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PDF Solutions® Reports Second Quarter 2024 Results
Source: Nasdaq GlobeNewswire / 08 Aug 2024 16:05:00 America/New_York
SANTA CLARA, Calif., Aug. 08, 2024 (GLOBE NEWSWIRE) -- PDF Solutions, Inc. (Nasdaq: PDFS), a leading provider of comprehensive data solutions for the semiconductor and electronics ecosystem, today announced financial results for its second quarter ended June 30, 2024.
Financial Highlights of Second Quarter 2024
- Analytics revenues of $38.1 million, up 3% over last year’s comparable quarter
- Quarterly revenues of $41.7 million, flat compared to last year’s comparable quarter
- GAAP gross margin of 71% and Non-GAAP gross margin of 75%
- GAAP diluted earnings per share (EPS) of $0.04 and non-GAAP diluted EPS of $0.18
- Backlog of $243.2 million as of June 30, 2024
Total revenues for the second quarter of 2024 were $41.7 million, compared to $41.3 million for the first quarter of 2024 and $41.6 million for the second quarter of 2023. Analytics revenue for the second quarter of 2024 was $38.1 million, compared to $38.5 million for the first quarter of 2024 and $37.1 million for the second quarter of 2023. Integrated Yield Ramp revenue for the second quarter of 2024 was $3.5 million, compared to $2.8 million for the first quarter of 2024 and $4.5 million for the second quarter of 2023.
GAAP gross margin for the second quarter of 2024 was 71%, compared to 67% for the first quarter of 2024 and 70% for the second quarter of 2023.
Non-GAAP gross margin for the second quarter of 2024 was 75%, compared to 72% for the first quarter of 2024 and 74% for the second quarter of 2023.
On a GAAP basis, net income for the second quarter of 2024 was $1.7 million, or $0.04 per diluted share, compared to a net loss of $0.4 million, or ($0.01) per diluted share, for the first quarter of 2024, and a net income of $6.8 million, or $0.17 per diluted share, for the second quarter of 2023.
Non-GAAP net income for the second quarter of 2024 was $7.1 million, or $0.18 per diluted share, compared to a non-GAAP net income of $5.7 million, or $0.15 per diluted share, for the first quarter of 2024, and non-GAAP net income of $7.5 million, or $0.19 per diluted share, for the second quarter of 2023.
Cash, cash equivalents and short-term investments as of June 30, 2024, were $117.9 million.
Financial Outlook
“We are pleased with the ongoing progress we are making with our customers. We reiterate our expectation that revenue for the second half of the year will grow by 20% over the comparable period of the prior year.” said John Kibarian, CEO and President.Conference Call
As previously announced, PDF Solutions will discuss these results on a live conference call beginning at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time today. To participate on the live call, analysts and investors should pre-register at: https://register.vevent.com/register/BI8d2f27b911674251b131f618f0692ce0. Registrants will receive dial-in information and a unique passcode to access the call. We encourage participants to dial into the call ten minutes ahead of the scheduled time. The teleconference will also be webcast simultaneously on the Company’s website at https://ir.pdf.com/webcasts. A replay of the conference call webcast will be available after the call on the Company’s investor relations website. A copy of this press release, including the disclosure and reconciliation of certain non-GAAP financial measures to the comparable GAAP measures, which non-GAAP measures may be used periodically by PDF Solutions’ management when discussing financial results with investors and analysts, will also be available on PDF Solutions’ website at http://www.pdf.com/press-releases following the date of this release.Second Quarter 2024 Financial Commentary Available Online
A Management Report reviewing the Company’s second quarter 2024 financial results will be furnished to the Securities and Exchange Commission on Form 8-K and published on the Company’s website at http://ir.pdf.com/financial-reports. Analysts and investors are encouraged to review this commentary prior to participating in the conference call.Information Regarding Use of Non-GAAP Financial Measures
In addition to providing results that are determined in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”), PDF Solutions also provides certain non-GAAP financial measures. Non-GAAP gross profit and margin exclude stock-based compensation expense and amortization of acquired technology under costs of revenues. Non-GAAP net income excludes stock-based compensation expense, amortization of acquired technology under costs of revenues, amortization of other acquired intangible assets, and the effects of certain non-recurring items, such as expenses related to an arbitration proceeding for a disputed contract with a customer, acquisition-related costs, and their related income tax effects, as applicable, as well as adjustments for the valuation allowance for deferred tax assets and reconciling items. These non-GAAP financial measures are used by management internally to measure the Company’s profitability and performance. PDF Solutions’ management believes that these non-GAAP measures provide useful supplemental information to investors regarding the Company’s ongoing operations in light of the fact that none of these categories of expense has a current effect on the future uses of cash (with the exception of expenses related to an arbitration proceeding for a disputed contract with a customer) nor do they impact the generation of current or future revenues. These non-GAAP results should not be considered an alternative to, or a substitute for, GAAP financial information, and may differ from similarly titled non-GAAP measures used by other companies. In particular, these non-GAAP financial measures are not a substitute for GAAP measures of income or loss as a measure of performance, or to cash flows from operating, investing and financing activities as a measure of liquidity. Since management uses these non-GAAP financial measures internally to measure profitability and performance, PDF Solutions has included these non-GAAP measures to give investors an opportunity to see the Company’s financial results as viewed by management. A reconciliation of the comparable GAAP financial measures to the non-GAAP financial measures is provided at the end of the Company’s condensed consolidated financial statements presented below.Forward-Looking Statements
The press release and the planned conference call include forward-looking statements regarding the Company’s future expected business performance and financial results, including expectations about total revenue growth for the second half of 2024, that are subject to future events and circumstances. Actual results could differ materially from those expressed in these forward-looking statements. Risks and uncertainties that could cause results to differ materially include, but are not limited to, risks associated with: expectations about the effectiveness of our business and technology strategies; expectations and integration concerns regarding recent and future acquisitions; current semiconductor industry trends; expectations of continued adoption of the Company’s solutions by new and existing customers; project milestones or delays and performance criteria achieved; cost and schedule of new product development; the continuing impact of global economic trends and rising global inflation and increased interest rates; supply chain disruptions; the success of the Company’s strategic growth opportunities and partnerships; customers’ production volumes under contracts that provide Gainshare royalties; possible impacts from the evolving trade regulatory environment and geopolitical tensions; our ability to obtain additional financing if needed; and other risks set forth in PDF Solutions’ periodic public filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and amendments to such reports. The forward-looking statements made in the conference call are made as of the date hereof, and PDF Solutions does not assume any obligation to update such statements nor the reasons why actual results could differ materially from those projected in such statements. We have not filed our Form 10-Q for the quarter ended June 30, 2024. As a result, all financial results described in this earnings release should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates, that are identified prior to the time we file our Form 10-Q.About PDF Solutions
PDF Solutions (Nasdaq: PDFS) provides comprehensive data solutions designed to empower organizations across the semiconductor and electronics ecosystem to improve the yield and quality of their products and operational efficiency for increased profitability. The Company’s products and services are used by Fortune 500 companies across the semiconductor and electronics ecosystem to achieve smart manufacturing goals by connecting and controlling equipment, collecting data generated during manufacturing and test operations, and performing advanced analytics and machine learning to enable profitable, high-volume manufacturing.Founded in 1991, PDF Solutions is headquartered in Santa Clara, California, with operations across North America, Europe, and Asia. The Company (directly or through one or more subsidiaries) is an active member of SEMI, INEMI, TPCA, IPC, the OPC Foundation, and DMDII. For the latest news and information about PDF Solutions or to find office locations, visit https://www.pdf.com.
PDF Solutions and the PDF Solutions logo are trademarks or registered trademarks of PDF Solutions, Inc. or its subsidiaries.
PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)June 30, December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 91,987 $ 98,978 Short-term investments 25,888 36,544 Accounts receivable, net 56,410 44,904 Prepaid expenses and other current assets 19,007 17,422 Total current assets 193,292 197,848 Property and equipment, net 40,707 37,338 Operating lease right-of-use assets, net 4,424 4,926 Goodwill 14,996 15,029 Intangible assets, net 13,897 15,620 Deferred tax assets, net 145 157 Other non-current assets 30,538 19,218 Total assets $ 297,999 $ 290,136 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 4,219 $ 2,561 Accrued compensation and related benefits 11,468 14,800 Accrued and other current liabilities 5,994 4,633 Operating lease liabilities ‒ current portion 1,609 1,529 Deferred revenues ‒ current portion 31,662 25,750 Billings in excess of recognized revenues 512 1,570 Total current liabilities 55,464 50,843 Long-term income taxes 2,668 2,972 Non-current operating lease liabilities 4,003 4,657 Other non-current liabilities 3,711 2,718 Total liabilities 65,846 61,190 Stockholders’ equity: Common stock and additional paid-in capital 487,225 473,301 Treasury stock at cost (155,084 ) (143,923 ) Accumulated deficit (96,733 ) (98,045 ) Accumulated other comprehensive loss (3,255 ) (2,387 ) Total stockholders’ equity 232,153 228,946 Total liabilities and stockholders’ equity $ 297,999 $ 290,136 PDF SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, 2024 2024 2023 2024 2023 Revenues: Analytics $ 38,114 $ 38,463 $ 37,134 $ 76,577 $ 73,460 Integrated yield ramp 3,547 2,847 4,467 6,394 8,900 Total revenues 41,661 41,310 41,601 82,971 82,360 Costs and Expenses: Costs of revenues 12,230 13,529 12,369 25,759 24,273 Research and development 12,649 12,984 12,264 25,633 25,315 Selling, general, and administrative 16,259 16,498 14,766 32,757 30,411 Amortization of acquired intangible assets 259 259 326 518 651 Interest and other expense (income), net (1,479 ) (1,692 ) (1,071 ) (3,171 ) (1,982 ) Income (loss) before income tax benefit (expense) 1,743 (268 ) 2,947 1,475 3,692 Income tax benefit (expense) (38 ) (125 ) 3,888 (163 ) 3,498 Net income (loss) $ 1,705 $ (393 ) $ 6,835 $ 1,312 $ 7,190 Net income (loss) per share: Basic $ 0.04 $ (0.01 ) $ 0.18 $ 0.03 $ 0.19 Diluted $ 0.04 $ (0.01 ) $ 0.17 $ 0.03 $ 0.18 Weighted average common shares used to calculate net income (loss) per share: Basic 38,619 38,500 37,859 38,456 37,799 Diluted 39,132 38,500 39,076 38,989 38,968 PDF SOLUTIONS, INC.
RECONCILIATION OF GAAP GROSS MARGIN TO NON-GAAP GROSS MARGIN (UNAUDITED)
(In thousands)Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, 2024 2024 2023 2024 2023 GAAP Total revenues $ 41,661 $ 41,310 $ 41,601 $ 82,971 $ 82,360 Costs of revenues 12,230 13,529 12,369 25,759 24,273 GAAP gross profit $ 29,431 $ 27,781 $ 29,232 $ 57,212 $ 58,087 GAAP gross margin 71 % 67 % 70 % 69 % 71 % Non-GAAP GAAP gross profit $ 29,431 $ 27,781 $ 29,232 $ 57,212 $ 58,087 Adjustments to reconcile GAAP to non-GAAP gross margin: Stock-based compensation expense 1,185 1,200 938 2,385 1,902 Amortization of acquired technology 584 584 553 1,168 1,106 Non-GAAP gross profit $ 31,200 $ 29,565 $ 30,723 $ 60,765 $ 61,095 Non-GAAP gross margin 75 % 72 % 74 % 73 % 74 % PDF SOLUTIONS, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (UNAUDITED)
(In thousands, except per share amounts)Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, 2024 2024 2023 2024 2023 GAAP net income (loss) $ 1,705 $ (393 ) $ 6,835 $ 1,312 $ 7,190 Adjustments to reconcile GAAP net income (loss) to non-GAAP net income: Stock-based compensation expense 5,700 6,110 4,678 11,810 9,562 Amortization of acquired technology under costs of revenues 584 584 553 1,168 1,106 Amortization of other acquired intangible assets 259 259 326 518 651 Expenses of arbitration (1) — — 166 — 2,299 Acquisition-related costs (2) — — 176 — 176 Tax impact of valuation allowance for deferred tax assets and reconciling items (3) (1,159 ) (813 ) (5,238 ) (1,972 ) (6,218 ) Non-GAAP net income $ 7,089 $ 5,747 $ 7,496 $ 12,836 $ 14,766 GAAP net income (loss) per diluted share $ 0.04 $ (0.01 ) $ 0.17 $ 0.03 $ 0.18 Non-GAAP net income per diluted share $ 0.18 $ 0.15 $ 0.19 $ 0.33 $ 0.38 Weighted average common shares used in GAAP net income (loss) per diluted share calculation 39,132 38,500 39,076 38,989 38,968 Weighted average common shares used in non-GAAP net income per diluted share calculation 39,132 39,053 39,076 38,989 38,968 ______________________
(1) Represents expenses related to an arbitration proceeding over a disputed customer contract, which expenses are expected to continue until the arbitration is resolved. (2) Acquisition-related costs are incremental expenses related to the business or asset acquisition transaction(s). These expenses may include consulting, legal and other fees. For the three and six months ended June 30, 2023, the charges were related to the acquisition of Lantern Machinery Analytics, Inc. (3) The difference between the GAAP and non-GAAP income tax provisions is primarily due to the valuation allowance on a GAAP basis and non-GAAP adjustments. For example, on a GAAP basis, the Company does not receive a deferred tax benefit for foreign tax credits or research and development credits after the valuation allowance. The Company’s non-GAAP tax rate and resulting non-GAAP tax expense is not calculated with a full U.S. federal or state valuation allowance due to the Company’s cumulative non-GAAP income and management’s conclusion that it is more likely than not to utilize its net deferred tax assets (DTAs). Each reporting period, management evaluates the need for a valuation allowance and may place a valuation allowance against its U.S. net DTAs on a non-GAAP basis if it concludes it is more likely than not that it will not be able to utilize some or all of its U.S. DTAs on a non-GAAP basis. Company Contacts: Adnan Raza Sonia Segovia Chief Financial Officer Investor Relations Tel: (408) 516-0237 Tel: (408) 938-6491 Email: adnan.raza@pdf.com Email: sonia.segovia@pdf.com 
