Q4 2024 Silvaco Group Inc Earnings Call
Operator: Thank you for standing by and welcome to the Silvaco Fourth Quarter 2024 Financial Results Conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded.
Okay.
Speaker Change: Thank you for standing by and welcome to the tobacco fourth quarter 2024 financial results Conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone. If your question has been ahead.
And you'd like to remove yourself from the queue simply press star one again.
Speaker Change: Reminder, today's program is being recorded and now I'd like to introduce your host for today's program Greg.
Greg McNiff: And now I'd like to introduce your host for today's program, Greg McNiff, Investor Relations. Please go ahead, sir. Thank you.
Speaker Change: Best Relations. Please go ahead Sir.
Greg McNiff: Joining me on the call today are Babak Taheri, Silvaco's CEO, and Ryan Benton, Silvaco's CEO.
Speaker Change: Thank you joining me on the call today are back to Harry's tobacco CEO, Ryan Benton Cybarco CFO as a reminder, a press release highlighting the company's results along with supplemental financial results in an earnings presentation are available on the company's IR site at Investor.
Greg McNiff: As a reminder, a press release highlighting the company's results, along with supplemental financial and an earnings presentation are available in the company's IR site at investors.silvaco.com.
Speaker Change: Investors docks debacle dot com.
Greg McNiff: An archived replay of the conference call will be available on this website for a limited time after the conference. Please note that during this call, management will be making remarks regarding future events and the future financial performance. These remarks constitute forward-looking statements for purposes of the Safe Harbor Program. of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. It is important to also note that the company undertakes no obligation to update such statements except as required by law.
Speaker Change: An archived replay of the conference call will be available on this website for a limited time after the call.
Speaker Change: Please note that during this call management will be making remarks regarding future events and the future financial performance of the company. These remarks constitute forward looking statements for purposes of the Safe Harbor provisions of the private Securities Litigation Reform Act. These forward looking statements are subject to risks and uncertainties that could cause actual results.
Speaker Change: To differ materially from those expressed in the forward looking statements is important to also note that the company undertakes no obligation to update such statements except as required by law. The company cautions you to consider risk factors that could cause actual results to differ materially from those in the forward looking statements contained in today's press release earnings.
Greg McNiff: The company cautions you to consider risk factors that could cause actual results to differ materially from those in the forward-looking statements contained in today's press release, earnings presentation, and on this conference call.
Speaker Change: Presentation and on this conference call the risk factors section in tobacco is most recent Form 10-Q filings with Securities and Exchange Commission provides a description of these risks with that I'd like to turn the call over to tobacco CEO back to Gerry.
Greg McNiff: The Risk Factors section in Silvaco's most recent Form 10-Q filing with the Security and Exchange Commission provides a description of these risks.
Babak Taheri: With that, I'd like to turn the call over to Silvaco's CEO, Babak Taheri. Thank you, Greg. Hello and welcome to Silvaco's fourth quarter 2024 earnings call. I am Babak Taheri, CEO of Silvaco. Thank you for joining us today. In addition to discussing Silvaco's result, we will provide guidance for the first quarter and full year 2025. along with updates on our recent press releases, business developments, and current market trends. For those joining us for the first time, Silvaco is a provider of TCAD, EDA, and semiconductor IP products that enable chip design, chip manufacturing, and photonics through digital twin modeling and simulation, utilizing AI and machine learning.
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Gerry: Thank you Greg.
Gerry: Hello, and welcome to <unk> fourth quarter 2024 earnings call.
Speaker Change: I am by Black Tahari T cell backhaul. Thank you for joining us today.
In addition to discussing tobaccos resolved, we will provide guidance for the first quarter and full year 2025.
Speaker Change: Along with updates on our recent press release, the business development side of the current market trends.
Speaker Change: For those joining us for the first time.
Speaker Change: Backhaul is a provider of tea CAD E D E and semi conductor IP products.
Speaker Change: It enabled chip design chip manufacturing and.
Speaker Change: Photonics hero, DJ powertrain modeling and simulation utilizing AI and machine learning.
Babak Taheri: We have decades of deep expertise in modeling and simulation software from concept to design and manufacturing. The lack of digital twin platform drives advances for the next generation of power semiconductors, photonics, memory devices, and advanced CMOS technologies utilized in design and fabrication of next generation of integrated circuits.
Speaker Change: We have decades of deep expertise in modeling and simulation software from concept to designer and manufacturer.
Speaker Change: The lack of this whole thing platform drive benefit for the next generation of power semiconductors photonics memory devices.
Speaker Change: Banks Cmos technology utilized in design and fabrication of next generation of integrated circuits.
Babak Taheri: I will now highlight our non-GAAP results for full year 2024 and our targets for full year 2025.
Speaker Change: I will now highlight our non-GAAP results for full year 2024, and our targets for full year 2025.
Babak Taheri: Our CFO, Ryan, will discuss our annual and quarterly non-GAAP financial results and guidance in more detail later on. For the fiscal year 2024, we reported gross bookings of $65.8 billion, reflecting a 13% increase from 2023. Revenue of $59.7 million, representing a 10% increase from 2023. Non-GAAP gross margin of 86% increased from 83% in 2023. non-GAAP operating income of $5.5 million compared to $4.4 million in 2023. non-GAAP net income per share of $0.25 compared to $0.17 in 2023. Shares used in the calculation of non-GAAP income per share increased to $26.8 million from $20 million in the same period a year ago.
Speaker Change: Our CFO, Ryan will discuss our annual and quarterly non-GAAP financial results and guidance in more detail later on.
Speaker Change: For the fiscal year 'twenty 'twenty four we reported gross bookings at $65.8 billion.
Speaker Change: Letting a 13% increase from 2023.
Speaker Change: Revenue of $59 7 million, representing a 10% increase.
Speaker Change: From 2023, non-GAAP gross margin of 86% increased from 83% in 2023.
Speaker Change: non-GAAP operating income of $5 5 million compared to four $4 million in 2023.
Speaker Change: non-GAAP net income per share of 25% compared to 17% in 2023.
Speaker Change: Shares used in the calculation of non-GAAP income per share increased to $26 8 million from 20 million in the same period a year ago.
Babak Taheri: Now for the fiscal year 2025, we expect gross booking in the range of 72 million to 79 million dollars, reflecting a 9 to 20 percent increase from 2024. Revenue in the range of 66 to 72 million dollars, representing an 11 percent to 21 percent increase from 2024. Non-GAAP gross margin in the range of 84 to 89 percent, which would compare to 86 percent in 2024. Non-GAAP operating income in the range of $2 million to $7 million compared to $6.7 million in 2024 and non-GAAP and income per share in the range of $0.07 to $0.19 compared to $0.25 in 2024.
Speaker Change: Now for the fiscal year 2025, we expect gross bookings in the range of 70 to maybe into $79 million, reflecting a 9% to 20% increase from 2020 for revenue in the range of $66 million to $72 million, representing an 11.
Speaker Change: Percent, 221% increase from 2024, non-GAAP gross margin in the range of 84% to 89%, which was compared to 86% in 2024.
Speaker Change: non-GAAP operating income in the range of <unk> 7 million compared to $6 $7 million in 2024, and non-GAAP net income per share in the range of 7% to 19% compared to 25%.
Speaker Change: In 2024.
Babak Taheri: I'm really excited about the progression of the business we have seen and our execution on the strategies we outlined since we've been public last year. We believe our strategic focus on driving innovation through AI-based semiconductor design for advanced CMOS geometries and power semiconductors, which includes digital twin modeling and quantum computing, positions us well for long-term growth, and our strong business fundamentals and innovation product lines will continue to drive our customer momentum.
Speaker Change: I'm really excited about the progression of the business, we have seen in our execution on this strategy as we outlined.
Speaker Change: Ben public last year.
Speaker Change: And believe our strategic focus on driving innovation through AI based semiconductor design for advanced Cmos geometries, and power semiconductors, which includes digital twin modeling and quantum computing positions us well for long term growth.
Speaker Change: Strong business fundamentals on innovation product lines will continue to drive our customer momentum.
Babak Taheri: Next I'd like to discuss our achievements in Q4. Please turn to next slide. Highlights of Silvaco milestone achievements. Silvaco expanded its AI-based digital twin modeling platform, FTCL, adoption in May and October. We announced a partnership with Micon Global in December to expand Silvaco's reach across the EMEA market, leveraging Micon's expertise to deliver cutting-edge TCAD, EDA, and SIP solutions to new customers. Silvaco joined the SmartUSA Institute under the Chips Manufacturing USA program to advance digital twin technologies in semiconductor manufacturing also in December, reinforcing Silvaco's leadership in innovation. Additionally, Silvaco expanded its Victory TCAD and digital twin modeling platform to planar CMOS, FinFET, and advanced CMOS technologies, which is a necessary step to enable FTCO for advanced process in September.
Speaker Change: Next I'd like to discuss alright achievements in Q4, please turn to next slide.
Speaker Change: Highlight that backhaul milestone achievements tobacco expanded it.
Please turn to our modeling platform FTE Seattle adoption in May and October.
Speaker Change: We announced a partnership with Micron global in December to expand tobaccos reach across the EMEA market, leveraging <unk> expertise to deliver cutting edge T cat <unk> chip solutions to new customers.
Speaker Change: Tobacco joined the Smart USA Institute under the chips manufacturing USA program type as detailed tune technologies in semiconductor manufacturing also in December <unk>.
<unk> leadership in innovation.
Speaker Change: Additionally, <unk> expanded its victory tea, CAD, and Utah train modeling platform to planar Cmos Finfet and advanced technology technologies.
Speaker Change: Terry step to enable FTC all for advanced process in September.
Babak Taheri: In October, the company achieved the ISO 9001 certification of TCAD, EDA, and IP products.
Speaker Change: In October the company achieved ISO 9001 certification of T Kat EDA and IP products.
Babak Taheri: In the next slide, I would like to review how our land and expanse strategies have performed in 2024 compared to 2023. Please turn to the next slide. Top vertical market trends and performance in fiscal year 2024. As previously stated, our focus in 2024 was expanding in the power and memory markets while maintaining display customers and adding new customers in other markets. I'm very proud of our team that has delivered 46 new customers or new logos in 2024. This slide represents a breakdown of 43 new customer wins that contributed to our primary end markets, along with their year-over-year growth rate.
Speaker Change: And the next slide I would like to review, how our land and expand strategy do you have performed internally at <unk> 24, compared to 23, please turn to the next slide.
Speaker Change: Okay.
Speaker Change: Copper nickel market trends and performance in fiscal year 2024.
As previously stated our focus in 2024 was not expanding in the power and memory markets, while maintaining display customers and adding new customers in other markets.
Speaker Change: I am very proud of our team that has delivered 46, new customers or new logos in 2024.
Speaker Change: This slide represents a breakdown of 43, new customer wins that contributed to our primary end markets.
Speaker Change: Long with their year over year growth rates.
Babak Taheri: Although new customer growth was down in three end markets, we view this as an opportunity to expand within the accounts we have already secured. As a reminder, we often land customers in certain markets with small opportunities and expand in them in the future. Notably, we added 13 new power customers with 43% increase. in bookings year-over-year in this segment for TCAD and EDA. One new memory customer with 89% increase in revenue year-over-year for our TCAD product line. Five new customers in photonics for TCAD and EDA. three new Foundry customers for TCAD, IP, and EDA, three new 5G, 6G customers for IP and EDA, five government and new Aero customers for EDA and IP, five new customers in IoT for IP and EDA, eight new customers in automotive for TCAD and IP, and three others.
Speaker Change: Although new customer growth was down in three end markets. We viewed this as an opportunity to expand within the accounts. We have already secured as a reminder, we often land customers in certain markets with small opportunities and expand in the future.
Speaker Change: Notably, we added 13, new power customers with 43% increase.
Speaker Change: In bookings year over year in this segment for tea CAD and.
Speaker Change: One new memory customer with 89% increase in revenue year over year for our tea CAD product line five new customers in photonics for tea CAD NDA.
Speaker Change: Three new foundry customers for tea CAD IP on EBITDA, three new <unk> customers for IP NDA file.
Speaker Change: Five government 10000 Aero customers for EDA, and IP five new customers in Iot for IP and EDA.
Speaker Change: Eight new customers in the automotive part tea, CAD and IP and three others.
Babak Taheri: On the next slide, I would like to review how we are expanding our SAM, including through the recently announced acquisition. Please turn to the next slide. Electronic design and manufacturing software enables value change. Silvaco is expanding its market time using AI-based digital twin modeling and simulation. The first step in developing a semiconductor chip is designing it using EDA software and semiconductor IT. As I mentioned in our last call, Silvaco provides software platforms for both step one, which is design, and step two, which is manufacturing preparation, as shown in this slide. Additionally, we have expanded our SAM by half a billion dollars through our FTCO platform.
Speaker Change: On the next slide I would like to review, how we are expanding our Tam, including through the recently announced acquisition. Please turn to the next slide.
Speaker Change: Electronic design and manufacturing software enables value chain sales.
Speaker Change: <unk> is expanding its market time, using AI based digital twin modeling and simulation.
Speaker Change: The first step in developing a semiconductor chip is designing it using eda's software semi conductor IP.
Speaker Change: As I mentioned in our last call sales backlog provides software platforms for both step one which is design and step two which is manufacturing preparation as shown in this slide.
Speaker Change: Additionally, we have expanded our Sam by half a billion dollars true RFT Seo platform.
Babak Taheri: I'd like to draw your attention to the new green arrows on the slide. These arrows highlight the crucial interface between chip design and manufacturing. especially the final step after design and the first step in manufacturing. The last step before manufacturing is the optimization of the design layout data for mass generation, a process known in the industry as optical proximity correction, or OPC. Think of OPC as a technology that enables the creation of precise masks needed for semiconductor manufacturing. At a high level, advanced algorithms analyze and correct distortions that occur due to optical and proximity effects, ensuring that masks used to pattern wafers in the lithography process produce highly accurate and manufacturable chips.
Speaker Change: I'd like to draw your attention to the new Green arrows on this slide these arrows.
Speaker Change: The crucial interface between chip design and manufacturing.
Speaker Change: Especially the final step after design and the first step in manufacturing.
Speaker Change: The last step before manufacturing is the optimization of the design layout data format generation.
Speaker Change: A process known in the industry as optical proximity correction or OTC pick.
Speaker Change: Think about PC as a technology that enables the creation of size masks needed for semiconductor manufacturing.
Speaker Change: High level advanced algorithms analyze and correct distortions that occur due to optical on proximity effects, ensuring that masks used to patterned wafers in the lithography process produce highly accurate and manufacturer of <unk> chips.
Babak Taheri: With our technology, Silvaco now directly addresses the first two key steps in the semiconductor value chain.
Speaker Change: We are technology cell backhaul now directly addresses the first two key steps in the semiconductor value chain.
Babak Taheri: I'm excited to announce that we've added OPC capabilities to our platform through the recent acquisition of Cadence's OPC products. This strategic addition enabled Silvaco to participate in a $357 million SAM, a market we previously did not have.
I'm excited to announce that we've added OTC capabilities to our platform through their recent acquisition of cadences OTC product line.
Speaker Change: This strategic addition enables <unk> to participate in a $357 million Tam.
Speaker Change: Market that we previously did not address.
Babak Taheri: Next, I'd like to go over the key highlights of this acquisition. Please turn to the next slide. Silvaco acquisition of Cadence's OPC product line overview, driving innovation, customer value, and market expansion through strategic acquisition. Silvaco's strategic expansion into the growing OPC market strength its position in advanced memory manufacturing and foundry operations. aligning with our long-term roadmap. This move enables us to foster deeper relationships with key memory manufacturers by addressing critical advanced node requirements, including EUV and AI-driven lithography. By integrating AI and machine learning into our OPC tools, Silvaco enhances efficiency and scalability. Driving Innovation in Next Generation Semiconductor Manufacturing.
Speaker Change: Next I'd like to go over the key highlights of this acquisition. Please turn to the next slide.
Speaker Change: The lack of acquisition of cadences RPC product line overview driver.
Speaker Change: Driving innovation customer value and market expansion through strategic acquisitions.
Speaker Change: <unk> strategic expansion into the growing OTT markets strengthened its position in advanced memory manufacturing and foundry operations aligning with our long term roadmap there.
Speaker Change: This move enables us to foster deeper relationships with key memory manufacturers by addressing critical advanced node requirements.
Speaker Change: Including <unk> and AI driven lithography.
Speaker Change: By integrating AI and machine learning into our OTC tools sales back are enhancing efficiency and scalability.
Speaker Change: Driving innovation in next generation semiconductor manufacturing.
Babak Taheri: Additionally, entering high-value OPC segment expands our SAM by $357 million. broadening our customer base with critical solutions. The acquisition also brings a highly skilled and innovative team, ensuring seamless integration and continuous product development.
Speaker Change: Additionally, entering high value OTC segment expands our Sam by $357 million.
Speaker Change: Broadening our customer rates with critical solutions.
Speaker Change: The acquisition also brings a highly scaled innovative team, ensuring seamless integration and continuous product development, while the initial revenue impact in 2025 will be modest due to aes.
Babak Taheri: While the initial revenue impact in 2025 will be modest due to ASC-606 timing, contributions are expected to reach mid-single-digit revenue by 2026, reinforcing our financial growth strategy. Please turn to the next.
606 timing contributions are expected to reach mid single digit revenue by 2026, reinforcing our financial growth strategy.
Speaker Change: Please turn to the next slide.
Babak Taheri: Key Differentiators of Acquired OPC Products. Advanced OPC solutions are setting new industry standards with cutting-edge technologies designed to improve semiconductor manufacturing. Hybrid SRAF optimization or sub-resolution assist features are tiny, non-printing patterns added to a photo mask to ensure the accuracy of the chip design. They help correct distortions that naturally occur during the printing process. making complex chip patterns more reliable and manufactured. The hybrid approach combines both rule based and AI driven techniques to enhance performance, especially for the most advanced semiconductor As chips become smaller, down to 2 nanometer and beyond, the traditional correction methods struggle to keep up.
Speaker Change: Key differentiators of our acquired RPC products.
Speaker Change: Advanced OTC solutions are setting new industry standards with cutting edge technology designed to improve semiconductor manufacturing.
Speaker Change: Hybrid SaaS optimization or soft Brexit solution features our tiny none printing patterns added to a photo mask to ensure the accuracy of the chip design.
Speaker Change: They help correct distortion that naturally occur during the printing process, making complex chip patterns more reliable on manufacturer book.
Speaker Change: The hybrid approach combines both route based on AI driven techniques to enhance performance.
Speaker Change: Especially for the most advanced semiconductor chips.
Speaker Change: Our chips become smaller down to two nanometer and beyond the traditional correction method struggled to keep up.
Babak Taheri: EUVOPC, or Extreme Ultraviolet Optical Proximity Correction, is a specialized technique that fine-tunes chip patterns for EUV lithography, which uses an ultra-small 13.5 nanometer wavelength light and showing precision at the smallest scale. Instead of using only straight lines and right anglers, curved linear OPC allows chip patterns to have smooth, round shapes, leading to better performance. Our technology ensures these designs comply with manufacturing standards while also improving efficiency and accuracy. Trusted by top memory manufacturers, these solutions have already proven their ability to speed up chip development while maintaining a high quality. By integrating seamlessly with chip design and manufacturing processes, our OPC technology helps reduce errors, increases efficiency, and accelerates product time.
Speaker Change: <unk> or extreme ultraviolet optical proximity correction.
Speaker Change: Is it specialized technique that fine tunes chip patterns for <unk> lithography, which uses an ultra small 13, five nanometer wavelength light ensuring precision at this smaller scales.
Instead of using only straight lines and right angles curve linear OTC allows cheap patterns to have smooth round shapes, leading to better performance.
Speaker Change: Our technology ensures these designs comply with manufacturing standards, while also improving efficiency and accuracy.
Speaker Change: Trusted by top memory manufacturers. These solutions have already proven their ability to speed up chip development.
Speaker Change: Maintaining a high quality.
By integrating seamlessly with chip design and manufacturing processes, our OTC technology hubs to reduce errors increases efficiency and accelerate product timelines.
Babak Taheri: As the semiconductor industry pushes towards smaller, more powerful chips, 2 nanometer, 1.4 nanometer, and beyond, Silvaco is staying ahead of the curve. They're delivering faster, smarter, and more reliable solutions to power the future of semiconductor manufacturing.
Speaker Change: As the semiconductor industry pushes towards smaller more powerful chips, two nanometer 140 nanometer and beyond sales.
Speaker Change: <unk> is staying ahead of the curve delivering faster smarter and more reliable solutions to power the future of semi conductor manufacturer.
Babak Taheri: Please turn to the next slide. Fourth level uses of artificial intelligence in EDA. As I mentioned earlier, Silvaco leverages AI industry trends through our digital twin modeling capabilities, which allows customers to create models which reduce costs and improve time to market.
Speaker Change: Please turn to the next slide.
Speaker Change: Four levels uses of artificial intelligence in EBITDA as I mentioned earlier sales backhaul leverages.
Speaker Change: AI industry trends through our digital twin modeling capabilities, which allows customers to create models, which reduced costs and improved time to market.
Babak Taheri: The EDA industry has historically utilized AI to assist chip designers at three levels. Optimizing Historical Tool Performance for Chip Designers aiding in design steps, and lastly, generating chip designs from specifications.
Speaker Change: The EDA industry has historically utilized AI to assist chip designers at three levels.
Speaker Change: Optimizing historical tool performance for chip designers.
Speaker Change: Aiding in design steps and lastly, generating chip designs from specification.
Babak Taheri: Silvaco has introduced a full level of AI which is not in the design space, but rather in the manufacturing space. This is where Silvaco is expanding its TAM by enabling operators in fabs to save time and reduce wafer production costs. Here is Silvaco's AI-Driven Fab Technology Co-Optimization, also known as FTCL. An example of Silvaco's AI-driven FTCL, this slide provides a more detailed layout of how digital twin models are generated at the wafer level. We leverage AI and machine learning to process the large volumes of data provided by the customers, transforming them into high-accurate wafer models.
Speaker Change: Tobacco has introduced a four level of AI, which is not in the design space, but rather in the manufacturing space.
Speaker Change: This is where <unk> is expanding its tam by enabling operators in fabs to save time and reduce wafer production costs.
Speaker Change: Next slide please.
Gary: Gary <unk> AI, driven top technology co optimization also known as the FTC.
Gary: An example of Tobaccos AI group driven FTC L. This slide provides a more detailed layout of how digital twin models are generated at the wafer level <unk>.
Gary: Leverage AI and machine learning to process large volumes of data provided by the customers transforming them into high accurate breakthrough.
Babak Taheri: By rapidly building and refining these models. AI and machine learning significantly reduce development time from months to just weeks or even days. With AI-enhanced FTCO, customers can lower costs, improve margins, and accelerate time to market.
Gary: Wafer models.
Gary: By rapidly building and refining these models.
Gary: AI and machine learning significantly reduce development time from months to just weeks or even days.
Gary: With AI enhanced <unk> customers can lower costs improve margins and accelerate time to market.
Babak Taheri: Lastly, I'd like to review our growth strategies which are fundamental to supporting our customers and driving future market share expansion. please turn into the next slide. Here is Silvaco's growth strategy summary.
Gary: Lastly, I'd like to review our growth strategies, which are fundamental to supporting our customers and driving future market share expansion. Please turn into the next slide.
Gary: Here is <unk> growth strategy summary.
Babak Taheri: In summary, we believe our strategic focus on driving innovation through AI-enabled semiconductor design, particularly for new announced advanced CMOS geometries and power semiconductors, including digital twin modeling, positions us well for long-term market expansion while addressing customer needs. We further address customer needs through Agile R&D, as well as both organic and inorganic growth strategies. Finally, we continue to leverage our deep relationships with R&D centers and academia to stay at the forefront of technological advances.
Gary: In summary, we believe our strategic focus on driving innovation through AI enabled semiconductor design, particularly for new announced as balanced Cmos geometries and power semiconductors.
Gary: Including these utilitarian modeling positions us well for long term market expansion, while addressing customer needs.
Gary: Further address customer needs through agile R&D as well as both organic and inorganic growth strategies.
Gary: Finally, we continue to leverage our deep relationships, where R&D centers and academia to stay at the forefront of technological advancement.
Ryan Benton: With that, I'll turn it over to Ryan to review the quarter and discuss our guide. Thanks, Babak, and thank you all for joining us today. I will review our financial results for the fourth quarter and full year 2024 and provide guidance for the first quarter and full year 2025. As a reminder, we announced preliminary unaudited results for the quarter and full year on January 14. Please note that I will be discussing non-GAAP results going forward.
Gary: With that I'll turn it over to Ryan to review the quarter and discuss our guidance.
Ryan Benton: Thanks, Bob.
Ryan Benton: And thank you all for joining us today.
Ryan Benton: I will review our financial results for the fourth quarter and full year 2024 to provide guidance for the first quarter and full year 2025.
As a reminder, we announced preliminary unaudited results for the quarter and full year on January 14th.
Ryan Benton: Please note that I'll be discussing non-GAAP results going forward.
Ryan Benton: As a reminder, our GAAP financial results, along with the reconciliation between GAAP and non-GAAP results can be found in our earnings press release in the appendix of the presentation and within the supplemental financials on our website. Gross booking for our software and semiconductor IP products in the fourth quarter were $20.3 million, up 30% year over year, setting a new quarterly record. Revenue was $17.9 million, up 43% year over year, also a quarterly record, driven by continued adoption of our FTCO platform and strong EDA sales. I will discuss the drivers behind our performance in more detail shortly.
Ryan Benton: As a reminder, our GAAP financial results along with a reconciliation between GAAP and non-GAAP results can be found in our earnings press release in the appendix of the presentation and within the supplemental financials on our website.
Ryan Benton: Gross bookings for our software and semiconductor IP products in the fourth quarter were $20 3 million up 30% year over year, setting a new quarterly record.
Ryan Benton: Revenue was $17 9 million.
Ryan Benton: Up 43% year over year.
Ryan Benton: Also a quarterly record driven by continued adoption of our <unk> platform and strong EDA itself.
Ryan Benton: I will discuss the drivers behind our performance in more detail shortly.
Ryan Benton: Our non-GAAP operating expenses were $12.8 million, up from $11.1 million last year, primarily due to increased G&A costs related to being a public company, as well as continued investment in R&D and sales. Breaking down our cost structure, R&D was 23 percent of revenue, sales and marketing was 20 percent, and G&A was 29 percent. While G&A expenses have increased with our transition to becoming a public company, we expect these costs to scale more efficiently over time. Non-GAAP operating income was $3.1 million, up from a loss of $1.3 million in Q4 2023. are non-GAAP net income for the quarter with $4.3 million compared to a non-GAAP net loss of $1.6 million in the same period last year.
Ryan Benton: For non-GAAP operating expenses were $12 8 million up from $11 $1 million last year, primarily due to increased G&A costs related to being a public company.
Ryan Benton: As well as continued investment in R&D and sales.
Ryan Benton: Breaking down our cost structure R&D was 23% of revenue sales and marketing was 20% and G&A was 29%.
Ryan Benton: While G&A expenses have increased with our transition to becoming a public company. We expect these costs to scale more efficiently over time.
Ryan Benton: non-GAAP operating income was $3 1 billion.
Ryan Benton: From a loss of $1 3 million in Q4 2023.
Ryan Benton: Our non-GAAP net income for the quarter with $4 3 million.
Compared to a non-GAAP net loss of $1 6 million in the same period last year.
Ryan Benton: diluted non-GAAP net income per share came in at $0.15. an improvement of $0.23 from a non-GAAP net loss of $0.08 in Q4 2023. These bottom line results reflect the impact that increased revenue scale can bring.
Ryan Benton: Diluted non-GAAP net income per share came in at 15.
Ryan Benton: An improvement of 23.
Ryan Benton: From a non-GAAP net loss of eight <unk> in Q4 of 2023.
Ryan Benton: These bottom line results reflect the impact of increased revenue scale can bring.
Ryan Benton: Two quick comments on ending balances. We ended the December quarter with $87.5 million in cash, cash equivalents, and marketable securities. Our ending diluted share count for the fourth quarter was 28.8 million shares.
Ryan Benton: Two quick comments on ending balances we ended.
Ryan Benton: The December quarter was $87 5 million in cash cash equivalents and marketable securities.
Ryan Benton: Our ending diluted share count for the fourth quarter was $28 8 million shares.
Ryan Benton: I would now like to discuss our fourth quarter bookings performance by product. we achieve total gross bookings of $20.3 million and increase 30% year over year. We saw strong bookings growth across multiple product categories. TCAD bookings were $14.3 million, up 68%, driven by a large fall in order for our FTCO product. EDA bookings were $5.5 million, up 31% year-over-year. SIP bookings were $0.6 million, down 79 percent, reflecting lingering impacts from the Q2 delay and renewing a key strategic resale agreement, as well as general order slowdowns in APAC. Despite this, we remain confident in the long-term opportunity for SIP.
Ryan Benton: I would now like to discuss our fourth quarter bookings performance by product.
Ryan Benton: We achieved total gross bookings of $20 3 million, an increase of 30% year over year.
Ryan Benton: We saw strong bookings growth across multiple product categories.
Ryan Benton: TK bookings were $14 3 million up 68% driven by a large follow on order for our FTC product.
Ryan Benton: EDA bookings were $5 5 million up 31% year over year.
Ryan Benton: <unk> bookings were zero point $6 million down, 79%, reflecting lingering impacts from the Q2 delay in renewing our key strategic resale agreement as.
Ryan Benton: As well as general order slowdowns in APAC. Despite this we remain confident in the long term opportunity for S&P.
Ryan Benton: Our non-gap gross margin for the quarter came in just shy of our long-term target at 89%, up from 79% in Q4 2023.
Ryan Benton: Our non-GAAP gross margin for the quarter came in just shy of our long term target at 89% up from 79% in Q4 2023.
Ryan Benton: The improvement was simply driven by the revenue growth and the largely fixed nature of our cost of revenues, which came in at $1.99 in the quarter.
Ryan Benton: The improvement was simply driven by the revenue growth in the largely fixed nature of our cost of revenues, which came in at $1 9 million in the quarter.
Ryan Benton: I'll now review our financial results for the full year. For 2024, we achieved annual record for gross bookings of $65.8 million, up 13% year over year. an annual record for revenue of $59.7 million, up 10% year over year. Our non-GAAP operating expenses for the full year were $45.9 million compared to $40.5 million in 2023. R&D was 25% of sales, sales and marketing was 23% of sales, and G&A was 29% of sales. This resulted in an annual record for non-GAAP operating income of $5.5 million, up from $4.4 million in 2023. Our non-GAAP net income for the full year was $6.7 million compared to $3.4 million in 2023.
Ryan Benton: I will now review our financial results for the full year.
Ryan Benton: For 2024, we achieved annual record for gross bookings of $65 $8 million up 13% year over year.
Ryan Benton: An annual record for revenue of $59 $7 million up 10% year over year.
Ryan Benton: Our non-GAAP operating expenses for the full year were $45 9 million compared to $45 million in 2023.
Ryan Benton: R&D was 25% of sales sales and marketing was 23% of sales and G&A G&A was 29% of sales.
Ryan Benton: This resulted in an annual record for non-GAAP operating income of $5 5 million up from $4 4 million in 2023.
Ryan Benton: Our non-GAAP net income for the full year was $6 7 million compared to three four in 2023.
Ryan Benton: And lastly, again, diluted non-GAAP income per share was 25 cents, up 8 cents from 2023.
Ryan Benton: And lastly, again diluted non-GAAP income per share.
Ryan Benton: 25.
Ryan Benton: Up 8% from 2023.
Ryan Benton: Terminator Bookings Performance by Product for the full year 2024. We achieved total gross bookings of $65.8 million, an increase of 13% year over year. Similarly to the quarter, our strong bookings performance was driven by TCAD and our FTCO product specifically. TCAD bookings were $46.9 million, up 32 percent. PDA bookings were $15.4 million, and SFP bookings were $3.4 million.
Ryan Benton: Turning to our bookings performance by product for the full year 2024.
Ryan Benton: We achieved total gross bookings of $65 8 million, an increase of 13% year over year.
Ryan Benton: Similarly to the quarter, our strong bookings performance was driven by <unk> and our <unk> product specifically.
Ryan Benton: TK bookings were $46 9 million up 32% EDA bookings were $15 4 million in SMB bookings were $3 4 million.
Ryan Benton: Again, for SFP, we took a step back in 2024, but we're expecting good things in 2025 and beyond.
Ryan Benton: Again for <unk>, we took a step back in 2024, but we're expecting good things in 2025 and beyond.
Ryan Benton: I would now like to highlight our bookings performance throughout the year. We finished strong in Q4. We successfully added 13 new customers in the fourth quarter alone, which brings our year-to-date new customer total wins to 46.
Ryan Benton: I would now like to highlight our bookings performance throughout the year.
Ryan Benton: We finished strong in Q4, we successfully added 13, new customers in the fourth quarter alone, which brings our year to date, new customer total wins to <unk> 46.
Ryan Benton: Turning to our revenue splits between geographic regions. For the fourth quarter of 2024, Asia-Pacific revenues were $9.2 million, or 52% of total sales. The Americas was just over $7 million, or 40% of sales, and EMEA was $1.5 million, or 8% of sales. For the full year, Asia Pacific revenues were $31.6 million or 53% of sales. The decline in SIP cells impacted our full-year performance, but strong Q4 recovery in TCAD and EDA helped stabilize our results for this region. The Americas was $22.5 million, or 38% of sales. This region showed exceptional growth compared to 2023, driven by the adoption of the new FTCO product at a key memory customer.
Ryan Benton: Turning to our revenue splits between geographic regions for.
Ryan Benton: For the fourth quarter of 2020 for Asia Pacific revenues were $9 2 million or 52% of total sales.
Ryan Benton: The Americas was just over $7 million.
Over 40% of sales in EMEA was $1 5 million or 8% of cells.
Ryan Benton: For the full year Asia Pacific revenues were $31 6 million or 53% of sales.
Ryan Benton: The decline in <unk> sales impacted our full year performance, but strong Q4 recovery and T can help stabilize our results for this region.
Ryan Benton: The Americas was $22 5 million or 38% of sales in this region showed exceptional growth compared to 2023, driven by the adoption of the new <unk> product and a key memory customer.
Ryan Benton: Europe with $5.6 million or 9% sales, fueled by EDA sales with additional momentum from further TCAT adoption in the fourth quarter. On the next slide here, we show the trend of remaining performance obligations, or RPO, which at year-end stood at $34.3 million, with 46 percent expected to be recognized as revenue within the next 12 months. This reflects strong customer commitments that support top line growth.
Ryan Benton: Europe with $5 6 million or 9% of sales fueled by <unk> sales with additional momentum from further <unk> adoption in the fourth quarter.
Ryan Benton: On the next slide here, we show the trend of remaining performance obligations or RPM, which at year end stood at $34 $3 million with 46% expected to be recognized as revenue within the next 12 months.
Ryan Benton: This reflects strong customer commitments that support topline growth.
Ryan Benton: On this slide, I will now review our first quarter 2025 guidance. I will note that the first quarter and the full year guidance on the following slide reflects the acquisition of the OPC product line, which will reflect less than one month's operating activity for the first quarter. I will also add that there are several complexities that may arise during the transition that could impact revenue recognition for the first year in particular, and as such, we are being cautious in our approach to forecasting current year sales from the acquisition. Considering all that, for Q1 2025, we expect gross bookings between $16 and $19 million, revenue between $14.5 million and $17 million, non-GAAP gross margin between 84% and 87%, non-GAAP operating income between a loss of $1 million and $1 million income.
Ryan Benton: On this slide I will now review, our first quarter 2025 guidance.
Ryan Benton: I will note that the first quarter and the full year guidance on the following slide reflects the acquisition of the OTC product line, which will reflect less than one month's operating activity for the first quarter.
Ryan Benton: I will also add that there are several complexities that may arise during the transition that could impact revenue recognition for the first year in particular and as such we are being cautious in our approach to forecasting current yourself from the acquisition.
Ryan Benton: Considering all of that for.
Ryan Benton: For Q1, 2025, we expect gross bookings between $16 million to $19 million.
Ryan Benton: Revenue between $14 $5 million and $17 million.
Ryan Benton: non-GAAP gross margin between $84, 87%.
Ryan Benton: non-GAAP operating income between a loss of $1 million and $1 million income.
Ryan Benton: and non-GAAP income per share between $0.03 loss and $0.03 income.
Ryan Benton: And non-GAAP income per share between <unk> loss and <unk> income.
Ryan Benton: Turning to the next slide, we'll review our guidance for the full year 2025. For 2025, we expect gross bookings to grow to come in between $72 and $79 million. We expect revenue in the range of $66 to $72 million, non-GAAP gross margin to come in between 84% and 89%, non-GAAP operating income between $2 and $7 million, and non-GAAP income per share between $0.07 and $0.19. Again, this assumes a modest top line contribution from the recent OPC acquisition.
Ryan Benton: Turning to the next slide.
Ryan Benton: We will review our guidance for the full year 2025.
Ryan Benton: For 2025, we expect gross bookings to grow to come in between $70 million to $79 million.
Ryan Benton: We expect revenue in the range of 66% to $72 million non.
Ryan Benton: non-GAAP gross margin to come in between 84% to 89% non.
Ryan Benton: non-GAAP operating income between $2 7 million and non-GAAP income per share between 7% and 19.
Ryan Benton: Again this assumes a modest top line contribution from the recent <unk> acquisition as.
Ryan Benton: As the ink is perhaps not even quite dry on the acquisition and there are some commercial sensitivities, there are limitations to what we're able to discuss about our plans and expectations for the business today. we should be able to provide a more detailed view on our next quarterly call. What I can definitely say today, which echoes Babak's comments, is we're excited about this acquisition. It's a wonderfully brilliant team that we're inheriting. It's a great technological and product fit, and we're thrilled to have it done.
Ryan Benton: As the ink is perhaps not even quite dry on the acquisition and there's some commercial sensitivities. There are limitations to what we are able to discuss about our plans and expectations for the business today.
Ryan Benton: We should be able to provide a more detailed view on our next quarterly call.
What I can definitely say today, which echoes <unk> comments, because we're excited about this acquisition. It's a wonderfully brilliant team that we're inheriting it's a great technological and product fit and we're thrilled to have it done.
Ryan Benton: Now let's move to review our long-term financial target. We continue to target 15% to 25% revenue growth. For a long-term target model, we expect 90% plus non-GAAP gross margin and 25% plus non-GAAP operating margin.
Ryan Benton: Now, let's move to review of our long term financial targets.
Ryan Benton: We continue to target, 15% to 25% revenue growth.
Ryan Benton: For our long term target model.
Ryan Benton: We expect 90% plus non-GAAP gross margin and 25% plus non-GAAP operating margin.
Ryan Benton: We believe we can achieve these targets through global sales expansion, deeper customer engagements, broader adoption of our FTCO platform, and the continued execution of strategic acquisitions to leverage our core technology strengths and operational efficiency.
Ryan Benton: We believe we can achieve these targets through global sales expansion.
Ryan Benton: Deeper customer engagements broader adoption of our FTC old platform and the continued execution of strategic acquisitions to leverage our core technology strengths and operational efficiencies.
Operator: With that, Babak and I would be happy to take your questions.
Ryan Benton: And with that Bob back and I will be happy to take your questions operator.
Operator: Operator? Certainly.
Charles Xie: And our first question for today comes from the line of Charles Xie from Needham & Company. Your question, please. Hi. I just want to ask a clarification on the contribution of the acquisition of the Cadence OPC product line. I get that you're saying it's probably going to be somewhere mid-single digit after 2026. revenue kind of implies somewhere about let's say three, four million dollars per year revenue run rate. But you were saying because of ASC 606 that you're not expecting, you're expecting a modest contribution to 25. But can you quantify that? What do you mean by modest?
Speaker Change: Certainly and our first question for today comes from the line of Charles <unk> from Needham <unk> Company. Your question. Please.
Speaker Change: Hi, just wanted to ask a clarification.
Speaker Change: The contribution of the acquisition.
Speaker Change: Cadence OTC product line.
Speaker Change: I guess, you're saying, it's probably going to be somewhere mid single digit after 2026 Rev.
Speaker Change: Revenue kind of implies some worry about let's say three $4 million per year revenue run rate, but you are saying because of ASC 606.
Speaker Change: Not expecting.
Speaker Change: We're expecting modest.
Speaker Change: A modest contribution to quantify it but can you quantify that what do you mean by modest that do you think thats still like somewhere in the $34 million range.
Ryan Benton: Do you think it's still like somewhere in the three, four million range? What does that mean? Yeah, it's okay, Babak. I'll take first crack at it. So this is Ryan. Thanks for the question, Charles. Again, we're super excited about this acquisition.
Speaker Change: What that means.
Speaker Change: Yeah.
Speaker Change: Yes, Okay I'll take first crack at it. This is Ryan. Thanks. Thanks for the question Charles Charles again, we're Super excited about this acquisition.
Ryan Benton: Again, as I said in prior remarks, I really will not be providing a separate number in terms of revenue forecast for the acquisition for the current year. There are certain complexities in terms of not only in terms of how the transaction works, in terms of how the commercial agreements are transitioned over to Silvaco, but there are certain dominoes to fall in terms of how the revenue recognition gets applied and what ends up happening. So we've, again, I use the word cautious, we try to be extremely cautious in terms of how we forecasted that number. So, very modest.
Speaker Change: Again as I said in prepared remarks I really.
Speaker Change: We will not be providing.
Speaker Change: A separate number in terms of revenue forecast for the acquisition for the current year.
Speaker Change: There are certain complexities in terms of not only the.
Speaker Change: In terms of how the transaction works in terms of how the commercial agreements are transitioned over to <unk>, but there are certain dom.
Speaker Change: Domino's Paul in terms of how the revenue recognition gets applied and what ends up happening. So we've.
Speaker Change: Again, I used the word cautious we tried to be extreme.
Speaker Change: Extremely cautious in terms of how we forecasted that number.
Babak Taheri: Babak, do you want to add to that? I think Ryan, you said it well.
Speaker Change: So very modest buyback do you want to add to that.
Speaker Change: No I think Brian you said it well.
Babak Taheri: And we will have a lot more details in our next call. We will have a lot more data that we can rely on. And so I would just repeat what I would have repeated what Ryan said, but it's modest at this point.
Speaker Change: And we will have a lot more details in our next call we will have a lot more.
Speaker Change: Data that the Academy.
Speaker Change: Can rely on and so I would.
Speaker Change: I would just repeat what I would have repeated what brian's had but it's modest at this time Sir.
Charles Xie: Yeah, do you have a number like what is the last year's revenue run rate or the trailing 12 months of that business, the revenue run rate of that business before you acquire it? Yeah. Yeah, Charles, we do have that number. We're under NDA, which prohibits us from really that number specifically. I think the best data point to look towards is Babak's comment in terms of what our expectations are for 2026 in terms of how we expect the business to settle out. In terms of 25, again, there's a lot of upside depending on how things fall and how things get contracted.
Speaker Change: Yes.
Speaker Change: But do you have a number like what is the last year's revenue run rate or.
Speaker Change: Over the trailing 12 months of that business that.
Speaker Change: The revenue run rate of that business before you acquired it.
Speaker Change: Before you acquire yet.
Speaker Change: Yes Charles.
Speaker Change: We do have that number we're under.
Speaker Change: We are under NDA, which prohibits us from really what's baked into that number specifically I think the best data point to look towards as is.
Speaker Change: <unk> comment in terms of what our expectations are for 2026 in terms of how that how we expect the business to settle out.
Speaker Change: In terms of in terms of 25.
Speaker Change: There's a lot of upside depending on how.
Speaker Change: How things fall and how things get contracted but we just thought it prudent to be extremely cautious.
Ryan Benton: But we just thought it prudent to be extremely cautious with what we kind of baked into the number.
Speaker Change: With what we kind of baked into the number the acquisition literally is it.
Charles Xie: The acquisition literally is only been closed for plus or minus 24 hours. Okay. Thanks.
Speaker Change: It's only been closed for plus or minus 24 hours.
Ryan Benton: The other question, obviously the guidance for Fiscal 25, you're guiding to a good amount of revenue growth, gross margin expansion, but operating profits, you're expecting a down year, kind of implies a pretty meaningful OPEX increase. Is that all because of the acquisition or you're also a little bit ramping up the existing part of the Silvaco business, the OPEX for that part of the business? Yeah, so there's really both parts. So certainly we have been, you know, hiring has always been the plan to have some operating expense growth that kind of coincides with the revenue growth that we expect.
Speaker Change: Okay.
Speaker Change: Thanks.
Speaker Change: Other question, obviously the guidance for Cisco quantify.
Speaker Change: You are guiding to good amount of revenue growth gross margin expansion, but.
Speaker Change: Operating profits.
Speaker Change: Back to being a down year kind of implies a pretty meaningful opex increase is that all because of the acquisition or youre also ramping up.
Speaker Change: Ed.
Speaker Change: The existing part of the <unk> barcode business that the opex for that part of the business.
Speaker Change: Yes.
Speaker Change: Theres really both part so so certainly we have been.
Speaker Change: Hiring is always been the plan to have some operating expense growth that kind of coincides with the revenue growth that we expect and again, we comment specifically we expect.
Ryan Benton: And again, we've commented specifically, we expect, you know, R&D as well as sales and marketing to kind of grow with revenue, just a tad bit of leverage, perhaps out of sales and marketing. In G&A, we expect to get leverage. But you're, the second part of your question, you're absolutely right. The acquisition is now closed. And so the cost that we, you know, that we have projected, the operating expenses, absolutely includes the cost of the, you know, the team that we've inherited and that we've taken on, as well as, again, another area when you're, as you know, when you do acquisition, there's a certain amount of cost that you incur in the first year of an acquisition.
Speaker Change: RMG R&D as well as some of the marketing to kind of.
Speaker Change: Grow with revenue just a tad better leverage perhaps out of sales and marketing G&A, we expect to get leverage but your the second part of your question Youre absolutely right. The acquisition is now closed and so the cost that we.
Speaker Change: That we have projected the operating expenses absolutely includes the cost of.
Speaker Change: The team that we've inherited and that we've taken on as well as again another area. When you are as you know when you do acquisition, there's a certain amount of costs that you incur in the first year of an acquisition that don't necessarily repeat into the second and third year and so whenever we've said we've taken a cautious approach.
Ryan Benton: That don't necessarily repeat into the second and third year. And so whenever we've said we've taken a cautious approach, we've done that in both top line as well as expenses. And so for expenses, that means, of course, you bake in the expenses that you've inherited and you expect.
Speaker Change: We've done that in both topline as well as expenses and so for expenses that means of course, you bake in the expenses that you that you've inherited than you expect.
Charles Xie: All right, thank you. That's all from me. Thanks, Charles.
Speaker Change: Okay.
Speaker Change: Alright. Thank you that's all for me Thanks Charles.
Blair Abernathy: Thank you. And our next question comes from the line of Blair Abernathy from Rosenblatt Securities. Your question, please. Hi, guys. Thanks for taking the question. Just a couple on the actual.
Speaker Change: Thank you and our next question comes from the line of Blair Abernathy from Rosenblatt Securities. Your question. Please.
Blair Abernathy: Hi, guys. Thanks for taking the question.
Speaker Change: Just a couple on the acquisition and if I could.
Babak Taheri: Would you be willing to give us sort of a ballpark number of how many customers? I would say to start with, I would add that some of the customers that we also accord as part of the deal are our existing customer. So we consider OPC part to those customers to be an expansion of a landed customer we already have. And then we also have new customers that We are, if you will, we have not had those logos before. And the top customers, I would say, are single digit numbers, less than 10. So, and that's a number we already have.
Speaker Change: Would you be willing to give us sort of a ballpark number of how many customers are.
Speaker Change: Coming with this business unit.
Speaker Change: Sure.
Speaker Change: I'd say.
Speaker Change: To start with.
Speaker Change: I would add that some of their customers that the.
Speaker Change: We also acquired as part of the deal are existing customer so because say their OTC part to those customers to be an expansion of our land that customer we already have.
Speaker Change: And then we also have new customers that.
Speaker Change: We are if you will we have not had those logos before.
Speaker Change: And the top the top customers I would say.
Speaker Change: Single digit numbers less than 10, so that that's a number we already have and be as you know.
Babak Taheri: And as you know, we've always been able to land and expand in these customers. So that would be the first thing we will be doing. But those are the numbers that I would be. And out of that top 10, about three or four of them are existing.
Speaker Change: We've always been able to land and expand in these customers said that would be the first thing they're going to be doing but those are the numbers that you would that at all.
Speaker Change: Of that.
Speaker Change: Sub 10 about three or four of them are.
Speaker Change: Our existing site.
Speaker Change: Okay. Okay. Thank you.
Babak Taheri: And then from a product perspective, how does, is there a technical integration path that you're going to take this on. some of your other products like the FTCO, or is this really a standalone? products that you'll sell with. That's a great question. So, as you know, we currently it's being sold as a standalone and with minor integration of other products, which we will continue to do so. But, as we said on our call, our plan is to, and by the way, this acquisition falls under our EDA product line. And just to be exact, since it would be the last step after GDS before manufacturing that OPC takes place.
Speaker Change: And then from a product perspective.
Speaker Change: How does.
Speaker Change: Is there a <unk>.
Speaker Change: Technical integration path that youre going to take this on.
Speaker Change: Vis vis some of your other products like the FTC or is this really a standalone.
Speaker Change: Products that youll sell with your cost of your existing products.
That's a great question, so as you know.
Speaker Change: Currently it's being sold as a standalone.
Speaker Change: Minor integration of other products, which we will continue to do so but as we said on our call.
Speaker Change: Our plan is to.
Speaker Change: And by the way it is.
Speaker Change: <unk>.
Speaker Change: Acquisition falls under our EBITDA and product line.
Speaker Change: Just to be exact since it will be the last step.
Speaker Change: Asset GDS before manufacturing that RPC RPC takes place.
Babak Taheri: However, as you know, since it's the first step in manufacturing is making masks and making patterns that go on a way for more reliable and more accurate and better yielding patterns. It also falls into manufacturing part, which FTCO is part of that. So, although the product line is within EDA, the algorithms, the technology and AI based modeling aspect of it will also be integrated as part of the FTCO. So, this will complete actually what's needed to have a full FTCO platform from mask making all the way to final wafers. So, it's a big advance for us and we will continue to expand this capability into FTCO.
Speaker Change: However, as you know since its the first step in manufacturing is making masks and making gab patterns that have gone away for a more reliable and more accurate and better yielding patterns.
Speaker Change: It also falls into manufacturing park reached <unk>.
Speaker Change: Ft is part of that so although the product line is within EMEA and algorithms that technology and AI based modeling aspect of it will also be integrated as part of the FTC L.
Speaker Change: So this will be this will complete actually what's needed to have a full <unk> platform from mask, making all the way to final wafer. So it's a big advance for us and we will continue to expand expand this capability to a tcf.
Babak Taheri: what's.
Yes.
Speaker Change: What's.
Babak Taheri: Timeline, Babak. and that would be. are tightly integrated. Yeah, absolutely. So, as you know, we already have customers that utilize FTCO, we are working with customers that potentially could use FTCO. And I would say, I would say typically, it takes us between six months to nine months to integrate these products into our current platform. And that would be the right time, I would say six to nine months would be the correct timeframe to do that. But don't forget that.
Speaker Change: Any sense on the timeline as to when that would be sort of.
Speaker Change: More tightly integrated with the FTC.
Speaker Change: Yes, absolutely.
Speaker Change: As you know we already have customers that utilize our CTO, we are working with customers that potentially could use ft Seo.
Speaker Change: And I would say and I would say typically.
Speaker Change: It takes us.
Speaker Change: Six months to.
Speaker Change: To nine months to integrate these products into our current platform and that would be the right type of I would say six to nine months would be the correct timeframe to do that.
Speaker Change: But don't forget that.
Babak Taheri: We do advance R&D with our customers, and matter of fact, we will start advance R&D combining this to the FTCO with some potential customers that we will start discussions in Q2. So getting advanced R&D part of it will be including some customers that we work with, and those will start much sooner than that. It's exactly as we mentioned. We already have two customers that are evaluating this technology and as we said Q2 time frame would be the time frame that we are pushing to get adoption. They've already adapted at the R&D level. The question is when can we get them adapted for final manufacturing steps.
Speaker Change: We do advanced R&D with our customers.
Speaker Change: Matter of fact.
Speaker Change: We will start advance R&D combining is to the FTC, albeit with some potential customers that we will start discretions.
Speaker Change: In Q2.
Speaker Change: So giving advance our R&D part of it will be incurring some customers as we work with.
Speaker Change: And those are those are those will start to abate sooner than that.
Speaker Change: Okay, Great and then just shifting over to the FTC as it is it's been lumpkin marketed I guess this past year whats how is the pipeline shaping up for that.
Speaker Change: It is.
Speaker Change: As we mentioned we already have two customers that are evaluating this technology and as we said Q Q2, Q2 timeframe would be the timeframe that we are.
Speaker Change: We are pushing to get adoption.
Speaker Change: Adopted.
Speaker Change: The level. The question is when can we get them adapt this four for final manufacturing steps and as I had mentioned before in our previous calls we have a customer net bouncing loss in customer empower that youre working with and through R&D and.
Babak Taheri: As I had mentioned before in our previous call, we have a customer in advanced CMOS and a customer in power that we are working with through R&D and hoping to close those for manufacturing acceptance this year. Ideally Q2 but it may be Q3.
Speaker Change: And hoping to close those.
Speaker Change: For manufacturing acceptance.
Speaker Change: This year, given Q2, but it may be Q3.
Speaker Change: Okay, Okay great.
Babak Taheri: and just shift that over to you.
Speaker Change: And then just shifting over.
To your end markets.
Babak Taheri: Clearly a lot of traction in 2024 in the power market, 13 new customers.
Speaker Change: Clearly a lot of traction.
Speaker Change: In 2024 in the power market 13, new customers can you just give us some color on sort of.
Babak Taheri: Can you just give us some color on a sort of, you know, what, what No, absolutely. As we've said before, we have been focusing on power, as well as memory and display markets historically, and power market. As we said, we added four top-level logos last year to the power market, and the power market includes, I would say, new technologies like silicon carbide, GaN, and some of the old historical technologies like transistors, CMOS-based technologies, DMOS, and what have you. And as it turns out, as you noticed, probably, and I've seen the news, silicon carbide has its own challenges for scaling.
Speaker Change: What exactly are.
Those customers have been buying and it's been fairly similar across the board or is it just.
Just give me a sense of what.
Speaker Change: Got that.
Speaker Change: End markets looking like for you.
Speaker Change: No absolutely.
Speaker Change: I've said before we have been focusing on power.
Speaker Change: As well as memory and display markets historically empower Mark Hurd as we said we added four top level logos last year to the power market.
Speaker Change: And the power market encouraged I would say in new technologies like Silicon carbide Gan and some of the old historical technologies like <unk>.
Speaker Change: Transistor Cmos based technology demos and what have you.
Speaker Change: And as it turns out.
Speaker Change: As you noticed probably have seen in the silicon carbide has its own challenges for scaling.
Babak Taheri: And as customers are realizing that... These challenges exist, and they need more understanding of the physics aspect of these devices and how they scale. We get more traction. And also, as you know, GAN is also picking up so I would say a combination of GAN and silicon carbide has been has been companies that adopt our TCAD technology and starting to for EDA as well and so I would I would just summarize it in mainly TCAD some EDA coming up in silicon carbide GAN and also older technology power devices. and it's across the world. at U.S.
Speaker Change: And as customers are realizing that.
Speaker Change: These challenges exist and they need.
Speaker Change: More understanding of physics aspect.
Speaker Change: Devices and how they scale, we get more traction.
Speaker Change: And also as you know.
Speaker Change: Gan is also picking up so I would say a combination of Gan on Silicon carbide has been has been companies that adopt our <unk> technology and starting to for EBITDA as well.
Speaker Change: So I would I would just summarize it in mainly tea CAD, some EBITDA coming up and Silicon carbide Gan and also older technology power devices.
Speaker Change: And it's across the across the world.
Babak Taheri: and Europe and Asia.
Speaker Change: U S and Europe and Asia.
Babak Taheri: Great, thanks. Thank you.
Speaker Change: Okay, great. Thank you.
Operator: As a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone.
Speaker Change: Goodbye.
Speaker Change: As a reminder, ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone. Our next question comes from the line of Robert Mertens from TB Cowen Your question. Please.
Robert Mertens: Our next question comes from the line of Robert Mertens from TD Cowen. Your question, please. Hi, this is Robert Mertens on for Chris Sankar. Thanks for taking my questions. Congrats on the quarter and the strong yearly outlook. It looks like it's maybe 400 basis points or so above what your large cap peers are sort of guiding. I know Charles sort of touched upon this already in a prior question, but with your operating profit forecast, it seems to on the low end, OPEX can grow sort of in line with sales this year and upwards of maybe 25% year over year.
Robert Mertens: Hi, This is Robert Mertens on for Chris Shankar, Thanks for taking my questions.
Speaker Change: That's on the quarter and the strong yearly outlook. It looks like it's maybe 400 basis points or so above what your large cap peers are sort of guiding.
Speaker Change: I know Charles sort of touched upon this already in a prior question, but with your operating profit forecast it seems to imply on the low end opex can grow sort of in line with sales this year and upwards of maybe 25% year over year could you just walk us through maybe where the major R&D investments. This year are focused.
Ryan Benton: Could you just walk us through maybe where the major R&D investments this year are focused and what sort of flexibility you have in the spending there? Yeah, Babak, if it's okay, I'll just make one quick comment. Babak will, of course, speak to the types of investment that we'll be making. Specifically, though, again, just reiterating the growth in the R&D line that I think, you know, you wouldn't necessarily have expected coming into the last 24 hours is as a result of the costs that we're absorbing as part of the acquisition, as well as some, what I believe are some costs that will be in the first year and won't necessarily be in the next year.
Speaker Change: What sort of.
Flexibility you have in the spending there.
Speaker Change: Yeah, Bob I'll, just make one quick comment.
Speaker Change: Buttock and will of course speak to the types of investment that that will be making specifically, though again just reiterating the.
Speaker Change: Growth in the R&D line, but I think you wouldn't necessarily have expected coming into the last 24 hours is as a result of the costs that we're that we're absorbing as part of the acquisition as well as some what I believe are some costs that will be in the first year and won't necessarily be recurring beyond year, one but in terms of the investments public.
Ryan Benton: It'll be recurring beyond year one.
Babak Taheri: But in terms of the investments, Babak? Yeah, absolutely. So, I showed in one of our slides, I believe the slide four or five that what our vertical end market trends and performance was last year. And Blair earlier alluded to power, which was 43% up for us. I should mention that memory was up also 89%. And then also we mentioned that photonics market, we actually had five new customers. So as you will see, and we have emphasised on these markets, our focus is on power, memory, maintaining display, growing in photonics and others. Where our investment falls is as we delve into more power and memory markets, especially our OPC tool, latest acquisition, gets us some stronger foothold in the memory market.
Speaker Change: Yes, absolutely so.
Speaker Change: I showed in one of our slides I believe with the slide four or five that what our vertical end market trends in performance versus last year.
Speaker Change: Blair earlier alluded to power, which was 43% up for us.
Speaker Change: And I should mention that memory was up also 89%.
Speaker Change: And then also we mentioned that photonics market, we actually had five.
Speaker Change: New customers so.
Speaker Change: As you will see and we have.
Speaker Change: Emphasized in these markets as we.
Speaker Change: Our focus is in power memory, maintaining display growing in photonics.
Speaker Change: And others.
Speaker Change: Our investment policies as we delve into more power in memory markets, especially our <unk> latest acquisition gets us strong with stronger foothold in the memory market.
Babak Taheri: The tools that we have initially are focusing and specialising in memory products. And the customers, our majority that we require are in-memory products. So that strengthens our presence in memory markets. And of course, the cost associated with acquisition of getting extremely intelligent talent, which is part of the OPEX that Marwan has already mentioned. But the other areas that we are investing to grow is power. We are making sure that we have enough agile R&D for our new customers to be able to design and manufacture their next generation of products. And as I mentioned, photonics in the past, actually past several quarters, but the proof is in the pudding.
Speaker Change: Hey.
Speaker Change: The tools that we have.
Speaker Change: Initially.
Speaker Change: Our focusing on specializing in memory products.
Speaker Change: Customers are majority that would be required or in memory products.
Greg: Greg <unk>, our presence in memory market. So.
Greg: And of course, the costs associated with acquisition of getting extremely intelligent talent, which is part of the opex that we we've already <unk> has already mentioned, but the other areas that we are investing to grow and.
Greg: Power.
Greg: Making sure that we have.
Greg: We have enough agile R&D for our new customers to be able to design and manufactured during next generation of products.
Greg: As I mentioned photonics.
Greg: The past actually past several quarters, but the processing of putting the fact that we have added five new photonics customer is a proof that we are actually.
Babak Taheri: The fact that we have added five new photonics customer is a proof that we are actually increasing our presence in that market. And photonics market, as you know, consists of anything that has to do with lasers, image sensors, displays, anything that has optics and electronics, up to electronics involved. And because we have acquired these new customers and we are doing advanced R&D for them, some of the optics comes from that as well. So, and we've always said we are actually 95 plus percent of our revenue comes from advanced R&D projects in our customers and landing in them.
Greg: Increasing our presence in that market and photonics market as you know concepts. So anything that has to do with lasers image sensors.
Greg: Displays anything that has optics and electronics optoelectronics involved and because we have the acquired these new customers and we are doing advanced R&D for them some of their some of the Opex comes from that as well so.
Greg: We've always said we are we are actually.
Greg: 95, plus percent of our revenue comes from my drives R&D projects in our customers.
Greg: And landing in them.
Babak Taheri: is the first key steps, and expanding in them requires a bit more R&D for the first few years, and then it rolls out as a standard product, which we tend to expand in the existing and land more customers. So our power devices are in that category, we are expanding less of R&D, but with photonics and memory, we are spending more R&D to get us to the next level of customers.
Greg: The first key steps in expanding in them requires a bit more R&D for the first few years and then.
Greg: Rolls out as a standard product, which we have we tend to expand into existing and new more customers. So our power.
Greg: <unk> devices are in that category, we are expanding.
Greg: Less over RMB.
Photonics in memory, we are spending more R&D to get us to the next level of customers.
Robert Mertens: Great, thank you. That's helpful. And then just one follow-up if I may.
Speaker Change: Great. Thank you that's helpful. And then just one follow up if I may in your outlook for March as well as the full year. Just how are you viewing your current exposure to.
Ryan Benton: In your outlook for March, as well as the full year, just how are you viewing your current exposure to China? Earlier, you had mentioned some customer delays that got pushed out into the December quarter and beyond. Have your views changed at all over the past couple months or is the revenue contribution from the region probably expected similar levels this year as calendar year 24? Yeah, that's a good question. So roughly 20% calendar 24, and we have set 15 to 20% for 25 from China region. So we expect it to be flat, literally, and maybe a bit down, but not significantly.
Speaker Change: To China earlier, you had mentioned some customer delays they got pushed out.
Speaker Change: And to the December quarter and beyond just.
Speaker Change: Have your views changed at all over the past couple of months.
Speaker Change: Revenue contribution from the region, probably expected similar levels. This year this calendar year 'twenty four.
Yes, that's a good question.
Speaker Change: Roughly 20%.
Tony: Calendar, Tony for MBS at 15% to 20% 425 from China region. So we expect it to be flat.
Tony: Literally and maybe a bit down but not significantly so.
Robert Mertens: Got it. All right. Well, thank you. That's all for me. Sure.
Tony: Got it alright, well. Thank you that's all for me.
Mayor Potpourri: Thank you, and our next question comes from the line of Mayor Potpourri from View Riley. Your question, please. Hi. Yeah, this is Mayor Ahn for Craig Ellis, and thanks for taking my question. I kind of wanted to ask about the gross margin that you're guiding for for a full year of 2025 and rectifying that with the kind of reiterated long-term target at about 90%. So we have, at that midpoint, gross margin not going up by a significant amount, I think about 50 bps. You know, how do you kind of leverage these two facts? Do we see maybe gross margin starting to pick up again later into the year as it's sort of a first half digestion, and then we get back on track?
Tony: Sure.
Tony: Thank you and our next question comes from the line of my appropriately from B Riley Your question. Please.
Hi, Yes. This is <unk> on for Craig Alice and Thanks for taking my question.
Tony: Wanted to ask about the gross margin that youre guiding for for full year of 125, and rectifying that with the kind of reiterated our long term target at about 90%.
Tony: So we have at that midpoint gross margin not going up by a significant amount I think about 50 bps.
Tony: How do you kind of leverage this effects do we see maybe gross margin starting to pick up again later into the year is it sort of a first first half digestion and then we'll get back on track. If you could characterize this formula would be great. Thank you.
Ryan Benton: If you could characterize this for me, that would be great. Thank you. Yeah, no, absolutely. I'll take that. I mean, look, obviously, we did 89%, really close to the 90% target model in Q4. Again, I said so many times the, you know, our cost of revenues are largely fixed cost, right? And so it really, it's really generally a factor of revenue as scales. And so you look at the The you know, kind of the undulations of revenue from from quarter to quarter. So what we have a strong quarter in revenue and that's what's going to cause the the margin to creep up.
Tony: Yes, absolutely I'll take that.
Tony: Look obviously, we did 89%.
Speaker Change: <unk> really close to the 90% target model in Q4.
Tony: I said, so many times.
Tony: Our cost of revenues are largely fixed cost right and so it really gets really generally a factor of the revenue as scales and so you look at the.
Tony: The kind of the undulations of revenue from from quarter to quarter. So when we have a stronger quarter in revenue and that's what's going to cause the margin to creep up but it really a couple of thousand a couple of hundred thousand dollars of costs can be a couple of points.
Ryan Benton: But it really a couple of thousand, a couple of hundred thousand dollars of cost can can be a couple of points in terms of gross margin. And so it's really just the it's just that level of range that it's very sensitive to that to those costs. All right, got it.
Tony: In terms of gross margin. So it's really just the it's just that level or range that it's very sensitive to that to those costs.
Babak Taheri: Okay, so then kind of switching gears, you know, can you help us understand where you're on with funnel conversion with other deals that might be going on? And so when you have disclosed the deal, like you just have and congrats on that, can you have multiple streams of deals going on? Or is there a period of ingestion where, you know, once one closes, there has to be some time for everything to reorganize and resettle before you guys can move on to another I'll take that, Ryan. And I think there is always a period of ingestion.
Tony: Alright got it okay. So then kind of switching gears.
Tony: Can you help us understand.
Tony: Where you are on with.
Tony: Tunnel conversion with other deals that might be going on.
And so when you have just closed the deal like you just happen. Congrats on that can you have multiple streams of deals going on or is there a period of digestion, where once when it closes there has to be some time for everything to reorganize and re settled before you guys can move on to another opportunity.
Brian: Yes, I'll take that Brian.
Speaker Change: I think there is always a period of ingestion.
Babak Taheri: And we do have a pipeline and our pipeline. And historically, we've done one and two. So that would actually extend it to a point that, that we can potentially do two. But the first one, then typically the, you know, the period in which we absorb technology and talent, the closer to what we do, the easier and the faster it is. And In case of our OPC platform, that'd be just accord. I think this is faster than other acquisitions we've done. So I would I would say three to six months. As a matter of fact, and that's why Ryan and I said that we will have a lot more information and data to give you at the end of Q2, so that's when we will be able to, or in the next call before the end of Q2, I would say.
Brian: And we do have a pipeline and our pipeline.
<unk> done.
Brian: One and two so that would actually be extended to a point that we can potentially do too.
Brian: But the first one and typically there.
Brian: The period in which we absorb technology and talent that closer to what we give the easier in the past 30 days.
Brian: In case of our OTC platform.
That would just that court I think this is.
Faster than other acquisitions, we've done so I would I would say three to six months.
Speaker Change: As a matter of fact, when Thats why Brian and I.
Speaker Change: I said that we will have a lot more information and data to give you at the end of Q1 Q2, sorry.
Speaker Change: So thats.
Speaker Change: That's when we will be able to or in the next call. It before the end of Q2 I would say.
Speaker Change: So.
Babak Taheri: With that, the ingestion period for the first acquisition would be three to six months. We are trying to get that done in three months. Matter of fact, as Ryan said, the ink is 24 hours, but the team is already on board and have all their compute power and data transfers done and that will be completed. by this week. And the rest is just a matter of supporting the existing customers and expanding in them, which we have already started discussions with them, matter of fact, as of today. So that's going to be fast. But we honestly can digest and do two of these at a time, if needed.
Speaker Change: With that ingestion period for the first acquisition would be three to six months.
Speaker Change: Trying to get that done in three months matter of fact.
Speaker Change: Ryan said banking 24 hours, but the team is already onboard and have all their compute power and data transfer is done and that will be completed.
Speaker Change: Bye Bye this weekend the rest.
Speaker Change: It's a matter of supporting the existing customers that are expanding in them, which we have already started to have discussions with them a matter of fact as of today, So that's going to be fast.
But we honestly Ken.
Speaker Change: Can digest.
Speaker Change: Two of these at a time if needed.
Babak Taheri: And that, but depending on what area that is, that could be also three months to nine months, depending on what kind of acquisitions we do. But this one is, it's pretty much, we are well-versed in it, we know the technology. And we used to have a lithography process ourselves, but this gets us to the next level that we wanted to get.
Speaker Change: And.
Speaker Change: And that.
Speaker Change: But depending on what area that is that could be also a three months to nine months depending on what.
Speaker Change: What kind of acquisitions, we do but this one is it's pretty much.
Speaker Change: <unk>, we know the technology when we used to have any geography process ourselves but.
Speaker Change: This gets us to the next level that we wanted to get to so.
Babak Taheri: Okay, yeah, thank you. And then just one last question. So I believe you said you acquired 13 new customers this quarter. I think it was a very similar amount last quarter. Is this kind of a pace that we can see continuing into 2025? Or will there be any sort of upside or downside, I guess, push? That's a good question and it's hard to answer. I'll tell you why, but I'll give you an answer anyways at the end. The quality of the customers that we tend to start acquiring over time has changed. We are dealing with customers and part of the reasons we went public was to have financial visibility for much larger customers that we are dealing with.
Speaker Change: Okay.
Speaker Change: Okay. Thank you and then just one last question.
Speaker Change: So I believe you said you acquired 30, new customers this quarter.
Speaker Change: Because it's a very similar amount last quarter is this kind of a pace that we can see continuing into 2025 or will there be any sort of upside or downside.
Speaker Change: I guess bush.
Speaker Change: Yes.
Speaker Change: That's a good question and it's hard to answer I'll tell you why but.
Speaker Change: Give you an answer any rates Dan but.
Speaker Change: The quality of the customers that we tend to start acquiring over time as has changed we are dealing with.
Speaker Change: And part of the reasons we win.
Speaker Change: We went public was to have financial visibility for much larger customers that we are dealing with so the quality and the size of the deals that we would make.
Babak Taheri: So, the quality and the size of the deals that we would make with our new customers will be larger. The numbers are important so that we can show where we are at. As we said already, we added 13 power customers, but we said there were only four power customers that are in the top 10 power market that we have acquired. So, our intention is to go after them. To us, we lead the market if we have six or more of the top 10. So, our goal is to go after the six or more on the markets we don't have.
Speaker Change: Our new customers will be larger than the numbers are important so that we can show where we are at and as as we said already.
Speaker Change: Added 13 power customers, but we said they were only four.
Speaker Change: Power customers that are in the top 10 power market rate that we are required. So our intention is to go after him to us to US we will lead the market. If you have six or more of the top 10. So our goal is to go after this six or more on the market. We don't have so we need to add more.
Babak Taheri: So, we need to add definitely at least two more to the power. The numbers are important. We always try to land, but the quality and the position of where those customers are even more important. Going back to give you a shorter answer, we expect the numbers to be the same, but the quality will Got it. Okay, thank you. Thank you.
Speaker Change: They asked us to want to the power.
Speaker Change: But the numbers.
Speaker Change: <unk> are very important we are always trying to land.
Speaker Change: But the quality and the position of where does.
Speaker Change: Those customers are even more important but.
Speaker Change: Going back to give you a shorter answer we expect the numbers to be the same but the quality will change that.
Speaker Change: Got it okay. Thank you.
Operator: And as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 1-1 on your telephone. And this does conclude the question and answer session of today's program.
Speaker Change: Thank you and as a reminder, ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone.
Speaker Change: Okay.
Speaker Change: And this does conclude the question and answer session of today's program I'd like to hand, the program back to Dr. Henry CEO of tobacco.
Babak Taheri: I'd like to hand the program back to Dr. Taheri, CEO of Silvaco. Thank you very much. I wanted to again mention that we appreciate all of you attending this. Great questions, and we're always there to answer more later on. I wanted to say that we are very proud to close out the year with strong momentum and growing customer traction, including the 46 new customer wins that we talked about in 2024 and multiple bookings on our FTCO platform. our FTC platform.
Speaker Change: Thank you very much I wanted to again.
Speaker Change: You mentioned that the I appreciate all of you attending this great questions and we were all leased aircrafts or more.
Speaker Change: Later on.
Wanted to say that we're very proud to close out the year with strong momentum and growing customer traction, including the 40 60 in customer wins that we talked about in 2024.
Speaker Change: And multiple bookings on our <unk> platforms.
Babak Taheri: You know, our first acquisition as a public company marks a significant milestone for us in executing our M&A strategy for talent technology and expanding through inorganic growth. We will continue doing that and our focus area will be in business units that we have, EDA, TCAD, product lines, and IP as well.
Speaker Change: RF is your platform.
Speaker Change: Our first acquisition.
Speaker Change: Our first acquisition as a public company marks a significant milestone for us.
Speaker Change: Executing our M&A strategy for talent technology, and expanding throwing their organic growth, we will continue doing that and our focus area will.
Speaker Change: We will be in business units that.
Speaker Change: That we have <unk> CAD product lines.
Operator: With that, I wanted to thank everyone again and have a great rest of the day.
Speaker Change: And IP as well with that I wanted to thank everyone again and.
Speaker Change: Yes.
Speaker Change: A great rest of the day.
Operator: Thank you, ladies and gentlemen, for your participation at today's conference. This does conclude the program. You may now disconnect. Good day.
Speaker Change: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].