PDF Solutions(US:PDFS)2025-11-06 21:30Financial Performance - Total revenues for the three months ended September 30, 2025, were $57.1 million, an increase of $10.7 million or 23% compared to the same period in 2024[140]. - Net income for the three months ended September 30, 2025, was $1.3 million, a decrease from $2.2 million for the same period in 2024, primarily due to increased costs and expenses[139]. - Analytics revenue for the nine months ended September 30, 2025, was $146.0 million, an increase of $24.6 million or 20% compared to the same period in 2024[140]. - Integrated Yield Ramp revenue for the nine months ended September 30, 2025, was $10.7 million, an increase of $2.6 million or 32% compared to the same period in 2024[140]. Costs and Expenses - Costs of revenues for the three months ended September 30, 2025, increased by $3.4 million, primarily due to increases in personnel-related costs and subcontractor costs[139]. - Gross margin for the three months ended September 30, 2025, decreased to 72% from 73% for the same period in 2024, primarily due to higher costs[150]. - Research and development expenses for the three months ended September 30, 2025, increased by $1.9 million or 14% compared to the same period in 2024[152]. - Selling, general, and administrative expenses for the nine months ended September 30, 2025, increased by $12.2 million or 24% compared to the same period in 2024[157]. - Selling, general, and administrative expenses increased by $1.9 million (approximately 5.5%) for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to a $1.8 million increase in personnel-related costs[158]. - For the nine months ended September 30, 2025, selling, general, and administrative expenses rose by $12.2 million (approximately 12.5%) compared to the same period in 2024, driven by a $7.0 million increase in personnel-related costs and $4.5 million in non-recurring costs related to the acquisition of SecureWise[159]. Interest and Tax Expenses - Interest expense for the three months ended September 30, 2025, was $1.2 million, reflecting a 100% increase compared to the same period in 2024, attributed to long-term debt financing for the acquisition of SecureWise[162]. - Other income (expense), net decreased by $1.6 million for the three months ended September 30, 2025, primarily due to a $1.5 million decrease in interest income[163]. - Income tax expense increased by $769,000 (approximately 54%) for the three months ended September 30, 2025, compared to the same period in 2024[165]. Cash Flow and Working Capital - As of September 30, 2025, working capital was $80.0 million, down from $145.4 million as of December 31, 2024[168]. - Net cash flows provided by operating activities were $6.7 million for the nine months ended September 30, 2025, a decrease of $1.4 million compared to $8.1 million for the same period in 2024[182]. - Net cash flows used in investing activities were $127.6 million for the nine months ended September 30, 2025, compared to net cash flows provided of $0.2 million for the same period in 2024[183]. - For the nine months ended September 30, 2025, net cash flows used in investing activities were primarily $129.7 million for the acquisition of SecureWise and $23.1 million for property and equipment purchases[184]. - Net cash flows provided by financing activities for the nine months ended September 30, 2025, were $65.5 million, a significant increase compared to net cash flows used of $10.9 million for the same period in 2024[186]. - The financing activities included $69.6 million proceeds from long-term debt for the acquisition of SecureWise and $4.2 million from employee stock purchase plans[187]. - As of September 30, 2025, the company had cash, cash equivalents, and short-term investments totaling $35.9 million[193]. Debt and Financial Risks - The company had $68.8 million of variable rate debt as of September 30, 2025, with a potential increase in interest expense of $0.5 million annually if rates rise by 100 basis points[195]. - The company is exposed to foreign currency risks due to cash balances and transactions in various currencies, including Euro, Yen, and Chinese Yuan[196]. - The company does not have any off-balance sheet arrangements or undisclosed borrowings as of September 30, 2025[190]. - The company has not entered into any foreign currency exchange contracts and does not expect to do so in the near future[196]. Future Outlook - The company anticipates fluctuations in research and development expenses due to the size and timing of product development projects[156]. - Future revenues from Integrated Yield Ramp may fluctuate due to factors outside the company's control, including customer production levels and contract negotiations[145]. - The company anticipates fluctuations in selling, general, and administrative expenses due to cost control initiatives and increased selling efforts in the future[160]. - The company has a stock repurchase program with approximately $39.8 million remaining available for repurchase as of September 30, 2025[179]. - Cash payments for taxes related to net share settlement of equity awards were $5.9 million for the nine months ended September 30, 2025[187].