Silvaco Group, Inc.

Previous wording

Our go-to-market strategy focuses on selling software solutions along with associated maintenance and services. Software solutions represented 60% and 66% of our revenue for the three and six months ended June 30, 2025, respectively, compared to 74% and 75% for the same periods in 2024. Revenue from associated maintenance and services accounted for 40% and 34% of our revenue for the three and six months ended June 30, 2025, respectively, compared to 26% and 25% for the corresponding periods in 2024. Approximately 70% and 73% of our bookings were attributable to existing customers for the three and six months ended June 30, 2025, respectively, compared to 91% and 89% for the same periods in 2024. See “Key Operating Indicators and Non-GAAP Financial Measures—Bookings” for a description of how we define bookings.

Current wording

Our go-to-market strategy focuses on selling software solutions along with associated maintenance and services. Software solutions represented 74% and 69% of our revenue for the three and nine months ended September 30, 2025, respectively, compared to 62% and 72% for the same periods in 2024. Revenue from associated maintenance and services accounted for 26% and 31% of our revenue for the three and nine months ended September 30, 2025, respectively, compared to 38% and 28% for the corresponding periods in 2024. Approximately 96% and 84% of our bookings were attributable to existing customers for the three and nine months ended September 30, 2025, respectively, compared to 88% and 90% for the same periods in 2024. See “Key Operating Indicators and Non-GAAP Financial Measures—Bookings” for a description of how we define bookings.

Previous wording

Similar to trends observed across the semiconductor industry, we saw a decline in orders during the three and six ended June 30, 2025 primarily driven by softer end market demand. During the three and six months ended June 30, 2025, our bookings were $12.9 million and $26.6 million, respectively, as compared to $19.5 million and $35.6 million for the same periods in 2024. Our revenue was $12.0 million and $26.1 million for the three and six months ended June 30, 2025, respectively, as compared to $15.0 million and $30.8 million for the corresponding periods in 2024.

Current wording

During the three and nine months ended September 30, 2025, our bookings were $22.8 million and $49.4 million, respectively, as compared to $9.9 million and $45.5 million for the same periods in 2024. Our revenue was $18.7 million and $44.8 million for the three and nine months ended September 30, 2025, respectively, as compared to $11.0 million and $41.8 million for the corresponding periods in 2024.

Previous wording

On April 29, 2025, we entered into 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 $8.0 million. The purchase consideration consisted of (i) $3.9 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.

Previous wording

We believe that the growth of our business and our future success are dependent upon many factors including those described above and elsewhere in this quarterly report and those described below. While the factors set forth below present significant opportunities for us, these factors also pose challenges that we must successfully address to sustain the growth of our business and enhance our results of operations. The growth of our business and our future success are also subject to uncertainties and risks as described in Part II, Item 1.A., Risk Factors of this Quarterly Report on Form 10-Q.

Current wording

We believe that the growth of our business and our future success are dependent upon many factors including those described above and elsewhere in this Quarterly Report on Form 10-Q and those described below. While the factors set forth below present significant opportunities for us, these factors also pose challenges that we must successfully address to sustain the growth of our business and enhance our results of operations. The growth of our business and our future success are also subject to uncertainties and risks as described in Part II, Item 1.A., Risk Factors of this Quarterly Report on Form 10-Q.

Previous wording

We believe that trends in the global EDA software market, including growth in the integrated circuits and electronics manufacturing markets, growing complexity of semiconductor and photonics designs, and increasing challenges associated with advanced materials and shrinking process technology nodes across the EDA market, will increase the demand for our software solutions over time, which will have a direct impact on our future revenues and results of operations. In response to this increase in complexity and new challenges facing designers, we have increased investments in our research and development for new software product offerings. For example, our research and development expense was 49% and 41% of revenue for the three and six months ended June 30, 2025, respectively, and 52% and 37% of revenue for the three and six months ended June 30, 2024, respectively. We plan to continue to invest in our software solutions to establish and expand a leadership position in our target markets. We also plan to use our research and development efforts to continue to cater to strategic customer needs.

Current wording

We believe that trends in the global EDA software market, including growth in the integrated circuits and electronics manufacturing markets, growing complexity of semiconductor and photonics designs, and increasing challenges associated with advanced materials and shrinking process technology nodes across the EDA market, will increase the demand for our software solutions over time, which will have a direct impact on our future revenues and results of operations. In response to this increase in complexity and new challenges facing designers, we have increased investments in our research and development for new software product offerings. For example, our research and development expense was $8.7 million and $19.4 million for the three and nine months ended September 30, 2025, respectively, and $4.1 million and $15.5 million for the three and nine months ended September 30, 2024, respectively. We plan to continue to invest in our software solutions to establish and expand a leadership position in our target markets. We also plan to use our research and development efforts to continue to cater to strategic customer needs.

Previous wording

We also recognized an immaterial portion of our revenue from device characterization and modeling services for the three and six months ended June 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 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.

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 related to the recognized revenue. We recognized $0.4 million and $0.6 million of stock-based compensation expense in cost of revenue during the three and six months ended June 30, 2025, respectively, as compared to $2.5 million for both the three and six months ended June 30, 2024. The decrease 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 $0.5 million of amortization associated with our acquired intangible assets in cost of revenue during the three and six ended June 30, 2025, respectively, compared to $0.2 million for both the three and six months ended June 30, 2024.

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 $0.4 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.

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, costs of facilities, information technology, depreciation and amortization. We expect our operating expenses to fluctuate as a percentage of revenue over time. During the three and six months ended June 30, 2025, we recognized $1.8 million and $3.8 million in total stock-based compensation expense, respectively, as compared to $19.4 million for both the three and six months ended June 30, 2024. The decrease was primarily related to stock-based compensation expense recorded during 2024 in connection with the consummation of 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 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.

Previous wording

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

Current wording

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

Previous 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.

Current 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.

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. Following 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. We recorded a charge to litigation settlement and accrued expenses and other current liabilities of $13.1 million for the six months ended June 30, 2025 related to the Settlement Agreement. We did not record a charge during the three months ended June 30, 2025. As of June 30, 2025, our remaining liability under the Settlement Payment was $14.4 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 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.

Previous 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.

Current 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.

Previous wording

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

Current wording

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

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, 2025 and 2024:

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, 2025 and 2024:

Previous wording

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Current wording

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

Previous wording

For the six months ended June 30, 2025, total revenue decreased by $4.7 million, or 15%, to $26.1 million from $30.8 million for the six months ended June 30, 2024. Revenue associated with our TCAD tools decreased by $6.3 million. This decrease was partially offset by revenue derived from our EDA tools and IP sales which increased by $0.9 million and $0.7 million, respectively. Software license revenue decreased by $6.1 million, or 26%, to $17.2 million for the six months ended June 30, 2025 from $23.3 million for the six months ended June 30, 2024. Maintenance and service revenue increased by $1.3 million, or 18%, to $8.9 million for the six months ended June 30, 2025 from $7.6 million for the six months ended June 30, 2024.

Current wording

For the nine months ended September 30, 2025, total revenue increased by $3.0 million, or 7%, to $44.8 million from $41.8 million for the nine 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 and IP sales increased by $8.6 million and $0.6 million, respectively. This increase was partially offset by revenue associated with our TCAD tools which decreased by $6.2 million. Software license revenue increased by $0.9 million, or 3%, to $31.0 million for the nine months ended September 30, 2025 from $30.1 million for the nine months ended September 30, 2024. Maintenance and service revenue increased by $2.1 million, or 18%, to $13.8 million for the nine months ended September 30, 2025 from $11.7 million for the nine months ended September 30, 2024.

Previous wording

For the six months ended June 30, 2025, gross profit decreased by $4.4 million, or 18%, to $19.6 million from $24.0 million for the six months ended June 30, 2024, primarily due to a$4.7 million decrease in revenue, partially offset by a$0.3 million decrease in cost of revenue. Cost of revenue during the six months ended June 30, 2024 included $1.9 million of additional stock-based compensation expense primarily related to the consummation of our IPO. This year-over-year decline in stock-based compensation expense waspartially offset by a$1.3 million increase in personnel and overhead costs dedicated to customer support and$0.2 million of amortization expense associated with acquired intangible assets during the six months ended June 30, 2025. Gross profit margin decreased to 75% for the six months ended June 30, 2025 from 78% for the six months ended June 30, 2024, primarily due to a decline in sales order volume due to softer end market conditions, as discussed above.

Current wording

For the nine months ended September 30, 2025, gross profit increased by $2.0 million, or 6%, to $34.2 million from $32.2 million for the nine months ended September 30, 2024, primarily due to a$3.0 million increase in revenue, partially offset by a$1.0 million increase in cost of revenue. Cost of revenue during the nine months ended September 30, 2025 reflects a$2.6 million increase in employee compensation and benefits resulting from increased headcount and a$0.2 million increase in amortization expense associated with acquired intangible assets. This increase was partially offset by $1.8 million of additional stock-based compensation expense primarily related to the consummation of our IPO during the nine months ended September 30, 2024. Gross profit margin decreased to 76% for the nine months ended September 30, 2025 from 77% for the nine months ended September 30, 2024, primarily due to an increase in employee compensation and benefits resulting from increased headcount andamortization expense associated with acquired intangible assets.

Previous wording

For the six months ended June 30, 2025, general and administrative expenses decreased by $6.7 million, or 29%, to $16.2 million from $22.9 million for the six months ended June 30, 2024. This decrease was primarily attributable to $11.7 million of stock-based compensation expense and $0.7 million of IPO preparation costs recognized in the prior year in connection with the consummation of our IPO. This decrease was partially offset by a $1.9 million increase in acquisition-related legal and professional fees, a $1.0 million increase in employee compensation and benefits reflecting higher headcount, merit-based salary adjustments, and increased payroll taxes, $2.3 millionof stock-based compensation expense,$0.4 million of amortization expense related to acquired intangible assets, and $0.2 million of software license and maintenance fees in the current year period.

Current wording

For the nine months ended September 30, 2025, general and administrative expenses decreased by $3.0 million, or 10%, to $27.1 million from $30.0 million for the nine months ended September 30, 2024. The year over year decrease was primarily attributable to $9.4 million of higher stock-based compensation expense recognized in the prior year period, primarily associated with the consummation of our IPO, and $0.7 million of IPO preparation costs incurred in the prior year period. These decreases were partially offset by $3.3 million of additional acquisition-related legal and professional fees, $1.4 million of executive severance costs, a $1.6 million increase in employee compensation resulting from increased headcount, merit increases, and payroll tax, and $0.9 million of amortization expense related to acquired intangible assets during the current year period.

Previous wording

Litigation settlement was $0 and $13.1 million for the three and six months ended June 30, 2025, as compared to $14.7 million for the three and six months ended June 30, 2024. 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 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.

Previous wording

On May 13, 2024, the Micron Note was converted into 294,217 shares of our common stock in connection with the consummation of our IPO. As a result, $5.6 million was recognized in additional paid-in capital and we recognized a loss on debt extinguishment of $0.6 million during the three and six months ended June 30, 2024. We also recognized a loss on debt extinguishment of $0.1 million associated with the settlement of the East West Bank Loan. See Note 7 of ourcondensed consolidated financial statements for further discussion.

Current wording

On May 13, 2024, the Micron Note was converted into 294,217 shares of our common stock in connection with the consummation of our IPO. As a result, $5.6 million was recognized in additional paid-in capital and we recognized a loss on debt extinguishment of $0.6 million during the nine months ended September 30, 2024. We also recognized a loss on debt extinguishment of $0.1 million associated with the settlement of the East West Bank Loan during the nine months ended September 30, 2024. See Note 7 of ourcondensed consolidated financial statements for further discussion.

Previous wording

Interest and other expense, net, was$0.4 million and$0.3 million for the three months ended June 30, 2025 and 2024, respectively, and$0.7 million and$0.6 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Interest and other income (expense), net, was$0.1 million and$(0.3) million for the three months ended September 30, 2025 and 2024, respectively, and$(0.7) million and$(0.8) million for the nine months ended September 30, 2025, and 2024, respectively.

Previous wording

Income tax (benefit) provision was $(0.5) million and $0.2 million for the three months ended June 30, 2025 and 2024, respectively and (benefit) provisions of$(0.3) millionand$1.0 millionfor thesix months ended June 30, 2025 and 2024, respectively. See Note 9 of our condensed consolidated financial statements for further discussion.

Current 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.

Previous wording

We define a booking as a signed contract and related purchase commitment from a customer, based on the value set forth in a purchase order. We believe bookings are a useful metric to measure whether we are successful in our sales efforts with new and existing customers, and provide an indication of trends in our operating results that are not necessarily reflected in our revenue, because our revenue recognition is based on the satisfaction of our customer obligations, and not of the successful execution of a booking at the time of sale. Reported bookings may be subject to adjustments and potential cancellations prior to the satisfaction of our customer obligations. For the three and six months ended June 30, 2025, we achieved $12.9 million and $26.6 million in bookings, respectively, as compared to $19.5 million and $35.6 million in bookings for the three and six months ended June 30, 2024, respectively.

Current wording

We define a booking as a signed contract and related purchase commitment from a customer, based on the value set forth in a purchase order. We believe bookings are a useful metric to measure whether we are successful in our sales efforts with new and existing customers, and provide an indication of trends in our operating results that are not necessarily reflected in our revenue, because our revenue recognition is based on the satisfaction of our customer obligations, and not of the successful execution of a booking at the time of sale. Reported bookings may be subject to adjustments and potential cancellations prior to the satisfaction of our customer obligations. For the three and nine months ended September 30, 2025, we achieved $22.8 million and $49.4 million in bookings, respectively, as compared to $9.9 million and $45.5 million in bookings for the three and nine months ended September 30, 2024, respectively.

Previous wording

We define non-GAAP operating income as our GAAP operating (loss) income adjusted to exclude certain costs, including IPO preparation costs, acquisition-related litigation settlement and legal costs, acquisition-related professional fees and retention bonus, stock-based compensation expense, and amortization of acquired intangible assets. We define non-GAAP net (loss) income as our GAAP net (loss) income adjusted to exclude certain costs, including IPO preparation costs, acquisition-related litigation settlement and legal costs, acquisition-related professional fees and retention bonus, stock-based compensation expense, amortization of acquired intangible assets, change in fair value of contingent consideration, foreign exchange (gain) loss, loss on debt extinguishment, and the income tax effect on non-GAAP items. We monitor non-GAAP operating (loss) income and non-GAAP net (loss) income as non-GAAP financial measures to supplement the financial information we present in accordance with GAAP to provide investors with additional information regarding our financial results.

Current wording

We define non-GAAP operating income as our GAAP operating (loss) income adjusted to exclude certain costs, including acquisition-related litigation settlement and legal costs, acquisition-related professional fees and retention bonus, amortization of acquired intangible assets, IPO preparation costs, executive severance, and stock-based compensation expense. We define non-GAAP net (loss) income as our GAAP net (loss) income adjusted to exclude certain costs, including acquisition-related litigation settlement and legal costs, acquisition-related professional fees and retention bonus, amortization of acquired intangible assets, IPO preparation costs, executive severance, stock-based compensation expense, change in fair value of contingent consideration, foreign exchange (gain) loss, loss on debt extinguishment, and the income tax effect on non-GAAP adjustments. We monitor non-GAAP operating (loss) income and non-GAAP net (loss) income as non-GAAP financial measures to supplement the financial information we present in accordance with GAAP to provide investors with additional information regarding our financial results.

Previous wording

(2)Reflects acquisition-related professional fees and retention bonuses related to acquisitions of the OPC Business and Tech-X and other potential acquisitions.

Current wording

(2)Reflects acquisition-related professional fees and retention bonuses related to acquisitions of the OPC Business, Tech-X, Mixel and other potential acquisitions.

Previous wording

(5)Includes the change in fair value of contingent consideration recorded in connection with our acquisitions.

Current wording

(6)Includes the change in fair value of contingent consideration recorded in connection with our acquisitions.

Previous wording

(6)Reflects loss incurred on conversion of the Micron Note to common stock in connection with the consummation of our IPO and the loss incurred on the extinguishment of the East West Bank Loan.

Current wording

(7)Reflects loss incurred on conversion of the Micron Note to common stock in connection with the consummation of our IPO and the loss incurred on the extinguishment of the East West Bank Loan.

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 June 30, 2025, we had $29.6 million in cash and cash equivalents and restricted cash, of which $4.1 million was held by our foreign subsidiaries, and $25.9 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 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.

Previous wording

In December 2023, we entered into the East West Bank Loan which provides for borrowings of up to $5.0 million bearing interest at a per annum rate equal to one half of one percent (0.5%) above the greater of (i) the prime rate as reported in The Wall Street Journal or (ii) four and one half percent (4.5%). We drew $4.3 million on the East West Bank Loan during the six months ended June 30, 2024. In May 2024, the East West Bank Loan was repaid in full and terminated.

Current wording

In December 2023, we entered into the East West Bank Loan which provides for borrowings of up to $5.0 million bearing interest at a per annum rate equal to one half of one percent (0.5%) above the greater of (i) the prime rate as reported in The Wall Street Journal or (ii) four and one half percent (4.5%). We drew $4.3 million on the East West Bank Loan during the nine months ended September 30, 2024. In May 2024, the East West Bank Loan was repaid in full and terminated.

Previous wording

As of June 30, 2025, $19.3 million, or 65%, 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 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.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2025 was $16.6 million compared to $8.8 million of net cash used in operating activities for the six months ended June 30, 2024. The $7.8 million decrease in net cash used in operating activities reflects the initial $16.0 million paid for the litigation agreement in June 2025 and an $11.0 million decrease in net income, after excluding 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 $6.0 million of related party funding for the litigation agreement and a $13.2 million decrease in net working capital, primarily due to changes in contract assets and accounts receivable.

Current 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.

Previous wording

Net cash provided by investing activities for the six months ended June 30, 2025 was $27.8 million, as compared to $67.9 million used in investing activities for the six months ended June 30, 2024. Cash provided by investing activities during the six months ended June 30, 2025, includes $32.0 million of maturities in marketable securities and $10.3 million in sales of marketable securities, partially offset by cash paid to acquire the OPC Business and Tech-X of $14.3 million and $0.2 million in purchases of property and equipment. During the six months ended June 30, 2024, we used cash of $67.8 million for purchases of marketable securities and $0.1 million on purchases of property and equipment.

Current 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.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2025 was $1.6 million, as compared to net cash provided by financing activities of $106.4 million for the six months ended June 30, 2024. Net cash used during the six months ended June 30, 2025 includes payroll taxes related to shares withheld from employees of $0.6 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 six months ended June 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 $0.3 million of payments for our vendor financing obligation.

Current 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.

Previous wording

The effects of exchange rate fluctuations on cash and cash equivalents were $0.4 million and $0.1 million for the six months ended June 30, 2025 and 2024, respectively.

Current 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.

Previous wording

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

Current 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.

Previous wording

◦Operating lease obligations consisted of a current obligation of $0.9 million and a non-current obligation of $1.3 million.

Current wording

◦Operating lease obligations consisted of a current obligation of $1.0 million and a non-current obligation of $1.7 million.

Previous wording

◦A vendor financing obligation, which includes a current obligation of $1.1 million and a non-current obligation of $1.9 million.

Current wording

◦A vendor financing obligation, which includes a current obligation of $1.1 million and a non-current obligation of $2.0 million.

Previous wording

◦An obligation to pay the Settlement Payment of $14.4 million, which is classified as current.

Current wording

◦An obligation to pay the Settlement Payment of $10.3 million, which is classified as current.

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. Following 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. We recorded a charge to litigation settlement and accrued expenses and other current liabilities of $13.1 million for the six months ended June 30, 2025 related to the Settlement Agreement. We did not record a charge during the three months ended June 30, 2025. As of June 30, 2025, our remaining liability under the Settlement Payment was $14.4 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 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.

Previous wording

As of June 30, 2025, we maintained restricted cash of $16.5 million, which is held to secure an irrevocable standby letter of credit issued in connection with the Settlement Agreement. Of the $16.5 million remaining due under the Settlement Agreement, the Company is obligated to pay $14.4 million. The letter of credit, secured with East West Bank on May 17, 2025, is scheduled to expire on June 30, 2026, unless drawn upon or renewed. As of June 30, 2025, no amounts had been drawn under the letter of credit. Restricted cash is classified as a current asset on the condensed consolidated balance sheets based on the expected expiration date of the letter of credit. See Note 6 and Note 11 of our condensed consolidated financial statements for further discussion.

Current wording

As of September 30, 2025, we maintained restricted cash of $12.4 million, which is held to secure an irrevocable standby letter of credit issued in connection with the Settlement Agreement. Of the $12.4 million remaining due under the Settlement Agreement, the Company is obligated to pay $10.3 million. The letter of credit, secured with East West Bank on May 17, 2025, is scheduled to expire on June 30, 2026, unless drawn upon or renewed. As of September 30, 2025, no amounts had been drawn under the letter of credit. Restricted cash is classified as a current asset on the condensed consolidated balance sheets based on the expected expiration date of the letter of credit. See Note 6 and Note 11 of our condensed consolidated financial statements for further discussion.