2025 was a transformative year for PDF Solutions. We achieved record revenues of $219 million, a 22% year-over-year growth, and significantly expanded both our gross margin and operating margin. More importantly, we took decisive strategic actions to position PDF Solutions as the leading commercial data, analytics, and mission critical platform for the semiconductor industry.
The Industry Inflection Point
The semiconductor industry is undergoing a fundamental transformation driven by three converging forces. First, the explosive complexity of 3D chiplet-based system manufacturing has multiplied test insertions and tightened process tolerances, requiring entirely new approaches to characterization, analysis, and production control. Second, artificial intelligence (AI) is driving the path to a $1 trillion semiconductor industry before 2030, while the chip industry itself must increasingly leverage AI to keep pace with that demand. Third, geopolitical realities have accelerated geographic diversification, creating a globally distributed manufacturing landscape that demands secure, seamless collaboration across every step of the supply chain.
From analytics to manufacturing platform: scaling data, systems, and connectivity across the semiconductor ecosystem
These forces are reshaping what our customers need from PDF Solutions. Their requirements have gone beyond just analytics tools used independently at each site; semiconductor companies need an AI-driven collaboration platform that connects engineers, manufacturing operations, and finance functions across enterprises and supply chains. PDF Solutions is uniquely positioned to capture that opportunity.
2025 Accomplishments
Our 2025 financial results reflect the strength and momentum of our platform strategy:
- Total revenues: $219 million (up 22% year-over-year), marking our highest annual revenue ever
- Platform revenue: $181 million (up 15% year-over-year)
- Volume-based revenue: $38 million (up 70% year-over-year), driven by contributions from gainshare and secureWISE
- Recurring revenue: $205 million (up 41% year-over-year)
- GAAP gross margin: 72% (non-GAAP gross margin: 76%); GAAP operating margin: 3% (non-GAAP operating margin: 21%)
- GAAP diluted EPS: $(0.02) per share (non-GAAP diluted EPS: $0.94 per share, up 12% from $0.84 in 2024)
- Year-end backlog: $254 million (up 15% year-over-year)
Completing Our Largest Acquisition: the secureWISE™ System
In early 2025, we completed our largest acquisition to date and added secureWISE products and services to our offerings. Our secureWISE system is the leading remote connectivity network connecting semiconductor equipment vendors to fabs. Since secureWISE system is present in virtually every 300-millimeter factory in the world, it extends our platform’s reach deep into the operational core of our customers’ facilities. Our secureWISE system provides a secure connectivity layer that makes AI-driven collaboration across the global supply chain possible: connecting fabs, equipment makers, OSATs, and fabless companies at the data level.
Reinventing Exensio® for the AI Era
Throughout the year, we continued work on a major rearchitecting and expansion of our Exensio analytics software in two dimensions. First, we enhanced our data model and announced the Exensio Scalable Analytics module, delivering a breakthrough that is architected to scale linearly with data size. It is designed to enable engineers to work interactively with large data sets far beyond what has been previously achievable. Second, we leveraged proven AI under license from Intel to integrate a data science machine learning (ML) development environment and lifecycle management solution within Exensio and the announced Exensio Studio AI module, which is designed to enable customers to build and deploy repeatable and automated AI systems from raw inputs to usable, reliable outputs at scale, while using their Exensio data. Historically, only a very small proportion of manufacturing data collected was actually used to create actionable insights. AI is changing this, enabling more data to be rapidly analyzed and potentially dramatically reshaping how work is done. For our industry, that means moving beyond analytical tools used by individual teams to an enterprise platform, such as that offered by PDF Solutions, where, in an ideal world, humans set the rules and AI executes at scale, mining 100% of the data 100% of the time, automating up to 90% of analysis, and rendering results in seconds.
Advancing Sapience™ Manufacturing Hub Enterprise (Sapience MHe)
In 2025, we initiated multiple engagements to deploy our Sapience MHe, a manufacturing orchestration solution deployed in partnership with SAP. Sapience MHe enables the integration of manufacturing execution systems (MES) with enterprise applications, like enterprise resource planning (ERP) or product lifecycle management (PLM), enabling data to be shared seamlessly across internal groups and drive coordinated actions between engineering, manufacturing operations, and finance.
DirectScan™ Systems: Expanding Advanced Inspection with our Proprietary eProbe® Tool
In 2025, we expanded the use of our DirectScan systems into manufacturing by shipping two systems to our first production fab users. This is on top expanding use at the three R&D sites we were already engaged at, as well as other customer evaluations. Our non-contact electron beam eProbe inspection machine is designed to enable customers to identify production issues in-line. As chiplet and 3D packaging complexity proliferates, the demand for in-line electrical inspection is growing and we believe our DirectScan system is an increasingly critical tool for our customers.
Demonstrating Ecosystem Leadership
At our 2025 Users Conference and Analyst Day in December, we showcased the breadth and depth of the PDF Solutions Platform’s capabilities to customers, partners, and investors. Intel talked to attendees about the benefits of using Exensio to standardize their manufacturing analytics infrastructure on an enterprise basis. Other customers, such as Qualcomm, shared testimonials about how they are using our platform to link data across the value chain and standardize and automate data access. We believe we are an increasingly trusted partner across a wide array of operations.
Looking Ahead
We operate in a world of genuine geopolitical and macroeconomic uncertainty. Importantly, we believe that our business model, built on recurring revenue, long-term contracts, and a platform that becomes more valuable as our customers expand, gives us resilience that other companies in our industry do not enjoy.
Looking further ahead, I believe we are at the beginning of a decade-long opportunity. As the semiconductor industry approaches $1 trillion in revenue, I believe that the complexity, scale, and geographic distribution of manufacturing will require the kind of AI-driven collaboration platform we are building. I also believe that the work we are doing today, including connecting systems, securing data flows, and starting to enable AI at scale, will be key to the industry’s operating model for years to come.
Weare grateful to our customers for their trust and partnership, to our employees for their dedication and ingenuity, and to our stockholders for their continued confidence in PDF Solutions. Together, we can seize the opportunities ahead!