Silvaco Group, Inc.
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 2026
SVCO$7.03+4.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-054449
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0001628280-26-070257
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 86 previous paragraphs and 86 current paragraphs.
51 unchanged; 27 reworded; 8 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Total revenue decreased by $2.4 million, or 13%, to $16.3 million for the three months ended September 30, 2026, from $18.7 million for the three months ended September 30, 2025. Revenue associated with our EDA revenue tools decreased by $5.8 million, primarily driven by the decrease in license revenue, which was partially offset by an increase in IP revenue of $2.4 million, which includes the acquisition of Mixel, and an increase in TCAD revenue of $1.0 million. Software license revenue decreased by $2.9 million, or 21%, to $10.9 million for the three months ended September 30, 2026, from $13.8 million for the three months ended September 30, 2025. Maintenance and service revenue increased by $0.5 million, or 11%, to $5.4 million for the three months ended September 30, 2026, from $4.9 million for the three months ended September 30, 2025.
Current report
Research and development expenses decreased by $1.5 million, or 18%, to $7.2 million for the three months ended September 30, 2026, from $8.7 million for the three months ended September 30, 2025. This decrease was primarily due to a $1.5 million reduction in employee compensation and the related benefits associated with our restructuring activities and a $0.3 million reduction in consulting costs. This was partially offset by a $0.3 million increase in software expense.
Current report
For the nine months ended September 30, 2026, selling and marketing expenses decreased by $1.0 million, or 7%, to $12.7 million from $13.7 million for the nine months ended September 30, 2025. This decrease was primarily due to a $3.4 million reduction in employee compensation and benefits resulting from our restructuring activities and reduced headcount. This was partially offset by an increase in allocated costs of $2.1 million, and a $0.4 million increase in cash severance expense associated with our restructuring activities.
Current report
General and administrative expenses decreased by $4.1 million, or 38%, to $6.7 million for the three months ended September 30, 2026, from $10.9 million for the three months ended September 30, 2025. The decrease was driven by a $2.6 million reduction in acquisition-related legal and professional fees, a $0.7 million reduction in employee compensation and benefits resulting from our restructuring activities, a $1.0 million reduction in severance costs, and a $0.5 million decrease in stock-based compensation expense due to reduced headcount. This was partially offset by a $0.7 million increase in employee compensation and benefits resulting from acquired headcount, and a $0.1 million increase in amortization expense.
Current report
For the nine months ended September 30, 2026, general and administrative expenses decreased by $6.8 million, or 25%, to $20.2 million from $27.1 million for the nine months ended September 30, 2025. The decrease was driven by a $5.9 million reduction in acquisition-related legal and professional fees, a $1.6 million reduction in employee compensation and benefits resulting from our restructuring activities, a $0.7 million reduction in severance costs, a $0.5 million decrease in stock-based compensation expense due to reduced headcount, and a $0.5 million decrease in recruiting fees. This was partially offset by a $1.3 million increase in expenses associated with our acquired businesses and a $1.1 million increase in amortization expense.
Current report
Interest and other income (expense), net
Current report
Interest and other income (expense), net, was expense of $0.4 million and income of $0.1 million for the three months ended September 30, 2026, and 2025, respectively, and expense of$0.9 million and$0.7 million for thenine months ended September 30, 2026 and 2025, respectively. Interest and other income (expense), net increased for the three months ended September 30, 2026 primarily due to an increase in our interest-bearing debt balances. Interest and other income (expense), net increased for the nine months ended September 30, 2026 primarily due to an increase in our interest-bearing debt balances, partially offset by a $0.3 million decrease in foreign currency fluctuations.
Current report
On August 6, 2026, we issued an unsecured convertible promissory note with a principal amount of $10.0 million (the “Note”). The Note bears interest at 8.0% per annum, with accrued interest payable through conversion. The Note and accrued interest automatically convert into common stock on August 7, 2028, or upon a change of control, at a conversion price equal to the lower of 90% of the fair market value of our common stock on the conversion date or 115% of the closing price immediately before issuance. In addition, the conversion price will be reduced by 10 basis points for each of six specified development projects that we have not completed by the date of conversion. Conversion of the Note is subject to stockholder approval to the extent the Note converts into shares of common stock in excess of 19.99% of our outstanding shares. If stockholder approval is not obtained, we may be required to settle the portion exceeding that limitation in cash.
Removed paragraphs (8)
Previous report
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 report
Total revenue increased by $5.8 million, or 48%, to $17.8 million for the three months ended June 30, 2026, from $12.0 million for the three months ended June 30, 2025. Revenue in the current period benefited from our recent acquisitions. TCAD revenue, IP revenue, and revenue associated with our EDA tools increased by $1.1 million $4.2 million, and $0.5 million, respectively. Software license revenue increased by $4.6 million, or 64%, to $11.8 million for the three months ended June 30, 2026, from $7.2 million for the three months ended June 30, 2025. Maintenance and service revenue increased by $1.2 million, or 24%, to $6.0 million for the three months ended June 30, 2026, from $4.8 million for the three months ended June 30, 2025.
Previous report
For the six months ended June 30, 2026, research and developments expenses increased by $7.3 million, or 68%, to $18.0 million from $10.7 million for the six months ended June 30, 2025. The increase was primarily attributable to a $4.3 million increase in expenses associated with our acquisitions, an increase in allocated costs of $1.5 million, a $1.3 million increase in stock-based compensation expense primarily associated with our restructuring activities as well as increased headcount, an increase of $0.5 million in cash severance associated with our restructuring activities, an increase of $0.4 million in consulting costs, and an increase of $0.2 million in software expenses, partially offset by a $1.3 million reduction in employee compensation and benefits resulting from a decrease in headcount.
Previous report
Selling and marketing expenses decreased by $0.8 million, or 18%, to $3.9 million for the three months ended June 30, 2026, from $4.7 million for the three months ended June 30, 2025. This decrease was primarily due to a $1.4 million reduction in employee compensation and benefits resulting from a decrease in headcount, and a $0.2 million reduction in marketing expense, partially offset by an increase in allocated costs of $0.8 million.
Previous report
General and administrative expenses decreased by $1.6 million, or 20%, to $6.5 million for the three months ended June 30, 2026, from $8.1 million for the three months ended June 30, 2025. The decrease was driven by a $2.0 million reduction in legal and professional fees, and a $0.3 million reduction in employee compensation and benefits resulting from a decrease in headcount, partially offset by a $0.4 million increase in depreciation and amortization, a $0.3 million increase in expenses associated with our acquisitions, and a $0.2 million increase in stock-based compensation expense.
Previous report
For the six months ended June 30, 2026, general and administrative expenses decreased by $2.7 million, or 17%, to $13.5 million from $16.2 million for the six months ended June 30, 2025. This decrease was primarily due to a $3.6 million reduction in legal and professional fees, and a $0.9 million reduction in employee compensation and benefits resulting from a decrease in headcount, partially offset by a $1.0 million increase in depreciation and amortization, a $1.0 million increase in software expense, and a $0.4 million increase in expenses associated with our acquisitions.
Previous report
Interest and other expense, net
Previous report
Interest and other expense, net, was $0.4 million for the three months ended June 30, 2026, and 2025, and$0.5 million and$0.7 million for thesix months ended June 30, 2026 and 2025, respectively. The decrease in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was primarily driven by a $0.2 million decrease in foreign currency fluctuations and a $0.1 million change in the fair value of contingent consideration.
Reworded paragraphs (27)
Previous wording
We are a provider of technology computer aided design software (“TCAD”), electronic data automation software (“EDA”), and semiconductor intellectual property (“SIP”). Our solutions are used by engineers to optimize semiconductor manufacturing processes and efficiently bring semiconductor products to market. Our differentiated solutions enable our customers to increase productivity, accelerate time-to-market and reduce development and manufacturing costs. Our customers include semiconductor manufacturers and systems companies that design and manufacture products containing semiconductors. Semiconductors are at the heart of innovation in many industries, including AI, display, power devices, automotive, memory, hyperscale and cloud computing, Internet of Things (“IoT”), telecommunications and many more.
Current wording
We are a provider of artificial intelligence (“AI”) driven manufacturing solutions, including technology computer aided design software (“TCAD”), and multi-physics software and our Fab Technology Co-Optimization (FTCO™) solution, and AI-driven design solutions, including electronic data automation software (“EDA”), and semiconductor intellectual property (“SIP”). Our solutions are used by engineers to optimize semiconductor manufacturing processes and efficiently bring semiconductor products to market. Our differentiated solutions enable our customers to increase productivity, accelerate time-to-market and reduce development and manufacturing costs. Our customers include semiconductor manufacturers and systems companies that design and manufacture products containing semiconductors. Semiconductors are at the heart of innovation in many industries, including AI, display, power devices, automotive, memory, hyperscale and cloud computing, Internet of Things (“IoT”), telecommunications and many more.
Previous wording
Our customers include foundries, integrated device manufacturers and fabless semiconductor companies. Our go-to-market strategy centers on selling software solutions and associated maintenance and services. Our software solutions accounted for 66% of our revenue for both the three and six months ended June 30, 2026, as compared to 60% and 66% during the same periods in 2025. Revenue from associated maintenance and services accounted for 34% of our revenue for both the three and six months ended June 30, 2026, as compared to 40% and 34% during the same periods in 2025, respectively.
Current wording
Our customers include foundries, integrated device manufacturers and fabless semiconductor companies. Our go-to-market strategy centers on selling software solutions and associated maintenance and services. Our software solutions accounted for 67% and 66% of our revenue for the three and nine months ended September 30, 2026, respectively as compared to 74% and 69% during the same periods in 2025. Revenue from associated maintenance and services accounted for 33% and 34% of our revenue for the three and nine months ended September 30, 2026, respectively, as compared to 26% and 31% during the same periods in 2025, respectively.
Previous wording
During the six months ended June 30, 2025, we completed two acquisitions: (i) Cadence Design System's (“Cadence”) Process Proximity Compensation product line (the “OPC Business”) for $11.5 million in March 2025; and (ii) Tech-X Corporation (“Tech-X”) for $8.2 million in April 2025.
Current wording
During the nine months ended September 30, 2025, we completed three acquisitions: (i) Cadence Design Systems (“Cadence”) Process Proximity Compensation product line (the “OPC Business”) for $11.5 million in March 2025; (ii) Tech-X Corporation (“Tech-X”) for $8.2 million in April 2025; and (iii) Mixel for an aggregate purchase price of $22.5 million in August 2025.
Previous wording
In October 2025, we began implementing targeted cost-savings initiatives intended to streamline our organizational structure, improve execution, and enhance stockholder value (the “Restructuring Plan”). The Restructuring Plan includes a voluntary early retirement program, a voluntary exit program, an involuntary reduction in force, and certain planned site closures. We expect to incur $5.0 million of costs in connection with the Restructuring Plan that primarily consists of severance costs for 82 terminated employees and other costs such as the site closures as part of our global site strategy. Of the total expected costs, $0.9 million and $2.4 million were incurred during the three and six months ended June 30, 2026, respectively, and $1.3 million during the year ended December 31, 2025. We expect to complete the Restructuring Plan in 2026. We anticipate these initiatives will result in significant annualized operating expense reductions. See Note 5 of our condensed consolidated financial statements for further discussion of the Restructuring Plan.
Current wording
In October 2025, we began implementing targeted cost-savings initiatives intended to streamline our organizational structure, improve execution, and enhance stockholder value (the “Restructuring Plan”). The Restructuring Plan includes a voluntary early retirement program, a voluntary exit program, an involuntary reduction in force, and certain planned site closures. We expect to incur $5.0 million of costs in connection with the Restructuring Plan that primarily consists of severance costs for 85 terminated employees and other costs such as the site closures as part of our global site strategy. Of the total expected costs, $0.2 million and $2.6 million were incurred during the three and nine months ended September 30, 2026, respectively, and $1.3 million during the year ended December 31, 2025. We expect to complete the Restructuring Plan in 2026. We anticipate these initiatives will result in significant annualized operating expense reductions. See Note 5 of our condensed consolidated financial statements for further discussion of the Restructuring Plan.
Previous wording
The following table sets forth our results of operations for the three and six months ended June 30, 2026, and 2025:
Current wording
The following table sets forth our results of operations for the three and nine months ended September 30, 2026, and 2025:
Previous wording
The following table summarizes our results of operations as a percentage of total revenue for the three and six months ended June 30, 2026, and 2025:
Current wording
The following table summarizes our results of operations as a percentage of total revenue for the three and nine months ended September 30, 2026, and 2025:
Previous wording
Comparison of the Three and Six Months Ended June 30, 2026, and 2025
Current wording
Comparison of the Three and Nine Months Ended September 30, 2026, and 2025
Previous wording
For the six months ended June 30, 2026, total revenue increased by $9.4 million, or 36% to $35.6 million from $26.1 million for the six months ended June 30, 2025. IP revenue and TCAD revenue increased by $7.1 million and $2.8 million, partially offset by a decline in revenue associated with our EDA tools of $0.5 million, respectively. Software license revenue increased by $6.2 million, or 36%, to $23.4 million for the six months ended June 30, 2026 from $17.2 million for the six months ended June 30, 2025. Maintenance and service revenue increased by $3.2 million, or 36%, to $12.1 million for the six months ended June 30, 2026 from $8.9 million for the six months ended June 30, 2025.
Current wording
For the nine months ended September 30, 2026, total revenue increased by $7.0 million, or 16% to $51.9 million from $44.8 million for the nine months ended September 30, 2025. IP revenue increased by $9.6 million, primarily driven by the acquisition of Mixel, and TCAD revenue increased by $3.9 million mainly driven by license revenue, partially offset by a decline in revenue associated with our EDA tools of $6.4 million, respectively. Software license revenue increased by $3.3 million, or 11%, to $34.3 million for the nine months ended September 30, 2026 from $31.0 million for the nine months ended September 30, 2025. Maintenance and service revenue increased by $3.7 million, or 27%, to $17.6 million for the nine months ended September 30, 2026 from $13.8 million for the nine months ended September 30, 2025.
Previous wording
Gross profit increased by $6.6 million, or 77%, to $15.2 million for the three months ended June 30, 2026, from $8.5 million for the three months ended June 30, 2025, primarily due to a $5.8 million increase in revenue and a $0.9 million decrease in cost of revenue. Cost of revenue during the three months ended June 30, 2026, decreased primarily due to our cost reduction efforts and restructuring activities. We recognized $0.3 million and $0.4 million of stock-based compensation expense in cost of revenue during the three months ended June 30, 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 June 30, 2026 and 2025. Gross profit margin increased to 85% for the three months ended June 30, 2026, from 71% for the three months ended June 30, 2025, primarily due to higher revenue, which improved the absorption of fixed costs, and lower cost of revenue resulting from our cost-reduction efforts and restructuring activities.
Current wording
Gross profit decreased by $0.9 million, or 6%, to $13.7 million for the three months ended September 30, 2026, from $14.5 million for the three months ended September 30, 2025, primarily due to a $2.4 million decrease in revenue and a $1.5 million decrease in cost of revenue. Cost of revenue during the three months ended September 30, 2026, decreased primarily due to our cost reduction efforts and restructuring activities, partially offset by an increase in royalties driven by an increase in IP revenue. We recognized $0.2 million and $0.4 million of stock-based compensation expense in cost of revenue during the three months ended September 30, 2026 and 2025, respectively. Gross profit margin increased to 84% for the three months ended September 30, 2026, from 78% for the three months ended September 30, 2025, primarily due to lower cost of revenue resulting from our cost reduction efforts and restructuring activities.
Previous wording
For the six months ended June 30, 2026, gross profit increased by $10.9 million, or 55%, to $30.5 million from $19.6 million for the six months ended June 30, 2025, primarily due to a $9.4 million increase in revenue and a $1.5 million decrease in cost of revenue. Cost of revenue during the six months ended June 30, 2026, decreased primarily due to our cost reduction efforts and restructuring activities. We recognized $0.6 million and $0.5 million of stock-based compensation expense in cost of revenue during the six months ended June 30, 2026 and 2025. We also recognized $0.5 million of amortization associated with our acquired intangible assets in cost of revenue during each of the six months ended June 30, 2026 and 2025. Gross profit margin increased to 86% for the six months ended June 30, 2026 from 75% for the six months ended June 30, 2025, primarily due to higher revenue, which improved the absorption of fixed costs, and lower cost of revenue resulting from our cost-reduction efforts and restructuring activities.
Current wording
For the nine months ended September 30, 2026, gross profit increased by $10.0 million, or 29%, to $44.2 million from $34.2 million for the nine months ended September 30, 2025, primarily due to a $7.0 million increase in revenue and a $3.0 million decrease in cost of revenue. Cost of revenue during the nine months ended September 30, 2026, decreased primarily due to our cost reduction efforts and restructuring activities, partially offset by an increase in royalties driven by an increase in IP revenue. We recognized $0.8 million and $1.0 million of stock-based compensation expense in cost of revenue during the nine months ended September 30, 2026 and 2025, respectively. Gross profit margin increased to 85% for the nine months ended September 30, 2026 from 76% for the nine months ended September 30, 2025, primarily due to lower cost of revenue resulting from our cost reduction efforts and restructuring activities.
Previous wording
Research and development expenses increased by $2.9 million, or 49%, to $8.8 million for the three months ended June 30, 2026, from $5.9 million for the three months ended June 30, 2025. This increase was primarily due to a $1.5 million increase in expenses associated with our acquisitions, an increase in allocated costs of $0.8 million, a $0.7 million increase in stock-based compensation expense primarily associated with our restructuring activities as well as increased headcount, an increase of $0.5 million in cash severance associated with our restructuring activities, and an increase of $0.1 million in consulting costs, partially offset by a $0.9 million reduction in employee compensation and benefits resulting from a decrease in headcount.
Current wording
For the nine months ended September 30, 2026, research and developments expenses increased by $5.7 million, or 29%, to $25.2 million from $19.4 million for the nine months ended September 30, 2025. The increase was primarily attributable to a $3.1 million increase in expenses associated with our acquired businesses, an increase in allocated costs of $1.8 million, a $1.1 million increase in stock-based compensation expense primarily associated with our restructuring activities as well as increased headcount, an increase of $0.5 million in cash severance associated with our restructuring activities, and an increase of $0.3 million in amortization expense, partially offset by a $1.0 million reduction in employee compensation and the related benefits associated with our restructuring activities.
Previous wording
For the six months ended June 30, 2026, selling and marketing expenses decreased by $0.7 million, or 8%, to $8.7 million from $9.4 million for the six months ended June 30, 2025. This decrease was primarily due to a $2.3 million reduction in employee compensation and benefits resulting from a decrease in headcount, and a decrease of $0.2 million in marketing expenses. This was partially offset by an increase in allocated costs of $1.4 million, a $0.3 million increase in cash severance expense associated with our restructuring activities, and a $0.1 million increase in stock-based compensation expenses.
Current wording
Selling and marketing expenses decreased by $0.2 million, or 5%, to $4.0 million for the three months ended September 30, 2026, from $4.3 million for the three months ended September 30, 2025. This decrease was primarily due to a $1.1 million reduction in employee compensation and benefits resulting from a decrease in headcount, partially offset by an increase in allocated costs of $0.6 million and a $0.1 million increase in cash severance expense associated with our restructuring activities.
Previous wording
Litigation settlement was $13.1 million for the six months ended June 30, 2025. 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 six months ended June 30, 2026, we made the remaining payment of $8.3 million. As of June 30, 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.
Current wording
Litigation settlement was $13.1 million for the nine months ended September 30, 2025. 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 nine months ended September 30, 2026, we made the remaining payment of $8.3 million. As of September 30, 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 income reflects interest earned and accretion on our cash equivalents and marketable securities. Interest income decreased by$0.6 million or 96% for the three months ended June 30, 2026, from $0.7 million for the three months ended June 30, 2025. The decrease was driven by a lower balance of marketable securities held during the period.
Current wording
Interest income reflects interest earned and accretion on our cash equivalents and marketable securities. Interest income decreased by $0.2 million or 78% for the three months ended September 30, 2026, from $0.3 million for the three months ended September 30, 2025. The decrease was driven by a lower balance of marketable securities held during the period.
Previous wording
Interest income decreased by $1.4 million or 95% for the six months ended June 30, 2026, from $1.5 million for the six months ended June 30, 2025 The decrease was driven by a lower balance in marketable securities held during the period.
Current wording
Interest income decreased by $1.7 million or 92% for the nine months ended September 30, 2026, from $1.8 million for the nine months ended September 30, 2025. The decrease was driven by a lower balance in marketable securities held during the period.
Previous wording
Income tax benefit was $0.7 million and $0.5 million for the three and six months ended June 30, 2026, respectively, as compared to $0.5 million and $0.3 million for the same period in 2025, respectively. See Note 11 of our condensed consolidated financial statements for further discussion.
Current wording
Income tax benefit was $0.1 million and $0.6 million for the three and nine months ended September 30, 2026, respectively, as compared to $3.6 million and $4.0 million for the same period in 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 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 June 30, 2026, we had $13.0 million in cash and cash equivalents, of which $5.3 million was held by our foreign subsidiaries.
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 September 30, 2026, we had $22.0 million in cash and cash equivalents, of which $6.8 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 $3.3 million as of June 30, 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.
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 $3.4 million as of September 30, 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
On March 13, 2026, we entered into an Open Market Sale Agreement with Jefferies LLC, as sales agent, pursuant to which we may conduct registered offers and sales of shares of our common stock under our registration statement on Form S-3 (Registration No. 333-291212), a prospectus supplement dated March 13, 2026, and a prospectus supplement dated May 8, 2026, for an aggregate public offering amount of up to $35.0 million. During the three and six months ended June 30, 2026, we issued 707,993 and 1,460,737 shares, respectively, of common stock at a weighted average price of $10.35 and $7.98 per share, respectively. For the three and six months ended June 30, 2026, we received gross proceeds of $7.4 million and $11.7 million, respectively.
Current wording
On March 13, 2026, we entered into an Open Market Sale Agreement with Jefferies LLC, as sales agent, pursuant to which we may conduct registered offers and sales of shares of our common stock under our registration statement on Form S-3 (Registration No. 333-291212), a prospectus supplement dated March 13, 2026, and a prospectus supplement dated May 8, 2026, for an aggregate public offering amount of up to $35.0 million. During the nine months ended September 30, 2026, we issued 1,460,737 shares of common stock, at a weighted average price of $7.98 per share.
Previous wording
As of June 30, 2026, $5.5 million, or 43%, 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.
Current wording
As of September 30, 2026, $14.1 million, or 64%, of our cash and cash equivalents was maintained with two financial institutions, 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 six months ended June 30, 2026, was $16.5 million compared to $16.6 million of net cash used in operating activities for the six months ended June 30, 2025. The $0.1 million decrease in net cash used in operating activities primarily reflects a $19.1 million decrease in net loss, a $1.4 million increase in non-cash stock based compensation expense, and a $1.3 million increase in non-cash depreciation and amortization expense, offset by the non-recurrence of a $13.1 million charge to litigation settlement (see Note 7 and Note 13 of our condensed consolidated financial statements for further discussion) and an $9.4 million increase in cash used related to changes in operating assets and liabilities.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2026, was $17.3 million compared to $24.4 million of net cash used in operating activities for the nine months ended September 30, 2025. The $7.1 million decrease in net cash used in operating activities primarily reflects a $19.9 million decrease in net loss, a $1.5 million increase in non-cash depreciation and amortization expense, a $0.6 million increase in non-cash stock based compensation expense, a $0.6 million increase in provision for estimated credit loss, and a $0.5 million decrease in net accretion of discount on marketable securities, offset by the non-recurrence of a $13.1 million charge to litigation settlement (see Note 7 and Note 13 of our condensed consolidated financial statements for further discussion) and an $3.0 million increase in cash used related to changes in operating assets and liabilities.
Previous wording
Net cash provided by investing activities for the six months ended June 30, 2026, was $1.0 million, as compared to $27.8 million net cash provided by investing activities for the six months ended June 30, 2025. Cash provided by investing activities during the six months ended June 30, 2026, included $1.0 million of maturities in marketable securities. During the six months ended June 30, 2025, cash provided by investing activities included $32.0 million of maturities in marketable securities and $10.3 million in sales of marketable securities, partially offset by $14.3 million in cash used to acquire the OPC Business and Tech-X and $0.2 million in purchases of property and equipment.
Current wording
Net cash provided by investing activities for the nine months ended September 30, 2026, was $1.0 million, as compared to $31.2 million net cash provided by investing activities for the nine months ended September 30, 2025. Cash provided by investing activities during the nine months ended September 30, 2026, included $1 million of maturities in marketable securities. During the nine months ended September 30, 2025, cash provided by investing activities included $34.9 million of maturities in marketable securities and $29.8 million in sales of marketable securities, partially offset by $32.9 million in cash used to acquire the OPC Business, Tech-X, and Mixel and $0.6 million in purchases of property and equipment.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2026, was $11.3 million, as compared to net cash used in financing activities of $1.6 million for the six months ended June 30, 2025. Net cash provided during the six months ended June 30, 2026, includes $12.2 million in net proceeds from the issuance of common stock, partially offset by payments of payroll taxes related to shares withheld from employees of $0.3 million. Net cash used during the three months ended June 30, 2025, includes payments on our vendor financing obligation $1.3 million and payments of payroll taxes related to shares withheld from employees of $0.6 million. This use of cash was partially offset by $0.4 million in proceeds from the issuance of common stock.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2026, was $21.2 million, as compared to net cash used in financing activities of $2.2 million for the nine months ended September 30, 2025. Net cash provided during the nine months ended September 30, 2026, includes $12.2 million in proceeds from the issuance of common stock, $10.0 million in proceeds from the issuance of the Note, partially offset by payments of equity issuance costs of $0.6 million and payments of payroll taxes related to shares withheld from employees of $0.3 million. Net cash used during the nine months ended September 30, 2025, includes payments on our vendor financing obligation $1.3 million and payments of payroll taxes related to shares withheld from employees of $1.3 million. This use of cash was partially offset by $0.4 million in proceeds from the issuance of common stock.
Previous wording
The effects of exchange rate fluctuations on cash and cash equivalents were $23.0 thousand and $0.4 million for the six months ended June 30, 2026, and 2025, respectively.
Current wording
The effects of exchange rate fluctuations on cash and cash equivalents were $0.1 million and $0.2 million for the nine months ended September 30, 2026, and 2025, respectively.
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 under which the Co-Defendants agreed to bear 25% of the Settlement Payment, with Silvaco bearing the remaining 75%. During the six months ended June 30, 2026, we made the remaining payment of $8.3 million. As of June 30, 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.
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 nine months ended September 30, 2026, we made the remaining payment of $8.3 million. As of September 30, 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
As of June 30, 2026, we did not have any off-balance sheet arrangements. As of December 31, 2025, we maintained an irrevocable standby letter of credit issued in connection with the Settlement Agreement, which was terminated during the six months ended June 30, 2026.
Current wording
As of September 30, 2026, we did not have any off-balance sheet arrangements. As of December 31, 2025, we maintained an irrevocable standby letter of credit issued in connection with the Settlement Agreement, which was terminated during the nine months ended September 30, 2026.
Previous wording
There have not been any material changes during the six months ended June 30, 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.
Current wording
There have not been any material changes during the nine months ended September 30, 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.