PDF Solutions Inc. (NASDAQ:PDFS) Q3 2019 Earnings Conference Call - Final Transcript

Oct 31, 2019 • 05:00 pm ET

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PDF Solutions Inc. (NASDAQ:PDFS) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen. And welcome to the PDF Solutions, Inc. conference call to discuss its financial results for the third quarter ended Monday, September 30th, 2019. [Operator instructions] As a reminder, this conference is being recorded.

If you have not yet received a copy of the corresponding press release, it has been posted to PDF's website at www.pdf.com. Some of the statements that will be made in the course of this conference are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding PDF's future financial results and performance, growth rates and demand for its solutions. PDF's actual results could differ materially.

You should refer to the section entitled risk factors on PDF's Annual Report on Form 10-K for the fiscal year ended December 31st, 2018, and similar disclosures and subsequent SEC filings. The forward-looking statements and risks stated in this conference call are based on the information available to PDF today. PDF assumes no obligation to update them.

Now I'd like to introduce John Kibarian, PDF's President and Chief Executive Officer and Christine Russell, PDF's Chief Financial Officer.

Mr. Kibarian, please go ahead.

Executive
John K. Kibarian

Thank you, and welcome, everyone. If you've not already seen our earnings press release and management report presentation for the third quarter, please go to the Investors section of our website, where each has been posted.

Our results in the third quarter showed continued progress towards our objective; to be the provider of choice for end-to-end analytics and manufacturing controls to the semiconductor and electronics industry. Our results reveal the ongoing evolution from being important to our customers in ramping leading-edge logic nodes to being even more valuable for controlling quality, reliability, yield and operational effectiveness across the lifetime of semiconductor production.

This is leading to a growing customer base. In the past, our focus on ramping leading-edge logic resulted in only a handful of customers driving the majority of our revenue. This caused our business to be tied closely to the investment cycle on leading-edge logic.

Our business is now driven by analytics, and we have over 130 customers that make everything from leading-edge logic to high-voltage discretes, mixed signal, memory and systems. The emphasis on analytics has grown our available market and will create a more predictable result from PDF.

With more than 50% of total revenue in the third quarter coming from analytics-based deals and another strong bookings quarter, primarily for analytics-based products, PDF Solutions continues its strategic evolution to be the provider of choice for end-to-end analytics and manufacturing controls to the semiconductor and electronics industry.

For the customers and analysts that attended our combined Exensio users' conference in 2019 Analyst Day, our progress on the evolution was clear. We had professionals from over 50 companies attend and 11 papers presented by our customers.

We also presented our perspective of the industry dynamics and our product development road map to meet our customers' growing requirements. Our users' presentations showed the value of end-to-end analytics, the