Core Insights - PDF Solutions, Inc. will host two significant semiconductor industry events in 2025, focusing on innovations in equipment connectivity and AI applications in semiconductor management [1][5]. Event Summaries Connected Equipment Summit - Scheduled for October 9, 2025, in Chandler, Arizona, this summit will highlight the latest innovations in equipment connectivity, secure remote access, and AI applications [2]. - The summit will detail the strategic vision following the acquisition of secureWISE LLC, aiming to enhance operational efficiency and secure collaboration in the semiconductor ecosystem [3]. - Key stakeholders from the semiconductor value chain, including equipment makers and foundries, will share their experiences with secureWISE solutions, showcasing the value of secure remote connectivity [4]. Users Conference - The Users Conference will take place on December 3-4, 2025, in Santa Clara, CA, covering the breadth of PDF Solutions' platform products and addressing challenges in semiconductor manufacturing [5]. - This event will coincide with PDF Solutions' Analyst Day, featuring expert insights and real-world case studies [5]. Industry Context - The semiconductor industry is undergoing rapid transformation with advancements such as 3D architectures and AI, necessitating new levels of collaboration among ecosystem players [6][7]. - PDF Solutions aims to unify diverse stakeholders through innovative platform solutions that address the complexities of modern semiconductor manufacturing [7]. Key Topics of Discussion - The events will cover strategic overviews, product strategies, technology leadership, digital transformation, supply chain integration, advanced analytics, and AI solutions [8][10][11][12][16]. - Specific discussions will include manufacturing data lake architecture, scalable data analytics, and secure manufacturing equipment control [16].

Business Overview - PDF Solutions is a leading commercial data and analytics platform in the semiconductor and electronics industry[5] - The company's platform addresses the needs of the semiconductor ecosystem with integrated solutions for characterization, smart manufacturing, and supply chain orchestration[19, 20] - PDF Solutions has a strong presence with >140k equipment factory connections with over >40k process tools[37] - The company has 350+ revenue generating customers in 33 countries as of TTM Q1'25[37] Market Opportunity and Growth - AI-related devices are expected to represent 71% of total semiconductor revenue in 2030[8] - The total semiconductor analytics TAM is projected to reach $26.1 billion by 2030+ from $10.4 billion in 2019[49] - PDF Solutions estimates its serviceable addressable market (SAM) at ~$2.6 billion based on 2023 data[52] - The company targets total revenue growth of >20% year-over-year[38] Financial Performance - In Q1 2025, PDF Solutions reported revenue of $47.8 million[62] - The company's backlog was $226.7 million as of Q1 2025[62] - The non-GAAP gross margin was 77% and the non-GAAP operating margin was 18% in Q1 2025[62] - As of Q1 2025, the company had $54.1 million in cash and $68.7 million in debt[57, 62]

Core Insights - PDF Solutions (PDFS) reported quarterly earnings of $0.21 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, and up from $0.15 per share a year ago [1] - The company experienced an earnings surprise of 10.53% and has surpassed consensus EPS estimates in all four of the last quarters [2] - Revenue for the quarter was $47.78 million, slightly missing the Zacks Consensus Estimate by 0.46%, but up from $41.31 million year-over-year [3] Earnings Performance - The earnings surprise of 10.53% indicates strong performance relative to expectations [2] - The company has consistently exceeded consensus EPS estimates over the last four quarters, showcasing a positive trend in earnings performance [2] Revenue Analysis - Revenue of $47.78 million for the quarter represents a year-over-year increase but fell short of expectations [3] - The company has topped consensus revenue estimates three times in the last four quarters, indicating a generally positive revenue trend despite the recent miss [3] Stock Performance - PDF Solutions shares have declined approximately 29.5% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [4] - The stock's immediate price movement will depend on management's commentary during the earnings call and future earnings expectations [4] Future Outlook - Current consensus EPS estimate for the upcoming quarter is $0.19 on revenues of $49.6 million, and for the current fiscal year, it is $0.87 on revenues of $205.1 million [8] - The estimate revisions trend for PDF Solutions is currently unfavorable, resulting in a Zacks Rank 4 (Sell), suggesting expected underperformance in the near future [7] Industry Context - The Computer - Services industry, to which PDF Solutions belongs, is currently ranked in the top 22% of over 250 Zacks industries, indicating a favorable industry outlook [9] - The performance of PDF Solutions may be influenced by the overall industry trends, as top-ranked industries tend to outperform lower-ranked ones significantly [9]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $47.8 million, up 16% year over year [13] - Analytics revenue was $42.5 million, an increase of 10% year over year, but lower compared to the prior quarter due to eProbe sales [13] - IYR revenue increased significantly by 86% year over year, driven by new gainshare contracts [13] - Gross margin for Q1 was 77%, compared to 72% in the prior quarter and the same quarter last year [15] - Operating margin remained stable at 18%, with net income totaling $8.1 million or $0.21 per share, up approximately 40% year over year [16] Business Line Data and Key Metrics Changes - Significant bookings were driven by enterprise-wide solutions, particularly the Sapiens Manufacturing Hub [5] - Exensio bookings were primarily from Fabless and OSATs for offline analytics and test operations [5] - Symmetric's bookings were strong as equipment vendors increased shipments of advanced tool control and communication modules [5] Market Data and Key Metrics Changes - The company noted that tariffs have not significantly impacted customer behavior, particularly in the software business [9] - The semiconductor industry remains focused on advanced nodes and complex packaging, which are strong drivers for the company's solutions [4][9] Company Strategy and Development Direction - The company anticipates revenue growth of 21% to 23% for the year, despite macroeconomic uncertainties [10] - The integration of SecureWise is expected to enhance collaboration between OSATs, fabless foundries, and equipment vendors [8] - The company is refining plans for integration with its platform to leverage AI and machine learning capabilities [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of customers from a weak 2024 and noted strong demand for advanced processing solutions [4] - The company is optimistic about the potential for incremental revenue growth from shipped systems and ongoing customer engagements [6][10] - Management highlighted the importance of flexibility and nimbleness for customers in the current uncertain environment [70][72] Other Important Information - The company completed the acquisition of SecureWise for $130 million, which is expected to be accretive to earnings and operating margins [12][54] - The backlog at the end of the quarter was approximately $227 million, showing slight growth compared to the prior quarter [13] Q&A Session Summary Question: Details on revenue guidance and analytics growth - Management confirmed that overall expectations are in line with initial guidance, with meaningful growth anticipated in IYR due to a low base [20] - Advanced node capabilities are expected to drive analytics growth, with increased enterprise customer engagement [21][22] Question: Sales and marketing expense allocation - The company is investing in sales and marketing to support a wider product portfolio and enhance customer engagement [25][26] Question: SecureWise integration plan - Customers appreciate the security features of SecureWise, and the integration is expected to enhance collaboration across the supply chain [32][34] Question: Update on partnerships and potential contracts - The company has ongoing revenue from partnerships, including with Advantest, and anticipates growth in these relationships [61][62] Question: Capital allocation strategy - The company prioritizes debt reduction while remaining open to share buybacks when opportunities arise [78][80] Question: Gross margin profile of SecureWise - SecureWise is a highly recurring revenue business, expected to be accretive to overall gross margins [81][84]

Financial Data and Key Metrics Changes - Total revenues for the first quarter were $47.8 million, up 16% year over year [14] - Analytics revenue was $42.5 million, an increase of 10% year over year, but lower compared to the prior quarter [14] - IYR revenue increased significantly by 86% year over year, driven by new gainshare from customer engagement [14] - Gross margin for the first quarter was 77%, compared to 72% in the prior quarter and the same quarter last year [15] - Operating margin for the first quarter was 18%, consistent with the prior quarter and up from 12% year over year [16] - Net income for the quarter totaled $8.1 million, or $0.21 per share, up approximately 40% year over year [16] Business Line Data and Key Metrics Changes - Significant bookings were primarily for enterprise-wide solutions, particularly for Sapient's Manufacturing Hub Enterprise [5] - Exensio bookings were driven by Fabless and OSATs for offline analytics and test operations [5] - Symmetric's bookings were strong as equipment vendors utilized more runtime licenses [5] - SecureWise contributed less than one month of revenues, with expectations for IYR revenues to improve throughout the year [6] Market Data and Key Metrics Changes - The company anticipates growth of 21% to 23% for the year, despite macroeconomic uncertainties [11] - The semiconductor industry remains focused on advanced nodes and complex packaging, with no significant changes in customer behavior due to tariffs [10] Company Strategy and Development Direction - The company aims to establish itself as the leading independent data analytics platform optimized for the semiconductor industry [15] - Integration plans for SecureWise are being refined to enhance collaboration between OSATs, fabless foundries, and equipment vendors [8] - The company is focusing on enhancing its product offerings with machine learning and AI capabilities [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the customer environment is mixed, with some recovering from a weak 2024 while others maintain momentum [4] - The company remains optimistic about its growth trajectory, reaffirming revenue growth estimates for the year [11] - Management highlighted the importance of flexibility and nimbleness for customers in the current uncertain environment [70] Other Important Information - The company completed the acquisition of SecureWise for $130 million, which is expected to be accretive to earnings and operating margins [13][55] - The company ended the quarter with cash and short-term investments of $54 million, down from $115 million due to the acquisition [17] Q&A Session Summary Question: Details on revenue guidance and analytics growth - Management confirmed that overall expectations are in line with initial guidance, with meaningful growth anticipated in IYR due to a low base [20][21] Question: Sales and marketing expense increase - The increase in sales and marketing expenses is aimed at enhancing engagement across a wide variety of product offerings and supporting ongoing pilots converting into bookings [24][26] Question: SecureWise integration plan - Customers appreciate the security features of SecureWise, and the integration is expected to enhance collaboration and operational efficiency [32][34] Question: Pipeline for Sapient Manufacturing Hub - Management expects to close additional contracts for SMH enterprise this year, driven by new workflows and AI capabilities [41] Question: DFI systems shipment details - Both shipped DFI systems were to existing logic customers, with expectations to ship additional systems in the second half of the year [46][47] Question: Challenges in analytics growth - Management noted that new innovations take time to be digested, and the complexity of deployments can delay substantial bookings [51][52] Question: Capital allocation strategy - The company prioritizes debt reduction while remaining open to share buybacks when opportunities arise [78] Question: SecureWise gross margin profile - SecureWise is a highly recurring revenue business, and its acquisition is expected to be accretive to overall gross margins [81][83]

PART I FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company's Q1 2025 financial statements show **$47.8 million** in revenue and a **$3.0 million** net loss, with the SecureWise acquisition significantly altering the balance sheet through increased assets and **$70 million** in new debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $43,734 | $90,594 | ($46,860) | | Goodwill | $96,645 | $14,953 | $81,692 | | Intangible assets, net | $58,357 | $12,307 | $46,050 | | Total assets | $389,972 | $315,289 | $74,683 | | Long-term debt, net | $66,416 | $0 | $66,416 | | Total liabilities | $140,992 | $69,252 | $71,740 | | Total stockholders' equity | $248,980 | $246,037 | $2,943 | Condensed Consolidated Statements of Comprehensive Loss (in thousands, except per share) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total revenues | $47,778 | $41,310 | +16% | | - Analytics | $42,471 | $38,463 | +10% | | - Integrated Yield Ramp | $5,307 | $2,847 | +86% | | Gross profit | $34,823 | $27,781 | +25% | | Loss from operations | ($3,555) | ($1,960) | +81% | | Net loss | ($3,032) | ($393) | +671% | | Net loss per share (basic & diluted) | ($0.08) | ($0.01) | ($0.07) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $8,640 | ($1,862) | | Net cash used in investing activities | ($123,861) | ($2,642) | | Net cash provided by (used in) financing activities | $67,958 | ($8,752) | | Net change in cash and cash equivalents | ($46,860) | ($13,722) | - On March 7, 2025, the company acquired SecureWise LLC for **$130.0 million** cash, financed by cash on hand and new credit facilities, with **$81.7 million** allocated to goodwill and **$47.1 million** to identifiable intangible assets[124](index=124&type=chunk)[126](index=126&type=chunk)[129](index=129&type=chunk) - The SecureWise acquisition was financed by a new Credit Agreement on March 7, 2025, including a **$45.0 million** revolving credit facility and a **$25.0 million** term loan, resulting in **$70.0 million** total debt outstanding as of March 31, 2025[114](index=114&type=chunk)[115](index=115&type=chunk)[121](index=121&type=chunk) - As of March 31, 2025, the company had approximately **$226.7 million** in remaining performance obligations, with over half expected to be recognized as revenue within the next two years[52](index=52&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **16%** revenue growth to increased demand and SecureWise contributions, while the **$3.0 million** net loss resulted from a **42%** surge in SG&A expenses, primarily due to acquisition costs, with current liquidity deemed sufficient for future operations Revenue and Gross Margin Comparison (in thousands) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues:** | | | | | | Analytics | $42,471 | $38,463 | $4,008 | 10% | | Integrated Yield Ramp | $5,307 | $2,847 | $2,460 | 86% | | **Total revenues** | **$47,778** | **$41,310** | **$6,468** | **16%** | | **Gross profit** | **$34,823** | **$27,781** | **$7,042** | **25%** | | **Gross margin** | **73%** | **67%** | - | 6 p.p. | - The increase in Integrated Yield Ramp revenue was primarily due to higher Gainshare from increased customer wafer shipments at non-leading-edge nodes[154](index=154&type=chunk) - Selling, general, and administrative (SG&A) expenses increased by **$6.9 million** (**42%**) year-over-year, mainly due to **$4.3 million** in non-recurring costs related to the SecureWise acquisition and a **$1.9 million** increase in personnel-related costs[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - The company completed the acquisition of SecureWise LLC on March 7, 2025, to expand its secure data exchange (DEX) network and accelerate equipment makers' ability to derive value from data using the Exensio platform[138](index=138&type=chunk) - Cash and investments decreased from **$114.9 million** at year-end 2024 to **$54.1 million** as of March 31, 2025, primarily due to the SecureWise acquisition, which was partially financed by drawing **$70 million** from new credit facilities[176](index=176&type=chunk)[191](index=191&type=chunk)[195](index=195&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks primarily from interest rate fluctuations on its **$70.0 million** variable-rate debt, where a **100 basis point** increase would raise annual interest expense by **$0.5 million**, and from unhedged foreign currency exposures in international operations - The company is exposed to interest rate risk on its **$70.0 million** of variable-rate debt, where a **100 basis point** rate increase would raise annual interest expense by an average of **$0.5 million**[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) - The company's investment portfolio of **$54.1 million** in cash, cash equivalents, and short-term U.S. Government securities is also subject to interest rate risk, though a **100 basis point** change is expected to have an immaterial impact on its fair value[201](index=201&type=chunk) - The company is exposed to foreign currency exchange risk as some revenues, expenditures, and cash balances are denominated in currencies such as the Euro, Yen, Chinese Yuan, New Taiwan Dollar, and Canadian Dollar, and does not currently engage in hedging activities[206](index=206&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with the recently acquired SecureWise business excluded from the internal control over financial reporting assessment as permitted by SEC guidance - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of March 31, 2025[207](index=207&type=chunk) - The company's management excluded the newly acquired SecureWise business from its assessment of internal control over financial reporting for the quarter ended March 31, 2025, as the acquisition was completed on March 7, 2025[208](index=208&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company is awaiting a tribunal decision in an ongoing arbitration proceeding initiated in May 2020 against SMIC for failure to pay fees - The company initiated arbitration against SMIC in May 2020 over unpaid fees, and after a hearing in February 2023 and final submissions, the company is awaiting the tribunal's judgment[110](index=110&type=chunk) [Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) As of the filing date, there were no material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - As of the filing date, there were no material changes from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[211](index=211&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any of its common stock during the first quarter of 2025 - There were no stock repurchases during the first quarter of 2025[212](index=212&type=chunk) [Defaults Upon Senior Securities](index=67&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None reported [Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) None reported [Other Information](index=67&type=section&id=Item%205.%20Other%20Information) During the quarter ended March 31, 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter[215](index=215&type=chunk) [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Equity Purchase Agreement for the SecureWise acquisition, the new Credit Agreement, and certifications by the principal executive and financial officers

[Q1 2025 Management Report](index=1&type=section&id=Q1%202025%20Management%20Report) [Q1 2025 Results](index=3&type=section&id=Q1%202025%20Results) PDF Solutions reported Q1 2025 total revenues of **$47.8 million**, a 5% sequential decrease but 16% year-over-year increase, with lower Analytics revenue offset by a 146% surge in Integrated yield ramp revenue [Overview](index=3&type=section&id=Overview) Q1 2025 total revenues reached **$47.8 million**, with Analytics revenue down 11% and Integrated yield ramp revenue up 146%, resulting in a GAAP diluted loss per share of **($0.08)** and non-GAAP diluted EPS of **$0.21** Q1 2025 Key Financial Metrics (in millions) | Metric | Value | | :--- | :--- | | Total Revenues | $47.8 | | GAAP Gross Margin | 73% | | Non-GAAP Gross Margin | 77% | | GAAP Diluted EPS | ($0.08) | | Non-GAAP Diluted EPS | $0.21 | | Operating Cash Flow | $8.6 | | Cash Used for Capital Expenditures | $8.2 | - **Total Revenues:** **$47.8 million**, down 5% from Q4 2024 and up 16% from Q1 2024[8](index=8&type=chunk) - **Analytics Revenue:** **$42.5 million**, down 11% from Q4 2024 and up 10% from Q1 2024[8](index=8&type=chunk) - **Integrated Yield Ramp Revenue:** **$5.3 million**, up 146% from Q4 2024 and up 86% from Q1 2024[8](index=8&type=chunk) [Key Financial & Operating Metrics](index=4&type=section&id=Key%20Financial%20%26%20Operating%20Metrics) Q1 2025 revenues decreased to **$47.8 million**, while non-GAAP gross margin improved to **77%**; outstanding debt reached **$68.7 million**, and operating cash flow significantly improved to **$8.6 million** Quarterly Financial & Operating Metrics (in thousands) | Metric | Q1'25 | Q4'24 | Q1'24 | | :--- | :--- | :--- | :--- | | Revenues | $47,778 | $50,085 | $41,310 | | GAAP Gross Margin | 73% | 68% | 67% | | Non-GAAP Gross Margin | 77% | 72% | 72% | | Outstanding Debt | $68,656 | $— | $— | | Operating Cash Flow | $8,640 | $1,606 | ($1,862) | | Cash Used for Capital Expenditures (CAPEX) | $8,203 | $5,847 | $2,023 | [Revenue by Geographic Area](index=5&type=section&id=Revenue%20by%20Geographic%20Area) Q1 2025 revenue was primarily from the **United States (38%)** and **Japan (25%)**, with China's contribution nearly doubling to **17%** while 'Rest of the world' decreased to **17%** Quarterly Revenue by Geographic Area (in thousands) | Region | Q1'25 Revenue | % of Total | Q4'24 Revenue | % of Total | | :--- | :--- | :--- | :--- | :--- | | United States | $18,228 | 38% | $16,320 | 33% | | Japan | $11,736 | 25% | $11,932 | 24% | | China | $8,043 | 17% | $4,576 | 9% | | Taiwan | $1,494 | 3% | $1,150 | 2% | | Rest of the world | $8,277 | 17% | $16,107 | 32% | | **Total revenues** | **$47,778** | **100%** | **$50,085** | **100%** | [Q1 2025 Non-GAAP Results & Reconciliations](index=6&type=section&id=Q1%202025%20Non-GAAP%20Results%20%26%20Reconciliations) Q1 2025 non-GAAP results reconcile a GAAP net loss of **($3.0 million)** to a non-GAAP net income of **$8.1 million**, primarily by excluding **$6.6 million** in stock-based compensation and **$4.3 million** in non-recurring costs [Explanation of Non-GAAP Financial Measures](index=6&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) Management uses non-GAAP measures to evaluate profitability and performance, excluding non-cash or non-recurring items like stock-based compensation and amortization of acquired intangibles - Non-GAAP measures are used by management to provide supplemental information on ongoing operations by excluding expenses that do not have a current effect on the future uses of cash or impact revenue generation[13](index=13&type=chunk) - Key Exclusions from GAAP: - Stock-based compensation expense[13](index=13&type=chunk) - Amortization of acquired technology and other intangible assets[13](index=13&type=chunk) - Amortization of debt issuance costs[13](index=13&type=chunk) - Non-recurring items such as certain legal proceedings and integration costs[13](index=13&type=chunk) - Related income tax effects and valuation allowance adjustments[13](index=13&type=chunk) [Reconciliation of GAAP to Non-GAAP Net Income](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Net%20Income) Q1 2025 GAAP net loss of **($3.0 million)** was reconciled to a non-GAAP net income of **$8.1 million**, primarily by adding back **$6.6 million** in stock-based compensation and **$4.3 million** in non-recurring costs Q1 2025 GAAP to Non-GAAP Net Income Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | **GAAP net income (loss)** | **($3,032)** | | Stock-based compensation expense | $6,596 | | Amortization of acquired technology | $678 | | Amortization of other acquired intangible assets | $378 | | Non-recurring legal, finance, integration and other costs | $4,345 | | Other adjustments | $150 | | **Non-GAAP net income** | **$8,115** | Q1 2025 GAAP vs. Non-GAAP EPS | Metric | Value | | :--- | :--- | | GAAP net income (loss) per diluted share | ($0.08) | | Non-GAAP net income per diluted share | $0.21 | [Reconciliation of GAAP to Non-GAAP Spending by Function](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Spending%20by%20Function) Q1 2025 functional spending was adjusted from GAAP to non-GAAP by removing stock-based compensation, with SG&A expenses seeing the largest reduction from **$23.4 million** to **$16.1 million** Q1 2025 GAAP to Non-GAAP Spending Reconciliation (in thousands) | Spending by Function | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Cost of Revenue | $12,955 | ($2,020) | $10,935 | | Research & Development | $14,628 | ($2,419) | $12,209 | | Selling, General, & Administrative | $23,372 | ($7,295) | $16,077 | - Primary Adjustments to SG&A: - Stock-based compensation expense: **($2,835) thousand**[21](index=21&type=chunk) - Non-recurring legal, finance, integration and other costs: **($4,345) thousand**[21](index=21&type=chunk) - Expenses for certain legal proceedings: **($115) thousand**[21](index=21&type=chunk)

Financial Performance - Total revenues for Q1 2025 were $47.8 million, a decrease from $50.1 million in Q4 2024 but an increase from $41.3 million in Q1 2024 [3] - Analytics revenue for Q1 2025 was $42.5 million, down from $47.9 million in Q4 2024 but up from $38.5 million in Q1 2024 [3] - Integrated Yield Ramp revenue for Q1 2025 was $5.3 million, compared to $2.2 million in Q4 2024 and $2.8 million in Q1 2024 [3] Profitability Metrics - GAAP gross margin for Q1 2025 was 73%, up from 68% in Q4 2024 and 67% in Q1 2024 [4] - Non-GAAP gross margin for Q1 2025 was 77%, compared to 72% in both Q4 2024 and Q1 2024 [4] - GAAP net loss for Q1 2025 was $3.0 million, or ($0.08) per diluted share, compared to net income of $0.5 million, or $0.01 per diluted share in Q4 2024 [5] - Non-GAAP net income for Q1 2025 was $8.1 million, or $0.21 per diluted share, down from $9.9 million, or $0.25 per diluted share in Q4 2024 [6] Strategic Developments - The company experienced strong customer activity and platform development, driven by AI-driven digitization [7] - The acquisition of SecureWise was completed to enhance supply chain collaboration [10] - The company reaffirmed its annual revenue growth guidance of 21-23% for 2025 [7] Backlog and Financial Position - The backlog as of March 31, 2025, was $226.7 million [10] - Total assets increased to $389.972 million as of March 31, 2025, from $315.289 million at the end of 2024 [17][18]

Company Announcement - PDF Solutions, Inc. will release its First quarter fiscal 2025 financial results after the market close on May 8, 2025 [1] - A live teleconference will be hosted by CEO John Kibarian and CFO Adnan Raza on the same day at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss the results [1] Participation Details - Analysts and investors are encouraged to pre-register for the live call at a provided link to receive dial-in information and a unique passcode [2] - Participants are advised to join the call ten minutes ahead of the scheduled time [2] Webcast Information - The teleconference will be webcast simultaneously on the company's website, with a replay available after the call on the investor relations site [3] Company Overview - PDF Solutions provides comprehensive data solutions aimed at improving yield, quality, and operational efficiency in the semiconductor and electronics industry [4] - The company's products and services are utilized by Fortune 500 companies to achieve smart manufacturing goals through data collection and advanced analytics [4] - Founded in 1991, PDF Solutions is headquartered in Santa Clara, California, with operations in North America, Europe, and Asia [5]

Core Insights - PDF Solutions, Inc. has completed the acquisition of secureWISE, LLC, enhancing its position in the semiconductor manufacturing equipment industry [1][2] - The acquisition is expected to significantly expand PDF Solutions' manufacturing connectivity network, covering most of the world's 300mm fabs [2] - The integration of secureWISE is anticipated to accelerate its adoption in the outsourced semiconductor assembly and test market [2] Company Overview - PDF Solutions provides comprehensive data solutions aimed at improving yield, quality, and operational efficiency in the semiconductor and electronics industry [4] - The company serves Fortune 500 clients by enabling smart manufacturing through data collection, advanced analytics, and machine learning [4] - Founded in 1991, PDF Solutions is headquartered in Santa Clara, California, with a global presence across North America, Europe, and Asia [5][6] secureWISE Overview - The secureWISE platform facilitates secure remote connectivity and collaboration in the semiconductor industry [7] - It is installed in over 90% of the world's 300mm semiconductor fabs, providing OEM suppliers with real-time access to their equipment [7] - The platform aims to deliver operational insights, enhance performance, and create new service revenue opportunities [7]