyon Networks, Jaguar Wave and Zinwell, demonstrating its technological leadership and share gains in the market for 60GHz mmWave solutions. Although it is unclear if any of these wins were among the more significant opportunities previously referenced, the continued traction leaves us comfortable with our estimates for Q2. As for the outlook, we surmise that the near-term will remain clouded by the combination of inventory correction headwinds and uncertainty over the timing and contribution from the larger deals in the pipeline. As such, we assume management may again opt for more qualitative than quantitative guidance for Q3. Regardless, we continue to believe the Peraso is poised for much stronger results in Q4 and beyond driven by momentum in the 60GHz market, a pull-forward in demand for its memory products and further conversion of its robust pipeline. Our price target remains $1.25 based on a FY ’23 EV/Sales multiple of 2x.

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.