Operator

Good afternoon and welcome to Silvaco’s Second Quarter Fiscal Year 2026 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Chris Zegarelli, Silvaco’s CFO. Please proceed.

Chris Zegarelli
Chief Financial Officer

Thank you. Joining me on the call today is Wally Rhines, Silvaco’s CEO and Director. As a reminder, a press release highlighting the company’s results, along with supplemental financial results, are available on the company’s IR site at investors.silvaco.com. An archived replay of the call will be available on this website for a limited time after the call.

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 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. 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 and on this conference call. The risk factors section in Silvaco’s Annual Report on Form 10-K

Catherine, the Princess of Wales, is said to be caught in the middle of growing tension between King Charles III and her husband, Prince William, according to anonymously sourced reports circulating across multiple celebrity outlets this week, which claim the strain stems from Charles’ recent private reunion with Prince Harry and Meghan Markle. None of the claims have been confirmed by Buckingham Palace or Kensington Palace.

The reports, traced to Australian outlet Woman’s Day and picked up by several other publications, cite an unnamed “royal source” describing Catherine as increasingly distressed by what the source characterized as a widening divide between Charles and William. According to the source, Catherine previously lost sleep over tension between William and his brother, but has since become even more troubled by the apparent distance growing between William and his father. The source added that while Catherine would not disrespect or undermine her husband, she also holds deep affection for her father-in-law and worries about him given his ongoing health treatment, and has reportedly encouraged William to take a gentler approach even as she understands his frustration with decisions Charles has made regarding Harry and Meghan.

What Is Actually Confirmed

Separate from these anonymously sourced claims about Catherine’s private feelings, one element of the broader story has more solid grounding: Harry and Meghan did travel to Charles’ Highgrove estate for a private meeting on July 10, bringing their two children, Prince Archie and Princess Lilibet, along with them. Vanity Fair royal correspondent Katie Nicholl reported, citing her own sources, that William and Catherine were not informed the meeting was taking place beforehand, and that Charles had asked Harry and Meghan to keep the visit confidential, with only palace aides authorized to confirm afterward that it had occurred. That specific detail, that William was reportedly not consulted or informed in advance, has been echoed across several outlets covering the story, giving it somewhat more credibility than the more elaborate emotional narratives that have followed.

A Recurring Tabloid Narrative

The claim that William feels frustrated or “blindsided” by his father’s outreach to Harry has become a recurring theme across celebrity media coverage in the weeks since the Highgrove meeting, though the specific framing and quoted details vary considerably from outlet to outlet, a pattern common when a single anonymously sourced claim gets picked up and reworked by multiple competing publications. One version of the story, citing a source speaking to a different outlet, claimed William feels sickened that Harry has, in the source’s words, “wormed his way back” into their father’s affections, and suggested William believes the reconciliation effort is calculated rather than genuine. Another version, citing royal commentator Emily Andrews, described William and Catherine as feeling “betrayed and possibly even humiliated” by Charles extending an olive branch to the Sussexes. None of these characterizations have been confirmed on the record by William, Catherine or Buckingham Palace.

A Pattern of Conflicting and Unverifiable Claims

Readers should note that stories built around anonymous “royal sources” or “insiders” in celebrity media have a mixed and often unreliable track record, and are frequently impossible to independently verify given that neither Kensington Palace nor Buckingham Palace routinely comments on this type of speculative reporting. In this instance, multiple outlets have published similar but not identical versions of the same underlying claim, sourced to unnamed individuals, without any of the involved parties, Charles, William, Catherine, Harry or Meghan, offering public confirmation or denial.

Broader Context on the Royal Family Rift

The underlying tension being described traces back to the extended estrangement between Harry and the rest of the royal family that followed his and Meghan’s departure from official royal duties in 2020, a rift that deepened further following Harry’s 2023 memoir “Spare” and the couple’s various television interviews, both of which included pointed criticism of William and other family members. Royal commentators have long suggested that William has taken a more guarded position toward reconciliation than his father, with some reports characterizing William’s stance as driven less by anger than by caution and a desire to protect the institution he is due to eventually lead.

Separately, royal writer Robert Jobson has reported, through on-record comments to Page Six, that there have been genuine differences of opinion between Charles and William over the past several years, while noting that both men understand they ultimately need to work together given the decisions Charles will make that affect William’s future role. That more measured characterization, offered as Jobson’s own assessment rather than through an anonymous “source,” stands in contrast to the more dramatic anonymous claims found in some of the tabloid coverage.

Catherine’s Own Public Focus

Amid the speculation about her private feelings toward the family rift, Catherine has continued to maintain a largely separate public focus this summer, centered on her family and her continued recovery following her cancer treatment, which she announced in March 2024 and confirmed was in remission in January 2025. She was seen in a visibly relaxed and happy setting alongside William and their three children at the Commonwealth Games in Glasgow on Aug. 1, an appearance royal commentators described as reflecting a family that had moved past its most difficult recent period, a characterization that sits somewhat uneasily alongside this week’s competing reports of Catherine privately losing sleep over renewed family tension.

What Remains Unclear

Ultimately, the claims about Catherine’s private worry over a rift between Charles and William rest entirely on unnamed sources relayed through celebrity gossip outlets, and have not been corroborated by any on-record statement from the royal family or its representatives. What can be said with more confidence is that Harry and Meghan’s July 10 meeting with Charles at Highgrove did take place, that it was kept confidential in advance, and that William and Catherine were reportedly not informed beforehand, details that have been more consistently reported across multiple sources. Beyond that, the specific emotional dynamics described in this week’s reports remain, for now, unverified claims rather than confirmed facts about the royal family’s private relationships.

SAN FRANCISCO — Shares of Atlassian Corporation jumped more than 30 percent in trading Friday after the collaboration software company reported stronger-than-expected fiscal fourth-quarter results and issued first-quarter revenue guidance that exceeded Wall Street estimates.

The stock rose as much as 30 percent or more in morning trading, with shares trading near $143 to $148 at various points, up sharply from the previous close of about $110. The move marked one of the largest single-day gains for the company in recent months and pushed the shares toward levels last seen earlier in the year.

Atlassian, known for tools such as Jira, Confluence and other team productivity software, said revenue for the quarter ended June 30 rose 28 percent year over year to $1.77 billion. That figure topped analysts’ average estimate of roughly $1.66 billion. Cloud revenue climbed 31 percent to $1.21 billion, continuing a trend of accelerating growth in the company’s subscription-based offerings.

Subscription annual recurring revenue reached $6.61 billion, up 23 percent from a year earlier. Remaining performance obligations, a measure of contracted future revenue, increased 44 percent to $4.82 billion, providing visibility into future business.

On a GAAP basis, Atlassian reported net income of $139 million, or 55 cents per share, compared with a net loss of $24 million, or 9 cents per share, in the year-earlier period. The company posted a GAAP operating margin of 12 percent. Adjusted earnings came in at $1.87 per share, beating the consensus forecast of $1.50.

“Simply put, we had an outstanding quarter to cap an outstanding year,” Chief Executive Officer and co-founder Mike Cannon-Brookes said in the company’s earnings materials. He noted that total revenue grew 28 percent year over year and that cloud growth accelerated, with certain AI-related tools surpassing one million monthly active users after more than doubling in a single quarter.

For the first quarter of fiscal 2027, Atlassian projected revenue between $1.705 billion and $1.715 billion, above the analyst consensus of about $1.66 billion to $1.67 billion. The company also pointed to continued cloud revenue growth in the high-20 percent range. Full-year fiscal 2027 guidance reflected more measured expectations amid broader macroeconomic uncertainty, though the near-term outlook and metrics on enterprise deals helped ease some investor concerns.

Cannon-Brookes also indicated plans to purchase up to $250 million of Atlassian shares, a move that signaled confidence in the company’s trajectory. He already holds a substantial stake in the firm.

The results and guidance prompted positive reactions from analysts. Bank of America upgraded the stock to Buy from Neutral and raised its price target to $175 from $105, describing Atlassian as an “AI beneficiary rather than an AI victim.” The firm highlighted the company’s workflow and collaboration data as a differentiated asset. Other firms also lifted targets, citing the strong finish to the fiscal year and evidence of AI-related product traction.

Atlassian has faced questions in recent periods about the potential impact of artificial intelligence on software demand and competitive dynamics in the collaboration space. The latest numbers showed accelerating cloud growth, record enterprise deals and rising adoption of AI-enabled features, which investors interpreted as evidence that the company is successfully integrating the technology into its platform rather than being disrupted by it.

The broader software sector has experienced volatility, with some SaaS companies seeing valuation pressure amid shifting growth expectations. Atlassian’s ability to post sequential improvement in cloud metrics and return to GAAP profitability stood out against that backdrop. Trading volume on Friday was elevated, reflecting heavy investor interest following the after-hours release of results on Thursday.

Atlassian’s products are used by teams for project tracking, knowledge management, service delivery and software development. The company has emphasized its shift toward cloud deployments and the expansion of its customer base among larger enterprises. Metrics such as remaining performance obligations and annual recurring revenue serve as key indicators of that transition’s progress.

Looking ahead, investors will watch for sustained cloud growth rates, further details on AI monetization and the company’s ability to convert strong remaining performance obligations into realized revenue. The first-quarter guidance provides an early test of momentum into the new fiscal year.

The stock’s sharp advance reflected relief that growth concerns had been addressed by the reported numbers and that management’s outlook aligned with or exceeded expectations on key near-term metrics. While full-year guidance was more cautious, the combination of beat-and-raise elements on the quarter, profitability improvement and insider buying supported the strong market reaction.

Atlassian closed its fiscal 2026 with clear evidence of demand for its core offerings and early signs that AI features are contributing to user engagement. The market’s response on Friday underscored how closely investors are monitoring the interplay between traditional software growth and the emerging role of artificial intelligence in enterprise tools.

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Yelp shares climbed Friday, trading up 7.79% to $26.99, extending gains following the local business review platform’s second-quarter earnings report, which beat Wall Street expectations on both revenue and profit while highlighting rapid growth in the company’s newer AI-powered products.

The results, released Thursday after markets closed, showed Yelp continuing to navigate a challenging advertising environment for its core local business listings while leaning increasingly on artificial intelligence-driven services to offset slower growth in its traditional revenue streams.

A Solid Beat Across the Board

Yelp reported second-quarter revenue of $375.5 million, up 1.4% from the same period a year earlier and comfortably ahead of the roughly $366.7 million analysts had been expecting heading into the report. On a per-share basis, the company posted GAAP earnings of 57 cents, beating the consensus estimate by 56.7%, while adjusted earnings came in at 62 cents per share, topping the 40-cent forecast by 22 cents.

The revenue beat came even as growth decelerated from the 3.7% year-over-year increase Yelp posted in the same quarter a year earlier, reflecting continued softness in the company’s core advertising business even as overall results exceeded the relatively modest expectations analysts had set heading into the report.

AI-Powered Services Provide a Bright Spot

The standout theme in Yelp’s results centered on the rapid growth of its newer artificial intelligence-driven revenue streams, a category the company groups under “other revenue” that includes its Yelp Host product, its Hatch platform, and data licensing arrangements. In the first quarter of 2026, that segment surged 75% year over year to a record $29 million, and the company has continued to point to it as central to its longer-term growth strategy, with management targeting a $250 million annual run rate for the category by the end of 2028.

Yelp Host, the company’s AI-powered call-handling product for local businesses, has shown particularly strong momentum. The service surpassed an annual run rate of 1.5 million calls handled by April, more than doubling its volume since January. Yelp’s chief executive has estimated the total addressable market opportunity for the product at more than $1 billion within the United States alone, underscoring why the company has continued prioritizing investment in the offering even as growth in its legacy advertising business has slowed.

Continued Pressure on Core Advertising

Despite the strength in its newer AI-driven offerings, Yelp’s traditional local advertising business has continued to show signs of strain. In the company’s first-quarter results, paying advertising locations fell 6% year over year to approximately 485,000, while ad clicks declined 10% even as the average cost per click rose 8%. Within that business, services advertising revenue grew a modest 1% to $234 million, while advertising revenue tied to restaurants, retail and other categories fell 11% to $99 million, reflecting uneven demand trends across different segments of Yelp’s local business customer base.

Management has attributed some of that softness to broader macroeconomic uncertainty affecting advertiser budgets, including a period of particular weakness in March that the company linked to geopolitical events weighing on business confidence more broadly.

Guidance Holds Steady

Following the second-quarter results, Yelp maintained its full-year 2026 revenue guidance at approximately $1.47 billion, a figure that closely aligns with analyst expectations and reflects the company’s continued confidence in its overall growth trajectory despite ongoing pressure in its core advertising segment. For the third quarter specifically, Yelp had previously guided investors to expect revenue in a range of $363 million to $368 million, alongside adjusted EBITDA of $70 million to $75 million, with full-year adjusted EBITDA guidance set at a range of $310 million to $330 million.

Capital Returns Continue

Alongside its operational results, Yelp has continued an active share buyback program, repurchasing $125 million worth of its own stock in the first quarter of 2026 alone, contributing to a roughly 12% year-over-year decline in diluted shares outstanding. The company reported $414 million remaining under its current share repurchase authorization as of that filing, giving it continued flexibility to return capital to shareholders even as it invests in its AI product roadmap.

Insider Selling Continues

Not every signal surrounding the stock has been unambiguously positive. According to recent filings, Yelp insiders have sold shares on the open market 19 times over the past six months, with zero purchases recorded during that same window, a pattern some analysts have flagged as worth monitoring even though insider selling can reflect a range of personal financial decisions unrelated to a company’s underlying business outlook. Institutional investor positioning has also been mixed, with 141 institutional holders adding to their Yelp positions in the most recent quarter while 175 reduced their stakes over the same period.

A Stock That Has Traded in a Wide Range

Yelp shares have traded within a 52-week range of $19.60 to $34.64, reflecting a meaningful degree of volatility over the past year even as the company’s underlying revenue growth has remained relatively stable. Ahead of Thursday’s earnings release, Yelp shares had traded modestly higher, up about 1.1% in the days leading into the report, with an average analyst price target of $26.71 sitting just below the stock’s pre-earnings trading level, suggesting that at least part of Friday’s post-earnings rally reflects the market recalibrating its expectations upward following the stronger-than-anticipated results.

With Yelp’s core advertising business continuing to face headwinds even as its newer AI-driven products post triple-digit growth rates, investors are likely to keep a close watch on how quickly Yelp Host and its related services can scale toward the company’s stated $250 million run-rate target by 2028. The trajectory of that AI-focused growth engine, set against the ongoing softness in Yelp’s traditional local advertising business, is expected to remain the central storyline shaping investor sentiment toward the stock heading into the back half of 2026.

Stocks are spitting out a smaller share of their returns in dividend income, a challenge for those who lean on steady cash flows to cover daily expenses. The trailing 12-month dividend yield on the S&P 500 is now hovering around a generational low of just over 1%, after trending downward for much of the past two decades. Read more on the trend here.