Slide 1: Investor Presentation August 2024
Investor Presentation August 2024 John Kibarian, President & CEO, Co-Founder Kimon Michaels, Executive VP, Products and Solutions, Co-Founder Adnan Raza, Executive VP, Finance & CFO © 2024 PDF Solutions, Inc. or its subsidiaries 1
Slide 2: Forward-looking statements
Certain statements in this presentation, and statements that may be made when discussing it, regarding the Company’s future expected business performance and financial results are forward looking and are subject to future events and circumstances. Actual results could differ materially from those ex
Slide 3: PDF Solutions overview
PDF Solutions overview ◼ PDF Solutions provides advanced AI, data analytics and equipment connectivity solutions for the semiconductor industry ◼ PDF Solutions improves Process Efficiency and Reliability 1. Differentiated data from manufacturing, test and in-field use 2. Analytics platform for the e
Slide 4: PDF Solutions Platform Overview
PDF Solutions Platform Overview Data Access & Integration Across the Value Chain Unique View to Data Sources in the Value Chain Exensio® Cimetrix® DFITM & CV ® Systems Analytics Platform Connectivity Platform Proprietary Data Sources Leading Analytics Differentiated Data Bridging the Supply Chain St
Slide 5: An open platform based on industry standards and integrated with leading solutions providers
An open platform based on industry standards and integrated with leading solutions providers Financial: Links business & supply chain data with E2E manufacturing data for automation/analysis of quality & cost Design: E2E manufacturing Test: Differentiated data integration with Test data and enhanced
Slide 6: PDF Solutions Platform Continues to Expand Over Time for Data Analytics
PDF Solutions Platform Continues to Expand Over Time for Data Analytics eProbe Equipment DirectScan Analytics AI / ML Assembly, Cloud Traceability 2022 Big Data Test YA-FDC 2020 Yield 2019 Analysis FDC 2017 Integrated 2015 Yield Ramp 2008 2006 2003 1997 Continued Transition To Subscription Model Enh
Slide 7: Building a Platform for Success
Building a Platform for Success • Analytics revenue grew 9% Y/Y from TTM Q2’23 to TTM Q2’24 GROWTH • Analytics at 93% of total revenue in TTM Q2’24 • GAAP gross margin of 71% for Q2’24 PROFITABILITY • Non-GAAP gross margin of 75% for Q2’24 • 75%+ non-GAAP gross margins target model • Greater than 10
Slide 8: Well-Received 2023 User Conference and Analyst Day
Well-Received 2023 User Conference and Analyst Day ◼ 300+ registered attendees ◼ 17 customer/partner presentations ◼ Over 80 companies and industry organizations represented Presenting Companies © 2024 PDF Solutions, Inc. or its subsidiaries 8
Slide 9: The Opportunity For PDF Is Expanding
The Opportunity For PDF Is Expanding Established strong presence: ◼ >140k equipment factory connections SYSTEM with over >40k process tools ◼ 350+ revenue generating customers in 32 countries in TTM Q2’24 Strong product suite: EMS ◼ Leading commercial provider of Lab to Fab optimization solutions: y
Slide 10: Strong Semiconductor End-Market Drivers
Strong Semiconductor End-Market Drivers ◼ AI is driving increasing data generation and data availability, which in turn is driving semiconductor revenue ◼ Driven by AI, semi revenue expected to reach $1T+ by 2030 Sources: Applied Materials; IDC, April 2023 © 2024 PDF Solutions, Inc. or its subsidiar
Slide 11: Semiconductor Growth Inflection Points
Semiconductor Growth Inflection Points Achieving the necessary semi growth requires overcoming new inflection points ◼ New architectures & materials https://semiwiki.com/semiconductor- services/techinsights/316095-semicon-west- 2022-and-the-imec-roadmap/ ◼ Chiplets ◼ Geographic disaggregation https:
Slide 12: AI Is Enabler For Rapid Growth
AI Is Enabler For Rapid Growth ◼ AI adoption across the semiconductor supply chain is a key component to efficiently achieving semi growth ◼ Successful AI application requires: – Cross-supply chain data integration – The right data, not just more data – AI/ML model operations https://itif.org/public
Slide 13: Corporate Timeline of Key Milestones and Acquisitions
Corporate Timeline of Key Milestones and Acquisitions Continued Transition To Subscription Model 2000 - 2010 2023 1H PDF Solutions Collaboration 2024 1H AISS Acquisition Engagement with a new with proteanTecs and Voltaiq o Layout analysis 2020 2021 leading edge customer First 8-figure size deal of C
Slide 14: Total Semiconductor Analytics TAM
Total Semiconductor Analytics TAM Potential value capture of analytics in Semiconductors Methodology ($ in billions) ▪ Analytics as a portion of total R&D and COGS spending by Semiconductor Companies across $26.1 three categories: ’23-’30 CAGR ▪ Fabless-Logic 9% ▪ IDM $14.3 ▪ Memory/Storage $10.4 ▪
Slide 15: Market Opportunity – PDF SAM
Market Opportunity – PDF SAM $3.0B ◼ SAM of more than $2B ~$2.6 B $2.5B (based on 2023 data) ◼ Growth drivers: $2.0B – Adoption across supply chain Billions $ $1.5B ~$1.3 B – ML & advanced solutions $1.0B – DFI for quality & reliability $0.5B – Transition to cloud 0 2019 2023 Source: PDF Solutions e
Slide 16: Analytics Revenue
Analytics Revenue ◼ Y/Y Analytics Growth of 9% from TTMQ2’23 to TTMQ2’24 ◼ Average Analytics revenue per $155.2 customer, excluding Cimetrix, $877K in TTM Q2’24, a 4% increase from $840K in TTM $ Millions Q2’23 $142.4 TTM Q2 2023 TTM Q2 2024 © 2024 PDF Solutions, Inc. or its subsidiaries 16
Slide 17: Gross Margins
Gross Margins ◼ Analytics customers transitioning to subscription 74% and cloud over time 72% 70% ◼ First monetization of 68% technology was IYR engagements with associated royalties ◼ Second wave of monetization consists of growing the Analytics business TTM Q2'23 TTM Q2'24 GAAP Non GAAP © 2024 PDF
Slide 18: Global Geographic Revenue Distribution
Global Geographic Revenue Distribution TTM Q2’24 ◼ Globally diverse geographic distribution ◼ No country outside the Japan United States accounts for 15% more than ~15% ◼ United States largest market at 51% of revenues United States 51% Rest of the world 34% © 2024 PDF Solutions, Inc. or its subsidi
Slide 19: Disciplined Capital Allocation
Disciplined Capital Allocation ◼ Capex investments Invest inOrganic Growth Invest in M&A to Return Capital to Stockholders through include DFI/eProbe, EnhanceGrowth Stock Buyback CVi, IP, DEX network, and infrastructure Total, $106.3 ◼ Cash balance has increased while PDF: M&A, $33.5 – Invested in C
Slide 20: Long-Term Target Financial Model
Long-Term Target Financial Model Total Revenue Growth >20% Non-GAAP Gross Margins >75% Non-GAAP Operating Margin 20% © 2024 PDF Solutions, Inc. or its subsidiaries 20
Slide 21: Summary – PDF Solutions
Summary – PDF Solutions Rapid Growth Disciplined Improved Capital Profitability Allocation Platform to Drive Stockholder Value Strong Increased Balance Sheet Visibility Enhanced Diversification © 2024 PDF Solutions, Inc. or its subsidiaries 21
Slide 22: Thank You
Thank You pdf-solutions pdfsolutionsinc pdfs.inc pdf_solutions pdfs_cn © 2024 PDF Solutions, Inc. or its subsidiaries 22
Slide 23: Financials - Appendix
Financials - Appendix © 2024 PDF Solutions, Inc. or its subsidiaries 23
Slide 24: Non-GAAP Presentation
Non-GAAP Presentation In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), the Company also provides certain non-GAAP financial measures. NonGAAP gross profit and margin exclude stock- based compensat
Slide 25: GAAP to Non-GAAP Income Reconciliation
GAAP to Non-GAAP Income Reconciliation in thousands (except share amounts, percent of revenue, and EPS) 2020 2021 2022 2023 Q1'24 Q2'24 GAAP net income (loss) $ (40,363) $ (21,488) $ (3,429) $ 3,105 $ (393) $ 1,705 Adjustments to reconcile GAAP net income (loss) to non-GAAP net income (loss): Stock-
Slide 26: GAAP to Non-GAAP Gross Margin Reconciliation
GAAP to Non-GAAP Gross Margin Reconciliation in thousands 2020 2021 2022 2023 Q1'24 Q2'24 GAAP Gross Margin $ 51,281 $ 66,867 $ 100,642 $ 114,086 $ 27,781 $ 29,431 GAAP Gross Margin % 58% 60% 68% 69% 67% 71% Adjustments to reconcile GAAP gross margin (loss) to non-GAAP gross margin: Stock-based comp
Slide 27: Balance Sheet
Balance Sheet ($ '000) 2020 2021 2022 2023 Q1'24 Q2'24 ASSETS Current assets: Cash and short-term investments 145,296 140,226 139,181 135,522 122,884 117,875 Accounts receivable, net 34,140 40,087 42,164 44,904 47,267 56,410 Prepaids and other current assets 13,944 8,194 12,063 17,422 17,165 19,007
Slide 28: © 2024 PDF Solutions, Inc. or its subsidiaries
© 2024 PDF Solutions, Inc. or its subsidiaries 28