Peraso, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Good afternoon, and thank you for joining today's conference call to discuss Peraso's second quarter 2026 financial results.

I'm James Sullivan, CFO of Peraso, 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-K are available on perasoinc.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 IR website. As a reminder, comments made during today's conference call may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended.

All statements other than statements of historical fact could be deemed as forward-looking. Peraso advises caution in 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 or technologies. Any statements regarding the sufficiency of the company's capital resources and its ability to continue as a going concern. Any statements regarding customer demand forecasts and concentration risk, and any statements related to prospective future financing arrangements or capital transactions and the evaluation or pursuit of strategic alternatives. All forward-looking statements are based on information available to Peraso on the date hereof.

These statements involve known and unknown risks, uncertainties, and other factors that may cause Peraso'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 Peraso's public filings with the SEC. Peraso 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 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 in a related Form 8-K, 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. I will now turn the call over to our CEO, Ron Glibbery, for his prepared remarks.

Ron? Thank you, Jim. Good afternoon, and welcome to everyone on the call and webcast.

We appreciate you taking the time to join today's call. As reported in our press release this afternoon, revenue for the second quarter increased approximately 36% sequentially and was above our previous expectations. The sequential growth primarily reflected our successful fulfillment of a previously delayed order shipment to a new fixed wireless access customer. Despite the better-than-anticipated top-line results this quarter, our overall business continues to be impacted by a combination of macro-related headwinds and irregular order patterns across our existing customer base. With limited ability to influence certain underlying market dynamics, particularly those affecting our leading fixed wireless access customers, we remain focused on the elements of the business we can control.

These include operational efficiencies, ongoing cost management, and enhancing the resilience of our supply chain while continuing to cultivate extensive customer engagement across our target end markets. Turning to slide 4. Across each of our target end markets, we continue to be encouraged by the growing recognition of 60 GHz mmWave technology and its inherent performance benefits over conventional wireless communication solutions that operate in lower frequency bands. Historically, the most prevalent commercial application for 60 GHz technology has been fixed wireless access. While this continues to be the largest and most mature end market for Peraso, the rapid proliferation of AI and associated demand for hardware in support of AI infrastructure has led to significant market dislocations. With respect to fixed wireless access, this includes customers navigating persistently elevated memory prices and the constrained supply of other key components.

We believe this has and is continuing to contribute to subdued purchase order activity and limited near-term visibility into future customer demand. While these current market dynamics are expected to extend into the fourth quarter, the value proposition of 60 GHz mmWave technology in fixed wireless application is its commercially proven ability to overcome interference and capacity limitations in congested wireless environments. As such, we believe we are positioned to benefit once the current supply dislocations moderate and order patterns normalize. Having said that, it has become increasingly clear over the past 12-18 months that the inherent benefits of 60 GHz mmWave technology extend beyond traditional fixed wireless access applications. We continue to engage with prospective customers and partners seeking to utilize our 60 GHz solutions to address real-world challenges encountered in other end markets, namely in autonomous edge AI, unmanned aerial vehicles, and defense communications applications.

Today, we are actively engaged on a combination of new and existing opportunities to leverage Peraso's proven 60 GHz technology in both of these high-value end markets. Turning to slide 5, I want to start with the substantial emerging market opportunity that we see for our technology in emerging edge AI and associated autonomous systems application. Whether it's operating a fleet of autonomous vehicles, a swarm of drones, or a factory floor full of robots, implementing edge AI at scale creates a fundamental bandwidth challenge. These platforms typically require the continuous upload of massive volumes of sensor and camera data, as well as the download of large AI models and software updates. This often entails not only multi-gigabit data transfers, but doing so while operating in close physical proximity to many other independent autonomous devices. Traditional 5 gigahertz Wi-Fi technology struggles in these types of environments due to limited spectrum.

Additionally, omnidirectional coverage creates widespread co-channel interference or overlapping of wireless signals. As the number of devices sharing the same channel increases, the throughput collapses and latency becomes unpredictable. With 60 GHz technology, we utilize highly directional narrow beams. That directional nature significantly reduces co-channel interference, allowing numerous simultaneous multi-gigabit links to operate reliably inside the same physical footprint with deterministic low-latency performance. This isn't just conceptual. In June of this year, we completed a customer demonstration with our partner Virewirx that put these advantages on full display. Together, we created a simulated drone wireless environment and successfully operated a high-capacity network cluster that achieved a peak aggregate data rate of more than 50 gigabits per second. Within the confined space of a large room, we simultaneously transmitted several independent multi-gigabit streams, something conventional sub-6 gigahertz technologies struggle to do at that density without severe interference.

The demonstration also underscored two additional attributes that are critical for autonomous and mission-critical systems. The inherent low probability of intercept and detection of 60 GHz links, and the ability, when combined with Virewirx's network synchronization technology, to maintain coordination without reliance on GPS. That GPS independence is particularly valuable in contested or GPS-denied environments. Looking ahead, we see applications in both defense, especially emerging drone swarm tactics and commercial settings such as automated factories, where large fleets of robots require high capacity, interference-free connectivity. The Virewirx collaboration is a strong example of how complementary 60 GHz technology can address real-world applications that traditional wireless architectures were not designed to solve. As we've introduced on previous conference calls, many of these fundamental characteristics of 60 GHz are equally, if not more, critical in defense and tactical communications applications.

Turning to slide 6, I want to highlight one of the most unique applications of our technology within the tactical communications space, IFF, which stands for identification friend or foe system. It goes without saying today's increasingly modern battlefield is a complex and congested environment. The ability to rapidly and reliably distinguish friendly assets from hostile ones is mission-critical. Traditional IFF systems operate by transmitting what's known as an interrogation signal and receiving authenticated responses. These signals or links can be detected, jammed, or spoofed, exposing troops and assets to devastating consequences, including friendly fire incidents. 60 GHz technology is designed to meaningfully upgrade the performance of an IFF system in three ways. First, the highly directional narrow beam makes the communication links inherently difficult for an adversary to detect or intercept.