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Silvaco Group, Inc. (SVCO)
:SVCO
US Market

Silvaco Group, Inc. (SVCO) AI Stock Analysis

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Silvaco Group, Inc.

(NASDAQ:SVCO)

Rating:47Neutral
Price Target:
$5.00
▲(3.95%Upside)
Silvaco Group, Inc.'s stock faces significant risks primarily due to poor financial performance, characterized by declining revenue, negative cash flows, and lack of profitability. Technical analysis signals are mixed, with bearish indicators prevailing. The company's valuation is unattractive with a negative P/E ratio. However, strategic acquisitions provide a positive outlook for future growth, offering some potential for improved market positioning.
Positive Factors
Customer Expansion
The Dec '24 quarter saw the addition of 13 new customers, totaling 46 new customers for the year.
Revenue Growth
Silvaco guides FY25 revenue to grow by a decent 15.5% at the guidance midpoint.
Strategic Acquisitions
Strategic acquisitions of Cadence's PPC group and recently announced Tech-X, a provider of software simulation, are additive to the growth story.
Negative Factors
Earnings Decline
FY25 EPS is expected to decline meaningfully from the FY24 level due to increased R&D investments and acquisition costs.
Operational Expenses
PPC and Tech-X acquisitions incur an estimated $1-2M per quarter in operational expense headwind before seeing a more material sales impact.
Revenue and Earnings Guidance
Silvaco lowered its FY25 guidance on both the top and bottom lines due to near-term macro headwinds and tariff uncertainty.

Silvaco Group, Inc. (SVCO) vs. SPDR S&P 500 ETF (SPY)

Silvaco Group, Inc. Business Overview & Revenue Model

Company DescriptionSilvaco Group, Inc. (SVCO) is a leading provider of electronic design automation (EDA) software and semiconductor intellectual property (IP) solutions. The company specializes in delivering tools and services that aid in the design and verification of complex electronic systems, including semiconductors and integrated circuits. Silvaco serves a diverse range of industries, including consumer electronics, automotive, and industrial sectors, offering a comprehensive suite of products that address the needs of analog, mixed-signal, and radio-frequency design.
How the Company Makes MoneySilvaco Group, Inc. generates revenue primarily through the sale of its EDA software licenses and semiconductor IP products. The company follows a licensing model where clients purchase software licenses for a specified duration, typically through annual or multi-year agreements. Additionally, Silvaco offers maintenance and support services, which provide clients with software updates and technical assistance, generating recurring revenue. The company also engages in consulting services and custom design solutions, leveraging its expertise to deliver tailored assistance to clients. Strategic partnerships with semiconductor manufacturers and technology companies further enhance Silvaco's revenue streams by expanding its market reach and driving collaborative innovation.

Silvaco Group, Inc. Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q3-2024)
|
% Change Since: -9.25%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
While Silvaco achieved several strategic milestones, including strong customer traction, key partnerships, and record future revenue expectations, the company faced challenges with a decline in Q3 revenue, significant order delays from China, and increased operating expenses resulting in a net loss for the quarter.
Q3-2024 Updates
Positive Updates
Strong Customer Traction
Signed 14 new customers in Q3, bringing the year-to-date new customer wins to 33. Strong demand in power, automotive, and IoT markets.
Strategic Partnerships and Collaborations
Announced partnerships with Purdue, Stanford, and Arizona State University to address talent shortages and enhance research.
Inclusion in Russell Indices
Silvaco was added to the Russell 2000, Russell 3000, and Russell Microcap indices, increasing visibility and shareholder base.
ISO 9001 Certification
Achieved ISO 9001 certification for TCAD, ADA, and NIP products in October, enhancing credibility and quality assurance.
Record Quarterly Revenue Expected in Q4
Guidance for Q4 revenue is $18.1 million to $21.2 million, which would be a record for the company.
Negative Updates
Decline in Revenue and Bookings
Q3 revenue was $11 million, down 27% year-over-year, and bookings were $9.9 million, a decrease of 21% year-over-year.
Challenges in China
Delayed orders from China, which represents 17% of the year-to-date revenue. The macroeconomic environment led to order delays.
SIP Revenue Decline
SIP revenue is down $2.1 million or 34% year-to-date, impacted by delays in renewing strategic refill agreements and order delays in Asia.
Increased Operating Expenses
Non-GAAP operating expenses were $11.3 million, up from $9.9 million in the same period last year, due to increased costs in G&A, R&D, and sales and marketing.
Net Loss for the Quarter
Reported a non-GAAP net loss of $1.8 million compared to a non-GAAP net income of $2.3 million in Q3 2023.
Company Guidance
During Silvaco's Q3 2024 earnings call, the company provided guidance indicating strong growth expectations for the fourth quarter and the full year. They anticipate gross bookings in the range of $64 million to $67 million for the year, representing a 10% to 15% increase from 2023. Revenue is expected to reach between $60 million and $63 million, marking a 10% to 16% year-over-year growth. For Q4, they project bookings between $18.5 million and $21.5 million, and revenue from $18.1 million to $21.2 million, which would set a new record for quarterly revenue. Silvaco also expects to maintain non-GAAP gross margins between 85% and 87% for the year. The company remains committed to achieving long-term financial targets of 15% to 25% top-line growth, 90% non-GAAP gross margin, and 25% plus non-GAAP operating margin through market expansion and strategic acquisitions.

Silvaco Group, Inc. Financial Statement Overview

Summary
Silvaco Group, Inc. is facing significant financial challenges, with declining revenue and profitability, negative cash flows, and reliance on external financing. Despite strong gross margins and low financial leverage, the company struggles with sustainability due to consistent net losses and negative free cash flow.
Income Statement
35
Negative
Silvaco Group, Inc. shows declining revenue growth with fluctuating profitability. The TTM data indicates a revenue decline from the previous annual report, compounding concerns with negative EBIT and EBITDA margins. The gross profit margin remains healthy at 77.39% TTM, but the net profit margin is deeply negative at -103.76%, reflecting substantial operational challenges.
Balance Sheet
45
Neutral
The company maintains a reasonable debt-to-equity ratio of 0.02, suggesting low financial leverage. However, the equity ratio has weakened to 60.50% TTM, and the return on equity is negative due to net losses. The balance sheet shows strong cash reserves relative to liabilities, providing some buffer against financial instability.
Cash Flow
30
Negative
Cash flow analysis reveals negative operating cash flow, with free cash flow also negative and declining. The TTM figures indicate challenges in turning revenue into positive cash flow, highlighted by a negative free cash flow to net income ratio. The company is heavily reliant on financing activities, raising concerns about long-term sustainability.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
57.88M59.68M54.25M46.47M41.96M40.28M
Gross Profit
44.80M47.64M44.89M37.59M33.31M31.61M
EBIT
-62.30M-40.28M1.13M27.00K-3.54M3.64M
EBITDA
-58.96M-37.11M1.74M-1.11M-2.37M4.46M
Net Income Common Stockholders
-60.05M-39.40M-316.00K-3.93M-1.84M2.55M
Balance SheetCash, Cash Equivalents and Short-Term Investments
5.48M82.68M4.42M5.48M6.70M9.72M
Total Assets
38.72M142.34M40.88M38.72M35.73M41.91M
Total Debt
4.39M1.69M3.93M8.47M501.00K3.49M
Net Debt
-1.08M-17.92M-488.00K2.99M-6.20M-6.23M
Total Liabilities
28.70M42.26M31.48M28.70M21.36M24.67M
Stockholders Equity
10.02M100.08M9.40M10.02M14.37M17.24M
Cash FlowFree Cash Flow
-18.93M-20.28M841.00K-2.19M-2.73M5.29M
Operating Cash Flow
-18.34M-19.77M1.18M-2.10M-2.64M5.78M
Investing Cash Flow
-55.12M-66.53M-339.00K-89.00K234.00K-1.60M
Financing Cash Flow
96.92M101.30M-1.65M624.00K60.00K2.33M

Silvaco Group, Inc. Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price4.81
Price Trends
50DMA
4.71
Positive
100DMA
5.75
Negative
200DMA
8.03
Negative
Market Momentum
MACD
-0.02
Negative
RSI
50.61
Neutral
STOCH
64.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SVCO, the sentiment is Neutral. The current price of 4.81 is above the 20-day moving average (MA) of 4.70, above the 50-day MA of 4.71, and below the 200-day MA of 8.03, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 50.61 is Neutral, neither overbought nor oversold. The STOCH value of 64.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SVCO.

Silvaco Group, Inc. Risk Analysis

Silvaco Group, Inc. disclosed 57 risk factors in its most recent earnings report. Silvaco Group, Inc. reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Silvaco Group, Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Neutral
$157.85M-76.11%16.52%-1.28%
62
Neutral
$171.35M13.7723.24%0.20%
58
Neutral
$4.97B19.83-16.90%5.27%13.61%-24.47%
53
Neutral
$183.07M-27.44%16.03%30.99%
47
Neutral
$141.35M-127.52%
44
Neutral
$593.32M0.6080.54%-44.58%1200.82%
* General Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SVCO
Silvaco Group, Inc.
4.81
-12.79
-72.67%
AEYE
AudioEye
12.67
-8.11
-39.03%
MAPS
WM Technology
1.11
0.11
11.00%
FRGE
Forge Global Holdings
14.85
-10.80
-42.11%
NXTT
Next Technology Holding
1.36
-1.89
-58.15%

Silvaco Group, Inc. Corporate Events

Executive/Board ChangesShareholder Meetings
Silvaco Group Approves Key Amendments at Annual Meeting
Neutral
May 28, 2025

On May 22, 2025, Silvaco Group, Inc. held its Annual Meeting where 83.61% of the outstanding shares were represented. During the meeting, stockholders elected Class 1 directors and approved an amendment to the company’s Certificate of Incorporation allowing for the removal of directors by stockholders without cause.

The most recent analyst rating on (SVCO) stock is a Buy with a $25.00 price target. To see the full list of analyst forecasts on Silvaco Group, Inc. stock, see the SVCO Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Silvaco Group Acquires Tech-X to Boost Photonics
Positive
Apr 29, 2025

On April 29, 2025, Silvaco Group, Inc. announced its acquisition of Tech-X Corporation, a leader in multi-physics simulation software for applications in photonics, electromagnetics, and plasma dynamics. This strategic acquisition aims to enhance Silvaco’s product offerings in photonics and wafer-scale plasma modeling for AI applications, combining Tech-X’s advanced simulation tools with Silvaco’s Victory TCAD platform to accelerate innovation in the semiconductor industry. The integration of Tech-X’s expertise is expected to significantly improve simulation speed and accuracy, expanding Silvaco’s presence in the rapidly growing photonics market.

Executive/Board ChangesBusiness Operations and Strategy
Silvaco Group Announces CFO Resignation and Transition Plan
Neutral
Mar 21, 2025

On March 18, 2025, Silvaco Group, Inc. announced the resignation of its Chief Financial Officer, Ryan Benton, effective April 11, 2025. Benton is leaving to pursue a new career opportunity outside of the semiconductor design industry, and his departure is not due to any disagreements with the company. To ensure a smooth transition, CEO Dr. Babak Taheri will temporarily take on the roles of principal financial officer and principal accounting officer, while Keith Tainsky will serve as Interim Chief Financial Officer. The company has started the process of finding Benton’s successor. Additionally, Silvaco reaffirmed its financial guidance for the first quarter and full year of fiscal 2025, indicating stability and confidence in its strategic direction.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.