PDFS - Earnings call transcript Q1 2024

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Operator

Good day, everyone, and welcome to the PDF Solutions, Inc. conference call to discuss its financial results for the first quarter conference call ending Sunday, March 31, 2024. [Operator Instructions] As a reminder, this conference is being recorded.

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

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

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

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

John Kibarian

Thank you joining on today's call. for us

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

our the was activity and solutions quarter a Business be as the to with IC driving aligned start strong larger our year. robust first trends industry. are products to continues The well

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

a strong the quarter, When bookings alignment our larger bookings that and product continues were by X were QX, again activities driven previous the backlog. the of macro up will the industry describe we between QX, to over build nature these. development at the see we QX which look trends of on in Building investments. business I and in presales

X-nanometer with largest new CVs XD interconnects systems, In backside leverage Exensio, for customer logic including advanced to and that and logic. manufacturing deploying transistors driving a accelerate the booking XD our like power. is demand of nanosheets the as First, was advanced strong quarter, our and DFI, AI development such processes

driving are to transformations customers operations. more digital achieve efficient Second,

include cloud Bookings Manufacturing the and Manufacturing our quarter include customer Sapience gaining number part activities evaluating our from usage, and Hub Exensio this systems for workload. Operations SAP from Test Exensio Exensio in as Hub presales customers deployment. Our Sapience are a Cloud, customers S/XHANA the attention increased of expanding of

and accelerating announced engineers and machine yield we publish system of are learning that our QX, but and customers results. both well to as build us field, report network. their own MLOps deploy that targets. the DEX ability facilities the them are are operational in their AI performance models to the partners' our mastering models, on via to In at enables Third, factories as the their them achieve they manufacturing, act to to in the train Customers and challenges they their monitor AI use AI

due customers we package MLOps Overall, engagement challenges. for strong platform first system the leverages MLOps customers. investments our designed DEX digital and to pilots quarter, and our SMH with DFI believe infrastructure. MLOps our system was in for have with the It manufacturing our of these lead test we for we complex In our running Cloud, our testing started Exensio eProbe is products. Our systems, and

this the the tools yield XD in extremely about and In our curious progress the I eProbe. issues. are many know with to third for February, new Utilization customer. lead ability deploy seeing field a we believe you we a contract of us customer our quarter in unique it's of anticipated said DFI because high, is we The eProbe. we a starting past third ship to the customer signed tool DFI would brings and we

third lead our to tool remain track our this to ship quarter. customer on We also

solution. we believe strong demand acceleration to Given for XXXX manufacturing our this for looking quite DFI, this goals our accelerate we of are now is as

been general very world. starting see believe due is occurred spending the in been its a Demand resulted have chips the silicon investments is while we AI outside in unusual at have an parts to weak, the about has results industry for improvement Government said, of track Our the while strong. capital we to industry health. for has time. That some metrics

our to to compared QX stronger shipments, improvements suggests go our year the as customer which track license equipment this expect year. year. well we of see strong in through we run-time QX sales, As our of as QX This, look and of customers bookings last business when as they last year,

and are investments. activity quarter as the of our in pleased business the it with the We demonstrates strength strategy

our call February XX%. the year -- to Consistent their efforts be first call, the the first to the year and during of employees half target during getting PDF of with quarter, flat the sorry. to we expect want with of I the second half our comments the all contractors growth year-over-year back in the thank for

Now the like and call to will over I'd on to Adnan turn our finances who the perspective his provide results. review

Adnan Raza

are to afternoon, Thank with Good well. you and and you, you of all everyone. John. families speak Good I today, your hope again

first We results of XXXX. the the financial quarter are review to for pleased

As report of mentioned, our are section in website. the Relations and Investor earnings management posted release the our

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

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

especially customer. multiyear, a We with the excited about booking new during are leading-edge the meaningful, momentum quarter, the booking

quarter quarter $XX our prior million. first the ending million of ending million was approximately $XXX $XXX higher or compared backlog to backlog Our

sequential driven was first year an of IYR were X% fixed million, well. the fee gain for share. in Analytics prior $XX.X came $XX.X up On lower a for on revenue year-over-year. and revenues million, quarter, up basis and a slightly down increase by our at Total basis business the slightly as year-over-year quarter the versus

versus to allowed period. up prior us year be growth in for analytics the total slightly However, revenue

we continue engage Like their seeing transformation manufacturing Exensio to operations. are the for platform on customers the Exensio deploying products, said, we and our initiatives John opportunities with digital for across

Exensio software. we continued with for over the which investment We're and coming the DFI with encompasses starting booking opportunities by expansion For the DFI our new to CV leading-edge solutions, in including see our offerings, years are infrastructure, system. a broader emboldened further customer,

our symmetrics licenses products, saw versus in optimistic. For quarter cautiously run-time we prior and the growth remain

us believe portfolio with product of for the our we solutions. provides offerings engagement Taken as analytics strategic our whole, customers for a opportunities

in time IYR by to quarter and about optimistic IYR product revenue shipment in came on year lower driven compared prior term business increase. spent longer lower for was eventual period, We down primarily million as volumes $X.X $X.X remain fixed-fee at the million share. of customer projects gain and the the

lease quarter last hardware, cost versus XX% XX% of personnel first DFI basis, treatment increased the for Our year-over-year our in gross at On costs. and and the was driven in QX. costs cloud the margin for flat year a sales for XX% came versus QX increases of accounting by

and for Our first the quarter. the quarter came sequential operating in XX% prior XX% margin for at for same the period year-ago XX% versus

and the $X.X per year-over-year and On utilize both the were or support increased sales to we resources our expenses year-over-year share, essentially technical marketing presales however, $X.XX SG&A as better sales a income headcount QX, to manage able lower and similar basis, our to we activities quarter with while basis. Net and totaled a our customers. million reduce for expenses, added R&D our on

$XXX of quarter, of balance change million the end prior cash and systems CapEx investments quarter, cash, million bonus million John the annual driven DFI expenses year XXXX the compared ended $XXX by with the equivalents and talked build-out support sheet. to $X the the payout primarily with share Turning of for during our about. the quarter to of first short-term at buybacks We to calendar that completed

program. We share million adopted a buyback also have new, larger $XX

in quarter, during pleased in Overall, are the seeing new growth the with the booking and backlog we leading-edge are pipeline. by our are excited opportunities we our

As periods. revenue our committed flat for the long-term compared growth prior of returning to this to rest XX% half the to target we the the for prior with year, we half revenues the to first of the second of year, look respective year guidance remain both year our of

to for that, me Q&A. turn the over With the operator call let

Operator

[Operator Instructions] our Abernethy question And Securities. Blair of comes with from the line first Rosenblatt

Blair Abernethy

wondering like expand I now. the one new of seeing just the you're years? with size little there. the that sort opportunity traction machine that is second this next customer on few customer. What John, scope market the bit DFI you of if looks It and This a customer, assume is can over

pilots DFI? of see other activity do there with customers what in of you secondly, ongoing sort for other now? Or And potential terms are

John Kibarian

Sure, Blair.

you feel one We we will talked a now nonpaying at ongoing well. was machines, And that know, as about past the a ship a customer, we That then who had as about our point. we signed ] and this in very quite We So X lead a QX a [ customer. third contract good That this with customer. started quarter, customer, evaluation third. is right, evaluation with second manufacturing a well.

what or one, the defect. all of at loss to very any advanced light speak for much the I we the is inspection look the is shine don't underneath of specific them, yield wafer for following: Conventional these conduction of the a And believe one surface between is and wafer. layers a the to the technologies about due surface for

gate is wafer, or can't all-around open viad like the the the that obviously ] or a something you structure. in of So see below down going short [ a surface that's contact

an never The voltage was electrical desirous, slow. this issue been enough wafer. could has has but always on the throughput or using test the contrast So so method been see you

is know you the and don't You what what's to about doesn't what going a what And on. it could can't be see what's know and defect not. enough matter, matters design

software in unique What's with DFI about is knows we've the what's first design. what done the

the I it later hour. thought features where knows a quarter expect. over it billion an has drives XX this billions, in look It we'll to So measuring of to It's look model there. simulation ship if what on and to machine

So huge it's statistics. seeing

] a a is it's on that, a well, that failure What's less what the and [ about in that let's capability That's perspective, then with is other from side less infractions a failure okay, in XX an say, of -- whole in of it's than the than eProbe. analytics design still a the DFI embedded end-to-end And problem unique billion billion. sales.

because and this, of you for enough. is, these hear of what process hundreds right? would to the for the of is And really typically, ramp in they've told itself market the machine I used certain once of early significant we think improve if production, the e-beam would And customers been the And from the sensitivity Right primarily in stages use now, and then hey, can multiple but yield that isn't this inspection this, market me in question customers. it's right? do for a of we millions level, the good dollars, be

demonstrate can with it can hence, the able see quite that the And is maturing. how the What a you look process evolved to If map prove this we able more unproven can as much case, inspection the silicon, How eProbe and things today. it's been in was this? that's like it and push manufacturing? is really that's it's use a inspection would see an business the question we've thing. we can business for far than lot much But of to optical how road lot the mark, that e-beam the

answer at then obviously, number up a the And want question everywhere discussed. have we of do capabilities customers are this your and aperture to that we more requests other X And pilot around bit take little lastly, pilots, work. go. demonstration on opening we've wafers we to we outside But from succeed on to the of really a of slowly

Blair Abernethy

any appreciate it. the year, manufacturing update the side, in over the Lantern question, I second technology battery John, just on really market? just that on acquisition made great. you That's last And

John Kibarian

Yes.

we've is issues analytics? with of you again, looking We the what for those -- some couple think things, So is They are we thing in biggest AI off can lead common of promising. ongoing. one the our their been data. there And look Those terms engineering And extracting understand critical around on it's in-line of customer pilots. issues. customers achieve can for the engaged a what

Operator

one question, for from and next line Northland. it Richard our the moment And of with Gus comes

Auguste Richard

what ago That could give with the the you size that services, couple the size you just included a a to of on Is one sort comparable? was of capital sized the Congratulations magnitude? of the or customer. of [ and other of it contract rapid new order DFI relative it that wondering, booked relative contract ] addition. is an years was I

John Kibarian

Comparable. Yes.

Auguste Richard

you to you Wow. DFI how plan bit for can is then you into I manufacturing And can next this the ramp demand? little Okay. X systems increased year, or can ramp X a quickly how think that about and rapidly meet talk year?

John Kibarian

was original our more Yes, plan to and commit actually year, effectively really committed we've to machines Sure. X this those. now

some be they so as as X of remarks, my -- build prepared completions building that's much next then were items into build pulling So success course, would of that, can. somewhat have, and on accelerate in And -- thoughtful said now, we and machines, lead we that X Gus, to accelerate preordered been anticipation as do we about were year. them planning to looking is the number. or in beyond I We're long

It's we we have it to what able meet too customer do to would way early be But for be the materializes say working to because of too. demand us we're work do we there, commit we it hope really to suppliers. with And to if our still to want that still lot will. a able

at squeeze flexibility build we this least than a year We and manufacturing think more more a we I plenty of more. this at time think have expect on, there's to That, to going We then some bit point, a XXXX. hope And to flexibility promise see. Gus, early of wait the it at committed. So obviously, to we're ramp it's steeper originally kind there. because year we little have can't more of end that have next we in or there. we

Auguste Richard

of at are this the outsourcing And... just you, And equipment? contemplating the Right. point, manufacturing

John Kibarian

complete I here QA production review States outsourced it, offshore. producers. the until just we the today. we all our up is -- assembly in not land we back if to of ever now, them final done at here to It QA don't want mean have is but And ability we the and we've final and and

Auguste Richard

Yes, okay.

time limiter a the to lead long the in ramp the items is -- like rapid year? more what's then next So

John Kibarian

Correct. Correct.

Auguste Richard

Okay. And...

John Kibarian

this not off pretty in it's and is technology shelf, the stuff, right? the not Obviously, thing simplistic it's but bespoke

Auguste Richard

lead your for So the refresh item my for longest times tool. memory as to typical lead time

John Kibarian

In and think back did applaud what that out quarter, didn't start really a get them the I test would would words, items poor Well, the then amount we do or team, suppliers them meet deterministic able -- a we would needed you been right? send you they than first to have lead material then is them, spec we've build because were small yields. they other take I more relatively with to just not this time, would

know, the manufacturability, yields deterministic. a a you do with kind what on worked to that's suppliers back be the manufacturing And up went company on to got predicated we of lot that and get times our of and

meets of and order months So subsystem out in you could put an requirements. in get a fixed actually that number

I that we've been through first So in the think working quarter.

up about feel basically still And had I rolling accounts on lot slack think that. I really achieved of great some Because now that take the results the really time, schedule? overall build build of where a we our for team undetermined. say, our out components okay, were schedule to can we're that it and slack

you didn't to going order when them. and could You know you're get

Auguste Richard

fog you of some deals some rather the some and had understand. And deals, working switching enterprise it. software side you're Exensio, for I funnel know I what are orders? just Got of on X-figure to I And start of come Got customers And does it, the I look sort -- world, committing then the large like to to out getting just look the closer potential today? to and beginning was that is where believe. that funnel wondering,

John Kibarian

Yes.

have I we X-figures some, contracts So would last quarter. did say,

-- the digital Manufacturing be lot to customer. the timing words Exensio pick Exensio be have one This next hard Sapience transformations. out critical my do see opportunities do of area the This Operations quarter number this quarter, QX. to We whether Hub, a Cloud, there. And I it's for always quarter, around or QX to they going larger are around or customers' Test I chose -- they're a and seems

one an lot SAP these connection is work the this a and for lot So of a of important contracts.

part larger we're in And engagement of cases. an those overall

size have it's how the contracts, feel clear a break and of to total up. of bit over pretty next But be little So what's trickier what to couple the them larger us for we quarters see visibility. good they will

course, we of but with strong early, do engagement it's think, the comps. feel I quite

Operator

with next D.A. William the One moment it's of line Davidson. from for question, Jellison our and please,

Will Jellison

by respect wanted incremental customer seeing curious I to of the I'm or modules Exensio trends there. one, first Exensio start are business. to sort you seeing software the of what usage adopting you their the about For trends in What out with asking core overall? you're behavior

John Kibarian

think the at in analytics; and X doing guided factories. I say, Sapience module, so more basically analytics, their at there's and test; cloud automate way and would Yes, Sure. looking connection customers our -- really so looking see, where places and looking the they're I'd Exensio customers say between then we larger assets: the right, the so AI customers common evaluating automation at SAP cloud I

get the an We manufacturing then call isn't and And and DEX kind feeds capabilities. that kind on tends their that, to my -- networks transformation, I of we of a, impact their because kind those of That's Will, because look lot of platform, of with them are those, test the change supply all what their X prepared question in an starts in way at S/XHANA deployment -- and around how a customers digital have those often the like remarks, real-time basically, things they like answered from chain some we're digital Gus' see. as, control. that that trying to

piece a So the course, of that. the cloud. starts it test cornerstone with And of operations is of the

and as connection. QX cloud, in had And had QX have quarter So being in in are We've in like operations activities stuff QX we it ends pipe we those the to SMH-SAP guided on now. related I well. those. analytics, ongoing And test after up said, -- the of the all some and those closed stuff

Will Jellison

bit on, ModelOps currently respect can expect uptake follow-up, ultimately to business? about how PDF's And ModelOps to into Exensio deeper you it to as you dive pilots that, a affects great. how going of monetization with talk a overall little that and then Okay, customers the

John Kibarian

question. prepared primarily a in We're noted so we is you the is go, around Yes, as what Will. as we But following: my our learning that's advanced so TestOps, for far ModelOps good the it does remarks, think testing drive packaging.

insertion insertion as added multiple levels performance package to more the you the things make the testing to in predictive there, be data going because and tests. sure points, being be chip possible able their the with be all make feed So at they've put really efficient the trying efficient forward, test then as is to that around bidding, you that They need sure many are so is points. test

So of this they a area has almost ModelOps deployment, machines is to of will pilots, and the on to right advanced, the that That been engagement lot basically that the related the now, where pilots ModelOps all packaging are which typically, advanced number all deploy tied drive chiplets. in open.

a scales and cloud with on analytics more also need then need And deployment. capability effect it follow-on you as of well. So of other has in the more training the the ML because the capacity the of kind you more it cloud, side

is sets models, is time, sophisticated, do That's around will have deployed. more general able overall, data AI we'll what the drive we things. moving complex manage more monitor, the also they're in as over in why I doing MLOps act roll about think on relatively more that of really being talked simplistic more would out cloud today. more as the impact and to they data as and close compute, business And an get think it larger models remarks, industry the in We our they say, and challenges the maintain models. stuff around first on my I prepared

Operator

Christian question, from with Craig-Hallum for Instructions] [Operator Schwab moment One next it Capital. comes our and

Christian Schwab

move you you it use more a So what of the take production research as a what kind guess customers call we that for would if tool, way if -- DFI and in you're charge versus eventually the development and that I charging it use tool? as I would of to

John Kibarian

Yes.

Christian. So that's a question, great

uptime a we dialogue on customers provide customer working bundled the subscription. the a gets on actually stack charge we're we deal we because whole the spare manage as now. manage the today, parts, the in layer. still the machine, think and the quite with The active software -- application this we I entire for And the thing right

drive selling inspection. off on machine for the to purchase itself, on and analytics a machine We a the still said drive And piece potentially that's data subscription we're the particularly basis. would the all and systems open they and product-level on and be the capital that

ways there stone the So are less around this for us and point. customers. is point. customers anything capital-intensive to we where I at dialogues had We've maybe set that don't that it have make we conventional think with in could more

through And and gone business just I think that. how subscription we've priced that, we've about as a learned lot we've our

made that's I it's I the think the see customer consider machines a in meaningful easy relatively it and get very total While that that way when we think there, very, subscriptions, into did the right? quite you deal. value, very, the to they're for good value a

Christian Schwab

that we that should of $X still is would that you sold million equipment assume a them capital million, $X piece fair? And an be as if to ASP

John Kibarian

I you'd much No, be them than basis. would capital probably that on where lower to think a expect be

Christian Schwab

Okay.

-- starts every tools done Okay. know per XX,XXX, do how on would production, a my is, you based if needed? of needed XX,XXX, month you XXX,XXX, then it I be idea the used would many on wafer with to guess was be how work yet in an have many question last whatever, have And capital

John Kibarian

defect certain customers you of a need first anymore. of to, I first that doing get see X of this the you think we really Christian. density, the right, I once they years you Then e-beam -- you right, anything don't the even yet, in to answer for the I lot couple started all following, development. we that when years, ago, or X many What before can't know is said, can years talk tell last a

they with very was you'd comfortable think it. see everyone the because didn't subscription So

faster as the of shipped, ship last so faster one defects the XXX, long. faster But further that, especially we've the shipped the XXX, reality we'll incrementally the done layer. due we called You right, capability and year, this year and These are really proven very it see would the is XXX. first are we we've machine, revs to we the getting software then with

And overall yields. think being problems in good to these in to pretty see market defect densities, able very and what we as we're customers know getting the of terms is even XD we unique are

why how So be that early in I to And customers' out would idea industry about was you the long what's surprising think that's case think, the need original be our is, to and thesis. turning the overall. tool, I

nice when see it it. So it's would to come true, we but we know start didn't

Operator

One moment for from with our it's and Richard Gus next question, please, Northland.

Auguste Richard

one having include be kind want that there's in-fab in question. process Just the third of to product the them buckets at of or then production. X more you're does there's where and about And production tools? talking one your more And I to DFI: clear, bucket least bring-up with you're customers, bring-up, conversations for

John Kibarian

SRAMs in where I structures So process bring-up, e-beam there very think used "nuisance that, product low. historically and vehicles Gus. what's people test about and they simple for people the the have are know is asking The where rate"

way least across what eProbe good engaged the them think surprised, so at couple very, the been looking customers we've and in with is product. I see at far, already the this very customers we a of -- have at

because up issues, can the via lands new new see each design very So issues targeted complex it on now you bring where is open each beam. and it chip,

You of can beam. the even sequence landing the

work. other very the in is in look very, can areas So it sophisticated areas on and way turn

It be customers And very powerful are getting for now that. product can on think themselves so bring-up. I

the production was about begin announced manufacturing very question. are in well. can course, They these we're we really And pilot deployed advanced we've QX was because really That engagements. question, starting just those okay, as now, the last That now, now to year of asking in that third you of are things on nodes one this getting around run application that of manufacturing? to their us

X right? fleet, we've And e-beam good uptime data like across of things? to and cars, our can pretty we've okay, we these feel and run again, seen, about be feel tools And tend data, the customers the Formula will uptime that, of good you and data, And consistency it. the we really course, one pretty seen question,

and to third People answer are it question. So that we'll have now. go asking

I pretty the now second think comfortable question. they're with

You yields new inspection, do in for even a new very as application bring product have that's ultimately and you mature products, I can think e-beam.

Operator

William our Jellison next question, with D.A. for coming from of moment it's Davidson. and line One the

Will Jellison

respect wanted that I to DFI margin that that to much during for drag was the accounting quarter, to impression you the mentioned. ask Adnan, gross the with of lease related my you year-over-year was

that does so into growth And change DFI target? all question bigger the a the and that is, part becomes PDF accelerates of from if greater-than-XX% the way that future, about springs think long-term at the you

Adnan Raza

very Thanks much Yes. for question. asking that

as the our getting shipped now better. -- we with the especially of actually early the market, some placing of So managing think term, advanced with costs about look, we we vendors. are look that that are team starting doing longer And at into these we multiple machines quite over orders the has these been are a job to great

side feeling have we our targets of So it pretty not hurt said. to gross that good being machine able the as XX% margin about well,

yes, the set to some gross was target as to But to quarters, the we margin last ending the gross getting revenue the of are would ramps our X seem second certainly be the through lower compared had and the year, expect be our the back targets. I the we the margin Well, by targets achievable think think time that they for that like margin gross starting year. we the year operating XX% model. half the ending rest margin of XX% of the to margin year, Particularly we're

Operator

with our Management. Wiener and for moment next question, Samjo from One please, Andrew it's

Andrew Wiener

and Christian on up follow to wanted I questions, guess. Gus' I

the sort with for realize anything then we drive of e-beam still the it sort tool you're like fair and tools you Is required is to earlier model, subscriptions that evaluating and strategy of give it believe want initial underpricing pricing in our but that's I prove license the overall other sort of and and charging value, that first et cetera, to part, and believe, then comments? were it a from works selling the to because as adoption. but sounds to a analytics respect them tools the a manage away that design, perspective, relative the and a don't software, the your the The or of inspection interpretation perhaps software idea I to potential, you of need and

John Kibarian

mean more machine capable. -- I lot the got and Yes, also a

smarter there's software, software the design, So to There faster. shipped we basically the a the take XXx in systems XXXX the lot software of to that getting on to about it's side make possible. from machine, that what side the changes is because of generation Because about the first of today, that of does. too, and control capability the advantage

But experience software, machine take -- of software to made to advantage to the the quite the be. improvements continues a have than think software different improvements to that we it

the then So and and go where good performance-wise, marketplace, can yes, look it we at in you competitively is, pretty feel there.

Andrew Wiener

of actually it design about I we I that a point use each of or process of it e-beam Okay. question Gus' but number of or being use the ready in second, put the realize your each up only the can you or individual market proving sort it and up units of But a of process, hundreds a we're bring fine earlier to millions of -- product. what take on you to And take sort market we're bring your in then sizing. prove then if that I dollars of not to individual yet comments sort response to could not

question then proof minimum, or it the sort e-beam would and market. It's fair of obviously eProbe larger, sort of larger getting be would the suggests somewhat the is be that And into manufacturing. much somewhat dependent how comment? current that you DFI upon Is at than -- believe for that market of the a

John Kibarian

the just inspection market the the ways inspection the e-beam use all markets, or It's market, yes. e-beam right? conventional overlay tools. of They're not contrast. I more other quoting market Andrew, uses was fair, number market. CD mean They just I people the And the for the review that there's the e-beam, think, I not use it and look, feature inspection, fine was voltage than

of producers, primarily -- got a right? do go contrast if a and far that the just And we up Yes, focus slice all on bit into to voltage So then so right? memory, and logic market the And vehicles? you goes think I you that's e-beam product the lot for logic make can not okay, and say, early bigger little can true. you've

customers, that being little that bigger the depends what Well, much or market? the regular, memory et more market about doing cetera. is to the we're a How relevant it is how in bit whole whole to the

I all why Andrew, that's some still think that. really we're like room digesting there, I So because wiggle

I are think think we important important PDF's of for we subscription we can an subscription an this be that a PDF on it PDF's be feeling and business, -- pretty part of the comfortable for basis will part business.

Andrew Wiener

Okay. And I sort of sure to lastly, just understand. then wanted make I

this we're our to quarter to leading a ship third tool planning So customer.

that the in sort comments, signed was is fall. of another for the think contract? timing on of that prior intended the Is ship or you'd of about expect sort always when that tool? that I the shipping to And prior current who tool calls talked you customer public --

John Kibarian

Yes.

customer. in ] but So [ to of next that to right? status, now we're we year. start able the flight And this they -- potentially supporting sooner this would what that machine than here their able year. their year, to is not being ability then So to the internally good later our facility I If end ready, was done stage they they're them get through move this transition as year, site that from machines think the said site in them right? of as go at our use help can this We that had

Andrew Wiener

the of a trying sort their then you availability forward about into to comments of pilot evaluations? of tool in seeing sort 'XX, are interest actual is And in commercial mostly pull Okay. tools customer potentially Or late for facilities? installing that

John Kibarian

come take? us which and what what of able want saying, And are looking to as Customers do. I at buy one, I They're think say to those would to to they've we we opportunities, we about it wanted want can we if availability take would I be we now, advantage really buy okay, are asking additional Andrew, said, of now. one wouldn't capacity, --

anyone go right? likely you've Obviously, about if loop, are it. knows customers to And of to maximum you chain, all how business fairly supply you So an it flexibility got gives control shorten eludes us the the out that's flexibility, out maximum of also more right? feedback it longer for instantaneous taken control, the because figure that asking and

chain the should we us think advantages. we the give And about supply some way thought

not having advantage it's that. fabless a There's is disadvantage. ask go people company, as historically, a manufacturer. disadvantages oh, a PDF some side a to or said, And think not I an

think I would leverage there's being can we flexibility. think ways companies of And similarly can that tell fabless maximize you to way with -- happy we operate that most we quite here, they're think that the be we if fabless. I the

Andrew Wiener

guess the evaluation. is I around manufacturing that the the And question is last doing customer

any this know if year they go, or I Have might the tools? sort additional it's a think you end they require of go a indication thought you it's no given by of would go. whether if

John Kibarian

Yes.

Andrew Wiener

answer they require the if assume tools? I is And yes, would additional

John Kibarian

they evaluation, purpose that's the No, of Yes. would. manufacturing Yes, right? the

Andrew Wiener

Yes.

Okay. I thought. just what I to No, confirm. wanted that's

Operator

call. Well, Instructions] and [Operator you gentlemen, us more this concludes joining for time, there Ladies on the Thank no are program. this today's questions. at

PDF Solutions (PDFS) 9 May 242024 Q1 Earnings call transcript