What is the anticipated effect on the company's balance sheet, particularly regarding working capital and debt levels?

Balance‑sheet outlook

The 30 % cut in operating expenses combined with the “preliminary” Q2‑2025 revenue lift means Perimeter should generate a markedly stronger cash‑flow conversion this quarter. With a higher top‑line and a leaner cost base, the company’s working‑capital cycle is expected to compress – cash collections from the expanding commercial pipeline will out‑pace the out‑flow for inventory, R&D supplies and SG&A. In practice, we can anticipate a rise in net cash (or cash‑equivalents) and a modest increase in trade receivables, while payables should stay flat or even decline as the firm negotiates better terms with vendors.

Because the cash‑generation premium now exceeds the cash‑burn that has historically driven Perimeter’s financing needs, the pressure to raise additional debt is likely to ease. Management could use the surplus to either pay down existing borrowings or to shore‑up the revolving credit facility, thereby lowering the net‑debt‑to‑EBITDA ratio and improving its credit profile. Even if a portion of the newly‑generated cash is earmarked for growth‑capex (e.g., expanding the sales force or scaling AI‑platform infrastructure), the net effect should still be a reduction in leverage and a healthier balance sheet.

Trading implication

The balance‑sheet tightening—higher working capital, lower net‑debt—should be priced in by the market as a credit‑quality upgrade and a catalyst for upside in the equity. Expect the stock to hold its recent gains and potentially test the next technical resistance (e.g., the 20‑day EMA or the prior swing‑high) as investors re‑rate the company on the basis of a stronger liquidity position and a clearer path to profitability. A short‑cover or buying on pull‑back would be appropriate if the price dips below the current support level, reflecting the improved fundamentals.