PART I [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for PDF Solutions, Inc. as of March 31, 2021, and for the three months then ended, including balance sheets, statements of comprehensive loss, stockholders' equity, and cash flows, with accompanying notes on accounting policies and financial data [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $271.1 million from $287.6 million at year-end 2020, primarily due to reduced short-term investments, while total liabilities also decreased to $45.9 million from $53.1 million, leading to a decline in total stockholders' equity to $225.3 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $178,446 | $193,380 | | **Total assets** | $271,131 | $287,580 | | **Total current liabilities** | $35,101 | $42,205 | | **Total liabilities** | $45,878 | $53,074 | | **Total stockholders' equity** | $225,253 | $234,506 | - Cash and cash equivalents increased significantly to **$74.3 million** from **$30.3 million**, while short-term investments decreased from **$115.0 million** to **$58.0 million**[9](index=9&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Total revenues for the three months ended March 31, 2021, increased to $24.2 million from $21.2 million year-over-year, driven by Analytics revenue growth, despite a net loss of $7.6 million, or ($0.21) per share, primarily due to higher costs and a shift from an income tax benefit to an expense Q1 2021 vs Q1 2020 Performance (in thousands, except per share amounts) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Total revenues** | $24,200 | $21,158 | | Analytics Revenue | $19,393 | $13,248 | | Integrated Yield Ramp Revenue | $4,807 | $7,910 | | **Costs of revenues** | $10,663 | $8,487 | | **Loss before income taxes** | $(6,641) | $(4,007) | | **Net loss** | $(7,597) | $(528) | | **Net loss per share, basic and diluted** | $(0.21) | $(0.02) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity decreased from $234.5 million at year-end 2020 to $225.3 million at March 31, 2021, primarily due to an $8.1 million comprehensive loss and $4.5 million in common stock repurchases, partially offset by employee stock plans and stock-based compensation - The company repurchased **$4.5 million** of its common stock during the first quarter of 2021[11](index=11&type=chunk) - Comprehensive loss for Q1 2021 was **$8.1 million**, which included a net loss of **$7.6 million** and other comprehensive loss of **$0.5 million**[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $8.3 million for Q1 2021, a shift from $5.4 million provided in the prior-year, while investing activities provided $56.4 million, and financing activities used $4.5 million, resulting in a $43.5 million increase in cash and cash equivalents Cash Flow Summary (in thousands) | Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $(8,325) | $5,380 | | **Net cash provided by (used in) investing activities** | $56,417 | $(2,068) | | **Net cash used in financing activities** | $(4,497) | $(507) | | **Net change in cash, cash equivalents, and restricted cash** | $43,491 | $2,780 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and provide further information on financial statement items, including revenue recognition, the Advantest partnership, Cimetrix acquisition, goodwill, intangible assets, stock-based compensation, and income tax matters, notably a full valuation allowance against U.S. deferred tax assets - Revenue is derived from two sources: Analytics and Integrated Yield Ramp. For Q1 2021, **50% of revenue** was recognized over time and **50%** at a point-in-time[27](index=27&type=chunk)[39](index=39&type=chunk) - The company recognized **$2.6 million** in Analytics revenue from its strategic partner Advantest during Q1 2021[56](index=56&type=chunk) - A measurement period adjustment for the Cimetrix acquisition reduced goodwill by **$0.5 million** in Q1 2021[59](index=59&type=chunk)[65](index=65&type=chunk) - The company maintains a full valuation allowance of approximately **$41.9 million** against its U.S. net federal and state deferred tax assets as of March 31, 2021[87](index=87&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion analyzes Q1 2021 financial results, noting a 14.4% revenue increase to $24.2 million, driven by 46% Analytics revenue growth, offset by a 39% decline in Integrated Yield Ramp revenue, with the net loss widening to $7.6 million due to increased operating expenses, higher costs, and a shift in income tax Q1 2021 Financial Highlights | Metric | Q1 2021 | Change vs Q1 2020 | | :--- | :--- | :--- | | **Total Revenues** | $24.2M | +14.4% | | **Analytics Revenue** | $19.4M | +$6.1M | | **Integrated Yield Ramp Revenue** | $4.8M | -$3.1M | | **Net Loss** | $7.6M | Increased from $0.5M | | **Cash, cash equivalents and short-term investments** | $132.3M | -$13.0M from Dec 31, 2020 | - The company believes the lack of in-person meetings due to COVID-19 may have made it harder to sell complex or new technologies to customers during 2020 and Q1 2021[112](index=112&type=chunk) - The company is focusing resources and investments in products, services, and solutions for analytics due to market developments in the logic foundry market[114](index=114&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Total revenues for Q1 2021 increased by $3.0 million (14%) year-over-year to $24.2 million, driven by 46% Analytics revenue growth, despite a 39% decline in Integrated Yield Ramp revenue, with gross margin decreasing to 56% and operating expenses rising due to higher personnel costs from the Cimetrix acquisition Revenue Breakdown (in thousands) | Revenue Stream | Q1 2021 | Q1 2020 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Analytics | $19,393 | $13,248 | $6,145 | 46% | | Integrated Yield Ramp | $4,807 | $7,910 | $(3,103) | (39)% | | **Total revenues** | **$24,200** | **$21,158** | **$3,042** | **14%** | - The increase in Analytics revenue was primarily driven by an **$8.2 million** increase from analytics and connectivity products[142](index=142&type=chunk) - Research and development expenses increased by **$2.3 million (26%)** year-over-year, mainly due to higher headcount from the Cimetrix acquisition and increased subcontractor expenses[150](index=150&type=chunk)[151](index=151&type=chunk) - Selling, general and administrative expenses increased by **$1.6 million (20%)** year-over-year, also primarily due to higher personnel costs from the Cimetrix acquisition, as well as increased facilities, legal, and accounting fees[153](index=153&type=chunk)[154](index=154&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, the company held $132.3 million in cash, cash equivalents, and short-term investments, a decrease from year-end 2020, with working capital at $143.3 million, and used $8.3 million in cash from operations, while repurchasing $4.5 million of common stock, with management confident in sufficient liquidity for the next twelve months Cash Flow Summary (in thousands) | Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash from Operating activities | $(8,325) | $5,380 | | Net cash from Investing activities | $56,417 | $(2,068) | | Net cash from Financing activities | $(4,497) | $(507) | - The company repurchased **251,212 shares** for a total of **$4.5 million** during Q1 2021 under its 2020 stock repurchase program[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate, credit, and foreign currency exchange rate risks, with its investment portfolio minimizing interest rate exposure, credit risk managed through investments with creditworthy institutions, and foreign currency risk from international payables occasionally hedged with forward contracts, none outstanding as of March 31, 2021 - As of March 31, 2021, the company had cash, cash equivalents, and short-term investments of **$132.3 million**, primarily in cash and U.S. Treasury bills, minimizing interest rate risk[174](index=174&type=chunk) - The company uses foreign currency forward contracts to hedge exposure but had no outstanding contracts as of March 31, 2021[176](index=176&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2021, management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the first quarter - Management concluded that disclosure controls and procedures were **effective** as of the end of the period[177](index=177&type=chunk) - **No material changes** to internal control over financial reporting occurred during the quarter ended March 31, 2021[178](index=178&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company was not a party to any material legal proceedings during the period, except for an ongoing arbitration initiated on May 6, 2020, against SMIC New Technology Research & Development (Shanghai) Corporation for failure to pay contractual fees - The company initiated an arbitration proceeding against SMIC for failure to pay fees, which is on-going[181](index=181&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 - **No material changes** from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020[182](index=182&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activity under its $25.0 million program adopted in June 2020, with 251,212 shares repurchased for $4.5 million during Q1 2021, leaving $20.5 million available for future repurchases as of March 31, 2021 Share Repurchases in Q1 2021 | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | Total Value (thousands) | | :--- | :--- | :--- | :--- | | Jan 2021 | — | $— | $— | | Feb 2021 | 69 | $18.18 | $1,253 | | Mar 2021 | 182 | $17.94 | $3,270 | | **Total** | **251** | **$18.01** | **$4,523** | - As of March 31, 2021, approximately **$20.5 million** remained available for repurchase under the 2020 Program[185](index=185&type=chunk) [Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - No defaults upon senior securities were reported[187](index=187&type=chunk) [Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported - No mine safety disclosures were reported[188](index=188&type=chunk) [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No other information was reported - No other information was reported[189](index=189&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the principal executive and financial officers pursuant to the Sarbanes-Oxley Act of 2002, and financial statements formatted in Inline XBRL - Exhibits filed include CEO and CFO certifications (Exhibits 31.01, 31.02, 32.01, 32.02) and Inline XBRL financial data (Exhibits 101, 104)[191](index=191&type=chunk)[193](index=193&type=chunk)

PDF SOLUTIONS, INC. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 000-31311 (Commission file number) (Exact name of registrant as specified in its charter) Delaware 25-1701361 (State or ot ...

PDF Solutions, Inc. (NASDAQ:PDFS) Q4 2020 Earnings Conference Call February 18, 2021 5:00 PM ET Company Participants Joe Diaz - Lytham Partners LLC, Managing Partner John Kibarian - President & Chief Executive Officer Adnan Raza - Executive Vice President & Chief Financial Officer Conference Call Participants Tom Diffely - D.A. Davidson Tyler Burmeister - Craig-Hallum Jon Tanwanteng - CJS Securities Gus Richard - Northland Operator Good day, ladies and gentlemen, and welcome to the PDF Solutions Inc. Confer ...

Financial Data and Key Metrics Changes - Total revenues for Q3 were $23.1 million, up 8% quarter-over-quarter and up 5% year-over-year [28] - Analytics revenue for Q3 was $14.3 million, growing 13% year-over-year but down 5% compared to the prior quarter [28] - Integrated Yield Ramp revenue was $8.8 million, up 41% sequentially but down 5% year-over-year [33] - Non-GAAP gross margins for the quarter were 63%, consistent with the prior quarter and down slightly from 64% year-over-year [36] - Non-GAAP net profit was $0.1 million, with non-GAAP earnings per share at $0.00 [39] Business Line Data and Key Metrics Changes - Analytics represented 62% of total revenues for Q3 and 65% year-to-date through Q3 [24][33] - The transition to an analytics company has seen analytics as a percentage of total revenue increase from 45% in 2018 to 64% on a last 12-month basis through Q3 2020 [24] - Strong bookings for Q3 exceeded total bookings for the full year of 2019, indicating significant growth momentum [25][26] Market Data and Key Metrics Changes - Strong bookings particularly in China, with renewed activity starting at the end of Q1 and building through Q3 [9] - Increased interest in Exensio analytics from various sectors, including automotive and semiconductor industries [11][20] Company Strategy and Development Direction - The company is focused on becoming a leading provider of differentiated data and analytics solutions, with ongoing investments in cloud infrastructure [41][42] - The partnership with Advantest is seen as a significant step, expected to generate over $50 million over its term [15][30] - Continued investment in analytics is anticipated, with a long-term growth target of 20% annually for the analytics business [29] Management's Comments on Operating Environment and Future Outlook - Management noted that the semiconductor industry continues to see investment despite the pandemic, with foundries reporting high manufacturing volumes [20] - The company expects broad-based interest in Exensio and analytics products in the fourth quarter [20] - Management expressed confidence in the long-term potential of the analytics business and the strategic partnerships being developed [42] Other Important Information - Cash and short-term investments grew to $168 million at the end of Q3, up from $100 million year-over-year, primarily due to a $65 million investment from Advantest [39][40] - The company has no debt and is positioned to invest in various initiatives to enhance its product offerings [41] Q&A Session Summary Question: About the IYR contract decision - Management explained that the decision to pursue an Integrated Yield Ramp contract instead of a subscription was based on better long-term economics for a specific customer [48][49] Question: Impact of legal expenses on SG&A - Legal expenses increased by $0.6 million due to various factors, including the Advantest partnership [54] Question: Future potential contracts similar to Advantest - Management indicated that while there are opportunities, such partnerships would be rare and typically involve a small number of customers [70][74] Question: Timeline for DFI machine shipments - Shipments for DFI machines are expected to slip into early 2021 due to various delays, but revenue generation is ongoing through pilot programs [76][78]

© 2020 PDF Solutions, All Rights Reserved1 Investor Presentation August 2020 John Kibarian, President & CEO, Co-Founder Kimon Michaels, Executive VP, Products and Solutions, Co-Founder Adnan Raza, Executive VP, Finance & CFO | --- | --- | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - Total revenues for Q2 were $21.4 million, up 1% versus the prior quarter and 4% year-over-year [31] - Non-GAAP net profit was $0.5 million with non-GAAP earnings per share of $0.01 [38] - Cash grew to $103 million at the end of Q2, an increase of approximately $17 million year-over-year [38] Business Line Data and Key Metrics Changes - Analytics revenue for Q2 was $15.2 million, growing 15% compared to Q1 2020 and 27% year-over-year [31] - Integrated Yield Ramp (IYR) revenue was $6.2 million, down $1.7 million sequentially and down $2.4 million year-over-year [33] - Analytics represented 71% of total revenues in Q2 compared to 58% for the calendar year 2019 [33] Market Data and Key Metrics Changes - Bookings for Q2 were nearly double those of Q2 2019, and bookings for the first half of 2020 exceeded the entire calendar year of 2019 [30] - Strong demand was noted from fabless foundries and integrated device manufacturers (IDMs) in the high-performance computing (HPC) segment [13] Company Strategy and Development Direction - The company is focusing on transitioning to an analytics-driven business model, with significant investments in cloud infrastructure and software [34][39] - A five-year partnership with Advantest was announced, expected to generate a minimum of $50 million in direct revenue [16][39] - The partnership aims to enhance the Exensio analytics platform and expand its deployment in the semiconductor industry [18][20] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism about the semiconductor industry's continued investment despite COVID-19 impacts, anticipating accelerated interest in products in the second half of the year [24] - The company expects demand for HPC solutions to persist, driven by technical milestones achieved with key customers [14] Other Important Information - The company achieved a non-GAAP gross margin of 63% for the quarter, down from 67% year-over-year, with expectations to reach a long-term target of 70% [35] - The company has no debt and a strong balance sheet, allowing for investments in new product areas and technology acquisitions [38][72] Q&A Session Summary Question: Clarification on the Advantest partnership revenue - The $50 million expected over five years is the minimum commitment of licenses to Advantest, with additional revenue from joint products being developed [44] Question: Impact of Intel's 7-nanometer process delay - The management refrained from discussing specific customers but noted that yield challenges are a broader industry issue, presenting opportunities for the company [46] Question: Characteristics of Advantest as a first major customer - Test generates significant data, and the company sees opportunities across the supply chain, not just with Advantest [51] Question: Future engagement with other equipment vendors - The company is engaged with other equipment vendors to leverage Exensio for data analytics and improve customer support [67] Question: Plans for cash on the balance sheet - The company is looking to acquire smaller companies that can enhance the Exensio platform and provide unique data or analytics capabilities [72]

PDF Solutions, Inc. (NASDAQ:PDFS) Q1 2020 Earnings Conference Call May 7, 2020 5:00 PM ET Company Participants Joe Diaz - IR, Lytham Partners John Kibarian - President & CEO Adnan Raza - EVP & CFO Conference Call Participants Tom Diffely - D.A. Davidson Jon Tanwanteng - CJS Securities Andrew Weiner - Samjo Capital Operator Good day, ladies and gentlemen and welcome to the PDF Solutions, Inc. Conference Call to discuss the company's financial results for the first quarter ended March 31, 2020. [Operator inst ...

PDF Solutions, Inc. (NASDAQ:PDFS) Q4 2019 Earnings Conference Call February 13, 2020 5:00 PM ET Company Participants Joe Diaz - IR, Lytham Partners John Kibarian - President & CEO Christine Russell - CFO Kimon Michaels - Co-Founder and EVP Conference Call Participants Christian Schwab - Craig-Hallum Capital Gus Richard - Northland Jon Tanwanteng - CJS Securities Operator Good day, ladies and gentlemen and welcome to the PDF Solutions, Inc. Conference Call to discuss the company's financial results for the f ...

PDF Solutions, Inc. (NASDAQ:PDFS) Q3 2019 Earnings Conference Call October 31, 2019 5:00 PM ET Company Participants John Kibarian – President and Chief Executive Officer Christine Russell – Chief Financial Officer Conference Call Participants Christian Schwab – Craig-Hallum Capital Gus Richard – Northland Tom Diffely – D.A. Davidson Jon Tanwanteng – CJS Securities Operator Good day, ladies and gentlemen. And welcome to the PDF Solutions, Inc. conference call to discuss its financial results for the third qu ...

PDF Solutions, Inc. (NASDAQ:PDFS) Q2 2019 Earnings Conference Call August 1, 2019 5:00 PM ET Company Participants John Kibarian – President and Chief Executive Officer Christine Russell – Chief Financial Officer Conference Call Participants Jon Tanwanteng – CJS Securities Tom Diffely – D.A. Davidson Gus Richard – Northland Christian Schwab – Craig-Hallum Operator Good day, ladies and gentlemen, and welcome to the PDF Solutions, Inc. Conference Call to discuss its financial results for the Second Quarter end ...