PDF Solutions, Inc.

For Q1 2026, PDF Solutions reported total revenue of $60.1 million, up 26% year over year. Platform revenue was $50.9 million, up 36%, while volume-based revenue was $9.2 million, down 12% due mainly to lower gain share. Gross margin came in at 76% versus 77% last quarter, operating margin was 25% versus 18% a year ago, net income was $12.6 million versus $8.1 million, and EPS was $0.31 versus $0.21. Backlog was $246 million, up 9% year over year. Looking ahead, management reiterated that 2026 revenue should grow year over year in line with its 20% long-term target and that it expects meaningful progress toward 77% gross margin and 27% operating margin.

John Kibarian framed the quarter as a strong start to the year, saying bookings and product development showed PDF is advancing toward being the semiconductor industry’s leading commercial data analytics and mission-critical platform. He emphasized that AI is changing semiconductor engineering and manufacturing, and said customers are increasingly engaging PDF to understand how its platform can help with that transition. His tone was notably optimistic, describing this as the most interesting business environment he has seen in 25 years at the company.

Adnan Raza highlighted several large bookings, including a double-digit million-dollar Exensio Test Operations booking, an Exensio renewal with a large fabless customer, and a fab control software booking in Asia. He said gross margin was 76%, operating margin was 25%, and operating profit was approximately $15 million, while net income reached $12.6 million and EPS was $0.31. Cash, cash equivalents and short-term investments ended at $31 million, down from $42 million, largely because about $10 million was used for CapEx tied to eProbe systems; he also said CapEx should increase this year versus last, but cash is expected to grow later in the year, especially in the second half.

Analysts focused on eProbe demand, the pipeline for 2027, secureWISE expansion, CapEx, customer concentration, and gross margin sensitivity to volume-based revenue. Management said about one-third of the 6 planned eProbe shipments should go to net-new customers, with 5 of the 6 expected to generate revenue and 1 likely serving as a demo machine; it also said any additional machines not shipped this year would likely start contributing next year. On secureWISE, management said the product is expanding from equipment vendors into fabs, OSATs, fabless companies, and eventually foundries, with a deep pipeline and early customer validation such as Intel standardizing on secureWISE.