PDF Solutions, Inc. (Nasdaq: PDFS), a leading provider of
comprehensive data solutions for the semiconductor ecosystem, today
announced financial results for its second quarter ended June 30,
2023.
Highlights of Second Quarter 2023
Financial Results
- Record quarterly revenues
of $41.6 million, up 20% over last year’s comparable
quarter
- GAAP gross margin of 70%
and Non-GAAP gross margin of 74%
- GAAP diluted earnings per
share (EPS) of $0.17 and non-GAAP diluted EPS of
$0.19
Total revenues for the second quarter of 2023
were $41.6 million, compared to $40.8 million for the first quarter
of 2023 and $34.7 million for the second quarter of 2022. Analytics
revenue for the first quarter of 2023 was $37.1 million, compared
to $36.3 million for the first quarter of 2023 and $31.1 million
for the second quarter of 2022. Integrated Yield Ramp revenue for
the first quarter of 2023 was $4.5 million, compared to $4.4
million for the first quarter of 2023 and $3.6 million for the
second quarter of 2022.
GAAP gross margin for the second quarter of 2023
was 70%, compared to 71% for the first quarter of 2023 and 65% for
the second quarter of 2022.
Non-GAAP gross margin for the second quarter of
2023 was 74%, compared to 75% for the first quarter of 2023 and 69%
for the second quarter of 2022.
On a GAAP basis, net income for the second
quarter of 2023 was $6.8 million, or $0.17 per diluted share,
compared to a net income of $0.4 million, or $0.01 per diluted
share, for the first quarter of 2023, and a net loss of $1.1
million, or ($0.03) per diluted share, for the second quarter of
2022.
Non-GAAP net income for the second quarter of
2023 was $7.5 million, or $0.19 per diluted share, compared to a
non-GAAP net income of $7.3 million, or $0.19 per diluted share,
for the first quarter of 2023, and non-GAAP net income of $4.3
million, or $0.11 per diluted share, for the second quarter of
2022.
Cash, cash equivalents and short-term
investments as of June 30, 2023 were $124.0 million.
Financial Outlook and Recent
Accomplishments
Based on the trends we are seeing for the rest
of the year, we expect 2023 revenue growth rate to be lower double
digit percent on a year-over-year basis.
“Thanks to all our employees, contractors, and
customers for our continued performance. We are pleased with our
performance so far in the year compared to last year and the level
of deal activity we see in our pipeline” 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/BI369bebeef9a54fe19863d7f6e8803f5a.
Registrants will receive dial-in information and a unique passcode
to access the call. We encourage participants to dial-in into the
call ten minutes ahead of 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 2023 Financial Commentary
Available Online
A Management Report reviewing the Company’s
second quarter 2023 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 Generally Accepted Accounting
Principles 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 the
amortization of acquired technology. Non-GAAP net income excludes
the effects of certain non-recurring items, expenses related to an
arbitration proceeding for a disputed contract with a customer,
stock-based compensation expense, amortization of acquired
technology and other acquired intangible assets,
acquisition-related costs and their related income tax effects, as
applicable, as well as adjustments for the valuation allowance for
deferred tax assets. 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
and acquisition-related costs) 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 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 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 impact of global economic trends and rising inflation and
interest rates; the provision of technology and services prior to
the execution of a final contract; the continuing impact of the
coronavirus (COVID-19) on the semiconductor industry and on the
Company’s operations or supply and demand for the Company’s
products; supply chain disruptions; the success of the Company’s
strategic growth opportunities and partnerships; the Company’s
ability to successfully integrate acquired businesses and
technologies; whether the Company can successfully convert backlog
into revenue; 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, 2022, 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.
About PDF Solutions
PDF Solutions (NASDAQ: PDFS) provides
comprehensive data solutions designed to empower organizations
across the semiconductor 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 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, |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
100,360 |
|
|
$ |
119,624 |
|
Short-term investments |
|
|
23,678 |
|
|
|
19,557 |
|
Accounts receivable, net |
|
|
61,451 |
|
|
|
42,164 |
|
Prepaid expenses and other current assets |
|
|
18,864 |
|
|
|
12,063 |
|
Total current assets |
|
|
204,353 |
|
|
|
193,408 |
|
Property and equipment,
net |
|
|
42,990 |
|
|
|
40,174 |
|
Operating lease right-of-use
assets, net |
|
|
5,389 |
|
|
|
6,002 |
|
Goodwill |
|
|
14,123 |
|
|
|
14,123 |
|
Intangible assets, net |
|
|
16,298 |
|
|
|
18,055 |
|
Deferred tax assets, net |
|
|
76 |
|
|
|
64 |
|
Other non-current assets |
|
|
7,043 |
|
|
|
6,845 |
|
Total assets |
|
$ |
290,272 |
|
|
$ |
278,671 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
2,279 |
|
|
$ |
6,388 |
|
Accrued compensation and related benefits |
|
|
10,994 |
|
|
|
16,948 |
|
Accrued and other current liabilities |
|
|
5,497 |
|
|
|
5,581 |
|
Operating lease liabilities ‒ current portion |
|
|
1,538 |
|
|
|
1,412 |
|
Deferred revenues ‒ current portion |
|
|
29,915 |
|
|
|
26,019 |
|
Billings in excess of recognized revenues |
|
|
1,854 |
|
|
|
1,852 |
|
Total current liabilities |
|
|
52,077 |
|
|
|
58,200 |
|
Long-term income taxes
payable |
|
|
2,430 |
|
|
|
2,622 |
|
Non-current operating lease
liabilities |
|
|
5,260 |
|
|
|
5,932 |
|
Other non-current
liabilities |
|
|
6,335 |
|
|
|
1,905 |
|
Total liabilities |
|
|
66,102 |
|
|
|
68,659 |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Common stock and additional
paid-in-capital |
|
|
459,078 |
|
|
|
447,421 |
|
Treasury stock at cost |
|
|
(138,278 |
) |
|
|
(133,709 |
) |
Accumulated deficit |
|
|
(93,960 |
) |
|
|
(101,150 |
) |
Accumulated other
comprehensive loss |
|
|
(2,670 |
) |
|
|
(2,550 |
) |
Total stockholders’ equity |
|
|
224,170 |
|
|
|
210,012 |
|
Total liabilities and stockholders’ equity |
|
$ |
290,272 |
|
|
$ |
278,671 |
|
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, |
|
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytics |
|
$ |
37,134 |
|
|
$ |
36,326 |
|
|
$ |
31,117 |
|
|
$ |
73,460 |
|
|
$ |
61,543 |
|
Integrated yield ramp |
|
|
4,467 |
|
|
|
4,433 |
|
|
|
3,551 |
|
|
|
8,900 |
|
|
|
6,623 |
|
Total revenues |
|
|
41,601 |
|
|
|
40,759 |
|
|
|
34,668 |
|
|
|
82,360 |
|
|
|
68,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of revenues |
|
|
12,369 |
|
|
|
11,904 |
|
|
|
12,042 |
|
|
|
24,273 |
|
|
|
23,571 |
|
Research and development |
|
|
12,264 |
|
|
|
13,051 |
|
|
|
13,374 |
|
|
|
25,315 |
|
|
|
27,463 |
|
Selling, general, and administrative |
|
|
14,766 |
|
|
|
15,645 |
|
|
|
9,770 |
|
|
|
30,411 |
|
|
|
20,609 |
|
Amortization of acquired intangible assets |
|
|
326 |
|
|
|
325 |
|
|
|
314 |
|
|
|
651 |
|
|
|
628 |
|
Interest and other expense (income), net |
|
|
(1,071 |
) |
|
|
(911 |
) |
|
|
(991 |
) |
|
|
(1,982 |
) |
|
|
(1,301 |
) |
Income (loss) before income tax
expense (benefit) |
|
|
2,947 |
|
|
|
745 |
|
|
|
159 |
|
|
|
3,692 |
|
|
|
(2,804 |
) |
Income tax expense (benefit) |
|
|
(3,888 |
) |
|
|
390 |
|
|
|
1,306 |
|
|
|
(3,498 |
) |
|
|
2,493 |
|
Net income (loss) |
|
$ |
6,835 |
|
|
$ |
355 |
|
|
$ |
(1,147 |
) |
|
$ |
7,190 |
|
|
$ |
(5,297 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.18 |
|
|
$ |
0.01 |
|
|
$ |
(0.03 |
) |
|
$ |
0.19 |
|
|
$ |
(0.14 |
) |
Diluted |
|
$ |
0.17 |
|
|
$ |
0.01 |
|
|
$ |
(0.03 |
) |
|
$ |
0.18 |
|
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
used to calculate net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
37,859 |
|
|
|
37,737 |
|
|
|
37,028 |
|
|
|
37,799 |
|
|
|
37,316 |
|
Diluted |
|
|
39,076 |
|
|
|
38,859 |
|
|
|
37,028 |
|
|
|
38,968 |
|
|
|
37,316 |
|
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, |
|
|
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
41,601 |
|
$ |
40,759 |
|
$ |
34,668 |
|
$ |
82,360 |
|
$ |
68,166 |
|
Costs of revenues |
|
|
12,369 |
|
|
11,904 |
|
|
12,042 |
|
|
24,273 |
|
|
23,571 |
|
GAAP gross profit |
|
$ |
29,232 |
|
$ |
28,855 |
|
$ |
22,626 |
|
$ |
58,087 |
|
$ |
44,595 |
|
GAAP gross margin |
|
|
70 |
% |
|
71 |
% |
|
65 |
% |
|
71 |
% |
|
65 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
$ |
29,232 |
|
$ |
28,855 |
|
$ |
22,626 |
|
$ |
58,087 |
|
$ |
44,595 |
|
Adjustments to reconcile GAAP
to non-GAAP gross margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
938 |
|
|
964 |
|
|
655 |
|
|
1,902 |
|
|
1,383 |
|
Amortization of acquired technology |
|
|
553 |
|
|
553 |
|
|
553 |
|
|
1,106 |
|
|
1,106 |
|
Non-GAAP gross profit |
|
$ |
30,723 |
|
$ |
30,372 |
|
$ |
23,834 |
|
$ |
61,095 |
|
$ |
47,084 |
|
Non-GAAP gross margin |
|
|
74 |
% |
|
75 |
% |
|
69 |
% |
|
74 |
% |
|
69 |
% |
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, |
|
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
$ |
6,835 |
|
|
$ |
355 |
|
|
$ |
(1,147 |
) |
|
$ |
7,190 |
|
|
$ |
(5,297 |
) |
Adjustments to reconcile GAAP
net income (loss) to non-GAAP net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
4,678 |
|
|
|
4,884 |
|
|
|
3,872 |
|
|
|
9,562 |
|
|
|
9,425 |
|
Amortization of acquired technology under costs of revenues |
|
|
553 |
|
|
|
553 |
|
|
|
553 |
|
|
|
1,106 |
|
|
|
1,106 |
|
Amortization of other acquired intangible assets |
|
|
326 |
|
|
|
325 |
|
|
|
314 |
|
|
|
651 |
|
|
|
628 |
|
Expenses of arbitration (1) |
|
|
166 |
|
|
|
2,133 |
|
|
|
36 |
|
|
|
2,299 |
|
|
|
487 |
|
Acquisition-related costs (2) |
|
|
176 |
|
|
|
— |
|
|
|
— |
|
|
|
176 |
|
|
|
— |
|
Tax impact of valuation allowance for deferred tax assets and
reconciling items (3) |
|
|
(5,238 |
) |
|
|
(980 |
) |
|
|
664 |
|
|
|
(6,218 |
) |
|
|
1,601 |
|
Non-GAAP net income |
|
$ |
7,496 |
|
|
$ |
7,270 |
|
|
$ |
4,292 |
|
|
$ |
14,766 |
|
|
$ |
7,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) per
diluted share |
|
$ |
0.17 |
|
|
$ |
0.01 |
|
|
$ |
(0.03 |
) |
|
$ |
0.19 |
|
|
$ |
(0.14 |
) |
Non-GAAP net income per
diluted share |
|
$ |
0.19 |
|
|
$ |
0.19 |
|
|
$ |
0.11 |
|
|
$ |
0.38 |
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
used in GAAP net income (loss) per diluted share calculation |
|
|
39,076 |
|
|
|
38,859 |
|
|
|
37,028 |
|
|
|
38,968 |
|
|
|
37,316 |
|
Weighted average common shares
used in non-GAAP net income per diluted share calculation |
|
|
39,076 |
|
|
|
38,859 |
|
|
|
37,615 |
|
|
|
38,968 |
|
|
|
38,096 |
|
(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 US 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 |
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