Silvaco Group Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 7, 2025

Key Takeaways

  • Silvaco delivered 10% organic revenue growth in fiscal year 2024 and added over 46 new customer logos, highlighting strong demand for its software platforms.
  • Q1 fiscal 2025 revenue of $14.1M missed guidance by $2.2M due to the deferral of certain customer orders representing less than 10% of annual revenue.
  • The acquisitions of Cadence’s PPC and TechX have expanded Silvaco’s serviceable addressable market by over $600M and are expected to contribute $3–5M and $1M in revenue for 2025, respectively.
  • Silvaco introduced annual contract value (ACV) reporting, with Q1 trailing twelve-month ACV reaching $52.3M, up 21% year-over-year to improve revenue visibility.
  • For Q2 fiscal 2025, Silvaco guided gross bookings of $14–18M and revenue of $12–16M, and for the full year bookings of $67–74M and revenue of $64–70M, adopting a conservative stance amid macroeconomic uncertainty.
AI Generated. May Contain Errors.
Earnings Conference Call
Silvaco Group Q1 2025
00:00 / 00:00

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Operator

and welcome to Silvaco's First Quarter Fiscal Year twenty twenty five Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please note this event is being recorded. I would now like to turn the conference over to Greg McNiff, Investor Relations for SEVARCO. Please go ahead.

Gregory McNiff
Managing Director at The Blueshirt Group

Thank you. Joining me on the call today are Bhabha Taheri, Sevaco's CEO and Keith Tainske, Sevaco's Interim CFO. As a reminder, a press release highlighting the company's results, along with supplemental financial results and an earnings presentation are available on the company's IR site at investors.savaco.com. An archived replay of the conference call will be available on this website for a limited time after the call. Please note that during this call, management will be making remarks regarding future events and the future financial performance of the company.

Gregory McNiff
Managing Director at The Blueshirt Group

These remarks constitute forward looking statements for purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act. These forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward looking statements. It is important to also note that the company undertakes no obligation to update such statements, except as required by law. The company cautions you to consider risk factors that could cause actual results to differ materially from those in the forward looking statements contained in today's press release, earnings presentation and on this conference call. The Risk Factors section in Savaco's annual report on Form 10 ks for the year ended 12/31/2024, and the most recent Form 10 Q filing with the Securities and Exchange Commission provide descriptions of these risks.

Gregory McNiff
Managing Director at The Blueshirt Group

With that, I'd like to turn the call over to Silvaco's CEO, Babak Taheri. Babak?

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Hello, and welcome to Silvaco's first quarter twenty twenty five earnings call. I am Babak Taheri, CEO of Silvaco. Thank you for joining us today. I'm excited to update you on the strong momentum we've built since going public in May of last year. For fiscal year twenty twenty four, we delivered a 13% increase in bookings and achieved 10% organic revenue growth over fiscal year twenty twenty three.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

We also added over 46 new customer logos, underscoring the growing demand for our software platforms. A core objective of our IPO was to position Silvaco for strategic acquisitions that would meaningfully expand our serviceable addressable market or SAM. We launched our acquisition strategy in Q1 of twenty twenty five and have maintained that momentum into this quarter, targeting high growth sectors such as AI, photonics and IoT. Our two most recent acquisitions have added more than an estimated $600,000,000 in incremental SAM, reinforcing our position in fast expanding markets and further diversifying our growth engine. The market response to this strategy has been very encouraging.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

In Q1 twenty twenty five, our sector encountered some short term macroeconomic headwinds, resulting in a deferral of certain customer orders, representing less than 10% of our annual revenue into future quarters. Revenue for the quarter came in at $14,100,000 below our guidance, primarily due to delays in closing two key bookings totaling $4,400,000 These delays reduced recognized revenue by approximately $2,200,000 Had these deals closed as expected, we would have reported bookings and revenue above the midpoint of our guidance. Despite these timing shifts, we remain highly confident in our updated Q2 and full year 2025 guidance, which has been intentionally set with a conservative approach given the current macroeconomic environment. We are equally confident in our long term growth trajectory, underpinned by strong market demand, strategic expansion, and the increasing value of our technology stack. To further enhance transparency around our revenue visibility, we will begin reporting annual contract value or ACV starting this quarter.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

This new metric will give investors greater insight into our recurring revenue base, while also reinforcing the fact that quarterly order timing has limited impact on the underlying growth trend. Next, I will provide financial updates for Q1 actuals as well as Q2 and full year 2025 guidance. Next slide, please. I will now highlight our non GAAP results for Q1 twenty twenty five, guidance for Q2, and full year 2025, and our interim CFO, Keith Penzke, will discuss our detailed financial results and guidance later. For Q1 twenty twenty five, we reported gross bookings of $13,700,000 revenue of $14,100,000 and non GAAP gross margin of 82%.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Non GAAP operating loss was $2,500,000,000 and non GAAP net loss was $07 per share. For Q2 twenty twenty five and full year 2025 guidance, we have intentionally set a conservative stance given the current macroeconomic uncertainty. For Q2 twenty twenty five, we are guiding gross bookings in the range of 14,000,000 to $18,000,000 revenue in the range of $12,000,000 to $16,000,000 and non GAAP gross margin in the range of 80% to 83%. As we stated in the past, our gross margin will increase as our revenue continues to pick up in the second half. For the full year 2025, we expect gross bookings in the range of $67,000,000 to $74,000,000 reflecting an increase of up to 13% year over year, revenue in the range of $64,000,000 to $70,000,000 reflecting an increase of up to 17% year over year, non GAAP gross margin in the range of 83% to 86% compared to 86% in 2024, non GAAP operating income in the range of minus 2 million dollars loss to 1,000,000 income compared to $5,500,000 in 2024, non GAAP net income per share of up to $03 compared to $0.25 in 2024.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Please note that this guidance includes the acquisition of Cadence's PPC platform for the full year and TechX for Q2 through Q4, considering only initial revenue synergies. In the first quarter, we continued to build on the momentum we highlighted on our last earnings call. Despite the near term macro uncertainty, we believe our focus on driving innovation through advanced R and D positions us well for long term growth. We are strategically expanding our capabilities to meet the evolving needs of our customers, particularly in high growth sectors such as AI, photonics, and advanced semiconductor manufacturing. At the same time, we are taking a disciplined approach to managing operating expenses, cash flow, and liquidity, reflecting a prudent posture in today's uncertain macroeconomic environment.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

This balance between targeted investment and financial discipline positions Silvaco to lead in some of the fast growing segments of the technology market, while protecting shareholder value and ensuring long term sustainability. Next, I'd like to discuss how Silvaco solves semiconductor and photonics challenges facing our customers. Next slide, please. Today, we face a rapidly changing market. New technologies are emerging, product complexities are increasing, customers are challenged.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Their expectations are evolving, and we must lead in addressing and solving these challenges by doing what we do best. Anticipating the next wave of technological breakthroughs, leading it through artificial intelligence, through advanced algorithms in multi physics, through digital twin models, and guide customers through complex design and manufacturing. To stay ahead, we don't work alone. We partner with universities, with leading research labs, with our strategic customers, and through targeted strategic acquisitions, focused on AI, focused on photonics, focused on IoT connectivity, strengthening our reach in power, memory, high performance compute, IoT and beyond. Let's look closer at the challenges shaping our markets.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

First, design and manufacturing complexity. Transistors are getting smaller with more functionality packed inside. Complex multicore architectures are being designed, all of it impacting memory, high performance computing, automotive, and more. Second, new materials like gallium nitride, silicon carbide, and photonics integrated devices are pushing the boundaries of fabrication and design. Third, go to market challenges, including rising cost and rising risk and cost of design, cost of tools, cost of wafers, and the pressure of time to market.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

This is the landscape we are navigating. This is the opportunity we are capturing with technology, with strategy, and with vision. Next slide, please. We just announced the acquisition of TechX Corporation, which we believe expands our SAM by another $260,000,000 with multi physics modeling capabilities. That's not all.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

We added approximately $348,000,000 more to our SAM with the acquisition of the PPC product line. We already recognized $1,900,000 of PPC revenue in Q1 alone, and we believe we are on track to deliver 3,000,000 to $5,000,000 for the full year from this acquisition. Faraday Technology also selected Silvaco FlexCAN IP for advanced automotive ASIC design. You may ask how about our AI based FTC platform? It's gaining serious traction.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

With major wins across power and advanced CMOS customers and our R and D partnership on advanced photonics technologies. We recently announced that ExcellenceMOS adopts silvaca D2CO flow for next generation silicon carbide devices, as well as a partnership with Korean Kyung Ke University's professor, Jin Jiang, for next generation of display technology. And there is more coming. We expect to announce new customer wins in the second half of the year. In Q1 twenty twenty five, we didn't just grow our customer base.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

We landed nine new customers for AI infrastructure in Q1 of twenty twenty five, which was 23% of the quarterly bookings and expanded in existing customers resulting in 38% of the quarterly bookings. Two in power, two in memory, three in photonics, one in foundry, and one in IoT. On the next slide, I will walk you through how our recent acquisitions are accelerating our expansion into new high growth markets. Next slide, please. On our last earnings call, I discussed the strategic rationale and opportunity behind the acquisition of Cadence's process proximity compensation product line, which expands Sylvaco SAM by approximately $357,000,000 As I mentioned earlier today, we expect the PPC acquisition to contribute between $3,000,000 to $5,000,000 in revenue in 2025, with even greater contributions anticipated in 2026.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Today, I'm excited to share an overview of our recently announced acquisition of TechX Corporation, including our technology integration plans and strategic rationale driving this move. We believe TechX expands our SAM by additional $260,000,000 We expect this acquisition to contribute approximately $1,000,000 in revenue for the remainder of 2025 and more next year by delivering product synergies to our new and expanding existing customers. It's important to note that historically, Silvaco's digestion period for acquisition of this size has been about six months. We have already integrated the initial revenue synergies for both acquisitions and are on track to complete the operational and tax synergies over the coming quarters. This year, Silvaco's total salmon expanded by over $600,000,000 increasing it from $3,800,000,000 in 2024 to $4,400,000,000 in 2025, positioning us for stronger long term growth.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Next slide, please. TechX strategic rationale. TechX provides advanced multi physics simulation software that significantly enhances Silvaco's capabilities across design and manufacturing workflows. The acquisition advances our ongoing efforts to enable GPU and AI accelerated simulation driving faster, more accurate results for complex use cases. A key highlight is the additional wafer level digital twin modeling for advanced CMOS and photonics, further strengthening our technology leadership.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

TechX brings fundamental technical and competitive advantage compared to alternatives in the market. The acquisition also introduces a new base of high value customers, enabling additional land and expand opportunities, while leveraging Silvaco's existing global channels to deepen engagements with current accounts and unlock cross selling potentials. Overall, the acquisition strengthens our leadership in next generation simulation technologies and expands our ability to serve the fast growing design and manufacturing of photonics and semiconductors. Please turn to the next slide for specific examples of how this technology is changing the industry. TechX Multiphysics simulation capabilities enables a wide range of high value applications across multiple industries.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

These include the simulation of antennas and optical waveguides, allowing for optimized communication, signal performance, and the light propagation simulation in an array waveguide, packaging and interconnect, supporting advancement in photonics integrated circuits. In the manufacturing domain, the technology supports modeling of plasma wafer etching, a critical process for advanced semiconductor fabrication at chamber and wafer level. Next slide, please. As I mentioned earlier, Silvaco leverages AI industry trends through our digital twin modeling capabilities, which allows customers to automate design manufacturing through creation of models, which reduce costs and improve time to market. There are four uses of artificial intelligence in EDA.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

The EDA EDAS three has historically utilized AI to assist chip designers at three levels. First, optimizing the historical tool performance for chip designers. Second, aiding in design steps. And third, generating chip designs from specification. Silvaco has introduced a four level of AI, which is not in the design space, but rather in the manufacturing space.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

This is where Silvaco is expanding TAM by enabling operators in fabs to save time and reduce wafer production costs. Next slide, please. Growth strategies. As highlighted here, we believe our growth strategies position us well for long term market expansion while addressing customer needs through agile R and D. We focus our land and expand strategies through both organic and inorganic growth, leveraging our sales channels and highly technical field application engineers to solve the next generation of customer challenges.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

We are committed to defining shareholder value through performance, transparency, and responsible capital management. We believe the fundamentals of Silvaco are strong, and we are taking clear, measurable steps to align our market presence with the long term strengths of our business. With that, I'll turn it over to Keith to review the quarter and discuss our guidance. Thank you. Keith?

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

Thanks, Bobak, and thank you all for joining us today. My name is Keith Tainske, Silvaco's Interim Chief Financial Officer. Today, I will be reviewing our financial results for the first quarter of twenty twenty five and providing guidance for the second quarter and full year. Please note that I will be discussing non GAAP results going forward. As a reminder, our GAAP financial results, along with a reconciliation between our GAAP and non GAAP results can be found in our earnings press release, in the appendix of the presentation and within the supplemental financials on our website.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

Moving to the next slide, I'd first like to start the financial overview by saying that despite the market headwinds, our long term target model remains intact and we remain confident in our ability to achieve our strategic and financial objectives. As far as Q1 results, while we are disappointed these specific order delays totaling $2,200,000 in revenue caused us to miss our quarterly guidance range, we are fully expecting that we will be able to get those POs later this year. We exited the March with 74,500,000 in cash, cash equivalents and marketable securities. This is down from 87,500,000.0 from the end of last year, primarily due to the acquisition of PPC during the first quarter. In Q1, I will also note that based on recent updates and conversations with our legal counsel, we have recognized an incremental $13,100,000 charge relating to the ongoing Nandgate litigation. Further details are available in our 10 Q. Other expenses this quarter have also increased as a result of both organic R and D investments as well as recent acquisitions, impacting both our gross margin and operating expense forecasts in the short term. We are actively working to minimize these effects similar to last quarter with PTC acquisition.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

The ink is still wet here on our acquisition of TechX, and we are now focused on integrating and realizing the synergies. Next, I am excited to introduce annual contract value or ACV is a meaningful metric for measuring underlying performance as it normalizes for multi year deals as well as minimizes the impact of ASC six zero six revenue accounting rules. Lastly, I will get into the details on guidance shortly, but I want to highlight that due to the macro issues, market volatility and tariff related uncertainties for some of our customers, we have provided a broader than usual guidance range for the second quarter. Let's turn to the next slide to begin our review of Q1 results in more detail. Gross booking for our software and semiconductor IP products in the first quarter were $13,700,000 down 15% year over year.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

Revenue was $14,100,000 down 11% year over year and included a $2,000,000 contribution from our recent PPC acquisition due to a successful early renewal with a key customer. The Q1 decline was primarily driven by the timing of renewal cycles in Q1 twenty twenty four as well as temporary order delays stemming from the short term macroeconomic uncertainty. Our non GAAP operating expenses were $14,000,000 up from $10,600,000 last year. Breaking down our cost structure, R and D was 32% of revenue, sales and marketing was 31%, and general and administrative was 37%. The increase in operating expenses was primarily driven by a higher headcount related costs in research and development, as well as sales and marketing, which also included commissions.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

Non GAAP operating loss was $2,500,000 down from non GAAP operating income of $3,300,000 in Q1 twenty twenty four. Our non GAAP net loss for the quarter was $1,900,000 compared to a non GAAP net income of 2,400,000.0 in the same period last year. Non GAAP net loss per share came in at $07 compared to non GAAP net income per share of $0.12 in Q1 twenty twenty four. Our weighted average diluted share count for the first quarter was 28,700,000.0 shares. Turning to the next slide on our booking performance trend, as Babak mentioned, and I've already highlighted, we did have some delays in the customer POs in Q1.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

However, we are proud to still added nine new customer wins for the quarter. In terms of product breakouts, TCAD bookings were down 42% year over year due to the timing of renewals that happened last year and EDA bookings were up 48% year over year, primarily due to the addition of PPC. We are also pleased that bookings for our SiP product increased by approximately $900,000 year over year, and we expect continued growth from this product line. Remaining performance obligations or RPO at quarter end stood at 33,700,000 with 45% expected to be recognized as revenue within the next twelve months. Next slide, moving to revenue.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

Despite being down 11% year over year, on a trailing twelve month basis, Q1 revenue was up 4% year over year. For the quarter, our software licenses accounted for 71% of our total revenue, while maintenance and services accounted for 29% consistent with historical levels. Looking by product, TCAD was down 26% year over year, once again due to the timing of renewals. EDA revenue was up 8% year over year, again driven by a key renewal for our recently acquired PPC product line. Revenue for our SiP product increased by 89% year over year due to a low bar from Q1 last year, which was due to a key agreement that had expired in Q4 of twenty twenty three, but renewed in Q2 'twenty four.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

Turning to our split between geographic regions. Revenue from The Americas was down 34% year over year due to lower revenue from our TCAD product. Asia Pacific was down 5% year over year for the same reason. EMEA was up 8% year over year supported by increased TCAD sales in this region. I will again reiterate that despite the current macro headwinds, as we continue to work towards closing some of the delayed customer orders and introducing our new products acquired to existing and new customer base, the company is well positioned for higher growth rates moving forward.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

Moving to the next slide. Our non GAAP gross margin for the quarter came in at 82%, down from 88% in Q1 twenty twenty four. The year over year decline was driven mostly by lower revenue due to the temporary order push outs. You can see in this chart that historically our cost of goods sold is relatively fixed and therefore gross margin closely correlates with revenue. This quarter we also experienced an increase in our cost of goods sold due to higher headcount related costs in part from a cost structure that also now includes the PPC acquisition.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

With both of these acquisitions now in our rearview mirror, we are focused on optimizing costs as part of integrating the operations. As we continue to scale, we still expect non GAAP gross margins to expand towards our long term target of 90% plus. Moving to the next slide. Beginning with this quarter, I am excited to introduce a new performance metric, annual contract value or ACV. We believe that ACV will be a more meaningful metric for measuring the underlying performance and health of the business, particularly in light of the quarterly volatility in revenue that results from ASC six zero six revenue accounting rules, as well as large multi year deals and the impact from the timing of renewals.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

Our ACV calculation includes all of our software licenses from EDA and TCAD, as well as maintenance and services. Please note that the definition excludes semiconductor IP product sales as they are generally not recurring in nature. We believe this new metric reflects a more stable, normalized growth by accounting for all contract types over twelve month period. Further details around the definition of ACV can be found and are provided in the earnings release as well as the investor presentation. Moving to the next slide, you can see the quarterly fluctuations in bookings and revenue, which is specifically why we will be providing ACV as an additional metric now starting with twenty twenty five.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

On a trailing twelve month TTM basis, ACV was $52,300,000 for the first quarter, up 21% year over year. The increase was driven by organic growth in term based licenses and renewals, as well as the acquisition of PPC. While quarterly revenue may fluctuate, core recurring revenue from new bookings has shown consistent annual growth. Moving on to the next slide, I will now cover our Q2 and full year 2025 guidance. For Q2, our updated forecast is gross bookings between 14,000,000 and $18,000,000 revenue in the range of $12,000,000 to $16,000,000 non GAAP gross margin between 8083% non GAAP operating loss between $4,000,000 and $2,000,000 non GAAP net loss per share between $0.10 and $03 For our full year 2025 guidance, our updated forecast is gross bookings between 67,000,000 and $74,000,000 revenue in the range of $64,000,000 to $70,000,000 non GAAP gross margin between 8386% non GAAP operating loss between $2,000,000 and income of $1,000,000 and non GAAP net loss per share of $07 to net income per share of $03 Given the recency of the acquisitions, this forecast does include assumptions of initial revenue synergies, but does not include cost or tax synergies.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

More specifically, as Babak already mentioned, for the full year 2025 outlook, the forecast includes a 3,000,000 to $5,000,000 contribution for the recent PPC acquisition and a $1,000,000 contribution from TechX for the remainder of the year. Moving on to my final slide. While our near term outlook remains uncertain due to macro headwinds, we are confident in our ability to regain momentum momentum and execute on our long term strategy. With the acquisition of TechX, we continue to execute on our goals to drive revenue growth through expansion of our SAM through M and A, which was a key goal from going public. We expect to return to 15% top line growth once macroeconomic conditions stabilize and continue to target 15% to 25% top line growth, 90% plus non GAAP gross margin and 25 plus non GAAP operating margin.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

We expect to achieve these targets by expanding our presence in key end markets and continuing to pursue the right strategic and organic opportunities. With that, Bobak and I would be happy to take your questions. Operator?

Operator

Thank you so much. And as a reminder, to ask a question, simply press 11 on your telephone and wait for your name to be announced. And it comes from the line of Craig Ellis with B. Riley Securities. Please proceed.

Craig Ellis
Director of Research at B Riley Financial

Yes, thank you for taking the questions, guys. And I'll roll two clarifications into one. So with the acquisitions, we now included in our $67,000,000 calendar 'twenty five revenue guidance have $5,000,000 of acquisition related revenue. The question on that clarification is, how much of that did you include in 2Q's guidance? And related to that, as we think about the order delay that you talked about that was, I think, 10% of annual revenues, how much of recapturing that is included in 2Q guidance and annual revenue guidance?

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Thanks, Greg. This is Bobak. Keith, I'll take this first, and then please add anything you feel I missed. So just to be clear, on couple of points, we did say the order misses were less than 10% of annual revenue. We specifically said

Craig Ellis
Director of Research at B Riley Financial

Got it.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Their revenue portion, not their bookings, but we gave two numbers. The bookings was roughly 4,400,000.0, which would have been recognized at about 2,200,000.0 revenue that got delayed. So that was the amount. And then in terms of acquisitions, we said PPCOPC adds between 3,000,000 to $5,000,000 for the year. And then we said Tech X adds another million dollars to the full year.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

If you add those numbers, the range is now between 4 and 6,000,000 just to get the record straight. So 4 and 6,000,000 due to acquisitions. Have you included a portion of these things in q2 revenue? Yes. I don't think we have specifically mentioned how much, but you could you could assume that in general a linear incremental to TECHEX revenue that will be contributed throughout the year, as well as OPC or PPC. Did I answer your question?

Craig Ellis
Director of Research at B Riley Financial

Yeah, thank you. And then the follow-up question, the company was quite explicit about introducing an additional degree of conservatism in its guidance, just given the very unusual macro that exists out there. Is it possible to quantify the degree to which that's impacting bookings or revenues or other line items for your calendar '25 guidance?

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Yes, Greg, of course. What we've said already the impact to Q1, the main impact if you think about this, for us has been historically and was also delay of orders due to uncertainty of tariffs and macro. Customer tend to want to take more time in justifying what they order and what they get. In cases of some other companies, they tend to worry about supply chain. They order more products in some cases of some other companies, which we fall under in this case, for the Q1, they push orders out.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

We know for a fact that we don't have cancellations, the orders are pushed out. So we know we can close this within upcoming quarters. That's one fact. And then secondly, to get your answer to very quickly, the impact for us, we estimate these delays would be, again, in the order of 10% of the revenue total, and those are already accounted for in our new guidance. So, Keith, do you want to add anything to that?

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

No, I would just basically reiterate the same.

Craig Ellis
Director of Research at B Riley Financial

Got it, guys. Then lastly, Babak, it's nice to see you get such significant TAM expansion off of the two announced deals. With two now going through integration generating revenue, how should we think about the timing with which you would think additional deals would be appropriate for the business? Thanks, guys.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

You bet, Greg. As usual, great question. So, some expansion is, as you know, is one of our main strategies. We tend to not compete directly, but expand our presence in the market. And the timing for, frankly, PPC, we had iterated last call that the timing would be actually in 2026.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

And that's what we expected. However, when we approached the customers that we acquired the PPC, there was a very welcoming response from them to a point that, as we mentioned, some of them already renewed the order with us, and that's how we did recognize 1,920,000.00 ish of PPC revenue in Q1. So as we get to meet with the customers more for both acquisitions and as we also, you know, we always have had this expansion strategy with accounts for roughly, you know, for Q1 was I believe it was about 35%. Keith can correct me of the revenue for Lan and XM3523 net range for both of them. And we tend to actually show the customers that the offerings that they have seen, there is an opportunity for them to do more advanced R and D with us, more capabilities the timing for that, I believe, as we said for the year will be such that it will be we're actually estimating it to be linear, but we could actually do it in an earlier fashion.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

And we are pushing to get more of these renewals and upgrades done, the expansion done faster than a linear approach to estimation of revenue coming from these two opportunities. And, you know, we did that already with our PPC acquisition. And we tend to do that also again with more of the customers in PPC and what we acquired in TechX. There's a lot of expansion in terms of when you do product synergies and how you combine certain capabilities to make the platform larger and be able to address and handle a lot more computing capabilities. Plus, as I mentioned, also in our tech x acquisition, these guys are world class in terms of mapping software algorithms of our kind into what we call AI GPUs and being able to do these things faster and cheaper and quicker.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

So we tend to show those capabilities to the customers and that's how we plan to get the timing sooner than linear. But for now, we're committing to linear revenue for them.

Craig Ellis
Director of Research at B Riley Financial

Thanks, Kash.

Operator

One moment for our next question, please. And it comes from the line of Blair Abernethy with Rosenblatt Securities. Please proceed.

Blair Abernethy
Managing Director, Sr. Research Analyst at Rosenblatt Securities

Hi. Thanks, guys, for taking the questions here. I just wanted to touch on a couple of things, Bek, if we could. Could you provide some color around the FTCO pipeline, maybe how that's progressing with new potential customers and with some of your existing with the existing customer?

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Yeah, absolutely. That's always a great question since it's one of our focus areas. Then, as you can see, we have said this in the past that we already have, we already have a big customer in memory that's going to expand more, we expect that to happen in the second half. We already have a customer in advanced CMOS for R and D purposes. And as soon as the R and D phase evaluation is done, then they will go into production.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

And then I expect again, that to happen in second half. We are also already have a customer for power in terms of power semiconductors that are in their r and d phase of FTC evaluation and that also we are pushing to get that across to production in also second half. The other two things that we announced, of course, we never talked about this before, but one of the interesting and nice things that we said in the past, that we will do after power and advanced CMOS penetration into key customers, we're going to do the same thing for next generation of displays. And our announcement with Kyung Hee University, which is one of the top rated universities for R and D in the world, Doctor. Jing probably is one of the leading researchers in advanced display technologies in Korea.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

And that by itself the fact that he's getting us and working with us to take that and prepare the FTCo platform for next generation of displays. If you really can take on any forms of small geometry displays, all the way to large panel displays is the progress we've made. We are very happy with the progress, of course, to get commitment for large orders and timing of these things is relevant. And that's why we are coming into second half of this year for advanced CMOS technology, power technology and some display customers to come on board on FTC also.

Blair Abernethy
Managing Director, Sr. Research Analyst at Rosenblatt Securities

Okay, great. Thank you for that color. Then just on the slipped deals in Q1 or the push out, was there anything that you would call out to say, you know, whether it was more geographically based customers or was it, you know, TCAD versus EDA versus IP? Any other sort of color on where closing, where things got pushed out?

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Yeah, I would say mostly Asia, as a matter of fact, all of them Asia, and then geographically, if you will, and then it was a combination of TCAD and IP, it wasn't just AEDM was not impacted. And some of these, it was a matter of getting more signature and more confidence in their customer about their forecast of where they're taking their products, and the fact that how tariffs could impact them and those we've already resolved. As a matter of fact, I was traveling most of last month to those customers in order to understand their concerns. And we are pretty confident that those orders will close. We had one instance of this thing again last year in Q3, closed those POs.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

And unfortunately, for the size of our company pushing these POs on the quarter boundaries impacts our quarterly results and that's why most companies have other metrics that they provide, we have decided to do ACV that shows the business is growing and these quarterly boundaries will not impact it since we are dealing with a CVs with a TTM metric that captures the essence of how the health of businesses so.

Blair Abernethy
Managing Director, Sr. Research Analyst at Rosenblatt Securities

Okay, great. Thanks very much.

Operator

Thank you. One moment for our next question. And it comes from the line of Robert Merton with TD Cowen. Please proceed.

Robert Mertens
Equity Research Associate at TD Cowen

Hi, this is Robert Merton on the line on behalf of Krish Sankar. Thanks for taking my question. You've given a lot of color on the order push outs and recent acquisitions. So I just had maybe a quick house keeping item. I might have missed this on the call.

Robert Mertens
Equity Research Associate at TD Cowen

But what was the expected OpEx into the June? And how should that trend throughout the year with the integration of those recent acquisitions? Just any color there would be helpful.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Keith, I'll let you take the first time, then I'll

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

Yeah, was gonna say I'll answer that, and then I'll let Bhabha add any color if he wants to. So when we closed PPC, we basically said the expense forecast was roughly 3,000,000 for the rest of the year for that acquisition and the color I'll give on Tech X is it's roughly 2 for the rest of the year. So, you know, we obviously we announced the Tech X at the April, so there'll be two months. It'll be a full quarter of PPC. Again, a cost synergy standpoint, we have not included any cost synergies in this guidance outlook at this point.

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

We are working on ultimately figuring out what the right approach is to getting there and getting there effectively while not losing any upsides from the revenue synergies that we hope to get. We'll have an update for where we're at with that on each coming call, but suffice to say we've got roughly 5 plus million in there for the two acquisitions combined.

Robert Mertens
Equity Research Associate at TD Cowen

Okay, got it. Thank you. That's helpful.

Operator

Thank you. And as a reminder, if you do have a question, simply press 11 to get in the queue. One moment for our next question. And it's coming from Christian Schwab with Craig Hallum Capital. Please proceed.

Christian Schwab
Senior Research Analyst at Craig-Hallum Capital Group LLC

Good evening, guys. So I was just wondering, I understand the macroeconomic environment and the tariffs and numerous companies in particular being impacted in Asia. But last quarter you expressed confidence in growing 15% to 25% annually. Obviously, if we exclude the $5,000,000 of acquisitions this year versus last year, this is a challenging year versus growth expectations. Is there anything that's changed in your business besides things we can't control such as tariffs that change your long term growth plans?

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Hey, Christian. Nice seeing you again. No. Absolutely. That's a good question.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

So besides the acquisition, the fundamental aspects of our business is strong. You know, we are number two in the world in terms of TCAD presence. We are showing that we are growing the IP business and also EDA, and organically, and in this case, we showed that Q1 for EDA was inorganic growth through PPC. We don't, unless there are delays in the orders due to macro and tariffs, we don't see any barrier in hitting bigger numbers. But as Keith mentioned, and we've mentioned, for the full year, you know, we're expecting an up to 17% growth in revenue, right?

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Between 64 and 70, if we hit $70,000,000 revenue, that's 17% growth, and would fall within the numbers of 15 to 20% or above that that you're discussing, or you mentioned. So I think for us, coming up with estimates that are conservative in terms of taking macro impact into our estimate. And that's all we're doing Christian. So, however, our fundamental business process is improving, understanding these macro impacts in terms of rev rec and understanding how these things could potentially impact us and coming up with a more, I would say disciplined way of guiding the street and providing guidance is part of our learning process of going through IPO. As a matter of fact, this month will be within few days will be our anniversary for having gone public.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

And that's all we're doing. I think the business is sound, we feel very good about the business, I feel we have quite a bit of more markets to be able to address, quite a few more customers that we acquired through acquisitions and through organic growth. So that's how I would say it. Keith, do want to add anything to that?

Keith Tainsky
Keith Tainsky
Interim CFO at Silvaco Group

I think that covers it fairly well. I mean, again, I think that at a high level, we're small cap, you know, we're between 64 and $70,000,000 There's, you know, customer specific deals that that are, you know, sizable and the FTC O ones we've alluded to before that, you know, it comes down to deal by deal, you know, working through the pipeline. Think, you know, the sales team is excited because, you know, they've with the two recent acquisitions, we've got a customer base of 800 plus customers with very small overlap with these two companies that we can now go sell these products to. So it's just a matter of going through the traditional Pareto, which ones are the other ones that we wanna go after first and and prioritizing that. That's effectively the process the box highlighted that we've started.

Christian Schwab
Senior Research Analyst at Craig-Hallum Capital Group LLC

That's great. Thank you. No other questions.

Operator

Thank you. And this concludes our Q and A session for today. I will turn it back to Doctor. Babak Taheri for closing remarks.

Babak Taheri
Babak Taheri
Director & CEO at Silvaco Group

Thank you everyone for attending our call and asking great questions, very direct and we wanted to make sure that we are as transparent as you want us to be as much as possible. And as I mentioned before, we are going through this journey together, we are learning being a public company and how conservative we estimate our earnings, some of the factors that we don't have direct control over. However, I just wanted to reemphasize that we have very good confidence in our business process, business plan, and, you know, we have a learning organization and we keep improving and getting better at how we go about giving our estimates and our projects. With that, I wanted to thank again everyone on the call and look forward to talking to you again.

Operator

And thank you all for participating. You may now disconnect.

Executives
    • Babak Taheri
      Babak Taheri
      Director & CEO
    • Keith Tainsky
      Keith Tainsky
      Interim CFO
Analysts
    • Gregory McNiff
      Managing Director at The Blueshirt Group
    • Craig Ellis
      Director of Research at B Riley Financial
    • Blair Abernethy
      Managing Director, Sr. Research Analyst at Rosenblatt Securities
    • Robert Mertens
      Equity Research Associate at TD Cowen
    • Christian Schwab
      Senior Research Analyst at Craig-Hallum Capital Group LLC
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