Silvaco Reports First Quarter 2024 Financial Results
June 20, 2024 11:30 AM EDT
Quarterly revenue of $15.9 million up 27% sequentially and 11% year-over-year
SANTA CLARA, Calif., June 20, 2024 (GLOBE NEWSWIRE) -- Silvaco Group, Inc. (Nasdaq: SVCO, “Silvaco” or the “Company”), a provider of TCAD,
EDA software, and SIP solutions that enable semiconductor design and digital twin modeling through AI software and innovation, today announced its
first quarter 2024 results.
“Having successfully completed our IPO on May 13 th, we are excited to embark on our journey as a public company,” said Babak Taheri, Silvaco’s
Chief Executive Officer. Dr. Taheri continued, “I am pleased with our first quarter results which were driven by strong demand for our TCAD and EDA
products across various sectors. With our proven software platform, we continue to capitalize on organic growth opportunities and customer
investments across multiple end markets.”
Commenting on the financial results and outlook, Ryan Benton, Silvaco’s Chief Financial Officer, added, “We achieved another quarter of stellar
financial results including double-digit top-line growth and profitability. Based on our visibility and strong, predictable revenue model, we expect the
momentum to continue into the second quarter. Moreover, following the completion of the IPO unaudited cash and cash equivalents was $104.2
million at the end of May 2024, allowing us to pursue our growth initiatives by means of both organic and inorganic opportunities.”
First Quarter 2024 Financial Highlights

Strong TCAD and EDA quarterly revenues with a key strategic customer renewal in Japan andnine new customer wins, partially offset by lower Semiconductor IP (“SIP”) revenue. As
previously disclosed, the NXP licensing agreement lapsed in the fourth quarter of 2023, but
has since been extended as of April 2024. The lapse of the NXP licensing agreement
impacted our IP revenues and bookings in the first quarter of 2024 but since reinstatement theCompany has observed a significant resumption in SIP bookings. This contributes to theCompany's estimate of total bookings growth of 18% to 29% for the second quarter of 2024.
GAAP and non-GAAP gross margins for the first quarter of 2024 of 88%, up from 86% in thefirst quarter of 2023 and 79% in the fourth quarter of 2023. This increase was driven in largepart by strong TCAD and EDA license revenue growth.
GAAP operating expenses for the first quarter of 2024 were up 7% from a year ago and down
2% sequentially from the fourth quarter of 2023. Non-GAAP operating expenses for the firstquarter were up 5% from a year ago and down 5% sequentially. The year-over-year increases
in GAAP and non-GAAP operating expenses were due in part to increased research anddevelopment and sales and marketing staff costs offset by lower sales commissions expense.
GAAP operating income and margin for the first quarter of 2024 of $2.4 million and 15%, up
from $1.5 million and 11% in Q1 2023, respectively. Non-GAAP operating income and nonGAAP operating margin of $3.3 million and 21%, up from $2.1 million and 15% in Q1 2023.
First Quarter 2024 Financial Results
GAAP Financial Results

Revenue of $15.9 million, up 27% quarter-over-quarter and up 11% year-over-year.
TCAD revenue of $10.6 million, up 21% year-over-year.
EDA revenue of $4.7 million, up 13% year-over-year.
SIP revenue of $0.6 million, down 57% year-over-year.
GAAP gross margin of 88%, compared to 86% in Q1 2023.
GAAP operating income and margin of $2.4 million and 15%, compared to $1.5 million and11% in Q1 2023, respectively.
GAAP net income of $1.4 million, compared to $0.8 million in Q1 2023.
GAAP diluted net income per share of $0.07.
As of March 31, 2024, cash and cash equivalents totaled $5.7 million.
Key Operating Indicators and Non-GAAP Financial Results:

Gross bookings were $16.1 million, up 3% year-over-year.
Remaining performance obligations as of March 31, 2024, were $29.1 million, 49% of which is
expected to be recognized as revenue in the next 12 months.
Non-GAAP operating income and non-GAAP margin of $3.3 million and 21%, compared to$2.1 million and 15% in Q1 2023, respectively.
Non-GAAP net income of $2.4 million, compared to $1.9 million in Q1 2023.
Non-GAAP diluted net income per share of $0.12.
For a discussion of the non-GAAP metrics presented in this press release, as well as a reconciliation of non-GAAP metrics to the nearest comparable
GAAP metric for Silvaco's first quarter 2024, fourth quarter 2023 and first quarter 2023 results, see “Discussion of Non-GAAP Financial Measures” and“GAAP to Non-GAAP Reconciliation” in the accompanying tables below.
First Quarter 2024 and Recent Business Highlights

Introduced artificial intelligence-based platform for digital twin modeling named fab technology
co-optimization, or FTCO™, for wafer-level fabrication facilities. FTCO™ uses manufacturing
data to perform statistical, AI and physics-based machine learning software simulations tocreate a computer model or ‘digital twin’ of a wafer that can be used to simulate the fabrication
process and yield. Customers can utilize this model to run simulation experiments tounderstand and enhance wafer yield without the need to run physical wafers, which can betime-consuming and expensive. The company estimates that the market opportunity for thistechnology represents a serviceable addressable market in excess of $500 million.
Announced an enhanced partnership with Micron Technology, Inc. (Nasdaq: MU) (“Micron”),
which included expanding the partnership for FTCO™ and securing a $5.0 million investment
from Micron in the form of a senior subordinated convertible promissory note, which
subsequently converted into common stock at the completion of the IPO.
Announced extension of Technology License and Distribution Agreement with NXP, which
extended the term of the SIP licensing agreement for an additional five years beginning from
April 1, 2024.
Priced and closed an IPO of 6,000,000 shares of Silvaco common stock at a price to the publicof $19.00 per share. Net proceeds to the company from the IPO were approximately $106
million after deducting underwriting discounts and commissions. The shares began trading on
the Nasdaq Global Select Market under the ticker symbol “SVCO” on May 9th, 2024.
Supplementary materials to this press release, including our first quarter 2024 financial results, can be found at https://investors.silvaco.com/financialinformation/quarterly-results.
Second Quarter and Full Year 2024 Financial Outlook
As of June 20, 2024, Silvaco is providing guidance for its second quarter of 2024 and its full-year 2024, which represents Silvaco’s current estimateson its operations and financial results. The financial information below represents forward-looking financial information and in some instances forwardlooking, non-GAAP financial information, including estimates of non-GAAP gross margin and non- GAAP operating income. GAAP gross margin is themost comparable GAAP measure to non-GAAP gross margin, and GAAP operating income is the most comparable GAAP measure to non-GAAP
operating income. Non-GAAP operating income differs from GAAP operating income in that it excludes items such as certain transaction-related costs,
IPO preparation costs, acquisition-related litigation costs, stock-based compensation, amortization of acquired intangible assets, impairment charges
and executive severance costs. Silvaco is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable
effort. Therefore, Silvaco has not provided guidance for GAAP gross margin or GAAP operating income or a reconciliation of the forward-looking
non-GAAP gross margin or non-GAAP operating income guidance to GAAP gross margin or GAAP operating income, respectively. However, it isimportant to note that these excluded items could be material to our results computed in accordance with GAAP in future periods.
Based on current business trends and conditions, the Company expects for second quarter 2024 the following:

Revenue in the range of $14.3 million to $15.0 million, which would represent a 14% to 20%

increase from the second quarter of 2023.
Gross bookings in the range of $17.0 million to $18.5 million, which would represent a 18% to
29% increase from the second quarter of 2023.
Non-GAAP gross margin to be in the range of 85% to 87%.
Non-GAAP operating income in the range of $0.5 million to $1.5 million, which would represent
a 62% to 185% increase from the second quarter of 2023.
For full year 2024, the Company expects:

Revenue of $63.0 million to $66.0 million, which would represent a 16% to 22% increase from
2023.
Gross bookings of $64.0 million to $68.0 million, which would represent an 10% to 17%
increase from 2023.
Non-GAAP gross margin to be in the range of 85% to 87%.
Non-GAAP operating income of $8.0 million to $11.0 million, which would represent an 82% to150% increase from 2023.
About Silvaco
Silvaco is a provider of TCAD, EDA software, and SIP solutions that enable semiconductor design and digital twin modeling through AI software andinnovation. Silvaco’s solutions are used for semiconductor and photonics processes, devices, and systems development across display, powerdevices, automotive, memory, high performance compute, foundries, photonics, internet of things, and 5G/6G mobile markets for complex SoC
design. Silvaco is headquartered in Santa Clara, California, and has a global presence with offices located in North America, Europe, Brazil, China,
Japan, Korea, Singapore, and Taiwan.
Safe Harbor Statement
This press release contains forward-looking statements based on Silvaco's current expectations. The words “believe”, “estimate”, “expect”, “intend”,“anticipate”, “plan”, “project”, “will”, and similar phrases as they relate to Silvaco are intended to identify such forward-looking statements. These
forward-looking statements reflect the current views and assumptions of Silvaco and are subject to various risks and uncertainties that could cause
actual results to differ materially from expectations.
These forward-looking statements include but are not limited to, statements regarding our future operating results, financial position, and guidance,
our business strategy and plans, our objectives for future operations, our development or delivery of new or enhanced products, and anticipatedresults of those products for our customers, our competitive positioning, projected costs, technological capabilities, and plans, and macroeconomic
trends.
A variety of risks and factors that are beyond our control could cause actual results to differ materially from those in the forward-looking statements
including, without limitation, the following: (a) market conditions; (b) anticipated trends, challenges and growth in our business and the markets inwhich we operate; (c) our ability to appropriately respond to changing technologies on a timely and cost-effective basis; (d) the size and growthpotential of the markets for our software solutions, and our ability to serve those markets; (e) our expectations regarding competition in our existingand new markets; (f) the level of demand in our customers’ end markets; (g) regulatory developments in the United States and foreign countries; (h)changes in trade policies, including the imposition of tariffs; (i) proposed new software solutions, services or developments; (j) our ability to attract andretain key management personnel; (k) our customer relationships and our ability to retain and expand our customer relationships; (l) our ability todiversify our customer base and develop relationships in new markets; (m) the strategies, prospects, plans, expectations, and objectives ofmanagement for future operations; (n) public health crises, pandemics, and epidemics and their effects on our business and our customers’
businesses; (o) the impact of the current conflicts between Ukraine and Russia and Israel and Hamas and the ongoing trade disputes among theUnited States and China on our business, financial condition or prospects, including extreme volatility in the global capital markets making debt orequity financing more difficult to obtain, more costly or more dilutive, delays and disruptions of the global supply chains and the business activities ofour suppliers, distributors, customers and other business partners; (p) changes in general economic or business conditions or economic or
demographic trends in the United States and foreign countries including changes in interest rates and inflation; (q) our ability to raise additional capital;(r) our ability to accurately forecast demand for our software solutions; (s) our expectations regarding the outcome of any ongoing litigation; (t) our
expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act and as a smaller reporting company
under the Exchange Act; (u) our expectations regarding our ability to obtain, maintain, protect and enforce intellectual property protection for our
technology; (v) our status as a controlled company; and (w) our use of the net proceeds from our initial public offering.
It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combinationof factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make.
Accordingly, you should not rely on any of the forward-looking statements. Additional information relating to the uncertainty affecting the Silvaco’s
business is contained in Silvaco's filings with the Securities and Exchange Commission. These documents are available on the SEC Filings section of
the Investor Relations section of Silvaco's website at http://investors.silvaco.com/. These forward-looking statements represent Silvaco's expectations
as of the date of this press release. Subsequent events may cause these expectations to change, and Silvaco disclaims any obligations to update oralter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.
Discussion of Non-GAAP Financial Measures
We use certain non-GAAP financial measures to supplement the performance measures in our consolidated financial statements, which are presented
in accordance with GAAP. These non-GAAP financial measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating
expenses, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP net income (loss) per share. We use these non-GAAPfinancial measures for financial and operational decision- making and as a means to assist us in evaluating period-to-period comparisons.
We define non-GAAP operating expenses and non-GAAP operating income (loss) as our GAAP operating expenses and GAAP operating income(loss), in each case, adjusted to exclude certain costs, including certain transaction-related costs, IPO preparation costs, acquisition-related litigation
costs, stock-based compensation, amortization of acquired intangible assets, impairment charges, and executive severance costs. We define
non-GAAP net income (loss) as our GAAP net income (loss) adjusted to exclude certain costs, including certain transaction-related costs, IPO
preparation costs, acquisition- related litigation costs, stock-based compensation, amortization of acquired intangible assets, impairment charges,
executive severance costs, change in fair value of contingent consideration, foreign exchange (gain) loss, gain on extinguishment of debt, and theincome tax effect on non-GAAP items. Our non-GAAP net income (loss) per share is calculated in the same way as our non-GAAP net income (loss),but on a per share basis. We monitor non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP net
income (loss) and non-GAAP net income (loss) per share as non-GAAP financial measures to supplement the financial information we present inaccordance with GAAP to provide investors with additional information regarding our financial results.
Certain items are excluded from our non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP
net income (loss) per share because these items are non-cash in nature or are not indicative of our core operating performance and rendercomparisons with prior periods and competitors less meaningful. We adjust GAAP operating income (loss) and net income (loss) for these items toarrive at non-GAAP operating income (loss) and non-GAAP net income (loss) because these amounts can vary substantially from company tocompany within our industry depending upon accounting methods and book values of assets, capital structure and the method by which the assets
were acquired. By excluding certain items that may not be indicative of our recurring core operating results, we believe that non-GAAP operating
income (loss), non-GAAP net income (loss) and non-GAAP net income (loss) per share, provide meaningful supplemental information regarding our
performance.
We believe these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect tofinancial measures used by management in its financial and operational decision-making and they may be used by our institutional investors and theanalyst community to help them analyze our financial performance and the health of our business. However, there are a number of limitations related
to the use of non-GAAP financial measures, and these non- GAAP measures should be considered in addition to, not as a substitute for or in isolation
from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP
financial measures differently or not at all, which reduces their usefulness as comparative measures.
SILVACO GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited, in thousands except share and par value amounts)

March 31,2024
ASSETS
Current assets:
Cash
Accounts receivable, net
Contract assets, net
Prepaid expenses and other current assets
Deferred transaction costs
Total current assets
Long-term assets:
Property and equipment, net
Operating lease right-of-use assets, net
Intangible assets, net
Goodwill
Long-term portion of contract assets, net
Other assets
Total long-term assets
Total assets
LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:
Accounts payable
Accrued expenses and other current liabilities
Accrued income taxes
Operating lease liabilities, current
Deferred revenue, current
Related party line of credit
Total current liabilities
Long-term liabilities:
Deferred revenue, non-current
Operating lease liabilities, non-current
Long-term loan facility
Other long-term liabilities
Total liabilities
Commitments and contingencies
Stockholders' equity:
Common stock, $0.0001 par value; 25,000,000 shares authorized; 20,000,000 shares issued
and outstanding

$

$

$

December 31,
2023

5,739
5,562
9,240
1,748
1,943
24,232
656
2,157
273
9,026
8,961
2,057
23,13047,362

3,332
9,945
2,185
817
7,935
2,016
26,230

$

$

$

4,421
4,006
8,749
2,549
1,163
20,888
591
1,963
342
9,026
6,250
1,825
19,99740,885

2,495
10,255
1,626
735
7,882
2,000
24,993

4,737
1,320
4,283
197
36,767

5,071
1,198
—
221
31,4832

2

Retained earnings
Accumulated other comprehensive loss
Total stockholders' equity

12,770(2,177)
10,595

Total liabilities and stockholders' equity$

11,392(1,992)
9,402

47,362$40,885SILVACO GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Unaudited, in thousands except share and per share amounts)
Three Months Ended March 31,
2024
2023
Revenue:
Software license revenue
Maintenance and service
Total revenue
Cost of revenue
Gross profit
Operating expenses:
Research and development
Selling and marketing
General and administrative
Total operating expenses
Operating income
Interest and other expense, net
Income before income tax provision
Income tax provision
Net income
Net income per share attributable to common stockholders:
Basic and diluted
Weighted average shares used in computing per share amounts:
Basic and diluted$

12,2583,631
15,8891,973
13,916$

10,665
3,626
14,291
2,025
12,266

$

3,616
3,312
4,600
11,528
2,388
205
2,183
805
1,378

$

3,375
2,805
4,553
10,733
1,533
331
1,202
388
814

$

0.07

$

0.04

$

20,000$20,000SILVACO GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited, in thousands)
Three Months Ended March 31,
2024
2023
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
Gain on disposal of fixed assets
Provision for credit losses
Change in fair value of contingent consideration
Changes in operating assets and liabilities:
Accounts receivable
Contract assets
Prepaid and other current assets
Other assets
Accounts payable
Accrued expenses
Accrued income taxes
Deferred revenue
Other current liabilities
Other long-term liabilities
Net cash (used in) provided by operating activities:
Cash flows from investing activities:
Purchases of property and equipment
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from loan facility

$

1,378

$ 814

120
(10)
222
(8)

166
—
21
265

(1,844)(3,679)
788
(274)
877
(670)
574
(21)
(49)
24
(2,572)(3,718)
889
(232)
—
513
(1,248)
242
2,888
146
(245)
501

(10)
(10)

(177)
(177)

4,250

—

Contingent consideration
Deferred transaction costs
Net cash provided by (used in) financing activities
Effect of exchange rate fluctuations on cash
Net increase (decrease) in cash
Cash, beginning of period
Cash, end of period

$

(13)
(364)
3,873
27
1,318
4,421
5,739

(582)
—
(582)
75
(183)
5,478
$ 5,295

SILVACO GROUP, INC.
REVENUE(Unaudited, in thousands)
Q1

Q2

2023
Q3

Q4

Year

2024
Q1

Revenue by Region:
Japan
United States
China
Korea
All other
Total revenue

16%
34%
19%
8%
23%
100%

14%
28%
29%
11%
18%
100%

12%
28%
17%
25%
18%
100%

14%
28%
30%
9%
19%
100%

14%
30%
23%
14%
19%
100%

29%
26%
11%
7%
27%
100%

Revenue by Product Line:
TCAD
EDA
IP
Total revenue

62%
29%
9%
100%

62%
20%
18%
100%

52%
31%
17%
100%

62%
22%
16%
100%

59%
26%
15%
100%

66%
30%
4%
100%

Revenue Item Category:
Software license revenue
Maintenance and service
Total revenue

75%
25%
100%

71%
29%
100%

74%
26%
100%

70%
30%
100%

73%
27%
100%

77%
23%
100%

SILVACO GROUP, INC.
GAAP to Non-GAAP Reconciliation(Unaudited, in thousands except per share amounts)
Three Months Ended
3/31/2024
12/31/2023

3/31/2023

GAAP Research and development
Less: Amortization of acquired intangible assets

$

3,616
70

$

3,337
82

$

3,375
101

Non-GAAP Research and development

$

3,546

$

3,255

$

3,274

GAAP Sales and marketing
Less: IPO preparation costs

$

3,312
127

$

3,833
—

$

2,805
—

Non-GAAP Sales and marketing

$

3,185

$

3,833

$

2,805

GAAP General and administrative
Less: Acquisition-related litigation costs
Less: IPO preparation costs

$

4,600
594
139

$

4,570
515
45

$

4,553
236
268

Non-GAAP General and administrative

$

3,867

$

4,010

$

4,049

GAAP Operating expenses
Less: Acquisition-related litigation costs
Less: IPO preparation costs
Less: Amortization of acquired intangible assets$

11,528
594
266
70

$

11,740
515
45
82

$

10,733
236
268
101

Non-GAAP Operating expenses$

10,598$

11,098$

10,128GAAP Income (loss) from operations
Plus: Acquisition-related litigation costs
Plus: IPO preparation costs
Plus: Amortization of acquired intangible assets

$

2,388
594
266
70

$

(1,936)
515
45
82

$

1,533
236
268
101

Non-GAAP Income (loss) from operations

$

3,318

$

(1,294)$2,138

GAAP Net income (loss)
Plus: Amortization of acquired intangible assets
Plus: Acquisition-related litigation costs
Plus: IPO preparation costs
Plus: Change in fair value of consideration
Plus: Foreign exchange (gain) loss
Plus: Income tax effect of non-GAAP adjustment

$

1,378
70
594
266
(8)
130
(33)

$

(2,247)
82
515
45
(7)
(3)
(27)

$

814
101
236
268
276
247
(23)

Non-GAAP Net income (loss)
GAAP Net income (loss) per share:
Basic and diluted:

$

2,397

$

(1,642)

$

1,919

$

0.07

$

(0.11)

$

0.04

$

0.12

$

(0.08)$

0.10

Non-GAAP Net income (loss) per share:
Basic and diluted:
Weighted average shares used in GAAP and non-GAAP net income(loss) per share:
Basic and diluted
Investor Contact: Greg McNiff investors@silvaco.com
Media Contact: Tyler Weiland press@silvaco.com

20,000,000

20,000,000

20,000,000