PDF Solutions Keeps 20% Growth Target After Record $68.3 Million Quarter
Profit and margins improved, but contracted business awaiting revenue recognition fell to $247.2 million.
PDF Solutions, which supplies software and hardware to help semiconductor and electronics companies improve manufacturing quality and efficiency, reported record third-quarter sales of $68.3 million Thursday and reaffirmed its 20% revenue growth target for 2026. The earnings release accompanying its SEC filing also showed a smaller backlog despite higher profit.
Record Sales, Less Contracted Business
Revenue grew 20% from the third quarter of 2025, when sales were $57.1 million. The latest total also exceeded the second quarter’s $61.5 million, with management reporting an 11% increase from that quarter.
Backlog — contracted business still awaiting recognition as revenue — stood at $247.2 million. That compares with $292.0 million a year earlier and $270.7 million in the second quarter.
The revenue mix changed, too. Recurring business supplied 88% of sales, below the year-earlier 95% but above the second quarter’s 80%. Upfront revenue accounted for the remaining 12%, versus 5% a year earlier and 20% in the second quarter.
More Sales Reached The Bottom Line
Net income reached $6.8 million, with diluted earnings of $0.16 a share. The year-earlier quarter produced $1.3 million and $0.03 a share; the second quarter generated $4.3 million and $0.10 a share.
Adjusted net income was $17.2 million, or $0.40 a diluted share, against $9.8 million and $0.25 a year earlier. The second-quarter adjusted figures were $11.4 million and $0.27 a share. Those adjusted results exclude stock-based pay, amortization of acquired assets and certain other expenses, with tax adjustments also affecting the comparison.
Operating margin — the share of revenue left after operating expenses — reached 12%, versus 8% in both comparison quarters. On an adjusted basis, the margin was 28%, above 23% a year earlier and 22% in the second quarter.
Gross margin, which measures revenue remaining after direct costs but before operating expenses, was 73%. The year-earlier figure was 72%, and the second-quarter figure was 69%. Adjusted gross margin reached 77%, compared with 76% and 73%, respectively.
Cash generation did not cover capital spending during the quarter: operations provided $13.8 million, while capital spending totaled $15.1 million.
Platform Growth And Aurora’s AI Push
Platform revenue reached $58.3 million, growing 22% from a year earlier and 19% from the second quarter. That category includes software licenses, cloud subscriptions, engineering work and fixed system fees. Volume-based fees totaled $10.0 million, up 10% from a year earlier but down 19% from the second quarter.
The Santa Clara, California-based company serves foundries, chip designers without their own factories, equipment manufacturers, and chip assembly and testing businesses. Its products include Exensio analytics, Characterization Vehicle test-chip systems, DirectScan inspection tools, Cimetrix equipment-connectivity software and the secureWISE remote-connectivity network.
PDF Solutions announced Exensio Aurora on September 9, 2026. The company says the analytics architecture is built to process large quantities of semiconductor-manufacturing data and allow secure use of AI agents in manufacturing and supply-chain operations.
John Kibarian, PDF Solutions’ CEO and president, cited results through the third quarter and the fourth-quarter pipeline in maintaining the outlook: “we reaffirm our 20% annual revenue growth target for 2026.”
Sources
- 8-K Filing — PDF SOLUTIONS INC (PDFS) — SEC EDGAR
- Exhibit ex_1002246.htm — PDF SOLUTIONS INC 8-K exhibit — SEC EDGAR
- Exhibit ex_1002247.htm — PDF SOLUTIONS INC 8-K exhibit — SEC EDGAR
- PDF Solutions® Reports Third Quarter 2026 Financial — globenewswire.com
