PDF SOLUTIONS INC (PDFS): Results of Operations and Financial Condition
PDF SOLUTIONS INC (PDFS) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 2858 De La Cruz Boulevard, Santa Clara CA 95050 USA +1.408.280.7900 www.pdf.com News Release Company Contacts: Adnan Raza Sonia Segovia Chief Financial Officer Investor Relations Tel: (408) 280-7900 Tel: (408) 938-6491 Email: adnan.raza@pdf.com Email: sonia.segovia@p
How this was made
The 30-second read
Why it matters
Traders can update models using the reported Q2 revenue, margins, EPS, and ending backlog, and reassess the credibility of the reaffirmed 20% 2026 annual revenue growth target.
Market read
Fresh quarterly metrics plus a reaffirmed full-year growth target and backlog increase are the main drivers for near-term positioning.
What to watch
Backlog is up sequentially, but the release does not quantify conversion timing into revenue, nor does it provide segment-level drivers or customer concentration details.
PDF Solutions Reports Second Quarter 2026 Financial Results
Total revenues were $61.5 million, up 19% over last year’s comparable quarter, and ending backlog reached $270.7 million. GAAP and non-GAAP operating margins and EPS improved from the second quarter of 2025, while both margin measures and earnings declined from the first quarter of 2026. The Company reaffirmed its 20% annual revenue growth target for 2026.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $61.5 million | – | 19% |
| Gross marginGAAP | 69% | – | – |
| Gross marginnon-GAAP | 73% | – | – |
| Operating marginGAAP | 8% | – | – |
| Operating marginnon-GAAP | 22% | – | – |
| Net incomeGAAP | $4.3 million | – | – |
| Diluted earnings per shareGAAP | $0.10 per diluted share | – | – |
| Net incomenon-GAAP | $11.4 million | – | – |
| Diluted earnings per sharenon-GAAP | $0.27 per diluted share | – | – |
| Ending backlogother | $270.7 million | – | – |
2026 outlook
- Revenue20% annual revenue growth target for 2026
- NoteThe Company expects backlog to add to revenue for a number of years.
What drove it
- Major customer wins for the secureWISE system, DirectScan system, and Exensio product and services.
- Broad product and services portfolio addressing evolving needs of the semiconductor manufacturing industry.
- Significant increase in backlog during the quarter.
Concerns
- GAAP gross margin was 69%, compared to 72% for the first quarter of 2026 and 71% for the second quarter of 2025.
- Non-GAAP gross margin was 73%, compared to 76% for the first quarter of 2026 and 76% for the second quarter of 2025.
- GAAP operating margin was 8%, compared to 10% for the first quarter of 2026.
- Non-GAAP operating margin was 22%, compared to 25% for the first quarter of 2026.
- GAAP net income was $4.3 million, compared to $4.8 million for the first quarter of 2026.
- Non-GAAP net income was $11.4 million, compared to $12.6 million for the first quarter of 2026.
- Risks cited include semiconductor industry trends and competition, adoption rates, project milestones or delays, macroeconomic conditions, tariffs, trade regulatory conditions, geopolitical tensions, supply chain disruptions, and backlog conversion.
What to watch
- Conversion of $270.7 million of ending backlog into revenue.
- Progress toward the reaffirmed 20% annual revenue growth target for 2026.
- Revenue contribution from secureWISE, DirectScan, and Exensio customer wins.
- GAAP and non-GAAP gross-margin and operating-margin trends following sequential declines in the second quarter of 2026.
Balance sheet and cash flow
- Cash and cash equivalents: $114,883 (In thousands) as of June 30, 2026.
- Cash and cash equivalents: $42,220 (In thousands) as of December 31, 2025.
- Accounts receivable, net: $90,579 (In thousands) as of June 30, 2026.
- Accounts receivable, net: $82,938 (In thousands) as of December 31, 2025.
- Total current assets: $252,609 (In thousands) as of June 30, 2026.
- Total current assets: $163,893 (In thousands) as of December 31, 2025.
- Property and equipment, net: $94,520 (In thousands) as of June 30, 2026.
- Property and equipment, net: $81,609 (In thousands) as of December 31, 2025.
Analysis
PDF Solutions reported second-quarter 2026 total revenues of $61.5 million, compared to $60.1 million for the first quarter of 2026 and $51.7 million for the second quarter of 2025. The Company described quarterly revenue as up 19% over last year’s comparable quarter. Management attributed the growth trajectory to its broad product and services portfolio and cited major customer wins for secureWISE, DirectScan, and Exensio product and services.
Profitability improved materially from the second quarter of 2025 but stepped down sequentially. GAAP operating margin was 8%, compared to 2% for the second quarter of 2025 and 10% for the first quarter of 2026. Non-GAAP operating margin was 22%, compared to 19% and 25%, respectively. GAAP gross margin was 69%, compared to 71% in the second quarter of 2025 and 72% in the first quarter of 2026, while non-GAAP gross margin was 73%, compared to 76% in both comparison periods.
GAAP net income was $4.3 million, or $0.10 per diluted share, versus $1.1 million, or $0.03 per diluted share, in the second quarter of 2025 and $4.8 million, or $0.12 per diluted share, in the first quarter of 2026. Non-GAAP net income was $11.4 million, or $0.27 per diluted share, compared with $7.3 million, or $0.19 per diluted share, a year earlier and $12.6 million, or $0.31 per diluted share, sequentially. The reconciliation disclosure states that non-GAAP results exclude stock-based compensation expense, amortization items, certain non-recurring items, and related tax effects, as applicable.
Ending backlog was $270.7 million, compared to $246.4 for the first quarter of 2026 and $232.6 for the second quarter of 2025. Management expects the increased backlog to add to revenue for a number of years and reaffirmed its 20% annual revenue growth target for 2026. Cash and cash equivalents were $114,883 (In thousands) as of June 30, 2026, compared to $42,220 (In thousands) as of December 31, 2025. The filing did not report capital-return activity, operating cash flow, free cash flow, or debt within the provided text.
Management, verbatim
In the second quarter of 2026, PDF Solutions continued on its growth trajectory, enabled by a broad product and services portfolio developed and curated to address the evolving needs of the semiconductor manufacturing industry.
John Kibarian, CEO and President
In the quarter, we had major customer wins for our secureWISE system, for our DirectScan system, and for our Exensio product and services. We significantly increased backlog in the quarter, which we expect to add to revenue for a number of years. Taking into account these positive factors, we reaffirm our 20% annual revenue growth target for 2026.
John Kibarian, CEO and President
Not in the filing
stated, not guessed- Segment revenue, segment comparisons, and segment profitability were not included in the provided filing text.
- GAAP gross profit was not reported in the provided filing text.
- Non-GAAP gross profit was not reported in the provided filing text.
- GAAP operating income was not reported in the provided filing text.
- Non-GAAP operating income was not reported in the provided filing text.
- Operating cash flow was not reported in the provided filing text.
- Free cash flow was not reported in the provided filing text.
- Debt balances were not reported in the provided filing text.
- Share repurchases and dividends were not reported in the provided filing text.
- Detailed quarterly revenue guidance, gross-margin guidance, operating-expense guidance, and tax-rate guidance were not reported in the provided filing text.
- Prior outlook was not provided.
- Total assets, total liabilities, and shareholders’ equity were not fully included in the provided filing text.
- Percentage changes for backlog, net income, EPS, gross margin, and operating margin were not printed for those respective line items.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
PDF Solutions filed an 8-K with Exhibit 99.1 reporting second quarter 2026 financial results and outlook commentary.
Ticker impact
PDF Solutions reported Q2 2026 results with $61.5M revenue, $270.7M ending backlog, and reaffirmed a 20% 2026 annual revenue growth target.
Likely positive near-term bias if investors view backlog growth and margin stability as supporting the reaffirmed 20% revenue growth target.
New, company-specific numbers (revenue, margins, EPS, backlog) and a reaffirmed 2026 growth target are actionable for positioning ahead of subsequent quarters, though the article does not include consensus comparisons or guidance range details.
Market effects
Signals demand and execution strength in semiconductor data solutions, potentially supporting sentiment toward adjacent yield/analytics software and services providers.
Limited direct regional read-through; company is US-listed with operations in Santa Clara.
Moderate, as semiconductor manufacturing ecosystem spending is globally distributed but the disclosure is company-specific.
Counterpoint
GAAP operating margin fell to 8% from 10% in Q1, and non-GAAP margins also eased, which could temper enthusiasm despite backlog growth.
Key entities
- companyPDF Solutions, Inc.
Nasdaq-listed provider of data solutions for the semiconductor and electronics ecosystem.
- executiveJohn Kibarian
CEO and President, quoted reaffirming the 20% annual revenue growth target for 2026.
