PDF Solutions (PD9) Q3 2026 Earnings Report

The call was strongly positive overall. The company reported record revenue, robust platform and equipment-related growth, substantial margin and EPS expansion, positive operating cash flow, major customer bookings, and strong customer interest in eProbe and Exensio Aurora. The main challenges were the sequential backlog decline, timing uncertainty around large contracts, eProbe build and supplier constraints, limited China exposure, and limited visibility into 2027. These lowlights were outweighed by the financial performance, reaffirmed 2026 growth target, and stated expansion opportunities.

PDF Solutions reaffirmed its 20% annual growth target for 2026 and 20% annual revenue growth rate for this year, expects to close the year with backlog above the $271 million backlog seen for the second quarter, and said Q4 gross margin should be “somewhere between the 75% and where our target margin model is,” with a long-term target model of 77% gross margin and 27% operating margin. The company expects Q4 CapEx to be “at or below” the “high number for the year,” reported as $15.1 million in Q3, and said free cash flow positive is the right direction to think about for the whole year, with expectations of growing the cash balance. For 2027, PDF has not given direct guidance, but said nothing about 2027 has it thinking growth will be less than its typical targets, expects to build more eProbe tools than it built this year, and expects secureWISE to have “a very good year”; if WFE is up “in the 30s or 40s,” runtime licenses year-over-year tend to be “in that range.”