Peraso Inc. (NASDAQ:PRSO) Q4 2022 Earnings Call Transcript

David Williams: Okay. Got it. Very helpful. And then just on the gross margin, it was up nicely on a sequential basis. I am just wondering, was that driven more by the €“ just the revenue and the scale there, or is there anything structural there that should be a little stickier?

Jim Sullivan: The gross margin was really driven by the memory products for the fourth quarter and the year. I want to say on the quarter, memory was over 50% of the revenue, which was obviously a driver of the margin as well as on the year, memory was over 50%. So, that was a big mover. On the mmWave on the antenna product solutions, we just started shipping those kind of second half of 2021 and obviously started to get into some volume in 2022. Just €“ it takes kind of more shipping, more volume to get our efficiencies. We bought some equipment, etcetera, to kind of improve our processes, constantly cutting test times around the products. So, that’s kind of a key focus point for 2022.

David Williams: Okay. Fantastic gentlemen. Thanks so much for the help and best of luck on the quarter.

Ron Glibbery: Thank you. Thank you, David.

Jim Sullivan: Appreciate it.

Operator: Okay. The next question is coming from Kevin Liu with K. Liu & Company. Kevin, please proceed.

Kevin Liu: Hi. Good afternoon guys. Congrats on getting back on track here with your large customer. I wanted to ask, now that they are kind of back on track in terms of payments and collections, curious on the outlook for growth with them as well as your other large customers. Would you expect them to contribute meaningfully at the start of the year, or is that something that takes time to ramp back up in terms of that relationship?

Jim Sullivan: I will go first, or you want to go ahead, Ron.

Ron Glibbery: No, go ahead, Jim.

Jim Sullivan: Yes. I will go first and then you can provide some color. In my model, I basically don’t have them starting to turn back on until the second half of the year just because of the uncertainty. And I kind of put them all in place or plan for the year, whatever a month or so ago. Obviously, we are very pleased to have the payments in and back on track. And there is a lot of discussions and they are certainly very interested in one of our new products. But right now, the number I gave for the second quarter really doesn’t €“ I am sorry, for the March quarter, I am already looking ahead a quarter, does not include anything from them. So, I am looking at it more towards the second half. And certainly, we will be quite pleased that they could start ordering sooner, but that was our position based on what we know at this time.

Kevin Liu: Great. That’s helpful. And I know, Jim, you mentioned there was kind of north of 50% of revenue in Q4 coming from memory products. How do you expect that mix shift to evolve kind of moving throughout €˜23 here? And then maybe more specifically, just should we expect a pretty steady improvement in the gross margin here, or are there going to be some puts and takes depending on kind of the ebbs and flows on memory as well as kind of the timing of new customer ramp-ups on the mmWave side?