Silvaco Group, Inc.

Previous wording

On April 29, 2025, we consummated a stock purchase agreement with the shareholders of Tech-X Corporation (“Tech-X”), pursuant to which we acquired all of the outstanding shares of Tech-X for an aggregate purchase price of $8.2 million. The purchase consideration consisted of (i) $4.1 million in cash, (ii) 457,666 shares of the Company’s common stock with a fair value of $2.4 million on the closing date, and (iii) contingent consideration, with a maximum payout of $2.0 million, and with an estimated fair value of $1.7 million, payable in cash upon the achievement of specified technical milestones through December 2026.

Current wording

On April 29, 2025, we consummated a stock purchase agreement with the shareholders of Tech-X Corporation (“Tech-X”), pursuant to which we acquired all of the outstanding shares of Tech-X for an aggregate purchase price of $8.2 million. The purchase consideration consisted of (i) $4.1 million in cash, (ii) 457,666 shares of the Company’s common stock with a fair value of $2.4 million on the closing date, and (iii) contingent consideration, with a maximum payout of $2.0 million, and with an estimated fair value of $1.7 million, payable in cash upon the achievement of specified technical milestones through December 2026. In February 2026, the Company amended the form of payment of a portion of the contingent consideration and post-closing net working capital adjustments to be payable in shares of the Company’s common stock. The Company also extended the date through which contingent consideration can be earned to July 2027.

Previous wording

On August 1, 2025, we consummated a stock purchase agreement with Mixel Group, Inc. (“Mixel”) and the shareholders of Mixel, pursuant to which we agreed to acquire all of the outstanding shares of Mixel for an aggregate purchase price of $22.5 million, which includes (i) $19.7 million in cash and (ii) 643,617 shares of the Company’s common stock with a fair value of $2.8 million on the closing date.

Current wording

On August 1, 2025, we consummated a stock purchase agreement with the shareholders of Mixel Group, Inc. (“Mixel”), pursuant to which we agreed to acquire all of the outstanding shares of Mixel for an aggregate purchase price of $22.5 million, which includes (i) $19.7 million in cash and (ii) 643,617 shares of the Company’s common stock with a fair value of $2.8 million on the closing date.

Previous wording

Building long-term relationships with our existing customer base is critical in driving renewals for our licenses and overall revenue growth. We have a global sales force selling to semiconductor companies and engineering universities that also instruct fabrication facility managers and the next generation of chip designers on the use and benefits of our design tools. Most of our customers enter into multi-year software license agreements for a fixed price including a multi-year software license and maintenance and services.

Current wording

Building long-term relationships with our existing customer base is critical in driving renewals for our licenses and overall revenue growth. We have a global sales force that advises semiconductor industry business leaders, fabrication facility managers and the next generation of chip designers on the benefits of our design tools and semiconductor IP. Most of our customers enter into multi-year software license agreements for a fixed price including a multi-year software license and maintenance and services.

Previous wording

When we renew expiring contracts with our customers, we may increase our bookings by selling them additional or new software or SIP. Over time, we expect that existing customers will choose to upgrade and/or purchase additional products, particularly as we de-emphasize our lower margin products, which we expect will over the long term drive margin expansion. Our ability to continue to generate sales from our existing customers and to expand those relationships is dependent on our ability to continue to offer software solutions that our existing customers demand. Any failure to continue to generate sales with our existing customers or expand our product and service offerings with our existing customers may have an adverse effect on our revenue and results of operations.

Current wording

When we renew contracts with our customers, we may increase our bookings by selling them additional or new software or SIP. Over time, we expect that existing customers will choose to upgrade and/or purchase additional products. Our ability to continue to generate sales from our existing customers and to expand those relationships is dependent on our ability to continue to offer software solutions that our existing customers demand. Any failure to continue to generate sales with our existing customers or expand our product and service offerings with our existing customers may have an adverse effect on our revenue and results of operations.

Previous wording

We enter into standard software licensing agreements with each of our customers. Pursuant to these agreements, we grant our customers a non-exclusive, non-transferable limited license, without the right to sublicense, to execute, use and operate certain software. Each party has the right to terminate the software license agreement under certain circumstances, in which event the customer will be required to remove, delete and return all software, related documentation and confidential information furnished under the license agreement.

Current wording

We enter into standard software licensing agreements with our customers. Pursuant to these agreements, we grant our customers a non-exclusive, non-transferable, limited license, without the right to sublicense, to execute, use and operate certain software. Each party has the right to terminate the software license agreement under certain circumstances, in which event the customer will be required to remove, delete and return all software, related documentation and confidential information furnished under the license agreement.

Previous wording

To meet the increasing complexity of semiconductor designs, the introduction of new advanced materials, and the increased costs associated with more advanced semiconductor technology nodes, we will need to continually enhance our product offerings through our own in-house research and development efforts, acquisitions, or strategic partnerships with third parties. The in-house development of new product offerings or enhancements to our existing product offerings requires significant research and development activities and time and may or may not result in offerings we can successfully market and sell to customers. For example, we have developed an artificial intelligence (“AI”)-based solution named fab technology co-optimization or FTCOTM for wafer level fabrication facilities. FTCO utilizes manufacturing data to perform statistical and physics-based machine learning software simulations to create a computer model of a wafer, which we call the “digital twin” of the wafer, in order to simulate the fabrication of wafers. We may also seek to acquire companies or assets for products or solutions which we believe are complementary to our existing products or solutions. Additionally, we currently, and have in the past, and may in the future, partner with third parties to expand our product offerings to our customers. If in the future, we enter into additional licensing agreements with other third parties and are unable to extend the term of those licensing arrangements, we will experience an associated decline in revenue relating to those products.

Current wording

To meet the increasing complexity of semiconductor designs, the introduction of new advanced materials, and the increased costs associated with more advanced semiconductor technology nodes, we need to continually enhance our product offerings through our own in-house research and development efforts, acquisitions, or strategic partnerships with third parties. The in-house development of new product offerings or enhancements to our existing product offerings requires significant research and development activities and time and may or may not result in offerings we can successfully market and sell to customers. We may also seek to acquire companies or assets for products or solutions which we believe are complementary to our existing products or solutions. Additionally, we currently, and have in the past, and may in the future, partner with third parties to expand our product offerings to our customers. If in the future, we enter into additional licensing agreements with other third parties and are unable to extend the term of those licensing arrangements, we will experience an associated decline in revenue relating to those products.

Previous wording

The drive to increase performance and diversification of applications is further accelerated by a broad-scale transition to cloud-based software applications and computing on mobile platforms. The development of semiconductors that are optimized for specific applications, including AI, 5G/6G communications and IoT, has continued to fuel demand for TCAD and EDA software tools, which in turn fuels demand to develop solutions to meet our markets’ evolving needs. Our ability to successfully generate customer demand amongst new customers and in new markets is dependent on our ability to educate these customers and markets about our software solutions and our ability to generate sufficient new solutions that solve problems for these potential customers. Our ability to continue to expand our product offerings into new markets also requires that we direct our research and development efforts toward value-generating new and existing initiatives. Our future revenues and results of operations will be directly impacted by our ability to produce and provide new software solutions in new and expanding markets.

Current wording

The development of semiconductors that are optimized for specific applications, including AI, 5G/6G communications and IoT, has continued to fuel demand for TCAD and EDA software tools, which in turn fuels demand to develop solutions to meet our markets’ evolving needs. Our ability to successfully generate customer demand amongst new customers and in new markets is dependent on our ability to educate these customers and markets about our software solutions and our ability to generate sufficient new solutions that solve problems for these potential customers. Our ability to continue to expand our product offerings into new markets also requires that we direct our research and development efforts toward value-generating new and existing initiatives. Our future revenues and results of operations will be directly impacted by our ability to produce and provide new software solutions in new and expanding markets.

Previous wording

If we can execute on our growth strategy and grow our revenue through a combination of new customer growth, upgrades and increased usage of our products by existing customers, as well as accretive acquisitions, our results will be impacted by our ability to reduce the rate at which our expenses increase in proportion with a rise in revenue. We believe this is possible in a number of expense line items, which may provide for additional gross margin and operating margin expansion. For example, we anticipate as our existing customers choose to upgrade to newer software solutions, our costs related to the support of legacy software decreases, outpacing any increases in cost related to supporting the upgraded software. Additionally, we have incurred increased general and administrative expenses in connection with preparing to become a public company, including increased staff costs and professional services fees, including legal and accounting fees. We have also incurred a significant increase in stock-based compensation expense. While we anticipate the increased level of costs to remain, we do not anticipate those costs scaling proportionally with our revenue. Finally, we may be able to gain sales efficiencies as our revenue grows, such that our sales and marketing expenses will decrease as a percentage of revenue. In the aggregate, our ability to keep these expenses from growing proportionally with our revenue may provide for meaningful gross margin and operating margin expansion.

Current wording

If we can execute on our growth strategy and grow our revenue through a combination of new customer growth, upgrades and increased usage of our products by existing customers, as well as accretive acquisitions, our results will be impacted by our ability to reduce the rate at which our expenses increase in proportion with a rise in revenue. We believe this is possible in a number of expense line items, which may provide for additional gross margin and operating margin expansion. For example, we anticipate as our existing customers choose to upgrade to newer software solutions, our costs related to the support of legacy software decreases, outpacing any increases in cost related to supporting the upgraded software. Additionally, we have incurred a significant increase in stock-based compensation expense since becoming a public company. However, we do not anticipate that to scale proportionally with our revenue. Finally, we have been able to gain sales efficiencies as our revenue grows, such that our sales and marketing expenses will have decreased as a percentage of revenue. In the aggregate, our ability to keep these expenses from growing proportionally with our revenue may provide for meaningful gross margin and operating margin expansion.

Previous wording

Our revenue is derived from software licensing and maintenance and services. Our customer agreements include combinations of licensed software and maintenance and services, which are accounted for as separate performance obligations with differing revenue recognition patterns.

Current wording

Our revenue is derived principally from software licensing, customization and related maintenance and services, which are generally accounted for as separate performance obligations with differing revenue recognition patterns. Arrangements with both software licenses and customization services are accounted for as a combined performance obligation.

Previous wording

We also recognized an immaterial portion of our revenue from device characterization and modeling services for the three and nine months ended September 30, 2025 and 2024. Revenue is recognized upon the completion of the requested services and, as applicable, satisfaction of customer acceptance terms. Revenue from these services is classified as maintenance and service revenue.

Current wording

We also recognized an immaterial portion of our revenue from device characterization and modeling services for the three months ended March 31, 2026, and 2025. Revenue is recognized upon the completion of the requested services and, as applicable, satisfaction of customer acceptance terms. Revenue from these services is classified as maintenance and service revenue.

Previous wording

Cost of revenue consists of personnel costs comprised of salaries and benefits for employees directly involved in our customer support function, such as customer support engineering salary and benefits, costs of our other customer services, allocation of overhead and facility costs, amortization of acquired intangible assets, and royalties. We recognized $0.4 million and $1.0 million of stock-based compensation expense in cost of revenue during the three and nine months ended September 30, 2025, respectively, as compared to $0.3 million and $2.8 million for the three and nine months ended September 30, 2024, respectively. The year over year decrease for the nine months ended was primarily related to stock-based compensation expense recorded during 2024 in connection with the consummation of our initial public offering (“IPO”). We also recognized $0.2 million and $0.7 million of amortization associated with our acquired intangible assets in cost of revenue during the three and nine ended September 30, 2025, respectively, compared to $0.3 million and $0.5 million for the three and nine months ended September 30, 2024, respectively.

Current wording

Cost of revenue consists of personnel costs comprised of salaries and benefits for employees directly involved in our customer support function, such as customer support engineering salary and benefits, costs of our other customer services, allocation of overhead and facility costs, amortization of acquired intangible assets, and royalties. We recognized $0.3 million and $0.2 million of stock-based compensation expense in cost of revenue during the three months ended March 31, 2026, and 2025, respectively. We also recognized $0.2 million of amortization associated with our acquired intangible assets in cost of revenue during each of the three months ended March 31, 2026, and 2025. Gross profit represents revenue less cost of revenue.

Previous wording

Our operating expenses consist of research and development, selling and marketing, general and administrative expenses, and litigation settlement. Related personnel costs are the most significant component of our operating expenses and consist of salaries, benefits, stock-based compensation expense, bonuses and commissions. Our operating expenses also include consulting costs, facilities, information technology, depreciation and amortization. We expect our operating expenses to fluctuate as a percentage of revenue over time. During the three and nine months ended September 30, 2025, we recognized $2.7 million and $6.5 million in total stock-based compensation expense, respectively, as compared to $2.2 million and $21.6 million for the three and nine months ended September 30, 2024, respectively. The year over year decrease in the nine months ended was primarily due to stock-based compensation expense recorded during 2024 in connection with our IPO.

Current wording

Our operating expenses consist of research and development, selling and marketing, general and administrative expenses, and litigation settlement. Related personnel costs are the most significant component of our operating expenses and consist of salaries, benefits, stock-based compensation expense, bonuses and commissions. Our operating expenses also include consulting costs, facilities, information technology, depreciation and amortization. We expect our operating expenses to fluctuate as a percentage of revenue over time. During the three months ended March 31, 2026, and 2025, we recognized $2.7 million and $2.1 million in total stock-based compensation expense, respectively.

Previous wording

The following table summarizes stock-based compensation expense by function for the three and nine months ended September 30, 2025 and 2024:

Current wording

The following table summarizes stock-based compensation expense by function for the three months ended March 31, 2026, and 2025:

Previous wording

Our research and development expense consists primarily ofpersonnel costs comprised of salaries, stock-based compensation expense, and benefits, as well as engineering, quality assessment, other costs associated with the development of new products, enhancements of existing products, quality assurance and testing and allocated overhead costs. We expense research and development costs as incurred. We believe that continued investment in our software solutions and services is important for our future growth and acquisition of new customers and, as a result, we expect our research and development expenses to continue to increase, although it may fluctuate as a percentage of revenue from period to period depending on the timing of these expenses.

Current wording

Our research and development expense consists primarily ofpersonnel costs comprised of salaries, stock-based compensation expense, and benefits for employees directly involved in our research and development efforts, as well as engineering, quality assessment, other related costs associated with the development of new products, enhancements to existing products, quality assurance and testing and allocated overhead costs. We expense research and development costs as incurred. We believe that continued investment in our software solutions and services is important for our future growth and acquisition of new customers and, as a result, we expect our research and development expenses to continue to increase, although it may fluctuate as a percentage of revenue from period to period depending on the timing of these expenses.

Previous wording

General and administrative expense consists of personnel costs associated with our executive, legal, finance, human resources, information technology and other administrative functions, including salaries, stock-based compensation expense, benefits and bonuses. General and administrative expense also includes professional and consulting fees, accounting fees, legal costs, and allocated overhead costs. We expect general and administrative expense to increase as we expand our finance and administrative personnel, grow our operations, and incur additional expense associated with operating as a public company, including director and officer liability insurance and legal and compliance costs, although it may fluctuate as a percentage of revenue from period to period depending on the timing of these expenses.

Current wording

General and administrative expense consists of personnel costs associated with our executive, legal, finance, human resources, information technology and other administrative functions, including salaries, stock-based compensation expense, benefits and bonuses. General and administrative expense also includes professional and consulting fees, accounting fees, legal costs, and allocated overhead costs. We expect general and administrative expense to remain consistent, although it may fluctuate as a percentage of revenue from period to period depending on the timing of these expenses.

Previous wording

In May 2025, Silvaco and two of our principal stockholders and members of our board of directors (the “Co-Defendants”) agreed to a settlement (the “Settlement Agreement”) in connection with litigation brought by the former shareholders of Nangate, Inc. (“Nangate”) and a third cross-complainant (together, the “Nangate Parties”). The $32.5 million settlement (the “Settlement Payment”) consists of an initial $16.0 million paid on June 17, 2025 and four quarterly installment payments of $4.1 million each, payable on August 15, 2025, November 14, 2025, February 13, 2026, and May 15, 2026. In September 2025, the U.S. Court of Appeals for the Ninth Circuit reversed the fraud and breach of contract verdicts and the parties dismissed all claims, triggering an acceleration clause in the settlement agreement, resulting in the acceleration of the final installment of the Settlement Payment of $4.1 million from May 15, 2026, to February 13, 2026. Following the execution of the Settlement Agreement, Silvaco and the Co-Defendants also executed an apportionment agreement pursuant to which the Co-Defendants agreed to bear 25% of the of the Settlement Payment, with Silvaco bearing the remaining 75%. In June 2025, we made the initial payment of $16.0 million on behalf of Silvaco and the Co-Defendants, which included a $6.0 million reimbursement from the Co-Defendants in accordance with the apportionment agreement. In August 2025, we made our first quarterly installment payment of $4.1 million. We recorded a charge to litigation settlement and accrued expenses and other current liabilities of $13.1 million for the nine months ended September 30, 2025 related to the Settlement Agreement. We did not record any charges during the three months ended September 30, 2025. As of September 30, 2025, our remaining liability under the Settlement Payment was $10.3 million, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheet. In the event the Co-Defendants do not satisfy their obligation under the Settlement Agreement, we will assume payment of the Co-Defendants litigation settlement obligation of $2.1 million to avoid a default under the Settlement Agreement. In such unlikely circumstance, we expect to seek remedies from the Co-Defendants under the apportionment agreement. See Note 6 and Note 11 of our condensed consolidated financial statements for further discussion.

Current wording

In May 2025, Silvaco and two of our principal stockholders and members of our board of directors (the “Co-Defendants”) agreed to a settlement (the “Settlement Agreement”) in connection with litigation brought by the former shareholders of Nangate, Inc. (“Nangate”) and a third cross-complainant (together, the “Nangate Parties”). The $32.5 million settlement (the “Settlement Payment”) consists of an initial $16.0 million paid on June 17, 2025, and four quarterly installment payments of $4.1 million each, payable on August 15, 2025, November 14, 2025, February 13, 2026, and May 15, 2026. In September 2025, the U.S. Court of Appeals for the Ninth Circuit reversed the fraud and breach of contract verdicts and the parties dismissed all claims, triggering an acceleration clause in the settlement agreement, resulting in the acceleration of the final installment of the Settlement Payment of $4.1 million from May 15, 2026, to February 13, 2026. Following the execution of the Settlement Agreement, Silvaco and the Co-Defendants also executed an apportionment agreement pursuant to which the Co-Defendants agreed to bear 25% of the Settlement Payment, with Silvaco bearing the remaining 75%. During the three months ended March 31, 2026, we made the remaining payment of $8.3 million. As of March 31, 2026, we had no remaining liability under the Settlement Agreement. See Note 7 and Note 13 of our condensed consolidated financial statements for further discussion.

Previous wording

Interest and other income (expense), net includes interest expense associated with cost of borrowings, leases or interest-bearing agreements, foreign exchange gains and losses and changes in the fair value of contingent consideration associated with acquisitions.

Current wording

Interest and other expense, net includes interest expense associated with cost of borrowings, leases or interest-bearing agreements, foreign exchange gains and losses and changes in the fair value of contingent consideration associated with legacy acquisitions.

Previous wording

Income tax provision is our estimate of current tax expense incurred from the consolidated results of operations globally.

Current wording

Income tax provision is our estimate of current tax expense incurred from the condensed consolidated results of operations globally.

Previous wording

The following table sets forth our results of operations for the three and nine months ended September 30, 2025 and 2024:

Current wording

The following table sets forth our results of operations for the three months ended March 31, 2026, and 2025:

Previous wording

The following table summarizes our results of operations as a percentage of total revenue for the three and nine months ended September 30, 2025 and 2024:

Current wording

The following table summarizes our results of operations as a percentage of total revenue for the three months ended March 31, 2026, and 2025:

Previous wording

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Current wording

Comparison of the Three Months Ended March 31, 2026, and 2025

Previous wording

Total revenue increased by $7.7 million, or 70%, to $18.7 million for the three months ended September 30, 2025 from $11.0 million for the three months ended September 30, 2024. While revenue in the current year period benefited from our recent sales growth, revenue in the prior year period was impacted by a delay in the timing of executing certain customer orders, which consummated in the fourth quarter of 2024. Revenue associated with our EDA tools increased by $7.8 million and IP sales decreased by $0.1 million. Software license revenue increased by $6.9 million, or 101%, to $13.8 million for the three months ended September 30, 2025 from $6.8 million for the three months ended September 30, 2024. Maintenance and service revenue increased by $0.8 million, or 19%, to $4.9 million for the three months ended September 30, 2025 from $4.1 million for the three months ended September 30, 2024.

Current wording

Total revenue increased by$3.7 million, or 26%, to$17.8 million for the three months ended March 31, 2026, from$14.1 million for the three months ended March 31, 2025. While revenue in the current period primarily benefited from our recent acquisitions, revenue in the prior period was impacted by lower demand in the Americas and economic challenges in Asia. TCAD revenue and IP revenue increased by $1.7 million and $2.9 million, respectively, while revenue associated with our EDA tools decreased by $1.0 million. Software license revenue increased by $1.6 million, or 16%, to $11.6 million for the three months ended March 31, 2026, from $10.0 million for the three months ended March 31, 2025. Maintenance and service revenue increased by $2.1 million, or 51%, to $6.1 million for the three months ended March 31, 2026, from $4.1 million for the three months ended March 31, 2025.

Previous wording

Gross profit increased by $6.4 million, or 78%, to $14.5 million for the three months ended September 30, 2025 from $8.2 million for the three months ended September 30, 2024 primarily due to a $7.7 million increase in revenue, partially offset by a $1.3 million increase in cost of revenue. Cost of revenue during the three months ended September 30, 2025 included a $1.3 million increase in employee compensation and benefits resulting from increased headcount. Gross profit margin increasedto 78% for the three months ended September 30, 2025 from 75% for the three months ended September 30, 2024, primarily reflecting the higher revenue volume.

Current wording

Gross profit increased by $4.3 million, or 38%, to $15.3 million for the three months ended March 31, 2026, from $11.1 million for the three months ended March 31, 2025, primarily due to a $3.7 million increase in revenue and a $0.6 million decrease in cost of revenue. Cost of revenue during the three months ended March 31, 2026, decreased primarily due to our cost reduction efforts and restructuring activities. Gross profit margin increased to 86% for the three months ended March 31, 2026, from 79% for the three months ended March 31, 2025, primarily reflecting the higher revenue volume.

Previous wording

Litigation settlement was $0 and $13.1 million for the three and nine months ended September 30, 2025, respectively, as compared to $0.4 million and $15.1 million for the three and nine months ended September 30, 2024, respectively. See Note 6 and Note 11 of our condensed consolidated financial statements for further discussion.

Current wording

Litigation settlement was $0 and $13.1 million for the three months ended March 31, 2026, and March 31, 2025, respectively. See Note 7 and Note 13 of our condensed consolidated financial statements for further discussion.

Previous wording

Income tax (benefit) provision was $(3.6) million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively and$(4.0) millionand$1.2 millionfor thenine months ended September 30, 2025 and 2024, respectively. See Note 9 of our condensed consolidated financial statements for further discussion.

Current wording

Income tax provision was $0.1 million and $0.2 million for the three months ended March 31, 2026, and 2025, respectively. See Note 11 of our condensed consolidated financial statements for further discussion.

Previous wording

Since inception, we have financed operations primarily through proceeds received from payments from our customers, borrowings from Ms. Ngai-Pesic and other lenders, and the net proceeds from the sale of our common stock in the IPO. Our primary sources of liquidity are cash, cash equivalents and marketable securities including cash generated from operations. As of September 30, 2025, we had $24.3 million in cash and cash equivalents and restricted cash, of which $7.2 million was held by our foreign subsidiaries, and $3.5 million in short-term marketable securities.

Current wording

Since inception, we have financed operations primarily through proceeds received from payments from our customers, borrowings from a principal stockholder and other lenders, and the net proceeds from the sale of our common stock. Our primary sources of liquidity are cash and cash equivalents including cash generated from operations. As of March 31, 2026, we had $10.9 million in cash and cash equivalents, of which $4.7 million was held by our foreign subsidiaries.

Previous wording

On April 11, 2024, we amended and restated our license agreement with NXP, pursuant to which we recorded an associated vendor financing obligation. The vendor financing obligation was $3.1 million as of September 30, 2025. We determined that the vendor financing obligation had an imputed interest rate of 9%, which is reflective of our borrowing rate with similar terms to that of the license agreement.

Current wording

On April 11, 2024, we amended and restated our license agreement with NXP, pursuant to which we recorded an associated vendor financing obligation. The vendor financing obligation was $3.3 million as of March 31, 2026. We determined that the vendor financing obligation had an imputed interest rate of 9%, which is reflective of our borrowing rate with similar terms to that of the license agreement.

Previous wording

If our cash and cash equivalents and marketable securities including cash generated from operating activities are not sufficient to satisfy our liquidity requirements, we may be required to seek additional financing. If we raise additional funds by issuing equity securities or convertible debt securities, our stockholders will experience dilution. Debt financing, if available, may contain covenants that significantly restrict our operations or our ability to obtain additional debt financing in the future. Any additional financing that we raise may contain terms that are not favorable to us or our stockholders. We cannot assure you that we would be able to obtain additional financing on terms favorable to us or our existing stockholders, or at all. See“Risk Factors—Risks Related to Our Business and Industry—Our ability to raise additional capital in the future may be limited and could prevent us from executing our growth strategy” in Item 1A in Part II in this Quarterly Report on Form 10-Q for further discussion.

Current wording

If our cash and cash equivalents, including cash generated from operating activities, are not sufficient to satisfy our liquidity requirements, we may be required to seek additional financing. If we raise additional funds by issuing equity securities or convertible debt securities, our stockholders will experience dilution. Debt financing, if available, may contain covenants that significantly restrict our operations or our ability to obtain additional debt financing in the future. Any additional financing that we raise may contain terms that are not favorable to us or our stockholders. We cannot assure you that we would be able to obtain additional financing on terms favorable to us or our existing stockholders, or at all. See “Risk Factors” in Item 1A in Part II in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

As of September 30, 2025, $16.8 million, or 61%, of our cash and cash equivalents and restricted cash was maintained with one financial institution, where our current deposits are in excess of federally insured limits. Past macroeconomic conditions have resulted in the actual or perceived financial distress of many financial institutions, including the 2023 failures of Silicon Valley Bank, Signature Bank and First Republic Bank and the UBS takeover of Credit Suisse. If the financial institutions with whom we do business were to become distressed or placed into receivership, we may be unable to access the cash we have on deposit with such institutions. If we are unable to access our cash as needed, our financial position and ability to operate our business could be adversely affected.

Current wording

As of March 31, 2026, $3.0 million, or 28%, of our cash and cash equivalents was maintained with one financial institution, where our current deposits are in excess of federally insured limits. Past macroeconomic conditions have resulted in the actual or perceived financial distress of many financial institutions, including the 2023 failures of Silicon Valley Bank, Signature Bank and First Republic Bank and the UBS takeover of Credit Suisse. If the financial institutions with whom we do business were to become distressed or placed into receivership, we may be unable to access the cash we have on deposit with such institutions. If we are unable to access our cash as needed, our financial position and ability to operate our business could be adversely affected.

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2025 was $24.4 million compared to $10.7 million of net cash used in operating activities for the nine months ended September 30, 2024. The $13.8 million increase in net cash used in operating activities reflects $20.1 million paid for the litigation agreement in the nine months ended September 30, 2025 and a decrease of $18.1 million in the non-cash effects of stock-based compensation expense, provision for credit losses, litigation settlement, change in fair value of contingent consideration, depreciation and amortization, and the accretion of discount on marketable securities. This use of cash was partially offset by a $9.6 million decrease in net loss, $6.0 million of related party funding for the litigation agreement and a $8.9 million decrease in net working capital, primarily due to changes in contract assets, deferred revenue and accounts receivable.

Current wording

Net cash used in operating activities for the three months ended March 31, 2026, was $11.0 million compared to $1.1 million of net cash used in operating activities for the three months ended March 31, 2025. The $9.9 million increase in net cash used in operating activities reflects a decrease of $12.2 million in net working capital, primarily driven by $8.3 million of cash paid under the Settlement Agreement, and a decrease of $11.1 million in the non-cash effects of stock-based compensation expense, provision for credit losses, change in fair value of contingent consideration, depreciation and amortization, and the accretion of discount on marketable securities. This use of cash was partially offset by a $13.4 million decrease in net loss.

Previous wording

Net cash provided by investing activities for the nine months ended September 30, 2025 was $31.2 million, as compared to $73.0 million used in investing activities for the nine months ended September 30, 2024. Cash provided by investing activities during the nine months ended September 30, 2025, includes $34.9 million of maturities in marketable securities and $29.8 million in sales of marketable securities, partially offset by cash paid to acquire the OPC Business, Tech-X and Mixel of $32.9 million and $0.6 million in purchases of property and equipment. During the nine months ended September 30, 2024, we used cash of $81.6 million in purchases of marketable securities and $0.3 million in purchases of property and equipment, partially offset by $9.0 million of maturities in marketable securities.

Current wording

Net cash provided by investing activities for the three months ended March 31, 2026, was $1.0 million, as compared to $11.4 million net cash provided by investing activities for the three months ended March 31, 2025. Cash provided by investing activities during the three months ended March 31, 2026, included $1.0 million of maturities in marketable securities. During the three months ended March 31, 2025, cash provided by investing activities included $23.0 million of maturities in marketable securities partially offset by $11.5 million in cash used to acquire OPC and $0.1 million in purchases of property and equipment.

Previous wording

Net cash used in financing activities for the nine months ended September 30, 2025 was $2.2 million, as compared to net cash provided by financing activities of $105.5 million for the nine months ended September 30, 2024. Net cash used during the nine months ended September 30, 2025 includes payroll taxes related to shares withheld from employees of $1.3 million and payments on our vendor financing obligation of $1.3 million. This use of cash was partially offset by $0.4 million in proceeds from issuance of common stock for share-based awards. During the nine months ended September 30, 2024, we received $106.0 million in net proceeds from the consummation of our IPO, $4.9 million in net proceeds from the Micron Note, and $4.3 million from our drawdown on the East West Bank Loan, partially offset by the $4.3 million repayment of the East West Bank Loan, payment of $2.1 million related to deferred transaction costs incurred in connection with the consummation of the IPO, the $2.0 million repayment of the line of credit with Ms. Ngai-Pesic (the “2022 Credit Line”), and $0.6 million of payments for our vendor financing obligation.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2026, was $3.7 million, as compared to net cash used in financing activities of $0.5 million for the three months ended March 31, 2025. Net cash provided during the three months ended March 31, 2026, includes $4.0 million in net proceeds from the issuance of common stock, partially offset by payroll taxes related to shares withheld from employees of $0.3 million and payments of acquisition related earn-out of $43.0 thousand. Net cash used during the three months ended March 31, 2025, includes payroll taxes related to shares withheld from employees of $0.3 million and payments on our vendor financing obligation $0.2 million.

Previous wording

The effects of exchange rate fluctuations on cash and cash equivalents were $0.2 million and $0.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

The effects of exchange rate fluctuations on cash and cash equivalents were $1.0 thousand and $0.1 million for the three months ended March 31, 2026, and 2025, respectively.

Previous wording

Our financial commitments for contractual obligations as of September 30, 2025 include operating leases, vendor financing obligation, contingent consideration related to the acquisition of Tech-X, and an obligation for the Settlement Agreement with the Nangate Parties.

Current wording

Our financial commitments for contractual obligations as of March 31, 2026, include operating leases, vendor financing obligation, and contingent consideration. See Note 7, Note 8, and Note 14 of our condensed consolidated financial statements for further discussion.

Previous wording

In May 2025, Silvaco and the Co-Defendants agreed to the Settlement Agreement in connection with litigation brought by the Nangate Parties. The Settlement Payment consists of an initial $16.0 million payment due on June 18, 2025, and four quarterly installment payments of $4.1 million each, payable on August 15, 2025, November 14, 2025, February 13, 2026, and May 15, 2026. In September 2025, the U.S. Court of Appeals for the Ninth Circuit reversed the fraud and breach of contract verdicts and the parties dismissed all claims, triggering an acceleration clause in the settlement agreement, resulting in the acceleration of the final installment of the Settlement Payment of $4.1 million from May 15, 2026, to February 13, 2026. Following the execution of the Settlement Agreement, Silvaco and the Co-Defendants also executed an apportionment agreement with us under which the Co-Defendants agreed to bear 25% of the of the Settlement Payment, with Silvaco bearing the remaining 75%. In June 2025, we made the initial payment of $16.0 million on behalf of Silvaco and the Co-Defendants, and received a $6.0 million reimbursement from the Co-Defendants in accordance with the apportionment agreement. In August 2025, we made our first quarterly installment payment of $4.1 million. We recorded a charge to litigation settlement and accrued expenses and other current liabilities of $13.1 million for the nine months ended September 30, 2025, related to the Settlement Agreement. We did not record any charges during the three months ended September 30, 2025. As of September 30, 2025, our remaining liability under the Settlement Payment was $10.3 million, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheet. In the event that the Co-Defendants do not satisfy their obligation under the Settlement Agreement, we will assume payment of the Co-Defendants litigation settlement obligation of $2.1 million to avoid a default under the Settlement Agreement. In such unlikely circumstance, we expect to seek remedies from the Co-Defendants under the apportionment agreement. See Note 6 and Note 11 of our condensed consolidated financial statements for further discussion.

Current wording

In May 2025, Silvaco and the Co-Defendants agreed to the Settlement Agreement in connection with litigation brought by the Nangate Parties. The Settlement Payment consists of an initial $16.0 million payment due on June 18, 2025, and four quarterly installment payments of $4.1 million each, payable on August 15, 2025, November 14, 2025, February 13, 2026, and May 15, 2026. In September 2025, the U.S. Court of Appeals for the Ninth Circuit reversed the fraud and breach of contract verdicts and the parties dismissed all claims, triggering an acceleration clause in the settlement agreement, resulting in the acceleration of the final installment of the Settlement Payment of $4.1 million from May 15, 2026, to February 13, 2026. Following the execution of the Settlement Agreement, Silvaco and the Co-Defendants also executed an apportionment agreement under which the Co-Defendants agreed to bear 25% of the Settlement Payment, with Silvaco bearing the remaining 75%. During the three months ended March 31, 2026, we made the remaining payment of $8.3 million. As of March 31, 2026, we had no remaining liability under the Settlement Agreement. See Note 7 and Note 13 of our condensed consolidated financial statements for further discussion.

Previous wording

There have not been any material changes during the nine months ended September 30, 2025, to the methodology applied by management for critical accounting policies previously disclosed in our audited financial statements set forth in our 2024 Form 10-K. For further discussion of our critical accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our 2024 Form 10-K.

Current wording

There have not been any material changes during the three months ended March 31, 2026, to the methodology applied by management for critical accounting policies previously disclosed in our audited financial statements set forth in our 2025 Form 10-K. For further discussion of our critical accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our 2025 Form 10-K.