SANTA CLARA, Calif. - Silvaco Group, Inc. (NASDAQ: SVCO), a provider of semiconductor design software and services, has released preliminary unaudited revenue results for the third quarter of 2024. The company reported that its expected total revenues for the quarter are approximately $11.0 million. This figure does not include a significant $5.0 million order, which was anticipated in Q3 but arrived in the early days of Q4 and will contribute to the fourth quarter's revenue.
The company also provided an updated outlook for the full year 2024. Previously, Silvaco had forecasted gross bookings to be between $67 million and $71 million, with revenue projected at $63 million to $66 million. However, the updated guidance indicates gross bookings are now expected to be in the range of $64 million to $67 million, with revenue estimates adjusted to $60 million to $63 million. This revision suggests a year-over-year growth of 10% to 16%, down from the 16% to 22% initially projected.
Additionally, Silvaco anticipates a non-GAAP gross margin of 85% to 87% and a non-GAAP operating income of $5.0 million to $8.0 million for the full year. These non-GAAP figures exclude certain costs such as stock-based compensation, amortization of acquired intangible assets, and other specific expenses which the company believes are not indicative of its core operating performance.
The announcement comes against the backdrop of challenges faced by the semiconductor industry, including economic pressures and the ongoing U.S.-China trade tensions, which have impacted orders from Asia during the third quarter.
Silvaco's CEO, Babak Taheri, remains confident in the company's long-term strategy, emphasizing the potential for double-digit revenue growth driven by Silvaco's proprietary platform and strategic acquisitions.
The company will report its full third-quarter earnings and conduct a conference call with an earnings presentation on November 12, 2024, after the market close. The call will be webcast live, and a replay will be available on Silvaco's investor relations website.
This financial update is based on a press release statement and represents forward-looking information that is subject to risks and uncertainties. The company cautions that actual results could differ materially from these projections.
In other recent news, Silvaco Group, Inc. is facing significant punitive damages following a recent jury verdict. The prepackaged software services company was ordered to pay $17.0 million in punitive damages related to fraud claims in the ongoing Nangate Litigation. Additionally, punitive damages of $6.0 million against chairperson Ms. Kathy Pesic, and $10.0 million against former board member Mr. Iliya Pesic, were also awarded. The company, Ms. Pesic, and Mr. Pesic plan to challenge the verdicts and anticipate that any appeals could extend over two years or more. Despite these legal challenges, Silvaco maintains a strong financial position, with an unaudited cash, cash equivalents, and marketable securities position of $102.3 million reported as of June 30, 2024. Investment firms such as Craig-Hallum, Needham, and Rosenblatt Securities maintain a positive outlook on the company, with Craig-Hallum and Needham giving Silvaco a Buy rating and Rosenblatt setting a 12-month price target of $26.00. These are recent developments in the company's ongoing operations.
InvestingPro Insights
Silvaco Group's recent financial update aligns with several key metrics and insights from InvestingPro. Despite the company's revised guidance and the challenges faced in Q3, there are positive indicators for potential growth and financial stability.
According to InvestingPro data, Silvaco's revenue for the last twelve months as of Q2 2024 stood at $58.28 million, with a robust revenue growth of 20.5%. This growth trajectory supports the company's projection of 10% to 16% year-over-year growth, even after the revised guidance.
An InvestingPro Tip highlights that Silvaco holds more cash than debt on its balance sheet, which is crucial for navigating the current economic pressures and industry challenges mentioned in the article. This financial cushion could provide the company with flexibility to pursue its long-term strategy and potential acquisitions.
Another relevant InvestingPro Tip indicates that analysts predict the company will be profitable this year. This aligns with Silvaco's expectation of a non-GAAP operating income between $5.0 million and $8.0 million for the full year 2024, suggesting a positive outlook despite the revised guidance.
It's worth noting that Silvaco's gross profit margin for the last twelve months as of Q2 2024 was an impressive 79.77%, which is consistent with the company's projected non-GAAP gross margin of 85% to 87% for the full year. This high margin reflects the company's strong position in its niche market of semiconductor design software and services.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Silvaco Group, providing a deeper understanding of the company's financial health and market position.
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