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DATE

Monday, May 11, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Ronald Glibbery
  • Chief Financial Officer — James W. Sullivan

TAKEAWAYS

  • Total Net Revenue -- $1 million, down from $2.9 million in the prior quarter and $3.9 million in 2025, reflecting a delay in shipment from an Asia-based supplier.
  • Product Revenue -- $700 thousand, compared with $2.8 million in the prior quarter and $3.8 million in 2025; decrease primarily due to lower shipments of millimeter wave products and significant reduction in legacy memory ICs because of end of life.
  • Millimeter Wave Product Revenue -- $600 thousand, a decrease from $2.4 million in the prior quarter and $1.5 million in 2025, indicating reduced shipments.
  • Gross Margin -- 61.5%, higher than the previous quarter’s 52.2% but lower than 69.3% in 2025; rise attributed to a higher share of nonrecurring engineering (NRE) revenue sequentially, with the annual fall due to fewer legacy memory IC sales.
  • GAAP Operating Expense -- $3.1 million, versus $2.8 million in the prior quarter and $3.2 million in 2025.
  • Non-GAAP Operating Expense -- $2.9 million, up from $2.7 million in the prior quarter and down from $3.1 million in 2025, maintaining approximately $3 million per quarter as a result of cost reductions and ongoing initiatives.
  • GAAP Net Loss -- $2.5 million, or $0.22 per share, compared with $1.2 million, or $0.13 per share, in the prior quarter and $500 thousand, or $0.08 per share, in 2025.
  • Non-GAAP Net Loss -- $2.3 million, or $0.20 per share; previously $1.2 million, or $0.13 per share, in the prior quarter and $400 thousand, or $0.07 per share, in 2025.
  • Adjusted EBITDA -- Negative $2.3 million, compared to negative $1.1 million in the prior quarter and negative $300 thousand in 2025.
  • Cash Balance -- $2.7 million at quarter end, down from $2.9 million at the end of 2025; decline reflects operating loss and $2.5 million in expenditures, partially offset by $2.3 million in net proceeds from the at-the-market offering program.
  • Outstanding Shares -- 14.2 million common and exchangeable shares as of the call, representing an increase from 11.6 million used for EPS calculations; CFO James W. Sullivan stated, “with additional activity we are probably around 14.5 million common shares and exchangeable shares outstanding.”
  • Revenue Outlook -- Management expects total net revenue of approximately $1.2 million for the next quarter, based on current shipments and backlog.
  • Gross Margin Guidance -- CFO James W. Sullivan said, “I expect margins to come back down into the 50s,” indicating a shift back to a higher percentage of product revenue versus NRE.
  • Military & Tactical Communications Market -- CEO Ronald Glibbery emphasized, “the military, defense, and security communications business is a very important part of our future,” highlighting stealth and non-jammable communications as competitive advantages.
  • New Customer Wins -- A defense contractor, Intact, selected Peraso Inc.’s 60 gigahertz millimeter wave technology for next-generation drone IFF (Identification Friend or Foe) systems, with initial production shipments delivered mid-April.
  • Field Trials & Order Cadence -- CEO Ronald Glibbery stated, “For the August field trials, we expect to start to see volume later in Q3 and Q4,” pointing to potential production in 2027.
  • Fixed Wireless Access Demand -- Subdued near-term demand cited, attributed to memory chip shortages and high prices, confirmed by customer feedback and acknowledged industry-wide.
  • Supply Chain Mitigation -- CEO Ronald Glibbery commented, “we are back on track” after resolving a supplier issue, and stated “we have now, I would say, robustly fixed” the exposed flaw with alternative suppliers.
  • Strategic Review Ongoing -- The process continues in coordination with a financial adviser, with no new updates disclosed regarding potential mergers, asset sales, or capital transactions.
  • Edge AI Growth Initiatives -- Management cited ongoing technology evaluations and engagements with multiple new prospective customers in Edge AI, including robotaxis, last-mile delivery, drones, and autonomous vehicles.
  • NRE Revenue Drivers -- CEO Ronald Glibbery identified both tactical defense communications and Edge AI system optimization as main sources contributing to nonrecurring engineering revenue for the quarter.

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RISKS

  • Management cited, near-term visibility, particularly within fixed wireless access, is below where we would like it to be due to the combination of broader market dynamics and irregular customer order patterns,
  • CEO Ronald Glibbery identified ongoing subdued demand, stating, a combination of current market dynamics, including the shortage and related increase of pricing of memory chips, are contributing to subdued near-term demand and purchase order activity from existing customers,
  • CFO James W. Sullivan noted the outlook is challenged by irregular, lumpy order patterns from our customers. and higher memory device prices affecting certain customers.

SUMMARY

Management reported a significant year over year and sequential revenue decline, driven by delayed shipments and reduced legacy product sales. The company executed initial shipments of its 60 gigahertz solution to a defense contractor, Intact, marking progress in tactical communications and expanding the customer base beyond fixed wireless. Management continues to explore strategic alternatives, while emphasizing ongoing cost control, NRE contribution, and intensified focus on Edge AI and military communications as expansion drivers.

  • Management reported that first quarter NRE was attributed to optimizing our system for Edge AI. with expectation for further growth in this segment as new customer interest builds out.
  • The supplier issue affecting product shipment timing in the first quarter has been the issue has been completely resolved with measures enacted to reduce future reliance on single suppliers.
  • Projected gross margin will decrease in the next quarter, driven by a shift back toward a higher share of traditional product revenue versus NRE.
  • Management highlighted industry-wide inventory and supply disruptions in memory devices as the primary causes for fixed wireless access market softness, as confirmed directly by customers.

INDUSTRY GLOSSARY

  • NRE (Nonrecurring Engineering): Revenue from one-time engineering services, such as design or system optimization, often tied to specific customer or project requirements, distinct from ongoing product sales.
  • Fixed Wireless Access (FWA): Wireless broadband service delivered to fixed locations using radio links as an alternative to wired connections, often leveraging high-throughput millimeter wave technology.
  • Edge AI: Artificial intelligence computations performed on distributed devices (robots, vehicles, drones, etc.) close to where data is captured, enabling real-time processing and control without reliance on centralized cloud infrastructure.
  • IFF (Identification Friend or Foe): Technology used in defense systems, including drones, to distinguish friendly from hostile forces for secure communications and targeting decisions.

Full Conference Call Transcript

James W. Sullivan: Good afternoon. Thank you for joining today's conference call to discuss Peraso Inc.'s first quarter 2026 financial results. I am James W. Sullivan, CFO of Peraso Inc., and joining me today is Ronald 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 Inc.’s website at parasoinc.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 Investor Relations 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 fact could be deemed as forward-looking. Peraso Inc. advises caution in 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 Inc. on the date hereof.

These statements involve known and unknown risks, uncertainties, and other factors that may cause Peraso Inc.'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 Inc.'s public filings with the SEC. Peraso Inc. 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-Ks, 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 will now turn the call over to our CEO, Ronald Glibbery, for his prepared remarks. Ron?

Ronald Glibbery: Thank you, Jim. Good afternoon, and welcome to everyone joining us on the call and webcast. We appreciate you taking the time to be here today. First quarter results were generally in line with our published revised expectations, with revenue negatively impacted by the anticipated delay of shipment of a sizable order which represented a significant portion of our first quarter backlog due to material availability from one of our Asia-based suppliers. We shipped this order in the current quarter, and we have since also begun taking steps to reduce our future reliance on any single supplier.

While our top-line results reflected this headwind, during the quarter we continued to maintain active customer engagement across all of our target and markets, including advancing multiple new opportunities for our 60 gigahertz technology in tactical communications and edge AI applications. Turning to slide four, fixed wireless access continues to represent the largest and most mature end market for our 60 gigahertz solutions. Although a combination of current market dynamics, including the shortage and related increase of pricing of memory chips, are contributing to subdued near-term demand and purchase order activity from existing customers, we believe that we remain well positioned to benefit from a recovery in orders once market conditions improve.

As highlighted on our previous conference call, in March, we secured a notable new customer win with MicroTeq’s launch of its next-generation 60 gigahertz NRAY point-to-point product at Mobile World Congress, incorporating Peraso Inc. technology. With MicroTeq’s global reach and market share across a broad number of wireless Internet service providers, we believe this newly introduced product will result in incremental fixed wireless access deployments using our industry-leading 60 gigahertz technology. More broadly, our fully integrated Doom platform continues to resonate with operators that are pursuing high performance but also cost-effective wireless deployments in challenging urban environments. The combination of multi-gigabit throughput, low power, long range, and point-to-multipoint capability remains a compelling alternative to traditional backhaul approaches.

As such, we are continuously supporting a range of proof-of-concept evaluations with wireless ISPs worldwide, which we believe have the potential to translate into additional production orders for existing fixed wireless customers. Moving to slide five, the interest level in 60 gigahertz technology for tactical communications continues to gain momentum, and we increasingly see our expansion into this market as a potentially significant contributor to Peraso Inc.'s future growth. Although the timing and magnitude of orders remains uncertain, the opportunity in tactical communications stems from the fundamental attributes of our millimeter wave technology, including narrow-beam directional links, dynamic beam steering, oxygen attenuation, and utilizing unlicensed spectrum.

Together, these attributes provide for inherently stealthy communications—low probability of detection, low probability of interception, robust anti-jamming performance—making 60 gigahertz uniquely well suited for mission-critical application. On today's increasingly modernized battlefield, the need for secure and clandestine communications naturally spawns numerous different send-and-receive scenarios, including forward operating bases and surveillance, vehicle-to-vehicle, air-to-ground, and ship-to-shore communications. After extensive collaboration to evaluate potential applications for our technology within tactical communications, in March we achieved a notable milestone with the announcement of Intact as a defense contractor customer. Our initial engagement with this customer began in 2024 and resulted in a jointly developed system solution for enhanced situational awareness on the battlefield.

This novel deployable solution continues to generate positive feedback and is scheduled for additional planned field trials in the August timeframe. Separately, as part of our customer announcement in March, we disclosed that Intact selected Peraso Inc.'s 60 gigahertz millimeter wave technology for its next-generation drone identification friend or foe system. For additional context, this is a purpose-built solution designed for highly contested electronic warfare environments. It enables secure, real-time authentication between friendly drones and ground forces, allowing counter-drone systems and operators to quickly distinguish friend from both. Peraso Inc.'s integrated beam-forming wireless transceivers provide the low-power, highly directional connectivity that is essential for maintaining stealth and reliable communication in dense battlefield conditions.

In mid-April, we delivered initial limited production shipments of our modules in support of Intact's next-generation drone platform. This extended engagement with our lead customer further reinforces our view that tactical communication represents a significant long-term market opportunity. Our announced collaboration has also served to increase the visibility and awareness of 60 gigahertz technology and the advantage that it brings to mission-critical tactical defense applications. In recent months, we have been approached by additional prospective customers and partners seeking to explore how Peraso Inc.'s 60 gigahertz millimeter wave technology could be incorporated into their future product road maps. Needless to say, we are excited about our growing momentum in tactical communications.

Turning to slide six, in addition to tactical communications, we continue to identify and be actively engaged on prospective growth opportunities in other areas outside of our core fixed wireless access market. We have frequently referred to these areas as adjacent markets because they are seemingly diverse and not easily grouped into a common end market category. That said, a majority of the adjacent opportunities we are targeting today involve the application of Edge AI, areas such as last-mile delivery, autonomous vehicles, and drones. One specific example that I highlighted on our previous conference call is our announced collaboration with Fireworks on their VX 60 platform for robotaxis.

Regardless of whether it is an autonomous vehicle, drone, or humanoid robot, implementing Edge AI frequently comes with the burden of requiring high-bandwidth wireless connectivity to upload massive amounts of captured data from various sensors and cameras and then also download large blocks with updates to the device's operating system or instructions. While this requirement is relatively easy to address in scenarios with a single vehicle, drone, or robot, a fleet of vehicles parked side by side, a swarm of drones in the air, or a factory floor full of robots could easily pose a significant challenge for traditional wireless technology.

Although purely illustrative, this slide provides a clear visual depiction of the challenges as well as the value proposition delivered by 60 gigahertz wireless solution. At the bottom, with a traditional 5 gigahertz Wi‑Fi network, signals flood the space like a light bulb, creating widespread co-channel interference that collapses capacity and impairs reliability. Whereas at the top of the slide, 60 gigahertz technology utilizes directional narrow-beam links that eliminate interference, enabling numerous simultaneous multi-gigabit connections with low latency in the same density footprint. With 60 gigahertz, you not only overcome the challenge, but you achieve maximum throughput, zero co-channel interference, and reliable real-time robot control.

Although purely illustrative, the relative outcomes shown here are representative of the real-world challenges associated with implementing Edge AI at scale in close proximity. I want to briefly emphasize that these exact same dynamics and respective outcomes extend beyond the factory floor to effectively any centralized hub for autonomous Edge AI devices. Today, we are working to advance ongoing discussions and have technology evaluations underway with multiple new prospective customers across a series of Edge AI and connected autonomous device applications. To the extent we are successful at converting these activities into design wins and future product ramps, it will represent expansion of our existing served market and also contribute to diversification of our future revenue base.

In closing, while near-term visibility, particularly within fixed wireless access, is below where we would like it to be due to the combination of broader market dynamics and irregular customer order patterns, we remain optimistic about the breadth of our customer engagement. We believe there is growing recognition of 60 gigahertz millimeter wave’s unique value proposition, and we are continuing to pursue expanding opportunities for 60 gigahertz wireless technology within tactical communication as well as other markets that require high bandwidth and secure connectivity beyond our core fixed wireless access business.

Our primary focus over the coming quarters is to secure new purchase orders while also increasing the conversion rate of existing customer engagements into design wins, with the goal of achieving renewed top-line growth. With that, I will turn the call over to Jim to review the financial results and share our outlook for the second quarter.

James W. Sullivan: Thank you, Ron. Turning now to the results for 2026. Total net revenue for the first quarter was $1 million, compared with $2.9 million for the prior quarter and $3.9 million for 2025. Product revenue in the first quarter was $700 thousand, compared with $2.8 million in the prior quarter and $3.8 million in 2025. The decrease in product revenue for 2026 from the comparable periods was primarily attributable to lower shipments of millimeter wave products and, year-over-year, also reflected a significant reduction in shipments of legacy memory ICs due to the previously announced product end of life.

Specific to sales of millimeter wave products, revenues were $600 thousand in 2026, compared with $2.4 million in the prior quarter and $1.5 million in 2025. Gross margin was 61.5% in the first quarter of 2026, compared with 52.2% in the prior quarter and 69.3% in the year-ago quarter. The sequential increase was primarily attributable to a higher mix of revenue from nonrecurring engineering products, while the year-over-year decline primarily reflected the decrease in sales of legacy memory ICs. GAAP operating expense for 2026 was $3.1 million, compared with $2.8 million in the prior quarter and $3.2 million in 2025.

Non-GAAP operating expenses, which exclude stock-based compensation, were $2.9 million in the first quarter, compared with $2.7 million in the prior quarter and $3.1 million in 2025. Our recent non-GAAP operating expenses level of approximately $3 million per quarter continues to reflect the benefits realized from previously implemented cost reductions and ongoing cost containment initiatives. GAAP net loss for 2026 was $2.5 million, or a loss of $0.22 per share, compared with a net loss of $1.2 million, or a loss of $0.13 per share, in the prior quarter, and compared with a net loss of $500 thousand, or a loss of $0.08 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 2026 was $2.3 million, or a loss of $0.20 per share. This compared with a non-GAAP net loss of $1.2 million, or a loss of $0.13 per share, in the prior quarter and a net loss of $400 thousand, or a loss of $0.07 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 2026 was approximately 11.6 million shares.

Adjusted EBITDA, which we define as GAAP net income or loss as 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 $2.3 million in 2026, compared with negative $1.1 million in the prior quarter and negative $300 thousand in 2025. With regard to the balance sheet, as of 03/31/2026, the company had approximately $2.7 million of cash, compared with $2.9 million as of 12/31/2025.

The net decrease of approximately $200 thousand in the company's cash balance at quarter end reflected the operating loss and capital expenditures of $2.5 million, partially offset by $2.3 million of net proceeds from sales under the company's at-the-market offering program during the first quarter. As of today's call, the company has approximately 14.2 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 transaction, as well as various potential sources of additional capital.

Aside from confirming that the strategic review process continues to be ongoing, in coordination with the company's financial adviser, there are no related updates to share on today's call from what we have previously disclosed. Now turning to our outlook, as Ron previously discussed, overall visibility into future near-term demand is lower due to irregular, lumpy order patterns from our customers. Additionally, we believe that certain of our customers are being negatively impacted by the higher pricing and reduced availability of memory devices. Based on shipments to date and existing order backlog, the company currently expects total net revenue for 2026 to be approximately $1.2 million. This concludes our prepared remarks, and we thank you for your time this afternoon.

We will now open the call for questions. Operator, please commence the Q&A session.

Operator: Certainly. The floor is now open for questions. If you wish to join the queue to ask a question at this time, please press 1 on your telephone keypad to join the queue. You will hear a brief tone to indicate you have joined the question queue. We do ask, if listening on speakerphone today, that you pick up your handset while asking your question to provide optimal sound quality. Once again, please press 1 on your telephone keypad at this time if you wish to join the queue to ask a question. Please hold a moment while we poll for questions. And we have a question from Kevin Liu of K. Liu and Company. Kevin, your line is live.

Please go ahead.

Kevin D. Liu: Hi. Good afternoon, guys. I just wanted to start here first on the supply chain challenges that impacted the Q1 orders. Did you see that affect other orders outside of the large one that was shipped here in Q2? And was there any sort of ongoing spillover effect, even though you were able to ship that one—maybe there are still shortages that are affecting other orders? Wondering what sort of color you can give us there.

Ronald Glibbery: Sure. I can speak to that, Kevin. Thanks for joining the call. The product that was affected is not exclusive to that specific customer, so it affected a broad product line. Although, clearly, there was really one customer that was affected the most. It is kind of a long story, but the issue has been completely resolved. The manufacturer was testing parameters that were not important to us. We resolved that, and we are back on track. Of course, in the meantime, it exposed a flaw in our supply chain that we have now, I would say, robustly fixed in terms of having alternative suppliers. We do not expect to see this again.

This was a one-off that unfortunately hit the first quarter, but it is fully resolved.

Kevin D. Liu: That is good to hear. And with respect to your FWA customers, both on the existing customer side as well as some of the newer ones that are starting to move into production, what exactly is creating the visibility challenges? Are they working through significant inventory levels after purchases last year? Is this more related to being still on preproduction given some of the memory shortages? What exactly can we pinpoint this to?

Ronald Glibbery: The consistent feedback is the memory issue. That is a fact in the marketplace now that several customers have confirmed. If we look around the industry, we have seen that with other companies that rely on DRAM. We are hoping this situation stabilizes in the next quarter, but we will wait and see. I would say that is the most consistent factor. Also, a lot of these are new customers that are coming online, and sometimes there are glitches ramping up. For example, one customer had an issue sourcing their casing from a supplier. That is completely resolved now, but there will be a bit of a growing period.

We expect to see a much better performance over the course of the rest of the year.

Kevin D. Liu: Got it. And on the defense side of things, now that friend-or-foe system has shipped and is in production, what do you think the cadence of orders looks like, either over the course of this year or in future years? Is there a small initial shipment with much bigger volumes behind it? And then more generally, you mentioned some field trials coming up in August. How does that opportunity differ from what you have done so far on the defense side?

Ronald Glibbery: Broadly for the company, our fixed wireless business—we feel that we have a very high percentage market share, and that business will stabilize. From our perspective, the military, defense, and security communications business is a very important part of our future. The real win there is secure communications that cannot be detected, given our beam forming—very difficult to detect and even more difficult to jam. This is becoming broadly an issue in military, particularly with regards to drones. We have all seen footage from the wars in Ukraine and in the Middle East where there is so much drone activity.

Historically, a lot of that activity has been facilitated by wireless, but adversaries are getting very smart at how to jam wireless. You have seen non-jammable systems or people going to fiber optic, but those solutions have many problems. Broadly, our win in military is the stealth capability and the non-jammable communications capabilities. The IFF that we announced is an important subset. The key win there is that it cannot be detected, and the pain point on the battlefield is friendly fire. Ironically, friendly fire was our first foray into the market, but what we are discovering now—and you will start seeing the orders—is really broadly this stealth and non-jammable communications capability.

For the August field trials, we expect to start to see volume later in Q3 and Q4. In Eastern Europe, we are seeing a real sense of urgency to get non-jammable wireless. I think we will start to see NRE later this year and then real production in 2027. One interesting point from recent conversations is Starlink in these war zones, which also uses millimeter wave technology. A core problem is that it relies on GPS, and adversaries jam the GPS, which makes the system inoperable. With our technology, we do not need GPS. We think we have saturated the market in fixed wireless; once that stabilizes and memory prices stabilize, we will see that market grow.

But from our perspective, we see the military market being at least as big, and probably much larger, than that market. You can expect to hear a lot of focus from us over the next few quarters regarding what we are doing on that front.

Kevin D. Liu: I appreciate the detail on that. And then with respect to NRE, what sort of programs are contributing to that number in the first quarter? To what extent do those continue versus any other opportunities you would want to highlight within your pipeline, either related to Edge AI or some of the other areas?

Ronald Glibbery: There are really two broad areas. For the military, the term we refer to is size, weight, and power—people want them smaller and lighter with less power consumption. Pretty much everything for the military is battery operated—think of drones and soldiers—so power consumption is critical. Optimizing those parameters for our customers is a source of NRE, and that will definitely continue. For Edge AI—the slide we showed about Edge AI where we show the silos created by our technology versus traditional Wi‑Fi really underscores the win. One of our engineers called it our superpower.

On a factory floor, the only way to solve the interference problem with Wi‑Fi is to create little rooms for each of the robots, which is not practical. Some of the first quarter NRE was attributable to optimizing our system for Edge AI. We will continue to see that grow over the rest of this year as we get more customers involved in that space, with the idea to optimize for those situations. The two main sources we feel are contributing to our NRE are tactical communications and Edge AI.

Kevin D. Liu: Got it. And maybe a last couple of housekeeping ones for Jim before I turn it over. On the gross margin for the Q2 guidance, there was a nice margin for Q1. Is that sustainable given the mix of revenue that you see, or is it going to shift more heavily back towards the product side?

James W. Sullivan: No, we expect it to shift more heavily back to the product side. With that large order pushing, the NRE was a larger percentage, so it pushed up the margins. We will see a much higher percentage of product revenue in Q2. I expect margins to come back down into the 50s.

Kevin D. Liu: Makes sense. And then just lastly, what kind of share count should we be thinking about now for Q2 and beyond?

James W. Sullivan: In the script, we said approximately 14.2 million. We have been active in our ATM program. We will provide a full update on that in the 10‑Q filing, but with additional activity we are probably around 14.5 million common shares and exchangeable shares outstanding.

Kevin D. Liu: Got it. Thank you for that, and good luck here in the quarter.

Ronald Glibbery: Thanks a lot, Kevin. Thanks, Kevin. Thank you.

Operator: I show there are no further questions in the queue at this time. That will conclude today's conference call. Thank you for your participation, and you may now disconnect.

Ronald Glibbery: Thank you.