What drove PRSO's earnings surprise in Q3 2023?

Peraso's earnings surprise in Q3 2023 can be attributed to several key factors: 1. **Revenue Growth**: Peraso reported a significant 100% year-over-year increase in fourth-quarter revenue, with full-year 2024 revenue reaching $14.6 million compared to $13.7 million in 2023. This growth underscores the company’s successful strategies in expanding its market presence and capitalizing on emerging opportunities. 2. **Gross Margin Improvement**: The company’s gross margins saw substantial improvement, with GAAP gross margin rising to 56.3% in Q4 2024 from 47% in the previous quarter, and non-GAAP gross margin reaching 71.6%. This marks a significant turnaround from the negative margins experienced in Q4 2023, reflecting a favorable product mix and reduced inventory write-downs. 3. **Effective Cost Reduction Strategies**: Peraso has successfully reduced its operating expenses by 20% year-over-year, benefiting from previous cost reduction actions. This efficient cost management has contributed to the improved financial performance. 4. **Strong Demand for mmWave Technology**: The company attributes its success to the strong demand for its mmWave technology and effective cost reduction strategies. The mmWave technology continues to gain traction, evidenced by a $3.6 million purchase order from a strategic customer. This renewed demand and increasing production orders highlight the growing market acceptance and potential of mmWave solutions. In conclusion, Peraso's earnings surprise in Q3 2023 can be attributed to a combination of revenue growth, gross margin improvement, effective cost reduction strategies, and strong demand for its mmWave technology. These factors collectively contributed to the company's financial performance and turnaround in that quarter.