Silvaco Group, Inc. (SVCO): Results of Operations and Financial Condition
Silvaco Group, Inc. (SVCO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Silvaco Reports Second Quarter 2026 Financial Results -- Profitability: Delivered better-than-expected operating results driven by continued tight management of operating expenses-- -- Partnerships: Announced new strategic partnerships with NVIDIA and Dassault System
How this was made
The 30-second read
Why it matters
The 8-K discloses Q2 2026 operating performance, record IP revenue and pipeline creation, new NVIDIA and Dassault SIMULIA partnerships, and a Micron-linked $10M convertible note, plus Q3 2026 bookings, revenue, and margin guidance.
Market read
This is a primary earnings-and-guidance disclosure with quantified profitability improvement and explicit Q3 targets, making it directly tradable for expectation and positioning.
What to watch
Balance-sheet strengthening via the Micron $10M convertible note may be viewed as supportive but not necessarily indicative of durable operating cash flow; traders may also scrutinize the breadth and timing of FTCO wins into 2H’26.
Silvaco reported 48% year-over-year revenue growth and reached non-GAAP operating profitability, supported by record IP revenue and reduced spending.
Revenue grew 48% year-over-year, IP revenue rose 238% year-over-year, and non-GAAP operating income was $0.6 million versus a $6.0 million operating loss in Q2 2025. GAAP results remained loss-making, while third-quarter guidance calls for revenue of $17.0 million +/- 10%.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $17.8 million | – | up 48% year-over-year |
| GAAP gross marginGAAP | 85% | – | up 1423 basis points year-over-year |
| GAAP operating lossGAAP | $4.0 million | – | – |
| GAAP net lossGAAP | $3.7 million | – | – |
| GAAP basic and diluted net loss per shareGAAP | $0.11 | – | – |
| Gross bookingsother | $16.2 million | – | up 25% year-over-year |
| IP bookingsother | $5.4 million | up 81% sequentially | 70% year-on-year |
| IP revenueother | $6.0 million | up 48% sequentially | 238% year-on-year |
| Non-GAAP gross marginnon-GAAP | 87% | – | up 1246 basis points year-over-year |
| Non-GAAP operating incomenon-GAAP | $0.6 million | – | – |
| Non-GAAP net incomenon-GAAP | $0.3 million | – | – |
| Non-GAAP basic and diluted net income per sharenon-GAAP | $0.01 | – | – |
| New pipeline opportunities addedother | $64M | – | – |
| Identified pipeline opportunities at quarter endother | over $292M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| TCADNot specified in document. | $7.9 million | – | up 16% year-over-year |
| EDANot specified in document. | $3.9 million | – | up 14% year-over-year |
| SIPIP strength driven by foundational IP and Mixel offerings. | $6.0 million | – | up 238% year-over-year |
Third quarter 2026 outlook
- Revenue$17.0 million +/- 10%
- Gross marginNon-GAAP gross margin of around 88%
- Operating expensesNon-GAAP operating expenses of $14.5 million +/- 5%
- NoteBookings of $18.0 million +/- 10%.
- NoteSilvaco has not provided guidance for GAAP gross margin or GAAP operating expenses.
What drove it
- IP bookings were up 81% sequentially and 70% year-on-year to $5.4 million.
- IP revenue was up 48% sequentially and 238% year-on-year to $6.0 million.
- IP strength was driven by foundational IP and Mixel offerings.
- The Company secured a new AI FTCO customer in Q2'26 and is working to close new AI FTCO wins in 2H'26.
- The Company announced partnerships with NVIDIA and Dassault Systemes SIMULIA.
- The Company reported record pipeline creation, with $64M in new opportunities added and identified pipeline opportunities growing to over $292M by quarter end.
- Reduced spending contributed to non-GAAP operating profitability.
Concerns
- GAAP operating loss was $4.0 million.
- GAAP net loss was $3.7 million.
- GAAP basic and diluted net loss per share was $0.11.
- The Company stated that excluded items in its forward-looking non-GAAP measures could be material to future GAAP results.
- Third-quarter revenue guidance is $17.0 million +/- 10%.
What to watch
- Progress closing new AI FTCO wins in 2H'26.
- Execution of the NVIDIA partnership to accelerate next-generation digital twins for semiconductor design and manufacturing.
- Execution of the Dassault Systemes SIMULIA partnership for interoperable digital twin workflows.
- Engagements with key strategic customers for Agentic AI offerings expected by yearend.
- Bookings performance against third-quarter guidance of $18.0 million +/- 10%.
- Revenue performance against third-quarter guidance of $17.0 million +/- 10%.
- Non-GAAP gross margin performance against guidance of around 88%.
- Non-GAAP operating-expense performance against guidance of $14.5 million +/- 5%.
Balance sheet and cash flow
- As of quarter-end, cash and cash equivalents totaled $13.0 million.
- Closed a $10 million investment from Micron Technologies.
- Micron Technologies' investment in Silvaco is a $10 million convertible note.
Analysis
Silvaco delivered a stronger second quarter, with GAAP revenue of $17.8 million, up 48% year-over-year. Growth was led by SIP revenue of $6.0 million, up 238% year-over-year, while TCAD revenue was $7.9 million, up 16% year-over-year, and EDA revenue was $3.9 million, up 14% year-over-year. The Company also reported IP bookings of $5.4 million, up 81% sequentially and 70% year-on-year, and IP revenue of $6.0 million, up 48% sequentially and 238% year-on-year.
Profitability improved materially. GAAP gross margin was 85%, up 1423 basis points year-over-year, while non-GAAP gross margin was 87%, up 1246 basis points year-over-year. The Company reported non-GAAP operating income of $0.6 million, compared with a $6.0 million operating loss in Q2 2025, and non-GAAP net income of $0.3 million, compared with a $5.8 million net loss in Q2 2025. GAAP operating loss, net loss, and basic and diluted net loss per share were $4.0 million, $3.7 million, and $0.11, respectively.
Demand indicators improved alongside the reported revenue growth. Gross bookings were $16.2 million, up 25% year-over-year. Silvaco added $64M in new pipeline opportunities during the quarter, and identified pipeline opportunities grew to over $292M by quarter end. Management cited a new AI FTCO customer, work to close additional AI FTCO wins in 2H'26, and partnerships with NVIDIA and Dassault Systemes SIMULIA as strategic developments supporting the FTCO and digital-twin opportunity.
Balance-sheet commentary centered on cash and the Micron relationship. Cash and cash equivalents totaled $13.0 million as of quarter-end. The Company said it closed a $10 million investment from Micron Technologies, described in the release as a $10 million convertible note, alongside an expanded collaboration centered on Silvaco's FTCO platform.
For the third quarter of 2026, Silvaco guided to bookings of $18.0 million +/- 10%, revenue of $17.0 million +/- 10%, non-GAAP gross margin of around 88%, and non-GAAP operating expenses of $14.5 million +/- 5%. The Company did not provide GAAP gross-margin or GAAP operating-expense guidance, stating it could not predict the ultimate outcome of the relevant exclusions with reasonable certainty without unreasonable effort.
Management, verbatim
Silvaco made solid progress on its strategic transformation in Q2.
Walden Rhines, Silvaco’s Chief Executive Officer
Silvaco’s record IP revenue in the quarter, combined with reduced spending, enabled us to deliver non-GAAP operating profitability in Q2 for the first time in almost two years.
Chris Zegarelli, Silvaco’s Chief Financial Officer
Real-time, AI-driven modeling is becoming a strategic advantage in advanced memory development, enabling our engineers to make faster, better-informed process decisions.
Gurtej Sandhu, Principal Fellow & CVP, Micron Technologies
Not in the filing
stated, not guessed- Period-end date for the second quarter 2026.
- Prior-year revenue amount.
- Prior-quarter total revenue amount and change.
- Prior-year and prior-quarter TCAD revenue amounts.
- Prior-quarter TCAD revenue and change.
- Prior-year and prior-quarter EDA revenue amounts.
- Prior-quarter EDA revenue and change.
- Prior-year and prior-quarter SIP revenue amounts.
- Prior-quarter SIP revenue and change.
- Prior-year and prior-quarter GAAP gross margin amounts.
- Prior-quarter GAAP gross margin and change.
- Prior-year and prior-quarter non-GAAP gross margin amounts.
- Prior-quarter non-GAAP gross margin and change.
- Prior-quarter GAAP operating loss.
- Prior-quarter GAAP net loss.
- Prior-quarter GAAP basic and diluted net loss per share.
- Prior-quarter non-GAAP operating income.
- Prior-quarter non-GAAP net income.
- Prior-quarter non-GAAP basic and diluted net income per share.
- Operating cash flow.
- Free cash flow.
- Debt.
- Share repurchases.
- Dividends.
- Tax-rate guidance.
- GAAP gross-margin guidance.
- GAAP operating-expense guidance.
- Previous-quarter outlook for comparison with actual results.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Silvaco is a TCAD, EDA software, and SIP solutions provider, positioning its FTCO platform as AI-powered surrogate modeling for semiconductor process development.
Ticker impact
Silvaco reports Q2 2026 results and provides Q3 2026 guidance, including bookings of $18.0M +/-10% and revenue of $17.0M +/-10%.
Likely positive near-term bias as traders price in profitable growth trajectory and FTCO/AI momentum, with focus on whether Q3 guidance is met.
The filing is a primary disclosure (8-K) with multiple quantified operating metrics (IP bookings/revenue, pipeline creation) and forward guidance for Q3, which directly informs near-term expectations.
Market effects
TCAD/EDA and semiconductor digital-twin software names may see read-across interest due to NVIDIA and Dassault partnership announcements and AI-driven modeling positioning.
Limited direct regional impact; primarily US-listed software/semicap software sentiment.
Partnership and Micron relationship are global semiconductor ecosystem signals, potentially affecting supplier and tooling sentiment.
Counterpoint
Despite non-GAAP profitability, GAAP still shows operating and net losses, so investors may discount sustainability until cash generation and GAAP profitability improve.
Key entities
- companySilvaco Group, Inc.
Nasdaq-listed TCAD/EDA and FTCO AI surrogate modeling provider reporting Q2 results and issuing Q3 guidance.
- companyMicron Technologies
Partnered with Silvaco via an expanded relationship and a $10M convertible note tied to FTCO adoption.
- companyNVIDIA
Announced partnership with Silvaco to accelerate next-generation digital twins using GPU-accelerated computing and AI.
- companyDassault Systemes SIMULIA
Partnership to develop interoperable digital twin workflows for semiconductor process development and yield ramp acceleration.
