Q2 2025 Silvaco Group Inc Earnings Call

Speaker #1: To participate, you will need to press star 11 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 11 again.

Speaker #1: Please note this event is being recorded. I would now like to turn the conference over to Greg McNiff, Investor Relations for Silvaco. Please proceed.

Speaker #2: Thank you. Joining me on the call today are Babak Taheri, Silvaco CEO and Dan Shaw, Silvaco's Director of FP&A. As a reminder, a press release highlighting the company's results along with supplemental financial results and an earnings presentation are available on the company's IR site at investors.silvaco.com.

Speaker #2: An archive replay of the conference call will be available on this website for a ited time after the call. Please note that during this call, management will be making remarks regarding future events, and the future financial performance of company.

Speaker #2: 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 risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

Speaker #2: It 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 presentation, and on this conference call.

Speaker #2: The risk factors section in Silvaco's annual report on Form 10K for the year ended December 31st, 2024, and the most recent Form 10Q filing with the Securities and Exchange Commission provide descriptions of these risks.

Speaker #2: With that, I'd like to turn the call over to Silvaco CEO, Babak Taheri. Babak?

Speaker #3: Thank you, Greg. Hello, and welcome to Silvaco's second quarter 2025 earnings call. I am Babak Taheri, CEO of Silvaco. Thank you for joining us today.

Speaker #3: As we report on our financial performance and strategic direction, I want to pause and acknowledge something that doesn't always appear in the numbers. But under Paine's every line on the balance sheet, it is our people and investors.

Speaker #3: I'm just any people or investors. The ones who remain through our product cycles that stretch into years, the ones who choose to be here when the market shifts, when uncertainty rises, and when the outcomes are not yet realized.

Speaker #3: The ones who commit to the mission even when the short-term picture is difficult. In the ADA space, where innovation is deep tech and long horizon, progress often demands patience.

Speaker #3: It's not always easy to stay the course. Yet time and again, our team does. Not because it's easy, or glamorous, or immediately rewarding, but because they believe in what we are building.

Speaker #3: Their loyalty and resilience form a competitive advantage that isn't easy replicated. Now, moving to our results, I'm excited to update you on the strong momentum we've built since going public in May of last year.

Speaker #3: For fiscal year 2024, we delivered a 13% increase in bookings and achieved 10% organic revenue growth over fiscal year 2023. We also added over $46 new customer logos underscoring the growing demand for our software platforms.

Speaker #3: A core objective of our IPO was to position Silvaco for strategic acquisitions that would meaningfully expand our serviceable addressable market or SAM. We launched our acquisition strategy in Q1 of 2025 and have maintained that momentum into this quarter, targeting high-growth sectors such as AI, photonics, and high-performance compute for edge and data centers.

Speaker #3: Our first two most recent acquisitions have added more than an estimated $600 million in incremental SAM, reinforcing our position in fast-expanding markets and further diversifying our growth engine.

Speaker #3: The market response to this strategy has been very encouraging. Our new acquisition from Excel adds another $110 million of SAM for us. Revenue for the Q2 came at $12.05 million, within our guidance.

Speaker #3: Likewise, we are maintaining our fiscal year 2025 guidance in the range of $64 to $70 million representing 7 to 17 percent year-over-year growth, which we intentionally set with a conservative approach given the current macroeconomic environment.

Speaker #3: We are taking a conservative approach on this guidance and did not include the mix of potential upside revenue for the year. We are equally confident in our long-term growth trajectory under Paine by strong market demand for organic growth, strategic expansion, and increasing value for our technology stack.

Speaker #3: Next slide, please. I will now highlight our non-GAAP results for Q2 2025, guidance for Q3 and full year 2025 and our Director of FP&A, Dan Shaw, will discuss our detailed financial results and guidance in his remarks.

Speaker #3: For Q2 2025, 14% of revenue from 10 new customer purchases in Q2. Equivalent of $4.18 million in bookings. 6% of our revenue came from new customer purchases in previous quarters totaling 20% of land and expand in new customers.

Speaker #3: We had also 40% of revenue from expansion in existing customers. 40% of revenue from renewals totaling 100% for Q2 2025. For Q3, we are providing the following guidance.

Speaker #3: Q3 booking guidance of $14 to $18.2 million revenue guidance of $14 to $18 million non-GAAP GM of $81 to $85 percent, non-GAAP OI or loss of minus 3.5 to plus half a million dollars, non-GAAP net income or loss of minus 12 cents to plus 2 cents per diluted shares.

Speaker #3: For the full year 2025, we are maintaining our existing guidance. Gross bookings in the range of $67 to $74 million reflecting an increase of up to 13% year-over-year.

Speaker #3: Revenue in the range of $64 million to $70 million reflecting an increase of up to 17% year-over-year. Non-GAAP gross margin in the range of $83 to 86% compared to 86% in 2024, non-GAAP operating income in the range of $2 million lost to $1 million income compared to $5.5 million in 2024.

Speaker #3: Non-GAAP net income per share of up to $0.03. Please note that this guidance includes the acquisition of Cadence's PVC platform for the full year and TechEx for Q2 through Q4 considering only initial revenue synergies not including potential land and expand for these acquisitions nor have we included Mixel potential revenue at this time.

Speaker #3: We are strategically expanding our capabilities to meet the evolving needs of our ustomers, particularly in high-growth sectors for design and manufacturing of semiconductors and photonics.

Speaker #3: At the same time, we are taking disciplining approach to managing operating expenses, cash flow, and liquidity reflecting a prudent posture in today's macroeconomic environment.

Speaker #3: This balance between targeted investment and financial discipline positions Silvaco to lead in some of the fast-growing segments such as AI, high-performance compute, memory, power, and photonics while protecting shareholder value and ensuring long-term sustainability.

Speaker #3: Next, I'd like to discuss how Silvaco solves semiconductor and photonics challenges facing our customers. Acquisitions expand solutions in key AI markets. Today, we face numerous design and manufacturing challenges.

Speaker #3: And we believe Silvaco is well-positioned to address key AI markets with our organic strategies and our recent acquisitions. I have highlighted the key AI markets with dashed orange boxes that we are expanding into.

Speaker #3: These include memory, high-performance compute, photonics, automotive, data centers, and edge compute to augment and enable AI democratization. New technologies are emerging, product complexities are increasing.

Speaker #3: Customers are challenged. They're expectations are evolving. And we must lead in addressing and solving these challenges by doing what we do best. Anticipating the next wave of technological breakthroughs.

Speaker #3: Leading it through artificial intelligence, through advanced algorithms in multiphysics, through digital twin models, that guide customers through complex design and manufacturing. To stay ahead, we don't work alone.

Speaker #3: We partner with universities, with leading research labs, with our strategic customers, and through targeted strategic acquisitions. We are focused on AI. We are focused on photonics.

Speaker #3: We are focused on high-performance computing and connectivity. Let's look closer at the challenges shaping our markets. First, design and manufacturing complexity. Transistors are getting smaller, with more functionality packed inside.

Speaker #3: Complex multi-core architectures are being designed. All of it impacting memory, high-performance computing, automotive, and more. Second, new materials such as gallium nitrite, silicon carbide, and photonics integrated devices are pushing the boundaries of fabrication and design.

Speaker #3: Third, go-to-market challenges including rising costs and rising risks cost of design, cost of tools, cost of wafers, and pressure of time to market. This is the landscape we are navigating.

Speaker #3: This is the opportunity we are capturing. With technology, with strategy, and with vision. Next slide, ase. Executive summary for the quarter. We just announced the acquisition of Mixel Incorporated.

Speaker #3: Which we believe expands our SAM by another $110 million with silicon-proven mixed signal IP in the world's leading foundries, many of which are ISO 26262 and ISO 9001 certified.

Speaker #3: Representing the high-quality of the products for automotive and other markets. And that's not all. We announced the addition of three new executives which I will give more details in the next slide.

Speaker #3: We also announced some of our recent customer successes. Al Salpine adopted Silvaco's Jivaro Pro to accelerate spice post-layout simulations. Fraunhofer ISIT, one of the top leading R&D companies in the world to advance next-generation gallium nitrite with Silvaco's DTCO flow.

Speaker #3: Wavetech deployed Silvaco's Victory TCAT to drive innovation in GAN-based connectivity solutions helping our lead position in power electronics. And there is more coming. We expect to announce new customer wins in the second half of the year.

Speaker #3: In Q2 2025, we didn't just grow our customer base. We landed 10 new customers in photonics, automotive, Millaro, foundry, and power markets. Three in photonics, one in foundry, two in power, and others in markets such as mill and arrow.

Speaker #3: Furthermore, we achieved a CV of 26% TTM. Ending in Q2, versus 21% ending in Q1. Next slide, please. We've added three new executives to our team.

Speaker #3: Andrew Wright, a senior vice president and general manager of semiconductor IP Group BU, Jasmin Nursing, a senior vice president and general manager of EDA Group BU, John Burke, as vice president of business development, collectively, they bring decades of experience in semiconductor design and software development to Silvaco.

Speaker #3: And we'll play pivotal roles in accelerating innovation and operational excellence. Adding these accomplished leaders strengthens our ability to innovate and scale Silvaco's organic growth.

Speaker #3: This will be our main focus for the remainder of 2025. Their insights and proven track records will help advance and accelerate the next phase of our growth.

Speaker #3: With their expertise, we are well-positioned to broaden our market presence and deliver even greater value to our customers worldwide. On the next slide, I will walk you through our recent acquisition that are accelerating our expansion into new high-growth markets.

Speaker #3: Next slide. Expanding market opportunities using AI-based digital twin modeling. On our last earnings call, I discussed the strategic rationale and opportunity behind the acquisition of Cadence's process proximity compensation or PPC product line.

Speaker #3: Which combine with our acquisition of TechEx we believe has increased our SAM to $4.4 billion. Today, I'm excited to share an overview of our recently announced acquisition of Mixel mixed signal IP including our technology integration plans and the strategic rationale driving this move.

Speaker #3: We believe Mixel expands our SAM by an additional $110 million. It is important to note that historically, Silvaco's digestion period for acquisitions of these sites has been about six months.

Speaker #3: We have already integrated the initial revenue synergies for the two previous acquisitions and are on track to complete the operation and tax synergies over the coming quarters.

Speaker #3: This year, Silvaco's total SAM has expanded by over $710 million through both organic growth and strategic acquisitions. The increase is from $3.8 billion in 2024 to $4.5 billion in 2025.

Speaker #3: Positioning us for stronger long-term growth. Next slide, please. Expanding market in silicon photonics integrated circuits. For the first time, we are excited to share our strategic expansion and roadmap for photonics which builds on our strong momentum in the market.

Speaker #3: As I mentioned, our total SAM now stands at $4.5 billion. Which includes $260 million from the TechEx acquisition. This includes $115 million from photonics design software and $145 million from wafer fabrication solutions covering advanced capabilities such as plasma edge at the tool level and packaging impact on photonics integrated circuits.

Speaker #3: This new segment represents a compelling growth engine for the coming year and beyond, expanding our reach into high-growth, high-value markets. Next slide, please. Mixel mixed signal IP strategic rationale.

Speaker #3: Silvaco's acquisition of Mixel brings in a portfolio of silicon-proven mixed signal IP that is already deployed in the world's leading foundries. Mixel has a 25-plus year track record of delivering successful silicon solutions and is widely recognized for its low power, high-performance IP.

Speaker #3: Strategically, Silvaco expects to land new customers through Mixel's base while driving revenue synergies with existing accounts. Leveraging Silvaco's global channel is projected to accelerate revenue growth.

Speaker #3: Please turn to the next slide for specific examples of how this technology is changing the industry. Mixel's MIPI-5 cores stand out in the market due to their comprehensive support across the ire MIPI multimedia ecosystems, including automotive, camera, display, and storage.

Speaker #3: Mixel is the number two company in terms of MIPI revenue. The diagram highlights Mixel's broad coverage of multi-protocol layers such as CSI2, DSI2, UFS, all supported by versatile PHI implementations including DPHI, CPHI, MPHI, and other combinations.

Speaker #3: This flexibility enables associate designers to integrate a single interoperable physical layer IP across a wide range of use cases. Reducing time to market, and validation complexity.

Speaker #3: Additionally, Mixel's long-standing track record of first-pass silicon success and compliance with MIPI alliance standards position it as a trusted supplier. These technical strengths coupled with seamless support for emerging standards and multi-protocol convergence differentiate Mixel in a crowded space and position the company to capture significant market shares as demand grows for high-speed low-power interfaces in mobile, automotive, and other applications.

Speaker #3: Next slide. Strategic focus for the remainder of 2025 and 2026. Silvaco is positioned for significant growth by capitalizing on immediate revenue synergies from recent acquisitions unlocking access to over 30 new customers and enabling expanded cross-selling and landing of new logos in high-demand sectors such as AI, photonics, and advanced semiconductors.

Speaker #3: Leveraging acquired technologies and established channels, the company is well-positioned to deliver multiphysics simulation solutions across semiconductor and display applications. Strategic next steps include deepening AI-based FTCL engagement with memory, advanced CMOS, power, and photonics R&D customers.

Speaker #3: Broadening semiconductor IP portfolio and driving expansion in the high-growth market of silicon-based photonics integrated circuits for HPC, automotive, and sensing applications that play a large role in AI and development and infrastructure.

Speaker #3: With a sharp focus on enhancing customer time-to-market and costs, we are able to command higher margins and well-through new product development and recent acquisitions.

Speaker #3: To summarize, strategic next steps include deepening engagement with R&D customers, broadening semiconductor IP portfolio, and driving expansion in high-growth market of silicon-based photonics to enable enhanced and support AI infrastructure, AI architecture, AI power management, and compute resources for both static and autonomous applications.

Speaker #3: Together, these strategic priorities position Silvaco to accelerate growth, strengthen margins, and deliver sustained profitability through the remainder of 2025 and into 2026. With that, I'll turn it over to Dan to review details of quarter financials and our guidance for Q3 and fiscal year 2025.

Speaker #3: Thank you, Dan.

Speaker #2: Thanks, Babak, and thank you all for joining us today. My name is Dan Shaw, Silvaco's Senior Director of FP&A. Today, I will be reviewing our financial results for the second quarter of 2025 and providing guidance for the third quarter and full year of 2025.

Speaker #2: Please note that I will be discussing non-GAAP results going forward. As a reminder, our GAAP financial results along with a reconciliation between GAAP and non-GAAP results can be found in ur earnings press release in the appendix of the presentation and within supplemental financials on our website.

Speaker #2: Moving to the next slide, I'd first like to start the financial overview by saying that our long-term target model remains intact and we remain confident in our ability to achieve our strategic and financial objectives.

Speaker #2: Q2 results fell within our quarterly guidance range, while some orders were shifted from Q1 into Q3 and Q4 with fully expect to book those POs later this year.

Speaker #2: We exited the quarter with $55.5 million in cash, cash equivalents, restricted cash, and marketable securities. This is down from $74.5 million at the end of Q1 primarily due to the NANGATE litigation settlement and the acquisition of TechEx during the quarter.

Speaker #2: Other expenses this quarter have also increased as a result of both organic R&D investments as well as recent acquisitions. Impacting both our gross margin and operating expense forecast for the short term.

Speaker #2: We are actively working to minimize these effects. Following the PPC product acquisition in Q1 and now with the recent acquisitions of TechEx in Q2 and Mixel in Q3, our focus has shifted to integration and driving higher revenue through land and expansion.

Speaker #2: Next, I'm excited to announce that we have achieved trailing 12 months ACV growth of 26% in Q2 2025. Which is up from last quarter.

Speaker #2: As a reminder, annual contract value or ACV is a meaningful metric for measuring Silvaco's underlying performance as it normalizes for multi-year deals as well as minimizes the impact of ASC 606 revenue accounting rules.

Speaker #2: Lastly, I will get into details on the guidance shortly, but I want to highlight that our annual guidance remains the same. Let's turn to the next slide.

Speaker #2: To begin our Q2 results in more detail, gross bookings for our software and semiconductor IP products in the second quarter were $12.9 million down 34% year-over-year.

Speaker #2: Revenue was $12.05 million down 19% year-over-year. The Q2 year-over-year decline was primarily due to the high value of the FTCL booking in Q2 2024 as well as pressures stemming from short-term macroeconomic uncertainty.

Speaker #2: Our non-GAAP operating expenses were $14.9 million up from $14 million last quarter. Breaking down our cost structure, R&D was 42% of revenue, sales, and marketing was 36% in G&A was 46%.

Speaker #2: The increase in operating expenses was primarily driven by higher headcount-related costs and research and development as well as sales and marketing, which also included commissions.

Speaker #2: Non-GAAP operating loss was $5.7 million, down from non-GAAP operating income of $1.7 million in Q2 2024. Our non-GAAP net loss for quarter was $4.6 million, compared to a non-GAAP net income of $1.8 million in the same period last year.

Speaker #2: Diluted non-GAAP net loss per share came in at $0.16 compared to a non-GAAP net income per share of $0.07 in Q2 2024. Our weighted average diluted share count for the second quarter was $29.3 million shares.

Speaker #2: For the year, we reiterate that we are expecting to be neutral in non-GAAP net income and break even on a free cash flow basis.

Speaker #2: Turning to our bookings performance in more detail, as Babak mentioned, we did have some delays in customer POs in Q2; however, we are proud to have still have added 10 new customer wins the second quarter.

Speaker #2: In s of product breakouts, TCAD bookings were down 55% year-over-year due to the timing of large renewals that happened last year. And EDA bookings were down slightly by 7% year-over-year with some partial offsets coming from the addition of PPC.

Speaker #2: We are also pleased that our bookings for our SIP product increased by approximately $1.5 million, a growth of 87% year-over-year. And we expect continued growth from this product line.

Speaker #2: Remaining performance obligations or RPO at quarter-end stood at $36.4 million. With 50% expected to be recognized as revenue within the next 12 months. Moving to revenue, Q2 was down 6% year-over-year on a trailing 12-month basis.

Speaker #2: ACV. For the quarter, our software licenses accounted for 60% of our total revenue, while maintenance and services accounted for 40%, consistent with historical levels.

Speaker #2: Looking by product, TCAD revenue was down 34% year-over-year once again due to the timing of renewals. EDA revenue was up 15% year-over-year again driven by a key renewal for our recently acquired PPC product line.

Speaker #2: Revenue for our SIP product increased by 11% year-over-year due to traction in technical enablement for foundries. Turning to our split between geographic regions, revenue from the Americas was down 44% year-over-year due to lower revenue from our TCAD product.

Speaker #2: Asia Pacific was up 11% year-over-year driven by higher EDA sales. EMEA was down 22% year-over-year due to lower TCAD sales in this region. I will again reiterate that despite the current macro headwinds as we continue to work towards closing some of the delayed customer orders and introducing our new products acquired to existing and new customer base, we believe the company is well-positioned for higher growth rates moving forward.

Speaker #2: Moving to the xt slide. Our non-GAAP gross margin for the quarter came in at 76%. Down from 86% in Q2 2024. The year-over-year decline was driven mostly by lower revenue due to temporary order push-outs.

Speaker #2: You can see from this chart that, historically, our cost of goods sold is relatively fixed, and therefore the gross margin closely coordinates with revenue.

Speaker #2: As was the case with last quarter, this quarter we saw an increase in our cost of goods sold due to higher headcount-related costs in part from a cost structure that now also includes both the PPC and TechEx acquisitions.

Speaker #2: With both acquisitions now in our arview mirror, we are now focused on optimizing costs as part of integrating the operations. As we continue to scale, we still expect non-GAAP gross margins to expand towards our long-term target of 90% plus.

Speaker #2: We believe company is poised for significant growth by capitalizing on immediate revenue from recent acquisitions and increases by our land and expand strategy. Unlocking access to over 30 new customers and enabling expanded cross-selling in high-demand sectors such as automotive, robotics, and AR/VR.

Speaker #2: Leveraging acquired technologies and established channels we believe the company is well-positioned to deliver multiphysics simulation solutions across semiconductor and display applications. Strategic next steps include deepening engagement with memory, advanced CMOS, power, and photonics, R&D customers, broadening semiconductor IP portfolios, and driving expansion in the high-growth market of silicon-based photonics integrated circuits for HPC, automotive, and sensing applications.

Speaker #2: With a sharp focus on enhancing first article yield and accelerating customer time to volume, the company is targeting fast-growing segments with robust markets for FPCO, silicon photonics, and power semiconductors creating what we believe to be a compelling trajectory for sustained investor value.

Speaker #2: Moving to the next slide. As we introduced last quarter, I'm excited to look at our new non-GAAP performance metric annual contract value or ACV.

Speaker #2: We believe that ACV is a more meaningful metric for measuring the underlying performance and health of the business, particularly in light of the quarterly volatility in revenue that results from ASC 606 revenue accounting rules as well as from large multi-year deals and the impact from the timing of renewals.

Speaker #2: Our ACV calculation includes all of our software licenses from EDA and TCAD as well as maintenance and services. Please note that the definition excludes semiconductor IP product sales as they are generally not recurring in nature.

Speaker #2: We believe this new metric reflects a more stable, normalized growth by accounting for all contract types over a 12-month period. Further details around the definition of ACV are provided in our earnings release as well as our investor presentation.

Speaker #2: Moving to the next slide. You can see the quarterly fluctuations in bookings and revenue which is specifically why we will be providing ACV as an additional metric starting this year.

Speaker #2: On a trailing 12-month basis, ACV was 55.9 million for the second quarter up 26% year-over-year in increase of 5% from Q1. While quarterly revenue may fluctuate, core recurring revenue from new bookings has shown consistent annual growth.

we continue to execute our goals to drive Revenue growth through expansion of our Sam through m&a, which was 1 of the primary expected uses of the capital raised in our IPO.

We expect to return to 15%, Topline growth. Once macroeconomic condition stabilized, and continue to Target, 15% to 25% Topline growth.

90% non-gaap gross margin and 25, plus percent non-gaap, operating margin.

We expect to achieve these targets by expanding our presence in key and markets, and continuing to pursue the right. Strategic inorganic opportunities, with additional focus on driving expansion. In the high growth Market of silicon based platon integration circuits for HPC automotive and sensing applications.

With that, the back, and I would be happy to answer your questions. Operator, thank you so much. And as a reminder, if you do have a question, press star, 1 1, 1 on your telephone, and wait for your name to be announced to remove yourself press star 1 again.

Our first question is from Blair, Abernathy with rosenblad Securities? Please proceed.

Uh, thanks. Good afternoon gentlemen.

I block, can you hear me okay? Um, absolutely listen. Yeah, thanks for, uh, providing the ACV number again and, and updating that, I guess. Uh, first question is around, you know, that's pretty good. Uh, uh, organ growth overall. Um, but you did make, uh, certainly the, uh, uh, PPC acquisition would have affected that, um, maybe the techx a little bit. But would you tell us what the the ACV, uh, organic growth was, uh, on the um, how much was acquired?

Yeah, I can take that.

Um, hi Blair so yeah, for that growth, we're seeing, um, obviously a sizable portion of that coming from the additional revenue from our Acquisitions. I think the organic, uh, component of that within the 1 to 2% range of that 5% increase,

Okay, great. Um, and then, um,

Like, on the go to market side.

Hold on. I'll take that 1. Thanks a lot. That's a good question. So as we said, we've already recognize some Revenue last quarter from that.

Um, in the trust integration consists of having the R&D team and all the other um, teams to to be integrated physically and um, software wise within your organization that's already done completed.

Um, the only portion of the integration of your still working on is financials in terms of uh, some of the senior other synergies and tax. Uh, synergies that we are working on including if you will Opex R&D, as well as sgna that that's what Dan reported that we were working on. But um, we expect, um, we also provided the guidance in terms of

Um, annual, uh, annual revenue from that to be in a 2 to 4 million range. And we've already um as we said last quarter, 1.92 million of it was already recognized in q1, so we have still um, um, additional Revenue to be recognized from a PPC acquisition, but again, as we are

And as we are working with the teams, um, and the customers, our expectation is always higher to, um, to be able to close more deals with the existing and, um, as well as new expansions. So,

Okay, great. And then just back on the macro environment. Um, and you, you came in sort of.

Uh, uh you you were trying to get your, your bookings. This Q2 were sort of 14 to 18, I think was the original range came in around 13 and is that um, you know, any any what, what's the, what's the environment? Like their versus q1 and any change in in your China and markets?

That's a that's a great question. Um no no no no impact to the China Market. As a matter of fact, we said in q1 that some of the push outs

Came from Asia. And matter of fact the ones that came from Asia, we've already um closed um in q1. Um and um and our expectation. Is that the other, um, the other portions of the delays will closing Q3. And maybe Q4 might be expected. Most of those delays to be covered in Q3

Okay, great thanks. I'll I'll jump back in the queue.

Thanks. Bye.

Thank you. Our next question is from Blaine Curtis with Jeffrey's, please. Proceed. Hey, good afternoon guys. Um, maybe you can ask, uh, a Mixel it's closed. So just curious if you could, um, outline how much revenue contribution to think about from that 1 for September and December quarter

Yeah. But um, we didn't say that in our, um, in our written, um, um, statements. But, um, from where as you know, we just closed it last week and um, um, to be conservative, you haven't included. As I mentioned earlier, any of the potential revenues coming from them, this year. However, we can provide a range of numbers that we we think, is within within our capability to close. Um, and that brand is between 3 to 5 million dollars additional Revenue.

In that quarterly or annual?

Um, for the remainder of the year.

Oh, 3 to 5 for the

for Q3 and Q4. Yeah, got you. And I guess I wanted to talk about the, you kept the annual guidance. I think you made the comment that it's conservative to keep it but like your results have come in lower throughout the years. So to get to the midpoint would require like 50% sequential growth. 90% gross margin so I guess I'm just trying to figure out. I know you're confident

You're going to get back these sales that were delayed. But uh are we talking about that magnitude of a Q4?

Um, yeah. And we've already given guidance for Q2 and you see our numbers for Q4, will get us to those points and they're very confident, also that some of these delays, in POS, from q1, um, trickling into Q2 little closing Q3 and Q4 and that's part of it. Um, there has not been any cancellation and, um, as a matter of fact, um, as you know the um the macro with regards to Asia has improved for everyone um in our industry and we expect to actually grow that as well. Those are some of the regional I would say growth that we expect to get

but also the Acquisitions we've done.

Historically. Um up to last quarter, we said our main markets have been photonix, um have been power, have been memory and as as you see more and more of what we are. Um, our commentary was that we we see also, we can expand really nicely with the combined Synergy in terms of products, um, for go to market. Um, in terms of expanding into new markets that, um, we have played smaller roles, but we can play bigger role and those include a wider base for high performance compute Automotive, especially the introduction of all these new IPS for automotive and being um you know, being isolated 9,001 and 2662 compliant which makes us very unique in terms of the offering that will help us expanding those as well.

Thanks and then maybe just 1 last 1. Um, if I do contemplate adding that Mixel Revenue back in, I mean, I guess is what about on the Opex side is, is that, I mean these employees, now work for you today. So is that contemplated Opex? And, you know, I think

I've seen some numbers of employees so maybe you can just help us with how much Opex per quarter you're going to bring over.

So I I've lived and answered but let me start it then um, what I would say, um, in terms of our annual guidance, as we said we did not include any Mixel um um any Excel contributions to either, um either in terms of Opex or Revenue, um, as we are closing um on quite a bit of the books and financials but um, naturally we will have Opex associated with them. They're looking at synergies for all 3. Um, all 3, acquire them and we are getting more mature in terms of our understanding of our synergies for for um PPC as well as Tech X and I think we'll have a very good handle on what it is that um that Mixel would uh would bring in in terms of both revenue and Opex for the quarter. Hoping that our next call will give you a lot more detail than what we have provided today.

Okay, thank you.

Sure.

Thank you. Our next question comes from Craig Ellis with B Riley Securities. Please proceed.

Yeah, thanks for taking the question, and I wanted to go a little bit deeper into the inorganic growth activity and, and what it could mean a little bit further out than I think we're bla was headed with, uh, implications for this year. So, I, I think the company indicated, that Acquisitions premix, Al were adding, uh, 6 to 11 million in revenues this year. And if I annualize, um, Mixel, uh, potential revenues, that would be 6 to 10 million if we double that 3 to 5. So in total it seems like there could be from Acquisitions, uh 12 to 21 million in annual revenues. So, the question is this is that the reasonable way to think about the the inorganic growth Revenue range for next year. And if not can help us with what a reasonable range, might be.

Absolutely, that's a fantastic question, Greg, as as usual, thank you for that. Um, you know, the general guidance we've given for, for OPC this year. Uh, since it was qish, we we said to do 4 for Tech hacks, we gave the range of 1 to 2 million and for, um, for, um,

um, a mix healthy service at 3 to 5 so and and a good assumption to think about and and we'll be glad in by end of this quarter, we will be

Helping in terms of whatever details we can provide so that you can fine-tune all these models for at least this year and the remainder for the next year. But, um, 1 1, you know, 1 linear, um, 1 linear way of interpolating, the data I gave you for this year is you can see the partial, um, revenue from these Acquisitions. What they are. I've given you the numbers just even now. Um, and those are the partial. So if you think of, if you think of uh Mixel we said 3 to 5 which is only, you know, 2 quarters. I would say in a 2 quarters but less than 1 month left, right? About 5 months of Revenue, you can, you can extrapolate that for the full year next year. You can do the same thing for. Um you can you can and do the same thing for the other 2. So what you're saying is not unreasonable.

Give us a bit of time till end of this quarter so we can fine-tune these and and give you a much better feel for it. Because as we speak, you know, my whole, um, executive team from the sales from all over the world are in Santa Clara. They've been there this whole week trying to, um, merge. And hash out, what are the new opportunities for each of these Acquisitions? What are the new customers that you need to go after? Plus how can we expand the into the 30 plus customer that we require through this acquisition? So

that's helpful. Good luck. Thank you. My next question was related to, um, the cash balance I believe, uh, in the deck, it showed that cash was 5555 million. And I expect that's before, uh, we've completed the cash part of the Mixel payments. So you can. Can you just confirm that that that is so. And and then I if so I would expect that we would be about 35 million in cash, uh, with the cash part of the ex Mixel payment made it is, is, is that a fair way to look at what's happened? Uh, as we started out, uh, the month of of August here, mid mid 3Q. Thanks guys.

That that's a perfect way to look at it. But initially, you said, 550 million, not 55 million and I was getting excited about that. That gave me a little bit too much credit. Yeah, sorry.

But you're right, you're right. But your final number came down to 35, and I think that it's reasonable to think that, um, 30 to 35 million would be the right number. Absolutely.

excellent. Thank you guys.

Thank you so much.

Our last question comes from Ross, Cole with Nina and Company, please proceed.

Thank you for taking my question. So I wanted to dive in a little bit to the, uh, the Acquisitions of PPC and techx and what the 3Q 255 guidance would look like, without those Acquisitions. Because I know the full year, they're adding 6 to 11 million, but do you think the third quarter of guidance would be slightly different? Thank you.

Um, so um, we've included what we have seen uh, from the customers, um, from PPC, and techex in, in Q3. So, our guidance includes what we've seen. And as I said for for the fraction, I, I would say to just estimate frankly, right now, um, as we said again, I'll, I'll emphasize, these are great questions. By the way, Ross, thanks for joining and 1 is 1. Is the fact that we said,

Um, 224 for, um, OPC we've recognized 2 already. So, for the reminder of the year, we, we, you know, there's another, um, 2 million at this on the table for the range we've guided, and then for Tech techex you said 1 to 2 million and I think, um, there's another million or so left for the rest of the year. So if you, if you look at the numbers, we provided, I would say um, um, a third or so of those totals would come in Q3 the rest, thank you for

You great question.

Thank you, and this concludes our Q&A session. I will turn it back to Bob. Babak Taheri, for final comments.

Thank you, operator. I wanted to thank everyone for being part of our journey and um thank you again for your support. We look forward to um our Q3 and Q4 um and um we'll see you soon. Thank you.

And this concludes our conference. Thank you all for participating. You may now disconnect.