Silvaco Reports Second Quarter 2024 Financial Results
August 7, 2024 8:05 PM EDT
Quarterly revenue of $15.0 million, up 19% year-over-year at the high end of guidance
Quarterly bookings of $19.5 million, up 36% year-over-year exceeding guidance
SANTA CLARA, Calif., Aug. 07, 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
second quarter 2024 results.
“I am thrilled to announce that Silvaco reported strong financial results for its first quarter as a public company,” said Babak Taheri, Silvaco’s Chief
Executive Officer. Dr. Taheri continued, “Our revenue came in at the high end of our guidance, driven by strong demand for our products acrossvarious sectors. We believe this momentum will continue into the second half of the year. Moreover, we are seeing growing customer interest in our
digital twin product, which is a good sign for our future growth.”
Commenting on the financial results and outlook, Ryan Benton, Silvaco’s Chief Financial Officer, added, “Our strong bookings for the second quarter
exceeded our expectations, and revenue came in at the high end of our guidance range, driven by strong demand from our customers. For quarterly
bookings, we are raising guidance for the full-year and maintaining our revenue guidance for the full-year.”
Second Quarter 2024 Financial Results
GAAP Financial Results
Revenue of $15.0 million, up 19% year-over-year, seasonally down 6% quarter-over-quarter.
TCAD revenue of $10.4 million, up 34% year-over-year.
EDA revenue of $3.0 million, up 20% year-over-year.
SIP revenue of $1.6 million, down 30% year-over-year.
GAAP gross profit and GAAP gross margin were $10.1 million and 68%, respectively, which includes the impact of $2.5 million stock-based
compensation, down from $10.2 million and 81% year over year.
GAAP operating expenses of $47.9 million, which includes $19.3 million stock-based compensation and a $14.7 million charge for acquisition
related estimated litigation claim, increased from $10.4 million in Q2 2023.
GAAP operating loss and margin of $(37.8) million and (253)%, compared to $(0.2) million and (2)% in Q2 2023, respectively.
GAAP net loss of $(38.4) million, compared to a GAAP net loss of $(0.3) million in Q2 2023.
GAAP basic and diluted net loss per share of $(1.55).
As of June 30, 2024, cash and cash equivalents and marketable securities totaled $102.3 million.
Key Operating Indicators and Non-GAAP Financial Results:
Gross bookings were $19.5 million, up 36% year-over-year.
As of June 30, 2024, remaining performance obligation ("RPO") balance of $33.2 million, 47% of which is expected to be recognized asrevenue in the next 12 months, up $4.0 million and 14% sequentially from Q1 2024 due to strong bookings.
Non-GAAP gross profit and non-GAAP gross margin were $12.8 million and 86%, respectively, up from $10.2 million and 81% year over year.
Non-GAAP operating expenses of $11.2 million, up from $9.3 million in Q2 2023.
Non-GAAP operating income and non-GAAP operating margin of $1.7 million and 11%, compared to $0.8 million and 6% in Q2 2023,
respectively.
Non-GAAP net income of $1.8 million, compared to $0.8 million in Q2 2023.
Non-GAAP diluted net income per share of $0.07.
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 second quarter 2024, first quarter 2024 and second quarter 2023 results, see “Discussion of Non-GAAP Financial
Measures” and “GAAP to Non-GAAP Reconciliation” in the accompanying tables below.
Second Quarter 2024 Business Highlights
Introduced and monetized artificial intelligence-based platform for digital twin modeling named Fab Technology Co-Optimization (FTCO™)
used at wafer-level fabrication facilities. Announced enhanced partnership with Micron Technology, which included expanding the FTCO™
partnership and securing a $5.0 million investment.
Strong TCAD and EDA quarterly revenues with a key FTCO™ digital-twin modeling product sale to memory customer and ten new customer
wins, partially offset by lower SIP revenue. Additionally, we have extended a SIP licensing agreement for an additional five years starting April
1, 2024.
Completed initial public offering in May, raising $106 million net of underwriters' fees.
Supplementary materials to this press release, including our second quarter 2024 financial results, can be found at https://investors.silvaco.com/financial-information/quarterly-results.
Third Quarter and Full Year 2024 Financial OutlookAs of August 7, 2024, Silvaco is providing guidance for its third quarter of 2024 and its full-year 2024, which represents Silvaco’s current estimates on
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, estimated acquisition-related litigation claims and 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 theforward-looking non-GAAP gross margin or non-GAAP operating income guidance to GAAP gross margin or GAAP operating income, respectively.
However, it is important 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 third quarter 2024 the following:
Gross bookings in the range of $16.0 million to $18.0 million, which would represent a 28% to 44% increase from the third quarter of 2023.
Revenue in the range of $15.5 million to $16.5 million, which would represent a 4% to 10% increase from the third quarter of 2023.
Non-GAAP gross margin to be in the range of 85% to 88%.
Non-GAAP operating income in the range of $1.8 million to $2.8 million, which would represent a 34% decrease to 2% increase from the third
quarter of 2023.
For full year 2024, the Company expects:
Gross bookings of $67.0 million to $71.0 million, which would represent a 15% to 22% increase from 2023.
Revenue of $63.0 million to $66.0 million, which would represent a 16% to 22% increase from 2023.
Non-GAAP gross margin to be in the range of 85% to 89%.
Non-GAAP operating income of $8.0 million to $11.0 million, which would represent an 82% to 150% 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 operating margin, 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 periodto-period comparisons.
We define non-GAAP gross profit and non-GAAP gross margin as our GAAP gross profit and GAAP gross margin adjusted to exclude certain costs,
including stock-based compensation and amortization of acquired intangible assets. We define non-GAAP operating expenses, non-GAAP operating
income (loss), and non-GAAP operating margin as our GAAP operating expenses, GAAP operating income (loss), and GAAP operating margin, ineach case, adjusted to exclude certain costs, including certain transaction-related costs, IPO preparation costs, estimated acquisition-related litigation
claims and 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, estimated acquisition-related litigation claims and 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, loss on extinguishmentof debt, and the income 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 profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP
operating income (loss), non-GAAP operating margin, 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 in accordance with GAAP to provide investors with additional information regarding ourfinancial results.
Certain items are excluded from our non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income(loss), non-GAAP operating margin, non-GAAP net income (loss) and non-GAAP net income (loss) per share because these items are non-cash innature or are not indicative of our core operating performance and render comparisons with prior periods and competitors less meaningful. We adjust
GAAP gross profit, GAAP gross margin, GAAP operating expenses, GAAP operating income (loss), GAAP operating margin, and net income (loss) for
these items to arrive at non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income (loss),
non-GAAP operating margin, and non-GAAP net income (loss) because these amounts can vary substantially from company to company 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 gross profit, non-GAAP grossmargin, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) andnon-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)
June 30,2024
ASSETS
Current assets:
Cash and cash equivalents
Short-term marketable securities
Accounts receivable, net
Contract assets, net
Prepaid expenses and other current assets
Deferred transaction costs
Total current assets
Long-term assets:Long-term marketable securities
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
Deferred revenue, current
Operating lease liabilities, current
Related party line of credit
Vendor financing obligation, current
Total current liabilities

$

$

$

34,27454,611
6,781
9,175
3,369
—
108,210
13,392
742
2,144
4,956
9,026
9,096
1,845
41,201
149,411

2,572
23,748
2,288
8,519
863
—
2,049
40,039December 31,
2023

$

$

$

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
7,882
735
2,000
—
24,993

Long-term liabilities:
Deferred revenue, non-current
Operating lease liabilities, non-current
Vendor financing obligation, non-current
Other long-term liabilities
Total liabilities
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, no shares issued and outstanding as ofJune 30, 2024; no shares authorized as of December 31, 2023
Common stock, $0.0001 par value; 500,000,000 shares authorized; 26,294,217 shares issued andoutstanding as of June 30, 2024; 25,000,000 shares authorized; 20,000,000 shares issued and outstanding
as of December 31, 2023
Additional paid-in capital(Accumulated deficit) Retained earnings
Accumulated other comprehensive loss
Total stockholders' equity$
Total liabilities and stockholders' equity

3,337
1,266
2,738
185
47,565

5,071
1,198
—
221
31,483——

3
129,837(25,618)(2,376)
101,846
149,4112—
11,392(1,992)
9,402
40,885$SILVACO GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME(Unaudited, in thousands except share and per share amounts)
Three Months Ended June 30,
2024
2023
Revenue:
Software license revenue
Maintenance and service
Total revenue
Cost of revenue
Gross profit
Operating expenses:
Research and development
Selling and marketing
General and administrative
Estimated litigation claim
Total operating expenses
Operating (loss) income
Loss on debt extinguishment
Interest income
Interest and other expense, net(Loss) income before income tax provision
Income tax provision (benefit)
Net (loss) income(Loss) earnings per share attributable to common stockholders:
Basic and diluted
Weighted average shares used in computing per share amounts:
Basic and diluted$

11,023
3,937
14,960
4,861
10,099

$

7,707
7,171
18,314
14,69647,888(37,789)
(718)
682
(349)
(38,174)
214(38,388)$(1.55)

$

8,845
3,680
12,525
2,373
10,152

$

3,169
2,930
4,258
—
10,357
(205)
—
2
(240)
(443)
(112)
(331)

$

(0.02)

24,811,112

Six Months Ended June 30,
2024
2023
$

23,281
7,568
30,8496,834
24,015$

19,5107,306
26,816
4,398
22,418$

11,323
10,483
22,914
14,69659,416(35,401)
(718)
682
(554)
(35,991)
1,019(37,010)

$

6,544
5,735
8,811
—
21,090
1,328
—
3
(572)
759
276
483

$

(1.66)$

0.02

20,000,000

22,405,557

20,000,000

SILVACO GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited, in thousands)
Six Months Ended June 30,
2024
2023
Cash flows from operating activities:
Net (loss) income
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization
Stock-based compensation expense
Provision for credit losses
Estimated litigation claim
Loss on debt extinguishment$(37,010)475
21,829143
14,696
718

$

483
309
—
43
—
—

Accretion of discount on marketable securities, net
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 marketable securities
Purchases of property and equipment
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting fees
Proceeds from issuance of convertible note, net of debt issuance costs
Proceeds from loan facility
Repayment of loan facility
Repayment of 2022 line of credit
Deferred transaction costs
Contingent consideration
Payments of vendor financing obligation
Net cash provided by (used in) financing activities
Effect of exchange rate fluctuations on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period

$

(194)
(18)

—
341

(3,102)(4,081)
(882)
(84)
(2)
(1,321)
687
(673)
34
(9)
(8,794)

759
290
(13)
—
(1,068)
(652)
(107)
1,368
830
(417)
2,166

(67,809)(56)(67,865)

—
(202)
(202)

106,020
4,852
4,250(4,250)(2,000)(2,126)(22)(300)
106,42488
29,853
4,421
34,274

—
—
—
—
—
—
(921)
—
(921)
(173)
870
5,478
6,348

$

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

Q1

2023
Q3

Q2

2024
Q4

Year

Q1

Q2

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%

69%
20%
11%
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%

74%
26%
100%

SILVACO GROUP, INC.
GAAP to Non-GAAP Reconciliation(Unaudited, in thousands except per share amounts)
Three Months Ended
6/30/2024
6/30/2023

Reconciliation GAAP to Non-GAAP
GAAP Gross profit
Add: Stock-based compensation
Add: Amortization of acquired intangible assets
Non-GAAP Gross profit$$

10,0992,467
249
12,815$$

10,152——
10,152Six Months Ended
6/30/2024
6/30/2023$$

24,0152,467
249
26,731$$

22,418——22,418GAAP Research and development
Less: Stock-based compensation
Less: Amortization of acquired intangible assets
Non-GAAP Research and Development

$

7,707
(4,065)
(47)
3,595

$

3,169
—
(74)
3,095

$

GAAP Sales and marketing
Less: Stock-based compensation
Less: Amortization of acquired intangible assets
Non-GAAP Sales and marketing

$

7,171
(3,552)
(39)
3,580

$

2,930
—
—
2,930

$

GAAP General and administrative
Less: Stock-based compensation
Less: Acquisition-related estimated litigation claim and legal costs
Less: Amortization of acquired intangible assets
Non-GAAP General and administrative$

18,314(11,745)(2,021)
(568)
3,980

$

4,258
—
(233)
(711)
3,314

$

GAAP Estimated litigation claim
Less: Acquisition-related estimated litigation claim and legal costs
Non-GAAP Estimated litigation claim$

14,696(14,696)
—

$

—
—
—

GAAP Operating expenses
Less: Stock-based compensation
Less: Acquisition related estimated litigation claim and legal costs
Less: IPO preparation costs
Less: Amortization of acquired intangible assets
Non-GAAP Operating expenses$

47,888(19,362)(16,717)(607)(47)
11,155$GAAP Income (loss) from operations
Add: Stock-based compensation
Add: Acquisition related estimated litigation claim and legal costs
Add: IPO preparation costs
Add: Amortization of acquired intangible assets
Non-GAAP Income (loss) from operations$(37,789)
21,82916,717
607
296
1,660

$

GAAP Net income (loss)
Add: Stock-based compensation
Add: Acquisition related estimated litigation claim and legal costs
Add: IPO preparation costs
Add: Amortization of acquired intangible assets
Add: Loss on debt extinguishment
Add: Change in fair value of contingent consideration
Add: Foreign exchange loss
Add: Income tax effect of non-GAAP adjustments
Non-GAAP Net income (loss)

$

$

$

(38,388)
21,82916,717
607
296
718
(10)
114
(43)
1,840

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

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

11,323(4,065)
(117)
7,141

$

10,483(3,552)
(178)
6,753

$

22,914(11,745)(2,615)
(695)
7,859

$

$

14,696(14,696)
—

$

—
—
—

10,357
—
(233)
(711)
(74)
9,339

$

59,416(19,362)(17,311)
(873)
(117)
21,753$21,090
—
(469)
(979)
(175)
19,467

(205)
—
233
711
74
813

$

(35,401)
21,82917,311
873
366
4,978

$

$

$

(37,010)
21,82917,311
873
366
718
(18)
244
(76)
4,237

$

$

(331)
—
233
711
74
—
65
168
(81)
839

$

483
—
469
979
175
—
341
415
(104)
2,758

(1.55)$(0.02)$(1.65)

$

0.02

$

0.07

$

0.04

$

0.19

$

0.14

$

0.07

$

0.04

$

0.18

$

0.14

$

$

$

$

$

24,811,112
25,408,465

$

$

$

$

$

20,000,000
20,000,000

$

$

$

$

$

22,405,557
23,052,554

$

$

$

$

$

6,544
—
(175)
6,369
5,735
—
—
5,735
8,811
—
(469)
(979)
7,363

1,328
—
469
979
175
2,951

20,000,000
20,000,000