Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 24, 2023 | Jun. 30, 2021 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 601 | ||
Entity Common Stock, Shares Outstanding | 37,768,010 | ||
Entity Central Index Key | 0001120914 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Auditor Name | BPM LLP | ||
Auditor Firm ID | 207 | ||
Auditor Location | San Jose, CA |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 119,624 | $ 27,684 |
Short-term investments | 19,557 | 112,542 |
Accounts receivable, net | 42,164 | 40,087 |
Prepaid expenses and other current assets | 12,063 | 8,194 |
Total current assets | 193,408 | 188,507 |
Property and equipment, net | 40,174 | 35,295 |
Operating lease right-of-use assets, net | 6,002 | 5,408 |
Goodwill | 14,123 | 14,123 |
Intangible assets, net | 18,055 | 21,239 |
Deferred tax assets, net | 64 | 75 |
Other non-current assets | 6,845 | 9,121 |
Total assets | 278,671 | 273,768 |
Current liabilities: | ||
Accounts payable | 6,388 | 5,554 |
Accrued compensation and related benefits | 16,948 | 9,495 |
Accrued and other current liabilities | 5,581 | 3,328 |
Operating lease liabilities - current portion | 1,412 | 1,758 |
Deferred revenues - current portion | 26,019 | 23,691 |
Billings in excess of recognized revenues | 1,852 | |
Total current liabilities | 58,200 | 43,826 |
Long-term income taxes payable | 2,622 | 2,656 |
Non-current operating lease liabilities | 5,932 | 5,258 |
Non-current portion of deferred revenue | 1,905 | 2,443 |
Total liabilities | 68,659 | 54,183 |
Commitments and contingencies (Note 8) | ||
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 48,613 and 47,414, respectively; shares outstanding 37,431 and 37,411, respectively | 6 | 6 |
Additional paid-in-capital | 447,415 | 423,069 |
Treasury stock at cost, 11,182 and 10,003 shares, respectively | (133,709) | (104,705) |
Accumulated deficit | (101,150) | (97,721) |
Accumulated other comprehensive loss | (2,550) | (1,064) |
Total stockholders' equity | 210,012 | 219,585 |
Total liabilities and stockholders' equity | $ 278,671 | $ 273,768 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares shares in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.00015 | |
Preferred stock, shares authorized (in shares) | 5,000 | |
Preferred stock, shares issued (in shares) | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | |
Common stock, par value (in dollars per share) | $ 0.00015 | |
Common stock, shares authorized (in shares) | 70,000 | |
Common stock, shares issued (in shares) | 48,613 | 47,414 |
Common stock, shares outstanding (in shares) | 37,431 | 37,411 |
Treasury stock, shares (in shares) | 11,182 | 10,003 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||
Revenues | $ 148,549 | $ 111,060 | $ 88,046 |
Costs and Expenses: | |||
Costs of revenues | 47,907 | 44,193 | 36,765 |
Research and development | 56,126 | 43,780 | 34,654 |
Selling, general and administrative | 45,338 | 37,649 | 32,677 |
Amortization of acquired intangible assets | 1,270 | 1,255 | 741 |
Interest and other expense (income), net | (2,562) | (683) | 1,269 |
Income (loss) before income taxes | 470 | (18,317) | (18,060) |
Income tax expense | 3,899 | 3,171 | 22,303 |
Net income (loss) | (3,429) | (21,488) | (40,363) |
Other comprehensive loss: | |||
Foreign currency translation adjustments, net of tax | (1,493) | (825) | 1,253 |
Change in unrealized gain (loss) related to available-for-sale debt securities, net of tax | 7 | (14) | 2 |
Total other comprehensive loss | (1,486) | (839) | 1,255 |
Comprehensive income (loss) | $ (4,915) | $ (22,327) | $ (39,108) |
Net income (loss) per share, basic (in dollars per share) | $ (0.09) | $ (0.58) | $ (1.17) |
Net income (loss) per share, diluted (in dollars per share) | $ (0.09) | $ (0.58) | $ (1.17) |
Weighted average common shares used to calculate net income (loss) per share, basic (in shares) | 37,309 | 37,138 | 34,458 |
Weighted average common shares used to calculate net income (loss) per share, diluted (in shares) | 37,309 | 37,138 | 34,458 |
Analytics | |||
Revenues: | |||
Revenues | $ 130,480 | $ 93,415 | $ 57,232 |
Integrated Yield Ramp | |||
Revenues: | |||
Revenues | $ 18,069 | $ 17,645 | $ 30,814 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock Outstanding | Additional Paid-in Capital | Treasury Stock | Retained Earnings | AOCI Attributable to Parent | Total |
Balances (in shares) at Dec. 31, 2019 | 32,503 | 9,294 | ||||
Balances at Dec. 31, 2019 | $ 5 | $ 325,197 | $ (91,695) | $ (35,870) | $ (1,480) | $ 196,157 |
Issuance of common stock, net of issuance of $0.1 million | $ 1 | 65,077 | 65,078 | |||
Issuance of common stock, net of issuance of $0.1 million (in shares) | 3,307 | |||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 183 | |||||
Issuance of common stock in connection with employee stock purchase plan | 1,670 | $ 1,670 | ||||
Issuance of common stock in connection with exercise of options (in shares) | 246 | 246 | ||||
Issuance of common stock in connection with exercise of options | 2,570 | $ 2,570 | ||||
Vesting of restricted stock units (in shares) | 611 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants (in shares) | 256 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants | $ (4,520) | (4,520) | ||||
Stock-based compensation expense | 12,659 | 12,659 | ||||
Comprehensive income (loss) | (40,363) | 1,255 | (39,108) | |||
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) | 109 | |||||
Issuance of common stock in connection with employee stock purchase plan | 1,035 | $ 1,035 | ||||
Issuance of common stock in connection with exercise of options (in shares) | 216 | 216 | ||||
Issuance of common stock in connection with exercise of options | 1,930 | $ 1,930 | ||||
Vesting of restricted stock units (in shares) | 487 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants (in shares) | 202 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants | $ (3,967) | (3,967) | ||||
Repurchase of common stock (in shares) | (251) | 251 | ||||
Repurchase of common stock | $ (4,523) | (4,523) | ||||
Stock-based compensation expense | 12,931 | 12,931 | ||||
Comprehensive income (loss) | (21,488) | (839) | (22,327) | |||
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 |
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 |
Balances (in shares) at Dec. 31, 2022 | 37,431 | 11,182 | ||||
Balances at Dec. 31, 2022 | $ 6 | 447,415 | $ (133,709) | (101,150) | (2,550) | 210,012 |
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) | 187 | |||||
Issuance of common stock in connection with employee stock purchase plan | 3,011 | $ 3,011 | ||||
Issuance of common stock in connection with exercise of options (in shares) | 150 | 150 | ||||
Issuance of common stock in connection with exercise of options | 1,686 | $ 1,686 | ||||
Vesting of restricted stock units (in shares) | 616 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants (in shares) | 246 | |||||
Purchases of treasury stock in connection with tax withholdings on restricted stock grants | $ (6,533) | (6,533) | ||||
Repurchase of common stock (in shares) | (933) | 933 | ||||
Repurchase of common stock | $ (22,471) | (22,471) | ||||
Stock-based compensation expense | (19,649) | (19,649) | ||||
Comprehensive income (loss) | (3,429) | (1,486) | (4,915) | |||
Balances (in shares) at Dec. 31, 2022 | 37,431 | 11,182 | ||||
Balances at Dec. 31, 2022 | $ 6 | $ 447,415 | $ (133,709) | $ (101,150) | $ (2,550) | $ 210,012 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (3,429,000) | $ (21,488,000) | $ (40,363,000) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 5,526,000 | 6,218,000 | 6,725,000 |
Stock-based compensation expense | 19,649,000 | 12,931,000 | 12,463,000 |
Amortization of acquired intangible assets | 3,484,000 | 3,334,000 | 1,446,000 |
Amortization of costs capitalized to obtain revenue contracts | 1,550,000 | 674,000 | 549,000 |
Loss on disposal and write-down in value of property and equipment | 3,183,000 | 500,000 | |
Deferred taxes | (4,000) | 1,373,000 | 21,007,000 |
Other | (187,000) | 147,000 | (25,000) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (2,143,000) | (5,980,000) | 8,101,000 |
Prepaid expenses and other current assets | (5,787,000) | 1,136,000 | (433,000) |
Operating lease right-of-use assets | 1,821,000 | 1,414,000 | 1,193,000 |
Other non-current assets | 2,258,000 | (1,336,000) | 2,069,000 |
Accounts payable | (1,423,000) | (86,000) | (918,000) |
Accrued compensation and related benefits | 7,720,000 | 1,264,000 | 1,926,000 |
Accrued and other liabilities | 1,671,000 | (648,000) | 928,000 |
Deferred revenues | 1,822,000 | 5,028,000 | 7,755,000 |
Billings in excess of recognized revenues | 1,852,000 | (1,337,000) | 220,000 |
Operating lease liabilities | (2,082,000) | (1,584,000) | (1,360,000) |
Net cash provided by (used in) operating activities | 32,298,000 | 4,243,000 | 21,783,000 |
Cash flows from investing activities: | |||
Proceeds from maturities and sales of short-term investments | 151,500,000 | 171,000,000 | 16,500,000 |
Purchases of short-term investments | (58,321,000) | (168,560,000) | (131,454,000) |
Purchases of property and equipment | (8,409,000) | (3,672,000) | (6,005,000) |
Prepayment for the purchase of property and equipment | (21,000) | (381,000) | (963,000) |
Purchases of intangible assets | 150,000 | ||
Payment for business acquisition, net of cash acquired | (3,054,000) | (28,580,000) | |
Net cash provided by investing activities | 84,599,000 | (4,667,000) | (150,502,000) |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options | 1,686,000 | 1,930,000 | 2,570,000 |
Proceeds from employee stock purchase plan | 3,011,000 | 1,035,000 | 1,670,000 |
Payments for taxes related to net share settlement of equity awards | (6,533,000) | (3,967,000) | (4,520,000) |
Repurchases of common stock | (22,471,000) | (4,523,000) | |
Proceeds from issuance of common stock, net of issuance costs paid | 65,078,000 | ||
Net cash used in financing activities | (24,307,000) | (5,525,000) | 64,798,000 |
Effect of exchange rate changes on cash and cash equivalents | (650,000) | (182,000) | 131,000 |
Net change in cash, cash equivalents, and restricted cash | 91,940,000 | (6,131,000) | (63,790,000) |
Cash, cash equivalents, and restricted cash at beginning of period | 27,684,000 | 33,815,000 | 97,605,000 |
Cash, cash equivalents, and restricted cash at end of period | 119,624,000 | 27,684,000 | 33,815,000 |
Reconciliation of cash, cash equivalents, and restricted cash to the balance sheets: | |||
Cash and cash equivalents | 119,624,000 | 27,684,000 | 30,315,000 |
Restricted cash | 3,500,000 | ||
Total cash, cash equivalents and restricted cash | 119,624,000 | 27,684,000 | 33,815,000 |
Supplemental disclosure of cash flow information: | |||
Cash paid during the period for taxes | 2,850,000 | 1,873,000 | 2,707,000 |
Cash paid for amounts included in the measurement of operating lease liabilities | 1,744,000 | 1,947,000 | 2,022,000 |
Supplemental disclosure of noncash information: | |||
Property and equipment received and accrued in accounts payable and accrued and other liabilities | 3,201,000 | 1,359,000 | 133,000 |
Advances for purchase of fixed assets transferred from prepaid assets to property and equipment | 336,000 | 963,000 | |
Operating lease liabilities arising from obtaining right-of-use assets | $ 2,502,000 | $ 161,000 | 286,000 |
Stock-based compensation capitalized as software development costs | $ 190,000 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business PDF Solutions, Inc. (the “Company” or “PDF”), provides products and services designed to empower organizations across the semiconductor ecosystem to connect, collect, manage, and analyze data about design, equipment, manufacturing, and test to improve the yield and quality of their products and operational efficiency. The Company’s products, services, and solutions include proprietary software, physical intellectual property (“IP”) for integrated circuit (“IC”) designs, electrical measurement hardware tools, proven methodologies, and professional services. Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after the elimination of all significant intercompany balances and transactions. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) 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, fair values of assets acquired and liabilities assumed in business combinations, 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 has impacted the operations and purchasing decisions of companies worldwide. As of the date of issuance of the 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 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. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. The Company maintains its cash and cash equivalents and short-term investments with what it considers high credit quality financial institutions. The Company primarily sells its products and services to companies in Asia, Europe and North America within the semiconductor industry. As of December 31, 2022, three customers accounted for 53% of the Company’s gross accounts receivable and two customers accounted for 41% of the Company’s total revenues for 2022. As of December 31, 2021, two customers accounted for 44% of the Company’s gross accounts receivable and two customers accounted for 27% of the Company’s revenues for 2021. See Note 13 for further details. The Company does not require collateral or other security to support accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition. The Company maintains allowances for potential credit losses. The allowance for doubtful accounts, which was based on management’s best estimates, could be adjusted in the near term from current estimates depending on actual experience. Such adjustments could be material to the consolidated financial statements. Cash and Cash Equivalents, and Short-term Investments The Company considers all highly liquid investments with an original maturity of 90 days or less or investments with a remaining maturity of 90 days or less at the purchase to be cash equivalents and investments with original maturities greater than 90 days but less than one year to be short-term investments. The Company classifies securities with readily determinable market values as available-for-sale. Short-term investments include available-for-sale securities and are carried at estimated fair value, with the unrealized gains and losses deemed temporary in nature, net of tax, reported as a component of accumulated other comprehensive loss in stockholders’ equity. Realized gains and losses and declines in value determined to be other than temporary are based on the specific identification method and are included as a component of other expense, net in the Consolidated Statements of Comprehensive Loss. The Company periodically reviews short-term investments for impairment. In the event a decline in value is determined to be other-than-temporary, an impairment loss is recognized. When determining if a decline in value is other-than-temporary, the Company takes into consideration the current market conditions, the duration and severity of and the reason for the decline, and the likelihood that it would need to sell the security prior to a recovery of par value. As of December 31, 2022, and 2021, short-term investments consisted solely of U.S. Treasury bills. The cost of these securities approximated fair value and there was no material gross realized or unrealized gains or losses as of December 31, 2022 and 2021. There were also no impairments in the investments’ value in the year ended December 31, 2022 and 2021. Refer to Note 14, “Fair Value Measurements” for further discussion on the Company’s investments. Restricted cash of $3.5 million noted in the Consolidated Statement of Cash Flows for the year ended December 31, 2020 pertains to the amount specifically designated to pay for the Holdback amount related to the Company’s acquisition of Cimetrix Incorporated (“Cimetrix”). Refer to Note 4, “Business Combination” for further discussion about the payment of Holdback Amount in fiscal 2021. 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 are determined on an individual contract basis. Unbilled accounts receivable, included in accounts receivable, totaled $13.5 million and $11.8 million as of December 31, 2022 and 2021, respectively. Unbilled accounts receivable that are not expected to be billed and collected during the succeeding 12-month period are recorded in other non-current assets and totaled $0.8 million and $1.3 million as of December 31, 2022 and 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. Accounts receivable reserves are summarized below (in thousands): Deductions/ Balance at Charged Write-offs Balance at Beginning Charged to Against of Accounts End of of Period Expense (1) Revenue (1) Receivable Period 2022 $ 890 $ — $ — $ — $ 890 2021 $ 963 $ — $ — $ (73) $ 890 2020 $ 213 $ — $ 800 $ (50) $ 963 (1) Additions to the accounts receivable reserve for doubtful accounts are charged to bad debt expense. Additions to the receivable reserve for billing adjustments are charged against revenue. Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives (in years) of the related asset as follows: Computer equipment 3 Software 3 Furniture, fixtures, and equipment 5-10 Laboratory and test equipment 3-10 Leasehold improvements Shorter of estimated useful life or term of lease Intangible Assets Intangible assets consist of acquired technology, certain contract rights, customer relationships, patents, trademarks and trade names. These intangible assets may be acquired through business combinations or direct purchases. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from one ten Goodwill The Company records goodwill when the purchase consideration of an acquisition exceeds the fair value of the net tangible and identified intangible assets as of the date of acquisition. The Company has one operating segment and one operating unit. The Company performs a qualitative analysis when testing a reporting unit’s goodwill for impairment. The Company performs an annual impairment assessment of goodwill during the fourth quarter of each calendar year or more frequently, if required to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If the carrying amount exceeds its fair value, an impairment loss would be recognized equal to the amount of excess, limited to the amount of total goodwill. Leases The Company has operating leases for administrative and sales offices, research and development laboratory and clean room. The Company recognizes long-term operating lease rights and commitments as operating lease right-of-use assets (ROU), operating lease liabilities and operating lease liabilities, non-current, respectively, in the Consolidated Balance Sheets. The Company elected to not separate lease and non-lease components for all of its leases. The Company determines if an arrangement is, or contains, a lease at inception. Operating lease right-of-use assets, and operating lease liabilities are initially recorded based on the present value of lease payments over the lease term. Lease terms include the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. The decision to include these options involves consideration of our overall future business plans and other relevant business economic factors that may affect our business. Since the determination of the lease term requires an application of judgment, lease terms that differ in reality from our initial judgment may potentially have a material impact on the Company’s Consolidated Balance Sheets. In addition, the Company’s leases do not provide an implicit rate. In determining the present value of the Company’s expected lease payments, the discount rate is calculated using the Company’s incremental borrowing rate determined based on the information available, which requires additional judgment. Software Development Costs Internally developed software is software developed to meet our internal needs to provide certain services to the customers. The Company’s capitalized software development costs consist of internal compensation related costs and external direct costs incurred during the application development stage and are amortized over their useful lives, generally five six Cost of Revenues Costs of revenues consist primarily of costs incurred to provide and support our services, costs recognized in connection with licensing our software, IT and facilities-related costs and amortization of acquired technology. Service costs include material, personnel-related costs including compensation, employee benefits, bonus and stock-based compensation expense, subcontractor costs, overhead costs, travel, and allocated facilities-related costs. Software license costs consist of costs associated with cloud-delivery related expenses and licensing third-party software used by us in providing services to the Company’s customers in solution engagements or sold in conjunction with the Company’s software products. Research and Development Expenses Research and development expenses consist primarily of personnel-related costs including compensation, employee benefits, bonus and stock-based compensation expense, outside development services, travel, third-party cloud-services related costs, IT and facilities cost allocations to support product development activities. Research and development expenses are charged to operations as incurred. Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of personnel-related costs including compensation, employee benefits, bonus, commission and stock-based compensation expense for sales, marketing and general and administrative personnel, legal, tax and accounting services, marketing communications expenses, third-party cloud-services related costs, travel, IT and facilities cost allocations. Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method, which requires the Company to measure stock-based compensation based on the grant-date fair value of the awards and recognize the compensation expense over the requisite service period. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The fair value of the Company’s restricted stock units (“RSUs”) is equal to the market value of the Company’s common stock on the date of the grant. These awards are subject to time-based vesting which generally occurs over a period of four years The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton option-pricing model, which incorporates various assumptions including volatility, expected life and interest rates. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options. The expected life is based on historical experience and on the terms and conditions of the stock options granted. The interest rate assumption is based upon observed Treasury yield curve rates appropriate for the expected life of the Company’s stock options. Income Taxes The Company’s provision for income tax comprises its current tax liability and change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effect of future changes in tax laws or rates are not anticipated. Valuation allowances are provided to reduce deferred tax assets to an amount that in management’s judgment is more likely than not to be recoverable against future taxable income. No U.S. taxes are provided on earnings of non-U.S. subsidiaries, to the extent such earnings are deemed to be permanently invested. The Company’s income tax calculations are based on application of applicable U.S. federal and state or foreign tax laws. The Company’s tax filings, however, are subject to audit by the respective tax authorities. Accordingly, the Company recognizes tax liabilities based upon its estimate of whether, and the extent to which, additional taxes will be due when such estimates are more-likely-than-not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. To the extent the final tax liabilities are different from the amounts originally accrued, the increases or decreases are recorded as income tax expense or benefit in the Consolidated Statements of Comprehensive Loss. Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income by weighted average number of common shares outstanding for the period (excluding outstanding stock options and shares subject to repurchase). Diluted net income (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. Dilutive potential common shares consist of incremental common shares issuable upon exercise of stock options, upon vesting of RSUs, contingently issuable shares for all periods and assumed issuance of shares under the Company’s employee stock purchase plan. No dilutive potential common shares are included in the computation of any diluted per share amount when a loss from continuing operations was reported by the Company. Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the local currency for the respective subsidiary. The assets and liabilities are translated at the period-end exchange rate, and statements of comprehensive loss are translated at the average exchange rate during the year. Gains and losses resulting from foreign currency translations are included as a component of other comprehensive loss. Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Comprehensive Loss. Derivative Financial Instruments The Company operates internationally and is exposed to potentially adverse movements in foreign currency exchange rates. From time to time, the Company enters into foreign currency forward contracts to reduce the exposure to foreign currency exchange rate fluctuations on certain foreign currency denominated monetary assets and liabilities. The Company does not use foreign currency contracts for speculative or trading purposes. The Company records these forward contracts at fair value. The counterparty to these foreign currency forward contracts is a financial institution that the Company believes is creditworthy, and therefore, we believe the credit risk of counterparty non-performance is not significant. These foreign currency forward contracts are not designated for hedge accounting treatment. Therefore, the change in fair value of these derivatives is recorded into earnings as a component of interest and other income (expense), net and offsets the change in fair value of the foreign currency denominated monetary assets and liabilities, which are also recorded in interest and other income (expense), net. The duration of these forward contracts is usually three months. Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values at the date of the business combination. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, estimated replacement costs and future expected cash flows from acquired customers, acquired technology, acquired patents, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects the Company’s amortization expense, as acquired finite-lived intangible assets are amortized over the useful life, whereas any indefinite lived intangible assets, including in-process research and development, and goodwill, are not amortized but tested annually for impairment. During the measurement period, which is not to exceed one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Litigation From time to time, the Company is subject to various claims and legal proceedings that arise in the ordinary course of business. The Company accrues for losses related to litigation when a potential loss is probable and the loss can be reasonably estimated in accordance with Financial Accounting Standards Board (FASB) requirements. See Note 8, “Commitments and Contingencies”. Accounting Standards Not Yet Effective 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. The Company will adopt this standard effective the first quarter of 2023. 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. 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. The Company is in the process of evaluating the impact of Topic 326 on its consolidated financial statements and the related disclosure but does not believe it will have a material effect. 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 consolidated financial statements. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE | |
REVENUE | 2. REVENUE 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 SSP attributed to each performance obligation. Revenue from DFI systems and CV systems (including Characterization services) 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 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 “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 judgement. Please refer to “Significant Judgments” section of this Note for further discussion. The Gainshare royalty contained in IYR 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 by timing of revenue: Year Ended December 31, 2022 2021 2020 Over time 69 % 65 % 63 % Point-in-time 31 % 35 % 37 % Total 100 % 100 % 100 % International revenues accounted for approximately 50%, 55% and 58% of total revenues for the years ended December 31, 2022, 2021 and 2020, respectively. See Note 13, “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 December 31, 2022 and 2021, contract assets of $3.3 million and $0.4 million, respectively, are included in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. The Company did not record any asset impairment charges related to contract assets during fiscal year 2022 and 2021. 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 accompanying Consolidated Balance Sheets. Revenue recognized for the years ended December 31, 2022, 2021 and 2020, that was included in the deferred revenues and billings in excess of recognized revenues balances at the beginning of each reporting period was $24.9 million, $16.9 million and $10.7 million, respectively. At December 31, 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 $277.7 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 three years The adjustment to revenue recognized in the years ended December 31, 2022, 2021 and 2020 from performance obligations satisfied (or partially satisfied) in previous periods was an increase of $0.4 million, a decrease of $0.4 million and an increase $0.1 million, 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 Consolidated Balance Sheets as of December 31, 2022 and 2021 was $1.7 million and $0.6 million, respectively. Total capitalized direct sales commission costs included in other non-current assets in the accompanying Consolidated Balance Sheets as of December 31, 2022 and 2021 was $2.1 million and $2.1 million, respectively. Amortization of these assets for each of the years ended December 31, 2022, 2021 and 2020 was $1.5 Practical Expedients The Company does not adjust 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 for the years ended December 31, 2022 and 2021. |
STRATEGIC PARTNERSHIP AGREEMENT
STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS | |
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 will collaborate on, and the Company will initially host, develop and maintain, an Advantest-specific cloud layer on the Exensio platform. On June 5, 2022, the parties amended Amendment #1 to provide another approved DEX Site (as defined therein). On November 11, 2022, the parties entered into a further amendment to Amendment #1 that provided, effective October 31, 2022: (i) flexibility for Advantest to spend the remainder of their committed $50.0 million over the remainder of the original term on its choice of products and services from a price list, instead of limiting Advantest to the original, fixed bundle of software and services; (ii) revised exclusivity; and (iii) the Company with free access/use of certain Advantest software. ● 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 no t been significant for the year ended December 31, 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 incurred related to the Commercial Agreement with Advantest during the years ended December 31, 2022 and 2021. Analytics revenue recognized from Advantest during the years ended December 31, 2022, 2021 and 2020 was $10.3 million, $10.6 million and $3.4 million, respectively. Accounts receivable from Advantest amounted to $0.3 million at December 31, 2022. There were no outstanding accounts receivable from Advantest at December 31, 2021. Deferred revenue amounted to $7.1 million and $6.8 million as of December 31, 2022 and 2021, respectively. There was no occurrence of any termination events under these agreements as of the issuance of these consolidated financial statements. The Company carries out transactions with Advantest on arm’s length commercial customary terms. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2022 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | 4. BUSINESS COMBINATION On December 1, 2020 (the “Acquisition Date”), the Company acquired all the stock of Cimetrix Incorporated (“Cimetrix”). Cimetrix a global provider of equipment connectivity products for smart manufacturing and Industry 4.0 that enable factory equipment to communicate to increase productivity, reduce costs, and improve quality. The combination of Cimetrix connectivity products and platforms with the Company’s Exensio analytics platform powered by machine learning, is intended to enable IC, assembly, and electronics manufacturer customers to extract more intelligence from their tools, not just data, to build more reliable chips and systems at lower manufacturing costs. The gross purchase price was approximately $37.5 million ($31.6 million net of cash acquired) for all of the outstanding equity of Cimetrix. The net cash payment for this acquisition which also include the payment of adjusted Holdback Amount, as discussed below, was funded from the available cash of the Company. At the Acquisition Date, the Company held back $3.5 million of the purchase price (the “Holdback Amount”) to satisfy adjustments and claims for indemnity arising out of breaches of certain representations, warranties and covenants, and certain other enumerated items in the merger agreement. In fiscal 2021, the Company recorded a measurement period adjustment which reduced the Holdback Amount to $3.1 million. The measurement period adjustment did not have an impact on the Company’s Consolidated Statement of Comprehensive Loss during the year ended December 31, 2021. The adjusted Holdback Amount of $3.1 million was paid to the participating equity holders in December 2021. The Company accounted for this acquisition as a business combination in accordance with FASB ASC Topic 805, Business Combinations. This method requires that assets acquired and liabilities assumed in a business combination be recognized at their respective estimated fair values as of the Acquisition Date. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The goodwill recorded from this acquisition represents business benefits the Company anticipates from the acquired workforce and expectation for expanded sales opportunities to foster further business growth. Due to the nature of the transaction, the goodwill associated with the acquisition is not deductible for tax purposes. The final purchase price allocation, completed in the fourth quarter of 2021, resulted in adjustments to certain assets and liabilities primarily related to Holdback amount, as discussed above, and a reduction to net deferred tax liabilities of approximately $1.3 million. The corresponding offset of measurement period acquisition adjustments to goodwill aggregated $1.7 million. The following summarizes the final allocation of the purchase price for this acquisition, as of the date of the acquisition, is as follows (in thousands, except amortization period): Amortization Amount Period (Years) Allocation of Purchase Price: Assets Fair value of tangible assets (including cash of $5,900) $ 8,298 Fair value of intangible assets: Developed technology 12,541 8 In-process R&D 3,635 N/A Customer relationships 1,967 10 Noncompetition agreements 848 3 Tradenames and trademarks 808 10 Goodwill 11,830 N/A Total assets acquired $ 39,927 Liabilities Accounts payable and accrued expenses $ 1,447 Deferred revenue 375 Operating lease liabilities 132 Deferred tax liabilities 439 Total liabilities assumed $ 2,393 Total purchase price allocation $ 37,534 The estimated fair value of accounts receivable acquired approximates the contractual value of $1.6 million. Pursuant to the merger agreement, the Company will also make payments to certain employees, subject to their continued employment with Cimetrix, through the second quarter of 2024. The estimated total cash payout is about $1.4 million at Acquisition Date and will be paid at various scheduled payout dates. This amount will be recognized as compensation expense over the period as services are rendered. As of December 31, 2022 and 2021, such accrued compensation recorded under “Accrued compensation and related benefits” in the accompanying Consolidated Balance Sheets amounted to $0.2 million and $0.5 million, respectively. Acquisition-Related Transaction Costs – |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment consist of (in thousands): December 31, 2022 2021 Computer equipment $ 11,853 $ 11,924 Software 5,395 5,419 Furniture, fixtures and equipment 2,484 2,506 Leasehold improvements 6,467 6,272 Laboratory and other equipment 4,431 3,981 Test equipment 28,403 24,452 Construction-in-progress 27,336 22,158 86,369 76,712 Less: Accumulated depreciation and amortization (46,195) (41,417) Total $ 40,174 $ 35,295 Test equipment mainly includes DFI™ systems and CV® systems assets at customer sites that are contributing to revenue. Among assets under construction, the construction-in-progress balance related to construction of DFI™ systems assets amounted to $22.2 million and $20.0 million as of December 31, 2022, and December 31, 2021, respectively. Depreciation and amortization expense for years ended December 31, 2022, 2021 and 2020 was $5.5 million, $6.2 million and $6.7 million, respectively. In 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
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | 6. GOODWILL AND INTANGIBLE ASSETS The Company completed the acquisition of Cimetrix in the year ended December 31, 2020. Refer to Note 4 for additional information related to the goodwill and intangible assets added from this acquisition. As of December 31, 2022 and 2021, the carrying amount of goodwill was $14.1 million. The following table summarizes goodwill transaction for the years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ 14,123 $ 15,774 $ 2,293 Addition — — 13,481 Measurement period acquisition adjustment (1) — (1,651) — Balance at end of year $ 14,123 $ 14,123 $ 15,774 (1) Goodwill adjustment was recorded within the measurement period with a corresponding reduction in the Holdback Amount and reduction to net deferred tax liabilities. See Note 4, “Business Combination”. Intangible assets balance was $18.1 million and $21.2 million as of December 31, 2022 and 2021, respectively. Intangible assets as of December 31, 2022 and 2021, consist of the following (in thousands): December 31, 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 $ (6,684) $ 2,723 $ 9,407 $ (6,041) $ 3,366 Developed technology 4 - 9 33,635 (19,647) 13,988 33,635 (17,250) 16,385 Tradename and trademarks 2 - 10 1,598 (918) 680 1,598 (812) 786 Patent 6 - 10 2,100 (1,696) 404 1,800 (1,640) 160 Noncompetition agreements 3 848 (588) 260 848 (306) 542 Total $ 47,588 $ (29,533) $ 18,055 $ 47,288 $ (26,049) $ 21,239 The weighted average amortization period for acquired identifiable intangible assets was 5.9 years as of December 31, 2022. The following table summarizes intangible assets amortization expense in the Consolidated Statements of Comprehensive Loss (in thousands): Year Ended December 31, 2022 2021 2020 Amortization of acquired technology included under Costs of Revenues $ 2,214 $ 2,079 $ 705 Amortization of acquired intangible assets presented separately under Costs and Expenses 1,270 1,255 741 Total amortization of acquired intangible assets $ 3,484 $ 3,334 $ 1,446 The Company expects annual amortization of acquired identifiable intangible assets to be as follows (in thousands): Year Ending December 31, Amount 2023 $ 3,491 2024 3,093 2025 2,928 2026 2,759 2027 2,606 2028 and thereafter 3,178 Total future amortization expense $ 18,055 There were no impairment charges |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | 7. LEASES In 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 accompanying Consolidated Statement of Comprehensive Loss for the year ended December 31, 2022. Lease expense was comprised of the following (in thousands): Year Ended December 31, 2022 2021 2020 Operating lease expense (1) $ 1,457 $ 1,860 $ 1,828 Short-term lease and variable lease expense (2) 1,032 822 545 Total lease expense $ 2,489 $ 2,682 $ 2,373 (1) Net of gain recognized upon lease termination of $0.1 million in the year ended December 31, 2022. (2) Leases with an initial term of 12 months or less are not recorded on the 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 consolidated balance sheets information related to leases was as follows: December 31, 2022 2021 Weighted average remaining lease term under operating ROU leases (in years) 5.3 5.7 Weighted average discount rate for operating lease liabilities 4.87 % 5.25 % Maturity of operating lease liabilities as of December 31, 2022, are as follows (in thousands): Year Ending December 31, Amount (1) 2023 $ 1,570 2024 1,633 2025 1,547 2026 1,357 2027 1,294 2028 and thereafter 991 Total future minimum lease payments $ 8,392 Less: Interest (2) (1,048) Present value of future minimum lease payments under operating lease liabilities (3) $ 7,344 (1) As of December 31, 2022, the total operating lease liability includes $0.9 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 $1.4 million as of December 31, 2022. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 8. COMMITMENTS AND CONTINGENCIES Strategic Partnership with Advantest See Note 3 for the discussion about the Company’s commitments under the strategic partnership with Advantest. Operating Leases Refer to Note 7, “Leases”, for the discussion about the Company’s lease commitments. Indemnifications The Company generally provides a warranty to its customers that its software will perform substantially in accordance with documented specifications typically for a period of 90 days following delivery of its products. The Company also indemnifies certain customers from third-party claims of intellectual property infringement relating to the use of its products. Historically, costs related to these guarantees have not been significant. The Company is unable to estimate the maximum potential impact of these guarantees on its future results of operations. Purchase obligations The Company has purchase obligations with certain suppliers for the purchase of goods and services entered in the ordinary course of business. As of December 31, 2022, total outstanding purchase obligations were $30.4 million, the majority of which due within the next 24 months. Indemnification of Officers and Directors As permitted by the Delaware general corporation law, the Company has included a provision in its certificate of incorporation to eliminate the personal liability of its officers and directors for monetary damages for breach or alleged breach of their fiduciary duties as officers or directors, other than in cases of fraud or other willful misconduct. 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. Litigation From time to time, the Company is subject to various claims and legal proceedings that arise in the ordinary course of business. The Company accrues for losses related to litigation when a potential loss is probable, and the loss can be reasonably estimated in accordance with FASB requirements. As of December 31, 2022, except as disclosed below, the Company was not party to any material legal proceedings for which a loss was probable or an amount was accrued. 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 (or a lump sum payment to end the contract), and costs associated with bringing the arbitration proceeding. SMIC denies liability and an arbitration hearing was held in February 2023. The decision is expected within approximately three to six months. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS EQUITY | |
STOCKHOLDERS' EQUITY | 9. STOCKHOLDERS’ EQUITY Issuance of Common Stock On July 30, 2020, the Company issued 3,306,924 shares of common stock, at a purchase price of $19.7085 per share, for aggregate gross proceeds of $65.2 million pursuant to a Securities Purchase Agreement with Advantest dated July 29, 2020. Issuance costs related to this private placement aggregated $0.1 million. See Note 3, “Strategic Partnership Agreement with Advantest and Related Party Transactions”, for further details. Stock Repurchase Program On May 28, 2020, the Company’s 2018 stock repurchase program (the “2018 Program”) that was originally adopted on May 29, 2018, expired. As of May 28, 2020, approximately 786,000 shares had been repurchased at an average price of $12.43 per share, for a total price of $9.8 million under the 2018 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 year ended December 31, 2022, the Company repurchased 218,858 shares under the 2020 Program at an average price of $26.40 per share for an aggregate total price of $5.8 million. During the year ended December 31, 2021, the Company repurchased 251,212 shares under the 2020 Program at an average price of $18.01 per share for an aggregate total price of $4.5 million. In total, 470,070 shares were 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 year ended December 31, 2022, the Company repurchased 714,600 shares under the 2022 Program at an average price of $23.36 per share for an aggregate total price of $16.7 million. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 10. EMPLOYEE BENEFIT PLANS On December 31, 2022, the Company had the following stock-based compensation plans: Employee Stock Purchase Plans 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 can contribute up to 10% of their compensation, as defined in the 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 The Company estimated the fair value of purchase rights granted under the Employee 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 Year Ended December 31, Year Ended December 31, Year Ended December 31, 2022 2021 2020 Expected life (in years) 1.25 1.25 1.25 Volatility 48.73 % 48.00 % 34.25 % Risk-free interest rate 2.75 % 0.11 % 1.43 % Expected dividend — — — Weighted average fair value of purchase rights granted during the period $ 10.00 $ 6.71 $ 4.83 During the year ended December 31, 2022, a total of 182,083 shares were issued under the 2021 Purchase Plan, at a weighted-average purchase price of $16.15 per share. During the years ended December 31, 2022, 2021 and 2020, a total of 5,203, 108,623 and 183,078 shares, respectively, were issued under the 2010 Purchase Plan, at a weighted-average purchase price of $13.40 per share, $9.53 per share and $9.12 per share, respectively. As of December 31, 2022, unrecognized compensation cost related to the 2021 Purchase Plan was $1.1 million. This estimated unrecognized cost is expected to be recognized over a weighted average period of 1.0 year. There was no unrecognized compensation cost related to the 2010 Purchase Plan as of December 31, 2022. As of December 31, 2022, 817,917 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 As of December 31, 2022, 13.3 million shares of common stock were reserved to cover stock-based awards under the 2011 Plan, of which 3.5 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 December 31, 2022. As of December 31, 2022, there were no outstanding awards that had been granted outside of the 2011 or 2001 Plans (collectively, the “Stock Plans”). The Company has elected to use the Black-Scholes-Merton option-pricing model, which incorporates various assumptions including volatility, expected life, interest rate and expected dividend. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options. The expected life of an award is based on historical experience and on the terms and conditions of the stock awards granted to employees. The interest rate assumption is based upon observed Treasury yield curve rates appropriate for the expected life of the Company’s stock options. Year Ended December 31, 2022 2021 2020 Expected life (in years) — — 4.45 Volatility — % — % 40.90 % Risk-free interest rate — % — % 0.60 % Expected dividend — — — Weighted average fair value per share of options granted during the period $ — $ — $ 5.75 No stock options were granted during the years ended December 31, 2022 and 2021. 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 Stock-based compensation expenses related to the Company’s stock plans and employee stock purchase plans were allocated as follows (in thousands): Year Ended December 31, 2022 2021 2020 Costs of revenues $ 2,974 $ 2,563 $ 3,454 Research and development 9,391 5,515 4,800 Selling, general and administrative 7,284 4,853 4,209 Stock-based compensation expenses $ 19,649 $ 12,931 $ 12,463 The stock-based compensation expense in the table above includes immaterial expense or credit adjustments related to cash-settled SARs granted to certain employees. The Company accounted for these awards as liability awards and the amount was included in accrued compensation and related benefits. SARs were fully exercised in the third quarter of 2020. Stock-based compensation capitalized in the capitalized software development costs included in property and equipment, net, was nil, nil and approximately $0.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. Additional information with respect to options under the Plans is as follows: Outstanding Options 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, 2020 745 $ 10.64 Granted (weighted average fair value of $5.75 per share) 24 $ 16.72 Exercised (246) $ 10.46 Canceled (57) $ 11.65 Expired (10) $ 10.06 Outstanding, December 31, 2020 456 $ 10.95 Granted — $ — Exercised (216) $ 8.90 Canceled (10) $ 15.56 Expired (4) $ 6.90 Outstanding, December 31, 2021 226 $ 12.78 Granted — — Exercised (150) 11.27 Canceled (6) 13.52 Expired (2) 8.79 Outstanding, December 31, 2022 68 $ 16.11 4.89 $ 847 Vested and expected to vest, December 31, 2022 68 $ 16.11 4.87 $ 842 Exercisable, December 31, 2022 57 $ 16.07 4.46 $ 706 The aggregate intrinsic value in the table above represents the total intrinsic value based on the Company’s closing stock price of $28.52 as of December 31, 2022, which would have been received by the option holders had all option holders exercised their options as of that date. The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $2.3 million, $3.0 million and $2.2 million, respectively. As of December 31, 2022, there was $0.1 million of total unrecognized compensation cost, net of forfeitures, related to unvested stock options. That cost is expected to be recognized over a weighted average period of 1.0 years. The total fair value of options vested during the year ended December 31, 2022, was $0.1 million. Nonvested shares (restricted stock units) were as follows: Weighted Average Grant Shares Date Fair Value (in thousands) Per Share Nonvested, January 1, 2020 1,887 $ 12.30 Granted 890 $ 21.31 Vested (867) $ 13.25 Forfeited (163) $ 13.23 Nonvested, December 31, 2020 1,747 $ 16.33 Granted 977 $ 19.43 Vested (689) $ 15.23 Forfeited (163) $ 17.63 Nonvested, December 31, 2021 1,872 $ 18.24 Granted 1,210 $ 23.23 Vested (862) $ 17.57 Forfeited (96) $ 19.71 Nonvested, December 31, 2022 2,124 $ 21.29 As of December 31, 2022, there was $32.7 million of total unrecognized compensation cost related to restricted stock units. That cost is expected to be recognized over a weighted average period of 2.6 years. Restricted stock units do not have rights to dividends prior to vesting. 401(k) Savings Plan The Company sponsors a 401(k) Retirement Savings Plan (the “401(k) Plan”) covering substantially all of its US employees. The Company’s 401(k) Plan is a defined contribution plan with a 401(k) salary deferral arrangement qualified under appropriate provisions of the Internal Revenue Code (the “Code”) and applicable state laws. Under the 401(k) Plan, eligible employees may make pre-tax salary or after-tax contributions up to 60% of annual compensation, as defined by the 401(k) Plan. In addition, participants who have reached the age of 50 can elect to withhold additional catch-up contributions subject to the Code and the 401(k) Plan limits. Participants may also contribute amounts representing distributions from other qualified plans (rollovers). The Company may make discretionary matching contributions. In fiscal 2022, the Company matches from 50% to 100% of each employee’s contribution up to a maximum of 4% of the employee’s total eligible earnings. The Company’s matching contributions to the 401(k) Plan aggregated $1.6 million for the year ended December 31, 2022. No discretionary Company contributions have been made to the Plan through December 31, 2021. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 11. INCOME TAXES During the years ended December 31, 2022, 2021 and 2020, loss before income taxes from U.S. operations was ($1.2) million, ($19.7) million and ($18.4) million, respectively, and income before income taxes from foreign operations was $1.7 million, $1.4 million and $0.3 million, respectively. Year Ended December 31, 2022 2021 2020 (In thousands) U.S. Current $ 1,210 $ (67) $ (1,325) Deferred 13 1,318 21,056 Foreign Current 577 237 238 Withholding 2,111 1,591 2,392 Deferred (12) 92 (58) Total income tax expense $ 3,899 $ 3,171 $ 22,303 The income tax expense differs from the amount estimated by applying the statutory federal income tax rate (21% for 2022, 2021 and 2020) for the following reasons (in thousands): Year Ended December 31, 2022 2021 2020 Federal statutory tax expense $ 106 $ (3,847) $ (3,793) State tax provision 949 239 703 Stock compensation expense (898) (499) (602) Tax credits (2,877) (2,676) (3,488) Foreign tax, net 2,195 1,653 2,443 Foreign-derived intangible income (FDII) deduction (830) — — Change in valuation allowance 5,122 8,099 29,034 Unrealized tax benefit reserve changes 136 (151) — Business combination costs — — 356 Tax law changes — — (2,237) Other (4) 353 (113) Total income tax expense $ 3,899 $ 3,171 $ 22,303 As of December 31, 2022, the Company had Federal and California net operating loss carry-forwards (“NOLs”) of approximately $9.9 million and $11.2 million, respectively. Some of the Federal NOLs, acquired as part of a past acquisition, have expirations at the end of this fiscal year and onwards, and the California NOLs begin expiring in 2028 onwards. As of December 31, 2022, the Company had federal and state research and experimental and other tax credit (“R&D credits”) carry-forwards of approximately $21.8 million and $22.8 million, respectively. The federal credits began to expire in 2022, while the California credits have no expiration. The extent to which the federal and state credit carry forwards can be used to offset future tax liabilities, respectively, may be limited, depending on the extent of ownership changes within any three-year period as provided in the Tax Reform Act of 1986 and the California Conformity Act of 1987. The Company assesses its deferred tax assets for recoverability on a regular basis, and where applicable, a valuation allowance is recorded to reduce the total deferred tax asset to an amount that will, more likely than not, be realized in the future. Based on all available evidence, both positive and negative, the Company determined a full valuation allowance was still appropriate for its federal and state net deferred tax assets (DTAs) at December 31, 2022, primarily driven by a cumulative loss incurred over the 12-quarter period ended December 31, 2022 and the likelihood that the Company will not utilize tax attributes before they begin to expire. The valuation allowance was approximately $59.2 million and $51.6 million as of December 31, 2022 and 2021, respectively. The increase in the valuation allowance from December 31, 2021 to December 31, 2022 was primarily driven by a net increase in timing differences relating to deferred revenue, accrued bonus and credits generated in the current year which require a valuation allowance. Management will continue to evaluate the need for a valuation allowance and may change its conclusion in a future period based on any change in facts (e.g. 12-quarter cumulative profit, significant new revenue, and other relevant factors). If the Company concludes that it is more likely than not to utilize some or all of its US DTAs, it will release some or all of its valuation allowance and our tax provision will decrease in the period in which we make such determination. Net deferred tax assets, after the US valuation allowance, was immaterial as of December 31, 2022, and December 31, 2021. The components of the net deferred tax assets are comprised of (in thousands): December 31, 2022 2021 Deferred tax assets Net operating loss carry forward $ 3,861 $ 13,149 Research and development and other credit carry forward 28,046 26,591 Foreign tax credit carry forward 11,764 11,010 Capitalized research and experimental expenses 10,069 — Accruals deductible in different periods 7,713 3,362 Leases 1,623 1,472 Stock-based compensation 1,948 1,442 Total deferred tax assets 65,024 57,026 Less: valuation allowance (59,215) (51,586) Deferred tax assets, net of valuation allowance $ 5,809 $ 5,440 Deferred tax liabilities Property and equipment, net (540) 178 Operating lease right-of-use assets (1,635) (1,472) Intangible assets (3,617) (4,129) Deferred tax liabilities $ (5,792) $ (5,423) Net deferred tax assets $ 17 $ 17 In accordance with the accounting standard relating to accounting for uncertain tax positions, the Company classifies its liabilities for income tax exposures as long-term. The Company includes interest and penalties related to unrecognized tax benefits within the Company’s income tax provision. As of December 31, 2022, 2021 and 2020, the Company had accrued interest and penalties related to unrecognized tax benefits of $0.7 million, $0.7 million, and $0.8 million, respectively. In the years ended December 31, 2022, 2021 and 2020, the Company recognized (reversal of) charges for interest and penalties related to unrecognized tax benefits of ($61,000), ($89,000) and $33,000 respectively, in the Consolidated Statements of Comprehensive Loss. The Company’s total amount of unrecognized tax benefits, excluding interest and penalties, as of December 31, 2022 was $15.1 million, of which $2.0 million, if recognized, would impact the Company’s effective tax rate. As of December 31, 2022, the Company has recorded unrecognized tax benefits of $2.6 million, including interest and penalties of $0.7 million, as long-term income taxes payable in its Consolidated Balance Sheet. The remaining $13.2 million has been recorded within our deferred tax assets, which is subject to a full valuation allowance. The Company does not expect the change in unrecognized tax benefits over the next twelve months to materially impact its results of operations and financial position. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Amount Gross unrecognized tax benefits, January 1, 2020 $ 13,615 Increases in tax positions for current year 1,024 Increases in tax positions for prior years 71 Lapse in statute of limitations (410) Gross unrecognized tax benefits, December 31, 2020 14,300 Increases in tax positions for current year 853 Increases in tax positions for prior years 1 Lapse in statute of limitations (411) Gross unrecognized tax benefits, December 31, 2021 14,743 Increases in tax positions for current year 988 Increases in tax positions for prior years — Lapse in statute of limitations (622) Gross unrecognized tax benefits, December 31, 2022 $ 15,109 The Company does not provide deferred taxes on undistributed earnings of its foreign subsidiaries as it intends to indefinitely reinvest those earnings. 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 years ended 2019 to present and 2018 to present, respectively. In addition, due to NOL 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 currently under income tax examinations in the US or in any other of its major foreign subsidiaries’ jurisdictions. Valuation allowance for deferred tax assets is summarized (in thousands): Balance at Charged to Deductions/ Balance at Beginning Costs and Write-offs of End of of Period Expenses Accounts Period Valuation allowance for deferred tax assets 2022 $ 51,586 $ 7,629 $ — $ 59,215 2021 $ 41,859 $ 9,727 $ — $ 51,586 2020 $ 10,486 $ 31,373 $ — $ 41,859 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | 12. 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): Year Ended December 31, 2022 2021 2020 Numerator: Net loss $ (3,429) $ (21,488) $ (40,363) Denominator: Basic weighted-average shares outstanding 37,309 37,138 34,458 Effect of dilutive options and restricted stock units — — — Diluted weighted-average shares outstanding 37,309 37,138 34,458 Net loss per share, basic and diluted $ (0.09) $ (0.58) $ (1.17) For the years ended December 31, 2022, 2021, and 2020, 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 are 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): Year Ended December 31, 2022 2021 2020 Outstanding options 56 170 332 Non-vested restricted stock units 787 968 921 Employee Stock Purchase Plan 84 33 160 Total 927 1,171 1,413 |
CUSTOMER AND GEOGRAPHIC INFORMA
CUSTOMER AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
CUSTOMER AND GEOGRAPHIC INFORMATION | |
CUSTOMER AND GEOGRAPHIC INFORMATION | 13. 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 Revenues from individual customers that are approximately 10% or more of the Company’s consolidated total revenues are as follows: Year Ended December 31, Customer 2022 2021 2020 A 31 % 17 % * % B 10 % * % * % D * % 10 % * % E * % * % 23 % 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 are as follows: December 31, Customer 2022 2021 A 29 % 29 % B 12 % 15 % C 12 % * % * represents less than 10% Revenues from customers by geographic area based on the location of the customers’ work sites are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Percentage Percentage Percentage Revenues of Revenues Revenues of Revenues Revenues of Revenues United States $ 73,625 50 % $ 50,374 45 % $ 36,723 42 % China 24,494 16 14,267 13 13,776 16 Japan 13,916 9 11,097 10 4,762 5 Rest of the world 36,514 25 35,322 32 32,785 37 Total revenue $ 148,549 100 % $ 111,060 100 % $ 88,046 100 % Long-lived assets, net by geographic area is as follows (in thousands): December 31, 2022 2021 United States (1) $ 44,730 $ 39,158 Rest of the world 1,446 1,545 Total long-lived assets, net $ 46,176 $ 40,703 (1) Includes assets deployed at customer sites which could be outside the U.S. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | 14. 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 December 31, 2022 and the basis for that measurement (in thousands): Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Identical Observable Significant December 31, Assets Inputs Unobservable Assets 2022 (Level 1) (Level 2) Inputs (Level 3) Cash equivalents Money market mutual funds $ 75,738 $ 75,738 $ — $ — U.S. Government securities (1) 1,990 1,990 — — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 19,557 19,557 — — Total $ 97,285 $ 97,285 $ — $ — The following table represents the Company’s assets measured at fair value on a recurring basis as of December 31, 2021 and the basis for that measurement (in thousands): 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) The carrying amount of the Company’s investments in U.S. Government securities approximate 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 at December 31, 2022 and 2021. From time to time, the Company enters into foreign currency forward contracts to reduce the exposure to foreign currency exchange rate fluctuations on certain foreign currency denominated monetary assets and liabilities, primarily on third-party accounts payables and intercompany balances. The primary objective of the Company’s hedging program is to reduce volatility of earnings related to foreign currency exchange rate fluctuations. The counterparty to these foreign currency forward contracts is a financial institution that the Company believes is creditworthy, and therefore, the Company believes the credit risk of counterparty nonperformance is not significant. These foreign currency forward contracts are not designated for hedge accounting treatment. Therefore, the change in fair value of these contracts is recorded into earnings as a component of other expense (income), net, and offsets the change in fair value of the foreign currency denominated assets and liabilities, which is also recorded in other expense (income), net in the Company’s Consolidated Statements of Comprehensive Loss. There was no realized gain or loss |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2022 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 15. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) The following is a summary of the Company’s quarterly consolidated results of operations (unaudited) for the fiscal years ended December 31, 2022 and 2021. Year Ended December 31, 2022 Q1 Q2 Q3 Q4 (In thousands, except for per share amounts) Total revenues $ 33,498 $ 34,668 $ 39,860 $ 40,523 Costs of revenues $ 11,529 $ 12,042 $ 12,545 $ 11,791 Net income (loss) $ (4,150) $ (1,147) $ 1,385 $ 483 Net income (loss) per share: Basic and diluted $ (0.11) $ (0.03) $ 0.04 $ 0.01 Year Ended December 31, 2021 Q1 Q2 Q3 Q4 (In thousands, except for per share amounts) Total revenues $ 24,200 $ 27,419 $ 29,555 $ 29,886 Costs of revenues $ 10,663 $ 10,785 $ 11,070 $ 11,675 Net loss $ (7,597) $ (4,484) $ (2,407) $ (7,000) Net loss per share: Basic and diluted $ (0.21) $ (0.12) $ (0.06) $ (0.19) |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation, Policy | Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after the elimination of all significant intercompany balances and transactions. |
Use of Estimates, Policy | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) 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, fair values of assets acquired and liabilities assumed in business combinations, 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 has impacted the operations and purchasing decisions of companies worldwide. As of the date of issuance of the 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 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. |
Concentration of Credit Risk, Policy | Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. The Company maintains its cash and cash equivalents and short-term investments with what it considers high credit quality financial institutions. The Company primarily sells its products and services to companies in Asia, Europe and North America within the semiconductor industry. As of December 31, 2022, three customers accounted for 53% of the Company’s gross accounts receivable and two customers accounted for 41% of the Company’s total revenues for 2022. As of December 31, 2021, two customers accounted for 44% of the Company’s gross accounts receivable and two customers accounted for 27% of the Company’s revenues for 2021. See Note 13 for further details. The Company does not require collateral or other security to support accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition. The Company maintains allowances for potential credit losses. The allowance for doubtful accounts, which was based on management’s best estimates, could be adjusted in the near term from current estimates depending on actual experience. Such adjustments could be material to the consolidated financial statements. |
Cash and Cash Equivalents, and Short-term Investments, Policy | Cash and Cash Equivalents, and Short-term Investments The Company considers all highly liquid investments with an original maturity of 90 days or less or investments with a remaining maturity of 90 days or less at the purchase to be cash equivalents and investments with original maturities greater than 90 days but less than one year to be short-term investments. The Company classifies securities with readily determinable market values as available-for-sale. Short-term investments include available-for-sale securities and are carried at estimated fair value, with the unrealized gains and losses deemed temporary in nature, net of tax, reported as a component of accumulated other comprehensive loss in stockholders’ equity. Realized gains and losses and declines in value determined to be other than temporary are based on the specific identification method and are included as a component of other expense, net in the Consolidated Statements of Comprehensive Loss. The Company periodically reviews short-term investments for impairment. In the event a decline in value is determined to be other-than-temporary, an impairment loss is recognized. When determining if a decline in value is other-than-temporary, the Company takes into consideration the current market conditions, the duration and severity of and the reason for the decline, and the likelihood that it would need to sell the security prior to a recovery of par value. As of December 31, 2022, and 2021, short-term investments consisted solely of U.S. Treasury bills. The cost of these securities approximated fair value and there was no material gross realized or unrealized gains or losses as of December 31, 2022 and 2021. There were also no impairments in the investments’ value in the year ended December 31, 2022 and 2021. Refer to Note 14, “Fair Value Measurements” for further discussion on the Company’s investments. Restricted cash of $3.5 million noted in the Consolidated Statement of Cash Flows for the year ended December 31, 2020 pertains to the amount specifically designated to pay for the Holdback amount related to the Company’s acquisition of Cimetrix Incorporated (“Cimetrix”). Refer to Note 4, “Business Combination” for further discussion about the payment of Holdback Amount in fiscal 2021. |
Accounts Receivable, Policy | 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 are determined on an individual contract basis. Unbilled accounts receivable, included in accounts receivable, totaled $13.5 million and $11.8 million as of December 31, 2022 and 2021, respectively. Unbilled accounts receivable that are not expected to be billed and collected during the succeeding 12-month period are recorded in other non-current assets and totaled $0.8 million and $1.3 million as of December 31, 2022 and 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. Accounts receivable reserves are summarized below (in thousands): Deductions/ Balance at Charged Write-offs Balance at Beginning Charged to Against of Accounts End of of Period Expense (1) Revenue (1) Receivable Period 2022 $ 890 $ — $ — $ — $ 890 2021 $ 963 $ — $ — $ (73) $ 890 2020 $ 213 $ — $ 800 $ (50) $ 963 (1) Additions to the accounts receivable reserve for doubtful accounts are charged to bad debt expense. Additions to the receivable reserve for billing adjustments are charged against revenue. |
Property and Equipment, Policy | Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives (in years) of the related asset as follows: Computer equipment 3 Software 3 Furniture, fixtures, and equipment 5-10 Laboratory and test equipment 3-10 Leasehold improvements Shorter of estimated useful life or term of lease |
Intangible Assets, Policy | Intangible Assets Intangible assets consist of acquired technology, certain contract rights, customer relationships, patents, trademarks and trade names. These intangible assets may be acquired through business combinations or direct purchases. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from one ten |
Goodwill, Policy | Goodwill The Company records goodwill when the purchase consideration of an acquisition exceeds the fair value of the net tangible and identified intangible assets as of the date of acquisition. The Company has one operating segment and one operating unit. The Company performs a qualitative analysis when testing a reporting unit’s goodwill for impairment. The Company performs an annual impairment assessment of goodwill during the fourth quarter of each calendar year or more frequently, if required to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If the carrying amount exceeds its fair value, an impairment loss would be recognized equal to the amount of excess, limited to the amount of total goodwill. |
Leases, Policy | Leases The Company has operating leases for administrative and sales offices, research and development laboratory and clean room. The Company recognizes long-term operating lease rights and commitments as operating lease right-of-use assets (ROU), operating lease liabilities and operating lease liabilities, non-current, respectively, in the Consolidated Balance Sheets. The Company elected to not separate lease and non-lease components for all of its leases. The Company determines if an arrangement is, or contains, a lease at inception. Operating lease right-of-use assets, and operating lease liabilities are initially recorded based on the present value of lease payments over the lease term. Lease terms include the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. The decision to include these options involves consideration of our overall future business plans and other relevant business economic factors that may affect our business. Since the determination of the lease term requires an application of judgment, lease terms that differ in reality from our initial judgment may potentially have a material impact on the Company’s Consolidated Balance Sheets. In addition, the Company’s leases do not provide an implicit rate. In determining the present value of the Company’s expected lease payments, the discount rate is calculated using the Company’s incremental borrowing rate determined based on the information available, which requires additional judgment. |
Software Development Costs, Policy | Software Development Costs Internally developed software is software developed to meet our internal needs to provide certain services to the customers. The Company’s capitalized software development costs consist of internal compensation related costs and external direct costs incurred during the application development stage and are amortized over their useful lives, generally five six |
Cost of Revenues, Policy | Cost of Revenues Costs of revenues consist primarily of costs incurred to provide and support our services, costs recognized in connection with licensing our software, IT and facilities-related costs and amortization of acquired technology. Service costs include material, personnel-related costs including compensation, employee benefits, bonus and stock-based compensation expense, subcontractor costs, overhead costs, travel, and allocated facilities-related costs. Software license costs consist of costs associated with cloud-delivery related expenses and licensing third-party software used by us in providing services to the Company’s customers in solution engagements or sold in conjunction with the Company’s software products. |
Research and Development Expenses, Policy | Research and Development Expenses Research and development expenses consist primarily of personnel-related costs including compensation, employee benefits, bonus and stock-based compensation expense, outside development services, travel, third-party cloud-services related costs, IT and facilities cost allocations to support product development activities. Research and development expenses are charged to operations as incurred. |
Selling, General and Administrative Expenses, Policy | Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of personnel-related costs including compensation, employee benefits, bonus, commission and stock-based compensation expense for sales, marketing and general and administrative personnel, legal, tax and accounting services, marketing communications expenses, third-party cloud-services related costs, travel, IT and facilities cost allocations. |
Stock-Based Compensation, Policy | Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method, which requires the Company to measure stock-based compensation based on the grant-date fair value of the awards and recognize the compensation expense over the requisite service period. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The fair value of the Company’s restricted stock units (“RSUs”) is equal to the market value of the Company’s common stock on the date of the grant. These awards are subject to time-based vesting which generally occurs over a period of four years The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton option-pricing model, which incorporates various assumptions including volatility, expected life and interest rates. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options. The expected life is based on historical experience and on the terms and conditions of the stock options granted. The interest rate assumption is based upon observed Treasury yield curve rates appropriate for the expected life of the Company’s stock options. |
Income Taxes, Policy | Income Taxes The Company’s provision for income tax comprises its current tax liability and change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effect of future changes in tax laws or rates are not anticipated. Valuation allowances are provided to reduce deferred tax assets to an amount that in management’s judgment is more likely than not to be recoverable against future taxable income. No U.S. taxes are provided on earnings of non-U.S. subsidiaries, to the extent such earnings are deemed to be permanently invested. The Company’s income tax calculations are based on application of applicable U.S. federal and state or foreign tax laws. The Company’s tax filings, however, are subject to audit by the respective tax authorities. Accordingly, the Company recognizes tax liabilities based upon its estimate of whether, and the extent to which, additional taxes will be due when such estimates are more-likely-than-not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. To the extent the final tax liabilities are different from the amounts originally accrued, the increases or decreases are recorded as income tax expense or benefit in the Consolidated Statements of Comprehensive Loss. |
Net Income (Loss) Per Share, Policy | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income by weighted average number of common shares outstanding for the period (excluding outstanding stock options and shares subject to repurchase). Diluted net income (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. Dilutive potential common shares consist of incremental common shares issuable upon exercise of stock options, upon vesting of RSUs, contingently issuable shares for all periods and assumed issuance of shares under the Company’s employee stock purchase plan. No dilutive potential common shares are included in the computation of any diluted per share amount when a loss from continuing operations was reported by the Company. |
Foreign Currency Translation, Policy | Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the local currency for the respective subsidiary. The assets and liabilities are translated at the period-end exchange rate, and statements of comprehensive loss are translated at the average exchange rate during the year. Gains and losses resulting from foreign currency translations are included as a component of other comprehensive loss. Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Comprehensive Loss. |
Derivative Financial Instruments, Policy | Derivative Financial Instruments The Company operates internationally and is exposed to potentially adverse movements in foreign currency exchange rates. From time to time, the Company enters into foreign currency forward contracts to reduce the exposure to foreign currency exchange rate fluctuations on certain foreign currency denominated monetary assets and liabilities. The Company does not use foreign currency contracts for speculative or trading purposes. The Company records these forward contracts at fair value. The counterparty to these foreign currency forward contracts is a financial institution that the Company believes is creditworthy, and therefore, we believe the credit risk of counterparty non-performance is not significant. These foreign currency forward contracts are not designated for hedge accounting treatment. Therefore, the change in fair value of these derivatives is recorded into earnings as a component of interest and other income (expense), net and offsets the change in fair value of the foreign currency denominated monetary assets and liabilities, which are also recorded in interest and other income (expense), net. The duration of these forward contracts is usually three months. |
Business Combinations, Policy | Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values at the date of the business combination. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, estimated replacement costs and future expected cash flows from acquired customers, acquired technology, acquired patents, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects the Company’s amortization expense, as acquired finite-lived intangible assets are amortized over the useful life, whereas any indefinite lived intangible assets, including in-process research and development, and goodwill, are not amortized but tested annually for impairment. During the measurement period, which is not to exceed one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Litigation, Policy | Litigation From time to time, the Company is subject to various claims and legal proceedings that arise in the ordinary course of business. The Company accrues for losses related to litigation when a potential loss is probable and the loss can be reasonably estimated in accordance with Financial Accounting Standards Board (FASB) requirements. See Note 8, “Commitments and Contingencies”. |
Accounting Standards Not Yet Effective, Policy | Accounting Standards Not Yet Effective 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. The Company will adopt this standard effective the first quarter of 2023. 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. 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. The Company is in the process of evaluating the impact of Topic 326 on its consolidated financial statements and the related disclosure but does not believe it will have a material effect. 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 consolidated financial statements. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Allowance for Doubtful Accounts [Table Text Block] | Accounts receivable reserves are summarized below (in thousands): Deductions/ Balance at Charged Write-offs Balance at Beginning Charged to Against of Accounts End of of Period Expense (1) Revenue (1) Receivable Period 2022 $ 890 $ — $ — $ — $ 890 2021 $ 963 $ — $ — $ (73) $ 890 2020 $ 213 $ — $ 800 $ (50) $ 963 (1) Additions to the accounts receivable reserve for doubtful accounts are charged to bad debt expense. Additions to the receivable reserve for billing adjustments are charged against revenue. |
Property Plant and Equipment Estimated Useful Lives [Table Text Block] | Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives (in years) of the related asset as follows: Computer equipment 3 Software 3 Furniture, fixtures, and equipment 5-10 Laboratory and test equipment 3-10 Leasehold improvements Shorter of estimated useful life or term of lease |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE | |
Schedule of Disaggregation of Revenue | Year Ended December 31, 2022 2021 2020 Over time 69 % 65 % 63 % Point-in-time 31 % 35 % 37 % Total 100 % 100 % 100 % |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes Tables | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following summarizes the final allocation of the purchase price for this acquisition, as of the date of the acquisition, is as follows (in thousands, except amortization period): Amortization Amount Period (Years) Allocation of Purchase Price: Assets Fair value of tangible assets (including cash of $5,900) $ 8,298 Fair value of intangible assets: Developed technology 12,541 8 In-process R&D 3,635 N/A Customer relationships 1,967 10 Noncompetition agreements 848 3 Tradenames and trademarks 808 10 Goodwill 11,830 N/A Total assets acquired $ 39,927 Liabilities Accounts payable and accrued expenses $ 1,447 Deferred revenue 375 Operating lease liabilities 132 Deferred tax liabilities 439 Total liabilities assumed $ 2,393 Total purchase price allocation $ 37,534 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property, Plant and Equipment | Property and equipment consist of (in thousands): December 31, 2022 2021 Computer equipment $ 11,853 $ 11,924 Software 5,395 5,419 Furniture, fixtures and equipment 2,484 2,506 Leasehold improvements 6,467 6,272 Laboratory and other equipment 4,431 3,981 Test equipment 28,403 24,452 Construction-in-progress 27,336 22,158 86,369 76,712 Less: Accumulated depreciation and amortization (46,195) (41,417) Total $ 40,174 $ 35,295 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of Goodwill | As of December 31, 2022 and 2021, the carrying amount of goodwill was $14.1 million. The following table summarizes goodwill transaction for the years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ 14,123 $ 15,774 $ 2,293 Addition — — 13,481 Measurement period acquisition adjustment (1) — (1,651) — Balance at end of year $ 14,123 $ 14,123 $ 15,774 (1) Goodwill adjustment was recorded within the measurement period with a corresponding reduction in the Holdback Amount and reduction to net deferred tax liabilities. See Note 4, “Business Combination”. |
Schedule of Finite-Lived Intangible Assets, Net | Intangible assets balance was $18.1 million and $21.2 million as of December 31, 2022 and 2021, respectively. Intangible assets as of December 31, 2022 and 2021, consist of the following (in thousands): December 31, 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 $ (6,684) $ 2,723 $ 9,407 $ (6,041) $ 3,366 Developed technology 4 - 9 33,635 (19,647) 13,988 33,635 (17,250) 16,385 Tradename and trademarks 2 - 10 1,598 (918) 680 1,598 (812) 786 Patent 6 - 10 2,100 (1,696) 404 1,800 (1,640) 160 Noncompetition agreements 3 848 (588) 260 848 (306) 542 Total $ 47,588 $ (29,533) $ 18,055 $ 47,288 $ (26,049) $ 21,239 |
Schedule of Finite-lived Intangible Assets Amortization Expense | The weighted average amortization period for acquired identifiable intangible assets was 5.9 years as of December 31, 2022. The following table summarizes intangible assets amortization expense in the Consolidated Statements of Comprehensive Loss (in thousands): Year Ended December 31, 2022 2021 2020 Amortization of acquired technology included under Costs of Revenues $ 2,214 $ 2,079 $ 705 Amortization of acquired intangible assets presented separately under Costs and Expenses 1,270 1,255 741 Total amortization of acquired intangible assets $ 3,484 $ 3,334 $ 1,446 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The Company expects annual amortization of acquired identifiable intangible assets to be as follows (in thousands): Year Ending December 31, Amount 2023 $ 3,491 2024 3,093 2025 2,928 2026 2,759 2027 2,606 2028 and thereafter 3,178 Total future amortization expense $ 18,055 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Schedule of Lease Expenses | In 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 accompanying Consolidated Statement of Comprehensive Loss for the year ended December 31, 2022. Lease expense was comprised of the following (in thousands): Year Ended December 31, 2022 2021 2020 Operating lease expense (1) $ 1,457 $ 1,860 $ 1,828 Short-term lease and variable lease expense (2) 1,032 822 545 Total lease expense $ 2,489 $ 2,682 $ 2,373 (1) Net of gain recognized upon lease termination of $0.1 million in the year ended December 31, 2022. (2) Leases with an initial term of 12 months or less are not recorded on the 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 consolidated balance sheets information related to leases was as follows: December 31, 2022 2021 Weighted average remaining lease term under operating ROU leases (in years) 5.3 5.7 Weighted average discount rate for operating lease liabilities 4.87 % 5.25 % |
Schedule of Operating Lease Liabilities and Maturities | Maturity of operating lease liabilities as of December 31, 2022, are as follows (in thousands): Year Ending December 31, Amount (1) 2023 $ 1,570 2024 1,633 2025 1,547 2026 1,357 2027 1,294 2028 and thereafter 991 Total future minimum lease payments $ 8,392 Less: Interest (2) (1,048) Present value of future minimum lease payments under operating lease liabilities (3) $ 7,344 (1) As of December 31, 2022, the total operating lease liability includes $0.9 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 $1.4 million as of December 31, 2022. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of Share-Based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | The Company estimated the fair value of purchase rights granted under the Employee 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 Year Ended December 31, Year Ended December 31, Year Ended December 31, 2022 2021 2020 Expected life (in years) 1.25 1.25 1.25 Volatility 48.73 % 48.00 % 34.25 % Risk-free interest rate 2.75 % 0.11 % 1.43 % Expected dividend — — — Weighted average fair value of purchase rights granted during the period $ 10.00 $ 6.71 $ 4.83 |
Schedule of Share-based Payment Awards, Stock Options, Valuation Assumptions | The Company has elected to use the Black-Scholes-Merton option-pricing model, which incorporates various assumptions including volatility, expected life, interest rate and expected dividend. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options. The expected life of an award is based on historical experience and on the terms and conditions of the stock awards granted to employees. The interest rate assumption is based upon observed Treasury yield curve rates appropriate for the expected life of the Company’s stock options. Year Ended December 31, 2022 2021 2020 Expected life (in years) — — 4.45 Volatility — % — % 40.90 % Risk-free interest rate — % — % 0.60 % Expected dividend — — — Weighted average fair value per share of options granted during the period $ — $ — $ 5.75 No stock options were granted during the years ended December 31, 2022 and 2021. |
Schedule of Share-based Payment Arrangement, Expensed and Capitalized Amounts | Stock-based compensation expenses related to the Company’s stock plans and employee stock purchase plans were allocated as follows (in thousands): Year Ended December 31, 2022 2021 2020 Costs of revenues $ 2,974 $ 2,563 $ 3,454 Research and development 9,391 5,515 4,800 Selling, general and administrative 7,284 4,853 4,209 Stock-based compensation expenses $ 19,649 $ 12,931 $ 12,463 |
Schedule of Share-based Payment Arrangement, Options Activity - Additional Information | Additional information with respect to options under the Plans is as follows: Outstanding Options 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, 2020 745 $ 10.64 Granted (weighted average fair value of $5.75 per share) 24 $ 16.72 Exercised (246) $ 10.46 Canceled (57) $ 11.65 Expired (10) $ 10.06 Outstanding, December 31, 2020 456 $ 10.95 Granted — $ — Exercised (216) $ 8.90 Canceled (10) $ 15.56 Expired (4) $ 6.90 Outstanding, December 31, 2021 226 $ 12.78 Granted — — Exercised (150) 11.27 Canceled (6) 13.52 Expired (2) 8.79 Outstanding, December 31, 2022 68 $ 16.11 4.89 $ 847 Vested and expected to vest, December 31, 2022 68 $ 16.11 4.87 $ 842 Exercisable, December 31, 2022 57 $ 16.07 4.46 $ 706 |
Schedule of Share-based Payment Arrangement, Restricted Stock Unit Activity | Nonvested shares (restricted stock units) were as follows: Weighted Average Grant Shares Date Fair Value (in thousands) Per Share Nonvested, January 1, 2020 1,887 $ 12.30 Granted 890 $ 21.31 Vested (867) $ 13.25 Forfeited (163) $ 13.23 Nonvested, December 31, 2020 1,747 $ 16.33 Granted 977 $ 19.43 Vested (689) $ 15.23 Forfeited (163) $ 17.63 Nonvested, December 31, 2021 1,872 $ 18.24 Granted 1,210 $ 23.23 Vested (862) $ 17.57 Forfeited (96) $ 19.71 Nonvested, December 31, 2022 2,124 $ 21.29 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of Components of Income Tax Expense (Benefit) | Year Ended December 31, 2022 2021 2020 (In thousands) U.S. Current $ 1,210 $ (67) $ (1,325) Deferred 13 1,318 21,056 Foreign Current 577 237 238 Withholding 2,111 1,591 2,392 Deferred (12) 92 (58) Total income tax expense $ 3,899 $ 3,171 $ 22,303 |
Schedule of Effective Income Tax Rate Reconciliation | The income tax expense differs from the amount estimated by applying the statutory federal income tax rate (21% for 2022, 2021 and 2020) for the following reasons (in thousands): Year Ended December 31, 2022 2021 2020 Federal statutory tax expense $ 106 $ (3,847) $ (3,793) State tax provision 949 239 703 Stock compensation expense (898) (499) (602) Tax credits (2,877) (2,676) (3,488) Foreign tax, net 2,195 1,653 2,443 Foreign-derived intangible income (FDII) deduction (830) — — Change in valuation allowance 5,122 8,099 29,034 Unrealized tax benefit reserve changes 136 (151) — Business combination costs — — 356 Tax law changes — — (2,237) Other (4) 353 (113) Total income tax expense $ 3,899 $ 3,171 $ 22,303 |
Schedule of Deferred Tax Assets and Liabilities | The components of the net deferred tax assets are comprised of (in thousands): December 31, 2022 2021 Deferred tax assets Net operating loss carry forward $ 3,861 $ 13,149 Research and development and other credit carry forward 28,046 26,591 Foreign tax credit carry forward 11,764 11,010 Capitalized research and experimental expenses 10,069 — Accruals deductible in different periods 7,713 3,362 Leases 1,623 1,472 Stock-based compensation 1,948 1,442 Total deferred tax assets 65,024 57,026 Less: valuation allowance (59,215) (51,586) Deferred tax assets, net of valuation allowance $ 5,809 $ 5,440 Deferred tax liabilities Property and equipment, net (540) 178 Operating lease right-of-use assets (1,635) (1,472) Intangible assets (3,617) (4,129) Deferred tax liabilities $ (5,792) $ (5,423) Net deferred tax assets $ 17 $ 17 |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Amount Gross unrecognized tax benefits, January 1, 2020 $ 13,615 Increases in tax positions for current year 1,024 Increases in tax positions for prior years 71 Lapse in statute of limitations (410) Gross unrecognized tax benefits, December 31, 2020 14,300 Increases in tax positions for current year 853 Increases in tax positions for prior years 1 Lapse in statute of limitations (411) Gross unrecognized tax benefits, December 31, 2021 14,743 Increases in tax positions for current year 988 Increases in tax positions for prior years — Lapse in statute of limitations (622) Gross unrecognized tax benefits, December 31, 2022 $ 15,109 |
Summary of Valuation Allowance | Valuation allowance for deferred tax assets is summarized (in thousands): Balance at Charged to Deductions/ Balance at Beginning Costs and Write-offs of End of of Period Expenses Accounts Period Valuation allowance for deferred tax assets 2022 $ 51,586 $ 7,629 $ — $ 59,215 2021 $ 41,859 $ 9,727 $ — $ 51,586 2020 $ 10,486 $ 31,373 $ — $ 41,859 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
Schedule of Earnings Per Share, Basic and Diluted | 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): Year Ended December 31, 2022 2021 2020 Numerator: Net loss $ (3,429) $ (21,488) $ (40,363) Denominator: Basic weighted-average shares outstanding 37,309 37,138 34,458 Effect of dilutive options and restricted stock units — — — Diluted weighted-average shares outstanding 37,309 37,138 34,458 Net loss per share, basic and diluted $ (0.09) $ (0.58) $ (1.17) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table sets forth potential shares of common stock that are 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): Year Ended December 31, 2022 2021 2020 Outstanding options 56 170 332 Non-vested restricted stock units 787 968 921 Employee Stock Purchase Plan 84 33 160 Total 927 1,171 1,413 |
CUSTOMER AND GEOGRAPHIC INFOR_2
CUSTOMER AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
CUSTOMER AND GEOGRAPHIC INFORMATION | |
Schedule of Revenue by Major Customers by Reporting Segments | Revenues from individual customers that are approximately 10% or more of the Company’s consolidated total revenues are as follows: Year Ended December 31, Customer 2022 2021 2020 A 31 % 17 % * % B 10 % * % * % D * % 10 % * % E * % * % 23 % 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 are as follows: December 31, Customer 2022 2021 A 29 % 29 % B 12 % 15 % C 12 % * % * 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 (in thousands): Year Ended December 31, 2022 2021 2020 Percentage Percentage Percentage Revenues of Revenues Revenues of Revenues Revenues of Revenues United States $ 73,625 50 % $ 50,374 45 % $ 36,723 42 % China 24,494 16 14,267 13 13,776 16 Japan 13,916 9 11,097 10 4,762 5 Rest of the world 36,514 25 35,322 32 32,785 37 Total revenue $ 148,549 100 % $ 111,060 100 % $ 88,046 100 % |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country | Long-lived assets, net by geographic area is as follows (in thousands): December 31, 2022 2021 United States (1) $ 44,730 $ 39,158 Rest of the world 1,446 1,545 Total long-lived assets, net $ 46,176 $ 40,703 (1) Includes assets deployed at customer sites which could be outside the U.S. |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FINANCIAL INSTRUMENTS | |
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 December 31, 2022 and the basis for that measurement (in thousands): Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Identical Observable Significant December 31, Assets Inputs Unobservable Assets 2022 (Level 1) (Level 2) Inputs (Level 3) Cash equivalents Money market mutual funds $ 75,738 $ 75,738 $ — $ — U.S. Government securities (1) 1,990 1,990 — — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 19,557 19,557 — — Total $ 97,285 $ 97,285 $ — $ — The following table represents the Company’s assets measured at fair value on a recurring basis as of December 31, 2021 and the basis for that measurement (in thousands): 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 $ — $ — |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of selected quarterly financial data (unaudited) | Year Ended December 31, 2022 Q1 Q2 Q3 Q4 (In thousands, except for per share amounts) Total revenues $ 33,498 $ 34,668 $ 39,860 $ 40,523 Costs of revenues $ 11,529 $ 12,042 $ 12,545 $ 11,791 Net income (loss) $ (4,150) $ (1,147) $ 1,385 $ 483 Net income (loss) per share: Basic and diluted $ (0.11) $ (0.03) $ 0.04 $ 0.01 Year Ended December 31, 2021 Q1 Q2 Q3 Q4 (In thousands, except for per share amounts) Total revenues $ 24,200 $ 27,419 $ 29,555 $ 29,886 Costs of revenues $ 10,663 $ 10,785 $ 11,070 $ 11,675 Net loss $ (7,597) $ (4,484) $ (2,407) $ (7,000) Net loss per share: Basic and diluted $ (0.21) $ (0.12) $ (0.06) $ (0.19) |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Gain (Loss) on Investments, Total | $ 0 | ||
Other than Temporary Impairment Losses, Investments, Total | 0 | ||
Restricted Cash, Total | $ 3,500 | ||
Unbilled Receivables, Current | 13,500 | $ 11,800 | |
Contract with Customer, Asset, Unbilled Receivables, Not Billable, Amount Expected to be Collected after Next Twelve Months | $ 800 | $ 1,300 | |
Finite-Lived Intangible Asset, Useful Life (Minimum in Years) | 1 year | ||
Finite-Lived Intangible Asset, Useful Life (Maximum in Years) | 10 years | ||
Number of Operating Segments | 1 | ||
Number of Reporting Units | 1 | ||
Capitalized Computer Software, Useful Life (Minimum in Years) | 5 years | ||
Capitalized Computer Software, Useful Life (Maximum in Years) | 6 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 4 years | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Number of Major Customers | 3 | 2 | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Two Customers [Member] | |||
Concentration Risk, Percentage | 53% | 44% | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | |||
Number of Major Customers | 2 | 2 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Two Customers [Member] | |||
Concentration Risk, Percentage | 41% | ||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customer [Member] | |||
Concentration Risk, Percentage | 27% |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Doubtful Accounts (Details) - SEC Schedule, 12-09, Allowance, Credit Loss [Member] - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Balance at Beginning of Period | $ 890 | $ 963 | $ 213 | |
Charged Against Revenue | [1] | 800 | ||
Deductions/ Write-offs of Accounts Receivable | (73) | (50) | ||
Balance at End of Period | $ 890 | $ 890 | $ 963 | |
[1] Additions to the accounts receivable reserve for doubtful accounts are charged to bad debt expense. Additions to the receivable reserve for billing adjustments are charged against revenue. |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer Equipment [Member] | |
Property, plant and equipment, useful life (Year) | 3 years |
Software and Software Development Costs [Member] | |
Property, plant and equipment, useful life (Year) | 3 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, plant and equipment, useful life (Year) | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, plant and equipment, useful life (Year) | 10 years |
Laboratory and Test Equipment [Member] | Minimum [Member] | |
Property, plant and equipment, useful life (Year) | 3 years |
Laboratory and Test Equipment [Member] | Maximum [Member] | |
Property, plant and equipment, useful life (Year) | 10 years |
Leaseholds and Leasehold Improvements [Member] | |
Leasehold improvements useful life | Shorter of estimated useful life or term of lease |
REVENUE (Details)
REVENUE (Details) | 12 Months Ended | 24 Months Ended | |||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2022 USD ($) | |
Number of revenue sources | item | 2 | ||||
Capitalized Contract Cost, Impairment Loss | $ 0 | ||||
Contract with Customer, Liability, Revenue Recognized | $ 24,900,000 | $ 16,900,000 | $ 10,700,000 | ||
Revenue, Remaining Performance Obligation, Amount | $ 277,700,000 | 277,700,000 | |||
Contract with Customer, Performance Obligation Satisfied in Previous Period | 400,000 | (400,000) | 100,000 | ||
Capitalized Contract Cost, Amortization | 1,550,000 | 674,000 | $ 549,000 | ||
Prepaid Expenses and Other Current Assets [Member] | |||||
Contract with Customer, Asset, after Allowance for Credit Loss, Current, Total | 3,300,000 | 400,000 | 3,300,000 | ||
Capitalized Contract Cost, Net, Total | 1,700,000 | 600,000 | 1,700,000 | ||
Other Noncurrent Assets [Member] | |||||
Capitalized Contract Cost, Net, Total | $ 2,100,000 | $ 2,100,000 | $ 2,100,000 | ||
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | |||||
Concentration Risk, Percentage | 100% | 100% | 100% | ||
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | Non-US [Member] | |||||
Concentration Risk, Percentage | 50% | 55% | 58% |
REVENUE - Additional informatio
REVENUE - Additional information (Details) - Software License and Related Services Agreement [Member] - Advantest America, Inc. [Member] | Dec. 31, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Minimum [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Maximum [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 3 years |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Percent of revenues | 100% | 100% | 100% |
Transferred over Time [Member] | |||
Percent of revenues | 69% | 65% | 63% |
Transferred at Point in Time [Member] | |||
Percent of revenues | 31% | 35% | 37% |
STRATEGIC PARTNERSHIP AGREEME_2
STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | ||||
Oct. 31, 2022 | Jul. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Proceeds from Issuance of Common Stock | $ 65,078,000 | ||||
Deferred revenues - current portion | $ 26,019,000 | $ 23,691,000 | |||
Strategic Partnership for Joint Development and Sales Technology Solutions | |||||
Stock Issued During Period, Shares, New Issues (in shares) | 3,306,924 | ||||
Proceeds from Issuance of Common Stock | $ 65,200,000 | ||||
Amendment #1 to Software License & Related Services Agreement | |||||
Commitments from Advantest | $ 50,000,000 | ||||
Commercial Agreement With Advantest | |||||
Related party receivables | 300,000 | 0 | |||
Contract with Customer, Liability, Total | 7,100,000 | 6,800,000 | |||
Material costs and expenses incurred | 0 | 0 | |||
Commercial Agreement With Advantest | Analytics | |||||
Advantest analytics revenue | $ 10,300,000 | $ 10,600,000 | $ 3,400,000 |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 01, 2020 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Payments to Acquire Businesses, Net of Cash Acquired, Total | $ 3,054 | $ 28,580 | |||
Increase (decrease) in goodwill due to the acquisition purchase price adjustment | $ 0 | (1,651) | 0 | ||
Cimetrix Incorporated [Member] | |||||
Business Combination, Consideration Transferred, Total | $ 37,500 | ||||
Payments to Acquire Businesses, Net of Cash Acquired, Total | 31,600 | ||||
Business Combination, Holdback Amount | 3,500 | ||||
Business Combination, Acquired Receivables, Gross Contractual Amount | 1,600 | ||||
Business Combination, Estimated Cash Payout to Certain Employees | $ 1,400 | ||||
Goodwill after purchase price adjustment | 3,100 | ||||
Increase (decrease) in deferred tax liabilities | $ (1,300) | ||||
Increase (decrease) in goodwill due to the acquisition purchase price adjustment | (1,700) | ||||
Business Combination, Acquisition Related Costs | $ 1,600 | ||||
Cimetrix Incorporated [Member] | Accrued Compensation and Related Benefits [Member] | |||||
Business Combination, Accrued Estimated Cash Payout to Certain Employees | $ 500 | $ 200 | $ 500 |
BUSINESS COMBINATION - Fair Val
BUSINESS COMBINATION - Fair Values of Assets Acquired and Liabilities Assumed and the Related Useful Lives (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-lived intangible assets, amortization period (Year) | 1 year | |||
Goodwill | $ 14,123 | $ 14,123 | $ 15,774 | $ 2,293 |
Cimetrix Incorporated [Member] | ||||
Fair value of tangible assets (including cash of $5,900) | 8,298 | |||
Goodwill | 11,830 | |||
Total assets acquired | 39,927 | |||
Accounts payable and accrued expenses | 1,447 | |||
Deferred revenue | 375 | |||
Operating lease liabilities | 132 | |||
Deferred tax liabilities | 439 | |||
Total liabilities assumed | 2,393 | |||
Total purchase price allocation | 37,534 | |||
Cimetrix Incorporated [Member] | In Process Research and Development [Member] | ||||
Fair value of indefinite-lived intangible assets | 3,635 | |||
Developed Technology Rights [Member] | Cimetrix Incorporated [Member] | ||||
Fair value of cash | 5,900 | |||
Fair value of finite-lived intangible assets | $ 12,541 | |||
Finite-lived intangible assets, amortization period (Year) | 8 years | |||
Customer Relationships [Member] | Cimetrix Incorporated [Member] | ||||
Fair value of finite-lived intangible assets | $ 1,967 | |||
Finite-lived intangible assets, amortization period (Year) | 10 years | |||
Noncompete Agreements [Member] | Cimetrix Incorporated [Member] | ||||
Fair value of finite-lived intangible assets | $ 848 | |||
Finite-lived intangible assets, amortization period (Year) | 3 years | |||
Trademarks and Trade Names [Member] | Cimetrix Incorporated [Member] | ||||
Fair value of finite-lived intangible assets | $ 808 | |||
Finite-lived intangible assets, amortization period (Year) | 10 years |
BUSINESS COMBINATION - Fair V_2
BUSINESS COMBINATION - Fair Values of Assets Acquired and Liabilities Assumed and the Related Useful Lives Other (Details) $ in Millions | Dec. 31, 2021 USD ($) |
Developed Technology Rights [Member] | Cimetrix Incorporated [Member] | |
Fair value of cash | $ 5.9 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Write-down in value of property and equipment | $ 3,183 | ||
DFI Test Equipment [Member] | |||
Construction in Progress, Gross | $ 22,200 | 20,000 | |
Depreciation, Depletion and Amortization, Nonproduction, Total | $ 5,500 | 6,200 | $ 6,700 |
Write-down in value of property and equipment | $ 3,200 |
PROPERTY AND EQUIPMENT - Proper
PROPERTY AND EQUIPMENT - Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property and equipment, gross | $ 86,369 | $ 76,712 |
Less: accumulated depreciation and amortization | (46,195) | (41,417) |
Total | 40,174 | 35,295 |
Computer Equipment [Member] | ||
Property and equipment, gross | 11,853 | 11,924 |
Software and Software Development Costs [Member] | ||
Property and equipment, gross | 5,395 | 5,419 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | 2,484 | 2,506 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 6,467 | 6,272 |
Laboratory and Test Equipment [Member] | ||
Property and equipment, gross | 4,431 | 3,981 |
Test Equipment [Member] | ||
Property and equipment, gross | 28,403 | 24,452 |
Construction in Progress [Member] | ||
Property and equipment, gross | $ 27,336 | $ 22,158 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill | $ 14,123,000 | $ 14,123,000 | $ 15,774,000 | $ 2,293,000 |
Net Carrying Amount, Total | $ 18,055,000 | 21,239,000 | ||
Finite-Lived Intangible Assets, Remaining Amortization Period (Year) | 5 years 10 months 24 days | |||
Amortization of Intangible Assets, Total | $ 3,484,000 | 3,334,000 | 1,446,000 | |
Impairment of Intangible Assets, Finite-lived | 0 | 0 | 0 | |
Costs of Revenues | ||||
Amortization of Intangible Assets, Total | 2,214,000 | 2,079,000 | 705,000 | |
Costs and Expenses | ||||
Amortization of Intangible Assets, Total | $ 1,270,000 | $ 1,255,000 | $ 741,000 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Change in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
GOODWILL AND INTANGIBLE ASSETS | |||
Balance at beginning of period | $ 14,123 | $ 15,774 | $ 2,293 |
Addition | 13,481 | ||
Measurement period acquisition adjustment (1) | 0 | (1,651) | 0 |
Balance at end of period | $ 14,123 | $ 14,123 | $ 15,774 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Amortization | $ (29,533) | $ (26,049) |
Net Carrying Amount | 18,055 | |
Gross Carrying Amount, Total | 47,588 | 47,288 |
Net Carrying Amount, Total | 18,055 | 21,239 |
Customer Relationships [Member] | ||
Gross Carrying Amount | 9,407 | 9,407 |
Accumulated Amortization | (6,684) | (6,041) |
Net Carrying Amount | $ 2,723 | 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 | (19,647) | (17,250) |
Net Carrying Amount | $ 13,988 | 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 | (918) | (812) |
Net Carrying Amount | $ 680 | 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 | $ 2,100 | 1,800 |
Accumulated Amortization | (1,696) | (1,640) |
Net Carrying Amount | $ 404 | 160 |
Patents [Member] | Minimum [Member] | ||
Amortization Period (Year) | 6 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 | (588) | (306) |
Net Carrying Amount | $ 260 | $ 542 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Annual Amortization of Identifiable Intangible Assets (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
GOODWILL AND INTANGIBLE ASSETS | |
2023 | $ 3,491 |
2024 | 3,093 |
2025 | 2,928 |
2026 | 2,759 |
2027 | 2,606 |
2028 and thereafter | 3,178 |
Total future amortization expense | $ 18,055 |
LEASES - Other (Details)
LEASES - Other (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | ||
Operating Lease, Liability, Amount Related to Extension of Lease Term | $ 900 | |
Operating Lease, Liability, Current | 1,412 | $ 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 |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | |||
Operating lease expense | $ 1,457 | $ 1,860 | $ 1,828 |
Short-term lease and variable lease expense | 1,032 | 822 | 545 |
Total lease expense | $ 2,489 | $ 2,682 | 2,373 |
Weighted average remaining lease term under operating ROU leases (in years) (Year) | 5 years 3 months 18 days | 5 years 8 months 12 days | |
Weighted average discount rate for operating lease liabilities | 4.87% | 5.25% | |
Operating lease ROU assets obtained (in thousands) | $ 2,502 | $ 161 | $ 286 |
LEASES - Maturity of Operating
LEASES - Maturity of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
LEASES | |
2023 | $ 1,570 |
2024 | 1,633 |
2025 | 1,547 |
2026 | 1,357 |
2027 | 1,294 |
2028 and thereafter | 991 |
Total future minimum lease payments | 8,392 |
Less: Interest (2) | (1,048) |
Present value of future minimum lease payments under operating lease liabilities (3) | $ 7,344 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Future Lease payments | $ 8,392 |
Term of Product Warranty | 90 days |
Purchase Obligation, Total | $ 30,400 |
Threshold payment period | 24 months |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 24 Months Ended | ||||||
Apr. 11, 2022 | Jul. 30, 2020 | Jun. 04, 2020 | May 28, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | |
Proceeds from Issuance of Common Stock | $ 65,078 | |||||||
Treasury Stock, Value, Acquired, Cost Method | $ 22,471 | $ 4,523 | ||||||
The 2018 Stock Repurchase Program [Member] | ||||||||
Treasury Stock, Shares, Acquired (in shares) | 786,000 | |||||||
Treasury Stock Acquired, Average Cost Per Share (in dollars per share) | $ 12.43 | |||||||
Treasury Stock, Value, Acquired, Cost Method | $ 9,800 | |||||||
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 | |||||||
Strategic Partnership for Joint Development and Sales Technology Solutions | ||||||||
Stock Issued During Period, Shares, New Issues (in shares) | 3,306,924 | |||||||
Shares Issued, Price Per Share (in dollars per share) | $ 19.7085 | |||||||
Proceeds from Issuance of Common Stock | $ 65,200 | |||||||
Payments of Stock Issuance Costs | $ 100 |
EMPLOYEE BENEFIT PLANS - Other
EMPLOYEE BENEFIT PLANS - Other (Details) | 1 Months Ended | 12 Months Ended | ||||
Jun. 15, 2021 | Jul. 31, 2001 item | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | Dec. 31, 2019 shares | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ | $ 100,000 | |||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 1 year | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year) | 4 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Cumulative Forfeitures of Plan (in shares) | 6,000 | 10,000 | 57,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance (in shares) | 68,000 | 226,000 | 456,000 | 745,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 0 | 24,000 | ||||
Share-based Payment Arrangement, Amount Capitalized | $ | $ 190,000 | |||||
Share Price (in dollars per share) | $ / shares | $ 28.52 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ | $ 2,300,000 | $ 3,000,000 | 2,200,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ | 100,000 | |||||
Software Development [Member] | ||||||
Share-based Payment Arrangement, Amount Capitalized | $ | 0 | $ 0 | $ 200,000 | |||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ | $ 32,700,000 | |||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 2 years 7 months 6 days | |||||
401(k) Savings Plan | ||||||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ | $ 1,600,000 | |||||
401(k) Savings Plan | Minimum [Member] | ||||||
Defined Contribution Plan, Percentage of Employee Gross Pay Match | 50% | |||||
401(k) Savings Plan | Maximum [Member] | ||||||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 60% | |||||
Defined Contribution Plan, Percentage of Employee Gross Pay Match | 100% | |||||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 4% | |||||
The 2010 Purchase Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate | 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 | 108,623 | 183,078 | |||
Employee Stock Purchase Plan Weighted Average Purchase Price of Shares Purchased (in dollars per share) | $ / shares | $ 13.40 | $ 9.53 | $ 9.12 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ | $ 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) | 182,083 | |||||
Employee Stock Purchase Plan Weighted Average Purchase Price of Shares Purchased (in dollars per share) | $ / shares | $ 16.15 | |||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total | $ | $ 1,100,000 | |||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year) | 1 year | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year) | 10 years | |||||
Twenty Eleven Stock Incentive Plan [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 | |||||
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 12,800,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 3,500,000 | |||||
Number of additional common stock capital shares reserved for future issuance | 13,300,000 | |||||
Twenty Twenty-One Employee Stock Purchase Plan [Member] | ||||||
Number Of ESPP Shares Available For Future Issuance (in shares) | 817,917 | |||||
Shares Previously Issued Under the 2001 Plan [Member] | ||||||
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 3,500,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Cumulative Forfeitures of Plan (in shares) | 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 |
EMPLOYEE BENEFIT PLANS - Stock
EMPLOYEE BENEFIT PLANS - Stock Options, Valuation Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Twenty Eleven Stock Incentive Plan [Member] | |||
Expected life (in years) (Year) | 4 years 5 months 12 days | ||
Volatility | 40.90% | ||
Risk-free interest rate | 0.60% | ||
Weighted average fair value per share of options granted during the period (in dollars per share) | $ 5.75 | ||
The 2021 Purchase Plan [Member] | |||
Expected life (in years) (Year) | 1 year 3 months | 1 year 3 months | |
Volatility | 48.73% | 48% | |
Risk-free interest rate | 2.75% | 0.11% | |
Expected dividend | 0% | 0% | |
Weighted average fair value of purchase rights granted during the period (in dollars per share) | $ 10 | $ 6.71 | |
The 2010 Purchase Plan [Member] | |||
Expected life (in years) (Year) | 1 year 3 months | ||
Volatility | 34.25% | ||
Risk-free interest rate | 1.43% | ||
Expected dividend | 0% | ||
Weighted average fair value of purchase rights granted during the period (in dollars per share) | $ 4.83 |
EMPLOYEE BENEFIT PLANS - Alloca
EMPLOYEE BENEFIT PLANS - Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation expenses | $ 19,649 | $ 12,931 | $ 12,463 |
Costs of Revenues | |||
Stock-based compensation expenses | 2,974 | 2,563 | 3,454 |
Research and Development Expense [Member] | |||
Stock-based compensation expenses | 9,391 | 5,515 | 4,800 |
Selling, General and Administrative Expenses [Member] | |||
Stock-based compensation expenses | $ 7,284 | $ 4,853 | $ 4,209 |
EMPLOYEE BENEFIT PLANS - Stoc_2
EMPLOYEE BENEFIT PLANS - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
EMPLOYEE BENEFIT PLANS | |||
Outstanding, beginning balance (in shares) | 226,000 | 456,000 | 745,000 |
Granted (in shares) | 0 | 24,000 | |
Exercised (in shares) | (150,000) | (216,000) | (246,000) |
Canceled (in shares) | (6,000) | (10,000) | (57,000) |
Expired (in shares) | (2,000) | (4,000) | (10,000) |
Outstanding, ending balance (in shares) | 68,000 | 226,000 | 456,000 |
Vested and expected to vest (in shares) | 68,000 | ||
Exercisable (in shares) | 57,000 | ||
Outstanding, weighted average exercise price, beginning balance (in dollars per share) | $ 12.78 | $ 10.95 | $ 10.64 |
Granted, weighted average exercise price (in dollars per share) | 16.72 | ||
Exercised, weighted average exercise price (in dollars per share) | 11.27 | 8.90 | 10.46 |
Canceled, weighted average exercise price (in dollars per share) | 13.52 | 15.56 | 11.65 |
Expired, weighted average exercise price (in dollars per share) | 8.79 | 6.90 | 10.06 |
Outstanding, weighted average exercise price, ending balance (in dollars per share) | 16.11 | $ 12.78 | $ 10.95 |
Vested and expected to vest, weighted average exercise price (in dollars per share) | 16.11 | ||
Exercisable, weighted average exercise price (in dollars per share) | $ 16.07 | ||
Outstanding, weighted average remaining contractual (Year) | 4 years 10 months 20 days | ||
Vested and expected to vest, weighted average remaining contractual term (Year) | 4 years 10 months 13 days | ||
Exercisable, weighted average remaining contractual term (Year) | 4 years 5 months 15 days | ||
Outstanding, aggregate intrinsic value | $ 847 | ||
Vested and expected to vest, aggregate intrinsic value | 842 | ||
Exercisable, aggregate intrinsic value | $ 706 |
EMPLOYEE BENEFIT PLANS - Nonves
EMPLOYEE BENEFIT PLANS - Nonvested Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Nonvested, Opening Balance (in shares) | 1,872 | 1,747 | 1,887 |
Granted (in shares) | 1,210 | 977 | 890 |
Vested (in shares) | (862) | (689) | (867) |
Forfeited (in shares) | (96) | (163) | (163) |
Nonvested, Ending Balance (in shares) | 2,124 | 1,872 | 1,747 |
Nonvested, weighted average grant date fair value (in dollars per share) | $ 18.24 | $ 16.33 | $ 12.30 |
Granted, weighted average grant date fair value (in dollars per share) | 23.23 | 19.43 | 21.31 |
Vested, weighted average grant date fair value (in dollars per share) | 17.57 | 15.23 | 13.25 |
Forfeited, weighted average grant date fair value (in dollars per share) | 19.71 | 17.63 | 13.23 |
Nonvested, weighted average grant date fair value (in dollars per share) | $ 21.29 | $ 18.24 | $ 16.33 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INCOME TAXES | ||||
Income Tax Expense (Benefit), Total | $ 3,899 | $ 3,171 | $ 22,303 | |
Unrecognized Tax Benefits, Ending Balance | 15,109 | 14,743 | 14,300 | $ 13,615 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 2,000 | |||
Unrecognized tax benefits including income tax penalties and interest accrued in long term liabilities | 2,600 | |||
Unrecognized tax benefits related to income tax penalties and interest accrued in long-term liabilities | 700 | 700 | $ 800 | |
Unrecognized tax benefits, penalties and interest | 700 | |||
Deferred Tax Assets, Valuation Allowance, Total | $ 59,215 | $ 51,586 |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Total income tax expense | $ 3,899 | $ 3,171 | $ 22,303 |
U.S. | |||
Current | 1,210 | (67) | (1,325) |
Deferred | 13 | 1,318 | 21,056 |
Foreign | |||
Current | 577 | 237 | 238 |
Withholding | 2,111 | 1,591 | 2,392 |
Deferred | $ (12) | $ 92 | $ (58) |
INCOME TAXES - Income Tax Recon
INCOME TAXES - Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
Federal statutory tax provision | $ 106 | $ (3,847) | $ (3,793) |
State tax provision | 949 | 239 | 703 |
Stock compensation expense | (898) | (499) | (602) |
Tax credits | (2,877) | (2,676) | (3,488) |
Foreign tax, net | 2,195 | 1,653 | 2,443 |
Foreign-derived intangible income (FDII) deduction | (830) | ||
Change in valuation allowance | 5,122 | 8,099 | 29,034 |
Unrealized tax benefit reserve changes | 136 | (151) | |
Business combination costs | 356 | ||
Tax law changes | (2,237) | ||
Other | (4) | 353 | (113) |
Total income tax expense | $ 3,899 | $ 3,171 | $ 22,303 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carry forward | $ 3,861 | $ 13,149 |
Research and development and other credit carry forward | 28,046 | 26,591 |
Foreign tax credit carry forward | 11,764 | 11,010 |
Capitalized research and experimental expenses | 10,069 | 0 |
Accruals deductible in different periods | 7,713 | 3,362 |
Leases | 1,623 | 1,472 |
Stock-based compensation | 1,948 | 1,442 |
Total deferred tax assets | 65,024 | 57,026 |
Less: valuation allowance | (59,215) | (51,586) |
Deferred tax assets, net of valuation allowance | 5,809 | 5,440 |
Deferred tax liabilities | ||
Property and equipment, net | (540) | 178 |
Operating lease right-of-use assets | (1,635) | (1,472) |
Intangible assets | (3,617) | (4,129) |
Deferred tax liabilities | (5,792) | (5,423) |
Net deferred tax assets | $ 17 | $ 17 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
Gross unrecognized tax benefits, Beginning Balance | $ 14,743 | $ 14,300 | $ 13,615 |
Increases in tax positions for current year | 988 | 853 | 1,024 |
Increases in tax positions for prior years | 0 | 1 | 71 |
Lapse in statute of limitations | (622) | (411) | (410) |
Gross unrecognized tax benefits, Ending Balance | $ 15,109 | $ 14,743 | $ 14,300 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | 24 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2019 | |
Income (Loss) from Continuing Operations before Income Taxes, Domestic | $ 1,200,000 | $ 19,700,000 | $ (18,400,000) | ||
Income (Loss) from Continuing Operations before Income Taxes, Foreign | 1,700,000 | 1,400,000 | 300,000 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% | ||||
Deferred Tax Assets, Valuation Allowance, Total | 59,215,000 | 51,586,000 | $ 59,215,000 | ||
Deferred Tax Assets, Net, Total | 17,000 | 17,000 | 17,000 | ||
Unrecognized tax benefits related to income tax penalties and interest accrued in long-term liabilities | 700,000 | 700,000 | 800,000 | 700,000 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense (Reversal) | (61,000) | (89,000) | 33,000 | ||
Unrecognized Tax Benefits, Ending Balance | 15,109,000 | 14,743,000 | $ 14,300,000 | 15,109,000 | $ 13,615,000 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 2,000,000 | 2,000,000 | |||
Unrecognized tax benefits including income tax penalties and interest accrued in long term liabilities | 2,600,000 | 2,600,000 | |||
Unrecognized Tax Benefits In Deferred Tax Asset Subject To Full Valuation Allowance | 13,200,000 | 13,200,000 | |||
California R&D Tax Credits [Member] | |||||
Deferred Tax Assets, Valuation Allowance, Total | 59,200,000 | $ 51,600,000 | 59,200,000 | ||
U.S. | |||||
Tax Credit Carryforward, Amount | 21,800,000 | 21,800,000 | |||
U.S. | Internal Revenue Service (IRS) [Member] | |||||
Operating Loss Carryforwards, Total | 9,900,000 | 9,900,000 | |||
U.S. | California Franchise Tax Board [Member] | |||||
Operating Loss Carryforwards, Total | 11,200,000 | 11,200,000 | |||
State and Local | |||||
Tax Credit Carryforward, Amount | $ 22,800,000 | $ 22,800,000 |
INCOME TAXES - Valuation Allowa
INCOME TAXES - Valuation Allowance of Deferred Tax Assets (Details) - SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Balance at Beginning of Period | $ 51,586 | $ 41,859 | $ 10,486 |
Charged to Expense | 7,629 | 9,727 | 31,373 |
Balance at End of Period | $ 59,215 | $ 51,586 | $ 41,859 |
NET LOSS PER SHARE - Calculatio
NET LOSS PER SHARE - Calculation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
NET LOSS PER SHARE | |||||||||||
Net loss | $ 483 | $ 1,385 | $ (1,147) | $ (4,150) | $ (7,000) | $ (2,407) | $ (4,484) | $ (7,597) | $ (3,429) | $ (21,488) | $ (40,363) |
Basic weighted-average shares outstanding (in shares) | 37,309 | 37,138 | 34,458 | ||||||||
Diluted weighted-average shares outstanding (in shares) | 37,309 | 37,138 | 34,458 | ||||||||
Basic (in dollars per share) | $ 0.01 | $ 0.04 | $ (0.03) | $ (0.11) | $ (0.19) | $ (0.06) | $ (0.12) | $ (0.21) | $ (0.09) | $ (0.58) | $ (1.17) |
Diluted (in dollars per share) | $ 0.01 | $ 0.04 | $ (0.03) | $ (0.11) | $ (0.19) | $ (0.06) | $ (0.12) | $ (0.21) | $ (0.09) | $ (0.58) | $ (1.17) |
NET LOSS PER SHARE - Anti-dilut
NET LOSS PER SHARE - Anti-dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Anti-dilutive securities (in shares) | 927 | 1,171 | 1,413 |
Share-based Payment Arrangement, Option [Member] | |||
Anti-dilutive securities (in shares) | 56 | 170 | 332 |
Restricted Stock Units (RSUs) [Member] | |||
Anti-dilutive securities (in shares) | 787 | 968 | 921 |
Employee Stock Purchase Plan [Member] | |||
Anti-dilutive securities (in shares) | 84 | 33 | 160 |
CUSTOMER AND GEOGRAPHIC INFOR_3
CUSTOMER AND GEOGRAPHIC INFORMATION - Other (Details) | 12 Months Ended |
Dec. 31, 2022 | |
CUSTOMER AND GEOGRAPHIC INFORMATION | |
Number of Operating Segments | 1 |
Number of Reportable Segments | 1 |
CUSTOMER AND GEOGRAPHIC INFOR_4
CUSTOMER AND GEOGRAPHIC INFORMATION - Revenue Percentage by Major Customers (Details) - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Benchmark [Member] | Customer A [Member] | |||
Concentration risk | 31% | 17% | |
Revenue Benchmark [Member] | Customer B [Member] | |||
Concentration risk | 10% | ||
Revenue Benchmark [Member] | Customer D [Member] | |||
Concentration risk | 10% | ||
Revenue Benchmark [Member] | Customer E [Member] | |||
Concentration risk | 23% | ||
Accounts Receivable [Member] | Customer A [Member] | |||
Concentration risk | 29% | 29% | |
Accounts Receivable [Member] | Customer B [Member] | |||
Concentration risk | 12% | 15% | |
Accounts Receivable [Member] | Customer C [Member] | |||
Concentration risk | 12% |
CUSTOMER AND GEOGRAPHIC INFOR_5
CUSTOMER AND GEOGRAPHIC INFORMATION - Revenues by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | $ 40,523 | $ 39,860 | $ 34,668 | $ 33,498 | $ 29,886 | $ 29,555 | $ 27,419 | $ 24,200 | $ 148,549 | $ 111,060 | $ 88,046 |
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | |||||||||||
Revenues | $ 148,549 | $ 111,060 | $ 88,046 | ||||||||
Concentration risk | 100% | 100% | 100% | ||||||||
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | UNITED STATES | |||||||||||
Revenues | $ 73,625 | $ 50,374 | $ 36,723 | ||||||||
Concentration risk | 50% | 45% | 42% | ||||||||
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | CHINA | |||||||||||
Revenues | $ 24,494 | $ 14,267 | $ 13,776 | ||||||||
Concentration risk | 16% | 13% | 16% | ||||||||
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | JAPAN | |||||||||||
Revenues | $ 13,916 | $ 11,097 | $ 4,762 | ||||||||
Concentration risk | 9% | 10% | 5% | ||||||||
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | Rest of the World [Member] | |||||||||||
Revenues | $ 36,514 | $ 35,322 | $ 32,785 | ||||||||
Concentration risk | 25% | 32% | 37% |
CUSTOMER AND GEOGRAPHIC INFOR_6
CUSTOMER AND GEOGRAPHIC INFORMATION - Long-lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Long-lived assets, net | $ 46,176 | $ 40,703 |
UNITED STATES | ||
Long-lived assets, net | 44,730 | 39,158 |
Rest of the World [Member] | ||
Long-lived assets, net | $ 1,446 | $ 1,545 |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Value, Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Total | $ 97,285 | $ 125,016 | |
Fair Value, Inputs, Level 1 [Member] | |||
Total | 97,285 | 125,016 | |
Money Market Funds [Member] | |||
Money market mutual funds | 75,738 | 12,474 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Money market mutual funds | 75,738 | 12,474 | |
US Government Corporations and Agencies Securities [Member] | |||
Money market mutual funds | 1,990 | ||
Short-term investments | 19,557 | [1] | 112,542 |
US Government Corporations and Agencies Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Money market mutual funds | 1,990 | ||
Short-term investments | $ 19,557 | [1] | $ 112,542 |
[1] The carrying amount of the Company’s investments in U.S. Government securities approximate 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 at December 31, 2022 and 2021. |
FINANCIAL INSTRUMENTS - Other (
FINANCIAL INSTRUMENTS - Other (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2020 USD ($) | |
Foreign Exchange Contract [Member] | ||
Derivative, Gain on Derivative | $ 0 | |
Derivative, Loss on Derivative | $ 0 | $ 200,000 |
Forward Contracts [Member] | ||
Derivative, Number of Instruments Held | item | 0 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||
Revenues | $ 40,523 | $ 39,860 | $ 34,668 | $ 33,498 | $ 29,886 | $ 29,555 | $ 27,419 | $ 24,200 | $ 148,549 | $ 111,060 | $ 88,046 |
Costs of revenues | 11,791 | 12,545 | 12,042 | 11,529 | 11,675 | 11,070 | 10,785 | 10,663 | 47,907 | 44,193 | 36,765 |
Net loss | $ 483 | $ 1,385 | $ (1,147) | $ (4,150) | $ (7,000) | $ (2,407) | $ (4,484) | $ (7,597) | $ (3,429) | $ (21,488) | $ (40,363) |
Basic (in dollars per share) | $ 0.01 | $ 0.04 | $ (0.03) | $ (0.11) | $ (0.19) | $ (0.06) | $ (0.12) | $ (0.21) | $ (0.09) | $ (0.58) | $ (1.17) |
Diluted (in dollars per share) | $ 0.01 | $ 0.04 | $ (0.03) | $ (0.11) | $ (0.19) | $ (0.06) | $ (0.12) | $ (0.21) | $ (0.09) | $ (0.58) | $ (1.17) |