10-K: Peraso Narrows 2025 Loss Amid mmWave Growth, Going Concern Doubt

Peraso Inc. reported a significantly reduced net loss of $4.8 million in 2025, driven by a shift to mmWave products and ongoing strategic review discussions, despite a decline in overall revenue and persistent going concern doubt.

Summary

• Net loss improved to $4.8 million in 2025 from $10.7 million in 2024.
• Total net revenue decreased by 17% to $12.193 million in 2025 from $14.573 million in 2024.
• Revenue from mmWave ICs and modules saw substantial growth, increasing to $6.734 million and $2.293 million respectively in 2025, from $0.302 million and $1.007 million in 2024.
• Memory IC product revenue significantly declined to $2.720 million in 2025 from $12.914 million in 2024 due to its end-of-life, with no significant revenue expected after December 2025.
• Gross margin percentage increased to 58% in 2025 from 52% in 2024, partly due to reduced amortization of intangible assets and lower inventory write-downs.
• Operating expenses, including Research and Development and Selling, General and Administrative, were significantly reduced in 2025.
• Cash and cash equivalents stood at $2.9 million as of December 31, 2025, down from $3.3 million in 2024.
• The company is evaluating an unsolicited, non-binding acquisition proposal from Mobix Labs, Inc., with discussions ongoing for a potential all-stock transaction at a premium.
• Management has concluded there is substantial doubt about the company's ability to continue as a going concern for at least 12 months beyond the filing date, necessitating additional capital beyond Q3 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging report, primarily due to the explicit 'going concern' doubt and continued cash burn, despite some positive shifts in product mix towards mmWave. The ongoing strategic review offers potential upside but introduces significant uncertainty.

Positives

• Net loss significantly improved to $4.8 million in 2025 from $10.7 million in 2024.
• Gross margin percentage increased to 58% in 2025 from 52% in 2024, partly due to reduced amortization and inventory write-downs.
• mmWave IC product revenue saw substantial growth, increasing from $0.302 million in 2024 to $6.734 million in 2025.
• mmWave module revenue also grew significantly, from $1.007 million in 2024 to $2.293 million in 2025.
• Operating expenses (R&D and SG&A) were significantly reduced in 2025 compared to 2024.
• The company holds 72 United States patents and 16 foreign patents, along with 9 essential claims patents for the IEEE 802.11ay wireless specification.
• Management expects sales of mmWave products to increase in 2026 from existing and new customers.

Negatives

• Total net revenue decreased by 17% to $12.193 million in 2025 from $14.573 million in 2024.
• Memory IC product revenue, which represented 89% of total revenue in 2024, declined by over $10 million in 2025 and is not expected to generate significant revenue after December 2025.
• The company has a history of net losses, with an accumulated deficit of $181.9 million as of December 31, 2025.
• Cash and cash equivalents decreased to $2.9 million at December 31, 2025, from $3.3 million at December 31, 2024.
• Cash used in operating activities increased to $5.6 million in 2025 from $4.6 million in 2024.
• Substantial doubt exists about the company's ability to continue as a going concern for at least the next 12 months.
• The company will need to raise additional capital to fund operations beyond Q3 2026.
• Revenue remains highly concentrated, with five customers accounting for approximately 80% of total revenue in 2025.

Risks

• Inability to continue as a going concern due to recurring losses and cash burn, requiring additional capital.
• Negative impact on future revenues, results of operations, and cash flows from the discontinuation of memory IC products.
• Fluctuations in gross profit due to customer and product mix, market acceptance of new products, yield, wafer pricing, packaging and testing costs, and competitive pricing.
• Failure to generate significant capital or raise additional capital to expand operations and invest in new products, reducing competitiveness.
• Inability to successfully market products, potentially forcing curtailment of R&D plans or existing operations.
• Future revenue growth depends on winning designs with existing and new customers, retaining current customers, and successful commercialization of products.
• Failure to achieve anticipated benefits of conducting business as a fabless semiconductor company.
• Dependence on demand growth for mmWave products from OEMs, service providers, and other equipment manufacturers.
• Failure to continue developing new products and enhancing existing products on a timely basis.
• Lengthy sales cycle for products, making it difficult to predict success and timing of future revenue.
• Cyclical nature of the semiconductor industry, leading to periodic downturns.
• High revenue concentration among a small number of customers, posing risk if a key revenue source is lost.
• Credit risks associated with revenue concentration, potentially affecting cash flow and financial condition.
• Defects and failures in products, leading to lost revenues, increased costs, and damage to reputation.
• Inaccurate forecasts of customer needs, leading to excess or obsolete inventory or inability to meet demand.
• Reliance on independent foundries and contractors for manufacturing, assembly, testing, and packaging, with potential for delivery failures or quality issues.
• Disruptions in the supply chain due to shortages, increasing lead times, or price increases.
• Claims of infringement on third-party intellectual property rights, leading to increased costs and litigation.
• Inability to protect and enforce intellectual property rights, impairing competitiveness.
• Uncertainty regarding the outcome of the evaluation of strategic alternatives, including Mobix Labs' proposal, which could create business disruption and stock price volatility.
• Risks associated with international operations, including public health issues, management difficulties, regulatory changes, reduced IP protection, and currency fluctuations.
• Adverse effects from international trade policies, such as tariffs and sanctions.
• Limitations on the ability to utilize net operating loss carryforwards due to Section 382 ownership changes.
• Potential for unauthorized access to networks or compromise of products and services from cybersecurity threats.
• Risks associated with future acquisitions or business combinations, including integration challenges and unforeseen liabilities.
• Impact of war, terrorism, natural disasters, and global pandemics on business and macroeconomic conditions.
• Potential for future sales of common stock to adversely affect market price and dilute ownership.
• Volatility of the common stock price.
• Provisions in corporate documents or Delaware law that might delay or prevent a change-of-control transaction.
• Warrants accounted for as liabilities, with changes in fair value impacting earnings and potentially stock price.
• Inability to satisfy Nasdaq continued listing requirements, leading to delisting.
• Reduced attractiveness to investors due to status as a smaller reporting company.
• Delay in receiving common stock for holders of exchangeable shares upon exchange request.

Future Outlook

The company expects sales of its mmWave products to increase in 2026 due to anticipated orders from existing customers and new customers commencing production. It also anticipates continuing to incur operating losses and cash expenditures exceeding receipts for at least the next 12 months, necessitating additional financing beyond Q3 2026. The company intends to continue devoting substantially all R&D efforts to expanding its mmWave technology portfolio and product offerings.

Management Comments

• "We believe that our existing cash and cash equivalents and expected receipts associated with forecasted product sales will enable us to meet our capital needs into the third quarter of 2026."
• "We will need to increase revenues substantially beyond levels that we have attained in the past in order to generate sustainable operating profit and sufficient cash flows to continue doing business without raising additional capital from time to time."
• "Management has concluded, and our independent registered public accounting firm has agreed with our conclusion that there is substantial doubt regarding our ability to continue as a going concern for a period of at least 12 months beyond the filing of this Annual Report on Form 10-K."
• "Our board of directors and management team are committed to acting in the best interests of all stockholders."
• "We do not intend to make further comments regarding potential transactions or provide any public updates regarding proposed or potential transactions, unless required by applicable law or a regulatory body."
• "We intend to continue to devote substantially all of our research and development efforts toward further expanding our mmWave technology portfolio and expanding our product offerings."

Industry Context

StockSavvy.ai notes that Peraso Inc. is operating within the rapidly expanding millimeter wave (mmWave) technology market, which Allied Market Research valued at $3.4 billion in 2024 and forecasted to grow at a 20% compound annual growth rate through 2032. The company's focus on both licensed (5G) and unlicensed (IEEE 802.11ad/ay) mmWave spectrum positions it to capitalize on diverse applications, including fixed wireless access (FWA), military communications, and consumer VR. The shift in U.S. government incentives (BEAD program) towards technology-neutral FWA funding, including 60GHz mmWave, presents a significant tailwind for Peraso. However, the company faces intense competition from established players like Qualcomm, MediaTek, and Samsung, particularly in the more competitive 5G licensed market.

Comparison to Industry Standards

• Peraso's 60 GHz mmWave products have achieved point-to-point links up to 25 kilometers, which the company believes is industry-leading.
• The company's mmWave technology provides low latency (under 5 milliseconds) for VR applications, a critical performance metric for immersive experiences.
• Peraso's DUNE user arbitration protocol is specifically designed to optimize network performance in dense urban environments, addressing a challenge where traditional WiFi struggles due to signal overlap.
• The company's mmWave technology operates under 12 watts, enabling communications networks to run on backup battery power for several hours, which is advantageous in environments with unreliable power grids like informal settlements.
• In the 5G mmWave market, Peraso believes it is currently the only pure-play vendor to offer a dual-band (28/39 GHz) RF solution optimized for the FWA market, differentiating itself from competitors like Qualcomm, whose solution is based on aggregating its mobile RF solution, potentially involving compromises in cost, performance, and power consumption.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not a party to any legal proceeding that it believes is likely to have a material adverse effect on its consolidated financial position or results of operations.
• The semiconductor industry is characterized by frequent and expensive litigation regarding patent and other intellectual property rights.
• The company may incur substantial litigation expense if claims of infringement arise or if it needs to enforce its IP rights.

Related Party Transactions

• On June 11, 2024, Ian McWalter, a former director, purchased 100,000 restricted shares of common stock from the company at a price of $1.27 per share, totaling $127,000.
• A family member of one of the executive officers is employed by the company, receiving approximately $129,300 in 2025 and $113,800 in 2024, which includes the aggregate grant date fair values of any stock options.

Stakeholder Impact

• Shareholders face significant dilution risk from future equity capital raises. Investment value is uncertain due to going concern doubt and stock price volatility. Potential for increased value if strategic review results in a favorable acquisition.
• Employees have experienced workforce reductions in 2023 and 2024. The company's ability to retain key personnel is a risk due to financial uncertainty. Compensation includes equity awards to align interests with stockholders.
• Customers may face uncertainty regarding the company's long-term viability as a supplier due to going concern doubt. Reliance on a small number of key customers creates concentration risk.
• Suppliers/Creditors face credit risks due to the company's financial condition and concentration of receivables. Supply chain disruptions and price increases from suppliers could impact the company.

Next Steps

• Increase mmWave product sales from existing customers in 2026.
• Secure new customers for mmWave products to commence production in 2026.
• Continue to invest in the development of mmWave products and expand the technology portfolio.
• Actively seek additional financing through debt or equity arrangements to meet cash requirements beyond Q3 2026.
• Evaluate the unsolicited, non-binding acquisition proposal from Mobix Labs, Inc. and other strategic alternatives.
• Implement additional cost reduction strategies, such as headcount reductions and curtailing business activities, if unable to secure additional financing.
• Monitor and update cybersecurity safeguards and employee training.

Key Dates

Recommendation

The explicit 'substantial doubt regarding our ability to continue as a going concern' is a severe red flag for investors. While the shift to mmWave shows promise and the net loss has narrowed, the company's liquidity position is weak, cash burn from operations increased, and it requires significant additional capital. The ongoing strategic review, while potentially offering an exit, is uncertain and has already involved a hostile bid, indicating a challenging environment. Given the fundamental financial instability and the need for further capital raises that will likely dilute existing shareholders, a seasoned investor would likely recommend selling to mitigate risk.

Keywords

mmWave, semiconductor, fabless, wireless technology, 60 GHz, 5G, fixed wireless access, FWA, beamforming, integrated circuits, antenna modules, intellectual property, Nasdaq, PRSO, Mobix Labs, strategic review, going concern, financial results, annual report