Cautionary Statements Regarding Forward-Looking Information The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included under Part I, Item 1 in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended December 31, 2025, included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”). This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties and assumptions set forth in our 2025 Form 10-K. Our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q titled “Risk Factors.” Forward-looking statements may be identified by words including, but not limited to, “may,” “will,” “could,” “would,” “can,” “should,” “anticipate,” “expect,” “intend,” “believe,” “estimate,” “project,” “continue,” “forecast,” "likely," "potential," "seek," or the negatives of such terms and similar expressions. The information included herein represents our estimates and assumptions as of the date of this filing. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Overview We are a provider of technology computer aided design software (“TCAD”), electronic data automation software (“EDA”), and semiconductor intellectual property (“SIP”). Our solutions are used by engineers to optimize semiconductor manufacturing processes and efficiently bring semiconductor products to market. Our differentiated solutions enable our customers to increase productivity, accelerate time-to-market and reduce development and manufacturing costs. Our customers include semiconductor manufacturers and systems companies that design and manufacture products containing semiconductors. Semiconductors are at the heart of innovation in many industries, including AI, display, power devices, automotive, memory, hyperscale and cloud computing, Internet of Things (“IoT”), telecommunications and many more. Our TCAD solutions are used in the semiconductor industry to model and optimize manufacturing processes and device performance. This includes foundational TCAD software and more advanced artificial intelligence (“AI”) machine learning for process development, called Fab Technology Co-Optimization (“FTCOTM”). We are a pioneer in the leverage of AI to redefine manufacturing process development in partnership with customers. Our EDA software is used by semiconductor companies to design, simulate, and verify semiconductors. Our EDA products include SPICE modeling and simulation, parasitic extraction and reduction, standard cell generation and optical proximity correction. Our SIP portfolio includes a range of products, including foundation technology, such as standard cells and memory compilers, as well as a suite of interface technologies. Our SIP portfolio benefited from recent acquisitions, most notably Mixel Group, Inc. (“Mixel”), which is positioned for growth as we roll out Mixel’s quality processes to the rest of the organization. Our customers include foundries, integrated device manufacturers and fabless semiconductor companies. Our go-to-market strategy centers on selling software solutions and associated maintenance and services. Our software solutions accounted for 66% of our revenue for both the three and six months ended June 30, 2026, as compared to 60% and 66% during the same periods in 2025. Revenue from associated maintenance and services accounted for 34% of our revenue for both the three and six months ended June 30, 2026, as compared to 40% and 34% during the same periods in 2025, respectively. Recent Acquisitions During the six months ended June 30, 2025, we completed two acquisitions: (i) Cadence Design System's (“Cadence”) Process Proximity Compensation product line (the “OPC Business”) for $11.5 million in March 2025; and (ii) Tech-X Corporation (“Tech-X”) for $8.2 million in April 2025. On August 1, 2025, we consummated a stock purchase agreement with the shareholders of Mixel Group, Inc. (“Mixel”), pursuant to which we agreed to acquire all of the outstanding shares of Mixel for an aggregate purchase price of $22.5 million, which includes (i) $19.7 million in cash and (ii) 643,617 shares of the Company’s common stock with a fair value of $2.8 million on the closing date. Key Factors Affecting our Results of Operations and Future Performance Current Economic Conditions Because of our global operations, our business is subject to economic downturns in the countries in which we do business, volatility in exchange rates, changes in interest rates, evolving trade control regulations and geopolitical conflicts. We have been impacted by the expansion of trade control laws and regulations, including the broadening of the list of Chinese technology companies on the U.S. Department of Commerce Bureau of Industry and Security “Entity List.” We expect the impact of these expanded trade controls on our business to be limited. We also monitor geopolitical conflicts around the world, including the conflict in Ukraine and conflicts in the Middle East. To date, these conflicts have not materially impacted our business. For additional information on the potential impact of macroeconomic conditions on our business, see Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q. Cost Reduction Initiatives In October 2025, we began implementing targeted cost-savings initiatives intended to streamline our organizational structure, improve execution, and enhance stockholder value (the “Restructuring Plan”). The Restructuring Plan includes a voluntary early retirement program, a voluntary exit program, an involuntary reduction in force, and certain planned site closures. We expect to incur $5.0 million of costs in connection with the Restructuring Plan that primarily consists of severance costs for 82 terminated employees and other costs such as the site closures as part of our global site strategy. Of the total expected costs, $0.9 million and $2.4 million were incurred during the three and six months ended June 30, 2026, respectively, and $1.3 million during the year ended December 31, 2025. We expect to complete the Restructuring Plan in 2026. We anticipate these initiatives will result in significant annualized operating expense reductions. See Note 5 of our condensed consolidated financial statements for further discussion of the Restructuring Plan. Relationships with Our Existing Customers Building long-term relationships with our existing customer base is critical in driving renewals for our licenses and overall revenue growth. We have a global sales force that advises semiconductor industry business leaders, fabrication facility managers and the next generation of chip designers on the benefits of our design tools and semiconductor IP. Most of our customers enter into multi-year software license agreements for a fixed price including a multi-year software license and maintenance and services. When we renew contracts with our customers, we may increase our bookings by selling them additional or new software or SIP. Over time, we expect that existing customers will choose to upgrade and/or purchase additional products. Our ability to continue to generate sales from our existing customers and to expand those relationships depends on our ability to continue to offer software solutions that our existing customers demand. Any failure to continue to generate sales with our existing customers or expand our product and service offerings with our existing customers may have an adverse effect on our revenue and results of operations. We enter into standard software licensing agreements with our customers. Pursuant to these agreements, we grant our customers a non-exclusive, non-transferable, limited license, without the right to sublicense, to execute, use and operate certain software. Each party has the right to terminate the software license agreement under certain circumstances, in which event the customer will be required to remove, delete and return all software, related documentation and confidential information furnished under the license agreement. Our Ability to Expand Our Product Offerings To meet the increasing complexity of semiconductor designs, the introduction of new advanced materials, and the increased costs associated with more advanced semiconductor technology nodes, we need to continually enhance our product offerings through our own in-house research and development efforts, acquisitions, or strategic partnerships with third parties. The in-house development of new product offerings or enhancements to our existing product offerings requires significant research and development activities and time and may or may not result in offerings we can successfully market and sell to customers. We may also seek to acquire companies or assets for products or solutions which we believe are complementary to our existing products or solutions. Additionally, we currently, and have in the past, and may in the future, partner with third parties to expand our product offerings to our customers. If in the future, we enter into additional licensing agreements with other third parties and are unable to extend the term of those licensing arrangements, we will experience an associated decline in revenue relating to those products. Our Ability to Expand into New Markets and Applications and Expansion of our Existing Markets The development of semiconductors that are optimized for specific applications, including AI, 5G/6G communications and IoT, has continued to fuel demand for TCAD and EDA software tools, which in turn fuels demand to develop solutions to meet our markets’ evolving needs. Our ability to successfully generate customer demand amongst new customers and in new markets is dependent on our ability to educate these customers and markets about our software solutions and our ability to generate sufficient new solutions that solve problems for these potential customers. Our ability to continue to expand our product offerings into new markets also requires that we direct our research and development efforts toward value-generating new and existing initiatives. Our future revenues and results of operations will be directly impacted by our ability to produce and provide new software solutions in new and expanding markets. Our Ability to Successfully Identify, Complete and Integrate Acquisitions Our success depends in part on our ability to identify, complete and integrate acquisitions. Our goal for future potential acquisitions is to pursue acquisitions that will increase our competitiveness in our markets and increase our bookings and revenue. Our ability to successfully identify, complete and integrate acquisitions will depend on a number of factors, including access to adequate capital, potential competition for the assets, and technology fit. When we engage in mergers and acquisitions, we aim to retain the customers of our acquired companies due to our expanded offerings or improved services. As a result, acquiring target companies is a key part of our growth strategy and may allow us to access and serve a broader range of customers, which ultimately may lead to more bookings, increased revenue growth and expansion in our market share presence. Our Ability to Scale While Mitigating Increases in Expenses If we can execute on our growth strategy and grow our revenue through a combination of new customer growth, upgrades and increased usage of our products by existing customers, as well as accretive acquisitions, our results will be impacted by our ability to reduce the rate at which our expenses increase in proportion with a rise in revenue. We believe this is possible in a number of expense line items, which may provide for additional gross margin and operating margin expansion. For example, we anticipate as our existing customers choose to upgrade to newer software solutions, our costs related to the support of legacy software decreases, outpacing any increases in cost related to supporting the upgraded software. Additionally, we have incurred a significant increase in stock-based compensation expense since becoming a public company. However, we do not anticipate that to scale proportionally with our revenue. Finally, we have been able to gain sales efficiencies as our revenue grows, such that our sales and marketing expenses will have decreased as a percentage of revenue. In the aggregate, our ability to keep these expenses from growing proportionally with our revenue may provide for meaningful gross margin and operating margin expansion. Results of Operations The following table sets forth our results of operations for the three and six months ended June 30, 2026, and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 % Change 2026 2025 % Change (in thousands) Revenue: Software license revenue $ 11,821 $ 7,217 64 % $ 23,430 $ 17,226 36 % Maintenance and service 5,985 4,831 24 % 12,131 8,914 36 % Total revenue 17,806 12,048 48 % 35,561 26,140 36 % Cost of revenue 2,644 3,504 (25) % 5,061 6,520 (22) % Gross profit 15,162 8,544 77 % 30,500 19,620 55 % Operating expenses: Research and development 8,811 5,907 49 % 17,970 10,707 68 % Selling and marketing 3,866 4,714 (18) % 8,688 9,433 (8) % General and administrative 6,484 8,066 (20) % 13,498 16,186 (17) % Litigation settlement — — — % — 13,069 (100) % Total operating expenses 19,161 18,687 3 % 40,156 49,395 (19) % Operating loss (3,999) (10,143) (61) % (9,656) (29,775) (68) % Interest income 29 651 (96) % 76 1,514 (95) % Interest and other expense, net (380) (443) (14) % (494) (734) (33) % Loss before income tax benefit (4,350) (9,935) (56) % (10,074) (28,995) (65) % Income tax benefit (673) (526) 28 % (537) (313) 72 % Net loss $ (3,677) $ (9,409) (61) % $ (9,537) $ (28,682) (67) % The following table summarizes our results of operations as a percentage of total revenue for the three and six months ended June 30, 2026, and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (as a percentage of total revenue) (as a percentage of total revenue) Revenue: Software license revenue 66 % 60 % 66 % 66 % Maintenance and service 34 % 40 % 34 % 34 % Total revenue 100 % 100 % 100 % 100 % Cost of revenue 15 % 29 % 14 % 25 % Gross profit 85 % 71 % 86 % 75 % Operating expenses: Research and development 49 % 49 % 51 % 41 % Selling and marketing 22 % 39 % 24 % 36 % General and administrative 36 % 67 % 38 % 62 % Litigation settlement — % — % — % 50 % Total operating expenses 108 % 155 % 113 % 189 % Operating loss (22) % (84) % (27) % (114) % Interest income — % 5 % — % 6 % Interest and other expense, net (2) % (4) % (1) % (3) % Loss before income tax benefit (24) % (82) % (28) % (111) % Income tax benefit (4) % (4) % (2) % (1) % Net loss (21) % (78) % (27) % (110) % Comparison of the Three and Six Months Ended June 30, 2026, and 2025 In March, April, and August 2025, we acquired the OPC Business, Tech-X, and Mixel, respectively. Accordingly, the results of operations of the OPC Business, Tech-X, and Mixel have been included in our condensed consolidated financial statements since their respective acquisition dates. Revenue Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: (in thousands) (in thousands) Software license revenue $ 11,821 $ 7,217 $ 23,430 $ 17,226 Maintenance and service 5,985 4,831 12,131 8,914 Total revenue $ 17,806 $ 12,048 35,561 26,140 Total revenue increased by $5.8 million, or 48%, to $17.8 million for the three months ended June 30, 2026, from $12.0 million for the three months ended June 30, 2025. Revenue in the current period benefited from our recent acquisitions. TCAD revenue, IP revenue, and revenue associated with our EDA tools increased by $1.1 million $4.2 million, and $0.5 million, respectively. Software license revenue increased by $4.6 million, or 64%, to $11.8 million for the three months ended June 30, 2026, from $7.2 million for the three months ended June 30, 2025. Maintenance and service revenue increased by $1.2 million, or 24%, to $6.0 million for the three months ended June 30, 2026, from $4.8 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, total revenue increased by $9.4 million, or 36% to $35.6 million from $26.1 million for the six months ended June 30, 2025. IP revenue and TCAD revenue increased by $7.1 million and $2.8 million, partially offset by a decline in revenue associated with our EDA tools of $0.5 million, respectively. Software license revenue increased by $6.2 million, or 36%, to $23.4 million for the six months ended June 30, 2026 from $17.2 million for the six months ended June 30, 2025. Maintenance and service revenue increased by $3.2 million, or 36%, to $12.1 million for the six months ended June 30, 2026 from $8.9 million for the six months ended June 30, 2025. Gross Profit Gross profit increased by $6.6 million, or 77%, to $15.2 million for the three months ended June 30, 2026, from $8.5 million for the three months ended June 30, 2025, primarily due to a $5.8 million increase in revenue and a $0.9 million decrease in cost of revenue. Cost of revenue during the three months ended June 30, 2026, decreased primarily due to our cost reduction efforts and restructuring activities. We recognized $0.3 million and $0.4 million of stock-based compensation expense in cost of revenue during the three months ended June 30, 2026 and 2025, respectively. We also recognized $0.2 million of amortization associated with our acquired intangible assets in cost of revenue during each of the three months ended June 30, 2026 and 2025. Gross profit margin increased to 85% for the three months ended June 30, 2026, from 71% for the three months ended June 30, 2025, primarily due to higher revenue, which improved the absorption of fixed costs, and lower cost of revenue resulting from our cost-reduction efforts and restructuring activities. For the six months ended June 30, 2026, gross profit increased by $10.9 million, or 55%, to $30.5 million from $19.6 million for the six months ended June 30, 2025, primarily due to a $9.4 million increase in revenue and a $1.5 million decrease in cost of revenue. Cost of revenue during the six months ended June 30, 2026, decreased primarily due to our cost reduction efforts and restructuring activities. We recognized $0.6 million and $0.5 million of stock-based compensation expense in cost of revenue during the six months ended June 30, 2026 and 2025. We also recognized $0.5 million of amortization associated with our acquired intangible assets in cost of revenue during each of the six months ended June 30, 2026 and 2025. Gross profit margin increased to 86% for the six months ended June 30, 2026 from 75% for the six months ended June 30, 2025, primarily due to higher revenue, which improved the absorption of fixed costs, and lower cost of revenue resulting from our cost-reduction efforts and restructuring activities. Operating Expenses Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) {in thousands) Operating expenses Research and development $ 8,811 $ 5,907 17,970 10,707 Selling and marketing 3,866 4,714 8,688 9,433 General and administrative 6,484 8,066 13,498 16,186 Litigation settlement — — — 13,069 Total operating expenses $ 19,161 $ 18,687 $ 40,156 $ 49,395 Research and Development Expenses Research and development expenses increased by $2.9 million, or 49%, to $8.8 million for the three months ended June 30, 2026, from $5.9 million for the three months ended June 30, 2025. This increase was primarily due to a $1.5 million increase in expenses associated with our acquisitions, an increase in allocated costs of $0.8 million, a $0.7 million increase in stock-based compensation expense primarily associated with our restructuring activities as well as increased headcount, an increase of $0.5 million in cash severance associated with our restructuring activities, and an increase of $0.1 million in consulting costs, partially offset by a $0.9 million reduction in employee compensation and benefits resulting from a decrease in headcount. For the six months ended June 30, 2026, research and developments expenses increased by $7.3 million, or 68%, to $18.0 million from $10.7 million for the six months ended June 30, 2025. The increase was primarily attributable to a $4.3 million increase in expenses associated with our acquisitions, an increase in allocated costs of $1.5 million, a $1.3 million increase in stock-based compensation expense primarily associated with our restructuring activities as well as increased headcount, an increase of $0.5 million in cash severance associated with our restructuring activities, an increase of $0.4 million in consulting costs, and an increase of $0.2 million in software expenses, partially offset by a $1.3 million reduction in employee compensation and benefits resulting from a decrease in headcount. Selling and Marketing Expenses Selling and marketing expenses decreased by $0.8 million, or 18%, to $3.9 million for the three months ended June 30, 2026, from $4.7 million for the three months ended June 30, 2025. This decrease was primarily due to a $1.4 million reduction in employee compensation and benefits resulting from a decrease in headcount, and a $0.2 million reduction in marketing expense, partially offset by an increase in allocated costs of $0.8 million. For the six months ended June 30, 2026, selling and marketing expenses decreased by $0.7 million, or 8%, to $8.7 million from $9.4 million for the six months ended June 30, 2025. This decrease was primarily due to a $2.3 million reduction in employee compensation and benefits resulting from a decrease in headcount, and a decrease of $0.2 million in marketing expenses. This was partially offset by an increase in allocated costs of $1.4 million, a $0.3 million increase in cash severance expense associated with our restructuring activities, and a $0.1 million increase in stock-based compensation expenses. General and Administrative Expenses General and administrative expenses decreased by $1.6 million, or 20%, to $6.5 million for the three months ended June 30, 2026, from $8.1 million for the three months ended June 30, 2025. The decrease was driven by a $2.0 million reduction in legal and professional fees, and a $0.3 million reduction in employee compensation and benefits resulting from a decrease in headcount, partially offset by a $0.4 million increase in depreciation and amortization, a $0.3 million increase in expenses associated with our acquisitions, and a $0.2 million increase in stock-based compensation expense. For the six months ended June 30, 2026, general and administrative expenses decreased by $2.7 million, or 17%, to $13.5 million from $16.2 million for the six months ended June 30, 2025. This decrease was primarily due to a $3.6 million reduction in legal and professional fees, and a $0.9 million reduction in employee compensation and benefits resulting from a decrease in headcount, partially offset by a $1.0 million increase in depreciation and amortization, a $1.0 million increase in software expense, and a $0.4 million increase in expenses associated with our acquisitions. Litigation Settlement Litigation settlement was $13.1 million for the six months ended June 30, 2025. In May 2025, Silvaco and two of our principal stockholders and members of our board of directors (the “Co-Defendants”) agreed to a settlement (the “Settlement Agreement”) in connection with litigation brought by the former shareholders of Nangate, Inc. (“Nangate”) and a third cross-complainant (together, the “Nangate Parties”). The $32.5 million settlement (the “Settlement Payment”) consists of an initial $16.0 million paid on June 17, 2025, and four quarterly installment payments of $4.1 million each, payable on August 15, 2025, November 14, 2025, February 13, 2026, and May 15, 2026. In September 2025, the U.S. Court of Appeals for the Ninth Circuit reversed the fraud and breach of contract verdicts and the parties dismissed all claims, triggering an acceleration clause in the settlement agreement, resulting in the acceleration of the final installment of the Settlement Payment of $4.1 million from May 15, 2026, to February 13, 2026. Following the execution of the Settlement Agreement, Silvaco and the Co-Defendants also executed an apportionment agreement pursuant to which the Co-Defendants agreed to bear 25% of the Settlement Payment, with Silvaco bearing the remaining 75%. During the six months ended June 30, 2026, we made the remaining payment of $8.3 million. As of June 30, 2026, we had no remaining liability under the Settlement Agreement. See Note 7 and Note 13 of our condensed consolidated financial statements for further discussion. Interest Income Interest income reflects interest earned and accretion on our cash equivalents and marketable securities. Interest income decreased by $0.6 million or 96% for the three months ended June 30, 2026, from $0.7 million for the three months ended June 30, 2025. The decrease was driven by a lower balance of marketable securities held during the period. Interest income decreased by $1.4 million or 95% for the six months ended June 30, 2026, from $1.5 million for the six months ended June 30, 2025 The decrease was driven by a lower balance in marketable securities held during the period. Interest and other expense, net Interest and other expense, net, was $0.4 million for the three months ended June 30, 2026, and 2025, and $0.5 million and $0.7 million for the six months ended June 30, 2026 and 2025, respectively. The decrease in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was primarily driven by a $0.2 million decrease in foreign currency fluctuations and a $0.1 million change in the fair value of contingent consideration. Income tax benefit Income tax benefit was $0.7 million and $0.5 million for the three and six months ended June 30, 2026, respectively, as compared to $0.5 million and $0.3 million for the same period in 2025, respectively. See Note 11 of our condensed consolidated financial statements for further discussion. Liquidity and Capital Resources Since inception, we have financed operations primarily through proceeds received from payments from our customers, borrowings from a principal stockholder and other lenders, and the net proceeds from the sale of our common stock. Our primary sources of liquidity are cash and cash equivalents including cash generated from operations. As of June 30, 2026, we had $13.0 million in cash and cash equivalents, of which $5.3 million was held by our foreign subsidiaries. On April 11, 2024, we amended and restated our license agreement with NXP, pursuant to which we recorded an associated vendor financing obligation. The vendor financing obligation was $3.3 million as of June 30, 2026. We determined that the vendor financing obligation had an imputed interest rate of 9%, which is reflective of our borrowing rate with similar terms to that of the license agreement. On March 13, 2026, we entered into an Open Market Sale Agreement with Jefferies LLC, as sales agent, pursuant to which we may conduct registered offers and sales of shares of our common stock under our registration statement on Form S-3 (Registration No. 333-291212), a prospectus supplement dated March 13, 2026, and a prospectus supplement dated May 8, 2026, for an aggregate public offering amount of up to $35.0 million. During the three and six months ended June 30, 2026, we issued 707,993 and 1,460,737 shares, respectively, of common stock at a weighted average price of $10.35 and $7.98 per share, respectively. For the three and six months ended June 30, 2026, we received gross proceeds of $7.4 million and $11.7 million, respectively. If our cash and cash equivalents, including cash generated from operating activities, are not sufficient to satisfy our liquidity requirements, we may be required to seek additional financing. If we raise additional funds by issuing equity securities or convertible debt securities, our stockholders will experience dilution. Debt financing, if available, may contain covenants that significantly restrict our operations or our ability to obtain additional debt financing in the future. Any additional financing that we raise may contain terms that are not favorable to us or our stockholders. We cannot assure you that we would be able to obtain additional financing on terms favorable to us or our existing stockholders, or at all. See “Risk Factors” in Part II, Item 1A in this Quarterly Report on Form 10-Q for further discussion. As of June 30, 2026, $5.5 million, or 43%, of our cash and cash equivalents was maintained with one financial institution, where our current deposits are in excess of federally insured limits. Past macroeconomic conditions have resulted in the actual or perceived financial distress of many financial institutions, including the 2023 failures of Silicon Valley Bank, Signature Bank and First Republic Bank and the UBS takeover of Credit Suisse. If the financial institutions with whom we do business were to become distressed or placed into receivership, we may be unable to access the cash we have on deposit with such institutions. If we are unable to access our cash as needed, our financial position and ability to operate our business could be adversely affected. Cash Flows The following table summarizes changes in our cash flows for the periods indicated. Six Months Ended June 30, 2026 2025 (in thousands) Cash provided by (used in): Operating activities (16,524) (16,613) Investing activities 986 27,817 Financing activities 11,257 (1,599) Effect of exchange rate fluctuations 23 421 Net change in cash and cash equivalents $ (4,258) $ 10,026 Operating Activities Cash flows from operating activities may vary significantly from period to period depending on a variety of factors including the timing of our collections and payments. Our ongoing cash outflows from operating activities primarily relate to personnel related costs, payments for professional services, office leases and related facilities costs, and software supporting our company infrastructure, among others. Our primary source of cash inflows is collections of our accounts receivable. The timing of invoices to our customers and subsequent collection is based on agreements executed and payment terms that can vary by customer. Net cash used in operating activities for the six months ended June 30, 2026, was $16.5 million compared to $16.6 million of net cash used in operating activities for the six months ended June 30, 2025. The $0.1 million decrease in net cash used in operating activities primarily reflects a $19.1 million decrease in net loss, a $1.4 million increase in non-cash stock based compensation expense, and a $1.3 million increase in non-cash depreciation and amortization expense, offset by the non-recurrence of a $13.1 million charge to litigation settlement (see Note 7 and Note 13 of our condensed consolidated financial statements for further discussion) and an $9.4 million increase in cash used related to changes in operating assets and liabilities. Investing Activities Net cash provided by investing activities for the six months ended June 30, 2026, was $1.0 million, as compared to $27.8 million net cash provided by investing activities for the six months ended June 30, 2025. Cash provided by investing activities during the six months ended June 30, 2026, included $1.0 million of maturities in marketable securities. During the six months ended June 30, 2025, cash provided by investing activities included $32.0 million of maturities in marketable securities and $10.3 million in sales of marketable securities, partially offset by $14.3 million in cash used to acquire the OPC Business and Tech-X and $0.2 million in purchases of property and equipment. Financing Activities Net cash provided by financing activities for the six months ended June 30, 2026, was $11.3 million, as compared to net cash used in financing activities of $1.6 million for the six months ended June 30, 2025. Net cash provided during the six months ended June 30, 2026, includes $12.2 million in net proceeds from the issuance of common stock, partially offset by payments of payroll taxes related to shares withheld from employees of $0.3 million. Net cash used during the three months ended June 30, 2025, includes payments on our vendor financing obligation $1.3 million and payments of payroll taxes related to shares withheld from employees of $0.6 million. This use of cash was partially offset by $0.4 million in proceeds from the issuance of common stock. Effects of Exchange Rate Fluctuations on Cash and Cash Equivalents The effects of exchange rate fluctuations on cash and cash equivalents were $23.0 thousand and $0.4 million for the six months ended June 30, 2026, and 2025, respectively. Contractual Obligations Our financial commitments for contractual obligations as of June 30, 2026, include operating leases, vendor financing obligation, and contingent consideration. See Note 7, Note 8, and Note 14 of our condensed consolidated financial statements for further discussion. Litigation Settlement In May 2025, Silvaco and the Co-Defendants agreed to the Settlement Agreement in connection with litigation brought by the Nangate Parties. The Settlement Payment consists of an initial $16.0 million payment due on June 18, 2025, and four quarterly installment payments of $4.1 million each, payable on August 15, 2025, November 14, 2025, February 13, 2026, and May 15, 2026. In September 2025, the U.S. Court of Appeals for the Ninth Circuit reversed the fraud and breach of contract verdicts and the parties dismissed all claims, triggering an acceleration clause in the settlement agreement, resulting in the acceleration of the final installment of the Settlement Payment of $4.1 million from May 15, 2026, to February 13, 2026. Following the execution of the Settlement Agreement, Silvaco and the Co-Defendants also executed an apportionment agreement under which the Co-Defendants agreed to bear 25% of the Settlement Payment, with Silvaco bearing the remaining 75%. During the six months ended June 30, 2026, we made the remaining payment of $8.3 million. As of June 30, 2026, we had no remaining liability under the Settlement Agreement. See Note 7 and Note 13 of our condensed consolidated financial statements for further discussion. Off-Balance Sheet Arrangements As of June 30, 2026, we did not have any off-balance sheet arrangements. As of December 31, 2025, we maintained an irrevocable standby letter of credit issued in connection with the Settlement Agreement, which was terminated during the six months ended June 30, 2026. Critical Accounting Policies and Significant Judgments and Estimates There have not been any material changes during the six months ended June 30, 2026, to the methodology applied by management for critical accounting policies previously disclosed in our audited financial statements set forth in our 2025 Form 10-K. For further discussion of our critical accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our 2025 Form 10-K.