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SG

Silvaco Group, Inc. (SVCO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue of $14.09M declined 11% YoY and 21% QoQ on Asia-based order pushouts; GAAP EPS was $(0.67) on a $13.1M litigation charge, and non-GAAP EPS was $(0.07) . Results missed S&P Global consensus: revenue $15.99M*, EPS ~$0.01*, EBITDA -$0.7M* versus actual -$6.1M (litigation) .
  • Management lowered FY25 guidance across bookings, revenue, margins and profitability (new: revenue $64–$70M vs prior $66–$72M; non-GAAP op income $(2)$–$1M vs $2–$7M) and issued a broader, conservative Q2 range given macro/tariff uncertainty .
  • Mix positive: EDA +8% YoY (helped by the Cadence PPC acquisition contributing ~$1.9M in Q1), SIP +89% YoY; TCAD -26% YoY on renewal timing .
  • Strategic catalysts: M&A expanded SAM by ~$600M (Cadence PPC closed Mar 4; Tech‑X closed Apr 29) and introduced ACV as a visibility KPI (TTM ACV $52.3M, +21% YoY); management expects 2H timing of delayed orders and early acquisition synergies to aid trajectory .

What Went Well and What Went Wrong

  • What Went Well

    • EDA and SIP growth: EDA revenue rose 8% YoY to $5.1M (incl. ~$1.9M from PPC); SIP grew 89% YoY to $1.1M .
    • Strategic M&A expanding TAM and product: closed Tech‑X (wafer-level/photonics digital twin) and acquired Cadence PPC, adding an estimated ~$600M to SAM; PPC expected to contribute $3–$5M and Tech‑X ~$1M in FY25 .
    • ACV transparency introduced: TTM ACV $52.3M, +21% YoY, highlighting underlying recurring growth despite quarterly volatility .

  • What Went Wrong

    • Revenue/earnings miss: Q1 revenue $14.09M and non-GAAP EPS $(0.07) missed consensus ($15.99M*, ~$0.01*); EBITDA far below consensus due to litigation charge (actual -$6.1M vs -$0.7M*) .
    • Macro/tariffs drove order pushouts in Asia: two deals (~$4.4M bookings; ~$2.2M revenue) slipped, with delays estimated at “~10% of annual revenue” baked into guidance .
    • Profitability reset: Non-GAAP GM fell to 82% (vs 88% Q1’24), and FY25 guidance cut: non-GAAP op income range moved to $(2)$–$1M (prior $2–$7M), reflecting higher OpEx (including M&A integration) and near-term macro conservatism .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($M)$10.97 $17.86 $14.09
GAAP Gross Margin %75% 86% 79%
Non-GAAP Gross Margin %80% 89% 82%
GAAP EPS ($)$(0.23) $0.14 $(0.67)
Non-GAAP EPS ($)$(0.06) $0.15 $(0.07)

Actual vs S&P Global Consensus (Q1 2025)

MetricConsensusActual
Revenue ($M)$15.99*$14.09
Primary EPS ($)$0.01*$(0.07)
EBITDA ($M)$(0.70)*$(6.13) [GetEstimates actual]
  • Values with asterisks (*) are from S&P Global.

Segment Revenue ($M)

SegmentQ3 2024Q4 2024Q1 2025
TCAD$6.49 $12.74 $7.90
EDA$2.64 $4.25 $5.11
SIP$1.84 $0.88 $1.09

Key KPIs

KPIQ3 2024Q4 2024Q1 2025
Gross bookings ($M)$9.88 $20.31 $13.68
RPO ($M)$32.6; 48% <12 mo $34.3; 46% <12 mo $33.7; 45% <12 mo
TTM ACV ($M)——$52.3
New customers (#)14 13 9

Narrative Drivers

  • Revenue shortfall: Asia order pushouts (~$2.2M revenue impact) and TCAD renewal timing; EDA grew on PPC contribution; non-GAAP GM down on lower volume and added costs post-acquisition .

Guidance Changes

MetricPeriodPrevious Guidance (3/5/25)Current Guidance (5/7/25)Change
Gross bookings ($M)FY 2025$72–$79 $67–$74 Lowered
Revenue ($M)FY 2025$66–$72 $64–$70 Lowered
Non-GAAP GM %FY 202584–89% 83–86% Lowered
Non-GAAP Op (Income) Loss ($M)FY 2025$2 to $7 $(2)$ to $1 Lowered
Non-GAAP Diluted EPS ($)FY 2025$0.07 to $0.19 $(0.07)$ to $0.03 Lowered
Gross bookings ($M)Q2 2025N/A$14–$18 New
Revenue ($M)Q2 2025N/A$12–$16 New
Non-GAAP GM %Q2 2025N/A80–83% New
Non-GAAP Op Loss ($M)Q2 2025N/A$(4)$ to $(2)$ New
Non-GAAP Diluted EPS ($)Q2 2025N/A$(0.10)$ to $(0.03)$ New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24, Q4’24)Current Period (Q1’25)Trend
AI/FTCO, digital twinExpanded TCAD platform; $5.0M FTCO follow-on in early Q4 FTCO traction across power, memory, advanced CMOS; 2H ramp expected; ACV introduced Momentum building; 2H weighted
Macro/tariffs, AsiaQ3 revenue hit by China delays Asia-based pushouts; guidance conservatism (delays ~10% of annual revenue baked in) Persistent headwind but viewed as timing
M&A integrationPPC closed Mar 4; synergies ahead Tech‑X closed Apr 29; FY25 adds PPC $3–$5M, Tech‑X ~$1M; linear contribution assumed Portfolio broadened; executing integrations
Profitability/marginsRebound in Q4; FY25 targets previously higher Near-term GM pressure on lower volume and added costs; FY25 margin targets lowered Reset near term, long-term 90%+ GM target intact
Litigation/regulatory—Recognized $13.1M estimated litigation charge in Q1; ongoing mandate litigation One-off hit to GAAP; monitoring
Legal overhang (investor actions)—Outside firms announced investor investigations post 2024 volatility Background noise; sentiment risk

Management Commentary

  • CEO on acquisition strategy and outlook: “We are pleased to have completed our first acquisition since our IPO… and have since announced our second acquisition of 2025… We believe our solid fundamentals and focus on innovation position us to sustain strong customer momentum and drive continued growth” .
  • On Q1 shortfall cause and conservatism: “Revenue… below our guidance, primarily due to delays in closing 2 key bookings totaling $4.4 million… reduced recognized revenue by approximately $2.2 million… guidance… intentionally set with a conservative approach given the current macroeconomic environment” .
  • CFO on charges and macro: “We have recognized an incremental $13.1 million charge relating to the ongoing mandate litigation… due to macro issues… and tariff-related uncertainties… we have provided a broader-than-usual guidance range for the second quarter” .
  • On ACV: “On a trailing 12-month basis ACV was $52.3 million… up 21% YoY… driven by organic growth… and the acquisition of PPC” .

Q&A Highlights

  • Acquisition contribution and phasing: FY25 adds from acquisitions total $4–$6M (PPC $3–$5M; Tech‑X ~$1M), assumed roughly linear through the year; partial inclusion in Q2 but not detailed .
  • Conservatism magnitude: Guidance incorporates pushouts estimated at ~10% of annual revenue; management emphasized delays not cancellations .
  • OpEx impact from M&A: PPC ~$3M and Tech‑X ~$2M OpEx for the remainder of FY25; no cost synergies assumed yet in guidance .
  • FTCO pipeline timing: Multiple customers (memory, advanced CMOS, power) expected to transition from evaluation to production in 2H 2025 .

Estimates Context

  • Q1 2025: Revenue $14.09M vs $15.99M consensus*; Primary EPS $(0.07) vs ~$0.01 consensus*; EBITDA $(6.13)M vs $(0.70)M consensus* — miss driven by order pushouts and a $13.1M litigation charge .
  • FY 2025: Company now guides revenue $64–$70M vs consensus $61.20M* (above Street at the midpoint), but guides non-GAAP EPS $(0.07)$–$0.03 while Street expects a larger loss (~$(0.41)$*) .
  • Implication: Revenue models may edge up toward guide; profit models likely reset lower near term given lowered margin/OP outlook and added integration costs.
  • Values marked with asterisks (*) are from S&P Global.

Key Takeaways for Investors

  • Near-term reset, long-term optionality: Q1 miss and FY25 guidance cuts reflect macro/tariff timing and a sizable litigation charge; ACV growth and expanding SAM (PPC, Tech‑X) support medium-term recovery as pushouts convert .
  • Mix shift matters: EDA/SIP momentum (PPC contribution) offsets TCAD renewal timing variability; watch EDA attach and cross-sell as Tech‑X integrates .
  • 2H execution critical: Management expects delayed POs to close and FTCO customers to move to production in 2H; delivery here is the likely stock catalyst .
  • Margin trajectory: Non-GAAP GM compressed to 82% on lower volume and added costs; structural goal remains 90%+ as scale returns — track Q2–Q3 gross margin and OpEx discipline .
  • Guidance bar reset: FY25 lowered across metrics; Q2 ranges are broad. Outperformance would likely come from faster order closure and earlier-than-linear acquisition synergies .
  • Legal overhang: The $13.1M charge hit GAAP and EBITDA; monitor 10-Q disclosures and any developments in mandate litigation; investor action PRs add sentiment risk .
  • Watch list: Asia macro/tariffs, FTCO deal timing, acquisition integration milestones (cost synergies not in guide), and ACV progression as a leading indicator .

Notes:

  • S&P Global consensus values are marked with an asterisk (*).
  • All other figures and quotes are sourced from Silvaco’s Q1 2025 8-K press release and supplemental materials, and the Q1 2025 earnings call transcript as cited.