Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 05, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-31311 | |
Entity Registrant Name | PDF SOLUTIONS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 25-1701361 | |
Entity Address, Address Line One | 2858 De La Cruz Blvd. | |
Entity Address, City or Town | Santa Clara | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95050 | |
City Area Code | 408 | |
Local Phone Number | 280-7900 | |
Title of 12(b) Security | Common Stock, $0.00015 par value | |
Trading Symbol | PDFS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 37,276,873 | |
Entity Central Index Key | 0001120914 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 81,343 | $ 27,684 |
Short-term investments | 35,907 | 112,542 |
Accounts receivable, net of allowance for doubtful accounts of $890 as of June 30, 2022 and December 31, 2021 | 36,117 | 40,087 |
Prepaid expenses and other current assets | 10,408 | 8,194 |
Total current assets | 163,775 | 188,507 |
Property and equipment, net | 38,390 | 35,295 |
Operating lease right-of-use assets, net | 5,240 | 5,408 |
Goodwill | 14,123 | 14,123 |
Intangible assets, net | 19,505 | 21,239 |
Deferred tax assets, net | 46 | 75 |
Other non-current assets | 8,088 | 9,121 |
Total assets | 249,167 | 273,768 |
Current liabilities: | ||
Accounts payable | 3,382 | 5,554 |
Accrued compensation and related benefits | 10,634 | 9,495 |
Accrued and other current liabilities | 6,237 | 3,328 |
Operating lease liabilities - current portion | 1,493 | 1,758 |
Deferred revenues - current portion | 19,568 | 23,691 |
Billings in excess of recognized revenues | 480 | |
Total current liabilities | 41,794 | 43,826 |
Long-term income taxes payable | 2,475 | 2,656 |
Non-current operating lease liabilities | 5,275 | 5,258 |
Non-current portion of deferred revenue | 1,748 | 2,443 |
Total liabilities | 51,292 | 54,183 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.00015 par value, 5,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.00015 par value, 70,000 shares authorized; shares issued 48,058 and 47,414, respectively; shares outstanding 36,975 and 37,411, respectively | 6 | 6 |
Additional paid-in-capital | 434,784 | 423,069 |
Treasury stock at cost, 11,083 and 10,003 shares, respectively | (131,365) | (104,705) |
Accumulated deficit | (103,018) | (97,721) |
Accumulated other comprehensive loss | (2,532) | (1,064) |
Total stockholders' equity | 197,875 | 219,585 |
Total liabilities and stockholders' equity | $ 249,167 | $ 273,768 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts | $ 890 | $ 890 |
Preferred stock, par value (in dollars per share) | $ 0.00015 | $ 0.00015 |
Preferred stock, shares authorized (in shares) | 5,000 | 5,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00015 | $ 0.00015 |
Common stock, shares authorized (in shares) | 70,000 | 70,000 |
Common stock, shares issued (in shares) | 48,058 | 47,414 |
Common stock, shares outstanding (in shares) | 36,975 | 37,411 |
Treasury stock, shares (in shares) | 11,083 | 10,003 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues: | ||||
Revenues | $ 34,668 | $ 27,419 | $ 68,166 | $ 51,619 |
Costs and Expenses: | ||||
Costs of revenues | 12,042 | 10,785 | 23,571 | 21,448 |
Research and development | 13,374 | 11,064 | 27,463 | 21,905 |
Selling, general and administrative | 9,770 | 9,410 | 20,609 | 18,874 |
Amortization of acquired intangible assets | 314 | 313 | 628 | 627 |
Interest and other expense (income), net | (991) | 243 | (1,301) | (198) |
Income (loss) before income taxes | 159 | (4,396) | (2,804) | (11,037) |
Income tax expense | 1,306 | 88 | 2,493 | 1,044 |
Net loss | (1,147) | (4,484) | (5,297) | (12,081) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments, net of tax | (1,037) | 216 | (1,434) | (314) |
Change in unrealized losses related to available-for-sale debt securities, net of tax | (6) | (34) | (4) | |
Total other comprehensive income (loss) | (1,037) | 210 | (1,468) | (318) |
Comprehensive loss | $ (2,184) | $ (4,274) | $ (6,765) | $ (12,399) |
Net loss per share, basic (in dollars per share) | $ (0.03) | $ (0.12) | $ (0.14) | $ (0.33) |
Net loss per share, diluted (in dollars per share) | $ (0.03) | $ (0.12) | $ (0.14) | $ (0.33) |
Weighted average common shares used to calculate net loss per share, basic (in shares) | 37,028 | 37,004 | 37,316 | 36,989 |
Weighted average common shares used to calculate net loss per share, diluted (in shares) | 37,028 | 37,004 | 37,316 | 36,989 |
Analytics [Member] | ||||
Revenues: | ||||
Revenues | $ 31,117 | $ 19,578 | $ 61,543 | $ 38,971 |
Integrated Yield Ramp [Member] | ||||
Revenues: | ||||
Revenues | $ 3,551 | $ 7,841 | $ 6,623 | $ 12,648 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock Outstanding [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balances (in shares) at Dec. 31, 2020 | 36,850 | 9,550 | ||||
Balances at Dec. 31, 2020 | $ 6 | $ 407,173 | $ (96,215) | $ (76,233) | $ (225) | $ 234,506 |
Issuance of common stock in connection with employee stock purchase plan (in shares) | 100 | |||||
Issuance of common stock in connection with employee stock purchase plan | 921 | 921 | ||||
Issuance of common stock in connection with exercise of options (in shares) | 81 | |||||
Issuance of common stock in connection with exercise of options | 568 | 568 | ||||
Vesting of restricted stock units (in shares) | 149 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants (in shares) | 73 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants | $ (1,463) | (1,463) | ||||
Repurchase of common stock (in shares) | (251) | 251 | ||||
Repurchase of common stock | $ (4,523) | (4,523) | ||||
Stock-based compensation expense | 3,369 | 3,369 | ||||
Comprehensive income (loss) | (7,597) | (528) | (8,125) | |||
Balances (in shares) at Mar. 31, 2021 | 36,929 | 9,874 | ||||
Balances at Mar. 31, 2021 | $ 6 | 412,031 | $ (102,201) | (83,830) | (753) | 225,253 |
Balances (in shares) at Dec. 31, 2020 | 36,850 | 9,550 | ||||
Balances at Dec. 31, 2020 | $ 6 | 407,173 | $ (96,215) | (76,233) | (225) | 234,506 |
Comprehensive income (loss) | (12,399) | |||||
Balances (in shares) at Jun. 30, 2021 | 37,086 | 9,925 | ||||
Balances at Jun. 30, 2021 | $ 6 | 415,063 | $ (103,088) | (88,314) | (543) | 223,124 |
Balances (in shares) at Mar. 31, 2021 | 36,929 | 9,874 | ||||
Balances at Mar. 31, 2021 | $ 6 | 412,031 | $ (102,201) | (83,830) | (753) | 225,253 |
Issuance of common stock in connection with exercise of options (in shares) | 39 | |||||
Issuance of common stock in connection with exercise of options | 290 | 290 | ||||
Vesting of restricted stock units (in shares) | 118 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants (in shares) | 51 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants | $ (887) | (887) | ||||
Stock-based compensation expense | 2,742 | 2,742 | ||||
Comprehensive income (loss) | (4,484) | 210 | (4,274) | |||
Balances (in shares) at Jun. 30, 2021 | 37,086 | 9,925 | ||||
Balances at Jun. 30, 2021 | $ 6 | 415,063 | $ (103,088) | (88,314) | (543) | 223,124 |
Balances (in shares) at Mar. 31, 2021 | 36,929 | 9,874 | ||||
Balances at Mar. 31, 2021 | $ 6 | 412,031 | $ (102,201) | (83,830) | (753) | 225,253 |
Balances (in shares) at Jun. 30, 2022 | 36,975 | 11,083 | ||||
Balances at Jun. 30, 2022 | $ 6 | 434,784 | $ (131,365) | (103,018) | (2,532) | 197,875 |
Balances (in shares) at Dec. 31, 2021 | 37,411 | 10,003 | ||||
Balances at Dec. 31, 2021 | $ 6 | 423,069 | $ (104,705) | (97,721) | (1,064) | 219,585 |
Issuance of common stock in connection with employee stock purchase plan (in shares) | 95 | |||||
Issuance of common stock in connection with employee stock purchase plan | 1,502 | 1,502 | ||||
Issuance of common stock in connection with exercise of options (in shares) | 75 | |||||
Issuance of common stock in connection with exercise of options | 675 | 675 | ||||
Vesting of restricted stock units (in shares) | 232 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants (in shares) | 113 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants | $ (3,389) | (3,389) | ||||
Repurchase of common stock (in shares) | (219) | 219 | ||||
Repurchase of common stock | $ (5,778) | (5,778) | ||||
Stock-based compensation expense | 5,553 | 5,553 | ||||
Comprehensive income (loss) | (4,150) | (431) | (4,581) | |||
Balances (in shares) at Mar. 31, 2022 | 37,594 | 10,335 | ||||
Balances at Mar. 31, 2022 | $ 6 | 430,799 | $ (113,872) | (101,871) | (1,495) | 213,567 |
Balances (in shares) at Dec. 31, 2021 | 37,411 | 10,003 | ||||
Balances at Dec. 31, 2021 | $ 6 | 423,069 | $ (104,705) | (97,721) | (1,064) | $ 219,585 |
Issuance of common stock in connection with exercise of options (in shares) | 87 | |||||
Comprehensive income (loss) | $ (6,765) | |||||
Balances (in shares) at Jun. 30, 2022 | 36,975 | 11,083 | ||||
Balances at Jun. 30, 2022 | $ 6 | 434,784 | $ (131,365) | (103,018) | (2,532) | 197,875 |
Balances (in shares) at Mar. 31, 2022 | 37,594 | 10,335 | ||||
Balances at Mar. 31, 2022 | $ 6 | 430,799 | $ (113,872) | (101,871) | (1,495) | 213,567 |
Issuance of common stock in connection with exercise of options (in shares) | 12 | |||||
Issuance of common stock in connection with exercise of options | 113 | 113 | ||||
Vesting of restricted stock units (in shares) | 84 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants (in shares) | 33 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants | $ (800) | (800) | ||||
Repurchase of common stock (in shares) | (715) | 715 | ||||
Repurchase of common stock | $ (16,693) | (16,693) | ||||
Stock-based compensation expense | 3,872 | 3,872 | ||||
Comprehensive income (loss) | (1,147) | (1,037) | (2,184) | |||
Balances (in shares) at Jun. 30, 2022 | 36,975 | 11,083 | ||||
Balances at Jun. 30, 2022 | $ 6 | $ 434,784 | $ (131,365) | $ (103,018) | $ (2,532) | $ 197,875 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (5,297) | $ (12,081) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,773 | 3,345 |
Stock-based compensation expense | 9,425 | 6,111 |
Amortization of acquired intangible assets | 1,734 | 1,698 |
Amortization of costs capitalized to obtain revenue contracts | 755 | 327 |
Deferred taxes | 17 | 84 |
Other | 20 | 133 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,910 | 3,989 |
Prepaid expenses and other current assets | (3,208) | 1,235 |
Operating lease right-of-use assets | 1,238 | 740 |
Other non-current assets | 1,002 | 362 |
Accounts payable | (3,633) | (1,723) |
Accrued compensation and related benefits | 1,362 | (1,028) |
Accrued and other liabilities | 2,147 | 116 |
Deferred revenues | (4,789) | (3,514) |
Billings in excess of recognized revenues | 480 | 848 |
Operating lease liabilities | (1,316) | (837) |
Net cash provided by (used in) operating activities | 6,620 | (195) |
Cash flows from investing activities: | ||
Proceeds from maturities and sales of short-term investments | 112,500 | 109,000 |
Purchases of short-term investments | (35,920) | (45,992) |
Purchases of property and equipment | (4,454) | (1,121) |
Prepayment for the purchase of property and equipment | (133) | |
Net cash provided by investing activities | 71,993 | 61,887 |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 788 | 793 |
Proceeds from employee stock purchase plan | 1,502 | 921 |
Payments for taxes related to net share settlement of equity awards | (4,189) | (2,350) |
Repurchases of common stock | (22,471) | (4,523) |
Net cash used in financing activities | (24,370) | (5,159) |
Effect of exchange rate changes on cash and cash equivalents | (584) | (128) |
Net change in cash, cash equivalents, and restricted cash | 53,659 | 56,405 |
Cash, cash equivalents, and restricted cash at beginning of period | 27,684 | 33,815 |
Cash, cash equivalents, and restricted cash at end of period | 81,343 | 90,220 |
Reconciliation of cash, cash equivalents, and restricted cash to the balance sheets: | ||
Cash and cash equivalents | 81,343 | 87,201 |
Restricted cash | 3,019 | |
Total cash, cash equivalents and restricted cash | 81,343 | 90,220 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for taxes | 1,690 | 1,275 |
Cash paid for amounts included in the measurement of operating lease liabilities | 795 | 1,076 |
Supplemental disclosure of noncash information: | ||
Property and equipment received and accrued in accounts payable and accrued and other liabilities | 2,466 | 530 |
Advances for purchase of fixed assets transferred from prepaid assets to property and equipment | 333 | 963 |
Operating lease liabilities arising from obtaining right-of-use assets | $ 1,137 | |
Release of restricted cash reducing goodwill due to the acquisition purchase price adjustment | $ 469 |
Note 1 - BASIS OF PRESENTATION
Note 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The interim unaudited condensed consolidated financial statements included herein have been prepared by PDF Solutions, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), including the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The interim unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments necessary (consisting only of normal recurring adjustments) to present a fair statement of results for the interim periods presented. The operating results for any interim period are not necessarily indicative of the results that may be expected for other interim periods or the full fiscal year. The accompanying interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 1, 2022. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after the elimination of all intercompany balances and transactions. The condensed consolidated balance sheet at December 31, 2021, has been derived from the audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include revenue recognition, the estimated useful lives of property and equipment and intangible assets, assumptions made in analysis of allowance for doubtful accounts, impairment of goodwill and long-lived assets, valuation for deferred tax assets, and accounting for lease obligations, stock-based compensation expense, and income tax uncertainties and contingencies. Actual results could differ from those estimates and may result in material effects on the Company’s operating results and financial position. The global COVID-19 pandemic (“COVID-19”) has impacted the operations and purchasing decisions of companies worldwide. As of the date of issuance of the condensed consolidated financial statements, the Company is not aware of any specific event or circumstance relating to COVID-19 that would require updates to the Company’s estimates and judgments or revisions to the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the financial statements. Recent Accounting Standards Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held at the reporting date based on internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model, which will result in earlier recognition of credit losses. Subsequent to the issuance of ASU No. 2016-13, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instrument, ASU No. 2019-05, Financial Instruments – Credit Losses (Topic 326) Targeted Transition Relief, ASU No. 2016-13, ASU No. 2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), and ASU No. 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses. The subsequent ASUs do not change the core principle of the guidance in ASU No. 2016-13. Instead, these amendments are intended to clarify and improve operability of certain topics included within ASU No. 2016-13. Additionally, ASU No. 2019-10 defers the effective date for the adoption of the new standard on credit losses for public filers that are considered small reporting companies (“SRC”) as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which will be fiscal 2023 for the Company if it continues to be classified as an SRC. In February 2020, the FASB issued ASU 2020-02, which provides guidance regarding methodologies, documentation, and internal controls related to expected credit losses. The subsequent amendments will have the same effective date and transition requirements as ASU No. 2016-13. Early adoption is permitted. Topic 326 requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. While the Company is currently evaluating the impact of Topic 326, the Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements or the related disclosure. In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-20): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The guidance allows for either full retrospective adoption or modified retrospective adoption. Additionally, the ASU will require entities to use the “if-converted” method when calculating diluted earnings per share for convertible instruments. The ASU will be effective for annual reporting periods beginning after December 15, 2023 for SRCs and interim periods within those annual periods. Early adoption is permitted. The Company does not anticipate that the adoption of this ASU will have a significant impact on its condensed consolidated financial statements or the related disclosures. Management has reviewed other recently issued accounting pronouncements issued or proposed by the FASB, and does not believe any of these accounting pronouncements has had or will have a material impact on the condensed consolidated financial statements. |
Note 2 - REVENUE FROM CONTACTS
Note 2 - REVENUE FROM CONTACTS WITH CUSTOMERS | 6 Months Ended |
Jun. 30, 2022 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
2. REVENUE FROM CONTRACT WITH CUSTOMERS | 2. REVENUE FROM CONTRACTS WITH CUSTOMERS The Company derives revenue from two sources: Analytics revenue and Integrated Yield Ramp revenue. The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers The Company determines revenue recognition through the following five steps: ● Identification of the contract, or contracts, with a customer ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, performance obligations are satisfied The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Contracts with multiple performance obligations The Company enters into contracts that can include various combinations of licenses, products and services, some of which are distinct and are accounted for as separate performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using the standalone selling price (“SSP”). Analytics Revenue Analytics revenue is derived from the following primary offerings: licenses and services for standalone software (which is primarily Exensio ® ® ® ® Revenue from standalone software is recognized depending on whether the license is perpetual or time-based. Perpetual (one-time charge) license software is recognized at the time of the inception of the arrangement when control transfers to the customers, if the software license is considered as a separate performance obligation from the services offered by the Company. Revenue from post-contract support is recognized over the contract term on a straight-line basis, because we are providing (i) support and (ii) unspecified software updates on a when-and-if available basis over the contract term. Revenue from time-based-licensed software is allocated to each performance obligation and is recognized either at a point in time or over time as follows. The license component is recognized at the time when control transfers to customers, with the post-contract support component recognized ratably over the committed term of the contract. For contracts with any combination of licenses, support, and other services, distinct performance obligations are accounted for separately. For contracts with multiple performance obligations, we allocate the transaction price of the contract to each performance obligation on a relative basis using the SSP attributed to each performance obligation. Revenue from SaaS arrangements, which allow for the use of a cloud-based software product or service over a contractually determined period of time without the customer having to take possession of software, is accounted for as a subscription and is recognized as revenue ratably, on a straight-line basis, over the subscription period beginning on the date the service is first made available to customers. For contracts with any combination of SaaS and related services, distinct performance obligations are accounted for separately. For contracts with multiple performance obligations, we allocate the transaction price of the contract to each performance obligation on a relative basis using the SSP attributed to each performance obligation. Revenue from DFI systems and CV systems that do not include performance incentives based on customers’ yield achievement is recognized primarily as services are performed. Where there are distinct performance obligations, the Company allocates revenue to all deliverables based on their SSPs. For those contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using the SSP attributed to each performance obligation. Where there are not discrete performance obligations, historically, revenue is primarily recognized as services are performed using a percentage of completion method based on costs or labor-hours inputs, whichever is the most appropriate measure of the progress towards completion of the contract. The estimation of percentage of completion method is complex and subject to many variables that require significant judgement. Please refer to the “Significant Judgments” section of this Note for further discussion. Integrated Yield Ramp Revenue Integrated Yield Ramp revenue is derived from the Company’s fixed-fee engagements that include performance incentives based on customers’ yield achievement (which consists primarily of Gainshare royalties) typically based on customer’s wafer shipments, pertaining to these fixed-price contracts, which royalties are variable. Revenue under these project–based contracts, which are delivered over a specific period of time, typically for a fixed fee component paid on a set schedule, is recognized as services are performed using a percentage of completion method based on costs or labor-inputs, whichever is the most appropriate measure of the progress towards completion of the contract. Where there are distinct performance obligations, the Company allocates revenue to all deliverables based on their SSPs and allocates the transaction price of the contract to each performance obligation on a relative basis using SSP. Similar to the services provided in connection with DFI systems and CV systems that are contributing to Analytics revenue, due to the nature of the work performed in these arrangements, the estimation of percentage of completion method is complex and subject to many variables that require significant judgment. Please refer to the “Significant Judgments” section of this Note for further discussion. The Gainshare royalty contained in Integrated Yield Ramp contracts is a variable fee related to continued usage of the Company’s intellectual property after the fixed-fee service period ends, based on a customer’s yield achievement. Revenue derived from Gainshare is contingent upon the Company’s customers reaching certain defined production yield levels. Gainshare royalty periods are generally subsequent to the delivery of all contractual services and performance obligations. The Company records Gainshare as a usage-based royalty derived from customers’ usage of intellectual property and records it in the same period in which the usage occurs. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into the timing of the transfer of goods and services and the geographical regions. The Company determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The Company’s performance obligations are satisfied either over time or at a point-in-time. The following table represents a disaggregation of revenue percentage by timing of revenue: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Over time 74 57 % 72 % 54 % Point-in-time 26 43 % 28 % 46 % Total 100 % 100 % 100 % 100 % International revenues accounted for approximately 51% and 49% of our total revenues during the three and six months ended June 30, 2022, respectively, compared to 56% and 60% of our total revenues during the three and six months ended June 30, 2021, respectively. See Note 10, Customer and Geographic Information Significant Judgments Judgments and estimates are required under ASC 606. Due to the complexity of certain contracts, the actual revenue recognition treatment required under ASC 606 for the Company’s arrangements may be dependent on contract-specific terms and may vary in some instances. For revenue under project-based contracts for fixed-price implementation services, revenue is recognized as services are performed using a percentage-of-completion method based on costs or labor-hours input method, whichever is the most appropriate measure of the progress towards completion of the contract. Due to the nature of the work performed in these arrangements, the estimation of percentage of completion method is complex, subject to many variables and requires significant judgment. Key factors reviewed by the Company to estimate costs to complete each contract are future labor and product costs and expected productivity efficiencies. If circumstances arise that change the original estimates of revenues, costs, or extent of progress toward completion, revisions to the estimates are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in revenue on a cumulative catch-up basis in the period in which the circumstances that gave rise to the revision become known. The Company’s contracts with customers often include promises to transfer products, licenses software and provide services, including professional services, technical support services, and rights to unspecified updates to a customer. Determining whether licenses and services are distinct performance obligations that should be accounted for separately, or not distinct and thus accounted for together, requires significant judgment. The Company rarely licenses software on a standalone basis, so the Company is required to estimate the range of SSPs for each performance obligation. In instances where SSP is not directly observable because the Company does not license the software or sell the service separately, the Company determines the SSP using information that may include market conditions and other observable inputs. The Company is required to record Gainshare royalty revenue in the same period in which the usage occurs. Because the Company generally does not receive the acknowledgment reports from its customers during a given quarter within the time frame necessary to adequately review the reports and include the actual amounts in quarterly results for such quarter, the Company accrues the related revenue based on estimates of customers underlying sales achievement. The Company’s estimation process can be based on historical data, trends, seasonality, changes in the contract rate, knowledge of the changes in the industry and changes in the customer’s manufacturing environment learned through discussions with customers and sales personnel. As a result of accruing revenue for the quarter based on such estimates, adjustments will be required in the following quarter to true-up revenue to the actual amounts reported. Contract Balances The Company performs its obligations under a contract with a customer by licensing software or providing services in exchange for consideration from the customer. The timing of the Company’s performance often differs from the timing of the customer’s payment, which results in the recognition of a receivable, a contract asset or a contract liability. The Company classifies the right to consideration in exchange for software or services transferred to a customer as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional, as compared to a contract asset, which is a right to consideration that is conditional upon factors other than the passage of time. The majority of the Company’s contract assets represent unbilled amounts related to fixed-price service contracts when the revenue recognized exceeds the amount billed to the customer. The contract assets are generally classified as current and are recorded on a net basis with deferred revenue (i.e., contract liabilities) at the contract level. At June 30, 2022 and December 31, 2021, the total contract assets included in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets were $2.8 million and $0.4 million, respectively. The Company did not record any asset impairment charges related to contract assets for the periods presented. Deferred revenues and billings in excess of recognized revenues consist substantially of amounts invoiced in advance of revenue recognition and are recognized as the revenue recognition criteria are met. Deferred revenues that will be recognized during the succeeding twelve-month period are recorded as current deferred revenues and the remaining portion is recorded as non-current deferred revenues in the Condensed Consolidated Balance Sheets. Revenue recognized that was included in the deferred revenues and billings in excess of recognized revenues balances at the beginning of each reporting period was $7.2 million and $6.5 million during the three months ended June 30, 2022 and 2021, respectively, and $11.8 million and $10.5 million during the six months ended June 30, 2022 and 2021, respectively. At June 30, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that were unsatisfied or partially unsatisfied was approximately $184.4 million. Given the applicable contract terms with customers, the majority of this amount is expected to be recognized as revenue over the next two years, with the remainder in the following three years. This amount does not include insignificant contracts to which the customer is not committed, nor significant contracts for which we recognize revenue equal to the amount we have the right to invoice for services performed, or future sales-based or usage-based royalty payments in exchange for a license of intellectual property. This amount is subject to change due to future revaluations of variable consideration, terminations, other contract modifications, or currency adjustments. The estimated timing of the recognition of remaining unsatisfied performance obligations is subject to change and is affected by changes to the scope, change in timing of delivery of products and services, or contract modifications. The adjustment to revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods was an increase of $0.5 million and a decrease $0.4 million during the three months ended June 30, 2022 and 2021, respectively, and an increase of $0.5 million and an increase of $0.1 million during the six months ended June 30, 2022 and 2021, respectively. These amounts primarily represent changes in estimated percentage-of-completion based contracts and changes in actual versus estimated Gainshare royalty. Costs to obtain or fulfill a contract The Company capitalizes the incremental costs to obtain or fulfill a contract with a customer, including direct sales commissions and related fees, when it expects to recover those costs. Amortization expense related to these capitalized costs is recognized over the period associated with the revenue from which the cost was incurred. Total capitalized direct sales commission costs included in prepaid expenses and other current assets in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2022, and December 31, 2021, were $1.1 million and $0.6 million, respectively. Total capitalized direct sales commission costs included in other non-current assets in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2022, and December 31, 2021, were $1.8 million and $2.1 million, respectively. Amortization of these assets were $0.6 million and $0.2 million during the three months ended June 30, 2022 and 2021, respectively, and $0.8 million and $0.3 million during the six months ended June 30, 2022 and 2021, respectively. There was no impairment loss in relation to the costs capitalized for the periods presented. Practical expedient The Company does not adjust the transaction price for the effects of a significant financing component when the period between the transfers of the promised good or service to the customer and payment for that good or service by the customer is expected to be one year or less. The Company assessed each of its revenue generating arrangements in order to determine whether a significant financing component exists, and determined its contracts did not include a significant financing component during the three and six months ended June 30, 2022 and 2021. |
Note 3 - STRATEGIC PARTNERSHIP
Note 3 - STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2022 | |
STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS | |
3. STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS | 3. STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS On July 29, 2020, the Company entered into a long-term strategic partnership with Advantest Corporation through its wholly-owned subsidiary, Advantest America, Inc. (collectively referred to herein as “Advantest”) that included the following agreements. ● A Securities Purchase Agreement for the purchase by Advantest of an aggregate of 3,306,924 shares of the Company’s common stock for aggregate gross proceeds of $65.2 million and a related Stockholder Agreement. ● An Amendment #1 to that certain Software License and Related Services Agreement, dated as of March 25, 2020, for an exclusive commercial arrangement in which the Company and Advantest collaborate on, and the Company initially hosts, develops and maintains, an Advantest-specific cloud layer on the Exensio platform. ● An Amended and Restated Master Development Agreement with Advantest, pursuant to which the Company and Advantest agreed to collaborate on extensions to or combinations of both of their existing technology and new technology to address mutual customers’ needs through one or more development phases subject to certain conditions as set forth therein. Costs and expenses incurred related to this agreement have not been significant for the three and six months ended June 30, 2022 and 2021. ● A Master Commercial Terms and Support Services Agreement for the commercialization and support of integrated products of the Company and Advantest that are the outcome of the above development agreement. No material costs and expenses were incurred related to the Commercial Agreement with Advantest during the three and six months ended June 30, 2022 and 2021. Analytics revenue recognized from Advantest was $2.6 million and $5.3 million during the three and six months ended June 30, 2022, respectively, compared to $2.6 million and $5.2 million during the three and six months ended June 30, 2021, respectively. There were no outstanding accounts receivable from Advantest as of June 30, 2022, and December 31, 2021, and deferred revenue amounted to $1.6 million and $6.8 million as of June 30, 2022 and December 31, 2021, respectively. There was no occurrence of any termination events under these agreements as of the issuance of these condensed consolidated financial statements. The Company carries out transactions with Advantest on arm’s length commercial customary terms. |
Note 4 - BALANCE SHEET COMPONEN
Note 4 - BALANCE SHEET COMPONENTS | 6 Months Ended |
Jun. 30, 2022 | |
BALANCE SHEET COMPONENTS | |
4. BALANCE SHEET COMPONENTS | 4. BALANCE SHEET COMPONENTS Accounts receivable Accounts receivable include amounts that are unbilled at the end of the period that are expected to be billed and collected within a 12-month period. Unbilled accounts receivable, included in accounts receivable, totaled $8.9 million and $11.8 million as of June 30, 2022, and December 31, 2021, respectively. Unbilled accounts receivable that are not expected to be billed and collected during the succeeding 12-month period is recorded in other non-current assets and totaled $1.1 million and $1.3 million as of June 30, 2022, and December 31, 2021, respectively. The Company performs ongoing credit evaluations of its customers’ financial condition. An allowance for doubtful accounts is maintained for probable credit losses based upon the Company’s assessment of the expected collectability of the accounts receivable. The allowance for doubtful accounts is reviewed on a quarterly basis to assess the adequacy of the allowance. Property and equipment Property and equipment, net consist of the following (in thousands): June 30, December 31, 2022 2021 Computer equipment $ 11,640 $ 11,924 Software 5,391 5,419 Furniture, fixtures and equipment 2,491 2,506 Leasehold improvements 6,294 6,272 Laboratory and other equipment 4,249 3,981 Test equipment 28,204 24,452 Construction-in-progress 23,690 22,158 81,959 76,712 Less: accumulated depreciation and amortization (43,569) (41,417) Total $ 38,390 $ 35,295 Test equipment mainly includes DFI™ systems and CV ® In the fourth quarter of 2021, the Company wrote down the value of its property and equipment by $3.2 million related to its first-generation of e-beam tools for DFI™ systems wherein carrying values may not be fully recoverable due to lack of market demand and future needs of our customers for these tools. Goodwill and Intangible Assets, Net As of June 30, 2022, and December 31, 2021, the carrying amount of goodwill was $14.1 million. Intangible assets, net, consisted of the following (in thousands): June 30, 2022 December 31, 2021 Amortization Gross Net Gross Net Period Carrying Accumulated Carrying Carrying Accumulated Carrying (Years) Amount Amortization Amount Amount Amortization Amount Acquired identifiable intangibles: Customer relationships 1 - 10 $ 9,407 $ (6,363) $ 3,044 $ 9,407 $ (6,041) $ 3,366 Developed technology 4 - 9 33,635 (18,447) 15,188 33,635 (17,250) 16,385 Tradename and trademarks 2 - 10 1,598 (865) 733 1,598 (812) 786 Patent 7 - 10 1,800 (1,660) 140 1,800 (1,640) 160 Noncompetition agreements 3 848 (448) 400 848 (306) 542 Total $ 47,288 $ (27,783) $ 19,505 $ 47,288 $ (26,049) $ 21,239 The weighted average amortization period for acquired identifiable intangible assets was 6.4 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Amortization of acquired technology included under Costs of Revenues $ 553 $ 536 $ 1,106 $ 1,071 Amortization of acquired intangible assets presented separately under Costs and Expenses 314 313 628 627 Total amortization of acquired intangible assets $ 867 $ 849 $ 1,734 $ 1,698 The Company expects annual amortization of acquired identifiable intangible assets to be as follows (in thousands): Year Ending December 31, Amount 2022 (remaining six months) $ 1,734 2023 3,444 2024 3,046 2025 2,882 2026 2,712 2027 and thereafter 5,687 Total future amortization expense $ 19,505 There were no impairment charges for goodwill and intangible assets during the three and six months ended June 30, 2022 and 2021. |
Note 5 - LEASES
Note 5 - LEASES | 6 Months Ended |
Jun. 30, 2022 | |
LEASES | |
5. LEASES | 5. LEASES The Company leases administrative and sales offices and certain equipment under non-cancellable operating leases, which contain various renewal options and, in some cases, require payment of common area costs, taxes and utilities. These operating leases expire at various dates through 2028. The Company had no leases that were classified as a financing lease as of June 30, 2022, and December 31, 2021. In the first quarter of 2022, the Company early terminated an office lease contract. The termination of this lease reduced the Company’s operating lease right-of-use assets and lease liabilities by approximately $0.5 million and $0.6 million, respectively. The gain from the lease termination of approximately $0.1 million was recorded under selling, general and administrative expense in the Condensed Consolidated Statement of Comprehensive Loss for the six months ended June 30, 2022. Lease expense was comprised of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Operating lease expense (1) $ 353 $ 484 $ 698 $ 969 Short-term lease and variable lease expense (2) 274 233 557 407 Total lease expense $ 627 $ 717 $ 1,255 $ 1,376 (1) Net of gain recognized upon lease termination of $0.1 million in the six months ended June 30, 2022. (2) Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Variable lease expense for the periods presented primarily included common area maintenance charges. Supplemental balance sheets information related to operating leases was as follows: June 30, December 31, 2022 2021 Weighted average remaining lease term under operating ROU leases (in years) 5.5 5.7 Weighted average discount rate for operating lease liabilities 4.96 % 5.25 % Maturities of operating lease liabilities as of June 30, 2022, were as follows (in thousands): Year Ending December 31, Amount (1) 2022 (remaining six months) $ 798 2023 1,488 2024 1,366 2025 1,258 2026 1,154 2027 and thereafter 1,701 Total future minimum lease payments $ 7,765 Less: Interest (2) (997) Present value of future minimum lease payments under operating lease liabilities (3) $ 6,768 (1) As of June 30, 2022, the total operating lease liability includes approximately $1.1 million related to an option to extend a lease term that is reasonably certain to be exercised. (2) Calculated using incremental borrowing interest rate for each lease. (3) Includes the current portion of operating lease liabilities of $1.5 million as of June 30, 2022. |
Note 6 - STOCKHOLDERS EQUITY
Note 6 - STOCKHOLDERS EQUITY | 6 Months Ended |
Jun. 30, 2022 | |
STOCKHOLDERS EQUITY | |
6. STOCKHOLDERS' EQUITY | 6. Stock Repurchase Program On June 4, 2020, the Company’s Board of Directors adopted a stock repurchase program (the “2020 Program”) to repurchase up to $25.0 million of the Company’s common stock both on the open market and in privately negotiated transactions, including through Rule 10b5-1 plans, over the next two years. During the six months ended June 30, 2022, 218,858 shares were repurchased under the 2020 Program at an average price of $26.40 per share for an aggregate total price of $5.8 million. During the six months ended June 30, 2021, 251,212 shares were repurchased under the 2020 Program at an average price of $18.01 per share for an aggregate total price of $4.5 million. Through April 10, 2022, 470,070 shares had been repurchased under the 2020 Program at an average price of $21.91 per share, for an aggregate total price of $10.3 million. On April 11, 2022, the Board of Directors terminated the 2020 Program, and adopted a new program (the “2022 Program”) to repurchase up to $35.0 million of the Company’s common stock both on the open market and in privately negotiated transactions, from time to time, over the next two years. During the three and six months ended June 30, 2022, 714,600 shares were repurchased under the 2022 Program at an average price of $23.36 per share for an aggregate total price of $16.7 million. |
Note 7 - EMPLOYEE BENEFIT PLANS
Note 7 - EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2022 | |
EMPLOYEE BENEFIT PLANS | |
7. EMPLOYEE BENEFIT PLANS | 7. EMPLOYEE BENEFIT PLANS On June 30, 2022, the Company had the following stock-based compensation plans: Employee Stock Purchase Plan In July 2001, the Company’s stockholders initially approved the 2001 Employee Stock Purchase Plan, which was subsequently amended and restated in 2010 (as amended, the “2010 Purchase Plan”) to extend the term of the plan through May 17, 2020. Under the 2010 Purchase Plan, eligible employees could contribute up to 10% of their compensation, as defined in the 2010 Purchase Plan, towards the purchase of shares of PDF common stock at a price of 85% of the lower of the fair market value at the beginning of the offering period or the end of the purchase period. The 2010 Purchase Plan provided for twenty-four-month offering periods with four six-month purchase periods in each offering period. The 2010 Purchase Plan expired on May 17, 2020. Existing offering periods under the 2010 Plan continued through the applicable expiration date and the final offering period expired on January 31, 2022. On June 15, 2021, the Company’s stockholders approved the 2021 Employee Stock Purchase Plan, which has a ten-year term (the “2021 Purchase Plan” and, together with the 2010 Purchase Plan, the “Employee Purchase Plans”). The terms of 2021 Purchase Plan are substantially similar to those of the 2010 Purchase Plan. A twenty-four-month offering period under the 2021 Purchase Plan commenced on August 1, 2021. The Company estimated the fair value of purchase rights granted under the 2010 and the 2021 Purchase Plans during the period using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions, resulting in the following weighted average fair values: 2021 Purchase Plan 2010 Purchase Plan Six Months Ended June 30, Six Months Ended June 30, 2022 2021 Expected life (in years) 1.25 1.25 Volatility 48.90 % 34.25 % Risk-free interest rate 0.86 % 1.43 % Expected dividend — — Weighted average fair value of purchase rights granted during the period $ 10.76 $ 4.83 During the three months ended June 30, 2022 and 2021, no shares were issued under the Employee Purchase Plans. During the six months ended June 30, 2022, a total of 90,040 shares were issued under the 2021 Purchase Plan, at a weighted-average purchase price of $15.90 per share. During the six months ended June 30, 2022 and 2021, a total of 5,203 and 99,674 shares, respectively, were issued under the 2010 Purchase Plan, at a weighted-average purchase price of $13.40 per share and $9.24 per share, respectively. As of June 30, 2022, unrecognized compensation cost related to the 2021 Purchase Plan was $1.5 million. These costs are expected to be recognized over a weighted average period of 1.2 years. No unrecognized compensation cost related to the 2010 Purchase Plan as of June 30, 2022. As of June 30, 2022, 909,960 shares were available for future issuance under the 2021 Purchase Plan. Stock Incentive Plans On November 16, 2011, the Company’s stockholders initially approved the 2011 Stock Incentive Plan, which has been amended and restated and approved by the Company’s stockholders a number of times since then (as amended, the “2011 Plan”). Under the 2011 Plan, the Company may award stock options, stock appreciation rights (“SARs”), stock grants or stock units covering shares of the Company’s common stock to employees, directors, non-employee directors and contractors. The aggregate number of shares reserved for awards under the 2011 Plan is 12,800,000 shares, plus up to 3,500,000 shares previously issued under the 2001 Stock Plan adopted by the Company in 2001, which expired in 2011 (the “2001 Plan”) that are either (i) forfeited or (ii) repurchased by the Company or are shares subject to awards previously issued under the 2001 Plan that expire or that terminate without having been exercised or settled in full on or after November 16, 2011. In case of awards other than options or SARs, the aggregate number of shares reserved under the 2011 Plan will be decreased at a rate of 1.33 shares issued pursuant to such awards. The exercise price for stock options must generally be at prices no less than the fair market value at the date of grant. Stock options generally expire ten years from the date of grant and become vested and exercisable over a four-year period. As of June 30, 2022, 13.3 million shares of common stock were reserved to cover stock-based awards under the 2011 Plan, of which 4.5 million shares were available for future grant. The number of shares reserved and available under the 2011 Plan includes 0.5 million shares that were subject to awards previously made under the 2001 Plan and were forfeited, expired or repurchased by the Company after the adoption of the 2011 Plan through June 30, 2022. As of June 30, 2022, there were no outstanding awards that had been granted outside of the 2011 or 2001 Plans (collectively, the “Stock Plans”). The Company estimated the fair value of share-based awards granted under the 2011 Stock Plan during the period using the Black-Scholes-Merton option-pricing model. There were no stock options granted during the three and six months ended June 30, 2022 and 2021. Stock-Based Compensation Stock-based compensation is estimated at the grant date based on the award’s fair value and is recognized on a straight-line basis over the vesting periods, generally four years . Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Costs of revenues $ 655 $ 538 $ 1,383 $ 1,190 Research and development 1,810 1,126 4,978 2,714 Selling, general and administrative 1,407 1,078 3,064 2,207 Stock-based compensation expenses $ 3,872 $ 2,742 $ 9,425 $ 6,111 Additional information with respect to options under the Stock Plans during the six months ended June 30, 2022, is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value (in thousands) per Share (Years) (in thousands) Outstanding, January 1, 2022 226 $ 12.78 Granted — — Exercised (87) 9.10 Canceled (4) 13.30 Expired (2) 8.79 Outstanding, June 30, 2022 133 $ 15.19 3.80 $ 848 Vested and expected to vest, June 30, 2022 133 $ 15.18 3.78 $ 843 Exercisable, June 30, 2022 112 $ 15.16 3.22 $ 714 The aggregate intrinsic value in the table above represents the total intrinsic value based on the Company’s closing stock price of $21.51 per share as of June 30, 2022. The total intrinsic value of options exercised was $1.5 million during the six months ended June 30, 2022. As of June 30, 2022, there was $0.1 million of total unrecognized compensation cost, net of forfeiture, related to unvested stock options, which is expected to be recognized over a weighted average period of 1.3 years. The total fair value of shares vested was immaterial during the six months ended June 30, 2022. Nonvested restricted stock unit activity during the six months ended June 30, 2022, was as follows: Weighted Average Grant Shares Date Fair Value (in thousands) Per Share Nonvested, January 1, 2022 1,872 $ 18.24 Granted 331 $ 27.24 Vested (462) $ 17.94 Forfeited (56) $ 19.38 Nonvested, June 30, 2022 1,685 $ 20.05 As of June 30, 2022, there was $24.8 million of total unrecognized compensation cost related to restricted stock units. That cost is expected to be recognized over a weighted average period of 2.3 years. Restricted stock units do not have rights to dividends prior to vesting. |
Note 8 - INCOME TAXES
Note 8 - INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
INCOME TAXES | |
8. INCOME TAXES | 8. INCOME TAXES Income tax expense increased $1.5 million for the six months ended June 30, 2022, to a $2.5 million income tax expense as compared to an income tax expense of $1.0 million for the six months ended June 30, 2021. The Company’s effective tax rate expense was (88.9%) and (9.5%) for the six months ended June 30, 2022 and 2021, respectively. The Company’s effective tax rate expense increased in the six months ended June 30, 2022, as compared to the same period in 2021, primarily due to increases in foreign withholding taxes and changes in the geographic mix of worldwide income, which is subject to taxation at different statutory tax rates. The Company’s total amount of unrecognized tax benefits, excluding interest and penalties, as of June 30, 2022, was $15.2 million, of which $1.9 million, if recognized, would affect the Company’s effective tax rate. The Company’s total amount of unrecognized tax benefits, excluding interest and penalties, as of December 31, 2021, was $14.7 million, of which $1.9 million, if recognized, would affect the Company’s effective tax rate. As of June 30, 2022, the Company has recorded unrecognized tax benefits of $2.4 million, including interest and penalties of $0.6 million, as long-term taxes payable in its Condensed Consolidated Balance Sheet. The remaining $13.4 million has been recorded net of the Company’s deferred tax assets (“DTAs”), which is subject to a full valuation allowance. The valuation allowance was approximately $51.6 million as of June 30, 2022, and December 31, 2021, which was related to U.S. net federal and state DTAs. The worldwide net deferred tax assets balance as of June 30, 2022, and December 31, 2021 were not significant. The Company conducts business globally and, as a result, files numerous consolidated and separate income tax returns in the U.S. federal, various state and foreign jurisdictions. For U.S. federal and California income tax purposes, the statute of limitations currently remains open for the tax years ending 2018 to present and 2017 to present, respectively. In addition, due to net operating loss carryback claims, the tax years 2013 through 2015 may be subject to federal examination and all of the net operating loss and research and development credit carryforwards that may be utilized in future years may be subject to federal and state examination. The Company is not subject to income tax examinations in any other of its major foreign subsidiaries’ jurisdictions. |
Note 9 - NET LOSS PER SHARE
Note 9 - NET LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2022 | |
NET LOSS PER SHARE | |
9. NET LOSS PER SHARE | 9. NET LOSS PER SHARE Basic net loss per share is computed by dividing net loss by weighted average number of common shares outstanding for the period (excluding outstanding stock options and shares subject to repurchase). Diluted net loss per share is computed using the weighted-average number of common shares outstanding for the period plus the potential effect of dilutive securities which are convertible into common shares (using the treasury stock method), except in cases in which the effect would be anti-dilutive. The following is a reconciliation of the numerators and denominators used in computing basic and diluted net loss per share (in thousands except per share amount): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Numerator: Net loss $ (1,147) $ (4,484) $ (5,297) $ (12,081) Denominator: Basic weighted-average shares outstanding 37,028 37,004 37,316 36,989 Effect of dilutive options and restricted stock units — — — — Diluted weighted-average shares outstanding 37,028 37,004 37,316 36,989 Net loss per share, basic and diluted $ (0.03) $ (0.12) $ (0.14) $ (0.33) For the three and six months ended June 30, 2022 and 2021, because the Company was in a loss position, basic net loss per share is the same as diluted net loss per share as the inclusion of the potential common shares would have been anti-dilutive. The following table sets forth potential shares of common stock that were not included in the diluted net loss per share calculation above because to do so would be anti-dilutive for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Outstanding options 45 194 73 209 Nonvested restricted stock units 684 970 795 1,038 Employee Stock Purchase Plan 45 1 69 6 Total 774 1,165 937 1,253 |
Note 10 - CUSTOMER AND GEOGRAPH
Note 10 - CUSTOMER AND GEOGRAPHIC INFORMATION | 6 Months Ended |
Jun. 30, 2022 | |
CUSTOMER AND GEOGRAPHIC INFORMATION | |
10. CUSTOMER AND GEOGRAPHIC INFORMATION | 10. CUSTOMER AND GEOGRAPHIC INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker, the chief executive officer, reviews discrete financial information presented on a consolidated basis for purposes of regularly making operating decisions, allocation of resources, and assessing financial performance. Accordingly, the Company considers itself to be in one operating and reporting The Company had revenues from individual customers that are approximately 10% or more of the Company’s consolidated total revenues as follows: Three Months Ended June 30, Six Months Ended June 30, Customer 2022 2021 2022 2021 A * % 15 % * % 14 % D 29 % * % 31 % 10 % * represents less than 10% Gross accounts receivable balances (including amounts that are unbilled) from individual customers that are approximately 10% or more of the Company’s gross accounts receivable balance as follows: June 30, December 31, Customer 2022 2021 C * % 15 % D 43 % 29 % * represents less than 10% Revenues from customers by geographic area based on the location of the customers’ work sites are as follows (amounts in thousands): Three Months Ended June 30, 2022 2021 Percentage Percentage Revenues of Revenues Revenues of Revenues United States $ 17,086 49 % $ 12,095 44 % China 4,539 13 4,289 16 Japan 2,794 8 2,450 9 Rest of the world 10,249 30 8,585 31 Total revenue $ 34,668 100 % $ 27,419 100 % Six Months Ended June 30, 2022 2021 Percentage Percentage Revenues of Revenues Revenues of Revenues United States $ 34,577 51 % $ 20,651 40 % China 8,659 13 6,028 12 Japan 5,401 8 6,028 12 Rest of the world 19,529 28 18,912 36 Total revenue $ 68,166 100 % $ 51,619 100 % Long-lived assets, net by geographic area are as follows (in thousands): June 30, December 31, 2022 2021 United States (1) $ 42,288 $ 39,158 Rest of the world 1,342 1,545 Total long-lived assets, net $ 43,630 $ 40,703 (1) Includes assets deployed at customer sites which could be outside the U.S. |
Note 11 - FAIR VALUE MEASUREMEN
Note 11 - FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2022 | |
FAIR VALUE MEASUREMENTS | |
11. FAIR VALUE MEASUREMENTS | 11. FAIR VALUE MEASUREMENTS Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The multiple assumptions used to value financial instruments are referred to as inputs, and a hierarchy for inputs used in measuring fair value is established, that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. These inputs are ranked according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3 - Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The following table represents the Company’s assets measured at fair value on a recurring basis as of June 30, 2022, and December 31, 2021, and the basis for those measurements (in thousands): Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Identical Observable Significant June 30, Assets Inputs Unobservable Assets 2022 (Level 1) (Level 2) Inputs (Level 3) Cash equivalents Money market mutual funds $ 65,020 $ 65,020 $ — $ — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 35,907 35,907 — — Total $ 100,927 $ 100,927 $ — $ — Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable December 31, Assets Inputs Inputs Assets 2021 (Level 1) (Level 2) (Level 3) Cash equivalents Money market mutual funds $ 12,474 $ 12,474 $ — $ — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 112,542 112,542 — — Total $ 125,016 $ 125,016 $ — $ — (1) As of June 30, 2022, and December 31, 2021, the amortized cost of the Company’s investments in U.S Government Securities approximated their fair value due to their short-term maturities, and there have been no events or changes in circumstances that would have had a significant effect on the fair value of these securities in the periods presented. There was no material realized or unrealized gains or losses, either individually or in the aggregate. |
Note 12 - COMMITMENTS AND CONTI
Note 12 - COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
12. COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Strategic Partnership with Advantest Strategic Partnership Agreement with Advantest And Related Party Transactions Operating Leases Leases Indemnifications Purchase Obligations Indemnification of Officers and Directors In addition, the Bylaws of the Company provide that the Company is required to indemnify its officers and directors even when indemnification would otherwise be discretionary, and the Company is required to advance expenses to its officers and directors as incurred in connection with proceedings against them for which they may be indemnified. The Company has entered into indemnification agreements with its officers and directors containing provisions that are in some respects broader than the specific indemnification provisions contained in the Delaware general corporation law. The indemnification agreements require the Company to indemnify its officers and directors against liabilities that may arise by reason of their status or service as officers and directors other than for liabilities arising from willful misconduct of a culpable nature, to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified, and to obtain directors’ and officers’ insurance if available on reasonable terms. The Company has obtained directors’ and officers’ liability insurance in amounts comparable to other companies of the Company’s size and in the Company’s industry. Since a maximum obligation of the Company is not explicitly stated in the Company’s Bylaws or in its indemnification agreements and will depend on the facts and circumstances that arise out of any future claims, the overall maximum amount of the obligations cannot be reasonably estimated. Legal Proceedings On May 6, 2020, the Company initiated an arbitration proceeding with the Hong Kong International Arbitration Center against SMIC New Technology Research & Development (Shanghai) Corporation (“SMIC”) due to SMIC’s failure to pay fees due to PDF under a series of contracts. The Company seeks to recover the unpaid fees, a declaration requiring SMIC to pay fees under the contracts in the future, and costs associated with bringing the arbitration proceeding. SMIC denies liability and the arbitration is on-going. |
Note 1 - BASIS OF PRESENTATIO_2
Note 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation, Policy | Basis of Presentation The interim unaudited condensed consolidated financial statements included herein have been prepared by PDF Solutions, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), including the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The interim unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments necessary (consisting only of normal recurring adjustments) to present a fair statement of results for the interim periods presented. The operating results for any interim period are not necessarily indicative of the results that may be expected for other interim periods or the full fiscal year. The accompanying interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 1, 2022. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after the elimination of all intercompany balances and transactions. The condensed consolidated balance sheet at December 31, 2021, has been derived from the audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Use of Estimates, Policy | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include revenue recognition, the estimated useful lives of property and equipment and intangible assets, assumptions made in analysis of allowance for doubtful accounts, impairment of goodwill and long-lived assets, valuation for deferred tax assets, and accounting for lease obligations, stock-based compensation expense, and income tax uncertainties and contingencies. Actual results could differ from those estimates and may result in material effects on the Company’s operating results and financial position. The global COVID-19 pandemic (“COVID-19”) has impacted the operations and purchasing decisions of companies worldwide. As of the date of issuance of the condensed consolidated financial statements, the Company is not aware of any specific event or circumstance relating to COVID-19 that would require updates to the Company’s estimates and judgments or revisions to the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the financial statements. |
Revenue from Contracts with Customers, Policy | The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers The Company determines revenue recognition through the following five steps: ● Identification of the contract, or contracts, with a customer ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, performance obligations are satisfied The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Contracts with multiple performance obligations The Company enters into contracts that can include various combinations of licenses, products and services, some of which are distinct and are accounted for as separate performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using the standalone selling price (“SSP”). |
Accounts Receivable, Policy | Accounts receivable include amounts that are unbilled at the end of the period that are expected to be billed and collected within a 12-month period. |
Employee Stock Purchase Plan, Policy | In July 2001, the Company’s stockholders initially approved the 2001 Employee Stock Purchase Plan, which was subsequently amended and restated in 2010 (as amended, the “2010 Purchase Plan”) to extend the term of the plan through May 17, 2020. Under the 2010 Purchase Plan, eligible employees could contribute up to 10% of their compensation, as defined in the 2010 Purchase Plan, towards the purchase of shares of PDF common stock at a price of 85% of the lower of the fair market value at the beginning of the offering period or the end of the purchase period. The 2010 Purchase Plan provided for twenty-four-month offering periods with four six-month purchase periods in each offering period. The 2010 Purchase Plan expired on May 17, 2020. Existing offering periods under the 2010 Plan continued through the applicable expiration date and the final offering period expired on January 31, 2022. On June 15, 2021, the Company’s stockholders approved the 2021 Employee Stock Purchase Plan, which has a ten-year term (the “2021 Purchase Plan” and, together with the 2010 Purchase Plan, the “Employee Purchase Plans”). The terms of 2021 Purchase Plan are substantially similar to those of the 2010 Purchase Plan. A twenty-four-month offering period under the 2021 Purchase Plan commenced on August 1, 2021. The Company estimated the fair value of purchase rights granted under the 2010 and the 2021 Purchase Plans during the period using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions, resulting in the following weighted average fair values: |
Earnings Per Share, Policy | Basic net loss per share is computed by dividing net loss by weighted average number of common shares outstanding for the period (excluding outstanding stock options and shares subject to repurchase). Diluted net loss per share is computed using the weighted-average number of common shares outstanding for the period plus the potential effect of dilutive securities which are convertible into common shares (using the treasury stock method), except in cases in which the effect would be anti-dilutive. |
Segment Reporting, Policy | The Company’s chief operating decision maker, the chief executive officer, reviews discrete financial information presented on a consolidated basis for purposes of regularly making operating decisions, allocation of resources, and assessing financial performance. Accordingly, the Company considers itself to be in one operating and reporting |
Fair Value Measurement, Policy | Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The multiple assumptions used to value financial instruments are referred to as inputs, and a hierarchy for inputs used in measuring fair value is established, that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. These inputs are ranked according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3 - Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. |
Recent Accounting Standards, Policy | Recent Accounting Standards Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held at the reporting date based on internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model, which will result in earlier recognition of credit losses. Subsequent to the issuance of ASU No. 2016-13, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instrument, ASU No. 2019-05, Financial Instruments – Credit Losses (Topic 326) Targeted Transition Relief, ASU No. 2016-13, ASU No. 2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), and ASU No. 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses. The subsequent ASUs do not change the core principle of the guidance in ASU No. 2016-13. Instead, these amendments are intended to clarify and improve operability of certain topics included within ASU No. 2016-13. Additionally, ASU No. 2019-10 defers the effective date for the adoption of the new standard on credit losses for public filers that are considered small reporting companies (“SRC”) as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which will be fiscal 2023 for the Company if it continues to be classified as an SRC. In February 2020, the FASB issued ASU 2020-02, which provides guidance regarding methodologies, documentation, and internal controls related to expected credit losses. The subsequent amendments will have the same effective date and transition requirements as ASU No. 2016-13. Early adoption is permitted. Topic 326 requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. While the Company is currently evaluating the impact of Topic 326, the Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements or the related disclosure. In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-20): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The guidance allows for either full retrospective adoption or modified retrospective adoption. Additionally, the ASU will require entities to use the “if-converted” method when calculating diluted earnings per share for convertible instruments. The ASU will be effective for annual reporting periods beginning after December 15, 2023 for SRCs and interim periods within those annual periods. Early adoption is permitted. The Company does not anticipate that the adoption of this ASU will have a significant impact on its condensed consolidated financial statements or the related disclosures. Management has reviewed other recently issued accounting pronouncements issued or proposed by the FASB, and does not believe any of these accounting pronouncements has had or will have a material impact on the condensed consolidated financial statements. |
Note 2 - REVENUE FROM CONTRACTS
Note 2 - REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Notes Tables | |
Schedule of Disaggregation of Revenue | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Over time 74 57 % 72 % 54 % Point-in-time 26 43 % 28 % 46 % Total 100 % 100 % 100 % 100 % |
Note 4 - BALANCE SHEET COMPON_2
Note 4 - BALANCE SHEET COMPONENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Notes Tables | |
Schedule of Property, Plant and Equipment | Property and equipment, net consist of the following (in thousands): June 30, December 31, 2022 2021 Computer equipment $ 11,640 $ 11,924 Software 5,391 5,419 Furniture, fixtures and equipment 2,491 2,506 Leasehold improvements 6,294 6,272 Laboratory and other equipment 4,249 3,981 Test equipment 28,204 24,452 Construction-in-progress 23,690 22,158 81,959 76,712 Less: accumulated depreciation and amortization (43,569) (41,417) Total $ 38,390 $ 35,295 |
Schedule of Finite-Lived Intangible Assets, Net | Intangible assets, net, consisted of the following (in thousands): June 30, 2022 December 31, 2021 Amortization Gross Net Gross Net Period Carrying Accumulated Carrying Carrying Accumulated Carrying (Years) Amount Amortization Amount Amount Amortization Amount Acquired identifiable intangibles: Customer relationships 1 - 10 $ 9,407 $ (6,363) $ 3,044 $ 9,407 $ (6,041) $ 3,366 Developed technology 4 - 9 33,635 (18,447) 15,188 33,635 (17,250) 16,385 Tradename and trademarks 2 - 10 1,598 (865) 733 1,598 (812) 786 Patent 7 - 10 1,800 (1,660) 140 1,800 (1,640) 160 Noncompetition agreements 3 848 (448) 400 848 (306) 542 Total $ 47,288 $ (27,783) $ 19,505 $ 47,288 $ (26,049) $ 21,239 |
Schedule of Finite-lived Intangible Assets Amortization Expense | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Amortization of acquired technology included under Costs of Revenues $ 553 $ 536 $ 1,106 $ 1,071 Amortization of acquired intangible assets presented separately under Costs and Expenses 314 313 628 627 Total amortization of acquired intangible assets $ 867 $ 849 $ 1,734 $ 1,698 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Amortization of acquired technology included under Costs of Revenues $ 553 $ 536 $ 1,106 $ 1,071 Amortization of acquired intangible assets presented separately under Costs and Expenses 314 313 628 627 Total amortization of acquired intangible assets $ 867 $ 849 $ 1,734 $ 1,698 |
Note 5 - LEASES (Tables)
Note 5 - LEASES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Notes Tables | |
Schedule of Lease Expenses | Lease expense was comprised of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Operating lease expense (1) $ 353 $ 484 $ 698 $ 969 Short-term lease and variable lease expense (2) 274 233 557 407 Total lease expense $ 627 $ 717 $ 1,255 $ 1,376 (1) Net of gain recognized upon lease termination of $0.1 million in the six months ended June 30, 2022. (2) Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Variable lease expense for the periods presented primarily included common area maintenance charges. Supplemental balance sheets information related to operating leases was as follows: June 30, December 31, 2022 2021 Weighted average remaining lease term under operating ROU leases (in years) 5.5 5.7 Weighted average discount rate for operating lease liabilities 4.96 % 5.25 % |
Schedule of Operating Lease Liabilities and Maturities | June 30, December 31, 2022 2021 Weighted average remaining lease term under operating ROU leases (in years) 5.5 5.7 Weighted average discount rate for operating lease liabilities 4.96 % 5.25 % |
Note 7 - EMPLOYEE BENEFIT PLA_2
Note 7 - EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Notes Tables | |
Schedule of Share-based Payment Awards, Stock Options, Valuation Assumptions | 2021 Purchase Plan 2010 Purchase Plan Six Months Ended June 30, Six Months Ended June 30, 2022 2021 Expected life (in years) 1.25 1.25 Volatility 48.90 % 34.25 % Risk-free interest rate 0.86 % 1.43 % Expected dividend — — Weighted average fair value of purchase rights granted during the period $ 10.76 $ 4.83 |
Schedule of Share-based Payment Arrangement, Expensed and Capitalized Amounts | Stock-based compensation is estimated at the grant date based on the award’s fair value and is recognized on a straight-line basis over the vesting periods, generally four years . Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Costs of revenues $ 655 $ 538 $ 1,383 $ 1,190 Research and development 1,810 1,126 4,978 2,714 Selling, general and administrative 1,407 1,078 3,064 2,207 Stock-based compensation expenses $ 3,872 $ 2,742 $ 9,425 $ 6,111 |
Schedule of Share-based Payment Arrangement, Options Activity | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value (in thousands) per Share (Years) (in thousands) Outstanding, January 1, 2022 226 $ 12.78 Granted — — Exercised (87) 9.10 Canceled (4) 13.30 Expired (2) 8.79 Outstanding, June 30, 2022 133 $ 15.19 3.80 $ 848 Vested and expected to vest, June 30, 2022 133 $ 15.18 3.78 $ 843 Exercisable, June 30, 2022 112 $ 15.16 3.22 $ 714 |
Schedule of Share-based Payment Arrangement, Restricted Stock Unit Activity | Weighted Average Grant Shares Date Fair Value (in thousands) Per Share Nonvested, January 1, 2022 1,872 $ 18.24 Granted 331 $ 27.24 Vested (462) $ 17.94 Forfeited (56) $ 19.38 Nonvested, June 30, 2022 1,685 $ 20.05 |
Note 9 - NET LOSS PER SHARE (Ta
Note 9 - NET LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Numerator: Net loss $ (1,147) $ (4,484) $ (5,297) $ (12,081) Denominator: Basic weighted-average shares outstanding 37,028 37,004 37,316 36,989 Effect of dilutive options and restricted stock units — — — — Diluted weighted-average shares outstanding 37,028 37,004 37,316 36,989 Net loss per share, basic and diluted $ (0.03) $ (0.12) $ (0.14) $ (0.33) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table sets forth potential shares of common stock that were not included in the diluted net loss per share calculation above because to do so would be anti-dilutive for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Outstanding options 45 194 73 209 Nonvested restricted stock units 684 970 795 1,038 Employee Stock Purchase Plan 45 1 69 6 Total 774 1,165 937 1,253 |
Note 10 - CUSTOMER AND GEOGRA_2
Note 10 - CUSTOMER AND GEOGRAPHIC INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Notes Tables | |
Schedule of Revenue by Major Customers by Reporting Segments | The Company had revenues from individual customers that are approximately 10% or more of the Company’s consolidated total revenues as follows: Three Months Ended June 30, Six Months Ended June 30, Customer 2022 2021 2022 2021 A * % 15 % * % 14 % D 29 % * % 31 % 10 % * represents less than 10% Gross accounts receivable balances (including amounts that are unbilled) from individual customers that are approximately 10% or more of the Company’s gross accounts receivable balance as follows: June 30, December 31, Customer 2022 2021 C * % 15 % D 43 % 29 % * represents less than 10% |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | Revenues from customers by geographic area based on the location of the customers’ work sites are as follows (amounts in thousands): Three Months Ended June 30, 2022 2021 Percentage Percentage Revenues of Revenues Revenues of Revenues United States $ 17,086 49 % $ 12,095 44 % China 4,539 13 4,289 16 Japan 2,794 8 2,450 9 Rest of the world 10,249 30 8,585 31 Total revenue $ 34,668 100 % $ 27,419 100 % Six Months Ended June 30, 2022 2021 Percentage Percentage Revenues of Revenues Revenues of Revenues United States $ 34,577 51 % $ 20,651 40 % China 8,659 13 6,028 12 Japan 5,401 8 6,028 12 Rest of the world 19,529 28 18,912 36 Total revenue $ 68,166 100 % $ 51,619 100 % Long-lived assets, net by geographic area are as follows (in thousands): June 30, December 31, 2022 2021 United States (1) $ 42,288 $ 39,158 Rest of the world 1,342 1,545 Total long-lived assets, net $ 43,630 $ 40,703 (1) Includes assets deployed at customer sites which could be outside the U.S. |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country | Six Months Ended June 30, 2022 2021 Percentage Percentage Revenues of Revenues Revenues of Revenues United States $ 34,577 51 % $ 20,651 40 % China 8,659 13 6,028 12 Japan 5,401 8 6,028 12 Rest of the world 19,529 28 18,912 36 Total revenue $ 68,166 100 % $ 51,619 100 % |
Note 11 - FAIR VALUE MEASUREM_2
Note 11 - FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Notes Tables | |
Schedule of Fair Value, Assets Measured on Recurring Basis | The following table represents the Company’s assets measured at fair value on a recurring basis as of June 30, 2022, and December 31, 2021, and the basis for those measurements (in thousands): Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Identical Observable Significant June 30, Assets Inputs Unobservable Assets 2022 (Level 1) (Level 2) Inputs (Level 3) Cash equivalents Money market mutual funds $ 65,020 $ 65,020 $ — $ — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 35,907 35,907 — — Total $ 100,927 $ 100,927 $ — $ — Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable December 31, Assets Inputs Inputs Assets 2021 (Level 1) (Level 2) (Level 3) Cash equivalents Money market mutual funds $ 12,474 $ 12,474 $ — $ — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 112,542 112,542 — — Total $ 125,016 $ 125,016 $ — $ — |
Note 2 - REVENUE FROM CONTRAC_2
Note 2 - REVENUE FROM CONTRACTS WITH CUSTOMERS - 1 (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Number of revenue sources | item | 2 | ||||
Contract with Customer, Asset, after Allowance for Credit Loss, Current, Total | $ 2,800 | $ 2,800 | $ 400 | ||
Capitalized Contract Cost, Impairment Loss | 0 | $ 0 | 0 | $ 0 | 0 |
Contract with Customer, Liability, Revenue Recognized | 7,200 | 6,500 | 11,800 | 10,500 | |
Revenue, Remaining Performance Obligation, Amount | 184,400 | 184,400 | |||
Contract with Customer, Performance Obligation Satisfied in Previous Period | 500 | 400 | 500 | 100 | |
Capitalized Contract Cost, Amortization | 600 | $ 200 | 755 | $ 327 | |
Prepaid Expenses and Other Current Assets [Member] | |||||
Capitalized Contract Cost, Net, Total | 1,100 | 1,100 | 600 | ||
Other Noncurrent Assets [Member] | |||||
Capitalized Contract Cost, Net, Total | $ 1,800 | $ 1,800 | $ 2,100 | ||
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | |||||
Concentration Risk, Percentage | 100% | 100% | 100% | 100% | |
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | Non-US [Member] | |||||
Concentration Risk, Percentage | 51% | 56% | 49% | 60% |
Note 2 - REVENUE FROM CONTRAC_3
Note 2 - REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative 2 (Details) - Software License and Related Services Agreement [Member] - Advantest America, Inc. [Member] | Jun. 30, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 3 years |
Note 2 - REVENUE FROM CONTRAC_4
Note 2 - REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenue (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Percent of revenues | 100% | 100% | 100% | 100% |
Transferred over Time [Member] | ||||
Percent of revenues | 74% | 57% | 72% | 54% |
Transferred at Point in Time [Member] | ||||
Percent of revenues | 26% | 43% | 28% | 46% |
Note 3 - STRATEGIC PARTNERSHI_2
Note 3 - STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 29, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer, Including Assessed Tax | $ 34,668 | $ 27,419 | $ 68,166 | $ 51,619 | ||
Strategic Partnership for Joint Development and Sales Technology Solutions [Member] | ||||||
Stock Issued During Period, Shares, New Issues (in shares) | 3,306,924 | |||||
Proceeds from Issuance of Common Stock | $ 65,200 | |||||
Amendment #1 to Software License & Related Services Agreement [Member] | ||||||
Revenue from Contract with Customer, Including Assessed Tax | 2,600 | $ 2,600 | 5,300 | $ 5,200 | ||
Related Party Transaction, Due from (to) Related Party, Total | 0 | 0 | $ 0 | |||
Contract with Customer, Liability, Total | $ 1,600 | $ 1,600 | $ 6,800 |
Note 4 - BALANCE SHEET COMPON_3
Note 4 - BALANCE SHEET COMPONENTS - Other (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Unbilled Receivables, Current | $ 8,900,000 | $ 11,800,000 | $ 8,900,000 | ||
Unbilled Receivables, Not Expected to be Billed and Collected in Next Twelve Months | 1,100,000 | 1,300,000 | 1,100,000 | ||
Depreciation, Depletion and Amortization, Nonproduction, Total | 1,400,000 | $ 1,600,000 | 2,800,000 | $ 3,300,000 | |
Impairment of Intangible Assets, Finite-lived | 0 | 0 | 0 | 0 | |
Goodwill | 14,123,000 | 14,123,000 | 14,123,000 | ||
Impairment of goodwill | 0 | 0 | 0 | 0 | |
Amortization of Intangible Assets, Total | 867,000 | 849,000 | $ 1,734,000 | 1,698,000 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life (Year) | 6 years 7 months 6 days | ||||
Write-down in value of property and equipment | 3,200,000 | ||||
Cost of Sales [Member] | |||||
Amortization of Intangible Assets, Total | 553,000 | 536,000 | $ 1,106,000 | 1,071,000 | |
Costs and Expenses [Member] | |||||
Amortization of Intangible Assets, Total | 314,000 | $ 313,000 | 628,000 | $ 627,000 | |
DFI Test Equipment [Member] | |||||
Construction in Progress, Gross | $ 19,800,000 | $ 20,000,000 | $ 19,800,000 |
Note 4 - BALANCE SHEET COMPON_4
Note 4 - BALANCE SHEET COMPONENTS - Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Property and equipment, gross | $ 81,959 | $ 76,712 |
Less: accumulated depreciation and amortization | (43,569) | (41,417) |
Total | 38,390 | 35,295 |
Computer Equipment [Member] | ||
Property and equipment, gross | 11,640 | 11,924 |
Software and Software Development Costs [Member] | ||
Property and equipment, gross | 5,391 | 5,419 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | 2,491 | 2,506 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 6,294 | 6,272 |
Laboratory and Test Equipment [Member] | ||
Property and equipment, gross | 4,249 | 3,981 |
Test Equipment [Member] | ||
Property and equipment, gross | 28,204 | 24,452 |
Construction in Progress [Member] | ||
Property and equipment, gross | $ 23,690 | $ 22,158 |
Note 4 - BALANCE SHEET COMPON_5
Note 4 - BALANCE SHEET COMPONENTS - Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Amortization Period (Year) | 6 years 7 months 6 days | |
Gross Carrying Amount | $ 47,288 | $ 47,288 |
Accumulated Amortization | (27,783) | (26,049) |
Net Carrying Amount | 19,505 | |
Net Carrying Amount, Total | 19,505 | 21,239 |
Customer Relationships [Member] | ||
Gross Carrying Amount | 9,407 | 9,407 |
Accumulated Amortization | (6,363) | (6,041) |
Net Carrying Amount | $ 3,044 | 3,366 |
Customer Relationships [Member] | Minimum [Member] | ||
Amortization Period (Year) | 1 year | |
Customer Relationships [Member] | Maximum [Member] | ||
Amortization Period (Year) | 10 years | |
Developed Technology Rights [Member] | ||
Gross Carrying Amount | $ 33,635 | 33,635 |
Accumulated Amortization | (18,447) | (17,250) |
Net Carrying Amount | $ 15,188 | 16,385 |
Developed Technology Rights [Member] | Minimum [Member] | ||
Amortization Period (Year) | 4 years | |
Developed Technology Rights [Member] | Maximum [Member] | ||
Amortization Period (Year) | 9 years | |
Trademarks and Trade Names [Member] | ||
Gross Carrying Amount | $ 1,598 | 1,598 |
Accumulated Amortization | (865) | (812) |
Net Carrying Amount | $ 733 | 786 |
Trademarks and Trade Names [Member] | Minimum [Member] | ||
Amortization Period (Year) | 2 years | |
Trademarks and Trade Names [Member] | Maximum [Member] | ||
Amortization Period (Year) | 10 years | |
Patents [Member] | ||
Gross Carrying Amount | $ 1,800 | 1,800 |
Accumulated Amortization | (1,660) | (1,640) |
Net Carrying Amount | $ 140 | 160 |
Patents [Member] | Minimum [Member] | ||
Amortization Period (Year) | 7 years | |
Patents [Member] | Maximum [Member] | ||
Amortization Period (Year) | 10 years | |
Noncompete Agreements [Member] | ||
Amortization Period (Year) | 3 years | |
Gross Carrying Amount | $ 848 | 848 |
Accumulated Amortization | (448) | (306) |
Net Carrying Amount | $ 400 | $ 542 |
Note 4 - BALANCE SHEET COMPON_6
Note 4 - BALANCE SHEET COMPONENTS - Annual Amortization of Identifiable Intangible Assets (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
BALANCE SHEET COMPONENTS | |
2022 (remaining nine months) | $ 1,734 |
2023 | 3,444 |
2024 | 3,046 |
2025 | 2,882 |
2026 | 2,712 |
2027 and thereafter | 5,687 |
Net Carrying Amount | $ 19,505 |
Note 5 - LEASES - Other (Detail
Note 5 - LEASES - Other (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) lease | Dec. 31, 2021 USD ($) lease | |
LEASES | |||
Number of finance leases | lease | 0 | 0 | |
Operating Lease, Liability, Amount Related to Extension of Lease Term | $ 1,100 | ||
Operating Lease, Liability, Current | 1,493 | $ 1,758 | |
Operating lease right of use assets decrease from early lease termination | $ 500 | ||
Operating lease liability decrease from early lease termination | $ 600 | ||
Lease termination gain | $ 100 |
Note 5 - LEASES - Lease Cost (D
Note 5 - LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
LEASES | |||||
Operating lease expense | $ 353 | $ 484 | $ 698 | $ 969 | |
Short-term lease and variable lease expense | 274 | 233 | 557 | 407 | |
Total lease expense | $ 627 | $ 717 | 1,255 | $ 1,376 | |
Lease termination gain | $ 100 | ||||
Weighted average remaining lease term under operating ROU leases (in years) (Year) | 5 years 6 months | 5 years 6 months | 5 years 8 months 12 days | ||
Weighted average discount rate for operating lease liabilities | 4.96% | 4.96% | 5.25% | ||
Operating lease ROU assets obtained (in thousands) | $ 1,137 |
Note 5 - LEASES - Maturity of O
Note 5 - LEASES - Maturity of Operating Lease Liabilities (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
LEASES | |
2022 (remaining nine months) | $ 798 |
2023 | 1,488 |
2024 | 1,366 |
2025 | 1,258 |
2026 | 1,154 |
2027 and thereafter | 1,701 |
Total future minimum lease payments | 7,765 |
Less: Interest (2) | (997) |
Present value of future minimum lease payments under operating lease liabilities (3) | $ 6,768 |
Note 6 - STOCKHOLDERS EQUITY (D
Note 6 - STOCKHOLDERS EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 22 Months Ended | |||||
Apr. 11, 2022 | Jun. 04, 2020 | Jun. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Apr. 10, 2022 | |
Treasury Stock, Value, Acquired, Cost Method | $ 16,693 | $ 5,778 | $ 4,523 | |||||
The 2020 Stock Repurchase Program [Member] | ||||||||
Treasury Stock, Shares, Acquired (in shares) | 218,858 | 251,212 | 470,070 | |||||
Treasury Stock Acquired, Average Cost Per Share (in dollars per share) | $ 26.40 | $ 18.01 | $ 21.91 | |||||
Treasury Stock, Value, Acquired, Cost Method | $ 5,800 | $ 4,500 | $ 10,300 | |||||
Stock Repurchase Program, Authorized Amount | $ 25,000 | |||||||
Stock Repurchase Program, Period in Force (Year) | 2 years | |||||||
Stock Repurchase Program 2022 [Member] | ||||||||
Treasury Stock, Shares, Acquired (in shares) | 714,600 | |||||||
Treasury Stock Acquired, Average Cost Per Share (in dollars per share) | $ 23.36 | |||||||
Treasury Stock, Value, Acquired, Cost Method | $ 16,700 | |||||||
Stock Repurchase Program, Authorized Amount | $ 35,000 | |||||||
Stock Repurchase Program, Period in Force (Year) | 2 years |
Note 7 - EMPLOYEE BENEFIT PLA_3
Note 7 - EMPLOYEE BENEFIT PLANS - Other (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 15 Months Ended | 128 Months Ended | |||||||
Jun. 15, 2021 | Nov. 16, 2011 shares | Jul. 31, 2001 | Jul. 31, 2001 item | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 shares | Dec. 31, 2001 shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Cumulative Forfeitures of Plan (in shares) | 4,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance (in shares) | 133,000 | 133,000 | 133,000 | 133,000 | 226,000 | |||||||
Share Price (in dollars per share) | $ / shares | $ 21.51 | $ 21.51 | $ 21.51 | $ 21.51 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ | $ 1,500,000 | |||||||||||
Share-based Payment Arrangement, Option [Member] | ||||||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 | ||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 1 year 3 months 18 days | |||||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ | 24,800,000 | $ 24,800,000 | $ 24,800,000 | 24,800,000 | ||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 2 years 3 months 18 days | |||||||||||
Employee Stock Purchase Plan [Member] | ||||||||||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans (in shares) | 0 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 4 years | |||||||||||
The 2010 Purchase Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate | 10% | 10% | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85% | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Offering Period | 24 months | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Purchase Period | item | 4 | |||||||||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans (in shares) | 5,203 | 99,674 | ||||||||||
Employee Stock Purchase Plan Weighted Average Purchase Price of Shares Purchased (in dollars per share) | $ / shares | $ 13.40 | $ 9.24 | ||||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ | 0 | $ 0 | $ 0 | 0 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 6 months | |||||||||||
The 2021 Purchase Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Offering Period | 24 months | |||||||||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans (in shares) | 90,040 | |||||||||||
Employee Stock Purchase Plan Weighted Average Purchase Price of Shares Purchased (in dollars per share) | $ / shares | $ 15.90 | |||||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ | $ 1,500,000 | $ 1,500,000 | $ 1,500,000 | $ 1,500,000 | ||||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 1 year 2 months 12 days | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year) | 10 years | |||||||||||
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 909,960 | 909,960 | 909,960 | 909,960 | ||||||||
Twenty Eleven Stock Incentive Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares) | 12,800,000 | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Shares Reserved Decrease Rate (in shares) | 1.33 | |||||||||||
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 13,300,000 | 13,300,000 | 13,300,000 | 13,300,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 4,500,000 | 4,500,000 | 4,500,000 | 4,500,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Cumulative Forfeitures of Plan (in shares) | 500,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 0 | 0 | 0 | 0 | ||||||||
Twenty Eleven Stock Incentive Plan [Member] | Share-based Payment Arrangement, Option [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year) | 10 years | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 4 years | |||||||||||
Shares Previously Issued Under the 2001 Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares) | 3,500,000 | |||||||||||
Outside of the 2011, 2001 or IDS Plans [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance (in shares) | 0 | 0 | 0 | 0 |
Note 7 - EMPLOYEE BENEFIT PLA_4
Note 7 - EMPLOYEE BENEFIT PLANS - Stock Options, Valuation Assumptions (Details) - Employee Stock Purchase Plan [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Expected life (in years) (Year) | 1 year 3 months | 1 year 3 months |
Volatility | 48.90% | 34.25% |
Risk-free interest rate | 0.86% | 1.43% |
Expected dividend | 0% | 0% |
Weighted average fair value of purchase rights granted during the period (in dollars per share) | $ 10.76 | $ 4.83 |
Note 7 - EMPLOYEE BENEFIT PLA_5
Note 7 - EMPLOYEE BENEFIT PLANS - Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stock-based compensation expenses | $ 3,872 | $ 2,742 | $ 9,425 | $ 6,111 |
Cost of Sales [Member] | ||||
Stock-based compensation expenses | 655 | 538 | 1,383 | 1,190 |
Research and Development Expense [Member] | ||||
Stock-based compensation expenses | 1,810 | 1,126 | 4,978 | 2,714 |
Selling, General and Administrative Expenses [Member] | ||||
Stock-based compensation expenses | $ 1,407 | $ 1,078 | $ 3,064 | $ 2,207 |
Note 7 - EMPLOYEE BENEFIT PLA_6
Note 7 - EMPLOYEE BENEFIT PLANS - Stock Options Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2022 | |
EMPLOYEE BENEFIT PLANS | |
Outstanding, beginning balance (in shares) | 226 |
Exercised (in shares) | (87) |
Canceled (in shares) | (4) |
Expired (in shares) | (2) |
Outstanding, ending balance (in shares) | 133 |
Vested and expected to vest (in shares) | 133 |
Exercisable (in shares) | 112 |
Outstanding, weighted average exercise price, beginning balance (in dollars per share) | $ 12.78 |
Exercised, weighted average exercise price (in dollars per share) | 9.10 |
Canceled, weighted average exercise price (in dollars per share) | 13.30 |
Expired, weighted average exercise price (in dollars per share) | 8.79 |
Outstanding, weighted average exercise price, ending balance (in dollars per share) | 15.19 |
Vested and expected to vest, weighted average exercise price (in dollars per share) | 15.18 |
Exercisable, weighted average exercise price (in dollars per share) | $ 15.16 |
Outstanding, weighted average remaining contractual (Year) | 3 years 9 months 18 days |
Vested and expected to vest, weighted average remaining contractual term (Year) | 3 years 9 months 10 days |
Exercisable, weighted average remaining contractual term (Year) | 3 years 2 months 19 days |
Outstanding, aggregate intrinsic value | $ 848 |
Vested and expected to vest, aggregate intrinsic value | 843 |
Exercisable, aggregate intrinsic value | $ 714 |
Note 7 - EMPLOYEE BENEFIT PLA_7
Note 7 - EMPLOYEE BENEFIT PLANS - Nonvested Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] shares in Thousands | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Nonvested, Opening Balance (in shares) | shares | 1,872 |
Granted (in shares) | shares | 331 |
Vested (in shares) | shares | (462) |
Forfeited (in shares) | shares | (56) |
Nonvested, Ending Balance (in shares) | shares | 1,685 |
Nonvested, weighted average grant date fair value (in dollars per share) | $ / shares | $ 18.24 |
Granted, weighted average grant date fair value (in dollars per share) | $ / shares | 27.24 |
Vested, weighted average grant date fair value (in dollars per share) | $ / shares | 17.94 |
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | 19.38 |
Nonvested, weighted average grant date fair value (in dollars per share) | $ / shares | $ 20.05 |
Note 8 - INCOME TAXES (Details)
Note 8 - INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
INCOME TAXES | |||||
Increase (Decrease) in Income Taxes | $ 1,500 | ||||
Income Tax Expense (Benefit), Total | $ 1,306 | $ 88 | $ 2,493 | $ 1,044 | |
Effective Income Tax Rate Reconciliation, Percent, Total | 88.90% | 9.50% | |||
Unrecognized Tax Benefits, Ending Balance | 15,200 | $ 15,200 | $ 14,700 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 1,900 | 1,900 | 1,900 | ||
Unrecognized tax benefits including income tax penalties and interest accrued in long term liabilities | 2,400 | 2,400 | |||
Unrecognized tax benefits related to income tax penalties and interest accrued in long-term liabilities | 600 | 600 | |||
Unrecognized Tax Benefits In Deferred Tax Assets | 13,400 | 13,400 | |||
Deferred Tax Assets, Valuation Allowance, Total | 51,600 | 51,600 | 51,600 | ||
Net deferred tax assets | $ 46 | $ 46 | $ 75 |
Note 9 - NET LOSS PER SHARE - C
Note 9 - NET LOSS PER SHARE - Calculation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
NET LOSS PER SHARE | ||||
Net loss | $ (1,147) | $ (4,484) | $ (5,297) | $ (12,081) |
Basic weighted-average shares outstanding (in shares) | 37,028 | 37,004 | 37,316 | 36,989 |
Diluted weighted-average shares outstanding (in shares) | 37,028 | 37,004 | 37,316 | 36,989 |
Basic (in dollars per share) | $ (0.03) | $ (0.12) | $ (0.14) | $ (0.33) |
Diluted (in dollars per share) | $ (0.03) | $ (0.12) | $ (0.14) | $ (0.33) |
Note 9 - NET LOSS PER SHARE - A
Note 9 - NET LOSS PER SHARE - Anti-dilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Anti-dilutive securities (in shares) | 774 | 1,165 | 937 | 1,253 |
Share-based Payment Arrangement, Option [Member] | ||||
Anti-dilutive securities (in shares) | 45 | 194 | 73 | 209 |
Restricted Stock Units (RSUs) [Member] | ||||
Anti-dilutive securities (in shares) | 684 | 970 | 795 | 1,038 |
Employee Stock Purchase Plan [Member] | ||||
Anti-dilutive securities (in shares) | 45 | 1 | 69 | 6 |
Note 10 - CUSTOMER AND GEOGRA_3
Note 10 - CUSTOMER AND GEOGRAPHIC INFORMATION - Other (Details) | 6 Months Ended |
Jun. 30, 2022 | |
CUSTOMER AND GEOGRAPHIC INFORMATION | |
Number of Operating Segments | 1 |
Number of Reportable Segments | 1 |
Note 10 - CUSTOMER AND GEOGRA_4
Note 10 - CUSTOMER AND GEOGRAPHIC INFORMATION - Revenue Percentage by Major Customers (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue Benchmark [Member] | Customer A [Member] | |||||
Concentration risk | 15% | 14% | |||
Revenue Benchmark [Member] | Customer D [Member] | |||||
Concentration risk | 29% | 31% | 10% | ||
Accounts Receivable [Member] | Customer C [Member] | |||||
Concentration risk | 15% | ||||
Accounts Receivable [Member] | Customer D [Member] | |||||
Concentration risk | 29% | 43% |
Note 10 - CUSTOMER AND GEOGRA_5
Note 10 - CUSTOMER AND GEOGRAPHIC INFORMATION - Revenues by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues | $ 34,668 | $ 27,419 | $ 68,166 | $ 51,619 |
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | ||||
Revenues | $ 34,668 | $ 27,419 | $ 68,166 | $ 51,619 |
Concentration risk | 100% | 100% | 100% | 100% |
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | UNITED STATES | ||||
Revenues | $ 17,086 | $ 12,095 | $ 34,577 | $ 20,651 |
Concentration risk | 49% | 44% | 51% | 40% |
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | CHINA | ||||
Revenues | $ 4,539 | $ 4,289 | $ 8,659 | $ 6,028 |
Concentration risk | 13% | 16% | 13% | 12% |
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | JAPAN | ||||
Revenues | $ 2,794 | $ 2,450 | $ 5,401 | $ 6,028 |
Concentration risk | 8% | 9% | 8% | 12% |
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | Rest of the World [Member] | ||||
Revenues | $ 10,249 | $ 8,585 | $ 19,529 | $ 18,912 |
Concentration risk | 30% | 31% | 28% | 36% |
Note 10 - CUSTOMER AND GEOGRA_6
Note 10 - CUSTOMER AND GEOGRAPHIC INFORMATION - Long-lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Long-lived assets, net | $ 43,630 | $ 40,703 |
UNITED STATES | ||
Long-lived assets, net | 42,288 | 39,158 |
Rest of the World [Member] | ||
Long-lived assets, net | $ 1,342 | $ 1,545 |
Note 11 - FAIR VALUE MEASUREM_3
Note 11 - FAIR VALUE MEASUREMENTS - Fair Value, Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Total | $ 100,927 | $ 125,016 |
Fair Value, Inputs, Level 1 [Member] | ||
Total | 100,927 | 125,016 |
Money Market Funds [Member] | ||
Money market mutual funds | 65,020 | 12,474 |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Money market mutual funds | 65,020 | 12,474 |
US Government Corporations and Agencies Securities [Member] | ||
Short-term investments | 35,907 | 112,542 |
US Government Corporations and Agencies Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Short-term investments | $ 35,907 | $ 112,542 |
Note 12 - COMMITMENTS AND CON_2
Note 12 - COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Future Lease payments | $ 7,765 |
Term of Product Warranty | 90 days |
Purchase Obligation, Total | $ 14,000 |
Threshold payment period | 12 months |
Accrued amount | $ 0 |