Silvaco Posts First Non-GAAP Operating Profit in Two Years
Second-quarter revenue of $17.8 million rose 48% after 26% growth in the first quarter, and non-GAAP operating income reached $0.6 million.
Silvaco Group (SVCO), a provider of TCAD, EDA software and SIP solutions for semiconductor design and digital-twin modeling, reported non-GAAP operating income of $0.6 million in the second quarter of 2026, a swing from a $6.0 million non-GAAP operating loss a year earlier and from a $0.5 million non-GAAP operating loss in the first quarter.
The result reflected continued tight management of operating expenses and record IP revenue. GAAP operating loss narrowed to $4.0 million from $10.1 million in the year-ago quarter. GAAP net loss was $3.7 million, or $0.11 a share. Non-GAAP net income was $0.3 million, or $0.01 a share.
Revenue of $17.8 million accelerated to 48% year-over-year growth after 26% growth in the first quarter. Gross bookings were $16.2 million, up 25% year-over-year. GAAP gross margin was 85%; non-GAAP gross margin was 87%.
The mix shifted toward system-in-package. SIP revenue was $6.0 million, up 238% year-over-year, after 270% growth in the prior quarter. TCAD revenue was $7.9 million, up 16% year-over-year. EDA revenue was $3.9 million, up 14% year-over-year, reversing a 20% year-over-year decline in the first quarter.
IP was the inflection inside that mix. IP bookings rose 81% sequentially and 70% year-on-year to $5.4 million. IP revenue rose 48% sequentially and 238% year-on-year to $6.0 million. IP strength was driven by foundational IP and Mixel offerings.
Pipeline creation was a record. Silvaco added $64 million in new opportunities, and identified pipeline grew to more than $292 million by quarter-end. The company secured a new AI FTCO customer in the quarter and was working to close additional AI FTCO wins in the second half of 2026.
Partnerships were the other thread. Silvaco announced a collaboration with NVIDIA to accelerate next-generation digital twins for semiconductor design and manufacturing, combining GPU-accelerated computing, physics-based simulation and AI. It also launched a partnership with Dassault Systèmes SIMULIA to develop interoperable digital-twin workflows aimed at first-time-right process development and faster yield ramps.
Micron Technologies invested $10 million in a convertible note as part of an expanded relationship centered on Silvaco’s FTCO platform, an AI-powered solution that creates real-time surrogate models from multiphysics simulations. Chief Financial Officer Chris Zegarelli said the company had taken steps to strengthen the balance sheet, including closing that investment. Cash and cash equivalents were $13.0 million at quarter-end.
Chief Executive Officer Walden Rhines said Silvaco delivered on its commitment to drive to non-GAAP profitability in the second quarter and saw record pipeline growth and revenue in IP. He said the company expects more FTCO wins, more AI offerings and more progress on profitable growth, and that those developments, coupled with a strengthening pipeline, give the company confidence in expecting record revenue in the fourth quarter and double-digit revenue growth again in 2027.
For the third quarter of 2026, Silvaco expects bookings of $18.0 million plus or minus 10% and revenue of $17.0 million plus or minus 10%. It expects non-GAAP gross margin of around 88% and non-GAAP operating expenses of $14.5 million plus or minus 5%.
The company is introducing Agentic AI offerings, with engagements with key strategic customers expected by year-end.