Silvaco Group, Inc.

What they do

Silvaco sells three product categories: TCAD software for modeling and optimizing semiconductor manufacturing processes and device performance, including an AI/ML 'digital twin' offering called Fab Technology Co-Optimization (FTCO); EDA software for SPICE modeling and simulation, parasitic extraction and reduction, standard cell generation and optical proximity correction; and SIP including standard cells, memory compilers and interface technologies. Customers are foundries, integrated device manufacturers and fabless semiconductor companies, served through software licenses plus associated maintenance and services across 12 offices worldwide.

Revenue drivers

• TCAD — Manufacturing process and device simulation software, including the AI/ML FTCO 'digital twin' product; TCAD revenue was $7.9 million in Q2 2026, up 16% year-over-year, the largest of the three reported product lines.
• EDA — Design, simulation and verification software including SPICE modeling, parasitic extraction, standard cell generation and optical proximity correction, expanded by the March 2025 acquisition of Cadence's Process Proximity Compensation (OPC) product line for $11.5 million; EDA revenue was $3.9 million in Q2 2026, up 14% year-over-year.
• SIP — Semiconductor intellectual property including standard cells, memory compilers and interface technologies, bolstered by the August 2025 acquisition of Mixel Group for $22.5 million ($19.7 million cash plus 643,617 shares valued at $2.8 million); SIP revenue was $6.0 million in Q2 2026, up 238% year-over-year, and IP bookings rose 70% year-over-year to $5.4 million.
• License vs. maintenance and services mix — Software solutions accounted for 66% of revenue for both the three and six months ended June 30, 2026, versus 60% and 66% in the comparable 2025 periods, with maintenance and services making up the remaining 34%.

Recent performance

Q2 2026 revenue was $17.8 million, up 48% year-over-year, with TCAD $7.9 million, EDA $3.9 million and SIP $6.0 million. GAAP gross margin was 85%, up 1423 basis points year-over-year, and the GAAP operating loss narrowed to $4.0 million from $10.1 million in Q2 2025. GAAP net loss was $3.7 million, or $0.11 per diluted share, versus a $9.4 million loss and $0.32 per share a year earlier. Non-GAAP operating income was $0.6 million, which management described as the first non-GAAP operating profitability in almost two years, and gross bookings were $16.2 million, up 25% year-over-year. Cash and cash equivalents were $13.0 million at quarter-end.

Strategy

Management is pursuing FTCO adoption for AI-powered process development, announcing partnerships with NVIDIA on GPU-accelerated digital twins and with Dassault Systemes SIMULIA on interoperable digital twin workflows, and adding Agentic AI offerings with engagements expected by year-end. In August 2026 Micron Technologies invested $10 million via a convertible note as part of an expanded relationship centered on the FTCO platform. The company is rolling out Mixel's quality processes across the organization to support SIP and IP growth and said it won another FTCO customer in Q2 2026. Cost discipline is a stated priority, with reduced spending credited for reaching non-GAAP operating profitability.

Risks

• Persistent net losses and cash burn — Net loss was $41.2 million in 2025 and $39.4 million in 2024, and operating cash flow was negative $33.9 million in 2025, so continued losses would require additional capital.
• Customer and industry concentration — The business depends primarily on the semiconductor and electronics systems industries, so a demand downturn in those end markets would directly reduce revenue.
• Trade controls and China exposure — The filing cites risks from doing business in China and the broadening of the U.S. Commerce Department Entity List, though management currently expects the impact of expanded trade controls to be limited.
• Litigation with Nangate former shareholders — The company flags ongoing litigation with former shareholders of Nangate Denmark ApS among the factors that could affect financial condition or results.

Outlook

Management expects more FTCO wins and more AI offerings, and said the strengthening pipeline supports an expectation of record revenue in Q4 2026 and double-digit revenue growth again in 2027. New AI FTCO wins are being pursued in the second half of 2026, with Agentic AI customer engagements expected by year-end. The company also said it took recent steps to strengthen the balance sheet, including closing the $10 million Micron investment.