Silvaco Group (SVCO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $11.0M, down 27% year-over-year, mainly due to delayed orders from China and a $5.0M order shift to Q4; year-to-date revenue was $41.8M, flat year-over-year.

• Q3 gross bookings were $9.9M, with year-to-date bookings of $45.5M, up 7% year-over-year; 14 new customers signed in Q3, with strong traction in power, memory, foundry, and display markets.

• Expanded FTCO/digital twin platform, secured a $5M order for Q4, formed strategic academic partnerships, and achieved ISO 9001 certification; added to Russell indices.

• IPO completed in May 2024, raising $106M in net proceeds; Micron Note converted to equity and debt repaid.

• Appointed new SVP, General Counsel, and Corporate Secretary.

Financial highlights

• Q3 GAAP gross margin was 75%, non-GAAP gross margin 80%, both down from 85% year-over-year; year-to-date non-GAAP gross margin was 85%.

• Q3 non-GAAP operating loss was $2.6M vs. $2.7M income last year; year-to-date non-GAAP operating income was $2.4M.

• Q3 GAAP net loss was $6.6M; non-GAAP net loss was $1.8M; year-to-date net loss was $43.6M.

• Q3 operating expenses rose 42% year-over-year, driven by R&D, G&A, and litigation charges; stock-based compensation was $2.6M in Q3 and $24.4M year-to-date.

• Cash and equivalents plus marketable securities totaled $100.4M as of September 30, 2024; free cash flow outflow was $2.16M.

Outlook and guidance

• Q4 2024 revenue expected at $18.1M–$21.2M, up 45%–70% year-over-year; Q4 gross bookings projected at $18.5M–$21.5M.

• Full-year 2024 revenue guidance is $60M–$63M, up 10%–16% year-over-year; non-GAAP gross margin expected at 85%–87%; non-GAAP operating income forecasted at $5M–$8M.

• Long-term targets: 15%–25% top-line growth, 90% non-GAAP gross margin, 25%+ non-GAAP operating margin.

• Management expects cash and marketable securities to be sufficient for at least the next 12 months.

• Ongoing investments in R&D and product development to address market complexity and drive growth.