•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Silvaco Group (NASDAQ: SVCO) reported first-quarter fiscal 2026 results that management said reflected improving momentum across bookings, revenue, margins and cash. The company also guided for a return to non-GAAP operating profitability in the second quarter.
Chief Executive Officer Wally Rhines said Silvaco delivered bookings, revenue and gross margin above the midpoint of its guidance range, helping cut its non-GAAP operating loss in half sequentially. Revenue increased 26% year over year, and the company recorded its first sequential increase in unrestricted cash since its May 2024 initial public offering.
Chief Financial Officer Chris Zegarelli said Silvaco generated $17.2 million in bookings and $17.8 million in revenue in the quarter, both above consensus and above the midpoint of guidance. Bookings and revenue each rose 26% from the prior-year period.
TCAD was the primary driver. Rhines said TCAD bookings increased 13% sequentially and 49% year over year to $10.5 million. TCAD revenue rose 10% sequentially and 22% year over year to $9.6 million.
The semiconductor IP business softened sequentially after a strong fourth quarter but remained much higher than a year earlier. Rhines said IP bookings were $3.0 million, down 41% sequentially but up more than 200% year over year. IP revenue was $4.0 million, down 21% sequentially but up 270% year over year. He attributed the sequential decline to the timing of new customer wins, with some designs pushed out by about one quarter.
Rhines said the year-over-year IP performance reflects a “new baseline” following the integration of Mixel’s MIPI PHY IP. He also said the IP sales pipeline has roughly doubled over the past year, with strength in automotive soft IP and Mixel PRO, a production-ready product introduced in the first quarter.
EDA bookings and revenue declined in the quarter, with bookings of $3.8 million and revenue of $4.1 million. Management said it is focusing on a smaller group of core products it believes can drive future growth, including Jivaro and UTMOST, a database-driven platform for device characterization and SPICE model extraction.
Management highlighted continued momentum for FTCO, Silvaco’s AI-driven manufacturing offering, which is reported within TCAD. Rhines said the company secured a new FTCO customer engagement for the second consecutive quarter and received an order from an existing FTCO customer for new functionality. Zegarelli said Silvaco expects to close one additional new FTCO customer in the second quarter.
Rhines said the company is seeing interest in FTCO from governments, power applications and semiconductor equipment companies. He said the breadth of potential users has been “surprising,” noting the technology can be applied beyond its initial work with Micron.
For semiconductor equipment companies, Rhines said FTCO can be used for both equipment design and development and for work with end customers. He cited applications including digital twin modeling to tune equipment, develop process recipes and accelerate equipment setup time.
“By having a reliable model, they can in fact tune in what the ultimate result should be from the process step, and therefore drive how the setup should be done,” Rhines said.
Silvaco reported GAAP gross margin of 86.4% and non-GAAP gross margin of 87.9% in the first quarter. Zegarelli said GAAP and non-GAAP gross margins increased sequentially by 305 and 235 basis points, respectively, and rose 779 and 788 basis points year over year. He said the improvement benefited from restructuring activities and that the company expects gross margins to remain in the mid- to upper-80% range.
GAAP operating expenses declined 4.5% sequentially to $21.0 million, while non-GAAP operating expenses fell 3.6% to $16.1 million. Zegarelli said total non-GAAP spending declined for two consecutive quarters for the first time since the IPO and is expected to decline again in the second quarter.
The company reported a GAAP operating loss of $5.7 million, an improvement from the prior quarter. Non-GAAP operating loss was $471,000. GAAP net loss was $5.9 million, or $0.19 per share, while non-GAAP net loss was $574,000, or $0.02 per share.
Zegarelli said Silvaco’s $20 million cost reduction initiative is largely behind it, though additional reductions—particularly internationally—are expected to flow through over time. He said operating expenses are likely to trend “down to flattish” from current levels, while the company continues targeted investments, including in AI tools.
Silvaco ended the quarter with $10.9 million in cash and cash equivalents and no restricted cash. Zegarelli said unrestricted cash increased nearly 10% sequentially, marking the first such increase since the IPO.
Net cash used in operating activities was $11.0 million, including an $8.3 million final litigation settlement payment and $1.0 million in severance payments. Excluding those items, net cash used in operating cash flow would have been $1.7 million, compared with $7.4 million in the fourth quarter on the same adjusted basis.
Zegarelli said the improvement from $7.4 million to $1.7 million reflects “meaningful improvement” in underlying economics and that the company expects positive operating cash flow by the third quarter.
Silvaco also signed a non-binding term sheet with its banking partner for a $10 million revolving line of credit, which it expects to close during the second quarter.
For the second quarter of fiscal 2026, Silvaco guided for bookings of $19.0 million, plus or minus 10%, and revenue of $18.0 million, plus or minus 10%. The company expects non-GAAP gross margin of about 88% and non-GAAP operating expenses of $15.5 million, plus or minus 5%.
Zegarelli said the guidance indicates Silvaco expects to deliver positive non-GAAP operating income in the second quarter, which would mark the company’s first quarter of non-GAAP operating profitability since the fourth quarter of 2024.
During the question-and-answer session, Zegarelli said IP is expected to grow sequentially in the second quarter, EDA could be flat to slightly down, and TCAD could be flat to slightly up. He also said remaining performance obligations, or backlog, were about $46.6 million, down slightly from the fourth quarter but still in an “elevated high-$40 million range.”
Rhines said TCAD should remain a solid core business but cautioned that its roughly 50% year-over-year bookings growth rate is not expected to continue. He said FTCO’s inclusion in TCAD provides an additional growth driver as the company adds customers and identifies new applications.
“We’ve made great strides in stabilizing the business, enhancing liquidity, and streamlining operations,” Rhines said. “We all continue to believe that the best is yet to come.”
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
