PDF Solutions (NasdaqGS:PDFS) Q4 2025 Earnings call February 12, 2026 05:00 PM ET Company ParticipantsAdnan Raza - CFOJohn Kibarian - President and CEOConference Call ParticipantsBlair Abernethy - Senior Research AnalystClark Wright - VP and Research AnalystOperatorAt this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. As a reminder, this ...

Financial Data and Key Metrics Changes - The company reported record total revenues of $219.0 million for the full year 2025, a 22% increase from $179.5 million in 2024, and Q4 revenues of $62.4 million, up 25% year-over-year from $50.1 million [15][19] - Gross margin for Q4 was 77%, and operating margin was 24%, while for the full year, gross margin was 76% and operating margin was 21%, exceeding previous long-term targets [19][23] - Earnings per share (EPS) for the full year was $0.94, reflecting a 12% growth from $0.84 in the prior year [21] Business Line Data and Key Metrics Changes - Platform revenue for Q4 was $52.5 million, up 20% year-over-year, while volume-based revenue was $9.9 million, up 58% [16] - For the full year, platform revenue was $181.0 million, a 15% increase, and volume-based revenue was $38 million, up 70% year-over-year [17] - Recurring revenue for Q4 was $61.1 million, up 62% year-over-year, and for the full year, it was $205.1 million, a 41% increase [17] Market Data and Key Metrics Changes - The semiconductor industry is projected to exceed $1 trillion in revenue, with increasing complexity in manufacturing processes driving demand for AI-driven collaboration [4][12] - The company anticipates continued growth in 2026, consistent with a long-term target of 20% CAGR, driven by increased customer activity across various segments [12][23] Company Strategy and Development Direction - The company aims to evolve from an analytics platform provider to an AI-driven collaboration platform, enhancing its offerings to meet the needs of customers in the semiconductor industry [5][11] - Strategic acquisitions, such as secureWISE, and partnerships with companies like SAP are integral to expanding the company's capabilities and market reach [7][18] - The focus for the next phase includes establishing orchestration, analytics, and data components across the industry [11][23] Management's Comments on Operating Environment and Future Outlook - Management highlighted the accelerating need for AI-driven collaboration in the semiconductor industry, with expectations for increased customer activity in 2026 [12][23] - The company is optimistic about launching advanced memory solutions and expanding its eProbe machine installations, anticipating nearly doubling the number in the field [12][23] - Management expressed confidence in achieving revenue growth consistent with long-term targets, even without inorganic growth contributions [13][23] Other Important Information - The company ended 2025 with a backlog of $254 million and generated positive operating cash flow of approximately $24 million [18][22] - Capital expenditures for 2025 were approximately $33 million, primarily related to DirectScan systems, with expectations for similar spending in 2026 [22] Q&A Session Summary Question: Clarification on DirectScan systems shipped - The company confirmed that four DirectScan systems were shipped in 2025, with a total of six currently in the field [30] Question: CapEx spending and future expectations - Management indicated that CapEx spending in 2026 is expected to be managed evenly throughout the year, with potential variations [38] Question: SAP relationship and expectations - The company continues to see increased needs for orchestration and expects to build on its partnership with SAP to enhance customer engagement [42][44] Question: Balance sheet and debt levels - Management expressed comfort with current debt levels, indicating a focus on balancing CapEx spending while gradually paying down debt [46][49] Question: Revenue methodology and growth expectations - The company provided insights into its new revenue categorization, emphasizing the importance of volume-based revenue and cross-selling opportunities with secureWISE [52][56]

Core Insights - The semiconductor industry is undergoing rapid innovation, with unprecedented demand and complexity, prompting PDF Solutions to provide advanced data and AI solutions to enhance operational effectiveness across the supply chain [2][11]. Event Overview - PDF Solutions will host its Users Conference and Analyst Day on December 3rd and 4th, 2025, in Santa Clara, CA, focusing on the semiconductor industry's transformation [1][2]. - The conference will feature presentations from major industry players such as Qualcomm, Intel, and GlobalFoundries, providing a platform for sharing insights and fostering industry relationships [4][11]. Conference Themes - The conference will address three key themes: the need for scalable solutions for cross-industry collaboration, the transformative role of AI in the semiconductor supply chain, and the importance of connectivity, security, and trust through a neutral industry platform [8]. Agenda Highlights - The agenda includes a morning plenary session, financial analysts session, and various presentations on topics such as AI strategies, manufacturing data analytics, and digital transformation in semiconductor manufacturing [5][6][10]. - Keynote speakers include Mike Campbell from Qualcomm and Aziz Safa from Intel, along with presentations on eBeam solutions and AI model operations [9]. Company Background - PDF Solutions, founded in 1991 and headquartered in Santa Clara, California, provides comprehensive data solutions aimed at improving yield and operational efficiency in the semiconductor and electronics industry [11][12].

Core Insights - PDF Solutions, Inc. is collaborating with Lavorro Inc. to enhance semiconductor manufacturing through access to real-time engineering documentation, aiming for quicker and more effective implementation of actions and equipment control [1][4]. Company Overview - PDF Solutions provides comprehensive data solutions for the semiconductor and electronics ecosystems, focusing on improving yield, quality, and operational efficiency for increased profitability [6]. - The company has over three decades of semiconductor expertise and offers AI-ready data from a secure infrastructure, enabling manufacturing companies to analyze data at scale [2]. Collaboration Details - The partnership with Lavorro aims to transform how fab operators utilize real-time, clean process data and access the latest engineering knowledge, facilitating better yield-enhancing decisions [4]. - Lavorro employs Generative AI and Agentic AI to synthesize knowledge from static and real-time data, providing context-aware assistance to maximize engineering and fab efficiency [3][5]. Strategic Goals - The combined solutions from PDF Solutions and Lavorro are designed to enable fab operators to act more swiftly on process alerts, leading to quicker remediation actions and enhanced operational efficiency [5].

Core Insights - PDF Solutions has announced the upcoming release of Exensio Studio AI, which combines Exensio analytics with Tiber AI Studio licensed from Intel Corporation [1][2] - The new solution aims to enhance operational efficiency in semiconductor manufacturing by leveraging big data analytics [2][8] Company Overview - PDF Solutions has been providing data solutions for semiconductor manufacturing for nearly 20 years, evolving its platform to include the latest IT technologies [2] - The company is headquartered in Santa Clara, California, and operates globally across North America, Europe, and Asia [9][10] Product Features - Exensio Studio AI integrates with existing Exensio manufacturing data infrastructure to clean, normalize, and align various data types, including FDC, characterization, and supply chain data [3] - The solution is designed to streamline the AI development lifecycle, enabling data scientists and engineers to build, train, deploy, and manage machine learning models [3][7] - Key design features include full-stack MLOps, flexibility for multi-cloud and on-premises deployments, automation of ML pipelines, and collaboration tools for data science teams [7] Strategic Partnerships - Intel Corporation is already utilizing Tiber AI Studio for its manufacturing operations and plans to adopt Exensio Studio AI to standardize its manufacturing data infrastructure [4] - PDF Solutions will continue to distribute Tiber AI Studio as Exensio Workbench for AI, providing support for existing users [5]