```markdown [Second Quarter 2025 and Year-to-Date Highlights](index=1&type=section&id=Second%20Quarter%202025%20and%20Year-to-Date%20Highlights) Genco declared a **$0.15** Q2 2025 dividend, acquired a Capesize vessel, reported a **$6.8 million** net loss, and upsized its credit facility - Declared a **$0.15 per share dividend** for Q2 2025, marking the **24th consecutive quarterly dividend**. The cumulative dividend paid reached **$6.915 per share**[3](index=3&type=chunk) - Agreed to acquire a **2020-built, scrubber-fitted 182,000 dwt Capesize vessel**, to be named the Genco Courageous, with delivery expected between September and October 2025[3](index=3&type=chunk) Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Loss | $6.8 million | | Net Loss per Share (basic & diluted) | $0.16 | | Adjusted Net Loss | $6.2 million | | Adjusted Loss per Share (basic & diluted) | $0.14 | | Adjusted EBITDA | $14.3 million | | Voyage Revenues | $80.9 million | | Average Daily Fleet-wide TCE | $13,631 | - Estimated Time Charter Equivalent (TCE) for Q3 2025 to date is **$15,926** for **70%** of the owned fleet's available days[3](index=3&type=chunk) - Amended its credit facility in July to establish a **$600 million Revolving Credit Facility (RCF)**, significantly increasing borrowing capacity[3](index=3&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO Wobensmith highlighted Genco's value strategy, focusing on dividends, strategic vessel acquisition, and expanded borrowing capacity - The company is executing a **value strategy** focused on returning capital to shareholders and expanding earnings power[4](index=4&type=chunk) - The acquisition of a new Capesize vessel is part of a strategy to modernize the asset base, with approximately **$200 million invested** in the Capesize sector over the last two years[4](index=4&type=chunk) - The company's borrowing capacity was expanded by **50%** to a new **$600 million revolving credit facility** to support growth[4](index=4&type=chunk) - Management observes a pick-up in Capesize and Supramax rates and believes the company is well-positioned to capitalize on improving drybulk fundamentals due to its commercial platform and operating leverage[4](index=4&type=chunk) [Comprehensive Value Strategy](index=2&type=section&id=Comprehensive%20Value%20Strategy) Genco's value strategy focuses on dividends, deleveraging, and opportunistic fleet growth, maintaining strong liquidity and low leverage - The company's strategy is centered on three pillars: **Dividends, Deleveraging, and Growth**[7](index=7&type=chunk)[8](index=8&type=chunk) - As of June 30, 2025, the company had a strong liquidity position of **$335.6 million**, comprising **$35.8 million in cash** and **$299.8 million in revolver availability**[8](index=8&type=chunk) - Maintained low financial leverage with a **net loan-to-value (LTV) of 7%** as of June 30, 2025, which is pro forma **13%** after the agreed vessel acquisition[8](index=8&type=chunk)[9](index=9&type=chunk) [Growth and Capital Structure](index=3&type=section&id=Growth%20and%20Capital%20Structure) Genco pursues growth via a **$63.6 million** Capesize acquisition, backed by a new **$600 million** revolving credit facility with improved terms [Vessel Acquisition](index=3&type=section&id=Vessel%20Acquisition) Genco agreed to acquire a **2020-built, 182,000 dwt Capesize vessel** for **$63.6 million**, its fourth high-specification Capesize acquisition since October 2023 - Agreed to acquire a **2020-Imabari built 182,000 dwt scrubber-fitted Capesize vessel** for a purchase price of **$63.6 million**[11](index=11&type=chunk) - This is the **fourth high-specification, fuel-efficient Capesize vessel** acquired since October 2023, expanding the company's presence in a key sector[12](index=12&type=chunk) [New $600 Million Revolving Credit Facility](index=3&type=section&id=New%20%24600%20Million%20Revolving%20Credit%20Facility) Genco upsized its credit facility to a **$600 million revolving credit facility**, increasing borrowing capacity by **50%** with improved pricing and extended maturity - Closed a **$600 million revolving credit facility**, increasing borrowing capacity by **50% ($200 million)**[14](index=14&type=chunk)[20](index=20&type=chunk) - Key terms include an extended maturity to **July 2030**, improved pricing with a margin of **1.75% to 2.15% over SOFR**, and a **100% revolving structure** for flexibility[15](index=15&type=chunk)[20](index=20&type=chunk) - As of the press release date, Genco has **$100 million of debt outstanding** and **$500 million of undrawn revolver availability**[15](index=15&type=chunk) [Dividend Policy](index=3&type=section&id=Dividend%20Policy) Genco declared a **$0.15 per share** Q2 2025 dividend, enabled by adjusting the voluntary reserve to maintain payouts and provide capital flexibility - Declared a cash dividend of **$0.15 per share** for Q2 2025, payable around August 25, 2025[17](index=17&type=chunk) - The dividend was enabled by reducing the Q2 voluntary reserve from **$19.50 million to $7.91 million**, as the standard formula would not have produced a dividend[17](index=17&type=chunk) Q2 2025 Dividend Calculation (in millions) | Description | Amount ($) | | :--- | :--- | | Net revenue | 46.90 | | Operating expenses | (32.41) | | **Operating cash flow** | **14.49** | | Less: voluntary quarterly reserve | (7.91) | | **Cash flow distributable as dividends** | **6.58** | | **Dividend per share** | **0.15** | - The voluntary quarterly reserve for Q3 2025 is expected to be **$19.50 million**, but the Board maintains flexibility to adjust it to pay dividends or for other uses like vessel acquisitions and debt repayments[22](index=22&type=chunk)[24](index=24&type=chunk) [Commercial and Fleet Strategy](index=5&type=section&id=Genco%27s%20Active%20Commercial%20Operating%20Platform%20and%20Fleet%20Deployment%20Strategy) Genco employs a flexible portfolio approach for revenue, favoring short-term fixtures, with **70%** of Q3 2025 available days fixed at **$15,926** TCE - The company utilizes a portfolio approach for revenue generation, combining short-term spot market fixtures and longer-term coverage, with a current weighting towards short-term fixtures for optionality[27](index=27&type=chunk) Estimated Net TCE - Q3 2025 to Date | Vessel Type | TCE ($) | % Fixed | | :--- | :--- | :--- | | Capesize | 20,951 | 69% | | Ultra/Supra | 13,326 | 70% | | **Total** | **15,926** | **70%** | [Financial Review](index=6&type=section&id=Financial%20Review) Genco reported a Q2 2025 net loss of **$6.8 million** and a H1 2025 net loss of **$18.7 million**, primarily due to lower TCE rates and reduced revenues [Second Quarter 2025 Financial Review](index=6&type=section&id=Financial%20Review%3A%202025%20Second%20Quarter) Genco reported a Q2 2025 net loss of **$6.8 million** and an average daily TCE of **$13,631**, with lower revenues and higher G&A expenses offsetting reduced operating costs Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net (Loss) Income | ($6.8M) | $23.5M | | Adjusted Net (Loss) Income | ($6.2M) | $19.9M | | Revenues | $80.9M | $107.0M | | Average Daily TCE | $13,631 | $19,938 | | Adjusted EBITDA | $14.3M | $39.8M | - Daily vessel operating expenses (DVOE) decreased to **$6,213 per vessel per day** from **$6,855** in Q2 2024, mainly due to the timing of stores/spares purchases and lower repair costs[36](index=36&type=chunk) - General and administrative expenses increased to **$7.4 million** from **$6.3 million** year-over-year due to higher legal/professional fees and nonvested stock amortization[38](index=38&type=chunk) [Six Months 2025 Financial Review](index=7&type=section&id=Financial%20Review%3A%20Six%20Months%202025) For H1 2025, Genco reported a net loss of **$18.7 million** and an average daily TCE of **$12,750**, driven by decreased revenues and lower charter rates compared to H1 2024 H1 2025 vs H1 2024 Performance | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net (Loss) Income | ($18.7M) | $42.3M | | Revenues | $152.2M | $224.5M | | Average Daily TCE | $12,750 | $19,564 | | Adjusted EBITDA | $22.2M | $81.6M | - Daily vessel operating expenses (DVOE) for the first half of 2025 decreased slightly to **$6,401** from **$6,558** in H1 2024[45](index=45&type=chunk) [Liquidity and Capital Resources](index=8&type=section&id=Liquidity%20and%20Capital%20Resources) Genco maintains solid liquidity despite decreased H1 2025 operating cash flow of **$8.3 million**, with plans to expand its **42-vessel fleet** and significant capital expenditures for upgrades [Cash Flow Analysis](index=8&type=section&id=Cash%20Flow) H1 2025 net cash from operations decreased to **$8.3 million** due to lower charter rates and higher drydocking costs, while investing and financing activities also saw significant shifts Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $8.3M | $61.3M | | Net Cash (Used in) Provided by Investing Activities | ($6.7M) | $65.1M | | Net Cash Used in Financing Activities | ($9.9M) | ($130.9M) | [Fleet and Capital Expenditures](index=8&type=section&id=Capital%20Expenditures) Genco's **42-vessel fleet** (average age **12.7 years**) will expand to **43** with a new acquisition, with significant capital expenditures budgeted for upgrades through 2026 - The current fleet consists of **42 vessels** with an average age of **12.7 years**. The planned acquisition will expand the fleet to **43 vessels** and lower the average age to **12.5 years**[54](index=54&type=chunk)[55](index=55&type=chunk) Estimated Capital Expenditures (Balance of 2025 & 2026, in millions) | Quarter | Total Costs ($) | Estimated Offhire Days | | :--- | :--- | :--- | | Q3 2025 | 21.52 | 228 | | Q4 2025 | 3.24 | 55 | | Q1 2026 | 11.12 | 100 | | Q2 2026 | - | - | | Q3 2026 | 10.27 | 100 | | Q4 2026 | 5.15 | 68 | [Summary Consolidated Financial and Other Data](index=10&type=section&id=Summary%20Consolidated%20Financial%20and%20Other%20Data) This section presents unaudited financial statements and operational data, including Q2 2025 voyage revenues of **$80.9 million** and a net loss of **$6.8 million**, with total assets of **$1.04 billion** Consolidated Income Statement Data (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Voyage Revenues | $80,939 | $107,047 | $152,208 | $224,482 | | Total Operating Expenses | $85,201 | $80,733 | $166,239 | $176,075 | | Operating (Loss) Income | ($4,262) | $26,314 | ($14,031) | $48,407 | | Net (Loss) Income | ($6,809) | $23,493 | ($18,771) | $42,436 | | Net (Loss) EPS - basic | ($0.16) | $0.54 | ($0.43) | $0.98 | Consolidated Balance Sheet Data (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $35,439 | $43,690 | | Total Current Assets | $78,972 | $97,990 | | Vessels, net | $897,156 | $915,022 | | **Total Assets** | **$1,040,250** | **$1,056,602** | | Total Current Liabilities | $48,547 | $40,660 | | Long-term debt, net | $92,968 | $82,175 | | **Total Liabilities** | **$147,208** | **$128,374** | | **Total Equity** | **$893,042** | **$928,228** | EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | EBITDA | $13,647 | $43,294 | $21,568 | $82,531 | | Adjusted EBITDA | $14,298 | $39,767 | $22,213 | $81,626 | ```

Part I — FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended June 30, 2025, reflect a shift to profitability from continuing operations, with net income of $5.8 million for the quarter compared to a net loss of $2.6 million in the prior year period, while total assets remained stable at approximately $1.42 billion, and cash flow from operations significantly increased to $57.7 million for the first six months of 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (as of June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $151,060 | $135,782 | | Assets held for sale | $48,336 | $11,422 | | Goodwill | $867,205 | $863,152 | | Total assets | $1,419,005 | $1,421,268 | | **Liabilities & Equity** | | | | Total current liabilities | $117,921 | $110,726 | | Long-term debt, net | $520,294 | $522,442 | | Total liabilities | $675,027 | $670,442 | | Total stockholders' equity | $743,978 | $750,826 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) Statement of Operations Summary (unaudited, in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $148,015 | $140,523 | $290,288 | $278,375 | | Operating income | $15,802 | $7,703 | $30,007 | $3,407 | | Net income (loss) from continuing operations | $5,761 | $(2,552) | $6,695 | $(18,562) | | Net income (loss) | $8,153 | $(3,376) | $440 | $(19,700) | | Diluted EPS (Total) | $0.04 | $(0.02) | $0.00 | $(0.11) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (Six months ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $57,659 | $37,216 | | Net cash used in investing activities | $(13,745) | $(8,526) | | Net cash used in financing activities | $(29,576) | $(34,190) | | Net increase (decrease) in cash | $15,278 | $(6,138) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate actions, including the strategic decision to sell the marketing technology solutions, now classified as discontinued operations, and the 2024 disposition of Fitness Solutions, while also providing breakdowns of revenue, goodwill, debt, and equity activities, including an active stock repurchase program, and a subsequent event note details a debt refinancing in July 2025 that extended maturities and reduced interest margins - The company provides integrated SaaS solutions for service-based SMBs across three core verticals: EverPro (Home Services), EverHealth (Health Services), and EverWell (Wellness Services)[26](index=26&type=chunk) - On March 5, 2025, the Board committed to a plan to sell the company's marketing technology solutions, which are now classified as discontinued operations, with assets and liabilities presented as held for sale[33](index=33&type=chunk) Discontinued Operations (Marketing Technology Solutions) Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $34,536 | $36,870 | $63,168 | $69,131 | | Operating income (loss) | $2,399 | $(824) | $(6,325) | $(1,138) | | Assets held for sale (net) | $35,618 | - | $35,618 | $40,930 (as of Dec 31, 2024) | - In 2024, the company sold its Fitness Solutions, recognizing losses of **$5.0 million** and a goodwill impairment of **$6.4 million** for the six months ended June 30, 2024, though this divestiture did not qualify for discontinued operations reporting[44](index=44&type=chunk) - The company's stock repurchase program was increased to a total authorization of **$250.0 million** and extended through December 31, 2026, with **$51.1 million** remaining available under the program as of June 30, 2025[78](index=78&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - Subsequent to the quarter end, on July 29, 2025, the company amended its credit facilities to refinance its term loan, extending the maturity to July 2031 and reducing the applicable interest margin by **25 basis points**[116](index=116&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 5.3% revenue growth in Q2 2025 to the successful delivery of its core software to SMBs in home services, health, and wellness, highlighting a Pro Forma Revenue Growth Rate of 7.4% for the quarter, normalizing for divestitures, while profitability improved significantly with operating income rising to $15.8 million from $7.7 million year-over-year, driven by revenue growth and cost management initiatives, and Adjusted EBITDA from continuing operations increased to $45.0 million for the quarter, with strong liquidity of $151.1 million in cash and $155.0 million available under the revolver supporting strategic investments and the ongoing share repurchase program [Overview](index=33&type=section&id=Overview) - The company's strategy is a "land and expand" model, starting customers with core Business Management Software and then cross-selling adjacent solutions like Billing & Payments and Customer Experience tools[122](index=122&type=chunk) - Approximately **97%** of revenue was recurring or re-occurring for the six months ended June 30, 2025, with the annualized net revenue retention rate also approximately **97%** for the quarter ended June 30, 2025[126](index=126&type=chunk) [Key Business and Financial Metrics](index=36&type=section&id=Key%20Business%20and%20Financial%20Metrics) - The Pro Forma Revenue Growth rate, which adjusts for acquisitions and divestitures, was **7.4%** for both the three and six months ended June 30, 2025, indicating underlying business growth[137](index=137&type=chunk) Adjusted EBITDA Reconciliation (Continuing Operations, in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) from continuing operations | $5,761 | $(2,552) | $6,695 | $(18,562) | | Adjustments (Interest, Taxes, D&A, etc.) | $39,196 | $41,985 | $83,207 | $96,645 | | **Adjusted EBITDA from continuing operations** | **$44,957** | **$39,433** | **$89,902** | **$78,083** | [Results of Operations](index=42&type=section&id=Results%20of%20Operations) - Total revenues from continuing operations increased by **$7.5 million (5.3%)** for Q2 2025 and **$11.9 million (4.3%)** for YTD 2025 compared to the prior year, primarily driven by growth in business management software and billing/payment solutions[163](index=163&type=chunk) - Operating expenses as a percentage of revenue decreased from **94.5%** to **89.3%** in Q2 2025 year-over-year, reflecting improved margins and lower depreciation, amortization, and impairment charges[162](index=162&type=chunk) - Depreciation and amortization expense decreased by **$3.3 million** in Q2 2025, primarily due to a reduced rate of replacement assets from fewer recent business acquisitions[169](index=169&type=chunk) - The loss from discontinued operations for YTD 2025 increased to **$6.3 million**, driven by a **$9.0 million** impairment charge related to the marketing technology disposal group[173](index=173&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had **$151.1 million** in cash and cash equivalents and **$155.0 million** of available borrowing capacity under its Revolver[176](index=176&type=chunk) - Net cash from operating activities increased to **$57.7 million** for the first six months of 2025, up from **$37.2 million** in the same period of 2024, due to lower costs from transformation initiatives and improved cash collections[178](index=178&type=chunk)[179](index=179&type=chunk) - The company repurchased and retired **3.1 million shares** for **$31.8 million** in the first six months of 2025 under its stock repurchase program[199](index=199&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports that there have been no material changes to its disclosures regarding market risk from those described in its Annual Report on Form 10-K - There have been no material changes to the company's market risk disclosures since the last Annual Report on Form 10-K[206](index=206&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were not effective due to a previously disclosed material weakness in internal control over financial reporting, which the company is actively working to remediate - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to a previously identified material weakness in internal control over financial reporting[207](index=207&type=chunk) - The company is continuing its efforts to remediate the material weakness, with no changes during the quarter identified that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[208](index=208&type=chunk) Part II — OTHER INFORMATION [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings arising in the ordinary course of business, and management does not expect the ultimate resolution of these matters to have a material adverse effect on the company's financial condition or operating results, with specific details on a putative class action lawsuit provided in Note 17 of the financial statements - The company is subject to various legal proceedings but does not believe their resolution will have a material adverse effect on its business or financial results[210](index=210&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those disclosed in its Annual Report on Form 10-K - No material changes to the risk factors disclosed in the Annual Report on Form 10-K have occurred[211](index=211&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activity under its publicly announced program, with approximately 2.0 million shares repurchased for a total of $20.6 million during the second quarter of 2025 Share Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid | Total Cost (in thousands) | | :--- | :--- | :--- | :--- | | April 2025 | 616,214 | $9.91 | ~$6,107 | | May 2025 | 615,384 | $10.18 | ~$6,265 | | June 2025 | 812,523 | $9.96 | ~$8,092 | | **Total Q2 2025** | **~2,044,121** | **-** | **~$20,600** | [Other Information](index=55&type=section&id=Item%205.%20Other%20Information) On June 12, 2025, CEO Eric Remer entered into a Rule 10b5-1 trading plan for the potential sale of up to 1.0 million shares of company common stock, effective until September 10, 2026, or upon certain other events - CEO Eric Remer established a Rule 10b5-1 trading plan on June 12, 2025, for the sale of up to **1.0 million shares** of common stock[215](index=215&type=chunk) [Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including amendments to credit agreements, officer certifications, and XBRL data files

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ FORM 10-Q _________________________________________ ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ For the transition period from to Commission File Number 001-35077 ________________________________ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ FORM 10-Q _________________________________________ ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ For the transition period from to Commission File Number 001-35077 ________________________________ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ FORM 10-Q _________________________________________ ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ For the transition period from to Commission File Number 001-35077 ________________________________ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ FORM 10-Q _________________________________________ ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ For the transition period from to Commission File Number 001-35077 ________________________________ ...

[Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20Financial%20Information) This section presents the company's financial statements, management's discussion and analysis, market risk disclosures, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the period ended June 30, 2025, show a 16.0% year-over-year revenue increase to $811.1 million for the second quarter, driven by growth in both Screening and Precision Oncology, with a significantly narrowed net loss [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $5.80 billion, a slight decrease from year-end 2024, while total liabilities decreased to $3.33 billion, largely due to convertible notes settlement Condensed Consolidated Balance Sheets (in thousands) | Balance Sheet Item | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Total Current Assets** | 1,507,859 | 1,571,423 | | Cash and cash equivalents | 657,099 | 600,889 | | Marketable securities | 201,336 | 437,137 | | **Total Assets** | **5,797,365** | **5,928,139** | | **Total Current Liabilities** | 521,933 | 732,187 | | Convertible notes, net, current portion | — | 249,153 | | **Total Liabilities** | **3,327,951** | **3,525,890** | | **Total Stockholders' Equity** | **2,469,414** | **2,402,249** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, revenue grew 16.0% to $811.1 million, with a significantly reduced net loss of $1.2 million, while six-month revenue increased 13.5% to $1.52 billion Condensed Consolidated Statements of Operations - Q2 (in thousands, except EPS) | Metric (in thousands, except EPS) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | $811,085 | $699,264 | +16.0% | | **Gross Profit** | $562,453 | $488,316 | +15.2% | | **Loss from Operations** | $(2,148) | $(26,257) | +91.8% | | **Net Loss** | $(1,185) | $(15,808) | +92.5% | | **Net Loss Per Share** | $(0.01) | $(0.09) | +88.9% | Condensed Consolidated Statements of Operations - H1 (in thousands, except EPS) | Metric (in thousands, except EPS) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | $1,517,870 | $1,336,788 | +13.5% | | **Gross Profit** | $1,063,000 | $934,639 | +13.7% | | **Loss from Operations** | $(98,158) | $(132,949) | +26.2% | | **Net Loss** | $(102,400) | $(126,036) | +18.8% | | **Net Loss Per Share** | $(0.55) | $(0.69) | +20.3% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities significantly improved to $119.8 million, with cash and cash equivalents increasing by $50.5 million Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $119,826 | $24,754 | | **Net cash provided by (used in) investing activities** | $190,458 | $(318,567) | | **Net cash provided by (used in) financing activities** | $(260,685) | $221,601 | | **Net increase (decrease) in cash** | $50,463 | $(73,658) | - The primary use of cash in financing activities was a **$249.2 million** payment for the settlement of convertible notes that matured in January 2025[23](index=23&type=chunk)[98](index=98&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue recognition, debt, and collaborations, highlighting strong Screening revenue growth, convertible notes settlement, and a new collaboration with Freenome Revenue by Source (in thousands) | Revenue Source (in thousands) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Screening** | $628,481 | $531,606 | +18.2% | | **Precision Oncology** | $182,604 | $167,658 | +8.9% | | **Total Revenue** | **$811,085** | **$699,264** | **+16.0%** | - In January 2025, the company settled its 2025 Convertible Notes with a cash payment of **$250.4 million** upon maturity[98](index=98&type=chunk) - On July 22, 2025, the company initiated a restructuring plan expected to result in approximately **$30 million** in costs through 2026, primarily for employee termination and consulting fees[167](index=167&type=chunk) - On August 4, 2025, the company entered into a collaboration and license agreement with Freenome, involving a **$75.0 million** upfront payment and up to **$700.0 million** in potential milestone payments for developing and commercializing blood-based colorectal cancer screening tests[169](index=169&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 2025 revenue growth to increased Cologuard and Oncotype DX test volumes, with new product launches and a multi-year productivity plan targeting over $150 million in annual savings by 2026 - Key milestones in Q2 2025 include delivering over **1.3 million** test results, obtaining Medicare reimbursement for the Oncodetect MRD test, and entering an exclusive license agreement with Freenome for blood-based CRC screening[177](index=177&type=chunk) - The company launched its next-generation Cologuard Plus test in late March 2025 and its Oncodetect MRD test in April 2025, with plans to launch its Cancerguard multi-cancer early detection test in Q3 2025[182](index=182&type=chunk) - A multi-year productivity plan is expected to deliver over **$150 million** in annual savings by 2026, primarily from general and administrative efficiencies, with expected restructuring costs of **$105 million to $120 million** through 2026[189](index=189&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Screening revenue grew 18.2% in Q2 2025 due to higher Cologuard test volume, while Precision Oncology revenue increased 8.9% driven by Oncotype DX adoption and sublicense revenue, with R&D expenses decreasing due to non-recurring items - The increase in Screening revenue was primarily due to a higher number of completed Cologuard tests, driven by increases in rescreen rates, care gap programs, and growth in new ordering providers[196](index=196&type=chunk) - Precision Oncology revenue growth was driven by an increase in Oncotype DX breast cancer tests, particularly in Japan, and recognition of **$7.5 million** in sublicense revenue[197](index=197&type=chunk) - Research and development expenses decreased by **10.1% YoY** for the quarter, primarily because Q2 2024 included a **$25.8 million** expense for a license agreement termination[202](index=202&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held $657.1 million in cash and cash equivalents and $201.3 million in marketable securities, with a new undrawn $500.0 million revolving credit agreement, sufficient to fund operations for at least the next 12 months - The company had **$657.1 million** in cash and cash equivalents and **$201.3 million** in marketable securities as of June 30, 2025[214](index=214&type=chunk) - In January 2025, the company entered into a new **$500.0 million** senior secured revolving credit agreement, which was undrawn as of June 30, 2025[212](index=212&type=chunk) - A material cash requirement was met in January 2025 with a **$250.4 million** payment to settle the 2025 Notes upon maturity[221](index=221&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures relate to interest rate risk on its cash, cash equivalents, and marketable securities, and foreign currency risk from its international operations, managed through conservative investment policies and forward contracts - Market risk is primarily confined to cash, cash equivalents, and marketable securities, which are invested in high-quality, investment-grade instruments[227](index=227&type=chunk) - The company uses foreign currency forward contracts to mitigate exchange rate risk, with open contracts having a notional value of **$50.8 million** as of June 30, 2025[231](index=231&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no significant changes in internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[232](index=232&type=chunk) - No significant changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[233](index=233&type=chunk) [Part II - Other Information](index=47&type=section&id=Part%20II%20-%20Other%20Information) This section covers legal proceedings, risk factors, and other significant corporate events [Item 1. Legal Proceedings](index=47&type=section&id=Legal%20Proceedings) The company is involved in ongoing intellectual property litigation with Geneoscopy, Inc., concerning patent infringement and false advertising, with recent PTAB decisions impacting patent validity - The company is in a legal dispute with Geneoscopy, Inc. over alleged patent infringement of the '781 and '746 patents and violations of the Lanham Act[153](index=153&type=chunk) - On July 9, 2025, the Patent Trial and Appeals Board (PTAB) found all claims of the '781 Patent unpatentable, with a notice of appeal potentially filed by September 10, 2025[154](index=154&type=chunk) [Item 1A. Risk Factors](index=47&type=page&id=Item%201A.%20Risk%20Factors) The company faces key risks including reliance on strategic collaborations, dependence on single-source suppliers, and uncertainties from potential healthcare reforms and evolving reimbursement policies - The company relies on strategic collaborations, such as with Mayo and the new Freenome agreement, and faces risks if these agreements are not maintained or if anticipated benefits are not realized[237](index=237&type=chunk) - Dependence on single-source suppliers like Phillips-Medisize (Cologuard kits), Illumina (sequencing platforms), and Hamilton (lab equipment) poses a significant operational risk[240](index=240&type=chunk)[241](index=241&type=chunk) - Uncertainty related to healthcare reform, including legal challenges to the ACA and changes in Medicare reimbursement under PAMA, could adversely affect coverage and profitability[246](index=246&type=chunk)[247](index=247&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Not applicable [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Defaults%20Upon%20Senior%20Securities) Not applicable [Item 4. Mine Safety Disclosures](index=50&type=section&id=Mine%20Safety%20Disclosures) Not applicable [Item 5. Other Information](index=50&type=section&id=Other%20Information) This section details significant corporate events including a collaboration with Freenome, amendments to executive employment agreements, and a Board of Directors resignation - On August 4, 2025, the company entered into a Collaboration and License Agreement with Freenome to develop and commercialize blood-based CRC screening products, which includes a **$75 million** upfront payment and potential milestones[255](index=255&type=chunk) - On August 5, 2025, the company amended the employment agreements for executives Brian Baranick, Aaron Bloomer, Sarah Condella, and Jake Orville, modifying the acceleration of equity vesting upon certain termination events[259](index=259&type=chunk) - Daniel Levangie resigned from the Board of Directors on August 5, 2025, due to his retirement[261](index=261&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Exhibits) This section lists the documents filed as part of the Form 10-Q, including amendments to employment agreements, certifications, and iXBRL data files

[PART I. Financial Information](index=1&type=section&id=PART%20I%2E%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201%2E%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, business operations, acquisitions, and other financial commitments for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets highlight changes in assets, liabilities, and equity, reflecting shifts in cash, marketable securities, and the impact of litigation settlements - The significant increase in restricted cash to **$16.5 million** as of June 30, 2025, from zero at December 31, 2024, is due to securing an irrevocable standby letter of credit for a litigation settlement[7](index=7&type=chunk)[31](index=31&type=chunk) - Total assets decreased by **10.3%** primarily driven by a **23.4% decrease** in total current assets, largely due to reductions in cash and cash equivalents and current marketable securities, partially offset by an increase in non-current assets[7](index=7&type=chunk) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :---------------- | :--------- | | Cash and cash equivalents | $13,132 | $19,606 | $(6,474) | -33.0% | | Restricted cash | $16,500 | $— | $16,500 | N/A | | Current marketable securities | $25,853 | $63,071 | $(37,218) | -59.0% | | Total current assets | $82,127 | $107,280 | $(25,153) | -23.4% | | Total non-current assets | $45,502 | $35,065 | $10,437 | 29.8% | | Total assets | $127,629 | $142,345 | $(14,716) | -10.3% | | Total current liabilities | $38,610 | $34,488 | $4,122 | 12.0% | | Total liabilities | $48,041 | $42,262 | $5,779 | 13.7% | | Total stockholders' equity | $79,588 | $100,083 | $(20,495) | -20.5% | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations reveal a decrease in total revenue but a significant improvement in net loss, primarily due to reduced litigation and stock-based compensation expenses - Total revenue decreased by **19.5%** for the three months ended June 30, 2025, and **15.3%** for the six months ended June 30, 2025, primarily due to a significant decline in software license revenue, partially offset by growth in maintenance and service revenue[9](index=9&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - Net loss significantly improved by **75.5%** for the three months ended June 30, 2025, and **22.5%** for the six months ended June 30, 2025, largely driven by a substantial reduction in litigation settlement expenses and stock-based compensation compared to the prior year[9](index=9&type=chunk)[122](index=122&type=chunk)[127](index=127&type=chunk)[132](index=132&type=chunk) Condensed Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Absolute) | Change (%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :-------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :--------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Software license revenue | $7,217 | $11,023 | $(3,806) | -34.5% | $17,226 | $23,281 | $(6,055) | -26.0% | | Maintenance and service revenue | $4,831 | $3,937 | $894 | 22.7% | $8,914 | $7,568 | $1,346 | 17.8% | | Total revenue | $12,048 | $14,960 | $(2,912) | -19.5% | $26,140 | $30,849 | $(4,709) | -15.3% | | Gross profit | $8,544 | $10,099 | $(1,555) | -15.4% | $19,620 | $24,015 | $(4,395) | -18.3% | | Operating loss | $(10,143) | $(37,789) | $27,646 | -73.1% | $(29,775) | $(35,401) | $5,626 | -15.9% | | Net loss | $(9,409) | $(38,388) | $28,979 | -75.5% | $(28,682) | $(37,010) | $8,328 | -22.5% | | Basic and diluted net loss per share | $(0.32) | $(1.55) | $1.23 | -79.4% | $(0.99) | $(1.65) | $0.66 | -40.0% | [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The statements of comprehensive loss show a significant reduction in comprehensive loss, driven by improved net loss and positive foreign currency translation adjustments - Comprehensive loss significantly decreased by **77.6%** for the three months ended June 30, 2025, and **25.9%** for the six months ended June 30, 2025, primarily driven by the improved net loss and positive foreign currency translation adjustments[12](index=12&type=chunk) - Foreign currency translation adjustments shifted from a loss in 2024 to a gain in 2025, contributing positively to comprehensive income[12](index=12&type=chunk)[34](index=34&type=chunk) Condensed Consolidated Statements of Comprehensive Loss Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Absolute) | Change (%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :-------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :--------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Net loss | $(9,409) | $(38,388) | $28,979 | -75.5% | $(28,682) | $(37,010) | $8,328 | -22.5% | | Foreign currency translation adjustments | $820 | $(199) | $1,019 | -512.1% | $1,096 | $(384) | $1,480 | -385.4% | | Unrealized loss on marketable securities | $(51) | $— | $(51) | N/A | $(121) | $— | $(121) | N/A | | Comprehensive loss | $(8,640) | $(38,587) | $29,947 | -77.6% | $(27,707) | $(37,394) | $9,687 | -25.9% | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) The statements of stockholders' equity show a decrease in total equity, primarily due to accumulated deficit from net losses, partially offset by increased paid-in capital from stock issuances - Total stockholders' equity decreased by **20.5%** from December 31, 2024, to June 30, 2025, primarily due to the accumulated deficit increasing by **$28.7 million** from net losses, partially offset by an increase in additional paid-in capital from stock issuances[7](index=7&type=chunk)[16](index=16&type=chunk) - Additional paid-in capital increased by **$7.2 million**, driven by common stock issuances for a business combination (**$2.4 million**) and share-based award plans (**$0.4 million**), and stock-based compensation expense (**$5.0 million**) during the six months ended June 30, 2025[16](index=16&type=chunk) Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands, except shares) | Metric | June 30, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :-------------------------- | :------------ | :---------------- | :---------------- | :--------- | | Common Stock Shares | 29,603,494 | 28,526,615 | 1,076,879 | 3.8% | | Additional Paid-in Capital | $137,572 | $130,360 | $7,212 | 5.5% | | Accumulated Deficit | $(56,694) | $(28,012) | $(28,682) | 102.4% | | Accumulated Other Comprehensive Loss | $(1,293) | $(2,268) | $975 | -43.0% | | Total Stockholders' Equity | $79,588 | $100,083 | $(20,495) | -20.5% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The statements of cash flows indicate increased cash usage in operating activities, a shift to cash inflow from investing, and reduced cash from financing compared to the prior year - Net cash used in operating activities increased by **88.9%** to **$16.6 million** for the six months ended June 30, 2025, primarily due to the initial **$16.0 million** payment for a litigation settlement, partially offset by related party funding and changes in working capital[19](index=19&type=chunk)[174](index=174&type=chunk) - Investing activities shifted from a significant cash outflow of **$67.9 million** in 2024 to a cash inflow of **$27.8 million** in 2025, driven by maturities and sales of marketable securities, partially offset by business acquisitions[19](index=19&type=chunk)[175](index=175&type=chunk) - Financing activities saw a substantial decrease in cash provided, moving from **$106.4 million** in 2024 (due to IPO proceeds) to a net cash outflow of **$1.6 million** in 2025, reflecting payroll taxes and vendor financing payments[19](index=19&type=chunk)[176](index=176&type=chunk) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :---------------- | :--------- | | Net cash used in operating activities | $(16,613) | $(8,794) | $(7,819) | 88.9% | | Net cash provided by (used in) investing activities | $27,817 | $(67,865) | $95,682 | -141.0% | | Net cash (used in) provided by financing activities | $(1,599) | $106,424 | $(108,023) | -101.5% | | Net increase in cash and cash equivalents and restricted cash | $10,026 | $29,853 | $(19,827) | -66.4% | | Cash and cash equivalents and restricted cash, end of period | $29,632 | $34,274 | $(4,642) | -13.5% | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, business operations, acquisitions, and other financial commitments [1. Description of Business](index=9&type=section&id=1%2E%20Description%20of%20Business) The company provides Technology Computer Aided Design (TCAD), Electronic Design Automation (EDA) software, and Semiconductor Intellectual Property (SIP) solutions - Silvaco Group, Inc. provides Technology Computer Aided Design (TCAD) software, Electronic Design Automation (EDA) software, and Semiconductor Intellectual Property (SIP) solutions[21](index=21&type=chunk) - The company's solutions help semiconductor and photonics companies increase productivity, accelerate time-to-market, and reduce development and manufacturing costs[21](index=21&type=chunk) - Target markets include display, power devices, automotive, memory, high-performance computing (HPC), internet of things (IoT), and 5G/6G mobile[21](index=21&type=chunk) [2. Summary of Significant Accounting and Reporting Policies](index=9&type=section&id=2%2E%20Summary%20of%20Significant%20Accounting%20and%20Reporting%20Policies) This section outlines the company's key accounting policies, including its status as an emerging growth company and details on customer concentration and restricted cash - The company is an emerging growth company and has elected to use the extended transition period for complying with new or revised accounting standards[25](index=25&type=chunk) - As of June 30, 2025, **$16.5 million** in restricted cash was held to secure an irrevocable standby letter of credit for a litigation settlement, classified as a current asset[31](index=31&type=chunk) - Foreign currency translation adjustments resulted in income of **$0.8 million** and **$1.1 million** for the three and six months ended June 30, 2025, respectively, compared to losses in the prior year periods[34](index=34&type=chunk) Customer Concentration (Accounts Receivable) | Customer | June 30, 2025 | December 31, 2024 | | :--------- | :------------ | :---------------- | | Customer A | 21% | * | | Customer B | 21% | * | | Customer C | 9% | * | | Customer D | * | 21% | | Customer E | * | 15% | Customer Concentration (Revenue) | Customer | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Customer B | 11% | * | * | * | | Customer F | * | 37% | * | 19% | [3. Revenue](index=11&type=section&id=3%2E%20Revenue) This section details the company's revenue recognition policies and future revenue expectations from remaining performance obligations - Revenue is primarily derived from software licensing (recognized upfront upon delivery) and maintenance and services (recognized ratably over the contract term)[40](index=40&type=chunk) - As of June 30, 2025, approximately **$36.4 million** of revenue is expected to be recognized from remaining performance obligations, with about **50%** expected within the next 12 months[43](index=43&type=chunk) - During the six months ended June 30, 2025, the Company recognized **$3.6 million** of revenue that was part of the deferred revenue balance as of December 31, 2024[45](index=45&type=chunk) [4. Acquisitions](index=13&type=section&id=4%2E%20Acquisitions) This section outlines recent business acquisitions, including the Cadence OPC Business and Tech-X Corporation, and their financial impact - On March 4, 2025, Silvaco acquired Cadence's Optical Proximity Correction (OPC) Business for **$11.5 million** in cash, enhancing its computational lithography solutions[46](index=46&type=chunk)[47](index=47&type=chunk) - On April 29, 2025, Silvaco acquired Tech-X Corporation for **$8.0 million**, consisting of **$3.9 million** cash, **457,666 shares** of common stock (**$2.4 million** fair value), and contingent consideration (**$1.7 million** estimated fair value)[53](index=53&type=chunk) OPC Business Acquisition: Assets Acquired (in thousands) | Asset Type | Fair Value | | :------------------ | :--------- | | Contract asset | $615 | | Developed Technology| $1,000 | | Customer Relationships | $4,990 | | Goodwill | $5,311 | | Deferred revenue | $(416) | | Net assets acquired | $11,500 | Tech-X Acquisition: Preliminary Fair Value of Assets Acquired (in thousands) | Asset Type | Fair Value | | :------------------ | :--------- | | Cash | $851 | | Accounts receivable | $749 | | Customer relationships | $1,730 | | Developed technology| $1,280 | | Tradename | $130 | | Goodwill | $4,355 | | Net assets acquired | $7,993 | [5. Goodwill and Intangible Assets](index=16&type=section&id=5%2E%20Goodwill%20and%20Intangible%20Assets) This section details changes in goodwill and intangible assets, including amortization expense and estimated future amortization - Goodwill increased by **$4.4 million** and **$9.7 million** during the three and six months ended June 30, 2025, respectively, due to the Tech-X and OPC Business acquisitions[61](index=61&type=chunk) Intangible Assets, Net (in thousands) | Intangible Asset | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Developed technology | $2,257 | $134 | | Customer relationships| $6,403 | $— | | Trade name | $119 | $— | | Licensed IP | $3,734 | $4,232 | | Total intangible assets | $12,514 | $4,369 | Amortization Expense by Function (in thousands) | Function | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $249 | $249 | $498 | $249 | | Research and development | $71 | $47 | $122 | $117 | | General and administrative | $302 | $— | $364 | $— | | Total amortization expense | $622 | $296 | $984 | $366 | Estimated Future Amortization Expense (in thousands) | Year Ending December 31, | Amount | | :----------------------- | :----- | | Remainder of 2025 | $1,313 | | 2026 | $2,465 | | 2027 | $2,421 | | 2028 | $2,400 | | 2029 | $1,653 | | Thereafter | $2,262 | | Total net carrying value | $12,514| [6. Related Parties](index=17&type=section&id=6%2E%20Related%20Parties) This section details transactions and agreements with related parties, including lease agreements and the litigation settlement funding arrangement - The Company has commercial lease agreements with related parties controlled by Katherine Ngai-Pesic (founding principal stockholder and chairperson) for its corporate and international offices, incurring **$0.1 million** in rent expense for each of the three and six months ended June 30, 2025 and 2024[63](index=63&type=chunk)[64](index=64&type=chunk) - In May 2025, the Company and Co-Defendants (Ms. Ngai-Pesic and Iliya Pesic) agreed to a **$32.5 million** litigation settlement, with the Company bearing **75%** (**$24.4 million**) and Co-Defendants **25%** (**$8.1 million**); the Company made an initial **$16.0 million** payment, including **$6.0 million** funded by Co-Defendants[66](index=66&type=chunk) - As of June 30, 2025, the Company's remaining liability for the settlement is **$14.4 million**; the Company may assume an additional **$2.1 million** if Co-Defendants default[66](index=66&type=chunk) [7. Debt and Financing Obligations](index=18&type=section&id=7%2E%20Debt%20and%20Financing%20Obligations) This section outlines the company's debt and financing obligations, including the repayment of the East West Bank Loan, a vendor financing obligation, and the conversion of the Micron Note - The East West Bank Loan (**$5.0 million** facility) was repaid in full and terminated in May 2024, resulting in a **$0.1 million** loss on debt extinguishment[67](index=67&type=chunk) - A vendor financing obligation of **$3.1 million** as of June 30, 2025, arose from an amended license agreement with NXP Semiconductors, with an imputed interest rate of **9%**[68](index=68&type=chunk) - The **$5.0 million** Micron Note was converted into **294,217 shares** of common stock in May 2024 upon IPO, leading to a **$0.7 million** loss on debt extinguishment[69](index=69&type=chunk)[70](index=70&type=chunk) Vendor Financing Obligation Payments (in thousands) | Year Ending December 31, | Amount | | :----------------------- | :----- | | Remainder of 2025 | $— | | 2026 | $1,200 | | 2027 | $1,200 | | 2028 | $1,200 | | Total undiscounted cash flows | $3,600 | | Less: Imputed interest | $537 | | Present value | $3,063 | | Current portion | $1,114 | | Non-current portion | $1,949 | [8. Stock-Based Compensation](index=19&type=section&id=8%2E%20Stock-Based%20Compensation) This section details the company's stock incentive plans, RSU activity, and stock-based compensation expense by function - The 2024 Stock Incentive Plan superseded the 2014 Plan, with **2,414,426 shares** reserved for future issuance as of June 30, 2025[71](index=71&type=chunk) - The 2024 Employee Stock Purchase Plan (ESPP) allows employees to purchase common stock at **85%** of the lesser of the fair market value at the beginning or end of the offering period[73](index=73&type=chunk) - Total stock-based compensation expense decreased significantly to **$2.1 million** (Q2 2025) and **$4.4 million** (YTD 2025) from **$21.8 million** (Q2 & YTD 2024), primarily due to the IPO-related expense recognition in 2024[78](index=78&type=chunk) RSU Activity (Six Months Ended June 30, 2025) | Metric | Number of Awards | | :---------------------- | :--------------- | | Balance as of Dec 31, 2024 | 1,503,662 | | Granted | 2,264,061 | | Vested | (657,936) | | Forfeited / canceled | (214,389) | | Balance as of June 30, 2025 | 2,895,398 | Stock-Based Compensation Expense by Function (in thousands) | Function | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $359 | $2,467 | $558 | $2,467 | | Research and development | $576 | $4,065 | $820 | $4,065 | | Sales and marketing | $411 | $3,552 | $734 | $3,552 | | General and administrative | $774 | $11,745 | $2,285 | $11,745 | | Total | $2,120 | $21,829 | $4,397 | $21,829 | [9. Income Taxes](index=20&type=section&id=9%2E%20Income%20Taxes) This section provides details on the company's income tax benefit/provision and effective tax rates, explaining the differences from the federal statutory rate - The company recorded an income tax benefit for both the three and six months ended June 30, 2025, compared to a provision in the prior year, with effective tax rates of **5%** and **1%** respectively[79](index=79&type=chunk) - The primary difference between the effective tax rate and the federal statutory rate is due to state income taxes, foreign income taxes, permanent differences, and a full valuation allowance against net deferred tax assets[80](index=80&type=chunk) Income Tax (Benefit) Provision (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax (benefit) provision | $(526) | $214 | $(313) | $1,019 | | Effective tax rate | 5% | (1)% | 1% | (3)% | [10. Segment Reporting](index=21&type=section&id=10%2E%20Segment%20Reporting) This section clarifies that the company operates as a single segment and how the chief operating decision maker reviews financial information - The Company operates as a single operating segment, focusing on TCAD, EDA, and design IP solutions for semiconductor design challenges[83](index=83&type=chunk) - The Chief Executive Officer, as the chief operating decision maker, reviews financial information on a consolidated basis for resource allocation and performance evaluation[83](index=83&type=chunk) Consolidated Net Loss Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $12,048 | $14,960 | $26,140 | $30,849 | | Payroll expenses | $14,941 | $31,523 | $29,473 | $40,861 | | All other expenses, net | $6,516 | $21,825 | $25,349 | $26,998 | | Total expenses | $21,457 | $53,348 | $54,822 | $67,859 | | Net loss | $(9,409) | $(38,388) | $(28,682) | $(37,010) | [11. Commitments and Contingencies](index=21&type=section&id=11%2E%20Commitments%20and%20Contingencies) This section outlines the company's warranties, the Nangate litigation settlement, restricted cash for the settlement, and a BIS warning letter regarding export controls - The Company provides warranties on software licenses (up to **90 days**) and other tools (up to **one year**) but has not incurred related costs in the reported periods[86](index=86&type=chunk) - In May 2025, the Company and Co-Defendants settled the Nangate litigation for **$32.5 million**; the Company's share is **75%**, with a remaining liability of **$14.4 million** as of June 30, 2025[91](index=91&type=chunk) - Restricted cash of **$16.5 million** is held to secure a standby letter of credit for the Nangate settlement, expiring June 30, 2026[92](index=92&type=chunk) - In April 2025, BIS issued a warning letter regarding past potential violations of U.S. export control laws, reserving the right for future enforcement[93](index=93&type=chunk) [12. Fair Value of Financial Instruments](index=23&type=section&id=12%2E%20Fair%20Value%20of%20Financial%20Instruments) This section details the fair value measurements of financial instruments, including cash equivalents, marketable securities, and contingent consideration liabilities - Contingent consideration liabilities are valued using a discounted cash flow model and increased to **$1.7 million** as of June 30, 2025, primarily due to the Tech-X acquisition[96](index=96&type=chunk)[97](index=97&type=chunk) Fair Value Measurements as of June 30, 2025 (in thousands) | Financial Instrument | Carrying Value | Level 1 | Level 2 | Level 3 | | :------------------- | :------------- | :------ | :------ | :------ | | Cash equivalents: Money market funds | $6,149 | $6,149 | $— | $— | | Available-for-sale marketable securities: U.S. government agencies securities | $25,853 | $— | $25,853 | $— | | Total Financial Assets | $32,002 | $6,149 | $25,853 | $— | | Liabilities: Contingent consideration | $1,699 | $— | $— | $1,699 | | Total Financial Liabilities | $1,699 | $— | $— | $1,699 | Changes in Contingent Consideration Liability (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :----------------------------- | :----------------------------- | | Fair value as of January 1 | $11 | $112 | | Change in fair value| $52 | $(18) | | Earn-out payments | $(46) | $(22) | | Acquisitions | $1,682 | $— | | Fair value as of June 30 | $1,699 | $72 | [13. Subsequent Events](index=24&type=section&id=13%2E%20Subsequent%20Events) This section reports on significant events occurring after the reporting period, specifically the acquisition of Mixel Group, Inc - On August 1, 2025, the Company acquired Mixel Group, Inc. for a preliminary aggregate purchase price of **$22.0 million**, consisting of **$19.0 million** in cash and **$3.0 million** in Company shares[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, discussing key factors affecting performance, recent acquisitions, revenue components, and a detailed comparison of financial results for the three and six months ended June 30, 2025, and 2024 [Overview](index=25&type=section&id=Overview) This overview describes Silvaco's core business as a provider of TCAD, EDA software, and SIP solutions, and highlights the composition of its revenue and recent booking trends - Silvaco is a provider of TCAD, EDA software, and SIP solutions for semiconductor and photonics companies, aiming to increase productivity and reduce costs[100](index=100&type=chunk) - Software solutions represented **60%** and **66%** of revenue for the three and six months ended June 30, 2025, respectively, while maintenance and services accounted for **40%** and **34%**[102](index=102&type=chunk) - Bookings declined by **33.8%** for Q2 2025 and **25.3%** for YTD 2025, driven by softer end market demand across the semiconductor industry[103](index=103&type=chunk)[152](index=152&type=chunk) Bookings (in thousands) | Period | Bookings | | :----- | :------- | | Q2 2025 | $12,912 | | Q2 2024 | $19,478 | | YTD 2025 | $26,593 | | YTD 2024 | $35,600 | [Recent Acquisitions](index=26&type=section&id=Recent%20Acquisitions) This section details the company's recent acquisitions of Cadence's OPC Business and Tech-X Corporation, outlining their strategic purpose and financial terms - On March 4, 2025, Silvaco acquired Cadence's OPC Business for **$11.5 million** in cash to enhance its computational lithography solutions[104](index=104&type=chunk) - On April 29, 2025, Silvaco acquired Tech-X Corporation for **$8.0 million**, comprising cash, common stock, and contingent consideration, to integrate advanced multi-physics simulation tools with its TCAD platform[105](index=105&type=chunk) [Key Factors Affecting our Results of Operations and Future Performance](index=26&type=section&id=Key%20Factors%20Affecting%20our%20Results%20of%20Operations%20and%20Future%20Performance) This section discusses the primary internal and external factors influencing the company's financial performance and future outlook, including economic uncertainties, customer relationships, and R&D investments - Worldwide economic and political uncertainties, including financial market fluctuations, tariffs, and trade protectionism, continue to adversely affect business operations and financial results[106](index=106&type=chunk) - Building long-term relationships with existing customers is crucial for driving renewals and overall revenue growth, with approximately **70-73%** of bookings from existing customers in H1 2025[108](index=108&type=chunk)[109](index=109&type=chunk) - The company plans to continually enhance product offerings through R&D, acquisitions, and strategic partnerships to meet increasing semiconductor design complexity and expand into new markets[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - R&D expense was **49%** and **41%** of revenue for the three and six months ended June 30, 2025, respectively, reflecting increased investment in software solutions[112](index=112&type=chunk) - Future success depends on scaling the business while mitigating expense increases, particularly in general and administrative, and sales and marketing, to achieve gross and operating margin expansion[115](index=115&type=chunk) [Components of Results of Operations](index=28&type=section&id=Components%20of%20Results%20of%20Operations) This section breaks down the key components of the company's financial results, including revenue recognition, cost of revenue, and operating expenses, highlighting the impact of stock-based compensation and litigation settlements - Revenue is primarily derived from software licensing (recognized upfront) and maintenance and services (recognized ratably over contract term)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Cost of revenue includes personnel costs for customer support, overhead, amortization of acquired intangible assets, and royalties; stock-based compensation in cost of revenue decreased significantly in 2025 compared to 2024 due to IPO-related expenses[120](index=120&type=chunk) - Operating expenses (R&D, S&M, G&A, litigation settlement) are significantly impacted by personnel costs, including stock-based compensation, which decreased substantially in 2025 post-IPO[122](index=122&type=chunk) - Litigation settlement expense was **$0** for Q2 2025 and **$13.1 million** for YTD 2025, significantly lower than **$14.7 million** in both periods of 2024, reflecting the Nangate settlement accrual[127](index=127&type=chunk) Stock-Based Compensation Expense by Function (in thousands) | Function | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $576 | $4,065 | $820 | $4,065 | | Sales and marketing | $411 | $3,552 | $734 | $3,552 | | General and administrative | $774 | $11,745 | $2,285 | $11,745 | | Total | $1,761 | $19,362 | $3,839 | $19,362 | [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section provides a summary of the company's financial performance, including total revenue, gross profit, operating loss, and net loss, for the reported periods Results of Operations Summary (in thousands, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Total revenue | $12,048 | $14,960 | (19)% | $26,140 | $30,849 | (15)% | | Gross profit | $8,544 | $10,099 | (15)% | $19,620 | $24,015 | (18)% | | Total operating expenses | $18,687 | $47,888 | (61)% | $49,395 | $59,416 | (17)% | | Operating loss | $(10,143) | $(37,789) | (73)% | $(29,775) | $(35,401) | (16)% | | Net loss | $(9,409) | $(38,388) | (75)% | $(28,682) | $(37,010) | (23)% | Results of Operations as a Percentage of Total Revenue | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Software license revenue | 60% | 74% | 66% | 75% | | Maintenance and service | 40% | 26% | 34% | 25% | | Gross profit | 71% | 68% | 75% | 78% | | Total operating expenses | 155% | 320% | 189% | 193% | | Net loss | (78)% | (257)% | (110)% | (120)% | [Comparison of the Three and Six Months Ended June 30, 2025 and 2024](index=32&type=section&id=Comparison%20of%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section provides a detailed comparative analysis of the company's financial performance for the three and six months ended June 30, 2025, versus the prior year, focusing on revenue, gross profit, and operating expenses - Total revenue decreased by **$2.9 million** (**19%**) for Q2 2025 and **$4.7 million** (**15%**) for YTD 2025, primarily due to a decline in TCAD tool revenue, partially offset by increases in EDA tools and IP sales[134](index=134&type=chunk)[135](index=135&type=chunk) - Gross profit decreased by **$1.6 million** (**15%**) for Q2 2025 and **$4.4 million** (**18%**) for YTD 2025, mainly due to lower revenue, though Q2 2025 gross margin improved to **71%** from **68%** due to reduced stock-based compensation[136](index=136&type=chunk)[137](index=137&type=chunk) - Research and development expenses decreased by **$1.8 million** (**23%**) for Q2 2025 and **$0.6 million** (**5%**) for YTD 2025, primarily due to lower stock-based compensation, partially offset by increased employee compensation[139](index=139&type=chunk)[140](index=140&type=chunk) - General and administrative expenses decreased by **$10.2 million** (**56%**) for Q2 2025 and **$6.7 million** (**29%**) for YTD 2025, largely due to reduced stock-based compensation and IPO preparation costs from the prior year[144](index=144&type=chunk)[145](index=145&type=chunk) - Litigation settlement expense was **$0** for Q2 2025 and **$13.1 million** for YTD 2025, a significant reduction from **$14.7 million** in both periods of 2024[146](index=146&type=chunk) [Key Operating Indicators and Non-GAAP Financial Measures](index=35&type=section&id=Key%20Operating%20Indicators%20and%20Non-GAAP%20Financial%20Measures) This section presents key operating indicators, such as bookings, and reconciliations of non-GAAP financial measures to their most directly comparable GAAP counterparts - Bookings, defined as signed contracts and purchase commitments, decreased to **$12.9 million** for Q2 2025 and **$26.6 million** for YTD 2025, from **$19.5 million** and **$35.6 million** in the comparable 2024 periods, reflecting softer end market demand[152](index=152&type=chunk) Bookings Trend (in thousands) | Period | Bookings | | :----- | :------- | | Jun 30, 2025 | $12,912 | | Mar 31, 2025 | $13,681 | | Dec 31, 2024 | $20,310 | | Sep 30, 2024 | $9,875 | | Jun 30, 2024 | $19,478 | Non-GAAP Operating (Loss) Income Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating loss | $(10,143) | $(37,789) | $(29,775) | $(35,401) | | Add: Acquisition-related litigation settlement and legal costs | $304 | $16,717 | $14,099 | $17,311 | | Add: Acquisition-related professional fees and retention bonus | $1,436 | $— | $2,139 | $— | | Add: Amortization of acquired intangible assets | $622 | $296 | $984 | $366 | | Add: IPO preparation costs | $— | $607 | $— | $873 | | Add: Stock-based compensation expense | $2,120 | $21,829 | $4,397 | $21,829 | | Non-GAAP operating (loss) income | $(5,661) | $1,660 | $(8,156) | $4,978 | Non-GAAP Net (Loss) Income Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(9,409) | $(38,388) | $(28,682) | $(37,010) | | Add: Acquisition-related litigation settlement and legal costs | $304 | $16,717 | $14,099 | $17,311 | | Add: Acquisition-related professional fees and retention bonus | $1,436 | $— | $2,139 | $— | | Add: Amortization of acquired intangible assets | $622 | $296 | $984 | $366 | | Add: IPO preparation costs | $— | $607 | $— | $873 | | Add: Stock-based compensation expense | $2,120 | $21,829 | $4,397 | $21,829 | | Add: Change in fair value of contingent consideration | $17 | $(10) | $52 | $(18) | | Add: Foreign exchange loss | $342 | $114 | $547 | $244 | | Add: Loss on debt extinguishment | $— | $718 | $— | $718 | | Add: Income tax effect of non-GAAP adjustments | $(7) | $(43) | $(12) | $(76) | | Non-GAAP net (loss) income | $(4,575) | $1,840 | $(6,476) | $4,237 | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources of liquidity, including cash, marketable securities, and IPO proceeds, and assesses its ability to meet future obligations while highlighting concentration risks - As of June 30, 2025, the Company had **$29.6 million** in cash, cash equivalents, and restricted cash, with **$4.1 million** held by foreign subsidiaries, and **$25.9 million** in short-term marketable securities[164](index=164&type=chunk) - The **$5.0 million** East West Bank Loan was repaid and terminated in May 2024; the **$5.0 million** Micron Note was converted to common stock in May 2024 following the IPO[165](index=165&type=chunk)[167](index=167&type=chunk) - The IPO in May 2024 generated **$106.0 million** in net proceeds, which are a primary source of liquidity[168](index=168&type=chunk) - The Company believes existing liquidity will be sufficient for at least the next 12 months, but future capital raising may be limited and could result in dilution or restrictive debt covenants[169](index=169&type=chunk)[170](index=170&type=chunk) - **65%** of cash and cash equivalents and restricted cash (**$19.3 million**) is maintained with one financial institution, exceeding federally insured limits, posing a concentration risk[170](index=170&type=chunk) [Cash Flows](index=38&type=section&id=Cash%20Flows) This section summarizes the company's cash flow activities from operations, investing, and financing for the reported periods, highlighting significant changes and their drivers - Net cash used in operating activities increased by **$7.8 million** to **$16.6 million** in H1 2025, primarily due to the initial **$16.0 million** litigation settlement payment, partially offset by related party funding and working capital changes[174](index=174&type=chunk) - Net cash provided by investing activities was **$27.8 million** in H1 2025, a significant shift from **$67.9 million** used in H1 2024, driven by marketable securities maturities and sales, partially offset by business acquisitions[175](index=175&type=chunk) - Net cash used in financing activities was **$1.6 million** in H1 2025, a substantial decrease from **$106.4 million** provided in H1 2024 (due to IPO proceeds), reflecting payroll taxes and vendor financing payments[176](index=176&type=chunk) Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Operating activities | $(16,613) | $(8,794) | | Investing activities | $27,817 | $(67,865) | | Financing activities | $(1,599) | $106,424 | | Effect of exchange rate fluctuations | $421 | $88 | | Net change in cash | $10,026 | $29,853 | [Contractual Obligations](index=39&type=section&id=Contractual%20Obligations) This section details the company's contractual obligations, including operating leases, vendor financing, contingent consideration, and litigation settlement payments - As of June 30, 2025, contractual obligations include current operating lease obligations of **$0.9 million** and non-current of **$1.3 million**[178](index=178&type=chunk)[183](index=183&type=chunk) - Vendor financing obligations include a current portion of **$1.1 million** and a non-current portion of **$1.9 million**[178](index=178&type=chunk)[183](index=183&type=chunk) - Contingent consideration related to the Tech-X acquisition includes a current obligation of **$1.0 million** and a non-current obligation of **$0.7 million**[178](index=178&type=chunk)[183](index=183&type=chunk) - The Company has a current obligation of **$14.4 million** for the Nangate Settlement Payment, with a contingent settlement payment obligation of up to **$2.1 million** if Co-Defendants default (not recognized as probable)[179](index=179&type=chunk)[183](index=183&type=chunk) [Off-Balance Sheet Arrangements](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements) This section describes the company's off-balance sheet arrangements, specifically the restricted cash held to secure a standby letter of credit for a litigation settlement - As of June 30, 2025, the Company held **$16.5 million** in restricted cash to secure an irrevocable standby letter of credit for the Nangate Settlement Agreement, expiring June 30, 2026[180](index=180&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) This section confirms that there have been no material changes to the company's critical accounting policies during the reported period - There have been no material changes to the methodology applied for critical accounting policies during the six months ended June 30, 2025, as previously disclosed in the 2024 Form 10-K[181](index=181&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Silvaco Group, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[182](index=182&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204%2E%20Controls%20and%20Procedures) This section details management's evaluation of the effectiveness of disclosure controls and procedures, reports on changes in internal control over financial reporting, and acknowledges the inherent limitations of control systems [Evaluation of Disclosure Controls and Procedures](index=40&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms management's conclusion on the effectiveness of the company's disclosure controls and procedures - Management, with CEO participation, concluded that disclosure controls and procedures were effective as of June 30, 2025[184](index=184&type=chunk) [Changes in Internal Control Over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting during the period - There were no changes in internal control over financial reporting (ICFR) that materially affected, or are reasonably likely to materially affect, ICFR during the period covered by this report[185](index=185&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=40&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) This section acknowledges the inherent limitations of any control system, emphasizing that reasonable assurance, not absolute, is provided - Management acknowledges that control systems provide only reasonable, not absolute, assurance of achieving objectives due to inherent limitations and cost-benefit considerations[186](index=186&type=chunk) [PART II. Other Information](index=41&type=section&id=PART%20II%2E%20Other%20Information) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201%2E%20Legal%20Proceedings) Information regarding the company's current legal proceedings is incorporated by reference from Note 11 to the unaudited condensed consolidated financial statements - Information regarding current legal proceedings is detailed in Note 11 of the unaudited condensed consolidated financial statements[187](index=187&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A%2E%20Risk%20Factors) This section outlines various risks and uncertainties that could materially affect the company's business, financial condition, results of operations, and prospects. These risks span business and industry-specific challenges, intellectual property and data security concerns, litigation, and factors related to the company's status as a controlled public entity [Risk Factor Summary](index=41&type=section&id=Risk%20Factor%20Summary) This summary highlights the main categories of risks the company faces, including competitive pressures, operational fluctuations, economic downturns, and governance issues - Key risks include significant competition, fluctuating operating results, economic downturns, challenges in product innovation, international operational disruptions, and the need to protect intellectual property[189](index=189&type=chunk) - Other risks involve IT system compromises, adverse financial services industry developments, and the impact of being a controlled company with limited stockholder influence[189](index=189&type=chunk) [Risks Related to Our Business and Industry](index=42&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details risks inherent to the company's business and the semiconductor industry, such as competition, economic volatility, product innovation, and international operations - The company faces significant competition from larger companies with greater resources, competing on technology, license quality, features, terms, compatibility, reliability, interoperability, price, and payment terms[190](index=190&type=chunk) - Operating results are subject to significant fluctuations due to point-in-time revenue recognition, seasonality (e.g., holidays, customer R&D cycles), and macroeconomic conditions, making period-to-period comparisons unreliable[195](index=195&type=chunk)[200](index=200&type=chunk) - Substantial economic downturns, particularly in key industrial sectors and China (**28%** of Q2 2025 revenue), can reduce software solution sales and revenue growth[201](index=201&type=chunk)[204](index=204&type=chunk) - Success depends on continuous innovation and timely delivery of new software solutions and enhancements to keep pace with rapid technological changes and meet evolving market demands[214](index=214&type=chunk) - Increased R&D investment may be required to address industry performance, new applications, and competitive factors, potentially increasing operating expenses without a proportional revenue increase[220](index=220&type=chunk) - A significant portion of revenue (**70%** in Q2 2025) comes from international customers, exposing the company to risks from government actions, trade disputes, political instability, and adverse foreign exchange fluctuations[224](index=224&type=chunk)[244](index=244&type=chunk) - Geopolitical conflicts (e.g., Israel-Hamas, Russia-Ukraine) could disrupt operations, delay software development, and impact global trade and economies, despite no direct revenue from Russia or Ukraine[238](index=238&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk)[243](index=243&type=chunk) - The ability to raise additional capital in the future may be limited, potentially leading to dilution from equity issuances or restrictive covenants from debt financing, hindering growth strategy execution[246](index=246&type=chunk) - Acquisitions, such as OPC Business and Tech-X, involve risks including integration difficulties, unforeseen expenditures, and potential loss of customers or key personnel[252](index=252&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk) [Risks Related to Intellectual Property, Information Technology and Data Privacy and Security](index=54&type=section&id=Risks%20Related%20to%20Intellectual%20Property%2C%20Information%20Technology%20and%20Data%20Privacy%20and%20Security) This section addresses risks concerning the protection of intellectual property, the security of IT systems and data, and compliance with evolving data privacy regulations - Failure to protect proprietary technology and inventions through patents, trade secrets, and other IP rights could adversely impact competitiveness and financial results, with enforcement being costly and difficult[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - The company's technology is vulnerable to piracy, unauthorized copying, and other forms of infringement, especially in countries with weak IP protection or enforcement[271](index=271&type=chunk) - Risks of security incidents, cyber-attacks, and data breaches are evolving and prevalent, potentially leading to regulatory actions, litigation, reputational harm, and operational disruptions[276](index=276&type=chunk)[277](index=277&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk) - Reliance on third-party open source software components carries risks of license non-compliance, potential source code release, and vulnerabilities, which could restrict product delivery or lead to litigation[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) - Software bugs or defects, especially in new releases or integrated technologies, could expose the company to liability, harm its reputation, and result in loss of market share[296](index=296&type=chunk) - Dependence on third-party software and IP licenses means risks of non-renewal, breach, or infringement claims, which could disrupt business and harm financial results[297](index=297&type=chunk)[298](index=298&type=chunk) - Compliance with stringent and evolving data privacy and security laws (e.g., CCPA, GDPR, PIPL) and cross-border data transfer limitations is complex and costly, with potential for significant fines and operational impacts[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk)[303](index=303&type=chunk)[305](index=305&type=chunk)[308](index=308&type=chunk) [Risks Related to Intellectual Property Litigation](index=61&type=section&id=Risks%20Related%20to%20Intellectual%20Property%20Litigation) This section highlights the financial and operational risks associated with intellectual property litigation, including substantial expenses and potential business disruption - The company is exposed to intellectual property litigation, which can incur substantial expenses, reduce sales, divert management attention, and potentially lead to significant damages or loss of IP rights[309](index=309&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk) - Obligations to indemnify customers in IP disputes could result in substantial and material expenses, severely disrupting customer operations and harming the company's business[314](index=314&type=chunk) [Risks Related to Our Status as a Controlled Company](index=62&type=section&id=Risks%20Related%20to%20Our%20Status%20as%20a%20Controlled%20Company) This section discusses the implications of the company's status as a controlled company, particularly concerning corporate governance and the influence of the Pesic Family - As a 'controlled company' (Pesic Family owns >**50%** voting power), Silvaco is exempt from certain Nasdaq corporate governance requirements, potentially limiting other stockholders' influence[315](index=315&type=chunk)[317](index=317&type=chunk) - The Pesic Family's collective voting control (over **65%** of common stock) allows them to control all matters affecting the company, including business plans, mergers, and asset dispositions, potentially conflicting with other stockholders' interests[318](index=318&type=chunk)[322](index=322&type=chunk) - Disputes with Ms. Ngai-Pesic or other Pesic Family members, particularly regarding related-party lease agreements, could adversely affect operating results due to potential lack of negotiation leverage[323](index=323&type=chunk)[325](index=325&type=chunk) [Risks Related to Legal, Regulatory, Accounting and Tax Matters](index=64&type=section&id=Risks%20Related%20to%20Legal%2C%20Regulatory%2C%20Accounting%20and%20Tax%20Matters) This section covers risks arising from compliance with various laws and regulations, potential litigation, and changes in tax policies - The company is subject to anti-corruption, anti-bribery, anti-money laundering, export/import controls, and sanctions laws, with non-compliance potentially leading to criminal/civil liability and reputational harm[326](index=326&type=chunk)[328](index=328&type=chunk) - Past voluntary disclosures to BIS and OFAC regarding potential export control and sanctions violations resulted in warning/cautionary letters, but future enforcement actions remain possible[329](index=329&type=chunk)[330](index=330&type=chunk) - Involvement in various investigations and legal proceedings, including the **$32.5 million** Nangate litigation settlement, could have a material adverse effect on financial position and stock price[333](index=333&type=chunk)[334](index=334&type=chunk) - Changes in tax laws (e.g., TCJA's R&D capitalization), exposure to additional tax liabilities, and audits by tax authorities could affect profitability and result in additional tax payments[335](index=335&type=chunk)[337](index=337&type=chunk)[342](index=342&type=chunk) [Risks Related to the Ownership of Our Common Stock](index=66&type=section&id=Risks%20Related%20to%20the%20Ownership%20of%20Our%20Common%20Stock) This section addresses risks pertinent to the company's common stock, including price volatility, internal control weaknesses, potential dilution, and dividend policy - The price of common stock is volatile due to various factors (e.g., operating results, market speculation, economic conditions) and could decline, potenti

FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from ----- to ----- Commission file number: 001-38669 LiveRamp Holdings, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisd ...

PART I — FINANCIAL INFORMATION [Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements for Genco Shipping & Trading Limited show a net loss for current periods compared to net income in prior year periods, driven by lower voyage revenues, with total assets slightly decreasing to $1.04 billion and liabilities increasing to $147.2 million [Condensed Consolidated Balance Sheets](index=5&type=section&id=a)%20Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030,%202025%20and%20December%2031,%202024) Total assets decreased slightly to $1.040 billion as of June 30, 2025, while total liabilities increased to $147.2 million, leading to a decrease in total equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $78,972 | $97,990 | | **Total Assets** | **$1,040,250** | **$1,056,602** | | **Total Current Liabilities** | $48,547 | $40,660 | | **Total Liabilities** | **$147,208** | **$128,374** | | **Total Equity** | **$893,042** | **$928,228** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=b)%20Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20ended%20June%2030,%202025%20and%202024) The company reported a net loss for Q2 and H1 2025, a significant shift from net income in prior periods, primarily due to decreased voyage revenues Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Voyage Revenues** | $80,939 | $107,047 | $152,208 | $224,482 | | **Operating (Loss) Income** | $(4,262) | $26,314 | $(14,031) | $48,407 | | **Net (Loss) Income** | $(6,809) | $23,493 | $(18,771) | $42,436 | | **Net (Loss) Earnings Per Share-diluted** | $(0.16) | $0.54 | $(0.43) | $0.97 | [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=7&type=section&id=c)%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income%20for%20the%20Three%20and%20Six%20Months%20ended%20June%2030,%202025%20and%202024) Comprehensive loss for Q2 and H1 2025 mirrored net loss figures, with no significant other comprehensive income or loss items impacting results Comprehensive (Loss) Income (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $(6,809) | $23,493 | | **Six Months Ended June 30** | $(18,771) | $41,909 | [Condensed Consolidated Statements of Equity](index=8&type=section&id=d)%20Condensed%20Consolidated%20Statements%20of%20Equity%20for%20the%20Three%20and%20Six%20Months%20ended%20June%2030,%202025%20and%202024) Total equity decreased to $893.0 million by June 30, 2025, primarily due to net loss and cash dividends declared - Total equity decreased by **$35.2 million** in the first six months of 2025, driven by net loss and dividend payments[18](index=18&type=chunk) - Cash dividends declared in H1 2025 amounted to **$0.45 per share** ($0.30 in Q1 and $0.15 in Q2), totaling **$19.7 million**[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=e)%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20ended%20June%2030,%202025%20and%202024) Net cash from operating activities significantly decreased in H1 2025, while net cash used in investing activities shifted to an outflow, and financing activities saw lower cash usage Cash Flow Summary (in thousands) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $8,303 | $61,283 | | **Net Cash (used in)/from Investing Activities** | $(6,661) | $65,118 | | **Net Cash from Financing Activities** | $(9,893) | $(130,910) | | **Net Decrease in Cash** | $(8,251) | $(4,509) | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=f)%20Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail fleet composition, segment reporting, debt structure, compensation plans, and significant subsequent events including a dividend declaration and credit facility upsizing - As of June 30, 2025, the Company's fleet consisted of **42 drybulk vessels** (16 Capesize, 15 Ultramax, 11 Supramax) with an aggregate capacity of approximately **4,446,000 dwt**[25](index=25&type=chunk) - The company operates under two reportable segments: **Major Bulk** (Capesize vessels) and **Minor Bulk** (Ultramax and Supramax vessels)[41](index=41&type=chunk)[42](index=42&type=chunk) - Subsequent to the quarter end, on August 6, 2025, the company declared a quarterly dividend of **$0.15 per share**[102](index=102&type=chunk) - On July 10, 2025, the company upsized its revolving credit facility from **$500 million to $600 million** and extended the maturity to July 2030[103](index=103&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting decreased voyage revenues and TCE rates leading to a net loss, alongside capital allocation, fleet strategy, regulatory updates, and liquidity - The company's capital allocation strategy focuses on compelling quarterly dividends, financial deleveraging, and accretive fleet growth, with debt reduced by **$349.2 million** since 2021[110](index=110&type=chunk)[114](index=114&type=chunk) - Total liquidity as of June 30, 2025, was **$335.6 million**, comprising **$35.8 million** in cash and **$299.8 million** in undrawn revolver availability[111](index=111&type=chunk) Fleet Average Daily Results Comparison | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Time Charter Equivalent (TCE)** | $13,631 | $19,938 | (31.6)% | | **Daily Vessel Operating Expenses** | $6,213 | $6,855 | (9.4)% | - Subsequent to quarter end, the company agreed to acquire the Genco Courageous, a 2020-built Capesize vessel, for **$63.55 million**, expected for delivery in Q3 2025[122](index=122&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks primarily from floating-rate debt interest rate changes and fuel price fluctuations, with currency exchange rate risk deemed immaterial - The company is subject to interest rate risk on its floating rate debt tied to SOFR; a hypothetical **1% increase in SOFR** would have increased H1 2025 interest expense by **$0.5 million**[231](index=231&type=chunk)[232](index=232&type=chunk) - The company's last interest rate cap agreement expired in Q1 2024, increasing exposure to variable interest rate fluctuations[229](index=229&type=chunk)[233](index=233&type=chunk) - Bunker swap and forward fuel purchase agreements are utilized to mitigate risk from changing fuel prices, with gains or losses recognized in other income[235](index=235&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are **effective** as of June 30, 2025[237](index=237&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[238](index=238&type=chunk) PART II —OTHER INFORMATION [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and financial data in Inline XBRL format - The report includes CEO and CFO certifications as required by Rules 13a-14(a) and 15d-14(a) of the Exchange Act[240](index=240&type=chunk) - Financial statements and notes are provided in Inline XBRL format as part of the filing[242](index=242&type=chunk)