Silvaco Group, Inc.(SVCO) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights Company Overview and Strategic Direction Silvaco, a TCAD, EDA software, and SIP solutions provider, expanded its Serviceable Addressable Market (SAM) through the Mixel Group acquisition and is confident in long-term growth driven by strong demand, strategic expansion, and increasing technology stack value - Through the acquisition of Mixel Group, Inc., Silvaco's Serviceable Addressable Market (SAM) is estimated to have increased by $110 million, in addition to the $600 million incremental SAM from earlier acquisitions this year[3] - The company is confident in its long-term growth trajectory, driven by strong market demand, strategic expansion, and the increasing value of its technology stack[3] Q2 2025 and Recent Q3 2025 Business Highlights Silvaco completed the Mixel Group acquisition in Q2 2025, with new customers contributing 14% and existing customer expansion 40% of revenue, while also announcing executive team updates and resolving a dispute with former Nangate shareholders - Completed the acquisition of Mixel Group, Inc. on August 1, further expanding the Serviceable Addressable Market (SAM) by approximately $110 million[4] Q2 2025 Revenue Contribution Sources | Source | Percentage of Q2 Revenue | | :-------------------------------- | :----------------------- | | New Customers (this quarter) | 14% | | New Customers acquired in prior two quarters | 6% | | Expansion from existing customers | 40% | | Renewals | 40% | - The executive team added three new members, including Senior Vice President of the EDA Business Unit, Senior Vice President of the Silicon IP Business Unit, and Vice President of Business Development[4] - Resolved an ongoing dispute with former shareholders of Nangate, Inc[4] Q2 2025 Financial Performance GAAP Financial Results In Q2 2025, Silvaco reported $12.05 million in revenue, a 19% year-over-year decrease, with a GAAP net loss of $9.40 million, significantly narrowed from $38.40 million in Q2 2024, resulting in a basic net loss per share of ($0.32) Q2 2025 GAAP Financial Highlights | Metric | Q2 2025 | Q2 2024 | Year-over-Year Change | | :----------------------- | :---------- | :---------- | :--------- | | Revenue | $12.05 million | $14.96 million | -19% | | GAAP Gross Profit | $8.50 million | $10.10 million | -15.8% | | GAAP Gross Margin | 71% | 68% | +3 percentage points | | GAAP Net Loss | ($9.40) million | ($38.40) million | +75.5% (loss narrowed) | | GAAP Basic Net Loss Per Share | ($0.32) | ($1.55) | +79.3% (loss narrowed) | Q2 2025 Revenue by Product Line (Year-over-Year Change) | Product Line | Q2 2025 Revenue | Year-over-Year Change | | :------------ | :-------------- | :--------- | | TCAD | $6.80 million | -34% | | EDA | $3.40 million | +15% | | SIP | $1.80 million | +11% | Non-GAAP Financial Results Silvaco's Q2 2025 non-GAAP gross profit was $9.20 million with a 76% gross margin, down from 86% in Q2 2024, leading to a non-GAAP net loss of $4.60 million compared to a net income of $1.80 million in the prior year, and a diluted non-GAAP net loss per share of ($0.16) Q2 2025 Non-GAAP Financial Highlights | Metric | Q2 2025 | Q2 2024 | | :-------------------------- | :---------- | :---------- | | Non-GAAP Gross Profit | $9.20 million | $12.80 million | | Non-GAAP Gross Margin | 76% | 86% | | Non-GAAP Net Loss | ($4.60) million | $1.80 million | | Non-GAAP Diluted Net Loss Per Share | ($0.16) | $0.07 | Key Operating Indicators In Q2 2025, Silvaco's total bookings were $12.90 million, a 34% year-over-year decrease, with remaining performance obligations of $36.40 million as of June 30, 2025, of which 50% is expected to be recognized as revenue within the next 12 months Q2 2025 Key Operating Indicators | Metric | Q2 2025 | Year-over-Year Change | | :-------------------------- | :---------- | :--------- | | Total Bookings | $12.90 million | -34% | | Remaining Performance Obligations (as of June 30, 2025) | $36.40 million | Not Applicable | | Revenue expected to be recognized within next 12 months | 50% of Remaining Performance Obligations | Not Applicable | Cash and Marketable Securities (as of Q2 2025) | Category | Amount | | :-------------------------------------- | :----------- | | Cash and Cash Equivalents, Restricted Cash | $29.632 million | | Marketable Securities | $25.853 million | | Total Cash, Cash Equivalents, Restricted Cash, and Marketable Securities | $55.50 million | Financial Outlook Q3 2025 Financial Outlook Silvaco projects Q3 2025 total bookings between $14.0 million and $18.2 million, representing a significant year-over-year increase of 42% to 84%, with revenue expected between $14.0 million and $18.0 million, and non-GAAP gross margin between 81% and 85% Q3 2025 Financial Guidance | Metric | Range | Year-over-Year Change vs. Q3 2024 | | :-------------------------- | :-------------------- | :---------------------- | | Total Bookings | $14.0 million - $18.2 million | +42% to +84% | | Revenue | $14.0 million - $18.0 million | +28% to +64% | | Non-GAAP Gross Margin | 81% - 85% | Compared to 86% in Q3 2024 | | Non-GAAP Operating Income (Loss) | ($3.5 million) - $0.5 million | Compared to ($2.6 million) in Q3 2024 | | Non-GAAP Diluted Net Income (Loss) Per Share | ($0.12) - $0.02 | Compared to ($0.06) in Q3 2024 | Full Year 2025 Financial Outlook Silvaco anticipates full-year 2025 total bookings between $67.0 million and $74.0 million, a 2% to 13% increase from 2024, with revenue projected between $64.0 million and $70.0 million, non-GAAP gross margin between 83% and 86%, and non-GAAP operating income (loss) between ($2.0 million) and $1.0 million Full Year 2025 Financial Guidance | Metric | Range | Year-over-Year Change vs. 2024 | | :-------------------------- | :-------------------- | :------------------- | | Total Bookings | $67.0 million - $74.0 million | +2% to +13% | | Revenue | $64.0 million - $70.0 million | +7% to +17% | | Non-GAAP Gross Margin | 83% - 86% | Compared to 86% in 2024 | | Non-GAAP Operating Income (Loss) | ($2.0 million) - $1.0 million | Compared to $5.5 million income in 2024 | | Non-GAAP Diluted Net Income (Loss) Per Share | ($0.07) - $0.03 | Compared to $0.25 income in 2024 | Detailed Financial Statements Condensed Consolidated Balance Sheets As of June 30, 2025, Silvaco's total assets were $127.6 million, a decrease from $142.3 million on December 31, 2024, with total liabilities decreasing to $48.0 million and total stockholders' equity also decreasing to $79.6 million during the same period Condensed Consolidated Balance Sheet Highlights (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total Assets | 127,629 | 142,345 | | Total Liabilities | 48,041 | 42,262 | | Total Stockholders' Equity | 79,588 | 100,083 | | Cash and Cash Equivalents | 13,132 | 19,606 | | Restricted Cash | 16,500 | — | | Current Marketable Securities | 25,853 | 63,071 | Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, total revenue was $12.0 million, down from $15.0 million in Q2 2024, with a net loss of $9.4 million, a significant improvement from the $38.4 million net loss in Q2 2024, primarily due to substantial reductions in general and administrative expenses and litigation settlement costs Condensed Consolidated Statements of Operations Highlights (for the three months ended June 30, in thousands of USD) | Metric | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Total Revenue | 12,048 | 14,960 | | Gross Profit | 8,544 | 10,099 | | Operating Loss | (10,143) | (37,789) | | Net Loss | (9,409) | (38,388) | | Basic and Diluted Net Loss Per Share | (0.32) | (1.55) | Key Operating Expenses (for the three months ended June 30, in thousands of USD) | Expense Category | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Research and Development Expenses | 5,907 | 7,707 | | Sales and Marketing Expenses | 4,714 | 7,171 | | General and Administrative Expenses | 8,066 | 18,314 | | Litigation Settlement Expenses | — | 14,696 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash outflow from operating activities increased to ($16.6 million) from ($8.8 million) in the prior year, while net cash inflow from investing activities significantly improved to $27.8 million, driven by sales and maturities of marketable securities and business acquisitions, and net cash outflow from financing activities was ($1.6 million), contrasting with $106.4 million cash inflow from IPO in the prior year Condensed Consolidated Statements of Cash Flows Highlights (for the six months ended June 30, in thousands of USD) | Cash Flow Activity | 2025 | 2024 | | :-------------------------------------- | :--------- | :--------- | | Net Cash Outflow from Operating Activities | (16,613) | (8,794) | | Net Cash Inflow (Outflow) from Investing Activities | 27,817 | (67,865) | | Net Cash Outflow (Inflow) from Financing Activities | (1,599) | 106,424 | | Net Increase in Cash and Cash Equivalents and Restricted Cash | 10,026 | 29,853 | | Cash and Cash Equivalents and Restricted Cash at End of Period | 29,632 | 34,274 | - Cash flow from investing activities significantly increased in 2025, primarily driven by the sale ($10.3 million) and maturity ($32.0 million) of marketable securities, partially offset by business acquisitions ($14.3 million)[30] Revenue Analysis Revenue Breakdown by Region In Q2 2025, Asia Pacific remained the largest revenue contributor at 57%, a decrease from 62% in Q1 2025, while the Americas' share increased from 20% to 36%, and EMEA's contribution declined to 7% Revenue Breakdown by Region (Percentage of Total Revenue) | Region | Q2 2025 | Q1 2025 | Q2 2024 | | :------- | :------ | :------ | :------ | | Americas | 36% | 20% | 51% | | Asia Pacific | 57% | 66% | 41% | | Europe, Middle East, and Africa | 7% | 14% | 8% | Revenue Breakdown by Product Line TCAD remained the dominant product line, accounting for 56% of Q2 2025 revenue, consistent with Q1 2025 but down from 69% in Q2 2024, while EDA's share decreased from 36% to 29%, and SIP's share increased from 8% to 15% Revenue Breakdown by Product Line (Percentage of Total Revenue) | Product Line | Q2 2025 | Q1 2025 | Q2 2024 | | :----------- | :------ | :------ | :------ | | TCAD | 56% | 56% | 69% | | EDA | 29% | 36% | 20% | | SIP | 15% | 8% | 11% | Revenue Breakdown by Item Category Software license revenue constituted 60% of total revenue in Q2 2025, down from 71% in Q1 2025 and 74% in Q2 2024, while maintenance and services revenue increased to 40% in Q2 2025, up from 29% in Q1 2025 and 26% in Q2 2024 Revenue Breakdown by Item Category (Percentage of Total Revenue) | Category | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | Software License Revenue | 60% | 71% | 74% | | Maintenance and Services | 40% | 29% | 26% | Revenue Breakdown by Country In Q2 2025, the United States contributed 30% of revenue, while China's share increased from 14% in Q1 2025 to 28%, and the "Other" category (representing multiple countries) decreased from 66% in Q1 2025 to 42% Revenue Breakdown by Country (Percentage of Total Revenue) | Country | Q2 2025 | Q1 2025 | Q2 2024 | | :------------ | :------ | :------ | :------ | | United States | 30% | 20% | 50% | | China | 28% | 14% | 17% | | Other | 42% | 66% | 33% | Non-GAAP Measures & Reconciliation Discussion of Non-GAAP Financial Measures Silvaco utilizes non-GAAP financial measures, including non-GAAP cost of revenue, gross profit, operating income (loss), net income (loss), and diluted net income (loss) per share, to supplement GAAP results by excluding non-cash or non-core operating items like stock-based compensation and acquisition-related amortization, aiming for clearer insights into core operational performance and enhanced period-over-period comparability - Non-GAAP measures exclude items such as stock-based compensation expense, amortization of acquired intangible assets, acquisition-related professional fees and retention bonuses, payroll tax expense related to IPO lock-up release, IPO readiness costs, acquisition-related litigation settlement and legal fees, executive severance, changes in fair value of contingent consideration, foreign exchange (gain) loss, loss on debt extinguishment, and income tax effects of non-GAAP adjustments[21][22] - These exclusions are due to their non-cash nature or because they do not represent core operating performance, thereby improving comparability with prior periods and competitors[23] - Non-GAAP measures are useful for management in making financial and operational decisions and for investors/analysts in analyzing financial performance and business health, but should supplement, not replace, GAAP results[24] GAAP to Non-GAAP Reconciliation The reconciliation table details adjustments to convert GAAP data to non-GAAP measures, including cost of revenue, gross profit, operating expenses, operating income (loss), and net income (loss), with key adjustments including the add-back of stock-based compensation, amortization of acquired intangible assets, and acquisition-related litigation settlement and legal fees Key GAAP to Non-GAAP Adjustments (for the three months ended June 30, in thousands of USD) | Adjustment Category | Cost of Revenue | Gross Profit | Operating Expenses | Operating Loss | Net Loss | | :------------------------------------------ | :-------------- | :----------- | :----------------- | :------------- | :------- | | Stock-based Compensation Expense | (359) | 359 | (1,761) | 2,120 | 2,120 | | Amortization of Acquired Intangible Assets | (249) | 249 | (373) | 622 | 622 | | Acquisition-related Professional Fees and Retention Bonuses | (59) | 59 | (1,377) | 1,436 | 1,436 | | Acquisition-related Litigation Settlement and Legal Fees | — | — | (304) | 304 | 304 | Corporate Information About Silvaco Silvaco is a global provider of TCAD, EDA software, and SIP solutions, enabling semiconductor design and digital twin modeling through AI software and innovation, serving diverse markets from display to 5G/6G mobile, with headquarters in Santa Clara, California, and global offices - Silvaco is a provider of TCAD, EDA software, and SIP solutions, enabling semiconductor design and digital twin modeling through AI software and innovation[13] - Its solutions are applied in complex SoC designs across markets such as display, power devices, automotive, memory, high-performance computing, foundries, photonics, IoT, and 5G/6G mobile[13] - The company is headquartered in Santa Clara, California, with global offices in North America, Europe, Egypt, Brazil, China, Japan, Korea, Singapore, Vietnam, and Taiwan[13] Q2 2025 Conference Call Details Silvaco held its Q2 2025 earnings conference call on Wednesday, August 6, 2025, at 5:00 PM ET, with a webcast and archived replay available on the investor relations website - The Q2 2025 conference call was held on Wednesday, August 6, 2025, at 5:00 PM ET[12][13] - Supplemental financial results and the earnings presentation are available at https://investors.silvaco.com/, along with an archived replay of the conference call[12] Safe Harbor Statement This press release contains forward-looking statements based on Silvaco's current expectations, subject to various risks and uncertainties including market conditions, technological changes, regulatory developments, and macroeconomic trends, which could cause actual results to differ materially from expectations - Forward-looking statements are based on current expectations and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations[14][16] - Risk factors include market conditions, technological changes, demand levels, regulatory developments, trade policies, public health crises, geopolitical conflicts, and the ability to integrate acquisitions and retain key personnel[16][18] - Readers should not place undue reliance on any forward-looking statements, and Silvaco undertakes no obligation to update these statements; further information is available in SEC filings[19] Contacts Contact information for media relations and investor relations is provided for inquiries - Media Relations contact: Tiffany Behany, press@silvaco.com[35] - Investor Relations contact: Greg McNiff, investors@silvaco.com[35]