Silvaco Group (SVCO) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 19% year-over-year to $15.0 million, driven by strong TCAD and EDA sales, including the FTCO digital twin product, and 10 new customer wins; bookings rose 36% to $19.5 million, both at the high end of guidance.

• IPO completed in May 2024, raising $106 million net of fees, supporting growth and strategic initiatives.

• Non-GAAP gross margin reached 86%, up from 81% last year; non-GAAP operating income was $1.7 million, while GAAP results were impacted by $21.8 million in stock-based compensation and a $14.7 million litigation charge.

• Net loss for Q2 2024 was $38.4 million, mainly due to litigation and stock-based compensation expenses.

• Expanded partnerships with Micron and NXP, including a five-year SIP licensing agreement and a $5 million Micron investment.

Financial highlights

• Q2 2024 revenue: $15.0 million (+19% YoY); software licensing: $11 million (+25% YoY); maintenance/services: $3.9 million (+7% YoY).

• TCAD revenue: $10.4 million (+34% YoY); EDA: $3.0 million (+20% YoY); SIP: $1.6 million (-30% YoY) due to a lapsed agreement, now renewed.

• Non-GAAP gross margin: 86% (Q2); GAAP gross margin: 68% (impacted by stock-based compensation and litigation charge).

• Non-GAAP operating income: $1.7 million (11% margin); non-GAAP net income: $1.8 million; non-GAAP EPS: $0.07.

• Cash and equivalents plus marketable securities: $102.3 million as of June 30, 2024, post-IPO and debt repayment.

Outlook and guidance

• Q3 2024 revenue expected at $15.5–$16.5 million (+4–10% YoY); full-year 2024 revenue guidance: $63.0–$66.0 million (+16–22% YoY).

• Q3 bookings guidance: $16.0–$18.0 million; full-year bookings: $67.0–$71.0 million, both up from prior expectations.

• Non-GAAP gross margin guidance: 85–88% for Q3, 85–89% for full year; non-GAAP operating income: $1.8–$2.8 million for Q3, $8.0–$11.0 million for full year.

• Long-term targets: 15–25%+ organic revenue growth, 90%+ gross margin, 25%+ operating margin.