PDF Solutions (PDFS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $41.7 million, flat year-over-year, with analytics revenue up 3% to $38.1 million and Integrated Yield Ramp revenue down 21% to $3.5 million due to lower customer wafer shipments.

• GAAP net income for Q2 2024 was $1.7 million ($0.04 per diluted share), down from $6.8 million in Q2 2023, mainly due to higher expenses; non-GAAP net income was $7.1 million ($0.18 per diluted share).

• Backlog increased to $243.2 million at Q2 close, up from $229.8 million at year-end 2023.

• Cash, cash equivalents, and short-term investments totaled $117.9 million at quarter end, down from $123 million last quarter and $135.5 million at year-end 2023.

• Strong customer engagement in advanced logic, AI/ML test control, and digital transformation initiatives drove business momentum.

Financial highlights

• GAAP gross margin for Q2 2024 was 71%, up from 70% a year ago and 67% sequentially; non-GAAP gross margin was 75%.

• GAAP EPS was $0.04, non-GAAP EPS was $0.18, both down from Q2 2023.

• Operating cash flow for the first half of 2024 was negative $1.2 million, an improvement from negative $6.6 million in the prior year period.

• CapEx increased to $5.3 million in Q2 and $7.3 million in the first half of 2024, mainly for DFI system investment.

• Working capital as of June 30, 2024, was $137.8 million.

Outlook and guidance

• Management expects second-half 2024 revenue to grow 20% over the comparable period in 2023.

• Backlog is anticipated to continue growing in the second half.

• CapEx is expected to remain elevated in coming quarters to support DFI system demand.

• Commitment to long-term 20% annual revenue growth target reaffirmed.

• Existing cash resources and anticipated funds from operations are expected to meet operating and capital needs for at least the next twelve months.