Peraso Inc.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss the financial results of Perasso, Inc. for the fourth quarter and full year of 2021. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Jim Sullivan, CFO of Perasso, Inc.

Good afternoon, and thank you for joining today's conference call to discuss Perasso's fourth quarter and full year 2021 financial results. I'm Jim Sullivan, CFO of Perasso, and joining me today is Ron Calabria, our CEO. This afternoon, we issued a press release and related Form 8K, which was filed with the United States Securities and Exchange Commission, or the SEC, The press release and Form 8K are available on Parasso's website at www.parassoinc.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 Parasso's IR 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. Perasso advises caution and reliance on forward-looking statements. These statements include, without limitation, any projections of revenue, margins, expenses, non-GAAP operating expenses, adjusted EBITDA, non-GAAP net income, cash flows, or other financial items. Also, any statements concerning the expected development, performance, and market share or competitive performance relating to our products or technologies. All forward-looking statements are based on information available to Perasso on the date hereof. These statements involve known and unknown risks, uncertainties, and other factors that may cause PARASO'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 PARASO's public filings with the SEC. PARASO 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. Included in the company's press release are definitions and reconciliations of GAAP to non-GAAP items, 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 section of Parasa's website. Now I would like to turn the call over to our CEO, Ron Glibury, for his prepared remarks. Ron?

Thank you, Jim, and thank you all for joining us on today's call. Good afternoon. I'm pleased to be joining you today from our first earnings call as a public company following the completion of our business combination with Moses in December. To tell you a bit about Perazzo, the company has been in the millimeter wave or MM wave business for over 12 years. MMWave is a technology which utilizes a specific portion of the radio spectrum in the 24 to 100 gigahertz frequency range. What we believe differentiates Perazo from many MMWave suppliers or others who have attempted to develop an MMWave technology is we've been shipping in volume whereas many have failed to commercially scale this technology. MMWave is very complex and the shift from development in the lab to customer deployment is a significant learning experience. Today, we're shipping 60 GHz products to multiple Tier 1 customers and have an expanding pipeline of opportunities in a variety of end-user market applications. We are also actively working to expand Peraza's product line from our existing 60 GHz mmWave products to include 5G mmWave products. Over the next three years, 5G mmWave for consumer premise and hotspot applications is estimated to represent a $3 billion TAM. And we believe we're well positioned for growth in the coming years with the global expansion of 5G MMWave technology. The central theme underpinning MMWave technology is that the existing wireless spectrum simply cannot provide the necessary bandwidth to satisfy increasing user demand. This is driven by a couple of fundamental factors. First, the number of users on global networks continues to increase. An additional driver of user demand is video. Applications such as TikTok, Netflix, and Twitch are having a profound impact on global wireless demand. In fact, Facebook recently indicated they are rolling out Facebook Reels on a global basis due to direct competition from TikTok. When you compare a static Facebook page to a Reels video, the difference is an order of magnitude increase in the wireless bandwidth needed for a single Facebook user. Additionally, we're seeing ever-increasing video resolution, starting with HD, moving to 4K, and eventually 8K. This is particularly critical for over-the-top video applications such as Netflix and YouTube, as well as streaming sports. As video becomes the dominant traffic category on mobile networks, we believe MMWave will be the primary source of additional capacity for 5G networks. Specific to the 5G specification, The millimeter wave frequency band spans from 24 to 100 gigahertz. This compares to 4G, which utilize spectrum below 6 gigahertz. 5G standards organizations are anticipating the need for additional spectrum in the future. In fact, during very early discussions of various interest groups regarding 6G, there's been a clear recognition of MMWave as being fundamental to future generations of mobile technology. We see these trends as a validation of MMWave technology and the enormous market opportunity further supporting investment Perazzo has made to date. Circling back to what differentiates Perazzo and how we win in millimeter weight, Perazzo has several established and sustainable advantages in this market. First, our customers have derived field proven 10 times performance advantage in deployed solutions for the fixed wireless market. This means they're shipping devices with a range of close to 30 kilometers, which is roughly 10 times farther than competitive offerings at similar data rates. This expanded network coverage is achieved through our collaboration and deep engagement with customer engineering teams. Second, Peraza has the experience and know-how gained from designing MMWave circuits for over 12 years. MMWave technology is challenging and very sensitive to minor variations in the manufacturing process. As such, foundry models can prove difficult to develop and are often inaccurate when applied in the design of MMWave RF circuits. Our engineers must characterize and test manufactured circuits in order to validate their original models. And this refinement process takes years to fine tune. We believe this provides Peraza with a significant technical barrier. And while potential competitors may try to catch up, in the meantime, our engineering teams continue to produce improved new models. Driven by our experience shipping millimeter wave devices in volume, we have learned how to improve yields and reduce manufacturing costs. This has allowed Peralzo to improve efficiencies over time and allow for future margin expansion in the coming years. The manufacturing know-how also serves as an additional barrier to competition. Peralzo has developed deep engagements with our customers, enabling us to add new high-value features to our product into customer roadmaps, which assists in focusing our R&D efforts. These relationships put Perrazzo in an important competitive position as our products are optimized through customer feedback and interaction, which we believe has enabled us to establish a leadership position in the millimeter-weight market. In addition, we've made significant investments in software. By offering both silicon and software, we provide our customers a platform solution which incentivizes long-term commitments and increases switching costs given the system-level performance we deliver. This strategy contrasts with traditional RF vendors who relied solely on RF performance to remain in a dominant position. Horazo products deliver excellent RF performance, and when combined with our extensive software platform, further entrenches Horazo with customers and provides a long-term sustainable advantage in our markets. Our millimeter wave technology is backed by a strong IP and patent portfolio, which we categorize into four primary groups, millimeter wave RF silicon, essential standard claims, millimeter wave antennas, and comprehensive software. Early on, Peraza made significant investments in antenna technology and developed key knowledge related to the manufacturing and optimal deployment of millimeter wave antennas. This is critical in millimeter wave solutions. as the antenna plays a fundamental role in system performance, particularly in phased array systems. We've also actively participated in MMWave's standard setting process, and as a result, we've been awarded essential claims patents for the IEEE 802.11ay standard. Any company planning to implement a semiconductor device utilizing this standard must obtain a license from Perazzo for these patents. Finally, following our significant investments in software, the company has filed several patents related to the implementation of our software and MMWave ICs. We believe our MMWave patent portfolio provides us with a strong defensible position within the MMWave market. Beamforming is another fundamental aspect of MMWave technology, and Perazzo has built a core competency in robust and effective beamforming as well as beam steering. The primary function of beamforming technology is to concentrate RF energy, ensuring strong, high-performance, long-distance connections. The objective of beamforming is to focus RF energy towards its target, similar to using a lens to concentrate light or energy from the sun towards a single point. The focused and dynamic nature of our beams make it very difficult for third-party interlopers to eavesdrop on millimeter wave communications. As such, mmWave is gaining traction in secure private networks. Examples of industries with which Perazzo is engaged includes transportation, advanced manufacturing, and defense. Another inherent advantage of beamforming is a lower susceptibility to signal interference. This is important in wireless AR-VR, which has very little tolerance to interference. Finally, the narrow beam technology utilized by Perazzo allows mmWave systems to overlap, creating a mesh network in dense urban areas. This expands the available bandwidth for high usage applications such as private networks and fixed wireless applications. One of the key aspects to our product strategy is the development of mmWave modules. It's important to stress here that Peraza is one of the few MMWave vendors that controls most aspects of the module IP. This includes RF circuits, software, and importantly, our antenna technology. Through the control of this IP, we avoid third-party margin stacking, and we're able to provide a highly competitive, very cost-effective solution. It's important to emphasize the inherent value proposition of this strategy. MMWave technology requires a tight interface between silicon and the millimeter wave antenna. Historically, customers were required to test and calibrate the signal between our silicon and network antennas. With the introduction of our mmWave modules, we have removed the need for the customer to deal with the delicate manufacturing challenges presented by mmWave technology. Perazzo is able to provide customers with stable and predictable solutions for which we can guarantee certain levels of performance. Additionally, this strategy has successfully helped accelerate our customers' time to market in the order of six to nine months, given the need for less technical support and less testing prior to deployment. Our module strategy allows us to control Peraza's solution at the system level, offering enhanced performance and ease of use. We believe this provides an advantage over competitors that focus solely on the component level with limited software and system capabilities. The target opportunities for Perazzo can be broadly divided into two markets, fixed wireless access and consumer electronics. Today, we're generating revenue in both of these end markets with growing opportunity pipeline. Our initial solution for 5G networks is consumer premise equipment for fixed wireless access. In addition, our 5G roadmap is focused on expanding opportunities in consumer electronics, including hotspots, laptops, and tablets. Specific to fixed wireless access, we have proven ourselves as a leading supplier of ICs and modules for the 60 gigahertz market. We've been shipping mmWave chipsets in volume since 2017 and established Perazzo as a competitive alternative in the fixed wireless market. Enabling solutions to span 29 kilometer links requires customization of all aspects of our solutions, including our circuits, our antennas, and our software. Working closely with leading customers, we were able to optimize our beamforming algorithms to achieve optimal system performance. This is a feature we do not believe the competition can easily replicate. We are committed to extending our leadership in 60 GHz fixed wireless by continuing to expand and develop our product technology roadmaps to achieve even higher levels of performance. Building on our momentum in the 60 GHz fixed wireless market, Our strategy is to further leverage Perazzo's MMWave technology in the 5G fixed wireless market. Carriers around the world are challenged with a shortage of spectrum, and MMWave is an integral part of the 5G specification and provides greenfield network bandwidth capacity. We also believe that fixed wireless gives carriers the opportunity to deploy competitive fixed-line Internet alternatives for both urban and rural deployments. While we haven't yet announced our specific 5G product offering, Our initial focus will be consumer premise equipment. Key requirements for this market that we believe Peraza will deliver include a high level of integration, a cost-effective solution, superior performance, and manageable power consumption. We will employ all aspects of our existing module strategy to our 5G solution. Important characteristics of MMOA technology include high data rate for wireless video, low latency, under 5 milliseconds, and significantly reduced interference. These aspects of 60 gigahertz millimeter wave can enhance and enable immersive video applications such as AR, VR, video conferencing, and docking. Today, Perazzo is actively engaged with leading consumer wireless video customers, and we anticipate initial production shipments in the second half of 2022. Looking forward, we plan to leverage our existing skills and expertise in 60 gigahertz consumer electronics into 5G consumer electronics. Our 5G roadmap is targeting higher volume 5G opportunities such as laptops, tablets, and hotspots. With the introduction of the Metaverse over the last year, it stands to rapidly become the leading use case and driver of high resolution graphics, higher frame rates, and lower latency. The continued development of the Metaverse and enabling devices such as AR and VR headsets, which are typically wireless, will ultimately require the bandwidth and experience that is associated with cable-based connections today. mmWave is the ideal technology to support mass adoption of the metaverse-type environment. mmWave technology supports the key requirements needed for low interference, high bandwidth applications. Moreover, the requirements of the metaverse will continue to evolve and demands even higher levels of bandwidth as resolutions move from 4K to 8K in coming years. With over a decade of experience in MMWave design, Perazzo has developed a deep understanding of using MMWave in VR-based environments. We are currently engaged in AR VR opportunities with multiple Tier 1 customers and see this as a future source of growth for millimeter wave technology. While MMWave and 5G are expected to drive our future growth, in late 2021, we acquired a high-performance memory IC product line through the business combination with MOSES Inc. These memory products have an established customer base, and the design wins are generally sticky and long-lived. Our bandwidth engine ICs have been shipping in volume for years to leading Tier 1 global telecom and networking OEMs. The revenue contribution from the memory IC products come with gross margins, expected to exceed 60%, which would positively contribute to our corporate gross margin profile. Since the business combination, we have identified initial cost synergies, which we expect will improve the combination margins from this product line. In addition, we are pleasantly surprised regarding the opportunity pipeline for the memory business. And based on the current backlog, we have excellent revenue visibility into the second half of 2022. And now I'll turn the call over to Jim Sullivan, our CFO, to discuss the financials. Jim?