PDF Solutions 2025 Q2 Earnings In-Line with Guidance as Net Income Slips 33%

PDF Solutions reported its fiscal 2025 Q2 earnings on Aug 7, 2025, delivering in-line performance with reaffirmed guidance but experiencing a decline in net income. The company maintained its previous revenue growth forecast of 21-23% for 2025, despite a 32.8% year-over-year drop in net income.

Revenue

PDF Solutions achieved robust revenue growth of 24.2% year-over-year, reaching $51.73 million in Q2 2025. This increase was primarily driven by the Analytics segment, which saw a significant 28% year-over-year rise to $48.82 million. The Integrated Yield Ramp segment contributed $2.91 million to the total, marking a modest improvement from the prior year but a decline compared to the first quarter of 2025. The strong performance in the core Analytics business underscores the company’s ability to leverage AI-driven digitization and advanced manufacturing analytics to meet growing demand in the semiconductor and electronics industry.

Earnings/Net Income

The earnings performance showed a decline in both EPS and net income. Earnings per share (EPS) for the company fell by 25.0% year-over-year to $0.03 in Q2 2025, compared to $0.04 in Q2 2024. Net income also dropped to $1.15 million in the quarter, reflecting a 32.8% year-over-year decrease from $1.71 million. These declines indicate a narrowing of profit margins despite the revenue growth, suggesting potential cost pressures or operational adjustments impacting profitability.

Price Action

Following the earnings report, the stock price of PDF Solutions declined. Over the latest trading day, the stock dropped 3.44%, and it continued to fall slightly by 0.22% during the most recent full trading week. On a month-to-date basis, the stock declined 6.41%, reflecting a bearish market response to the earnings outcome.

Post-Earnings Price Action Review

The strategy of buying PDF Solutions shares after the revenue drop quarter-over-quarter on the earnings release date and holding for 30 days yielded moderate returns, but underperformed the broader market. The approach generated a compound annual growth rate (CAGR) of 3.12%, which trailed the benchmark by 42.19%. While the strategy demonstrated minimal risk, characterized by a maximum drawdown of 0.00% and a Sharpe ratio of 0.07, it offered only conservative returns. Investors seeking stability in a volatile market may find this approach suitable, although it is unlikely to deliver high growth.

CEO Commentary

John Kibarian, CEO and President of PDF Solutions, highlighted the company’s strong customer activity and platform development during the quarter. He emphasized the role of AI-driven digitization in driving record bookings in both the Sapience™ Manufacturing Hub and the newly acquired secureWISE® offerings. Kibarian underscored the comprehensive capabilities of the PDF Platform, which spans analytics, AI/Model Ops, enterprise connectivity, equipment, and supply chain, in addressing complex manufacturing and testing environments. Reaffirming confidence in the company’s product portfolio and momentum, Kibarian reiterated the 21-23% annual revenue growth guidance for 2025.

Guidance

PDF Solutions reaffirmed its prior guidance of 21-23% annual revenue growth for 2025, citing strong second-quarter performance and continued momentum across its product offerings. This reaffirmation reflects the company’s confidence in its ability to sustain growth despite the near-term earnings challenges.

Additional News

On Aug 7, 2025, PDF Solutions announced the acquisition of SecureWise LLC, a wholly owned subsidiary, in March 2025. The acquisition is expected to enhance the company’s offerings in the secure manufacturing and data analytics space. The company has not disclosed any C-level executive changes or dividend-related updates in the recent period. The integration of the newly acquired secureWISE® offering has already contributed to record bookings in the second quarter, indicating a strategic focus on expanding its AI-driven solutions and strengthening its market position in the semiconductor industry.