Silvaco Group, Inc. reported significant financial changes in its latest 10-Q filing for the quarter ending September 30, 2024. The company experienced a notable decline in revenue for the three-month period, with total revenue of $10.972 million, down 27% from $14.944 million in the same quarter of 2023. However, for the nine-month period, revenue remained relatively stable at $41.821 million, slightly up from $41.760 million year-over-year.

The decrease in quarterly revenue was primarily attributed to a 38% drop in software license revenue, which fell to $6.840 million from $11.083 million in the prior year. In contrast, maintenance and service revenue increased by 7% to $4.132 million. For the nine-month period, software license revenue decreased by 2%, while maintenance and service revenue rose by 5%.

Operating expenses surged significantly, totaling $15.488 million for the three months ended September 30, 2024, compared to $10.928 million in the same period of 2023, marking a 42% increase. For the nine months, operating expenses reached $74.904 million, a substantial rise from $32.018 million in the previous year. This increase was largely driven by a $13.1 million stock-based compensation expense related to the company's IPO and a $3.8 million rise in legal and professional fees.

As a result of these factors, Silvaco reported an operating loss of $(7.302) million for the third quarter, a stark contrast to the operating income of $1.742 million in the same quarter of 2023. The net loss for the three months was $(6.551) million, compared to a net income of $1.448 million in the prior year. For the nine-month period, the net loss was $(43.561) million, down from a net income of $1.931 million in 2023.

The company’s cash position improved significantly, with cash and cash equivalents rising to $26.606 million as of September 30, 2024, compared to $4.421 million at the end of 2023. This increase was bolstered by the net proceeds of $106 million from the IPO completed in May 2024, where 6 million shares were issued at $19.00 per share.

Strategically, Silvaco aims to expand its product offerings through in-house research and development, acquisitions, and partnerships, particularly in response to increasing complexities in semiconductor designs. The company also introduced an AI-based solution for wafer-level fabrication facilities, indicating a focus on innovation in its product line.

The filing also highlighted ongoing litigation issues, including a jury award of $11.3 million related to breach of contract claims, which contributed to the increased legal expenses. The company is pursuing an appeal regarding this verdict.