Peraso Inc.

Good afternoon, and welcome to Parasso Inc.'s second quarter 2026 conference call. At this time, all participants are on 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, Tuesday, August 11, 2026. I would now like to turn the call over to your host for today's conference call,

Good afternoon, and thank you for joining today's conference call to discuss PRASO's second quarter 2026 financial results. I'm Jim Sullivan, CFO of PRASO, 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 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. Perasso 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. 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 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 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-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'll 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 continue to cultivate extensive customer engagement across our target end markets. Turning to slide four. Across each of our target end markets, we continue to be encouraged by the growing recognition of 60 gigahertz millimeter wave 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 gigahertz technology has been fixed wireless access. While this continues to be the largest and most mature end market for Perazzo, 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 applications 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 to 18 months that the inherent benefits of 60 gigahertz millimeter wave technology extend beyond traditional fixed wireless access applications. We continue to engage with prospective customers and partners seeking to utilize our 60 gigahertz 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 Perazzo's proven 60 gigahertz technology in both of these high value end markets. Turning to slide five, 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 GHz 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 gigahertz 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, BioWorks, 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 struggled 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 lengths, and the ability, when combined with BioWorks' 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 BioWorks 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 gigahertz are equally, if not more, critical in defense and tactical communications applications. Turning to slide six, 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 spooked, 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. Second, that same directional beam, combined with the physical properties of the 60 GHz band, substantially reduces the risk of spoofing or successful jamming. Third, we have integrated our solutions to deliver these capabilities in a compact, low-power form factor. This makes it ideal for size, weight, and power-constrained platforms, such as unmanned aerial systems, or UAS. In partnership with our previously announced lead defense contractor, Intacct, we are continuing to make solid progress on the refinement and testing of next-generation drone IFF solutions. This system is purpose-built for highly contested electronic warfare environments and is designed to enable secure real-time mutual authentication between friendly drones and ground forces. Following our delivery of initial limited production modules earlier this year, feedback on this jointly developed solution continues to be positive, which we believe is meaningful validation of Perazzo's 60 GHz technology for IFF applications. More broadly, the combination of stealth-oriented design, anti-jam-resistant architecture, and compact integration is generating expanded interest from additional prospective customers and partners seeking to evaluate the benefits of 60 GHz for their future product roadmaps. With that foundation, let me turn to the wider opportunity we see in unmanned aerial systems communications. Moving to slide seven, building on the initial foundation from our ongoing work on IFF applications, we have identified and are beginning to target broader opportunities for our 60 gigahertz solutions and unmanned aerial systems. In fact, the rapid growth of UAVs and related systems, especially in defense and security applications, has helped to increase the awareness and the limitations of traditional sub-6 gigahertz radio links. These legacy systems are increasingly susceptible to wireless congestion, relatively easy to detect, and vulnerable to jamming in contested electromagnetic environments. Additionally, modern drones have become highly data intensive with large arrays of sensors. They are also frequently required to support real-time coordination, autonomy, and swarm operations. Today's existing drone communications infrastructure is challenged to meet all of these demands. 60 gigahertz millimeter wave technology is designed to enable a fundamentally different solution for modern UAS platforms. Instead of broadcasting energy broadly, it utilizes highly directional, high-capacity data links. Atmospheric oxygen absorption further limits long-distance propagation, reducing the probability of detection or interception outside the intended path. Adaptive beamforming is the foundational capability that makes this possible. enabling precise energy steering and spatial filtering of interference and high spatial reuse so multiple independent links can operate concurrently without overlapping interference. As seen on the slide, the narrow point-to-point math of 60 gigahertz beams are virtually impossible to detect and extremely difficult to jam. The highly directional beam makes alignment by a jammer difficult while oxygen attenuation further weakens potential interfering signals. Since by definition the band is unlicensed, 60 GHz also avoids interference with licensed spectrum. Bringing all of these elements together, this week we expanded our product portfolio with the formal introduction of Perazzo's PRM2145. This new jam-resistant communications module is purpose-built for unmanned aerial vehicles, autonomous systems, and defense applications. The PRM2145 leverages our proven 60 GHz platform to deliver secure, ultra-low latency, gigabit class performance in a lightweight, compact form factor optimized for airborne platforms. It is designed to support robust command and control links, high-definition video, ISR data transport, identification friend or foe communications, and drone-to-drone networking. This new module is expected to be available for customer evaluation in the fourth quarter, supporting integration across a broad range of unmanned and autonomous platforms. We believe the PRM 2145 further strengthens our early entry position in these high-value ad markets while also reinforcing our strategy of diversifying Perazzo's future growth beyond our core fixed wireless access business. Turning to slide eight, before my concluding remarks, I want to briefly highlight one other real-world application and the opportunity that we are actively engaged in development of with a prospective customer. Today, the current landscape within defense tactical communications is rapidly driving the evolution of next-generation solutions. One real-time example of this is hybrid UAV networks. In these architectures, 60 gigahertz communications links are combined with other transport layers, such as satellite backhaul or selective fiber, to deliver high-capacity, low-latency connectivity while still maintaining the intended stealth and anti-jamming benefits of millimeter wave technology. As visualized on this slide, this hybrid approach allows operators to optimize a complete end-to-end network for range, resilience, and mission flexibility in contested or GPS-denied environments. I wanted to briefly share this example of a hybrid UAV network on today's call for two reasons. First, it reflects the type of advanced system design work that we're actively collaborating with partners to solve and work toward bringing to market. And second, I believe it further illustrates the expanding role of 60 gigahertz can play beyond traditional point-to-point or fixed wireless use cases. In closing, our near-term focus remains firmly on the areas within the company's control. We continue to take steps to strengthen the resilience of our supply chain and reduce single supplier bottlenecks, while also reducing to secure additional distribution partners that will expand the market reach of our 60 gigahertz millimeter wave portfolio. Our highest priority is driving commercial traction, converting existing customer engagements, proof of concepts, and technology demonstrations into design wins, purchase orders, and production revenue that can support renewed top-line growth. While near-term visibility, particularly within fixed wireless access, remains limited due to external market dynamics and irregular order patterns, the breadth of our current engagements and the growing recognition of 60 GHz differentiated capabilities makes us optimistic for the future. With that, I'll turn the call over to Jim for a detailed review of the financial results for the quarter.