Thank you for standing by, and welcome to the Silvaco Fourth Quarter 2024 Financial Results Conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Greg McNiff, Investor Relations. Please go ahead, sir. Thank you. Joining me on the call today are Babak Taheri, Silvaco CEO, and Ryan Benton, Silvaco CFO. 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. An archived replay of the conference call will be available on this website for a limited time after the call. Please note that during this call, management will be making reremarks regarding future events and the future financial performance of the company. These reremarks 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, earnings presentation, and on this conference call. The risk factors section in Silvaco's most recent Form 10-Q filing with the Securities and Exchange Commission provides a description of these risks. With that, I'd like to turn the call over to Silvaco CEO, Babak Taheri. Babak? Thank you, Greg. Hello, and welcome to Silvaco's Fourth Quarter 2024 earnings call. I am Babak Taheri, CEO of Silvaco. Thank you for joining us today. In addition to discussing Silvaco's results, we will provide guidance for the first quarter and full year 2025, along with updates on our recent press releases, business developments, and current market trends. For those joining us for the first time, Silvaco is a provider of TCAD, EDA, and semiconductor IP products that enable chip design, chip manufacturing, and photonics through digital twin modeling and simulation, utilizing AI and machine learning. We have decades of deep expertise in modeling and simulation software, from concept to design and manufacturing. Silvaco's digital twin platform drives advances for the next generation of power semiconductors, photonics, memory devices, and advanced CMOS technologies utilized in design and fabrication of next generation of integrated circuits. I will now highlight our non-GAAP results for full year 2024 and our targets for full year 2025. Our CFO, Ryan, will discuss our annual and quarterly non-GAAP financial results and guidance in more detail later on. For the fiscal year 2024, we reported gross bookings of $65.8 million, reflecting a 13% increase from 2023. Revenue of $59.7 million, representing a 10% increase from 2023. Non-GAAP gross margin of 86%, increased from 83% in 2023. Non-GAAP operating income of $5.5 million compared to $4.4 million in 2023. Non-GAAP net income per share of $0.25 compared to $0.17 in 2023. Shares used in the calculation of non-GAAP income per share increased to 26.8 million from 20 million in the same period a year ago. Now, for the fiscal year 2025, we expect gross bookings in the range of $72 million-$79 million, reflecting a 9%-20% increase from 2024. Revenue in the range of $66-$72 million, representing an 11%-21% increase from 2024. Non-GAAP gross margin in the range of 84%-89%, which would compare to 86% in 2024. Non-GAAP operating income in the range of $2 million-$7 million compared to $6.7 million in 2024. Non-GAAP net income per share in the range of $0.07-$0.19 compared to $0.25 in 2024. I'm really excited about the progression of the business we have seen and our execution on the strategies we outlined since we've been public last year. We believe our strategic focus on driving innovation through AI-based semiconductor design for advanced CMOS geometries and power semiconductors, which includes digital twin modeling and quantum computing, positions us well for long-term growth, and our strong business fundamentals and innovation product lines will continue to drive our customer momentum. Next, I'd like to discuss our achievements in Q4. Please turn to the next slide. Highlights of Silvaco milestone achievements. Silvaco expanded its AI-based digital twin modeling platform, DTCO, adoption in May and October. We announced a Mykon Global in december to expand Silvaco's reach across the EMEA market, leveraging Mykon's expertise to deliver cutting-edge TCAD, EDA, and SIP solutions to new customers. Silvaco joined the SMART USA Institute under the CHIPS Manufacturing USA program to advance digital twin technologies in semiconductor manufacturing also in December, reinforcing Silvaco's leadership in innovation. Additionally, Silvaco expanded its Victory TCAD and digital twin modeling platform to planar CMOS, FinFET, and advanced CMOS technologies, which is a necessary step to enable DTCO for advanced process in September. In October, the company achieved the ISO 9001 certification of TCAD, EDA, and IP products. In the next slide, I would like to review how our land and expand strategies have performed in 2024 compared to 2023. Please turn to the next slide. Top vertical market trends and performance in fiscal year 2024. As previously stated, our focus in 2024 was expanding in the power and memory markets while maintaining display customers and adding new customers in other markets. I'm very proud of our team that has delivered 46 new customers or new logos in 2024. This slide represents a breakdown of 43 new customer wins that contributed to our primary end markets along with their year-over-year growth rates. Although new customer growth was down in three end markets, we view this as an opportunity to expand within the accounts we have already secured. As a reminder, we often land customers in certain markets with small opportunities and expand in them in the future. Notably, we added 13 new power customers with a 43% increase in bookings year-over-year in this segment for TCAD and EDA. One new memory customer with an 89% increase in revenue year-over-year for our TCAD product line, five new customers in photonics for TCAD and EDA, three new foundry customers for TCAD, IP and EDA, three new 5G, 6G customers for IP and EDA, five government and military customers for EDA and IP, five new customers in IoT for IP and EDA, eight new customers in automotive for TCAD and IP, and three others. On the next slide, I would like to review how we are expanding our SAM, including through the recently announced acquisition. Please turn to the next slide. Electronic design and manufacturing software enables value chain. Silvaco is expanding its market SAM using AI-based digital twin modeling and simulation. The first step in developing a semiconductor chip is designing it using EDA software and semiconductor IPs. As I mentioned in our last call, Silvaco provides software platforms for both step one, which is design, and step two, which is manufacturing preparation, as shown in this slide. Additionally, we have expanded our SAM by $500,000,000 through our DTCO platform. I'd like to draw your attention to the new green arrows on the slide. These arrows highlight the crucial interface between chip design and manufacturing, especially the final step after design and the first step in manufacturing. The last step before manufacturing is the optimization of the design layout data for mass generation, a process known in the industry as optical proximity correction, or OPC. Think of OPC as a technology that enables the creation of precise masks needed for semiconductor manufacturing. At a high level, advanced algorithms analyze and correct distortions that occur due to optical and proximity effects, ensuring that masks used to pattern wafers in the lithography process produce highly accurate and manufacturable chips. With our technology, Silvaco now directly addresses the first two key steps in the semiconductor value chain. I'm excited to announce that we've added OPC capabilities to our platform through the recent acquisition of Cadence's OPC product line. This strategic addition enables Silvaco to participate in a $357 million SAM, a market we previously did not address. Next, I'd like to go over the key highlights of this acquisition. Please turn to the next slide. Silvaco acquisition of Cadence's OPC product line overview, driving innovation, customer value, and market expansion through strategic acquisitions. Silvaco's strategic expansion into the growing OPC markets strengthens its position in advanced memory manufacturing and foundry operations, aligning with our long-term roadmap. This move enables us to foster deeper relationships with key memory manufacturers by addressing critical advanced node requirements, including EUV and AI-driven lithography. By integrating AI and machine learning into our OPC tools, Silvaco enhances efficiency and scalability, driving innovation in next-generation semiconductor manufacturing. Additionally, entering high-value OPC segment expands our SAM by $357 million, broadening our customer base with critical solutions. The acquisition also brings a highly skilled and innovative team, ensuring seamless integration and continuous product development. While the initial revenue impact in 2025 will be modest due to ASC 606 timing, contributions are expected to reach mid-single-digit revenue by 2026, reinforcing our financial growth strategy. Please turn to the next slide. Key differentiators of acquired OPC products. Advanced OPC solutions are setting new industry standards with cutting-edge technologies designed to improve semiconductor manufacturing. Hybrid SRAF optimization, or sub-resolution assist features, are tiny non-printing patterns added to a photo mask to ensure the accuracy of the chip design. They help correct distortions that naturally occur during the printing process, making complex chip patterns more reliable and manufacturable. The hybrid approach combines both rule-based and AI-driven techniques to enhance performance, especially for the most advanced semiconductor chips. As chips become smaller, down to 2 nanometers and beyond, the traditional correction methods struggle to keep up. EUV OPC, or extreme ultraviolet optical proximity correction, is a specialized technique that fine-tunes chip patterns for EUV lithography, which uses an ultra-small 13.5 nanometer wavelength light, ensuring precision at the smallest scales. Instead of using only straight lines and right angles, curvilinear OPC allows chip patterns to have smooth, round shapes, leading to better performance. Our technology ensures these designs comply with manufacturing standards while also improving efficiency and accuracy. Trusted by top memory manufacturers, these solutions have already proven their ability to speed up chip development while maintaining a high quality. By integrating seamlessly with chip design and manufacturing processes, our OPC technology helps reduce errors, increases efficiency, and accelerates product timelines. As the semiconductor industry pushes towards smaller, more powerful chips, 2 nanometers, 1.4 nanometers, and beyond, Silvaco is staying ahead of the curve, delivering faster, smarter, and more reliable solutions to power the future of semiconductor manufacturing. Please turn to the next slide. Four levels uses of artificial intelligence in EDA. As I mentioned earlier, Silvaco leverages AI industry trends through our digital twin modeling capabilities, which allows customers to create models which reduce costs and improve time to market. The EDA industry has historically utilized AI to assist chip designers at three levels: optimizing historical tool performance for chip designers, aiding in design steps, and lastly, generating chip designs from specification. Silvaco has introduced a four-level of AI, which is not in the design space but rather in the manufacturing space. This is where Silvaco is expanding its SAM by enabling operators in fabs to save time and reduce wafer production costs. Next slide, please. Here is Silvaco's AI-driven fab technology co-optimization, also known as DTCO. An example of Silvaco's AI-driven DTCO, this slide provides a more detailed layout of how digital twin models are generated at the wafer level. We leverage AI and machine learning to process the large volumes of data provided by the customers, transforming them into high-accurate wafer models. By rapidly building and refining these models, AI and machine learning significantly reduce development time from months to just weeks or even days. With AI-enhanced DTCO, customers can lower costs, improve margins, and accelerate time to market. Lastly, I'd like to review our growth strategies, which are fundamental to supporting our customers and driving future market share expansion. Please turn into the next slide. Here is Silvaco's growth strategy summary. In summary, we believe our strategic focus on driving innovation through AI-enabled semiconductor design, particularly for newly announced advanced CMOS geometries and power semiconductors, including digital twin modeling, positions us well for long-term market expansion while addressing customer needs. We further address customer needs through agile R&D, as well as both organic and inorganic growth strategies. Finally, we continue to leverage our deep relationships with R&D centers and academia to stay at the forefront of technological advancement. With that, I'll turn it over to Ryan to review the quarter and discuss our guidance. Thanks, Babak. Thank you all for joining us today. I will review our financial results for the fourth quarter and full year 2024 and provide guidance for the first quarter and full year 2025. As a reminder, we announced preliminary unaudited results for the quarter and full year on January 14th. Please note that I will be discussing non-GAAP results going forward. As a reminder, our GAAP financial results, along with the reconciliation between GAAP and non-GAAP results, can be found in our earnings press release, in the appendix of the presentation, and within the supplemental financials on our website. Gross bookings for our software and semiconductor IP products in the fourth quarter were $20.3 million, up 30% year-over-year, setting a new quarterly record. Revenue was $17.9 million, up 43% year-over-year, also a quarterly record, driven by continued adoption of our DTCO platform and strong EDA sales. I will discuss the drivers behind our performance in more detail shortly. Our non-GAAP operating expenses were $12.8 million, up from $11.1 million last year, primarily due to increased G&A costs related to being a public company, as well as continued investment in R&D and sales. Breaking down our cost structure, R&D was 23% of revenue, sales and marketing was 20%, and G&A was 29%. While G&A expenses have increased with our transition to becoming a public company, we expect these costs to scale more efficiently over time. Non-GAAP operating income was $3.1 million, up from a loss of $1.3 million in Q4 2023. Our non-GAAP net income for the quarter was $4.3 million, compared to a non-GAAP net loss of $1.6 million in the same period last year. Diluted non-GAAP net income per share came in at $0.15, an improvement of $0.23 from a non-GAAP net loss of $0.08 in Q4 2023. These bottom-line results reflect the impact that increased revenue scale can bring. Two quick comments on ending balances. We ended the December quarter with $87.5 million in cash, cash equivalents, and marketable securities. Our ending diluted share count for the fourth quarter was 28.8 million shares. I would now like to discuss our fourth quarter bookings performance by product. We achieved total gross bookings of $20.3 million and an increase of 30% year-over-year. We saw strong bookings growth across multiple product categories. TCAD bookings were $14.3 million, up 68%, driven by a large follow-on order for our DTCO product. EDA bookings were $5.5 million, up 31% year-over-year. SIP bookings were $0.6 million, down 79%, reflecting lingering impacts from the Q2 delay in renewing a key strategic resale agreement, as well as general order slowdowns in APAC. Despite this, we remain confident in the long-term opportunity for SIP. Our non-GAAP gross margin for the quarter came in just shy of our long-term target at 89%, up from 79% in Q4 2023. The improvement was simply driven by the revenue growth and the largely fixed nature of our cost of revenues, which came in at $1.9 million in the quarter. I'll now review our financial results for the full year. For 2024, we achieved annual record for gross bookings of $65.8 million, up 13% year-over-year, an annual record for revenue of $59.7 million, up 10% year-over-year. Our non-GAAP operating expenses for the full year were $45.9 million, compared to $40.5 million in 2023. R&D was 25% of sales, sales and marketing was 23% of sales, and G&A was 29% of sales. This resulted in an annual record for non-GAAP operating income of $5.5 million, up from $4.4 million in 2023. Our non-GAAP net income for the full year was $6.7 million, compared to $3.4 million in 2023. Lastly, again, diluted non-GAAP income per share was $0.25, up 8% from 2023. Turning to our bookings performance by product for the full year 2024, we achieved total gross bookings of $65.8 million, an increase of 13% year-over-year. Similarly to the quarter, our strong bookings performance was driven by TCAD and our DTCO product specifically. TCAD bookings were $46.9 million, up 32%. EDA bookings were $15.4 million, and SIP bookings were $3.4 million. Again, for SIP, we took a step back in 2024, but we're expecting good things in 2025 and beyond. I would now like to highlight our bookings performance throughout the year. We finished strong in Q4. We successfully added 13 new customers in the fourth quarter alone, which brings our year-to-date new customer total wins to 46. Turning to our revenue splits between geographic regions, for the fourth quarter of 2024, Asia-Pacific revenues were $9.2 million, or 52% of total sales. The Americas was just over $7 million, or 40% of sales, and EMEA was $1.5 million, or 8% of sales. For the full year, Asia-Pacific revenues were $31.6 million, or 53% of sales. The decline in SIP sales impacted our full-year performance, but strong Q4 recovery in TCAD and EDA helped stabilize our results for this region. The Americas was $22.5 million, or 38% of sales. This region showed exceptional growth compared to 2023, driven by the adoption of the new DTCO product at a key memory customer. Europe was $5.6 million, or 9% of sales, fueled by EDA sales, with additional momentum from further TCAD adoption in the fourth quarter. On the next slide here, we show the trend of remaining performance obligations, or RPO, which at year-end stood at $34.3 million, with 46% expected to be recognized as revenue within the next 12 months. This reflects strong customer commitments that support top-line growth. On this slide, I will now review our first quarter 2025 guidance. I will note that the first quarter and the full-year guidance on the following slide reflects the acquisition of the OPC product line, which will reflect less than one month's operating activity for the first quarter. I will also add that there are several complexities that may arise during the transition that could impact revenue recognition for the first year in particular, and as such, we are being cautious in our approach to forecasting current-year sales from the acquisition. Considering all that, for Q1 2025, we expect gross bookings between $16 million and $19 million, revenue between $14.5 million and $17 million, non-GAAP gross margin between 84% and 87%, non-GAAP operating income between a loss of $1 million and $1 million income, and non-GAAP income per share between $0.03 loss and $0.03 income. Turning to the next slide, we'll review our guidance for the full year 2025. For 2025, we expect gross bookings to grow to come in between $72 million and $79 million. We expect revenue in the range of $66 million to $72 million, non-GAAP gross margin to come in between 84% and 89%, non-GAAP operating income between $2 million and $7 million, and non-GAAP income per share between $0.07 and $0.19. Again, this assumes a modest top-line contribution from the recent OPC acquisition. As the ink is perhaps not even quite dry on the acquisition, and there are some commercial sensitivities, there are limitations to what we're able to discuss about our plans and expectations for the business today. We should be able to provide a more detailed view on our next quarterly call. What I can definitely say today, which echoes Babak's comments, is we're excited about this acquisition. It's a wonderfully brilliant team that we're inheriting. It's a great technological and product fit, and we're thrilled to have it done. Now let's move to review our long-term financial targets. We continue to target 15%-25% revenue growth. For our long-term target model, we expect 90% plus non-GAAP gross margin and 25% plus non-GAAP operating margin. We believe we can achieve these targets through global sales expansion, deeper customer engagements, broader adoption of our DTCO platform, and the continued execution of strategic acquisitions to leverage our core technology strengths and operational efficiencies. With that, Babak and I would be happy to take your questions. Operator? Certainly. Our first question for today comes from the line of Charles Shi from Needham & Company. Your question, please. Hi. Just want to ask a clarification on the contribution of the acquisition of the Cadence OPC product line. I get that you're saying it's probably going to be somewhere in mid-single-digit of the 2026 revenue. Kind of implies somewhere about, let's say, $3-$4 million per year revenue run rate. But you were saying because of ASC 606, you're not expecting a modest contribution to 2025. Can you quantify that? What do you mean by modest? Do you think it's still somewhere in the $3-$4 million range? What that means? Yeah. Yeah. If it's okay, Babak, I'll take first crack at it. This is Ryan. Thanks for the question, Charles. Again, we're super excited about this acquisition. Again, as I said before, remarks, I really will not be providing a separate number in terms of revenue forecast for the acquisition for the current year. There are certain complexities in terms of not only the in terms of how the transaction works, in terms of how the commercial agreements are transitioned over to Silvaco, but there are certain dominoes to fall in terms of how the revenue recognition gets applied and what ends up happening. I use the word cautious. We try to be extremely cautious in terms of how we forecasted that number. Very modest. Babak, do you want to add to that? No, I think Ryan you said it well. We will have a lot more details in our next call. We will have a lot more data that we can rely on. I would just repeat what I would have repeated what Ryan said, but it's modest at this time, so. Yeah. Do you have a number? What is the last year's revenue run rate or the trailing 12 months of that business, the revenue run rate of that business before you acquired it? Yeah, Charles. We do have that number. We're on an NDA, which prevents us from really speaking to that number specifically. I think the best data point to look towards is Babak's comment in terms of what our expectations are for 2026, in terms of how we expect the business to settle out. In terms of 2025, again, there's a lot of upside depending on how things fall and how things get contracted, but we just thought it prudent to be extremely cautious with what we kind of baked into the number. The acquisition literally has only been closed for plus or minus 24 hours. Okay. Thanks. The other question, obviously, the guidance for fiscal 2025, you're guiding to a good amount of revenue growth, gross margin expansion, but operating profits, you're expecting a down year. Kind of implies a pretty meaningful OpEx increase. Is that all because of the acquisition, or you're also a little bit ramping up the existing part of the Silvaco business, the OpEx for that part of the business? Yeah. There's really both parts. Certainly, we have been hiring, has always been the plan to have some operating expense growth that kind of coincides with the revenue growth that we expect. Again, we've commented specifically we expect R&D as well as sales and marketing to kind of grow with revenue, just a tad bit of leverage perhaps out of sales and marketing. G&A, we expect to get leverage. The second part of your question, you're absolutely right. The acquisition is now closed, and so the cost that we have projected, the operating expenses, absolutely includes the cost of the team that we've inherited and that we've taken on, as well as, again, another area. As you know, when you do acquisitions, there's a certain amount of cost that you incur in the first year of an acquisition that don't necessarily repeat into the second and third year. Whenever we've said we've taken a cautious approach, we've done that in both top line as well as expenses. For expenses, that means, of course, you bake in the expenses that you've inherited and you expect. All right. Thank you. That's all from me. Thanks, Charles. Thank you. Our next question comes from the line of Blair Abernathy from Rosenblatt Securities. Your question, please. Hi, guys. Thanks for taking the question. Just a couple on the acquisition, if I could. Would you be willing to give us sort of a ballpark number of how many customers are coming with this business unit? Sure. I would say to start with, I would add that some of the customers that we also acquired as part of the deal are our existing customers. We consider OPC part to those customers to be an expansion of a landed customer we already have. We also have new customers that, if you will, we have not had those logos before. The top customers, I would say, are single-digit numbers, less than 10. That is a number we already have. As you know, Blair, we have always been able to land and expand in these customers. That would be the first thing we will be doing. But those are the numbers that I would be. And out of that sub-10, about three or four of them are existing, so. Okay. Okay. Thank you. Then from a product perspective, is there a technical integration path that you're going to take this on vis-à-vis some of your other products like the DTCO, or is this really a standalone product that you'll sell with your existing products? That's a great question. As you know, currently, it's being sold as standalone with minor integration of other products, which we will continue to do so. As we said on our call, our plan is to—and by the way, this acquisition falls under our EDA product line, just to be exact, since it would be the last step after GDS before manufacturing that OPC takes place. However, as you know, since it's the first step in manufacturing, it is making masks and making patterns that go on a wafer for more reliable and more accurate and better yielding patterns. It also falls into the manufacturing part, which DTCO is part of that. Although the product line is within EDA, the algorithms, the technology, and AI-based modeling aspect of it will also be integrated as part of the DTCO. This will complete actually what's needed to have a full DTCO platform from mask making all the way to final wafers. It is a big advance for us, and we will continue to expand this capability into DTCO. What's any sense on the timeline, Babak, as to when that would be sort of more tightly integrated with the DTCO? Yeah, absolutely. As you know, we already have customers that utilize DTCO. We are working with customers that potentially could use DTCO. I would say typically, it takes us between six months to nine months to integrate these products into our current platform. That would be the right time. I would say six to nine months would be the correct timeframe to do that. Do not forget that we do advance R&D with our customers. Matter of fact, we will start advance R&D combining this to the DTCO with some potential customers that we will start discussions in Q2. Getting advanced R&D part of it will be including some customers that we work with. Those will start much sooner than that. Okay. Great. Just shifting over to the DTCO as it's been marketed, I guess, this past year, how's the pipeline shaping up for that? It's exactly as we mentioned. We already have two customers that are evaluating this technology. As we said, Q2 timeframe would be the timeframe that we are pushing to get adoption. They've already adopted at the R&D level. The question is, when can we get them adopt this for final manufacturing steps? As I had mentioned before on our previous call, we have a customer in advanced CMOS and a customer in power that we are working with through R&D and hoping to close those for manufacturing acceptance this year, ideally in Q2, but it may be Q3. Okay. Okay. Great. Just shifting over to your end markets, clearly a lot of traction in 2024 in the power market, 13 new customers. Can you just give us some color on sort of what exactly those customers have been buying? Has it been fairly similar across the board, or just give me a sense of what that end market's looking like for you? No, absolutely. As we've said before, we have been focusing on power as well as memory and display markets historically and power market. As we said, we added four top-level logos last year to the power market. The power market includes, I would say, new technologies like silicon carbide, GaN, and some of the old historical technologies like transistor CMOS-based technologies, DMOS, and what have you. As it turns out, as you noticed probably and have seen in new silicon carbide, it has its own challenges for scaling. As customers are realizing that these challenges exist and they need more understanding of the physics aspect of these devices and how they scale, we get more traction. Also, as you know, GaN is also picking up. I would say a combination of GaN and silicon carbide has been companies that adopt our TCAD technology and starting to for EDA as well. I would just summarize it in mainly TCAD, some EDA coming up in silicon carbide, GaN, and also older technology power devices. It is across the world. It is US and Europe and Asia. Okay. Great. Thank you. Goodbye. Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone. Our next question comes from the line of Robert Mertens from TD Cowen. Your question, please. Hi. This is Robert Mertens on for Krish Sankar. Thanks for taking my questions. Congrats on the quarter and the strong yearly outlook. It looks like it's maybe 400 basis points or so above what your large-cap peers are sort of guiding. I know Charles sort of touched upon this already in a prior question, but with your operating profit forecast, it seems to imply on the low end, OpEx can grow sort of in line with sales this year and upwards of maybe 25% year over year. Could you just walk us through maybe where the major R&D investments this year are focused and what sort of flexibility you have in the spending there? Yeah. By the way, if it's okay, I'll just make one quick comment. Babak will, of course, speak to the types of investment that we'll be making. Specifically, though, again, just reiterating, the growth in the R&D line that I think you wouldn't necessarily have expected coming into the last 24 hours is as a result of the costs that we're absorbing as part of the acquisition, as well as what I believe are some costs that will be in the first year and won't necessarily be recurring beyond year one. In terms of the investments, Babak? Yeah, absolutely. I showed in one of our slides, I believe it was slide four or five, that what our vertical end market trends and performance was last year. Blair earlier alluded to power, which was 43% up for us. I should mention that memory was up also 89%. Also, we mentioned that photonics market, we actually had five new customers. As you will see, and we have emphasized on these markets, our focus is in power, memory, maintaining display, growing in photonics, and others. Where our investment falls is as we delve into more power and memory markets, especially the OPC tool latest acquisition gets us a stronger foothold in the memory market. The tools that we have initially are focusing and specializing in memory products, and the customers, our majority that we've acquired, are in memory products. That strengthens our presence in memory markets. Of course, the cost associated with that acquisition of getting extremely intelligent talent, which is part of the OpEx that we've already has already mentioned. The other areas that we are investing to grow is power. We are making sure that we have enough agile R&D for our new customers to be able to design and manufacture their next generation of products. As I mentioned, photonics in the past, actually past several quarters, but the proof is in the pudding. The fact that we have added five new photonics customers is a proof that we are actually increasing our presence in that market. Photonics market, as you know, consists of anything that has to do with lasers, image sensors, displays, anything that has optics and electronics, optoelectronics involved. Because we have acquired these new customers and we are doing advanced R&D for them, some of the OpEx comes from that as well. We've always said we are actually 95+% of our revenue comes from advanced R&D projects in our customers. Landing in them is the first key steps, and expanding in them requires a bit more R&D for the first few years, and then it rolls out as a standard product, which we tend to expand into existing and land new more customers. Our power devices are in that category already. We are expanding less of R&D, but with photonics and memory, we are spending more R&D to get us to the next level of customers. Great. Thank you. That's helpful. Just one follow-up, if I may. In your outlook for March as well as the full year, just how are you viewing your current exposure to China? Earlier, you had mentioned some customer delays that got pushed out into the December quarter and beyond. Just have your views changed at all over the past couple of months, or is the revenue contribution from the region probably expected similar levels this year as calendar year 2024? That's a good question. So roughly 20% calendar 2024, and we have said 15%-20% for 2025 from China region. We expect it to be flat literally and maybe a bit down, but not significantly, so. Got it. All right. Thank you. That's all for me. Sure. Thank you. Our next question comes from the line of Michael Ahn from B. Riley. Your question, please. Hi. Yeah, this is Michael Ahn for Craig Ellis. Thanks for taking my question. I kind of wanted to ask about the gross margin that you're guiding for full year of 2025 and rectifying that with the kind of reiterated long-term target at about 90%. We have at that midpoint, gross margin not going up by a significant amount, I think about 50 basis points. How do you kind of leverage these two facts? Do we see maybe gross margin starting to pick up again later into the year? Is it sort of a first-half digestion, and then we get back on track? If you could characterize this for me, that'd be great. Thank you. Yeah. No, absolutely. I'll take that. Look, obviously, we did 89%, really close to the 90% target model in Q4. Again, like I said so many times, our cost of revenues are largely fixed cost, right? And so it's really generally a factor of revenue as scales. And so you look at the kind of the undulations of revenue from quarter to quarter. When we have a stronger quarter in revenue, that's what's going to cause the margin to creep up. Really, a couple of hundred thousand dollars of cost can be a couple of points in terms of gross margin. It's just that level of range that it's very sensitive to those costs. All right. Got it. Okay. Kind of switching gears, can you help us understand where you're on with funnel conversion with other deals that might be going on? When you have just closed the deal like you just have, and congrats on that, can you have multiple streams of deals going on, or is there a period of ingestion where once one closes, there has to be some time for everything to reorganize and resettle before you guys can move on to another opportunity? I'll take that, Ryan. I think there is always a period of ingestion. We do have a pipeline, and our pipeline, and historically, we've done one and two. That would actually extend us to a point that we can potentially do two. The first one, and typically, the period in which we absorb technology and talent, the closer to what we do, the easier and the faster it is. In case of our OPC platform, that would be just that quarter. I think this is faster than other acquisitions we've done. I would say three to six months, as a matter of fact. That is why Ryan and I said that we will have a lot more information and data to give you at the end of Q2, sorry. That is when we will be able to, or in the next call before the end of Q2, I would say. With that, ingestion period for the first acquisition would be three to six months. We are trying to get that done in three months. Matter of fact, as Ryan said, the ink is 24 hours, but the team is already on board and have all their compute power and data transfers done, and that will be completed by this week. The rest is just a matter of supporting the existing customers and expanding in them, which we have already started discussions with them, matter of fact, as of today. That is going to be fast. We honestly can digest and do two of these at a time if needed. That would, depending on what area that is, that could be also three months to nine months, depending on what kind of acquisitions we do. This one is pretty much we are well-versed in it. We know the technology. We used to have a lithography process ourselves, but this gets us to the next level that we wanted to get to. Okay. Yeah. Thank you. Just one last question. I believe you said you acquired 13 new customers this quarter. I think it was a very similar amount last quarter. Is this kind of a pace that we can see continuing into 2025, or will there be any sort of upside or downside, I guess, push? That is a good question. It is hard to answer. I will tell you why, and I will give you an answer anyways at the end. The quality of the customers that we tend to start acquiring over time has changed. We are dealing with custom, and part of the reasons we went public was to have financial visibility for much larger customers that we are dealing with. The quality and the size of the deals that we would make with our new customers will be larger. The numbers are important so that we can show where we are at. As we said already, we added 13 power customers, but we said there were only four power customers that are in the top 10 power market, right, that we have acquired. Our intention is to go after, and to us, we lead the market if we have six or more of the top 10. Our goal is to go after the six or more on the markets we do not have. We need to add more, definitely at least two more to the power. The numbers are very important. We always try to land, but the quality and the position of those customers are even more important. Going back to give you a shorter answer, we expect the numbers to be the same, but the quality will change. Got it. Okay. Thank you. Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone. This does conclude the question and answer session of today's program. I'd like to hand the program back to Dr. Taheri, CEO of Silvaco. Thank you very much. I wanted to again mention that we appreciate all of you attending these great questions, and we are always there to answer more later on. I wanted to say that we are very proud to close out the year with strong momentum and growing customer traction, including the 46 new customer events that we talked about in 2024, and multiple bookings on our DTCO platforms. Our DTCO platform, our first acquisition as a public company, remarks a significant milestone for us in executing our M&A strategy for talent, technology, and expanding through inorganic growth. We will continue doing that. Our focus area will be in business units that we have, EDA, TCAD product lines, and IP as well. With that, I wanted to thank everyone again and have a great rest of the day. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.