Silvaco Group, Inc. Common Stock Q4 FY2025 earnings call

• Turnaround plan execution faster than anticipated with Q4 bookings at high end of guided range, revenue and gross margin above high end, non-GAAP operating expenses at low end.
• AI milestone reached in Q4 with second customer adopting AI-driven solution for manufacturing process development, TCAD bookings and revenue up due to this win.
• IP business had record revenue and bookings in Q4 driven by Mixel, with Mixel's MIFI IP having strong global following and PRO portfolio silicon proven in multiple foundries and nodes.
• EDA focusing on shifting priority to core products like Javaro, with Javaro having strong customer interest and pipeline.
• Restructuring steps taken including targeted reductions in support and product areas, limiting direct customer support work by R&D staff to focus on product development, and implementing AI tools for software development.

In Q4, TCAD bookings were up 70% sequentially to $9.2 million and revenue up 34% to $8.7 million. IP delivered record revenue and bookings of over $5 million in the quarter, with Mixel contributing meaningfully. EDA saw a significant sequential decline in Q4 with bookings under $4 million and revenue $4.4 million. IP was already almost 30% of the business as of 2025 end. TCAD's AI-driven solution had a milestone with a second customer adoption, and IP's Mixel has strong MIFI IP with growth potential. EDA focuses on core products like Javaro.

• Q1 2026 guidance: Bookings between $15 - $19 million, revenue between $15 - $19 million, non-GAAP gross margin around 85%, non-GAAP operating expenses $14.5 - $16.5 million.
• Expect further reductions in total spending in Q2, aiming to turn the business profitable at flat revenue, having committed to reducing annualized non-GAAP operating expenses by $20 million annually.

Q: Craig Ellis asked about the NICE Asia Foundry FTCO deal rep rack and incremental expense savings.

A: Wally Rhines said the FTCO win wasn't all recognized in Q4, rest will run over contract term; Chris Segarelli mentioned cost savings from support organization reductions, streamlining org structures, and product teams focusing on development while field teams handle support leading to improved gross margin.

Q: Kevin Gerrigan asked about FTCO adoption speed and bookings by segment in Q1.

A: Wally Rhines said efficiency in closing and ramping FTCO customers is increasing, message honed, pipeline increasing; Chris Segarelli said TCAD strong sequentially in Q1, IP in same range maybe slight tick down, EDA flattish sequentially.

Q: Robert Mertens asked about MixLX acquisition growth and TCAD growth.

A: Chris Segarelli said IP grew $4 million sequentially from Q3 to Q4, approaching double digits annually, TCAD growth strong with traditional users and new AI-driven opportunities.

Q: Christian Schwab asked about MixLX acquisition growth from 25 to 26.

A: Chris Segarelli said IP grew sequentially, annualizing quarterly performance approaching double digits, growth from PRO products and sales force leveraging; Wally Rhines said expecting double-digit revenue growth in 2026.

Q: Dennis Piasci asked about 2026 segment performance and additional OPEX savings.

A: Wally Rhines said IP to have large percentage growth, TCAD strong but not fastest, EDA stable with strong renewals; Chris Segarelli said additional savings from broad streamlining and cost reduction effort in SG&A and selected businesses to move towards profitability at flat revenue