Strong Top-Line Growth
Q1 bookings of $17.2M and revenue of $17.8M, both +26% year-over-year and above consensus and the midpoint of guidance.
Silvaco Group, Inc.
· SVCO
May 7th, 2026
Summary
- Earnings Call Date:
- 2026-05-07
- Change Since:
- -1.99%
- Next Earnings Date:
- 2026-08-12
Earnings Call Sentiment
PositiveThe call presents materially more positive developments than negatives: strong year-over-year top-line growth (+26% bookings and revenue), robust gross margins (mid- to upper-80s), significant TCAD/FTCO momentum, dramatic year-over-year IP growth and a doubling pipeline, sequential cost reductions, and improving cash trends. Lowlights center on near-term EDA softness, sequential lumpiness in IP due to timing, GAAP losses and a modest absolute cash balance, and the early-stage (and potentially lumpy) nature of FTCO adoption. Overall the positives (growth, margin expansion, cost reductions, FTCO traction, and guidance toward non-GAAP profitability) outweigh the negatives.
Company Guidance
For Q2 FY2026 Silvaco guided to bookings of $19.0M ±10% (≈$17.1M–$20.9M), revenue of $18.0M ±10% (≈$16.2M–$19.8M), non‑GAAP gross margin around 88% (management expects gross margins to remain in the mid‑ to upper‑80s), and non‑GAAP operating expenses of $15.5M ±5% (≈$14.7M–$16.3M); management said this should deliver non‑GAAP operating profitability in Q2 (first since Q4‑2024), expects to close a $10M revolving credit facility in Q2, anticipates signing one more FTCO customer in Q2, reiterated a target of positive operating cash flow by Q3, and noted unrestricted cash grew ~10% sequentially in Q1 with remaining performance obligations/backlog of about $46.6M.
Improved Profitability and Elevated Gross Margins
GAAP gross margin 86.4% and non-GAAP gross margin 87.9%; sequential increases of ~305 bps (GAAP) and ~235 bps (non-GAAP); year-over-year increases of ~779 bps (GAAP) and ~788 bps (non-GAAP). Non-GAAP operating loss narrowed to $471k (sequentially cut in half) and management expects to deliver non-GAAP operating profitability in Q2.
FTCO Momentum and Customer Wins
Secured a second FTCO AI-driven manufacturing customer in as many quarters, plus an order for new functionality from an existing FTCO customer; management expects another FTCO customer to close in Q2 and identifies strong pipeline interest from governments, power applications and equipment companies.
TCAD Segment Strength
TCAD bookings of $10.5M, +49% year-over-year and +13% sequential; TCAD revenue $9.6M, +22% year-over-year and +10% sequential. FTCO growth is reported in TCAD and credited with driving momentum.
Semiconductor IP: Large Year-over-Year Growth and Expanding Pipeline
IP revenue $4M (+270% year-over-year) and bookings $3M (more than +200% year-over-year). Management reports the IP pipeline has roughly doubled year-over-year and expects IP to be the fastest-growing line going forward.
Cost Reductions and Cash/Balance Sheet Improvements
$20M cost reduction initiative largely complete; GAAP operating expenses down 4.5% sequentially to $21M and non-GAAP operating expenses down 3.6% sequentially to $16.1M. Total non-GAAP spending declined for two consecutive quarters. Unrestricted cash grew nearly 10% sequentially to $10.9M (no restricted cash at quarter end). Adjusted net cash used in operating activities (excluding $8.3M litigation and $1M severance) was $1.7M in Q1 and management expects positive operating cash flow by Q3.
Prudent Capital and Liquidity Actions
Signed a nonbinding term sheet for a $10M revolving credit facility expected to close in Q2, improving liquidity optionality.
Constructive Forward Guidance
Q2 guidance: bookings $19M ±10%, revenue $18M ±10%, non-GAAP gross margin ~88%, and non-GAAP operating expenses $15.5M ±5%. Management reiterated expectation of non-GAAP operating profitability in Q2.
Operator
Good afternoon, and welcome to Silvaco's First Quarter Fiscal Year 2026 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Chris Zegarelli, Silvaco's CFO. Please proceed.
Chris Zegarelli
Thank you. Joining me on the call today is Wally Rhines, Silvaco's CEO and Director. As a reminder, a press release highlighting the company's results, along with supplemental financial results, are available on the company's IR site at investors.silvaco.com. An archived replay of the 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. 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 and on this conference call. The Risk Factors section in Silvaco's annual report on Form 10-K for the year ended 12/31/2025, provides descriptions of these risks. With that, I'd like to turn the call over to o...
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