PDF Solutions, Inc. (NASDAQ:PDFS) Q3 2022 Earnings Call Transcript

Adnan Raza: Yes. First of all, we are happy that, that Gainshare number is much higher than we expected. And overall, it helps the trend compared to Q3 of last year for what we are seeing. So yes, I think the right way to think about it is on a year-to-date basis in terms of progress. And yes, it’s related to later reporting from the customer, particularly some of those customers were experiencing some COVID-related shutdowns. So from a reporting standpoint, they’re caught up with the reporting during this quarter.

Tom Diffely: Okay. But it looks like if you take out that $2 billion, you’re, okay €“ John.

John Kibarian: Production inside 2022, right, that they caught up on reporting in Q3 in part because I think some of their ability to operate their offices during the COVID shutdowns.

Tom Diffely: Okay. But if you take out the $2 million, you’re still €“ you’re showing some nice growth in that line item?

Adnan Raza: Yes. I mean Q3, just for that particular customer and of itself, even if you took out the onetime adjustments it was a very respectable growth compared to Q1 and Q2 of this year. So overall from this customer, we’re starting to see the volumes ramp up similar to what John said earlier, that is trailing edge volumes that we see picking up.

Tom Diffely: Great. And then finally, obviously, nice to see the Advantest offer the DPT come out. How many such projects do you have that are going to, do you think rolling out over the next several years?

John Kibarian: Well, certainly, it’s hard to forecast, Tom. But I can say over the next couple of quarters, we expect to put out a number of additional applications for Advantest that you’ll see us announce. And there’s also other activities with Siemens testing and productization going on work with €“ in cell phone productization on work there, activities with SAP and the productization of the integration of analytics with ERP systems. So each one of these partnerships, when we take them on, we make a commitment on the development side, not just the kind of marketing and press release side of it. And so there will be products associated at least one product associated with each one of these releases. And in the case of Advantest, where we have the most work going on. We are already at the four on the website plus DPT and a handful more of them in the next couple of quarters, so we’ll quickly be approaching 10 apps across just for them.

Tom Diffely: Great to hear. Okay. Well, thank you both for your time today.

Operator: Next is from Auguste Richard of Northland.

Auguste Richard: Yes. Thanks for taking the question. I think I’d be, Tom, on the number of times I hit star 1. Real quick on this new contract you’ve got a part of it is DFI. It sounds like it is a subscription service? Or are you shipping a tool? And sort of what does that do to the availability of DFI tools after this transaction?

John Kibarian: Sure. It does include shipping the tool. As I said in my prepared remarks, Exensio and our IT hardware what we call Templatizer, our design manufacturing €“ optimization software we call fire . Those are available on the Exensio Cloud, so they access that from the cloud. But obviously, the characterization vehicles and the DFI infrastructure needs to be on-premise. And so those are on-premise and that will ship. That will, of course, reduce will take €“ we have fewer machines that we could ship. To be candid with you, Gus, so we have really only a couple that we could truly ship to customers at this point beyond what we’re committed to in 2023. And we also we’re very careful to make sure we’ve got customers really fully getting maximum value of what we shipped and moving appropriately.