Core Insights - Silvaco Group, Inc. announced that ProMOS Technologies has adopted its Victory TCAD simulation solution to enhance the development of next-generation silicon photonics devices [1][4] - The Victory TCAD solution is designed to provide accurate modeling of semiconductor manufacturing processes, ensuring that simulated outcomes align closely with actual production [2] - The solution supports various applications, including Photonics, CMOS, Power, Memory, and Display technologies, facilitating efficient process optimization and rapid design iteration [3] Company Overview - Silvaco is a provider of TCAD, EDA software, and SIP solutions, focusing on semiconductor design and AI innovation across multiple markets, including automotive, memory, and 5G/6G mobile [5] - The company is headquartered in Santa Clara, California, with a global presence in regions such as North America, Europe, Brazil, China, Japan, Korea, Singapore, and Taiwan [5]

Company Overview - Silvaco Group, Inc. is a provider of TCAD, EDA software, and SIP solutions that facilitate semiconductor design and digital twin modeling through AI software and innovation [10] - The company is headquartered in Santa Clara, California, and has a global presence with offices in North America, Europe, Brazil, China, Japan, Korea, Singapore, and Taiwan [10] Leadership Changes - Chief Financial Officer Ryan Benton has resigned effective April 11, 2025, to pursue a new career opportunity outside the semiconductor design industry [1] - Dr. Babak Taheri, the Chief Executive Officer, will take on the roles of principal financial officer and principal accounting officer on an interim basis following Mr. Benton's departure [2] - Keith Tainsky, who leads the Financial Planning and Analysis function, will report directly to Dr. Taheri as Interim Chief Financial Officer [2] - Sherry Lin, Corporate Controller, will also report directly to Dr. Taheri, having joined Silvaco in November 2023 [2] Transition and Future Guidance - The company has begun the process of engaging a search firm to identify Mr. Benton's replacement [3] - Silvaco has reaffirmed its previously disclosed guidance for the first quarter and full year fiscal 2025, with first quarter results expected to be reported on May 7, 2025 [4]

Financial Data and Key Metrics Changes - For fiscal year 2024, the company reported gross bookings of $65.8 million, reflecting a 13% increase from 2023, and revenue of $59.7 million, representing a 10% increase from 2023 [8][31] - Non-GAAP gross margin improved to 86% from 83% in 2023, while non-GAAP operating income increased to $5.5 million from $4.4 million in 2023 [8][31] - Non-GAAP net income per share rose to $0.25 from $0.17 in 2023, with shares used in the calculation increasing to 26.8 million from 20 million [8][31] Business Line Data and Key Metrics Changes - In Q4 2024, TCAD bookings reached $14.3 million, up 68% year over year, while EDA bookings were $5.5 million, up 31% year over year [27][30] - For the full year 2024, TCAD bookings totaled $46.9 million, a 32% increase, while EDA bookings were $15.4 million [34] Market Data and Key Metrics Changes - In Q4 2024, Asia Pacific revenues were $9.2 million, accounting for 52% of total sales, while the Americas contributed just over $7 million, or 40% of sales [35] - For the full year, Asia Pacific revenues were $31.6 million, representing 53% of sales, with the Americas at $22.5 million, or 38% of sales [35] Company Strategy and Development Direction - The company aims to drive innovation through AI-based semiconductor design, focusing on advanced CMOS geometries and power semiconductors [9][25] - The recent acquisition of Cadence's OPC product line is expected to enhance the company's capabilities in advanced memory manufacturing and foundry operations [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the acquisition of the OPC product line, indicating it will contribute to mid-single-digit revenue by 2026 [18][38] - The company expects gross bookings for 2025 to range between $72 million and $79 million, with revenue projected between $66 million and $72 million [38] Other Important Information - The company added 46 new customers in 2024, with a focus on expanding in power and memory markets [11][92] - The company has a strong cash position, ending December with $87.5 million in cash, cash equivalents, and marketable securities [29] Q&A Session Summary Question: Clarification on the contribution of the acquisition of the Cadence OPC product line - Management indicated that the contribution is expected to be modest for 2025, with more details to be provided in future calls [41][44] Question: Guidance for operating profits and OpEx increase - Management confirmed that the increase in operating expenses is due to both the acquisition and planned growth in R&D and sales [46][47] Question: Customer acquisition and integration with existing products - Management stated that the OPC product will initially be sold as a standalone product but will be integrated into the FTCO platform over the next six to nine months [54][56] Question: Current exposure to China and revenue contribution - Management expects revenue contribution from China to remain flat, around 15% to 20% for 2025 [73] Question: Gross margin guidance and long-term targets - Management explained that gross margin fluctuations are sensitive to revenue changes and that they expect margins to improve as revenue scales [80] Question: Customer acquisition pace and quality - Management anticipates maintaining the pace of customer acquisition but emphasizes that the quality of new customers will be more significant moving forward [88][89]

Financial Performance - In 2024, the company generated $65.8 million in bookings and recognized $59.7 million in revenue, resulting in a net loss of $39.4 million and cash flows used in operating activities of $19.8 million[32]. - The company reported a GAAP operating loss of $40.3 million and a non-GAAP operating income of $5.5 million for 2024, compared to a GAAP operating income of $1.1 million and a non-GAAP operating income of $4.4 million in 2023[32]. - Strategic accounts contributed $40.3 million to total bookings in 2024, with a 37% CAGR in bookings from these accounts over the past two years[86]. - Approximately 53% and 60% of the company's revenue was derived from customers in APAC for the years ended December 31, 2024 and 2023, respectively[114]. - 18% and 23% of the company's revenue was derived from customers in China for the years ended December 31, 2024 and 2023, respectively, with ongoing economic slowdown in China posing risks to future revenue[115]. - 63% and 70% of the company's revenue for the years ended December 31, 2024 and 2023, respectively, was derived from international customers[129]. - The company generated $0.4 million and $0.6 million in revenues from the Middle East in 2024 and 2023, respectively[149]. Market Trends and Opportunities - The semiconductor market is experiencing increased complexity due to the demand for advanced manufacturing processes and new materials, leading to higher development costs and longer time-to-market[39]. - The automotive market is rapidly evolving, with increasing semiconductor content driven by electrification and advanced electronic controls, necessitating the adoption of wide bandgap materials like SiC and GaN[53]. - The memory market is expected to grow significantly, driven by demand for dynamic random-access memory and flash memory products, with new technologies like MRAM being explored[48]. - The IoT market is anticipated to grow as it requires complex SoCs for data processing and connectivity, with a focus on ultra-low energy demands[56]. - The shift to 5G/6G mobile communications is expected to increase demand for sophisticated chip designs, with the company providing unique tools for parasitic reduction and analysis[57]. - High-performance computing applications are driving demand for specialized circuit and memory elements, with the company offering solutions to meet performance, power, and latency requirements[59]. - The company focuses on growth industries such as AI, automotive, and high-performance computing, enabling customers' memory and power devices to play crucial roles in these sectors[6]. - The company aims to expand its market share in the growing display, automotive semiconductor, memory device, and IoT markets, leveraging its established position[81]. Research and Development - The company plans to increase R&D expenditures to expand its presence in established market segments, including low-geometry CMOS technology and photonics, with revenue generated from beta customers in 2023 and 2024[81]. - The company plans to continue investing in research and development, focusing on TCAD, analog and custom design, circuit simulation, and SIP[89]. - The company emphasizes the importance of TCAD, EDA, and SIP solutions to accelerate time-to-market and reduce costs in semiconductor design and manufacturing[60]. - The company provides production-ready silicon-proven SIP solutions, which help customers lower development costs and reduce time to market compared to non-silicon-proven alternatives[64]. - The company's TCAD solutions are designed to reduce time and manufacturing cycles in semiconductor technology development, contributing to cost reductions[66]. - The company has delivered more than 50 standard cell libraries and 96 memory compilers, demonstrating maximal density and routing performance across process technology nodes from 0.35nm to 16nm[75]. Customer Base and Sales Strategy - As of December 31, 2024, the company had over 800 customers globally, including over 200 academic institutions, with revenue distribution of 53% from Asia, 38% from North America, and 9% from Europe[84]. - The company gained 13 new customers in the power end-market and eight new customers in the memory end-market in 2024[86]. - The company aims to expand its customer base by increasing marketing and sales resources, particularly in automotive and IoT segments[86]. - The company plans to continue expanding its sales force both domestically and internationally, requiring significant financial and other resource investments[132]. - The company’s sales and marketing team included 30 regional sales representatives as of December 31, 2024, with an average of over 25 years of sales experience[88]. Competitive Landscape - The company may face increased competition from larger firms with greater resources, impacting its ability to maintain market share and pricing[105]. - Consolidation among customers in the semiconductor and photonics industries could lead to reduced demand for the company's software solutions and services[127]. - The introduction of new software solutions is critical, as failure to innovate could materially adversely affect revenues[123]. - The interoperability of the company's software solutions with customers' use cases and competitors' products is essential for success, and any failure in this area could negatively impact market share and demand[180]. Regulatory and Compliance Risks - The company is subject to various regulatory challenges, including anti-corruption and data privacy laws, which could impact its operations and compliance obligations[97]. - The company faces evolving cybersecurity risks due to remote work and reliance on third-party service providers, which could introduce vulnerabilities into its systems[188]. - The company is subject to various data privacy and security laws, which could lead to regulatory investigations, litigation, and significant fines if not complied with[203]. - The California Consumer Privacy Act (CCPA) allows for fines of up to $7,500 per intentional violation, impacting the company's financial condition[206]. - The EU General Data Protection Regulation (GDPR) imposes fines of up to €20 million or 4% of annual global revenue for non-compliance, which could adversely affect the company[208]. Ownership and Governance - The Pesic Family collectively holds approximately 70.7% of the total outstanding common stock, equating to 20,173,590 shares[223]. - Following the IPO in May 2024, the company became a "controlled company" and is exempt from certain corporate governance requirements[222]. - The Pesic Family has the ability to control all matters affecting the company, including business plans, mergers, and financing activities[225]. - The concentration of ownership by the Pesic Family may delay or prevent changes in control that other stockholders might favor[229]. - The interests of the Pesic Family may conflict with those of other stockholders, potentially affecting decision-making[229].

Financial Performance - Achieved record gross bookings of $65.8 million and revenue of $59.7 million for full-year 2024, representing a 10% year-over-year revenue increase[1][14] - Fourth quarter revenue reached $17.9 million, up 43% year-over-year and 63% quarter-over-quarter[1][6] - Gross bookings for Q4 2024 were $20.3 million, up 30% year-over-year[1][6] - Non-GAAP net income for full-year 2024 was $6.7 million, compared to $3.4 million in 2023[1][14] - Total revenue for the three months ended December 31, 2024, was $17,859,000, representing a 43.0% increase from $12,486,000 in the same period of 2023[32] - Software license revenue increased to $13,870,000 for the three months ended December 31, 2024, up 58.9% from $8,738,000 in the prior year[32] - Non-GAAP diluted net income per share for full-year 2024 was $0.25, compared to $0.17 in 2023[1][14] - GAAP net income for Q4 2024 was $4.2 million, compared to a net loss of $2.2 million in Q4 2023[1][6] - Net income for the three months ended December 31, 2024, was $4,157,000, compared to a net loss of $2,247,000 in the same period of 2023[32] - Non-GAAP Net income for the twelve months ended December 31, 2024, was $6,676 million, up from $3,442 million in 2023, representing a 94.5% increase[38] Customer Acquisition - Signed 46 new customers in 2024, contributing approximately 10% of gross bookings for the year[1][8] Cash and Assets - As of December 31, 2024, cash and cash equivalents totaled $87.5 million[1][6] - Total current assets increased to $107,280,000 as of December 31, 2024, from $20,888,000 in 2023, marking a substantial growth of 413.5%[30] - Total assets reached $142,345,000 as of December 31, 2024, compared to $40,885,000 in 2023, indicating an increase of 248.5%[30] - Cash and cash equivalents at the end of the period increased to $19.606 million in 2024 from $4.421 million in 2023[34] - The company raised $106.020 million from its initial public offering in 2024, contributing to a net cash provided by financing activities of $101.301 million[34] Expenses and Liabilities - Research and development expenses rose to $20,740,000 for the twelve months ended December 31, 2024, a significant increase of 57.5% from $13,170,000 in 2023[32] - Total liabilities increased to $42,262,000 as of December 31, 2024, from $31,483,000 in 2023, reflecting a rise of 34.2%[30] - The company experienced a significant increase in stock-based compensation expense, rising to $26.915 million in 2024 from zero in 2023[34] - Non-GAAP Operating expenses for the twelve months ended December 31, 2024, totaled $45,902 million, compared to $40,491 million in 2023, marking a 13.4% rise[38] Guidance and Future Expectations - Guidance for full-year 2025 includes revenue expectations in the range of $66.0 million to $72.0 million, representing an 11% to 21% increase from 2024[1][17] Mergers and Acquisitions - Acquired Cadence's Process Proximity Compensation product line, marking a significant milestone in the company's M&A strategy[2][3] Revenue Breakdown - Revenue from software licenses accounted for 74% of total revenue in Q4 2024, up from 70% in Q4 2023[36] - The EDA product line contributed 24% to total revenue in Q4 2024, consistent with the previous quarter[36] Losses and Cash Flow - The company reported a net loss of $39.404 million for the year ended December 31, 2024, compared to a net loss of $0.316 million in 2023[34] - Cash flows from operating activities showed a net cash used of $19.774 million in 2024, a significant decrease from net cash provided of $1.180 million in 2023[34]

Core Insights - Silvaco Group, Inc. achieved record gross bookings of $65.8 million and revenue of $59.7 million for the full year 2024, marking a 13% increase in gross bookings year-over-year and a 10% increase in revenue year-over-year [1][11][14] - The company signed 46 new customers in 2024 and expanded relationships with existing customers across key markets such as power, automotive, memory, foundry, and display [1][2] - Silvaco expanded its product portfolio through the acquisition of Cadence's Process Proximity Compensation product line, enhancing its EDA and TCAD tool suites [1][6][2] Business Highlights - In Q4 2024, Silvaco acquired 13 new customers, contributing approximately 9% to gross bookings for the quarter [6] - The company announced a partnership with Micon Global to enhance its reach in the EMEA market [6] - Silvaco joined the SMART USA Institute under the CHIPS Manufacturing USA program to advance digital twin technologies in semiconductor manufacturing [6] - The company received a $5.0 million follow-on order for its FTCO™ digital-twin modeling product from a strategic memory customer [6] Financial Performance - For Q4 2024, Silvaco reported revenue of $17.9 million, a 43% increase year-over-year and a 63% increase quarter-over-quarter [6] - TCAD revenue reached $12.7 million, up 65% year-over-year, while EDA revenue was $4.2 million, up 57% year-over-year [6] - The company achieved a GAAP net income of $4.2 million in Q4 2024, compared to a net loss of $2.2 million in Q4 2023 [11] - Non-GAAP net income for Q4 2024 was $4.3 million, compared to a non-GAAP net loss of $(1.6) million in Q4 2023 [11] Future Outlook - For Q1 2025, Silvaco expects gross bookings in the range of $16.0 million to $19.0 million and revenue between $14.5 million and $17.0 million [14] - For the full year 2025, the company anticipates gross bookings between $72.0 million and $79.0 million, representing a 9% to 20% increase from 2024 [14] - Revenue for 2025 is expected to be in the range of $66.0 million to $72.0 million, indicating an 11% to 21% increase from 2024 [14]

Core Insights - Silvaco Group, Inc. announced the strategic acquisition of Cadence's Process Proximity Compensation (PPC) product line, enhancing its capabilities in semiconductor design and digital twin modeling through AI software and innovation [1][2] Group 1: Acquisition Details - The PPC product line is an optical proximity correction (OPC) suite that complements Silvaco's existing EDA and TCAD offerings, expected to strengthen its market position and accelerate its mission [2][3] - The acquisition is anticipated to enhance Silvaco's ability to provide advanced computational lithography solutions, addressing the complexities of semiconductor manufacturing at advanced nodes [2][3] Group 2: Strategic Implications - The acquisition is seen as a significant step in advancing Silvaco's AI-based FTCO platform and hybrid Fab optimization for semiconductor and photonics mask generation [3] - Silvaco aims to maintain continuity for existing customers and partners during the integration process, ensuring no disruption to ongoing projects or customer support [3] Group 3: Market Position and Future Outlook - Silvaco closed 2024 with record bookings and revenue, driven by demand for its digital twin modeling platform and growth in key semiconductor markets [4] - The company is focused on delivering value for customers and stakeholders, setting the stage for further growth in 2025 with the addition of new capabilities [4]

Core Insights - Silvaco Group, Inc. announced the strategic acquisition of Cadence's Process Proximity Compensation (PPC) product line, enhancing its capabilities in semiconductor design and digital twin modeling through AI software and innovation [1][2] Company Overview - Silvaco is a provider of TCAD, EDA software, and SIP solutions, focusing on semiconductor design and digital twin modeling across various markets including automotive, memory, and 5G/6G mobile [4] Acquisition Details - The PPC product line includes an optical proximity correction (OPC) suite of tools that will complement Silvaco's existing EDA and TCAD offerings, aiming to improve accuracy and efficiency in semiconductor manufacturing [2][3] - The acquisition is expected to enhance Silvaco's advanced computational lithography solutions, addressing the complexities of semiconductor manufacturing at advanced nodes [2][3] Strategic Goals - The acquisition aligns with Silvaco's strategy to provide a comprehensive digital full-flow solution and focus on faster-growing areas within its digital portfolio [3] - Silvaco aims to leverage the expertise and technology from Cadence to advance its AI-based FTCO platform and improve innovation and automation for customers [3] Market Position - The PPC product line has been adopted by leading semiconductor companies, providing Silvaco with complementary go-to-market opportunities and enhancing its EDA, TCAD, and AI-Driven Fab Technology Co-Optimization offerings [3][4] - The company reported record results for bookings and revenue in 2024, driven by demand for its digital twin modeling platform and growth in key semiconductor markets [4]

Core Viewpoint - Silvaco Group, Inc. has announced the strategic acquisition of Cadence's Process Proximity Compensation (PPC) product line, which is expected to enhance its market position and capabilities in semiconductor design and manufacturing [1][2][3] Company Overview - Silvaco is a provider of TCAD, EDA software, and SIP solutions that facilitate semiconductor design and digital twin modeling through AI software and innovation [4] - The company operates in various markets including display, power devices, automotive, memory, high-performance computing, foundries, photonics, IoT, and 5G/6G mobile markets [4] Acquisition Details - The PPC product line includes an optical proximity correction (OPC) suite of tools that complements Silvaco's existing EDA and TCAD offerings [2] - This acquisition is anticipated to enhance Silvaco's ability to provide advanced computational lithography solutions, addressing the complexities of semiconductor manufacturing at advanced nodes [2][3] Strategic Implications - The acquisition is seen as a significant step in advancing Silvaco's AI-based FTCO platform and improving quantum-level simulation and hybrid Fab optimization for semiconductor and photonics mask generation [3] - The integration of Cadence's OPC expertise is expected to drive innovation, precision, and AI-driven automation for Silvaco's customers [3] Market Position and Growth - Silvaco closed 2024 with record bookings and revenue, driven by demand for its digital twin modeling platform and growth in key semiconductor markets [4] - The company aims to continue delivering value and set the stage for further growth in 2025 with the new capabilities from the acquisition [4]

Group 1 - Silvaco Group, Inc. is currently under investigation for securities fraud, which raises concerns among investors [1] - Affected investors are encouraged to reach out to the Schall Law Firm for potential legal action [1]