Third Quarter 2026
Filed Nov 5, 2026PDF Solutions reported record quarterly total revenues of $68.3 million, up 20% over last year's comparable quarter, with GAAP diluted EPS of $0.16 and non-GAAP diluted EPS of $0.40.
Third-quarter revenue reached a record $68.3 million and was up 20% year over year, while GAAP and non-GAAP gross and operating margins improved from both the second quarter of 2026 and the third quarter of 2025. GAAP net income rose to $6.8 million and non-GAAP net income rose to $17.2 million. The company also reaffirmed its 20% annual revenue growth target for 2026, although ending backlog declined to $247.2 million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 total revenues (in thousands)GAAP | $68.33M | – | up 20% |
| Q3 2026 platform revenue (in thousands)GAAP | $58.33M | – | – |
| Q3 2026 volume-based revenue (in thousands)GAAP | $10.00M | – | – |
| Q3 2026 costs of revenues (in thousands)GAAP | $18.59M | – | – |
| Q3 2026 gross profit (in thousands)GAAP | $49.74M | – | – |
| Q3 2026 gross marginGAAP | 73% | – | – |
| Q3 2026 non-GAAP gross profit (in thousands)non-GAAP | $52.29M | – | – |
| Q3 2026 non-GAAP gross marginnon-GAAP | 77% | – | – |
| Q3 2026 research and development expense (in thousands)GAAP | $19.45M | – | – |
| Q3 2026 selling, general, and administrative expense (in thousands)GAAP | $20.97M | – | – |
| Q3 2026 amortization of acquired intangible assets (in thousands)GAAP | $1.04M | – | – |
| Q3 2026 income from operations (in thousands)GAAP | $8.29M | – | – |
| Q3 2026 operating marginGAAP | 12% | – | – |
| Q3 2026 non-GAAP income from operations (in thousands)non-GAAP | $19.22M | – | – |
| Q3 2026 non-GAAP operating marginnon-GAAP | 28% | – | – |
| Q3 2026 interest expense (in thousands)GAAP | −$1.12M | – | – |
| Q3 2026 interest income and other, net (in thousands)GAAP | $1.19M | – | – |
| Q3 2026 income before income tax expense (in thousands)GAAP | $8.35M | – | – |
| Q3 2026 income tax expense (in thousands)GAAP | −$1.51M | – | – |
| Q3 2026 net income (in thousands)GAAP | $6.84M | – | – |
| Q3 2026 diluted EPSGAAP | $0.16 | – | – |
| Q3 2026 basic EPSGAAP | $0.16 | – | – |
| Q3 2026 weighted average diluted sharesGAAP | 42,976 | – | – |
| Q3 2026 weighted average basic sharesGAAP | 42,193 | – | – |
| Q3 2026 non-GAAP net income (in thousands)non-GAAP | $17.16M | – | – |
| Q3 2026 non-GAAP net income per diluted sharenon-GAAP | $0.40 | – | – |
| Q3 2026 weighted average shares used in non-GAAP net income per diluted share calculationnon-GAAP | 42,976 | – | – |
| Q3 2026 stock-based compensation expense, gross-profit reconciliation (in thousands)non-GAAP | $1.59M | – | – |
| Q3 2026 amortization of acquired technology under costs of revenues (in thousands)non-GAAP | $958K | – | – |
| Q3 2026 stock-based compensation expense, operating-income reconciliation (in thousands)non-GAAP | $8.47M | – | – |
| Q3 2026 amortization of acquired intangible assets, operating-income reconciliation (in thousands)non-GAAP | $2.00M | – | – |
| Q3 2026 expenses for certain legal proceedings (in thousands)non-GAAP | $436K | – | – |
| Q3 2026 acquisition-related and integration costs (in thousands)non-GAAP | $30K | – | – |
| Q3 2026 amortization of debt issuance costs (in thousands)non-GAAP | $64K | – | – |
| Q3 2026 tax impact of valuation allowance for deferred tax assets and reconciling items (in thousands)non-GAAP | −$680K | – | – |
| Nine months ended September 30, 2026 total revenues (in thousands)GAAP | $190.0M | – | – |
| Nine months ended September 30, 2026 platform revenue (in thousands)GAAP | $158.4M | – | – |
| Nine months ended September 30, 2026 volume-based revenue (in thousands)GAAP | $31.60M | – | – |
| Nine months ended September 30, 2026 gross profit (in thousands)GAAP | $135.4M | – | – |
| Nine months ended September 30, 2026 gross marginGAAP | 71% | – | – |
| Nine months ended September 30, 2026 non-GAAP gross profit (in thousands)non-GAAP | $142.4M | – | – |
| Nine months ended September 30, 2026 non-GAAP gross marginnon-GAAP | 75% | – | – |
| Nine months ended September 30, 2026 income from operations (in thousands)GAAP | $19.66M | – | – |
| Nine months ended September 30, 2026 operating marginGAAP | 10% | – | – |
| Nine months ended September 30, 2026 non-GAAP income from operations (in thousands)non-GAAP | $47.85M | – | – |
| Nine months ended September 30, 2026 non-GAAP operating marginnon-GAAP | 25% | – | – |
| Nine months ended September 30, 2026 net income (loss) (in thousands)GAAP | $15.90M | – | – |
| Nine months ended September 30, 2026 diluted EPSGAAP | $0.38 | – | – |
| Nine months ended September 30, 2026 non-GAAP net income (in thousands)non-GAAP | $41.18M | – | – |
| Nine months ended September 30, 2026 non-GAAP net income per diluted sharenon-GAAP | $0.99 | – | – |
| Q3 2026 ending backlogother | $247.2M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Platform revenuePlatform revenue is derived from licenses for software other than Cimetrix runtime licenses and related software maintenance and technical support services; SaaS; engineering services; fixed fees associated with CV systems; and licenses and purchase contracts for DirectScan systems. | $58.33M | – | – |
| Volume-based revenueVolume-based revenue is derived from Cimetrix runtime licenses, secureWISE data, and Gainshare. | $10.00M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
2026 outlook
- Revenue20% annual revenue growth target for 2026
- NoteThe company reaffirmed its 20% annual revenue growth target for 2026.
What drove it
- Record quarterly total revenues of $68.3 million.
- Platform revenue was $58,331 (in thousands) in the third quarter of 2026.
- PDF Solutions announced Exensio Aurora on September 9, 2026. The company described it as a highly-scalable Exensio analytics architecture designed to handle semiconductor manufacturing data at petabyte scale and securely deploy agentic AI across manufacturing operations and the supply chain.
- The company cited actual results through the third quarter and the pipeline for the fourth quarter in reaffirming its 20% annual revenue growth target for 2026.
Concerns
- Ending backlog was $247.2 million, compared to $270.7 million for the second quarter of 2026 and $292.0 million for the third quarter of 2025.
- Volume-based revenue was $10,003 (in thousands), compared to $12,399 (in thousands) in the second quarter of 2026.
- Expenses for certain legal proceedings were $436 (in thousands). The company stated these legal costs and expenses are expected to continue until the matter is fully resolved.
- The filing identifies risks related to semiconductor industry trends, adoption rates, project milestones or delays, customer production volumes under Gainshare contracts, macroeconomic conditions, tariffs, trade regulation, geopolitical tensions, supply chain disruption, and backlog conversion.
What to watch
- Conversion of the $247.2 million ending backlog into revenue.
- The fourth-quarter pipeline cited in support of the reaffirmed 20% annual revenue growth target for 2026.
- Platform and volume-based revenue trends, including Cimetrix runtime licenses, secureWISE data, and Gainshare.
- Adoption and deployment of Exensio Aurora.
- The continuing legal proceeding and related costs.
Balance sheet and cash flow
- Cash and cash equivalents were $107,131 (in thousands) as of September 30, 2026, compared to $42,220 (in thousands) as of December 31, 2025.
- Accounts receivable, net were $96,869 (in thousands) as of September 30, 2026, compared to $82,938 (in thousands) as of December 31, 2025.
- Total current assets were $257,185 (in thousands) as of September 30, 2026, compared to $163,893 (in thousands) as of December 31, 2025.
- Property and equipment, net were $104,333 (in thousands) as of September 30, 2026, compared to $81,609 (in thousands) as of December 31, 2025.
- Goodwill was $94,990 (in thousands) as of September 30, 2026, compared to $95,005 (in thousands) as of December 31, 2025.
- Intangible assets, net were $46,060 (in thousands) as of September 30, 2026, compared to $52,194 (in thousands) as of December 31, 2025.
- Total assets were $540,956 (in thousands) as of September 30, 2026, compared to $418,697 (in thousands) as of December 31, 2025.
- Deferred revenues, current portion, were $32,776 (in thousands) as of September 30, 2026, compared to $19,441 (in thousands) as of December 31, 2025.
- Current portion of long-term debt, net was $2,237 (in thousands) as of September 30, 2026, compared to $2,236 (in thousands) as of December 31, 2025.
- Long-term debt, net was $63,096 (in thousands) as of September 30, 2026, compared to $64,763 (in thousands) as of December 31, 2025.
- Total liabilities were $157,948 (in thousands) as of September 30, 2026, compared to $147,675 (in thousands) as of December 31, 2025.
- Total stockholders' equity was $383,008 (in thousands) as of September 30, 2026, compared to $271,022 (in thousands) as of December 31, 2025.
- No operating cash flow, capital expenditures, or free cash flow was reported in the provided filing text.
Analysis
PDF Solutions delivered record third-quarter total revenues of $68.3 million, up 20% over the third quarter of 2025. The detailed statement of operations reported $68,334 in thousands of revenue, compared with $61,529 in thousands in the second quarter of 2026 and $57,115 in thousands in the third quarter of 2025. Platform revenue was $58,331 in thousands, while volume-based revenue was $10,003 in thousands. The sequential decline in volume-based revenue from $12,399 in thousands is notable even as total revenue reached a record.
Profitability strengthened sequentially and year over year. GAAP gross margin was 73%, compared with 69% in the second quarter of 2026 and 72% in the third quarter of 2025, while non-GAAP gross margin was 77%, compared with 73% and 76%, respectively. GAAP operating margin reached 12%, compared with 8% in both comparison periods. Non-GAAP operating margin was 28%, versus 22% sequentially and 23% a year earlier. GAAP income from operations was $8,286 in thousands and non-GAAP income from operations was $19,222 in thousands.
GAAP net income was $6,841 in thousands, or $0.16 per diluted share, compared with $4,271 in thousands, or $0.10 per diluted share, in the second quarter and $1,294 in thousands, or $0.03 per diluted share, a year earlier. Non-GAAP net income was $17,161 in thousands, or $0.40 per diluted share, compared with $11,372 in thousands, or $0.27 per diluted share, sequentially and $9,805 in thousands, or $0.25 per diluted share, a year earlier. The non-GAAP reconciliation included $8,472 in thousands of stock-based compensation expense, $1,998 in thousands of amortization of acquired intangible assets, and $436 in thousands of expenses for certain legal proceedings.
The balance sheet showed $107,131 in thousands of cash and cash equivalents at September 30, 2026, compared with $42,220 in thousands at December 31, 2025. Long-term debt, net was $63,096 in thousands, and the current portion of long-term debt, net was $2,237 in thousands. Ending backlog was $247.2 million, down from $270.7 million in the second quarter of 2026 and $292.0 million in the third quarter of 2025, making backlog conversion and new business formation central items to monitor.
Management reaffirmed its 20% annual revenue growth target for 2026 based on actual results through the third quarter and the fourth-quarter pipeline. The company also highlighted the September 9, 2026 announcement of Exensio Aurora, describing the architecture as designed for semiconductor manufacturing data at petabyte scale and agentic AI deployment across manufacturing operations and the supply chain. No quantified fourth-quarter revenue, margin, expense, or tax-rate guidance was provided in the filing text.
Management, verbatim
In the third quarter of 2026, PDF Solutions continued its growth trajectory with total revenues 20% higher compared to the third quarter of 2025.
John Kibarian, CEO and President of the Company
On September 9, 2026, we announced Exensio Aurora, the new, highly-scalable Exensio analytics architecture. Exensio Aurora is purpose-built to handle semiconductor manufacturing data at petabyte scale and to securely deploy agentic AI across manufacturing operations and the supply chain. We believe this new architecture will help semiconductor companies address the challenges associated with the fast growth and transformation of the industry. Based on actual results through the third quarter and the pipeline for the fourth quarter, we reaffirm our 20% annual revenue growth target for 2026.
John Kibarian, CEO and President of the Company
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore, no comparison of actual results with prior guidance is available.
- No quantified fourth-quarter 2026 revenue guidance was provided.
- No gross-margin, operating-expense, or tax-rate guidance was provided.
- No operating cash flow, capital expenditures, or free cash flow was reported in the provided filing text.
- No share repurchases or dividends were reported in the provided filing text.
- The referenced third-quarter 2026 Management Report and CFO commentary were not included in the provided filing text.
- No percentage changes were printed for platform revenue, volume-based revenue, expenses, gross profit, operating income, net income, EPS, backlog, or balance-sheet items other than total revenue being up 20% over the third quarter of 2025.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.