Q4 '24 Earnings Preview
Peraso (PRSO) reports Q4 ’24 results after market close on Wednesday, March 19. We expect the print to fall largely in line with management’s guidance, our estimates and consensus. We note that the vast majority of revenue anticipated in Q4 is associated with end-of-life (EOL) memory IC sales already in backlog, effectively providing a floor for the company’s performance in both Q4 and the current quarter. Regarding the latter, we note that Q1 has the potential for a meaningful ramp in mmWave sales given the company’s previously announced wins for its DUNE platform in South Africa and its Perspectus modules for battlefield communications. As such, we expect revenue guidance for Q1 at least in line with, if not better than, our estimates and consensus. More importantly, the inventory overhang across the semiconductor industry appears to be clearing, setting the stage for the resumption of orders from large, existing customers as the year progresses. Moreover, the announced revamping of the BEAD program earlier this month to take a tech-neutral approach should benefit wireless internet service providers and their suppliers. Taken together, we are incrementally more confident in Peraso’s prospects for scaling its mmWave business in FY ‘25.
Exhibit i: Our Estimates Versus Consensus
Sources: K. Liu & Company LLC; FactSet Estimates
Our Q4 estimates include revenues of $3.8 million, adjusted EBITDA of $(0.4) million and non-GAAP EPS of $(0.17), generally in line with consensus of $3.8 million, $(0.6) million and $(0.27), respectively. Management’s guidance calls for revenues of $3.6-$4.0 million. We assume EOL memory IC sales will comprise $3.3 million of revenue with the rest reflecting contribution from mmWave products. Recall that Peraso exited Q3 with an EOL memory IC backlog of $5.7 million, all of which we expect to be shipped by the end of Q1 ’25. Looking forward, we remain comfortable with both consensus and our projections for Q1 and FY ’25 given the more favorable backdrop for mmWave sales than seen in the prior year. We continue to believe that Peraso has sufficient liquidity to operate through 1H ’25, and we are optimistic that a ramp in volume orders for mmWave products early in the year will leave the company poised to raise capital on more favorable terms. Our price target remains $2.75 based on an unchanged FY ’25 EV/Sales multiple of 1x.
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.