0001437749-26-005366
SEC filingRevenue grew 22% to $219M, but net loss of $0.6M from acquisition costs and interest expense; gross margin improved to 72%.
PDF Solutions, Inc. provides comprehensive data solutions designed to empower organizations across the semiconductor and electronics ecosystems to improve the yield and quality of their products and operational efficiency for increased profitability. The company derives revenues from two categories: Platform and Volume-based fees. Platform revenue includes licenses for software (other than Cimetrix runtime licenses) and related software maintenance and technical support, SaaS, engineering services, fixed fees associated with Characterization Vehicle systems, and licenses and purchase contracts for DirectScan systems. Volume-based revenue is derived from Cimetrix runtime licenses, secureWISE data, and variable/royalty fees associated with CV systems (Gainshare). The company is headquartered in Santa Clara, California, and operates worldwide with offices in the US, Canada, China, France, Germany, Italy, Japan, South Korea, and Taiwan.
The PDF Solutions Platform comprises six primary brands: Exensio (data analytics and AI), Sapience (information and process integration), DirectScan (3D e-beam inspection), CV (parametric characterization and yield improvement), Cimetrix (equipment integration), and secureWISE (secure remote connectivity). Exensio software modules include Manufacturing Analytics, Process Control, Test Operations, and Assembly Operations. Sapience includes Sapience Data Platform and Sapience Manufacturing Hub. DirectScan combines proprietary eProbe hardware and Fire software. CV system includes CV test chips, pdFasTest electrical tester, and Exensio Characterization software. Cimetrix software covers equipment factory connectivity, testing, and control. secureWISE system includes software, servers, and a managed network.
The sales strategy primarily pursues targeted accounts through a combination of direct sales force, service teams, and strategic alliances. The company also uses sales representatives/agents in certain territories. Customers include Fortune 500 companies, foundries, IDMs, fabless semiconductor companies, OSATs, equipment manufacturers, EMS, and ODMs. Three customers accounted for an aggregate of 53% of revenues in 2025, two customers for 31% in 2024, and one customer for 35% in 2023. No other customers represented 10% or more of revenues in those years.
Direct competitors include yield management/prediction systems providers such as KLA, Onto Innovation, and Synopsys; semiconductor manufacturing software providers like Applied Materials, Synopsys, Invantest, Emerson, Onto, and Siemens; inline inspection and metrology equipment providers such as ASML, Applied Materials, KLA, and Keysight; and connectivity software providers including PEER Group, Kontron, Yokogawa, Advantest, Kornic, and Tracces. Indirect competition comes from internal groups at IC companies using general-purpose analytics tools like Tableau, Spotfire, Snowflake, and Databricks.
The company's strategy is anchored on four integrated pillars: (1) Differentiated Data & Process Characterization, leveraging DirectScan, eProbe, and advanced CV test chips with agentic AI; (2) AI-Ready Data Platform, with a new scalable analytics architecture designed to handle large data volumes and enable AI with human governance; (3) Collaboration and Supply Chain Orchestration, through Sapience Manufacturing Hub for internal and external integration; and (4) Global Secure Connectivity Platform, via Cimetrix and secureWISE for secure equipment connectivity and data exchange.
As of December 31, 2025, PDF Solutions had 600 employees worldwide: 180 field application engineers, 225 in research and development, 135 in sales and marketing, and 60 in general and administrative functions. Of these, 364 are located in the United States and Canada, 197 in Asia, and 39 in Europe. None of the employees are represented by a labor union, except those in France and Italy who are subject to collective bargaining agreements.
For the year ended December 31, 2025, total revenue increased 22% to $219.0 million from $179.5 million in 2024. Gross profit rose 26% to $158.4 million, yielding a gross margin of 72%, up 2 percentage points year-over-year, driven by higher revenues and mix shift toward higher-margin Volume-based revenue. Despite top-line growth, the company reported a net loss of $0.6 million compared to net income of $4.1 million in the prior year. The decline was primarily due to a $6.5 million increase in costs of revenues (including $4.0M personnel costs, $2.1M subcontractor fees, and $1.3M amortization of acquired technology) and a $14.8 million increase in SG&A expenses (including $6.9M personnel, $3.6M SecureWise acquisition and integration costs, and $2.7M arbitration legal fees). Additionally, new interest expense of $3.955 million from the term loan used to finance the SecureWise acquisition and a $4.6 million decrease in interest income contributed to the loss. Income tax expense increased $1.3 million primarily due to the impact of the One Big Beautiful Bill Act and changes in deferred taxes.
Revenue is now reported in two categories: Platform and Volume-based. Platform revenue grew 15% to $181.0 million, representing 83% of total revenue (down from 88% as Volume-based grew faster). The increase was driven by higher fixed fees from CV systems and the addition of SecureWise revenue, partially offset by declines in perpetual license and DirectScan revenue. Volume-based revenue surged 70% to $38.0 million (17% of total), led by Gainshare, secureWISE data usage, and Cimetrix runtime licenses. The shift toward Volume-based revenue, which carries higher margins and is tied to customer production volumes, provides a more scalable and recurring revenue base.
Management provided no quantitative guidance but highlighted several strategic priorities: the integration of SecureWise to expand connectivity solutions and accelerate analytics adoption; continued investment in R&D (which increased 20% to $64.2 million) to support product development; and ongoing cost control initiatives. Geopolitical risks, uneven global demand, elevated semiconductor inventories, and U.S.-China trade tensions (including export restrictions) were cited as headwinds that could prolong sales cycles and impact future revenue growth. The company expressed confidence that its existing cash and operating cash flows will satisfy cash requirements for at least the next twelve months, despite a decrease in working capital to $92.0 million from $145.4 million driven by the SecureWise acquisition. Management also expects R&D and SG&A expenses to fluctuate in absolute dollars depending on project timing and sales efforts.
As of December 31, 2025, the company holds $42.2M in cash and cash equivalents with no short-term investments, a significant decline from $90.6M at year-end 2024. The decrease was driven by the SecureWise acquisition ($129.7M net cash paid) and capital expenditures, partially offset by debt proceeds. Total assets grew to $418.7M from $315.3M, primarily due to $80.0M in acquired goodwill and $52.2M in intangible assets. Shareholders' equity increased to $271.0M.
The company has $65.3M in outstanding purchase obligations with suppliers, the majority expected to be paid within two years. Operating lease liabilities total $5.8M, with maturities extending to 2031. Additionally, the company is party to a strategic partnership with Advantest (Note 15) involving a cloud-based subscription that expired in July 2025; deferred revenue from Advantest was $0.7M at year-end.
The company's capital allocation includes a stock repurchase program authorized in April 2024 for up to $40M, of which $39.8M remained at year-end (only $0.2M utilized during 2025). No dividends were declared. In March 2025, the company entered into a $45M revolving credit facility and a $25M term loan (drawn $23.1M) to finance the SecureWise acquisition; total net debt stood at $67.0M. The weighted average interest rate on debt was 6.47%. Capital expenditure is not explicitly disclosed in the notes but property and equipment additions are indicated by the increase in gross PP&E by $37.1M, which includes $32.6M in cash purchases per the cash flow statement.
The company operates as a single reporting segment. Revenue is disaggregated into Platform ($181.0M, up 15.2% YoY) and Volume-based ($38.0M, up 70.4% YoY). Recurring revenue accounted for 94% of total revenue (vs 81% in 2024). Geographically, U.S. revenue (48%) grew significantly while international revenue (52%) declined in share from 59% in 2024. Major customers: Customer A (30% of 2025 revenue), Customer B (13%), Customer C (10%).