PDF Solutions’ Record Revenue Rises 20% as It Reaffirms Annual Growth Target
Key Facts
PDF Solutions reported on November 5 results for the third quarter ended September 30, 2026, posting record quarterly revenue of $68.3 million, up 20% from the same period a year earlier. The company said revenue was about $61.5 million in the second quarter of 2026, meaning it also rose sequentially. It reaffirmed its 20% annual revenue growth target for 2026, citing results through the third quarter and its fourth-quarter business pipeline. But the operating picture included a decline in backlog compared with both reference quarters. The stock closed at $34.52 in the November 5 session, according to EL7 data.
GAAP net income improved to $6.8 million in the third quarter, compared with $4.3 million in the second quarter of 2026 and $1.3 million in the third quarter of 2025. Non-GAAP net income was $17.2 million for the same period. The difference reflects results calculated on two different bases, so GAAP net income remains separate from the adjusted measure reported by the company. The improvement extended beyond net income, as operating and gross margins widened during the quarter. The quarterly and annual comparisons provide context for the company’s results, while the two accounting measures should not be combined in a single reading.
GAAP operating margin was 12% in the third quarter, versus 8% in both the second quarter of 2026 and the third quarter of 2025. Non-GAAP operating margin reached 28%, the company said. GAAP gross margin was 73%, up from 69% in the second quarter. On a non-GAAP basis, gross margin was 77%, versus 73% in the previous quarter. These comparisons reflect improved margins in the third quarter, with a difference in measurement between the figures presented under GAAP and the adjusted figures.
By contrast, backlog totaled $247.2 million at the end of the quarter, versus $270.7 million in the second quarter of 2026 and $292.0 million in the third quarter of 2025. The decline put backlog below its previous quarterly and annual levels, alongside the company’s revenue growth during the period. In its second-quarter results, the company said it had secured major customer wins for secureWISE and DirectScan systems and Exensio products and services. It added at the time that it expected the increased backlog to contribute to revenue over several years. Realizing that contribution depends on converting backlog into revenue, which the company included among the risks that could cause actual results to differ from expectations.
On its products, Chief Executive John Kibarian said the company announced its new Exensio Aurora analytics architecture on September 9, 2026, designed to process semiconductor manufacturing data at petabyte scale. He described it as a highly scalable architecture built to handle those data volumes. He said the platform was also designed to deploy agentic AI securely. The announcement provides product context for the quarterly results, alongside the company’s systems and products mentioned in its previous report. The results statement did not provide a figure for Aurora’s contribution to third-quarter revenue.
The company identified a range of risks related to its outlook, including semiconductor industry trends, inflation, changes in interest rates, tariffs and supply chain disruptions. It also listed its ability to convert backlog into revenue among the factors that could cause results to differ materially from expectations. At the same time, it reaffirmed its 20% annual revenue growth target for 2026, saying it was based on actual results through the end of the third quarter and its fourth-quarter business pipeline. The results discussion call was scheduled to begin on November 5 at 2:00 p.m. Pacific time, or 5:00 p.m. Eastern time. The call was the designated opportunity to discuss the period’s results with the company on announcement day.