Financial Data and Key Metrics Changes - For Q1 2025, the company reported gross bookings of $13.7 million, revenue of $14.1 million, and a non-GAAP gross margin of 82% [8][30] - Non-GAAP operating loss was $2.5 million, and non-GAAP net loss per share was $0.07 [9][31] - The company expects Q2 2025 revenue in the range of $12 million to $16 million and full year 2025 revenue between $64 million and $70 million, reflecting a year-over-year increase of up to 17% [9][38] Business Line Data and Key Metrics Changes - TCAD bookings were down 42% year-over-year, while EDA bookings increased by 48% year-over-year, primarily due to the addition of the PPC product line [32] - Revenue from software licenses accounted for 71% of total revenue, while maintenance and services accounted for 29% [33] - The SiP product line saw an increase in revenue of 89% year-over-year [33] Market Data and Key Metrics Changes - Revenue from the Americas was down 34% year-over-year, while Asia Pacific revenue decreased by 5% [34] - EMEA revenue increased by 8% year-over-year, supported by increased TCAD sales in that region [34] Company Strategy and Development Direction - The company is focusing on strategic acquisitions to expand its serviceable addressable market (SAM), targeting high-growth sectors such as AI, photonics, and IoT [5][10] - Recent acquisitions have added an estimated $600 million to the SAM, increasing it from $3.8 billion in 2024 to $4.4 billion in 2025 [19] - The company aims to achieve long-term growth through innovation, R&D, and disciplined management of operating expenses and cash flow [10][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term macroeconomic headwinds that resulted in the deferral of certain customer orders, representing less than 10% of annual revenue [6][27] - Despite these challenges, management remains confident in the long-term growth trajectory and has set conservative guidance for Q2 and full year 2025 [6][39] - The company plans to introduce annual contract value (ACV) as a new performance metric to provide better insight into recurring revenue [7][36] Other Important Information - The company recognized an incremental $13.1 million charge related to ongoing litigation, impacting operating expenses [28] - Non-GAAP gross margin for the quarter was down from 88% in Q1 2024 to 82% in Q1 2025, primarily due to lower revenue and increased costs [35] Q&A Session Summary Question: Clarification on acquisition-related revenue in guidance - Management clarified that the $5 million of acquisition-related revenue is included in the $67 million revenue guidance for calendar 2025, with a portion expected in Q2 [41][43] Question: Impact of macroeconomic conditions on guidance - Management indicated that the macroeconomic environment has led to order delays, estimated to impact revenue by about 10%, which has been accounted for in the new guidance [44][46] Question: Timing for additional acquisitions - Management stated that while they are open to further acquisitions, the focus is currently on integrating recent deals and maximizing revenue synergies [48][50] Question: Progress on FTCO pipeline - Management reported ongoing R&D evaluations with existing customers and expects significant progress in the second half of the year [54][57] Question: Expected operating expenses for the year - Management provided an estimate of approximately $5 million in operating expenses related to the recent acquisitions for the remainder of the year [62][65] Question: Long-term growth plans amidst macro challenges - Management reassured that the fundamental aspects of the business remain strong, with expectations of achieving up to 17% revenue growth for the year [68][70]

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, and related disclosures [Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents the unaudited condensed consolidated financial statements for Silvaco Group, Inc. as of March 31, 2025, and for the three-month periods ended March 31, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$138.1 million** from **$142.3 million**, while total liabilities increased to **$54.5 million** from **$42.3 million**, leading to a decline in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $99,922 | $107,280 | | **Total assets** | $138,135 | $142,345 | | **Total current liabilities** | $46,744 | $34,488 | | **Total liabilities** | $54,542 | $42,262 | | **Total stockholders' equity** | $83,593 | $100,083 | - Goodwill increased from **$9.0 million** to **$14.3 million**, and Intangible assets increased from **$4.4 million** to **$10.0 million**, reflecting the recent acquisition[6](index=6&type=chunk) - Accrued expenses and other current liabilities rose significantly from **$19.8 million** to **$32.4 million**, largely due to the accrued litigation claim[6](index=6&type=chunk) [Condensed Consolidated Statements of (Loss) Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20%28Loss%29%20Income) For the three months ended March 31, 2025, the company reported a net loss of **$19.3 million**, a stark contrast to the **$1.4 million** net income in the same period of 2024, driven by decreased revenue and a substantial litigation claim Q1 2025 vs. Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $14,092 | $15,889 | | Gross profit | $11,076 | $13,916 | | Total operating expenses | $30,708 | $11,528 | | Operating (loss) income | $(19,632) | $2,388 | | Net (loss) income | $(19,273) | $1,378 | | Basic and diluted EPS | $(0.67) | $0.07 | - A significant charge of **$13.1 million** for an 'Estimated litigation claim' was recorded in Q1 2025, which was the primary driver of the operating loss[9](index=9&type=chunk) [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income) The company reported a comprehensive loss of **$19.1 million** for Q1 2025, primarily due to the net loss, slightly offset by foreign currency translation adjustments Q1 2025 vs. Q1 2024 Comprehensive (Loss) Income (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (loss) income | $(19,273) | $1,378 | | Other comprehensive income (loss) | $206 | $(185) | | Comprehensive (loss) income | $(19,067) | $1,193 | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity decreased from **$100.1 million** to **$83.6 million** due to the net loss of **$19.3 million**, partially offset by stock-based compensation expense - The accumulated deficit increased from **$(28.0) million** to **$(47.3) million** due to the net loss of **$19.3 million** in Q1 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$1.1 million**, while investing activities provided **$11.4 million**, primarily from marketable securities maturities offsetting acquisition costs, leading to a **$9.9 million** increase in cash Q1 2025 vs. Q1 2024 Cash Flows (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,135) | $(2,572) | | Net cash provided by (used in) investing activities | $11,404 | $(10) | | Net cash (used in) provided by financing activities | $(503) | $3,873 | | Net increase in cash and cash equivalents | $9,883 | $1,318 | - A non-cash charge of **$13.1 million** for the estimated litigation claim was a major adjustment reconciling net loss to operating cash flow[17](index=17&type=chunk) - Investing activities were dominated by **$23.0 million** in maturities of marketable securities and a **$11.5 million** cash payment for the acquisition of Process Proximity Compensation[17](index=17&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, the **$11.5 million** acquisition of Cadence's OPC tool suite, a **$13.1 million** litigation claim, revenue recognition, and the subsequent acquisition of Tech-X Corporation - On March 4, 2025, the company acquired Cadence's Process Proximity Compensation (OPC) product line for **$11.5 million** in cash, resulting in **$5.3 million** of goodwill and **$6.0 million** of intangible assets[44](index=44&type=chunk)[45](index=45&type=chunk)[47](index=47&type=chunk) - The company recorded an additional charge of **$13.1 million** for an estimated litigation claim related to the Nangate lawsuit, bringing the total probable loss estimate to **$24.4 million** based on a preliminary settlement agreement[78](index=78&type=chunk) - As of March 31, 2025, the company had **$33.7 million** in remaining performance obligations, with approximately **45%** expected to be recognized as revenue over the next 12 months[41](index=41&type=chunk) - Subsequent to the quarter end, on April 29, 2025, the company acquired Tech-X Corporation for **$5.0 million** in cash and stock, plus up to **$2.0 million** in contingent consideration[83](index=83&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **11%** year-over-year revenue decline to softening demand and economic challenges, with the significant net loss primarily driven by a **$13.1 million** litigation charge, while strategic acquisitions enhance product offerings and liquidity remains strong Q1 2025 vs. Q1 2024 Results of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total revenue | $14,092 | $15,889 | (11)% | | Gross profit | $11,076 | $13,916 | (20)% | | Operating (loss) income | $(19,632) | $2,388 | (922)% | | Net (loss) income | $(19,273) | $1,378 | (1,499)% | - Bookings decreased to **$13.7 million** in Q1 2025 from **$16.1 million** in Q1 2024, reflecting a decline in orders from Asia due to economic challenges and U.S.-China trade tensions[89](index=89&type=chunk)[131](index=131&type=chunk) - Operating expenses increased **166%** YoY, primarily due to a **$13.1 million** estimated litigation claim, **$1.5 million** in stock-based compensation, and a **$0.7 million** increase in acquisition-related legal fees[118](index=118&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) Reconciliation of GAAP to Non-GAAP Operating (Loss) Income (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Operating (loss) income (GAAP)** | **$(19,632)** | **$2,388** | | Acquisition-related estimated litigation claim and legal costs | $13,795 | $594 | | Stock-based compensation expense | $2,277 | $— | | Other adjustments | $1,065 | $336 | | **Non-GAAP operating (loss) income** | **$(2,495)** | **$3,318** | [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Silvaco is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Silvaco is exempt from providing quantitative and qualitative disclosures about market risk[162](index=162&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO concluded that the company's disclosure controls and procedures were effective at the end of the reporting period[163](index=163&type=chunk) - No changes in internal control over financial reporting (ICFR) occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's ICFR[164](index=164&type=chunk) [PART II. Other Information](index=33&type=section&id=PART%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, and other required disclosures [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) This section directs readers to Note 11 of the unaudited condensed consolidated financial statements for information regarding the company's current legal proceedings, specifically the Nangate litigation - Information regarding legal proceedings is detailed in Note 11 of the financial statements[166](index=166&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company outlines significant risks including intense competition, dependence on the cyclical semiconductor industry, economic downturns, potential litigation, and risks associated with being a 'controlled company' due to majority ownership - The company faces significant competition from larger entities like Synopsys, Cadence, and Siemens EDA, which have greater resources[169](index=169&type=chunk)[170](index=170&type=chunk) - The business is highly dependent on the cyclical semiconductor and photonics industries, and economic downturns, especially in China (which accounted for **14%** of revenue in Q1 2025), can significantly reduce sales[180](index=180&type=chunk)[183](index=183&type=chunk)[187](index=187&type=chunk) - The Nangate litigation poses a significant financial risk, with a potential settlement leading to a **$13.1 million** charge in Q1 2025 and a potential appellate bond of up to **$35.4 million** if a settlement is not finalized[312](index=312&type=chunk) - The company is a 'controlled company' as the Pesic family holds over **50%** of the voting power, exempting it from certain Nasdaq corporate governance requirements, such as having a majority of independent directors[292](index=292&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's IPO on May 13, 2024, generated **$114.0 million** in gross proceeds, with net proceeds of **$106.0 million** used for general corporate purposes and debt repayment - The IPO on May 13, 2024, generated gross proceeds of **$114.0 million** and net proceeds of **$106.0 million**[354](index=354&type=chunk) - Proceeds were used for general corporate purposes and to repay **$2.0 million** of the 2022 Credit Line and **$4.3 million** of the East West Bank Loan[355](index=355&type=chunk) [Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - The company reports no defaults upon senior securities[356](index=356&type=chunk) [Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports no mine safety disclosures - The company reports no mine safety disclosures[356](index=356&type=chunk) [Other Information](index=65&type=section&id=Item%205.%20Other%20Information) The company reports no other information under this item - The company reports no other information under this item[356](index=356&type=chunk) [Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including key legal documents and officer certifications - The report includes key legal documents as exhibits, such as the Asset Purchase Agreement for the Cadence OPC acquisition and officer certifications required by the Sarbanes-Oxley Act[357](index=357&type=chunk)

Financial Performance & Guidance - FY 2024 Bookings were $65.8 million, a 13% increase, and Revenue was $59.7 million, a 10% increase[11] - Q1 2025 Revenue was $14.1 million, an 11% decrease year-over-year[34] - Q1 2025 Bookings were $13.7 million, a 15% decrease year-over-year[34] - The company is providing Q2 2025 Revenue guidance in the range of $12 million to $16 million, and full year 2025 Revenue guidance in the range of $64 million to $70 million, representing a 7% to 17% increase year-over-year[12] - The company is providing Q2 2025 Gross Bookings guidance in the range of $14 million to $18 million, and full year 2025 Gross Bookings guidance in the range of $67 million to $74 million, representing a 2% to 13% increase year-over-year[12] Strategic Initiatives & Market Expansion - The company expanded its Serviceable Addressable Market (SAM) by $600 million through acquisitions, including PPC and Tech-X, targeting AI, Photonics, and IoT markets[11] - The company's Total Addressable Market (TAM) is $4.4 billion, including $3.3 billion for Electronic Design Automation (EDA) and $0.5 billion for Fab Technology Co-Optimization (FTCO)[17] - Annual Contract Value (ACV) for the trailing twelve months ending Q1 2025 was $52.3 million, a 21% increase year-over-year[49] Product & Customer Highlights - TCAD accounted for 52% of Q1 2025 bookings at $7 million, while EDA contributed 41% at $5.6 million, and SIP made up 7% at $1 million[39] - The company landed 9 new customers for AI and Photonics in Q1 2025, representing 23% of bookings[15] - Expansion within existing customers accounted for 38% of Q1 2025 bookings[15]

Exhibit 99.1 Silvaco Reports First Quarter 2025 Financial Results Achieved gross bookings of $13.7 million and revenue of $14.1 million in the first quarter 2025 Signed 9 new customers in the first quarter 2025 and expanded relationship with existing customers across key markets including AI, Photonics, and IoT Expanded Product Portfolio with the Acquisition of Tech-X Corporation SANTA CLARA, Calif. - May 7, 2025 -- Silvaco Group, Inc. (Nasdaq: SVCO) ("Silvaco" or the "Company"), a provider of TCAD, EDA sof ...

Core Insights - Silvaco Group, Inc. reported gross bookings of $13.7 million and revenue of $14.1 million for Q1 2025, reflecting a year-over-year decline of 15% in gross bookings and an 11% decrease in revenue [1][8] - The company signed 9 new customers and expanded relationships with existing clients in key markets such as AI, Photonics, and IoT [1][4] - Silvaco completed the acquisition of Tech-X Corporation, enhancing its product portfolio and expanding its addressable market by an estimated $600 million [1][4] Financial Performance - Revenue of $14.1 million in Q1 2025, down 11% year-over-year and down 21% quarter-over-quarter [8] - TCAD revenue was $7.9 million, a 26% decrease year-over-year, while EDA revenue increased by 8% to $5.1 million, including $1.9 million from the PPC product line [8] - SIP revenue surged by 89% year-over-year to $1.1 million, driven by new bookings in automotive and IoT sectors [8] Customer Acquisition and Market Expansion - The company acquired 9 new customers, with approximately 23% of gross bookings coming from AI infrastructure, Photonics, and IoT markets [4] - Existing customers contributed to 38% of gross bookings, indicating strong retention and expansion opportunities [4] - Partnerships with notable entities, such as Excelliance MOS and Kyung Hee University, were established to advance next-generation technologies [4] Strategic Initiatives - Silvaco's CEO emphasized the importance of innovation and solid fundamentals to sustain customer momentum and drive growth in EDA and TCAD product lines through 2025 [2] - The company is committed to defending shareholder value through performance, transparency, and responsible capital management [2] - A new performance metric, Annual Contract Value (ACV), was introduced to provide additional insight into customer commitments and business momentum [4][22] Financial Outlook - For Q2 2025, Silvaco expects gross bookings in the range of $14.0 million to $18.0 million and revenue between $12.0 million and $16.0 million [12] - Full-year 2025 guidance includes projected revenue of $64.0 million to $70.0 million, representing a 7% to 17% increase from 2024 [12] - Non-GAAP gross margin is anticipated to be between 80% and 83%, compared to 86% in the second quarter of 2024 [12]

Core Insights - Silvaco Group, Inc. announced that Excelliance MOS has adopted its DTCO flow, which includes Victory TCAD™ and UTMOST IV™, to enhance the development of next-generation Silicon Carbide (SiC) power devices [1][2] Company Overview - Silvaco is a leading provider of TCAD, EDA software, and SIP solutions that facilitate semiconductor design and digital twin modeling through AI software and innovation [5] - The company offers solutions applicable across various sectors, including power, memory, photonics, CMOS, and display technologies [4] Technology and Solutions - The DTCO platform from Silvaco streamlines research and development for SiC technology, providing realistic process and accurate device simulation [2] - Silvaco's tools, including Victory Process™ and Victory Device™, support SiC-specific phenomena, enabling precise modeling of next-generation devices [2][3] - The integration of Victory DoE allows for rapid exploration of process variations, while UTMOST IV automates electrical measurements and SPICE model extraction [3] Market Position - Silvaco's simulation solutions are technology-agnostic and designed to empower engineers to innovate with greater speed and accuracy [4] - The company has a global presence with offices in North America, Europe, Brazil, China, Japan, Korea, Singapore, and Taiwan, catering to various markets including automotive, high-performance computing, and 5G/6G mobile [5]

Core Viewpoint - Silvaco Group, Inc. has announced a strategic partnership with Kyung Hee University to advance display technology through AI-driven Digital Twin modeling and FTCO integration [1][2][4] Partnership Details - The collaboration is a four-year initiative that began on February 1, 2025, focusing on Micro-LED and OLED technologies [1][2] - Silvaco will fund Ph.D. students at KHU and work closely with Professor Jin Jang's team to provide high-quality measurement data [2] Technological Integration - The partnership aims to combine experimental data with Silvaco's simulation tools and FTCO solution to create a comprehensive Digital Twin for display technology [2][3] - Silvaco will utilize its Victory TCAD™ simulators along with SmartSpice™ and UTMOST IV™ EDA tools to run simulations and develop a complete FTCO flow [3] Goals and Expectations - The collaboration seeks to demonstrate how FTCO and AI-enabled Digital Twins can enhance the development and production of advanced display technologies [3] - The integration of physical experimentation with virtual modeling is expected to improve decision-making speed and accuracy in manufacturing environments [3][4] Industry Impact - This partnership is seen as a significant advancement in optimizing next-generation display technologies, aiming to unlock new efficiencies in process optimization and yield improvement [4] - Silvaco's expertise in semiconductor design and digital twin modeling positions it well to lead innovations in display manufacturing and related fields [5]

Core Viewpoint - Silvaco Group, Inc. has announced the strategic acquisition of Tech-X Corporation to enhance its capabilities in multi-physics simulation software, which will accelerate innovation in semiconductor design and digital twin modeling through AI [1][3]. Group 1: Acquisition Details - The acquisition of Tech-X Corporation will integrate its multi-physics simulation tools with Silvaco's Victory TCAD platform, enabling customers to create more accurate digital twin models for various applications [2][3]. - Tech-X's expertise in high-performance, multi-node GPU-based computing will significantly improve simulation speed and accuracy for Silvaco's offerings [2][3]. Group 2: Strategic Implications - The CEO of Silvaco emphasized that this acquisition is a significant step in the company's growth strategy, particularly in expanding into AI applications and enhancing their technology and customer base [3]. - The addition of Professor John Cary, with over 40 years of experience in computational physics, is expected to accelerate innovation and expand Silvaco's presence in the growing photonics market [3]. Group 3: Company Background - Silvaco is a provider of TCAD, EDA software, and SIP solutions, serving various markets including semiconductor, photonics, automotive, and 5G/6G mobile [4]. - The company has a global presence with offices in North America, Europe, Brazil, China, Japan, Korea, Singapore, and Taiwan [4].

Core Insights - Silvaco Group, Inc. will release its financial results for Q1 2025 on May 7, 2025, after market close [1] - A conference call will be held at 5:00 p.m. Eastern time to discuss the results and the full year 2025 outlook [1][3] - Supplemental financial results and an earnings presentation will be available on the company's investor website [2] Company Overview - Silvaco is a provider of TCAD, EDA software, and SIP solutions that facilitate semiconductor design and AI through innovative software [3] - The company's solutions are utilized in various sectors including display, power devices, automotive, memory, high-performance computing, photonics, IoT, and 5G/6G mobile markets [3] - Silvaco is headquartered in Santa Clara, California, with a global presence across North America, Europe, Brazil, China, Japan, Korea, Singapore, and Taiwan [3]

Core Insights - Silvaco Group, Inc. has announced that ProMOS Technologies will utilize its Victory TCAD™ simulation solution to enhance the development of next-generation silicon photonics devices, aiming for improved accuracy, efficiency, and reliability in design [1][4] Company Overview - Silvaco is a provider of TCAD, EDA software, and SIP solutions that facilitate semiconductor design and digital twin modeling through AI innovation, serving various markets including display, power devices, automotive, memory, and 5G/6G mobile [5] Product Features - Victory Process™ is a comprehensive simulation solution that accurately models semiconductor fabrication steps such as etching, deposition, and diffusion, ensuring that simulated outcomes align closely with actual production processes [2] - The Victory TCAD solution supports applications in Photonics, CMOS, Power, Memory, and Display technologies, featuring a user-friendly interface and advanced simulation capabilities for process optimization and design iteration [3] Industry Trends - The adoption of Silvaco's Victory TCAD tools by ProMOS reflects the increasing demand for advanced simulation solutions in the silicon photonics sector, highlighting the importance of process variation consideration for optimizing device performance [4]