Earnings call transcript Q2 2023

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Operator

Good day, everyone, and welcome to the PDF Solutions Inc. Conference Call to Discuss its Financial Results for the Second Quarter and Year-End 2023 Conference Call Ending Friday, June 30, 2023. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded.

yet has copy website been not press the at have it release, posted you received of a corresponding www.pdf.com. If to PDF's

the its are the of and PDF's materially. performance, of statements and will actual results made Some demand results rates for differ that future financial this PDF's including forward-looking, in conference growth statements solutions. regarding be course could

assumes for the XX report SEC obligation refer update and to disclosures section fiscal XX-K through on information conference this no of should Factors similar pages stated are entitled risks December You on filings. to ended based available annual XX PDF's Form and PDF statements XX, on them. the year PDF Risk to in call The XXXX, forward-looking subsequent in today.

introduce Now Officer. Chief PDF's Kibarian, I'd Adnan and go PDF's Financial and Officer, Chief ahead. to John like Executive Raza, Mr. please Kibarian, President

John Kibarian

today's joining call. us you Thank on for

earnings If report our you've website and first of has section the where not the please our each management been for already go Investors posted. to seen press release quarter,

very quarter of by similar our customers. analytics our Revenue remained first was strong continued as end-to-end second The our adoption quarter. we experienced to

some the of quarter Before detail, Adnan the the year. market comments financials about remainder from I for and discusses observations have the our perceptions in second our of the

improved as strength for in design in a share analytics company With process included and chip continued customer team deploying to quarter. cloud Significant XD analytics internal game first customers QX in and contracts fabs, complex the the shipments in in magnitude versus QX chip was for closed the quarter Bookings an quarter improved. similar second front deploying deploying that Asia, packaging. a control end

shipments, modest in symmetric for license runtime equipment started QX versus bookings Finally, as China, to our customers' improvements in increase. particularly shows QX connectivity

earnings. results business most and our Overall, backlog typically deliver continue to strong strong revenue given recognized, in we of is where our model, revenue and ratably

we with booked, and in that customer business strength business underway in with the our experienced number it quarter We the significant the the results customers. demonstrates interest pleased we Beyond are model. have of our a were pilots as analytics of business

Subsequent quarter, an acquisition Analytics. Lantern second of Machinery to we announced the

past been the manufacturers the ability some year-and-a-half, manufacturing. apply to battery with analytics evaluating platform ion Over we've lithium battery PDF's to

Today, lithium ion years under XX million be over is over next $XXX battery $XXX forecasted to manufacturing revenue, in is billion. the and

So variability quality there's a of and controlling to be product of going improve increase is to in tremendous yields Moreover, capacity. becoming manufacturing interest.

combined collect that yields our improve process quality. there Through images. and recognize be to to This data, product and need is the data, equipment with manufacturers, sensitive to work a used we has when with potential upstream

image are Analytics as revenue images with assembly early IC battery developed customers, company. particularly an but This for capability Machinery Analytics ML some well, have processing. applications customers have the Machinery was pre-revenue collected. our a for most also part many where processes had may pipeline for small

develop We will IC products and pipeline team. join ML excited applications manufacturing. to we for them in as incorporate their our We're the have battery

customer now by The customer. onsite fab, our evaluation an about our XXX anticipate machine. machines the eProbe we new evaluation has another we eProbe has our and different eProbe shipping and lengthy for end in with previously their DFI at to Turning a After running XXX year of talked facility. two qualified the a

We program. with the are we are DFI excited making about progress very the

control processes yields. develop to backside ramp believe like XD be and our power, inspection As customers we increasingly will and electrical important gate-all-around

term cautious XXXX, our we to are in discuss of me the Midway short let view. of perspective our environment turn of our the year. view and the half more Now, second into

the year. in will game second reduce which reporting share half volumes, Our in China the are game wafer of share customers decreased

rate we conservative of equipment on lower We anticipate initially suppliers, outside but China, as equipment anticipated, continued in increases improvement shipments. in increase particularly remain licenses, than the a Cimetrix of runtime

saw expected in the some Exensio, of for we Finally, bookings customers QX, the delay year. to second half

we in those remain about cautious Although some July, others. the of already of timing bookings closed

we approaching mid-teens. growth year revenue for Early this year, the anticipated

be integrated expectation overall Our is the but double-digit to in be expected growth will by it cloud now year-over-year ramp. partially analytics low The exceed year-over-year decline growth will is the percentage. growth, offset in yield

seeing is devices which supply being term increased are drivers our amplified of world the include the term that environment While the for smart around electrification customers, various AI, of the are embracing. in These ML, of place. energy the of increased and economy, and by are many customers the semiconductors long chains short diversification the use drivers we the in unsettled, investments remain government cloud, our

our a our result, business is on of growth. and strong remain pipeline success continued and As customers' confident

We like have will PDF at we would that, October to everyone on the the also Marriott. Conference to XX XXth, the Santa Clara remind Users Meeting

will combine which latest Day, on XX. of and with gives other. days analysts will chance the a customers, one partners, with see an As to from to PDF we and This each pre-COVID those from our be strategic our stockholders capabilities October event, Analyst learn

have to Devices. year applying Siemens, and the Other SVP about and years. Analog to the turning they Logic four enabled has ever have of and executives nodes assembled. Intel AI/ML Global this transform include is which is speakers Advantest, them technology speakers Technology in five Foundries, out to the from manufacturing of be Development, deliver transformation list strongest will made, co-GM talk Sanjay theme SAP, R&D. The The we Nagarajan,

expect also speak We event. executives and engineers will to commit additional at the

foundries, share companies, passion that drives all and analytics ML fabless, engineers who for and a R&D Our in manufacturing. and attendees usually include IDMs, OSATs, system executives companies equipment from

hiatus forward after the this event looking multi-year COVID. year We a after to are

I want to first employees thank efforts all half their and contractors for the year. PDF of the during

the call to results. review perspective provide over and the turn will our who Adnan, I his on Now will Adnan? financials

Adnan Raza

good everyone. all Thank you, John. Good And afternoon, you speak with today. to again

progress results business. second of the date up financial quarter review of and on the you the bring to pleased are to We the to

also today. has with the SEC XX-Q Form been filed Our

Please to on provided reconciliation GAAP basis note the on in our of the is website. we materials will that discussed a be and today's financials financial a results all call non-GAAP in

Financial comparable after XX% the results a coming continued QX last Revenue million, quarter. up quarter the total to versus XXXX solid first of quarter be year. second $XX.X for was strong,

Analytics runtime On came $X.X and offset revenue growth Exensio this was basis, analytics a was the The up total million. XX% to and in revenue $XX.X $XX.X QX XX% million our year leading growth quarter-over-quarter in up versus XXXX edge this of our licenses. in in Cimetrix by revenue quarter. quarter in revenues from analytics decline million of products, of second represented

from at million, $X.X from primarily share due XX% revenue of year's Asian second customers. contribution integrated level higher yield volumes the to increased last During was from our some game ramp quarter, of up quarter, comparable

in pleased strategic various close the involved conversations to very the we're strategic working major and have our We're around partners, we currently engagements world. ongoing, with we're initiatives and semiconductor the bookings customers, deal the of with sizes governmental

to factors electronics of the global towards for analytics a platform data manufacturing goal evidence All go-to be these and ecosystems. progress the semiconductor

was year is than million, end Our which ending of ending prior QX backlog at QX of $XXX.X backlog. our XX% higher this the year

for margins XX% for meaningfully QX gross the of XX% reported of versus up prior year. We quarter,

customer may of some spend for quarter-over-quarter to our and basis, margin gross greater before, engagements on remain grow a the as we growth modulate We recurring the people target metric cloud committed this we non-GAAP model XX%. variations and we support As have see our revenues. on our said to of spend than

continue sales as million to the we business the down pre was initiatives. spending to take and side, leverage new resources our and $X.X our operating prior versus shift On expense quarter R&D advantage of spend our

Our side, invested and a in SG&A slightly have while and faster down driven G&A into SG&A, sales the million prior can well marketing, on advantage up ensuring increased versus marketing by both our that have the year. as pre-sales take Overall, quarter revenue scale as was of efforts. quarter, percentage QX prior we prior as within of $X.X versus we primarily G&A of brought and our spend

a the reported a same but of than we profit ago. the quarter level, higher to year similar $X.XX $X.XX EPS, for meaningfully for last For quarter quarter,

pleased $X.XX about compared swing quarter in year. of the last positive are We EPS same our year-over-year to

compared cash quarter quarter year increase with million the at driven of at a million by quarter change million quarter, accounts We prior ended quarter versus timing the $XXX an the the in $XXX of $XXX in with receivables end same equivalents of cash the billings. and primarily ago of the and our end due to prior the to

majority Since have collected of our through today, the already receivables. the quarter-end billed the end of quarter we

analytics During the out of team to acquisition Machinery expand cash approximately of battery we excellent platform that with quarter, $X.X EV to of mentioned, based Poland close our million an Analytics the manufacturing. for John and also Canada spent

available. as our balance of investments believe We well the consider acquisitions positions continue strength become strategic in to to that sheet as they

John a year-over-year grow as lower level the we on expect our basis for guided. look mid-teens of year we previously level we at mentioned, approaching double-digit instead Like percentage had forward, to this revenue

careful We're on of the being the three year. key rest of based observations

of own customers face challenges slow some their as game Asian year share and is from to decreased. the for our expected the First, down volumes rest demand economic they and

facing regions, coupled while from licenses, other muted up are quarter, with prior Cimetrix from our a of Second, increased still versus regions. runtimes some demand demand mix

John's bookings clear, given the consistent is industry of less comments, Third, the timing dynamics. with

digit bookings our for with size is become our approaching customers many high-single of strategically important or double-digit the millions we As partners, dollars. and the growing, of

the taking Overall, government products and look – our various factors, by and demand with can term, we is emboldened relevance sales for the hold the in the all at pipeline strategic that our when platform, strategic three which of we constituents we longer initiatives. analytics customers, our feel partners, two see

Exensio in the unique each we and PDF. and for capabilities analytics conductivity Cimetrix of the strong leading edge products, that, future our the platform, other, growth products. the three about We're elements excited our ahead that believe also have complement our collection platform, analytic data We

call the commence over the that, session. to operator I'll Operator? turn to With the question-and-answer

Operator

Instructions]. [Operator

come will question from first Securities. Abernethy from Our Blair Rosenblatt

Blair Abernethy

give I what needs terms take Machinery, take to sort it of ask Just and of about timelines? a in the of thinking what are you guess, this – package to to maybe market be done of acquisition product sense wanted Lantern and to you just this

John Kibarian

that them feel scanning on on we manufacturers with coming to had test wanted images. SEM A electron working optical good images lot pipeline from acquisition with We optical microscope very that. use did was we of about R&D been images. We some the is pilot The work to the of with. early in images, before done

to pilots six package development expect and We about begin then of this customers. months appropriately, with

So, early with pilots there. and seeing we'd XXXX, follow begin start from revenue customers probably expect to in to

Blair Abernethy

or CapEx $X required see be to much will the looks have going get any sense up? in paid your to the R&D money that from million? or Will how Do you under you it how's XX-Q, we It just like market? investment show to of

Adnan Raza

that. as remarks, in course. There's based spend, is two is people people. XX elements my really One just I well it's to in And Canada, prepared the under of mentioned The in as Poland. like team

So well. there's able balancing were to a of the what costs do there as bit

to cost spend, The system we of second your what piece the point, on is, of course, improvements.

the when P&L. small. It's going as of course, you will, as nature, on of We manageable. at thinking is XXXk the given versus will it we're this but small for this through to appropriate P&L what acquisition be far keep accounting our it capitalizing, We'll probably Couple treatment look of kind go year. hit

to manageable, is kind of our perspective. So, keep we'll it continue

structure off-the-shelf camera, machines basically one the used, used and context. with that's I'll themselves, it. The other you equipment give the it's then that's

So value coupling AI/ML with the that a it. the in be software we'll of and the pipeline lot is

So, margins. it for is our acquisition is mentioning, the reason very hopefully to to point John the is hopefully, get we the once that accretive

Blair Abernethy

highlight over, side of on couple just some the with? can partners QX, been with you've partnership whether out or a stand of shifting that Just it's you the Advantest other working in things

John Kibarian

cloud I my in SEMICON, about in At QX, new on Advantest already partnership the presented were booth talked highlight think in jointly to I announced Advantest. we product a with anticipating customers, the We AWS. on user had with capabilities previous tremendous Exensio conference. turnout there, had AWS remarks of number

quite few statistics. I think a the I leads, generated that saw as

and somewhere that generated leads between XX XXX of I think activity. off

already first a I But, And to then, the or we the at PDF customer SAP, of beyond in same booking pilot. the of entry SAP again, a way activities also Nothing selling standpoint with number from – with the that we a on in company, A through describe effective we organization of find think early customer it's reaching they're continued a base typically there. that demonstrations lot different customers C the very suite. at it. the company knew, finance point

partnership activity that say with those the quarter. I partners would throughout heavy was quite

press edge at the to their noticed also that have have of might edge to supported in enhances that a set for that's with our we You important their And quoted close economic Teradyne many long of Teradyne with machine a as applications. and Teradyne ability relationship others. support And believe same this were as a box But now. standing Exensio learning SEMICON, provide on the testers whole an their release a we on relationship. platform. box of customer we dialogues capability kicked provide can do on well, customers We off decade there's

Operator

line next Capital. Our come of Christian from Craig-Hallum question from Schwab will

Christian Schwab

and attention the to the drivers, for guidance think a despite year, growth bringing of back paying should term happen would we beyond to be backlog return to substantial to What here positive Given for XX% plus would about remain lot are? to what we and kind and have XXXX what as of low-double long half kind what occur close of the down in most revenue the the growth to your have digits? of prospects rate

John Kibarian

think I a Christian. great that's question,

on equipment a create weakness us. continued headwind will for So

I out equipment continues take weakness, the reasonably. are you As the remaining prepared pieces business the actually remarks, – that IYR analytics if and control pretty core my in in grow to said weakness

we'd so, And that. like

XX% us on comes to would core range. that get the bookings headwind I back it close think pretty down analytics. up Ending to momentum Then

range. while. get back think over XX for been – that I get plus That than range will us growing that you back into would a we've more

we in remarks, awful his have said prepared going lot on. pilots an of Adnan

lot in I large that In are the value. I'd growth. a millions has a things substantially. of of been think bookings it's that past, double-digit of a small in the number that increased breadth quite terms say of the number the them drove

those Obviously, And, XX% of to with we interest But base seeing, top on bookings, course, robust that's that a out it there. a number small right? XX% the growth. there, of think to see harder return larger a was in number. on obviously, out do than activity start activity – hard much I you is on more past, do larger customer that

went I on So a ramble. kind of

well, that you Christian. if me can Let I summarize see for

those the the on Let's and the deals, of things, get the in rid of headwinds, eight the help creating and figure shipments then on Exensio. bookings on stop activity terms headwind growth really would not declining on on larger again, edge equipment both a leading

Christian Schwab

a follow-up quick Just that. on

to growth wafer that Let's front-end a to just us Do sees enough recovery a market? to double-digit next XX% year. muted have equipment say flat we million take in WFE pilot XX% businesses

John Kibarian

Yeah.

Operator

Our Tom next question from D.A. comes Co. & Davidson Diffely from

Unidentified Participant

[ph] This is behalf Tom of on Diffely. Linda

of all, First quarter. good a on congratulations

in through my the center different guess observing customer markets. across better across I'd Maybe is, types. question you're what to I could understand seeing data So you're love automotive, walk us first you customer memory, behavior trends and

John Kibarian

saw statistics of that just cloud our coming high we analytics saw, bookings where double we customers in of of in continues we be that areas, the organizations market. was most. some the you related And process that strong strong usage driving customers. voltage what actually saw of the happen two of carbide the our the off silicon kind We for track that definitely quarter, bookings the sites one are control and to parts a the part the click If within bookings area,

cloud IC related. data and customer, again, system company a center for center deployment analytics package, computing Exensio complex analytics high related. and for The performance an The obviously, does data it's that

it been center were that see remarks, escalated didn't bit because seeing we We quite on second for of So customers That's that prepared talk the in area. we about encouraged test driven in started for strength that area tends that that data thing. customers, the positive were second the did the to I bookings a has be we've seen floor area. see We that cellular. our by by and results my mobile definitely

more bit past. feel to weaker are I I those a customers been, the have So in starting They think little think, confident.

do little That on piece. then memory we when the fair memory than pre-sales of past. have on a at the in was our amount lastly, we activity And see activity, the look larger side, bit a we

I feel them. they for also the so, to starting of are see tunnel like And end the

When China. we to on the steep wafer did We in off see of previous said as remarks, because share my look that we royalties. our drop drop July measure royalties we off months. a quarter the you geographically, I relatively volumes cautious wafers meaningfully our that saw saw compared prepared pretty in And third And amount of for on in follow-up out test how we that's the IYR customers. the in we became in game

also And equipment primarily Chinese shipping into to licenses, though, in we shipments that. runtime China, our tend they mature that silicon to but companies very Europe, are when companies, what with an China, And IGBT for voltage like things again, at equipment as new strong. when and at activity, as carbide technologies, and look see on being be look high you shipping nodes factory emphasis you well more category companies of

we and very what consistent that look track, equipment I at wafer characteristics think, you overall, when shipments, we we what buying is from the see with reported the see, customers. our market So, volumes, in segments

Unidentified Participant

booking by what customers? of other interest effect the pipeline, And any has on With last you your influenced see quarter? been to degree from it developing forward figure the respect to can the announcement tangible S&P seven

John Kibarian

whether than that they The we customers. are cycles say, pre-sales activity partners ours. different found of faster a others, will come hard It's than have with to very selling to our the their be continue okay, meaningful part in

strong to Some are able give pretty us predictability.

the leading run customer end between of two-way off in half bookings half driven will the of substantial year. come a relationship year that in and second them an with contracts are directly anticipate do the and bulk for our But PDF, of second most of the pilots by being we edge. the So selling impacting the Exensio

Unidentified Participant

on those floor A more that. drive other conversations like and SAP, shop any linkages? where Have you platforms pair can in of uptick noticed you maybe with follow to up floor Exensio partners top other with

John Kibarian

I mentioned was the new announced with That SEMICON. during relationship Teradyne. they that one

We are on other things. also working

Some – announce not obviously, are position a Linda, related. in conference yet, software them I think, but engineering more and have we up. software user are related to a related engineering some coming We're

position to being that our working you a around can in on. at announcements So anticipate make more user we're things us conference

Unidentified Participant

to on the a basis, forward that. model, then a have last looking on they improved and Adnan, margins nicely. And to question be year-over-year gross We'll progress continue

So, volume on what leverage drivers aside level? improvement that growth, other this contributing from from revenue are to

Adnan Raza

I bunch think a things. of

what been it to scales, they As the look are charge with at was our versus a the actually side, positioned we side, do whether do all more where dimensions, on a Cimetrix able the we've things. bit how prices we and right? markup little pay the getting focus taking So all on of AWS, bigger, business a into combination cloud those the different ourselves on our scale of okay, of

then, enterprise the about level done. have deals talked we that And we've leading on edge,

and of are a year. what of So allowed XX%. long face term hope have of to next that the combination today we few we of the even those as to in the factors comments rest call margin some discussed frankly, of is maintain on the quarters the these above revenue us, for has And be

Operator

come the from And our next Gus from of Northland line Capital. will question Richard

Gus Richard

you system you in point? fourth a in ship field you've in another would at have quarter expect this and think I the How the the many shipped said On PFI, quarter. one to

John Kibarian

qualified, anticipate first at call And our in said would we in that an I said ship actually, able in three my again the quarter second the That had today. field then quarter. the recently, remarks, would machine a quarter, customer. we to actually we being in in existing shipped put fourth What the was prepared last in that

Gus Richard

prefab? used people thinking of into lab they field, The for sort or in are are going to that new them be systems about going are out trying the

John Kibarian

with customers look machine. isn't at conventionally most tool, you can run an really a once been the e-beam number inspection used If the you to of defects you're R&D, probably the kind in to tell of has see e-beam of continue two us, done how recipe hour sucks, enough

are not they typically manufacturing. in used So,

actually machine's a node think with billion the base evaluating situation, a given similar ability two-hour few hour, even the came close finding I scan it into maturing. measuring good as pieces so to finding and e-probe, assuming in was recipe to the is XX billion the customer they're what per defects It's overall a XXX, the pretty features.

their Now structures, things via like be a used that in are I test this technique saying, and electrical maybe thirst. be as them. know, people scratch than actually an you really just manufacturing. defects, well, shorts, no gate-all-around to think heads can That XD voids, for can starting see would And inspection other there's

has So, metrology. on usually, of of giving things eventually, to inspection technique. with believe try just it controlling up give potential control an We and inspection with the way e-probe people the a them

to years. The will continue roadmap the of the over machine improve throughput the next

up with believe customers. our at so, keep can And we improving defect we densities

encouraged think are customers the that. I by

Gus Richard

model a as revenue equipment here The service? is

John Kibarian

As of yes. today,

Gus Richard

it wells. of to massive and And over sus at doing And to images wire I you're move at field going against if It battery, amounts those end, going you're like to ML/AI batteries. just you've back at what the looking – looking sounds the want you're to here. you're into bonding. acquisition, out if the use got to are sure you're just understand looking make I maybe Switching images collect it's And failures.

John Kibarian

end, There's The assembly that. mean for back I other just the on the Speakers] but finishing chip the things bonds, production. a think captured [Multiple and not backend number you like [indiscernible] are in IC

pipeline and recognition places an So assembly. apply there's many to image

information life, grains roller this features second. this Customers – going very things prediction battery meters want are and take different per give is stable about speed these on to those images And capture a [ph] many the and to want in different information the the as going like, things you the cathode to really like, they materials battery's applied. about area, battery, anode how the grain because it that on For move perform is what's the grains that of high to are is predicts be a [indiscernible]. the images that

we electrical collect gives inline gives products of with They Voltaic. our measurement. have then you the behavior. you on So a extraction to data have the equipment being rolling of the we the the when that's over rollers, it's rolls, data cetera. material, collect. the pressed alignment film et control the ability an the pace, partnership This And pressure That already end-of-line running process as applying you're

So an it's And can pieces to for really end three done inline your we've like IC tying those our together as as of create battery think image data situation end inspection you collection the to point. for kind manufacturing. like of

there on focusing we're What [indiscernible] software.

Gus Richard

it. Got makes no. Right, sense. Absolutely

back building more? pipeline like? you DFI, one What's are couple have demos? a for assembly look to you kept inhouse the Just And of

John Kibarian

We look this even have to few hardware to and to inhouse, after incremental a development. software machines do be able demos,

the as on doing And been the over long increased some for placed we've year, machines. further orders items lead half have that we've of We first purchase confidence. our

You our this do that you probably can in like the in feature capability been the now. that long And spending industry fact a like away I've only prove has [indiscernible] the half we industry. count. the very you of it's capital in do can it's have We exacerbated high very structures XD by useful feel We in if the feel year. as first saw as wandered

XX inspection an on time. can measuring be You billion

very You can small [indiscernible]. see deviations

Operator

Instructions]. [Operator

Capital. Wiener line Samjo from question next the of come Andrew from will Our

Andrew Wiener

DFI third to by just on to DFI. you say follow-up correct? hoping new wanted ship that you're And tool customer, a the year-end is did I

John Kibarian

Correct.

Andrew Wiener

And is that for advanced logic as an application well?

John Kibarian

Correct.

Andrew Wiener

obviously thinking into increased how for expressed – just you're waiting look around commercial some to a we while for opportunity. real DFI. optimism this become We've if Maybe a out you XXXX, about been

So, you now customer. lead have two with your

You're adding a second customer.

you customers do you you're the them, advanced inhouse, as And ordering growth to think penetrating said where year? opportunity in next customers you Or pilots there you if tools as is around What parts. want lead at into new to call Gus, you're out How to some two other, wafers opportunity XXXX? to to you look more are happen? running has it deeper? ship there's like, these additional Sounds where an get

John Kibarian

Great question. way frame the to

Let you me answer. see if well an I organized can as give

So, something important single on this first. Because first, because lead was me into leading to many the get thing can the said see When try to capacity always I've need one, second second. if up most every tool company a does now times, you've it a know two, to you filled something. you get means that the the will to customer have of and edge they

so, the important And I – us that really was emboldened for super big milestone that a this it's first think thing us.

lead other way, There's We spreading after be customer to establishing doing many effort companies, customer the digesting thinly to feel on in going Again, keep and a same customers solution. Along with at the one that only thing. sending second. we just winning you yourself need of that a prove much them, we have customer felt emboldened got should referred onsite. point no some did would two. across more the that the lead to the our started with as pilots, wafers doing us we We time. XX% because like We've

tool ship a can the and have we're machines. customer. What is really like, position Now, e-beam in remarkable that a on uptimes okay, machine an feel third us that new first we that for utilizations the also we been to lets demonstrate

also a taking I market. the We were. broadly aperture while across by does customers, the of of think that of increasing strong how demonstrate that customers people pilots able were want to be and work parts chip quite from other to on really couple they surprised other potentially

memory done with really much we So yet. haven't

we see. additional We that are that. and will go opportunities back look There at

seeing So, That's success in the customer. thing. XXXX, more first we most would at like to important start the

sorry, onsite Secondly, customers. And getting our lab increasing I'm – aperture revenue additional second at on on in that pilots our starting more for there. customer to growth and then drive pilots the site

Some of that of leading will expand the aperture onsite edge logic.

Andrew Wiener

then Maybe second. a for gears switching

called You silicon strength. area as of carbide an out

the carbide was of given become made PDF customers longer Exensio as about look the historically, of large significant excitement starting a very think, XXXX around trajectory you you've to how it who relative relative expect about parts it, material? out And it seen volumes industry you as see whole? silicon think would carbide you semiconductor term, sort traditional some trajectory And we've you I industry solutions. material, are opportunity into silicon that XXXX? the other to Would grow to that to not despite the sort commitments and but of provide a obviously talked of materially to that as

John Kibarian

A couple of Andrew. you, data for points there

meeting reviewing our was customer meetings of me are the sites with been lot of telling for cloud site the on business. customers existing of them carbide that driver do customers with our early cloud their drop in silicon – the has they I I occasionally statistics some a been some cloud when have – So, – and

are we seeing So that.

control in half carbide first new silicon QX these We the customers started this seeing particular. process in technologies other for start of capability in side IGBT-like year, for to our deploy in the

happened and the carbide to a driver look are be So, XXXX anticipate we business of the And in silicon carbide because do out part our business of into that number a XXXX. PDF that customers. for as we being silicon historic is companies

up do their it's extend to and Exensio these – We tooling them that. So, for they're into natural facilities them already stand new as natural they deployment start up. them anticipate

making have are transistors, high silicon comparison customer anticipate, reported companies And other and also a the been IGBTs to opportunity that investment the been are not this gives a voltage who we in very to big an in have us carbide to as substantial, historically do because, challenges PDF press. go manufacturing in

it customers more all the as complex connectivity more much for for a platform voltage has control analytics conventional It important becoming than realized. been down equipment production. the these is an the to now much, transistor using equipment and high so, And it's is production way

there be expect test. just to elements flow We wafer opposed four processing these flows, working to meaningful to package and as really

you like you and packaging to Smart have You packaging. have to end grow the the have front Cut processing, use ingot, you then technology, the something system Soitec need and

base. we end-to-end customer important that So believe, will analytics, for be

XXXX so, growing anticipate and do And being business XXXX. we yeah, of our that in part a

Andrew Wiener

or to but like dollar say, for different in is mixed opportunity And going maybe the logic, sort nodes, Analyst or even investment that's like I dollar you're quantifiable, let's ground and, two, in present at across if, to carbide think the what Day, the and want advance do I mature either one, the of if then how silicon across, capacity basis? something maybe don't revenue think even signal expansion a PDF about buckets? a you a invested like trump relative about on of maybe

John Kibarian

market customers. understand customers It's to a trying hard multi been because our bit some we've Andrew, end that little of are ourselves.

do IDM So, transistors, they have do also make different signal analog for a we they embedded silicon controllers, mixed of carbide things. example, they do lot they customers, parts,

business is driving are parts so get they're kind loaded hard out certain sometimes some class data so, sites and specific they're to that how getting sites of what their what sites, understanding can customers, some growth. it's peel the from in logging of we from we sites and of of kind using of which the system And are, for enterprise unless know those

we a it really way to don't yet. So just quantify easy have

found as analytics words, drive. for our ADI carbide we've is as the What leading always customers trailing an other as Onsemi and leading like I the or you drive on business In ST, tell much and edge or voltage edge. an there's on edge silicon a can there company they Exensio, high as is, much

number that's of because tend to And part more. be a in lot the products

X,XXX, track trailing on to XXX So while to a our or edge different products couple products, customers leading hundred the they company Exensio. have edge of or have of up keep in XX,XXX need a maybe may may

are the different. So, characteristics

of wallet kind out looked should share you're it it's we've That far. the it's to figured analytics it in customers much still conservative. how and manufacturing, on it. okay, done we've out. haven't are and little how not what But may frankly, what beyond of is way a spend a the they percents, so intriguing you've We that, broken the way say, find spending tens modelled We've at it be just describing. model of I way kind

Andrew Wiener

a last, point it. a more I of question and wanted put just like fine on little to Maybe follow-up Christian's on bit

of growth You number you equipment even sort the made the percent to that to robust modestly deals, if of potential And that path period? pipeline IYR to is experienced to the year percent ability a closing sort see XX-ish that to execute that guys of analytics had the you saying couple of return returning a enough I analytics XX-ish to business. growing, you against wafer were flat rates comments can were over about you'd talked think of sort that aside, return years. the over you grow to about If putting sales growth a in

John Kibarian

working through. about user I we'll still, think what talk the you're thunder the And conference. following, the what feel Andrew. general, we're think, I stealing in that is But, maybe for we on

That We for our platform opportunity a do customer significant for big universe our believe there very and base. overall is analytics. for a Exensio is

I it As before, getting grow do more at achieve sales, of little if and Christian, the XX% having at to has can we a were get started can were we bit growing return they to least decreasing, little the a to to equipment before, like a said over believe back bit, the meaningfully, growth. we levels return that IVR volumes not the

robustness I To XX% of what bookings return early which said environment? to of couple slide the QX. pencils that and analytics want out overall see of say, growth, from business. couple already Because part to and see on and that as the going which did get go prepared we're in a sharpen – remarks, do overall one – QX, already in the the a to closed in to return things our back my we needs back We

there. of awful lot said, out I an As activity there's

customer happens there. just of second how believe that do see is the in demand half we confidence We'll year. So the

Andrew Wiener

Adnan you of called around where of my obviously strong activity And question, or seeing out in the is and semiconductor investment as new subsidized you're one interest sort sponsored both constituents last government, or either of And shown still more that yet? chains, seeing come? opportunities supply in that you to be direct are pipeline Or there? to Or all is sort enhanced that has up and indirect? is going capacity

John Kibarian

time, with last the to pretty what That's the And industry world through the governments also that's else of across companies to governments industry, in themselves, the of tried starting to are companies. us. which But to over everybody footprint – show they experience up new our in them pipeline, some get PDF's unique thoughtful do this the are the which understand should Andrew. given about. companies, we you from mostly funding, our so perspective with to time are and be some existing imagine, out do reach decade can into It's or have dialogues

in directly pipeline really But motivations us intention help don't we them, their put it. business with really not have what We and our and it does on focus understand are.

They're understand are And many they cases, owners, writing wants. what good the since in right? the the checks. to It's these effect, ones in of ownership

those us to And the perspective educated opportunity at an and their see new effective understand activity a at – easy not do for in drive. be on in for we vision all. their semiconductors. to be on it's So as a our taken past creating an what to introducing them It's then entrant

Operator

a and day. questions. the are no on today's Thank you. program. you there [Operator for joining time, concludes Everyone, this more Ladies have great gentlemen, Instructions]. And call. at this Thank

PDF Solutions (PDFS) 8 Aug 232023 Q2 Earnings call transcript