Peraso Inc.

Good afternoon and welcome to Perazzo Inc's first quarter 2024 conference call. At this time, all participants are in a listen-only mode. If anyone needs assistance at any time during the conference call, please press the star key followed by the zero key on your touchtone phone. As a reminder, this conference call is being recorded today, Monday, May 13th, 2024. I would now like to turn the call over to the host for today's program, Mr. Jim Sullivan. Please go ahead.

Good afternoon, and thank you for joining today's conference call to discuss Perasso's first quarter 2024 financial results. I'm Jim Sullivan, CFO of Perasso, and joining me today is Ron Glivery, our CEO. Today, after the market closed, we issued a press release and related Form 8K, which was filed with the SEC. The press release and Form 8K are available on Perasso's website, at www.perassoinc.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 investor relations 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, margin, 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. Also, any statements concerning the expected development, performance, and market share or competitive performance of our products or technologies. All forward-looking statements are based on information available to PRASO on the date hereof. These statements involve known and unknown risks, uncertainties, and other factors that may cause PRASO'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 PRASO's public filings with the SEC. PRASO 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, amortization of reported intangible assets, 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 and related Form 8 , 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. Now I'd like to turn the call over to our CEO, Ron Glibrey, for his prepared remarks. Ron? Thank you, Jim.

Good afternoon and welcome to everyone on the phone and webcast. We appreciate you joining us. I want to start with a few brief comments on the first quarter and the current outlook. Then I'll get into more detail on the key developments and progress we've been making since our last conference call. First quarter revenue increased sequentially and was above the midpoint of our guidance as customer demand for our MMOA products improved and we had increased shipments of our Memory IC products in fulfillment of our backlog and end-of-life orders. Combined with positive market indicators, we began to see our MMOA business were increasingly competent in our expectation for 2024 to be a year of solid growth for Perazzo. Turning to slide four, I want to provide a brief update on the end of life of our MemoryIC products. Shipments against backlog orders increased to $2.4 million in the first quarter. We also received an additional $2.9 million end of life order late in the quarter, which increased our total remaining purchase order backlog to approximately $12.6 million at March 31st, 2024. We anticipate shipments of our MemoryIC products to increase sequentially in the second quarter. and we expect to fulfill the total remaining backlog by the end of the first quarter of 2025. Collectively, these shipments will contribute meaningful revenue and cash flow in support of the continued execution of our growth initiative to expand our MMWave customer base. Flipping to slide five, as I've stated in the past, one of our key strategic initiatives continues to be building a larger and more diversified customer base for our MMWave business. And again, we're approaching this both from a geographical perspective and in terms of end market applications. Although it's been a relatively short period since our last earnings call, we continue to make progress on culminating new engagements while advancing existing opportunities in the sales funnel. A number of these new engagements continue to be targeted outside of North America to further expand Peraza's global reach. I'll discuss a few of our most recent successes and secure design ones in the next few slides. Turning to slide six, I want to profile one of Prowse's more notable recent design wins. In April, we announced Panasonic's adoption of our X710 MMWave chipset in its newly introduced 60 gigahertz WLAN solution. This was a significant win for our team, and it serves as further validation of our leading MMWave technology. Panasonic's wireless LAN solution achieves high speed, low latency communications that's equivalent to wired LAN performance over distances of hundreds of meters. The solution is easy to install and operate thanks to its use of unlicensed interference-free 60 gigahertz band coupled together with Peraza's narrow beam directional antenna control. As I've discussed on previous calls, the 60 gigahertz unlicensed band provides extensive RF spectrum, which is ideal for fixed wireless applications delivering multi-gigabit data service. Now looking at slide seven, as further proof points of our focused efforts and initial success towards diversification, I want to briefly highlight some of our examples of our recent activity. First, Peraza's MMWave solutions are now a key enabler of a 60 gigahertz radio for high-speed train-to-station communications for a Chinese rail system. More specifically, our partner, JaguarWave, is deploying a 60 gigahertz MMWave radio system that utilizes Peraza's X720 chipset to provide up to 2 gigabits per second for high-speed data communications as trains approach one kilometer of a station. Separately, we have now shipped proof of concepts of our new DUNE platform to multiple WISP providers targeting deployments across Africa. Additionally, MilliWave, a South Korean equipment manufacturer, recently announced a new fixed wireless product line using Peraza's X720 chipset. Lastly, we also continue to gain traction in defense applications with the introduction of our new MMWave solutions for battlefield communication, which I'll expand on in a minute. Collectively, these examples demonstrate the progress we continue to make expanding our market reach both geographically and by application. Turning to slide 8, I wanted to go a layer deeper on DUNE, our dense urban network environment platform for fixed wireless access that we launched earlier this year. DUNE addresses the network access problems experienced in sprawling urban neighborhoods where conventional connectivity solutions are too costly, physically impractical, or saturated. Many technologies simply weren't designed to work well in densely concentrated population centers, especially those found in emerging markets such as India, South America, and Africa. As previously mentioned, in recent months, we have shipped proof of concepts to multiple WISPs in Africa. Perazzo's DUNE platform originated from our firsthand engagement with numerous WISPs and equipment suppliers to understand the specific deployment challenges they face in these environments. In addition to significant upfront infrastructure and deployment costs, Wi-Fi technology, for example, struggles with the wireless congestion and interference resulting from high numbers and the density of connected devices. Moreover, electricity can often be limited and less reliable in these emerging markets. In order to avoid service interruptions, infrastructure equipment must be able to remain operational for extended periods or utilize alternative power sources such as solar and batteries. Having said that, I want to emphasize the need for dense urban environments solutions is not exclusive to emerging markets. DUNE's benefits and the challenges that it solves are equally relevant in other geographies, including here in North America. As one prominent example and potential use case, Los Angeles County has announced plans to deploy its own high-speed wireless broadband service targeted at serving low-income residents. Los Angeles recently contracted a well-known WISC to lead the project, which is expected to leverage a 60 gigahertz millimeter wave fixed wireless solution to deliver two gigabits per second wireless connectivity to qualify residents for as low as $25 per month. Regardless of this geography, these types of urban fixed wireless deployments are exactly what DUNE was designed to enable. Broadly speaking, we're very encouraged by the initial positive feedback of our DUNE platform And we expect further engagements and expansions of these opportunities in the coming quarters. Shifting to slide nine, I wanted to briefly touch on our recent success in the aerospace and defense sector, as we believe it's a market that is ideally suited for MMWave technology solutions. Our advanced integrated antenna technology allows for communications using unique, narrow, and focused beams, which make it more difficult to intercept and even detect sensitive data communication. In March, we released our PRM 2136 platform for stealthy tactical communications. This platform solution offers support for high bandwidth, low latency applications using unlicensed MMWave spectrum, and guarantees a reliable high throughput connection between users. All of Perazzo's 60 gigahertz modules enable multi-gigabit data transfer rates, which can be mission critical in military operations that require sharing data in real time. Additionally, the PRM 2136 incorporates a proprietary adaptive beamforming and narrow pencil beams capability that allow for highly directional communications, which are inherently stealthy and lower probability of interception and detection. Acknowledging that it takes some additional time to cultivate and realize material revenue in the market due to typically longer evaluation and design cycles, it's clear that MMWave dispense applications represent an incremental market opportunity with significant potential. In closing, with our expanding engagement pipeline for MMWave solutions across an increasingly diverse customer base and market applications, as well as initial indications of renewed customer demand for fixed wireless access, we feel highly confident in the company's outlook for strong growth in 2024. Additionally, we expect the backlog of our EOL shipment IC products to provide meaningful revenue and cash flow to improve our financial position and outlook. As we continue to execute on our strategic initiatives to expand the customer base for our MMOA products, we believe there is a large opportunity to realize significant growth over the coming years. With that, I'll turn the call back to Jim to review the first quarter financials, as well as our revenue expectation for the second quarter of 2024. Thank you, Ron.