Silicom (SILC) investor relations material

Executive summary

• Q2 2026 revenue reached $23.8 million, up 59% year-over-year, exceeding expectations and prior guidance, with H1 2026 revenue at $42.9 million, up 46%.

• Strong momentum driven by core business growth, recurring revenue from design wins, and new opportunities in AI inference, PQC, and white-label switching.

• Secured seven new design wins in H1 2026, meeting the lower end of the annual target, and launched the first AI-Inference production order.

• Raised full-year 2026 revenue guidance to $93–$95 million, reflecting over 50% year-over-year growth.

• Management projects a return to quarterly non-GAAP profitability in the second half of 2026, earlier than previously anticipated.

Financial highlights

• Q2 2026 revenue was $23.8 million, a 59% increase from $15 million in Q2 2025; H1 2026 revenue was $42.9 million, up 46%.

• Gross profit grew 51% to $7.2 million, with a gross margin of 30.4%, at the upper end of the expected range.

• Operating expenses rose 16% to $8.3 million, demonstrating operating leverage as revenue outpaced expense growth.

• Operating loss narrowed to $1.1 million non-GAAP and $2.0 million GAAP; net loss improved to $0.9 million non-GAAP and $2.1 million GAAP.

• Cash and cash equivalents at June 30, 2026, were $25.1 million; total assets were $162.9 million.

Outlook and guidance

• Q3 2026 revenue guidance is $25–$26 million, implying up to 66% year-over-year growth.

• Full-year 2026 revenue guidance raised to $93–$95 million, up from previous $82–$83 million.

• AI inference revenues expected to contribute $3–$4 million in 2026, with higher impact anticipated in 2027.

• Targeting 7 to 9 major design wins annually for 2026 and beyond, supporting sustained double-digit growth.

• Non-GAAP profitability expected to return in the second half of 2026.