Prepared remarks
Good afternoon, and welcome to Peraso Inc.'s Second Quarter 2026 Conference Call. 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, Mr. Jim Sullivan. 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 Jim 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 Peraso's website at www.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 facts could be deemed as forward-looking. Peraso 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 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 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 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 gigahertz 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 gigahertz 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 gigahertz mmWave technology and 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's become increasingly clear over the past 12 to 18 months that the inherent benefits of 60 gigahertz mmWave 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 Peraso's proven 60 gigahertz 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 WiFi 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, 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 combined 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 gigahertz 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 gigahertz 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 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 gigahertz 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 gigahertz 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, InTACT, 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 Peraso's 60 gigahertz 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 gigahertz for their future product road maps. With that foundation, let me turn to the wider opportunity we see in unmanned aerial systems communications. Moving to Slide 7. 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 in 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 of 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 mmWave 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 paths 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 interference signals. Since by definition the band is unlicensed, 60 gigahertz also avoids interference with licensed spectrum. Bringing all of these elements together, this week, we expanded our product portfolio with the formal introduction of Peraso'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 gigahertz 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 PRM2145 further strengthens our early entry position in these high value-add markets while also reinforcing our strategy of diversifying Peraso's future growth beyond our core fixed wireless access business. Turning to Slide 8. Before my concluding remarks, I want to briefly highlight one other real-world application and 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 mmWave 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 are actively collaborating with partners to solve and work toward bringing to market. And second, I believe it further illustrates the expanding role 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 securing additional distribution partners that will expand the market reach of our 60 gigahertz mmWave 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 gigahertz 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.
Thank you, Ron. Turning to the results for the quarter. Total net revenue for the second quarter was $1.3 million compared with $1 million for the prior quarter and $2.2 million for the second quarter of 2025. Product revenue in the second quarter was $1.2 million compared with $0.7 million in the prior quarter and $2.2 million in the second quarter of 2025. The sequential increase in product revenue for the second quarter of 2026 was attributable to higher shipments of mmWave products. Sales of our legacy memory and related products were less than $25,000 in each of the first two quarters of 2026. We recorded no sales of legacy memory and related products in the second quarter of 2025. Gross margin was 63.7% in the second quarter compared with 61.5% in the prior quarter and compared with 48.3% in the year ago quarter. The sequential increase for the second quarter of 2026 was primarily attributable to mmWave product mix, including increased sales of inventory written down in prior periods as partially offset by a decrease in nonrecurring engineering services or NRE revenue. The year-over-year increase was primarily attributable to an increase in NRE revenue and mmWave product mix, combined with an increase in sales of inventory written down in prior periods as partially offset by a decrease in sales of memory and related products. GAAP operating expenses for the second quarter of 2026 were $3.1 million, consistent with the prior quarter and compared with $2.9 million in the second quarter of 2025. Non-GAAP operating expenses, which excludes stock-based compensation, were $2.9 million in the second quarter, consistent with the prior quarter and compared with $2.7 million in the second quarter of 2025. Our recent non-GAAP operating expense level of approximately $2.9 million per quarter continues to reflect the benefits realized from previously implemented cost reductions and our ongoing cost containment initiatives. GAAP net loss for the second quarter of 2026 was $2.2 million or a loss of $0.16 per share compared with a net loss of $2.5 million or a loss of $0.22 per share in the prior quarter and compared with a net loss of $1.8 million or a loss of $0.31 per share in the same quarter a year ago. Non-GAAP net loss, which excludes stock-based compensation and changes in fair value of warrant liabilities for the second quarter of 2026 was $2.1 million or a loss of $0.15 per share. This compared with a non-GAAP net loss of $2.3 million or a loss of $0.20 per share in the prior quarter and a net loss of $1.7 million or a loss of $0.28 per share in the same quarter a year ago. The weighted average number of basic and diluted shares outstanding for purposes of calculating both GAAP and non-GAAP EPS for the second quarter of 2026 was approximately 14.1 million shares. Adjusted EBITDA, which we define as GAAP net income or losses reported, excluding stock-based compensation, change in fair value of warrant liabilities, interest expense, depreciation and amortization and the provision for income taxes was negative $2 million in the second quarter of 2026 compared with negative $2.3 million in the prior quarter and negative $1.6 million in the second quarter of 2025. With regard to the balance sheet, as of June 30, 2026, the company had approximately $3.3 million of cash compared with $2.7 million as of March 31, 2026. The net increase of approximately $0.6 million in the company's cash balance at quarter end reflected approximately $2.4 million of net proceeds from sales under the company's at-the-market offering program during the second quarter of 2026. As of today's call, the company has approximately 15.1 million shares of common stock and exchangeable shares outstanding. As previously disclosed, the company has been exploring potential strategic alternatives, including a merger, sale of assets or other similar transactions as well as various potential sources of additional capital. On June 30, 2026, the company entered into a committed equity facility with ROTH Principal Investments. This facility allows but does not obligate the company to issue and sell up to $25 million of shares of its common stock. In addition to providing access to additional working capital for general corporate purposes, the facility is expected to support continued product development targeting expanded opportunities in drone, defense and tactical communications markets. Independent of the newly entered equity facility, we don't have any updates to share today in the company's broader strategic review process. As Ron previously mentioned, overall visibility into future near-term demand remains challenging due to the irregular order patterns from our fixed wireless access customers. Due to insufficient visibility, we will not be providing quarterly guidance on today's call. This concludes our prepared remarks, and we thank you for your time this afternoon. Operator, please commence the Q&A session.
Questions and answers
Your first question is coming from Jon Hickman from Ladenburg.
This new communications strategy, who did you say your partner was again that you're working with to design for the factory floor and UAVs and all that?
Are you referring to the final slide?
No, the third to the last one that showed all the robots and related applications.
Yes. That is obviously still confidential, Jon. The concept there is that you are seeing this a lot in the U.S. as well as China with humanoid robots, which have substantial data requirements. The data flow between the network and these humanoid robots is substantial. That's where our chips come into play. That slide shows the benefit of our technology over traditional wireless technology: we have a very narrow beam and a physically limited area of operation versus traditional wireless, which has a wide field of coverage. That's why we are competitive in those circumstances. We see that market as an important emerging market because of that capability of our technology. I hope the slide communicated that message.
You said you'd have chips available for people to experiment with or evaluate by the end of the year in the fourth quarter. Is that correct?
No. Our chips are available now. The concern I referenced is that availability of third-party memory like DDR4 and DDR5 is limiting sales and making orders lumpy. That's what I was referring to. As far as silicon for that application, we are in full production and it is available today.
So what were you referring to when you said you would have chips available in the fourth quarter?
We have a new module product based on our existing silicon. We issued a press release yesterday introducing the PRM2145. That is a new module with specific technical details on our website. It's another part of our module family based on existing silicon. The significant change in that product is a new antenna we designed in-house, which allows different RF characteristics.
And you've been working with a partner, I think in Israel, on the friendly fire application for more than a year. Are you generating revenues there?
Yes. We have generated substantial revenue there, seven-figure revenue from two perspectives. One is engineering services, and we have shipped volume. Originally that business was in-country, but we're starting to see a shift to the drone application as well. Imagine the need for friendly-fire prevention where a drone and infantry are both present and the drone must ensure it does not target ground personnel. It's an evolution from ground-based communications to aerial-based communications. We anticipate more volume from that customer over the next few quarters.
With drones being jammed or their communications interrupted, theoretically every drone should have mmWave on it to avoid that, correct?
Theoretically, yes. That is a core value proposition. We've had this capability for some time. What's changed over the last year is that traditional wireless used to control drones is now being jammed. Our technology is targeted at military and security applications where users want to avoid being jammed. For consumer applications, it's less necessary. For military and security, interest is very strong. You'll see a number of announcements from us in the coming weeks and months. Yesterday's announcement was a specific new module for drone applications. We see this as an important part of drone deployments over the coming years.
So it is primarily a defensive technology for preventing communications interruptions. Can it be used offensively to interrupt other parties' drones more precisely, or is that not applicable?
No. It's really more command and control. The two primary applications are friendly-fire prevention, where the drone can determine whether ground personnel or devices are friend or foe, and command and control of the drone. How you define defensive or offensive is subjective, but our focus is not on offensive capabilities. Eventually we have the ability to detect drones in a radar-like application, but we are not doing that today. Our current focus is command and control for the drone application with links that are very difficult to jam.
How are you getting noticed by military customers?
We have strong partners in the U.S. that are helping, and those relationships are confidential. We have been accepted by a NATO consortium promoting technology in NATO-based countries, which has been a strong channel to get recognized by drone manufacturers. We have been engaging with new drone customers and achieving design wins on a weekly basis. We also attend trade shows and use traditional marketing channels, but NATO has been particularly helpful. As word spreads that our technology supports jam-resistant communications, inquiries have increased weekly.
Some drone manufacturers are making thousands per week or per month. If a customer wants that kind of volume, can you produce at that scale?
Yes. Today our capacity is about 30,000 to 50,000 units a month, which we have achieved in the past. We could get to 100,000 units a month. Our primary silicon supplier is TSMC, and that level is modest for them. With our other suppliers, it's a matter of time to reach those volumes. We are not worried about achieving those volumes operationally.
Your next question is coming from Kevin Liu from K. Liu & Company.
Just a couple of follow-ons on the defense opportunities. Can you talk about the pipeline? Specifically, how soon do you think you can get a second and third production customer? Is that a couple of quarters out or longer term? And for the hybrid UAV network you referenced, are there any specific LEO partners you can name?
For the pipeline, there's an interesting development: we are targeting drone manufacturers, but we are also seeing traction in secure fixed wireless communications. Some customers who provide drone communications want us to provide communications on the ground as well. We could see those shipments starting in Q4. Drone shipments are more likely in Q1 or Q2 next year, though we could start shipping in lower volumes later this year. The concept of secure communications is vital—our ability to avoid jamming boils down to very narrow, directional and dynamic beams that make detection and jamming difficult. Regarding LEO partners, without getting specific, one scenario we're working on involves a LEO satellite provider linking to a control drone, which then manages client drones. That allows a drone operator to be anywhere in the world and view real-time first-person video from client drones. That's one of the applications we are actively working on and people are very intrigued by it.
With all these new initiatives, how quickly can you get these products to the battlefield? Are these intended for current conflicts or more next-generation technologies that could take a year or more to reach production?
This will be phased. I can see us starting to ship later this year on ground-based applications. For example, some customers provide radar and need secure data links to their radar units; there's very little development needed for those point-to-point applications. For a very sophisticated swarm, that is a more complex problem and likely a year away. But we can start shipping later this year or early Q1 and ramp from there.
Switching to the traditional fixed wireless business: given the challenges customers face, what are you hearing about their inventory levels of your chips? When they reorder, do you expect a big restocking ramp or a gradual uptick?
Even with military interest, we've had three major customer opportunities arise recently, including one of the largest OEMs in India, a Middle Eastern customer, and a large OEM partner. The message from these potential customers is that they are seeing traction. Regarding our existing customers, we are starting to see reorders from some, and we expect a turnaround by Q4. We're hopeful to overcome the memory situation by Q4. One mitigation customers are pursuing is switching to DDR3 in some cases; many AI customers use DDR4 and DDR5, but in most cases our customers can use DDR3. We're starting to see that transition and hope it alleviates pressure by Q3.
One last question for Jim: regarding the ROTH equity facility you secured after quarter end, did you tap into it at all or is it still fully available?
No, we have not tapped into the ROTH facility or used our ATM facility since June 30. I think we had some trades under the ATM that settled on July 1, but there has been no activity under either facility since. We'll include comments in the 10-Q regarding runway and liquidity going forward. We have market conditions working against us on the fixed wireless side while there's a tremendous amount of activity on the drone and defense side. I've seen a lot of NDAs crossing my desk from Ron's trade show activity, which is a good sign. Regarding the pipeline, our first priority remains getting products out the door based on customer orders. If we can't get products out quickly, we focus on nonrecurring engineering services, NRE transactions. Ron and the team are working on at least one NRE in the defense space. Generally those contracts have no incremental cost to us, so they are funded R&D that drops to the bottom line. We have at least one opportunity we hope is mid-6 figures. We're also pursuing grants from the Canadian government; the engineers and team working on mmWave technology sit in Canada, so we've been aggressive in applying for those. We've done administrative data submissions and technical details have been provided by Alex, our CTO; Brad, our COO; and our VP of Biz Dev. We're optimistic about some of those coming in. Anything I missed there, Ron?
No, that was perfect. Terrific, Jim.
I'll stop there. I don't know if that answered your question.
Definitely. Look forward to seeing some of these defense announcements in the near future.
I show that there are no further questions in the queue at this time. That will conclude today's conference call. Thank you for your participation. You may now disconnect.