Slide 1: Investor Presentation August 2022
Investor Presentation August 2022 John Kibarian, President & CEO, Co-Founder Kimon Michaels, Executive VP, Products and Solutions, Co-Founder Adnan Raza, Executive VP, Finance & CFO © 2022 PDF Solutions, All Rights Reserved 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 provides advanced data analytics, machine learning, and equipment connectivity products, services, and systems for the semiconductor supply chain ◼ PDF products improve process efficiency and product reliability: – Analytics software and services for the end-to-end needs
Slide 4: Building a Platform for Success
Building a Platform for Success • 54% CAGR of analytics revenue from TTM Q2’21 to TTM Q2’22 GROWTH • Analytics at 91% of total revenue in TTM Q2’22 vs. 70% in TTM Q2’21 • GAAP gross margin of 65% for Q2’22 PROFITABILITY • Non-GAAP gross margin of 69% for Q2’22 • 70%+ non-GAAP gross margins target mo
Slide 5: The Leading Data Analytics Platform
The Leading Data Analytics Platform 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 Chai
Slide 6: PDF Business Models
PDF Business Models PDF has two business models to capture the value of our solutions, which combines advanced analytics and differentiated data Subscription Model: Gainshare Model: when value is data and analytics when value is time to volume – Analytics is primarily subscription-based and is the –
Slide 7: Benefiting From Strong Market Tailwinds
Benefiting From Strong Market Tailwinds Value in Semiconductor Supply Chain Shifting to Mass Production: – Increased value in mass production continuous improvement vs. simply time to market – Financial risk shifting away from foundry to fabless & system companies Foundries consolidating due to % of
Slide 8: Data and Analytics Growing in Importance
Data and Analytics Growing in Importance Data & Analytics in Semis & Electronics ($B) $32 $18 2020 2027 Data & Analytics in Semiconductor & Electronics Companies moving to faster decision speed with manufacturing is expected to grow significantly greater sophistication, especially in tech. sector 50
Slide 9: PDF has a Unique View & Comprehensive Access to Data Across the Supply Chain
PDF has a Unique View & Comprehensive Access to Data Across the Supply Chain ✓ Wafer-level grading and Coverage by disposition Design Semis Parametric Wafer Assembly Final System-level ✓ Test reduction and adaptation manufacturing test sort test test ✓ Die quality and RMA prediction ✓ Virtual metrol
Slide 10: PDF Spans and Bridges the Supply Chain Stack to Enable Smart Manufacturing
PDF Spans and Bridges the Supply Chain Stack to Enable Smart Manufacturing ✓ The only commercial data and SYSTEM analytics-focused provider with breadth and scale EMS required by our customers ✓ Analytics and data SEMI (Fabless, Fab-lite) implemented broadly across the supply chain ✓ Most of the top
Slide 11: Customer Base Spans Equipment, Fabless, Fab, OSAT and System
Customer Base Spans Equipment, Fabless, Fab, OSAT and System >125K equipment >40K process tools >330 revenue #1 commercial Fastest growing Leading solution for to factory under PDF process generating customers solution for mfg yield commercial provider die traceability connections control across the
Slide 12: Available Market Size
Available Market Size ◼ Today, PDF provides the only 1,800 commercial, supply-chain- IYR 1,600 DFI wide analytics products, 1,400 Analytics w/o DFI services, and systems 1,200 ◼ Growth in analytics market Millions $ 1,000 800 being driven from 600 – Move to cloud and increased data volumes 400 – Add
Slide 13: PDF Solutions and Advantest Partnership – July 2020 Announcement
PDF Solutions and Advantest Partnership – July 2020 Announcement Overview of PDF Solutions Strategic Rationale of Partnership Mfg Test Assembly Analytics Operations Operations ◼ The only end-to-end data and analytics solutions provider for the ◼ >40 and deepens Expands >100 tools >20 supported >50 b
Slide 14: PDF Offers Connectivity and Control for Manufacturing Equipment Since Dec 2020
PDF Offers Connectivity and Control for Manufacturing Equipment Since Dec 2020 Data Sources ◼ PDF is the only provider of analytics, differentiated data and connectivity ◼ PDF’s mission is to lead the Data Connectivity Platform trend toward Smart (SECS/GEM, GEM300, EDA/Interface A) Manufacturing & I
Slide 15: Acquisitions and Product Releases Expanded Scope
Acquisitions and Product Releases Expanded Scope Gainshare Model “Selling Time to Volume” Subscription Model “Selling Actionable Data” 2022 July 2021 PDF Solutions Announces Conversion of Quick Start Collaboration with SAP contract to a large 2018 booking for Leading Edge 2015 CV Core and Exensio Sa
Slide 16: Revenue Transition to Analytics
GROWTH Revenue Transition to Analytics Integrated Integrated Yield Ramp TTM Q2’21 Yield Ramp TTM Q2’22 30% 9% 70% 91% Analytics Analytics © 2022 PDF Solutions, All Rights Reserved 16
Slide 17: Analytics Revenue
GROWTH Analytics Revenue ◼ Y/Y Growth of 54% from TTM Q2’21 to TTM Q2’22 ◼ Average Analytics revenue per $116.0 customer, excluding Cimetrix, $748K in TTM Q2’22 a 62% increase from $461K in TTM $ Millions Q2’21 $67.8 TTM Q2'21 TTM Q2'22 © 2022 PDF Solutions, All Rights Reserved 17
Slide 18: Gross Margins
PROFITABILITY Gross Margins ◼ Progressing towards our long 68% term target Non-GAAP gross margin of 70%+ ◼ Analytics customers transitioning to subscription 64% and cloud over time 62% ◼ First monetization of technology was IYR engagements with associated royalties 58% ◼ Second wave of monetization
Slide 19: Global Geographic Revenue Distribution
DIVERSIFICATION Global Geographic Revenue Distribution ◼ Globally diverse geographic TTM Q2 2022 distribution ◼ No country outside the 15% United States accounts for more than ~13% 34% ◼ North America largest market APAC at 51% of revenues NORTH AMERICA EMEA 51% © 2022 PDF Solutions, All Rights Rese
Slide 20: Balance Sheet Strength
STRENGTH Balance Sheet Strength ◼ Existing balance sheet End of End of Q1 Q2 strength provides foundation ($ Millions) for investment in growth of 2020 2021 2022 2022 Cash and ST invt $145.3 $140.2 $134.2 $117.3 analytics business both Debt $0 $0 $0 $0 organically and inorganically ◼ Share buyback o
Slide 21: Disciplined Capital Allocation
Disciplined Capital Allocation INVESTMENT ◼ Capex investments include Return Capital to DFI, CVi, IP, DEX network, and Invest in Organic Invest in M&A to Shareholders through Growth Enhance Growth Stock Buyback infrastructure ◼ Cash balance has increased while we: – Invest in Capex Capex Share Repur
Slide 22: Target Financial Model
VALUE Target Financial Model Target Annual Analytics Revenue Growth 20% Non-GAAP Gross Margins >70% Non-GAAP Operating Margin 20% © 2022 PDF Solutions, All Rights Reserved 22
Slide 23: Summary
Summary Rapid Growth Disciplined Improved Capital Profitability Allocation Platform to Drive Shareholder Value Strong Increased Balance Sheet Visibility Enhanced Diversification © 2022 PDF Solutions, All Rights Reserved 23
Slide 24: Thank You
Thank You pdf-solutions pdfsolutionsinc pdfs.inc pdf_solutions pdfs_cn © 2022 PDF Solutions, All Rights Reserved 24
Slide 25: Financials - Appendix
Financials - Appendix © 2022 PDF Solutions, All Rights Reserved 25
Slide 26: 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. Non- GAAP net income (loss) excludes the effects of non-recurr
Slide 27: GAAP to Non-GAAP Income Reconciliation
GAAP to Non-GAAP Income Reconciliation in thousands (except share amounts, percent of revenue, and EPS) 2020 2021 Q1'22 Q2'22 GAAP net income (loss) $ (40,363) $ (21,488) $ (4,150) $ (1,148) Adjustments to reconcile GAAP net income (loss) to non-GAAP net income (loss): Stock-based compensation expen
Slide 28: GAAP to Non-GAAP Gross Margin Reconciliation
GAAP to Non-GAAP Gross Margin Reconciliation in thousands 2020 2021 Q1'22 Q2'22 GAAP Gross Margin $ 51,281 $ 66,867 $ 21,968 $ 22,627 GAAP Gross Margin % 58% 60% 66% 65% Adjustments to reconcile GAAP gross margin (loss) to non-GAAP gross margin: Stock-based compensation expense 3,454 2,563 728 655 A
Slide 29: Balance Sheet
Balance Sheet Actual Actual Actual Actual ($ '000) 2020 2021 Q1'22 Q2'22 ASSETS Current assets: Cash and short-term investments 145,296 140,226 134,242 117,250 Accounts receivable, net 34,140 40,087 37,753 36,117 Accounts receivable, net 26,964 Unbilled accounts receivable 7,176 Prepaids and other c
Slide 30: © 2022 PDF Solutions, All Rights Reserved
© 2022 PDF Solutions, All Rights Reserved 30