Silvaco Group Reports 19% Revenue Decline in Q2 2025, Operating Loss Narrows

Silvaco Group, Inc. reported a decline in financial performance for the second quarter of 2025, with total revenue of $12.0 million, down 19% from $15.0 million in the same period last year. For the first half of 2025, revenue decreased by 15% to $26.1 million compared to $30.8 million in the first half of 2024. The decrease in revenue was primarily attributed to a significant drop in software license revenue, which fell by 35% to $7.2 million for the quarter and by 26% to $17.2 million for the six-month period. In contrast, maintenance and service revenue increased by 23% to $4.8 million for the quarter and by 18% to $8.9 million for the first half of the year.

The company’s operating loss improved significantly, narrowing to $10.1 million for the second quarter, compared to a loss of $37.8 million in the prior year. For the first half, the operating loss was $29.8 million, down from $35.4 million in 2024. This improvement was largely due to a reduction in operating expenses, which decreased by 61% to $18.7 million for the quarter, driven by lower general and administrative costs following the IPO-related expenses incurred in the previous year. The net loss for the second quarter was $9.4 million, a 75% reduction from the $38.4 million loss reported in the same quarter of 2024.

Silvaco has made strategic moves to enhance its product offerings, including the acquisition of Cadence Design Systems' optical proximity correction tools for $11.5 million in March 2025 and the purchase of Tech-X Corporation for $8.0 million in April 2025. These acquisitions are expected to bolster Silvaco's capabilities in advanced computational lithography and multi-physics simulation tools, respectively. The company has also reported an increase in goodwill, reflecting the synergies anticipated from these acquisitions.

Operationally, Silvaco's customer base remains concentrated, with 70% of bookings in the second quarter coming from existing customers. The company reported a decline in bookings, totaling $12.9 million for the quarter, down from $19.5 million in the same period last year. The company’s cash and cash equivalents stood at $29.6 million as of June 30, 2025, with $16.5 million held in restricted cash to secure a letter of credit related to a litigation settlement. The company is currently facing a remaining liability of $14.4 million under this settlement agreement.

Looking ahead, Silvaco anticipates continued challenges due to softer end-market demand and economic uncertainties affecting the semiconductor industry. The company plans to focus on enhancing its product offerings and expanding its market presence while managing operational costs effectively. The outlook remains cautious, with management emphasizing the need to adapt to changing market conditions and customer demands to sustain growth and profitability.