PDF Solutions (PDFS) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $60.1 million, up 26% year-over-year, driven by strong Platform sales, Exensio, Cimetrix, and SecureWISE contributions, with robust bookings and deepening customer collaborations.

• GAAP net income was $4.8 million, reversing a net loss in the prior year, while non-GAAP net income rose to $12.6 million.

• Platform revenue rose 36% to $50.9 million, while volume-based revenue declined 12% due to lower Gainshare.

• AI-driven transformation in semiconductor manufacturing is driving increased customer engagement and larger deployments.

• Backlog at quarter-end was $246.4 million, up 9% year-over-year.

Financial highlights

• GAAP gross margin was 72%, down 1 percentage point year-over-year; non-GAAP gross margin was 76%.

• GAAP operating margin improved to 10%, while non-GAAP operating margin was 25%, up from 18% a year ago.

• GAAP diluted EPS was $0.12; non-GAAP diluted EPS was $0.31, up 48% year-over-year.

• Gross profit increased 24% to $43.2 million.

• Cash and cash equivalents were $31.2 million at quarter-end, down from $42.2 million due to CapEx for eProbe systems.

Outlook and guidance

• Management reaffirmed full-year revenue growth target of 20% and progress toward long-term gross margin of 77% and operating margin of 27%.

• CapEx is expected to rise in 2026, primarily for eProbe and DirectScan systems, but cash balance is projected to grow in the second half.

• Management expects continued volatility in semiconductor demand due to macroeconomic and geopolitical factors, but sees ongoing opportunities from Industry 4.0 and cloud analytics.