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

Jim Sullivan: Sure. So, a couple of points. As I have said on the call, we are still kind of targeting a non-GAAP gross margin in the 50% range. And right now, when you look back at 2022, we had $14.2 million of product revenue and just under 700,000 or so of royalty NRE other. So, kind of looking at on the product side because obviously, NRE transactions are hard to predict. We know we will continue to collect the amount 400,000, 500,000 royalties from our memory licenses, it keeps kind of rolling in until one day, it doesn’t. The NRE deals are always €“ can improve, should be a big improvement to margin if there is a license component, etcetera. But to your question, I think the first quarter, we will start to see a shift towards a higher percentage of mmWave, particularly with the revenue recognition from that customer and our other business.

Possibly, they will be about even. But I think starting with the second quarter, we expect mmWave to take €“ to be a larger percentage of the quarterly revenue.

Kevin Liu: Understood. And maybe this is for Ron, but just you talked about a number of opportunities here, whether it’s with the leading WISP, maybe the carrier 5G opportunity towards year-end. What do you think is kind of the most significant potential revenue contributor over the course of fiscal €˜23 here if you had to kind of rank some of these applications that are coming online?

Ron Glibbery: Definitely, the wireless ISPs, I mean it’s just, basically €“ how can I say, Kevin. I mean that market is vibrant and shipping and starting to €“ I mean, really like every month shipping more and more mmWave and getting more recognition. So, our focus frankly is on that market in terms of €“ and when we talk about short-term ROI, that’s where we see the real growth for 2023. On the 5G side of things, we have got a very, very strong product. We have got partnerships. But the market is, I would say, just less certain in terms of predictability. So, we are really predicting very little revenue from 5G in 2023 because from a carrier perspective, we are just €“ we haven’t seen that transition yet, whereas in the wireless ISP market, we are really starting to see that heavy transition. So, I think to answer your question, for 2023, the wireless size piece is going to be the major source of revenue for us.

Kevin Liu: Understood. That’s helpful. And then last one for me. Just in terms of the $5 million in annualized cost reductions you guys talked about, I wanted to clarify, Q4 expenses already looked like they were coming down sequentially from Q3. So, was any of this $5 million in cost savings already starting to be realized in the fourth quarter, or are all of these kind of incremental to where we saw you exit the year and headed into this year?