Peraso Inc.

Good afternoon, and welcome to Parasso, Inc.' 's second quarter 2025 conference call. At this time, all participants run a listen-only mode. If anyone needs assistance at any time during the conference call, please press the star key followed by zero on your touchtone phone. As a reminder, this conference call is being recorded today, Monday, August 11, 2025. I would now like to turn the call over to your host for today's conference call, Mr. Jim Sullivan. Please go ahead.

Good afternoon, and thank you for joining today's conference call to discuss Parasso's second quarter 2025 financial results. I'm Jim Sullivan, CFO of Parasso, and joining me today is Ron Glibbery, our CEO. Today, after the market closed, we issued a press release and related Form 8K, which was filed with the Securities and Exchange Commission. 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 the 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. PRASO advises caution and 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, and any statements related to prospective future financing arrangements or capital transactions and the evaluation of pursuit of strategic alternatives. All forward-looking statements are based on information available to Parasso on the date hereof. These statements involve known and unknown risks, uncertainties, and other factors that may cause Parasso'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 Parasso'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 intangible assets, severance costs, and the change in fair value of warrant liabilities. These non-GAAP financial measures, definitions, and the reconciliation of these differences between them and comparable GAAP measures are presented in our press release and related to Form 8K, 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 Glibberi, for his prepared remarks. Ron?

Thank you, Jim. Good afternoon, and welcome to everyone on the phone and the webcast. We appreciate you joining us for today's conference call. We had a solid and productive second quarter marked by continued market momentum and growing demand for Peraza's industry-leading MMWave technology. Revenue from our MMWave products increased 45% sequentially and more than 200% year-over-year. as we continue to ramp shipments to an expanding customer base and across multiple targeted end markets. Further highlighting sustained market leadership of our 60 GHz solutions, we achieved a significant milestone having surpassed 2 million cumulative shipments of our MMWave devices. Complementing the growth of our MMWave products, we have continued to exercise disciplined cost management resulting in lower run rate operating expenses and significant year-over-year improvement in our operating results for the quarter. Looking at slide four, fixed wireless access continues to represent the largest and fastest-growing market opportunity for MMWave technology. Due to its unique ability to deliver reliable, high-speed, and low-latency broadband connectivity to homes and businesses without the cost burden associated with fiber infrastructure, Throughout the first half of the year, we have seen a steady and broadening recovery in both market demand and customer orders for our fixed wireless access solutions. Highlighting our most recently announced win, in July, we announced one of our leading partners, Tachyon Networks, selected Peraza's MMWave modules to power its latest outdoor 60 GHz fixed wireless solution. Our advanced MMWaves module enabled Tachyon's solution to deliver fiber-class speeds to at a breakthrough price point, supporting rapid broadband deployments in both dense urban and rural markets. More specifically, their latest solution offers gigabit connectivity, has an over three-kilometer range, and is compatible with Tachyon's existing TNA 300 series, with the ability to support up to 48 client connections per sector. This win and our ongoing collaborative partnership with Tachyon Networks are a testament to Praza's recognized technology leadership for high performance mmWave solutions. Today we remain engaged with numerous wireless internet service providers that are utilizing Peraza's mmWave technology in proof of concepts for future fixed wireless access deployment. We expect these and additional new opportunities to contribute to our sustained future growth as we convert successful proof of concepts into new initial production orders. Now turning to slide five. In addition to capitalizing on the recent momentum with the fixed wireless access market, we continue to be excited about the growing interest and market opportunity for MMWave technology in next-generation tactical communications and military defense applications. Following a series of early prospective discussions and initial engagement with potential customers and ecosystem partners, we have become increasingly confident that the inherent characteristics of our MMWave technology are well-matched to solve a number of critical communication challenges encountered in tactical defense environments. As discussed on a previous call, we demonstrated our first commercial proof point earlier this year with a strategic contract with a specialized defense contractor to deliver mission critical wireless application to global military and defense forces. We have since been working in close collaboration with this lead customer to refine a jointly created and deployable system solution for a first of its kind tactical defense application. In June, we announced a significant milestone with the delivery of initial production shipments of our advanced 60 gigahertz wireless solutions in support of this jointly developed solution. More specifically, this new deployable system solution leverages Peraza's technology to provide heightened communication and situational awareness to help safeguard both military personnel and noncombatants, such as medics and humanitarian responders operating in high-risk environments. As a company, we are proud to be part of enabling this next generation tactical communication solution designed to mitigate and prevent unnecessary human casualties. This notable win is also further validation of the performance and versatility of our MMWave technology, helping to establish Peraza's commercial presence and accelerate our strategic expansion in the broader tactical defense communications market. With increasing awareness of its inherent performance attributes and advanced capabilities, including ultra-low latency, high reliability, and stealthy multi-gigabit data transmission, we believe that 60 GHz MMWave technology is poised to gain substantial market traction across a broad span of mission-critical applications. As just one prominent example from our previously mentioned early discussions with prospective future customers and ecosystem partners, we've recently identified observe heightened interest around leveraging the benefits of MMMWay for various drone-related applications. More generally, we are highly motivated by both the significant and growing commercial potential of mission-critical applications, as well as the associated opportunities to contribute to future positive real-world impacts. We believe Peraza's advanced MMMWay technology and commercially proven solutions represent the unique strategic advantage that we can capitalize on and continue to scale over time. As such, we remain committed to expanding our market presence, collaboration with ecosystem partners, and customer engagement in the tactical defense communications market over the coming quarters. Move to slide six. Although we traditionally dedicate a majority of our quarterly calls and commentary to updates on our two largest targeted markets, I wanted to take the opportunity on today's call to briefly highlight both the versatility of our MMOA products and the incremental growth opportunities that exist in adjacent end markets. Kindly note, we generally separate and refer to our collective target adjacent and end markets as two distinct categories. The first being transportation and the second category we call professional video delivery. While the typical revenue contribution from both these categories is smaller relative to fixed wireless access business, we do have a combination of current or recurring customers sales, as well as active engagements in both these adjacent markets. Having provided that background as context, the most important takeaway is that MMWave technology delivers a uniquely compelling value proposition for overcoming complex connectivity challenge across diverse applications in both our target adjacent markets. It's largely the same inherent high performance and advanced capabilities that MMWave brings to fixed wireless and tactical communications. These same attributes make mmWave a critical enabler and frequently the only practical economic solution for applications requiring robust high data rate connectivity. As a recent example, further highlighting mmWave's unique capabilities and value proposition in adjacent markets, in June we received and have since shipped a production order of our 60 gigahertz wireless solution in support of a new customer's wireless video system for classroom environments. This customer chose to incorporate Peraza's 60 GHz wireless MMWave technology to enable its solution for the reliable delivery of high-performance, low-latency video in high-density school environments, while also operating completely independent of schools' frequently congested existing Wi-Fi infrastructure. Also notable, this was our first-ever production shipment in support of a solution specifically tailored for education, and therefore reflected an expansion of our served addressable market. Looking now at slide seven. Boring from the layout that we utilized to show our overall pipeline in previous quarters, we recently introduced this new pipeline slide in order to specifically track and visualize the progression of our customer base over time. Noting the timeframe between the two respective funnels from Q4 2023 to Q2 2025, representing approximately 18 months, We are very pleased with the substantial progress we've made towards expanding our customer base over this relatively short period, especially when viewed in the context of how time and resource intensive it can often be to acquire a single new customer and then successfully advance engagement on a specific program from an initial evaluation through the design process and ultimately see a customer's finished product be released to production. Although doubling our number of customers that are now in production from seven to 14 hopefully speaks for itself, there's another potentially more subtle takeaway that I want to highlight. In addition to successfully attracting and securing new customers, this slide also demonstrates our ability to effectively advance a growing number of funnel opportunities and program engagements across an increasingly diverse group of end market applications. Turning to slide eight, this is another view of our pipeline over the same 18 month period ending in June. but shown in terms of the number of SKUs or individual device models, irrespective of whether an individual SKU is associated with a new or existing customer. The overall trajectory is definitively positive and similar to the prior slide, also demonstrates our substantial progress on advancing a sizable number of engagement opportunities and to finish customer products released into production. The other two takeaways that I want to briefly highlight are First, the number of customer SKUs that are now currently in production have increased 90% over the last 18 months. This metric alone reflects a dramatically more diversified base of existing products with the potential for revenue contribution. Lastly, as of quarter end, we had seven additional engagements in the pre-production stage representing potential incremental revenue contribution in the relatively near future as customers release these products into production. In summary, we are pleased with our demonstrated growth and market momentum through the first half of the year as we've continued to ramp production shipments of our MMWave solutions in support of an expanding and increasingly diverse customer base. Combined with our ongoing commitment to disciplined expense management, we have meaningfully improved our operating results and significantly reduced our quarterly cash burns. Looking forward, we have good visibility into near-term orders for our MMWave solutions with an existing backlog that supports continued sequential growth. In fact, we currently expect record quarterly revenue contribution from our MMOA products in the third quarter. Having said that, we continue to be diligently focused on converting our healthy pipeline of existing customer engagements into new designs and incremental production orders in support of sustained growth in 2026 and beyond. I'll now turn the call back over to Jim to review the finances and provide our current revenue outlook for the third quarter of 2025.