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spk00: good day and thank you for standing by welcome to pdf solutions second quarter 2021 conference call at this time all participants line are in the listen only mode after the speaker's presentation there will be a question and answer session for which instructions will be given at that time i would like to hand call over to joseph diaz of the lead on partners please go ahead sir thank you donna and thanks to all of you for joining us today
spk02: on this call. We appreciate your time and your ongoing interest in PDF solutions. As the operator indicated, my name is Joe Diaz. I'm a managing partner at Lithium Partners. We are the investor relations consulting firm for PDF. If you do not yet have a copy of today's press release, it's available on the company's website at www.pdf.com. Some of the statements made during the course of this conference call will be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding PDF's future financial results, performance, growth rates, and demand for its solutions. PDF's actual results could differ materially. You should refer to the section entitled Risk Factors on the company's annual report on Form 10-K for the fiscal year ended December 31, 2020, and similar disclosures in subsequent SEC filings. The forward-looking statements and risks stated on this conference call are based on information available to PDF today. The company has no obligation to update them. With that said, I'd like to introduce John Kabarian, PDF Solutions President and Chief Executive Officer, who will be followed by Adnan Raza, Executive Vice President and Chief Financial Officer. At the conclusion of management's prepared remarks, we will open the call for your questions. Let me now turn the call over to John Kabarian, President and CEO of PDF Solutions. John?
spk03: Thank you for joining us on our call today. If you have not already seen our earnings press release management report and 10Q for the second quarter, please go to the investor section of our website where each has been posted. We appreciate your taking time to join us today. I will start with the discussion. start the discussion by providing commentary on our Q2 highlights. From there, we'll provide our impressions of the semiconductor industry and conclude with our expectations for PDF's business in the second half of the year before handing it over to Adnan for more detailed financial update. Highlights for the second quarter show progress towards our long-term objective of being the go-to manufacturing data analytics platform for the semiconductor and electronics industry. Building on Q1, business activity in the second quarter was very strong. For the first half of the year, bookings are up 60% more compared with the first half of 2020. In total backlog, as of June 30, 2021, has more than doubled compared to June 30, 2020. As we have said before, we believe that a successful manufacturing analytics platform requires the right data, data quality, and analytics at the equipment edge. Increasingly, customers are requiring the platform to be on the cloud where they can benefit from both SAS model and supply chain-wide use of the analytics platform, which fosters collaboration between them and their suppliers. In the second quarter, we demonstrated our ability to bring the customers the right data with strong bookings for leading-edge solutions applied to customers developing and ramping processes from 28 nanometer to three. In particular, there were two contracts of note. The first is a multi-year, multi-node integrated yield ramp contract for an existing Chinese customer. The second is a quick start agreement with the customer to begin deployment of Accentio's CV infrastructure and DFI system on a subscription basis. This already multi-million dollar agreement enabled us to quickly start the deployment of these systems while the larger multi-year subscription contract for the first node is completed. The industry's increased interest in having analytics as equipment edge is reflected in part by another strong quarter for the Symmetrix connectivity products. This quarter included orders from some of the most complex front-end lab equipment, as well as test and assembly tools. Our business with equipment customers starts with licensing our software development kits, or SDKs, to enable integration of our software with their equipment. They then pay us for runtime licenses for each tool on which the software is included. For the first half of the year, we experienced record revenue from runtime licenses. We also had strong design wins on new equipment platforms that bodes well for future runtime licenses. Our SaaS bookings continue to grow in the quarter as Accenture customers adopt our cloud. In the second quarter, one of the largest US-based fabulous companies signed a contract with us to move their on-premise deployment to the cloud enabled by our big data solution. They found like most companies who benchmark, that the performance and cost advantages of moving to Accentio Cloud are quite meaningful. Given the growth of Accentio Cloud, we anticipate having multiple petabytes of data under management over the next few years. In the second quarter, we recognized revenue from the first sales by Adventest of our first integrated product that leverages their know-how in tests and Accentio's capabilities in adaptive tests. This revenue is over and above the $10 million per year minimum commitment that Adventest and PDF agreed to when the partnership was initiated. The sale of this integrated product in less than a year from our signing the partnership agreement demonstrates the advantage of collaboration between the companies and importantly provides Adventest with unique and differentiated capabilities in the marketplace. Looking at the first half of the year, we are very pleased with the progress achieved to date. On a year-over-year basis, we grew analytics revenue 37% for the first half of the year and 29% for Q2. I would now like to turn to what we're seeing in the industry. Overall, semiconductor and electronic companies continued elevated investments in process control and new node bring-up, which bodes well for our business. We believe that we will see continued strong interest in our products in the second half of the year. As we discussed earlier this year, we do anticipate legacy gain share contracts rolling off in the third quarter to result in gain share in the second half of the year below the first half. That said, due to the strong backlog and anticipated bookings for the remainder of the year, we believe Q3 revenue should exceed Q2 revenue, and we anticipate this growth to be broad-based, led by continued strong bookings of our analytic solution for leading edge customers and our cloud offering more broadly. We are pleased with the progress we made in the first half of the year in making PDF Solutions the manufacturing data analytics platform for the industry, which helps us build recurring revenue streams to provide greater visibility and predictability of our financial results. Finally, I want to thank our employees for nimbly supporting our customers and continuing to innovate in the COVID-19 environment. Now I'd like to turn the call over to Adnan for a review of the financials, after which we'll open the call up to your questions. Adnan?
spk01: Thank you, John. Good afternoon, everyone. Good to speak with you all again today, and I hope all of you and your families are keeping safe. We're pleased to review the financial results of the second quarter and to bring you up to date on the progress of the business. Our Form 10Q has also been filed to the SEC today. Please note that all of the financial results we discuss in today's call will be on a non-GAAP basis, and a reconciliation to GAAP financials is provided in the materials on our website. Financial results for the second quarter of 2021 continued to be strong coming after a solid first quarter. Q2 total revenue was $27.4 million, up 28% from the comparable quarter last year. Analytics revenue was up 29% to $19.6 million in Q2 of 2021, versus $15.2 million in the second quarter of 2020, and represented 71% of total revenues this quarter. On a dollar basis, as well as a percentage basis, we expect analytics revenue to grow further in the coming quarters. We're making great progress towards our goal to be the largest manufacturing data analytics platform for the global semiconductor and electronics industry. During the second quarter, revenue contribution from integrated yield ramp was $7.8 million, compared to $6.2 million in last year's second quarter, an increase of 26%. We saw strength in IYR revenue from fixed fee services as a result of a large booking from a Chinese customer, which John spoke about. Overall, our business is gaining momentum. You may recall that full year 2020 bookings increased by two and a half times that of 2019. In the first half of 2021, total bookings increased by more than 60% from that comparable high growth period last year. So bookings continue to be very strong, which sets the stage for future revenue growth. Given the strength in bookings and backlog, we believe analytics will more than offset any decline in IYR revenue in the coming quarters. Our backlog is very strong and continues to grow. At the end of Q2 2021, our backlog was $138.6 million compared to $63.5 million in Q2 of 2020, an increase of 118%. While we do not expect this triple-digit percentage growth to continue going forward, we believe the momentum building in the backlog can continue in the coming quarters as our bookings continue to be strong. During the quarter, we continued to make progress toward our non-GAAP gross margin goal of 70%. Favorable product mix got us to 65% gross margin in Q2 2021. The transition to software continues to increase gross margin, which is especially important given lower anticipated gainshare revenues. The growth in bookings and backlog provide us confidence that we can continue to progress towards our gross margin goal. On the spending side, compared to Q2 of prior year, our cost of sales were up $1.8 million, primarily due to personnel-related costs from our Symmetrix acquisition and also due to investments in cloud, hardware, and software infrastructure to deliver on customer contracts. Within operating expenses, our R&D increased by 3.3 million compared to Q2 of prior year, primarily due to personnel and subcontractor related costs from Symmetrix and PDF side. Our SG&A increase of 1.6 million compared to Q2 of prior year was driven by the Symmetrix acquisition. As John mentioned, with regards to DFI and CV systems, some of our customers are increasingly looking at Accentio, DFI, and CV as a combined analytic solution for leading-edge technology nodes. On the cash flows, we generated $8.1 million in cash flow from operations, and we expect to generate cash from operations for the year, consistent with our history. We ended the quarter with cash and cash equivalents of approximately $139 million compared to $145 million at December 2020. During the first half of the year, we used cash for stock buybacks of approximately $4.5 million, payments related to the Symmetrix acquisition, and continued cloud infrastructure investments for future growth. We believe that the strength of our balance sheet positions as well to consider strategic acquisition opportunities as they become available. Looking forward, given our backlog and anticipated strong bookings, we are gaining confidence with the expected results for the remainder of 2021. and now expect full-year calendar year 2021 total revenues to grow between 20 to 25% on a year-over-year basis. We also expect full-year 2021 analytics revenues to grow more than 30% on a year-over-year basis. With that, I'll turn the call over to the operator to commence the Q&A session. Operator?
spk00: Ladies and gentlemen, to ask a question, please press star 1 on your phone's keypad. Again, that's star 1 on your phone's keypad. We will pause for just a moment to compile the Q&A roster. And your first question comes from the line of John McPeak from Rosenblatt Securities. Your line is now open, sir.
spk03: Hello, John.
spk00: Hello, Mr. John McPeak. Your line is now open.
spk05: Oh, I'm sorry. I had mute. It's not zoom and I still had mute. Okay. I, what I was saying when I was on view was nice job guys. Um, and I'm going to kick the car off with a somewhat dull question, but my calculations right here, it looks like a DSOs, uh, which have been kind of a thorn here have come down nicely. Is that right?
spk01: Yeah. Our, our balance is yes. Uh, you know, we did really well with cash collections this quarter. compared to the last quarter. We had some work to do, and to be honest with you, we put in some new processes this quarter, and the team did a fantastic job collecting cash from some of our customers this quarter.
spk05: Yeah, I mean, I'm not doing the exact days to the day of the quarter using 90 days. It looks like it went from 129 to 99. Can it stay down here, do you think, Adam?
spk01: I think, yeah. Look, I mean, we will continue to stay focused on this metric. Obviously, it's important for us to continue building cash depending on the customer and the region where they're located. And sometimes it might skew the result one way or the other. But I can tell you this, that over the last few quarters, we have increased focus on this and hope to continue this momentum.
spk05: Yeah, nice work on that. And I guess I'll ask kind of an open-ended question a little bit. You know, there's been an increased focus on domestic production, particularly trying to get leading edge production in the United States, not just a couple hundred miles from nuclear missiles of an adversary, potential adversary of ours. And is that affecting your bid business at all, guys? That's just kind of an open-ended question, but I'd love to hear what you're seeing.
spk03: Sure. Yeah, I like that one, John. So I think, you know, specifically there's, I know, the act that the U.S. government's passing, which is about $52 billion. Should that pass, and we anticipate it would, it would probably create additional opportunities for us. We do have customers that are locating factories in the United States and also customers that are expanding development across multiple nodes, not just the leading edge in the U.S., And that is impacting, and partly why my prepared remarks, I think that is happening almost irrespective of the government activity, but probably being enhanced by the government activity. That is impacting, as we said in my prepared remarks, anticipated continued strong bookings on the leading edge, because we do see customers, as was said in Adnan's prepared remarks, who like the integration of the characterization vehicles, Accentio and DFI, for bringing up these very complex 3D applications. technologies.
spk05: Well, it has worked for the leader there, so I'll pass it along and get back in the queue if I need another question. Thanks, guys.
spk00: Thank you. And your next question comes from the line of Tom Diefle from DA Davidson. Your line is now open, sir.
spk04: Yeah, good afternoon. John, I was hoping to get a little more color. I think you made a comment about how the customers are looking at DFI with more of an analytics solution bin to it than before. Maybe just a little more color on what you're seeing in DFI and what that opportunity looks like.
spk03: Yeah, sure, Tom. So about, you know, a year ago, our customers, fabulous customers came to us with a series of issues they were seeing in manufacturing in particular. And our team figured out ways of using the system to inspect the product by using a combination of our part of Xencio called FHIR that analyzes product layouts. I'm just going to get a little technical. I probably should be careful how deep I go. But identifying what looks like a DFI cell cell at a given point in the process, even if it was just part of the active circuit, and then analyze all of that. What you find is then this tremendous amount of information data you create. Literally, you're measuring tens of billions of these things on a wafer, and you're seeing lots of different dependencies in the layout, which they can go back and use to tune how they do design. And it would turn out to be very helpful for characterizing some of the key issues on designs and bring up. And it kind of gets to the question that John asked, too. We are seeing, as customers are trying to bring up these complex 3D processes, this capability of combining the ability to analyze the product layout with the fire capability, drive the machine to all of those spots, take that data, and really have a huge machine learning problem of all the different layout styles that were in, and then their failure rates because you're collecting tremendous statistics that you really can't see any other way. And it's a very unique capability and one that helps learn a lot of these process design interactions very efficiently.
spk04: Okay, so is the thought, though, that they would use you more for service going forward to do the big data analysis, or would they want to keep that data internally and try to evaluate it themselves?
spk03: You know, the typical, you know, the machines always go, will end up being on-site. That machine plus the cloud deployment of Accentio would all be part of an overall subscription. And, you know, there's a big advantage of using Accentio in the cloud for this because you need to scale up and down the computing quite, quite substantially to look at these dependencies. And that's why it's an overall bundle of basically hardware and software. As you know, the cloud deployment is also a hardware software combination.
spk04: Yeah. Okay, that's helpful. Thank you. And then when you look at the mix of business in the second half with gainshare coming down, but the analytics doing quite well, does that meaningfully impact the margin structure? Do you think over the next couple quarters?
spk01: Yeah, I think it's early to say. I think, you know, look, what we've said in our prepared remarks is we feel confident about heading towards our 70%. How many quarters it takes, we're not being precise on. To your point, it'll depend a little bit on the mix between those deals as well. Obviously, larger deals, we hope it will come with a little bit better margin. I think for the rest of the year, it's fair to say that, you know, it stays flat to maybe incrementally up at best.
spk04: Okay. And then you also mentioned that... you know, obviously the biggest adder to the costs over the last year have been personnel. Are there expected, you know, increases in personnel expenses over the next couple quarters as well?
spk01: Yeah, so it's a great question, by the way, Tom. Yeah, so similar to our revenue thoughts as well, what we will be doing, yes, we'll be investing a little bit more, but I think our goal is going to be that we are spending at a slower rate than the revenue is growing. So on a combined spend basis, when you look at cost of sales plus OPEX together, you know, we should be spending less than the revenue growth, which should hopefully trickle a little bit more to the bottom line.
spk04: Okay. And then finally, for the backlog, obviously a nice, impressive backlog, can you give us some sense of what the duration or what the average length of the backlog is?
spk01: Yeah, majority of the contracts, you know, within the next two years, majority of the realization of that backlog, and the rest of them were, you know, kind of up to the five-year timeframe, but majority over the next two years.
spk04: Okay. And maybe just one more for you, John. When you look at your customer interactions recently, have they changed much over the last two, three quarters, or are you still in a position where it's a little harder to close some of the deals that traditionally have been done in person?
spk03: Yeah, you know, it's funny you should ask that question, Tom. I had a number of calls last week with customers. I did one in-person visit, and You know, the calls are now becoming very natural. One of the executives said to me, hey, John, we're used to doing business this way now. This is the way to go. And so I think that we're figuring out how to work in this way better and better. Our confidence on the second half of the year is greatly because I do see us making great progress working this way. And I anticipate that, you know, even larger complex contracts are starting to close. You was pretty amazing to me because it's a very sizable contract with Gainshare that goes out over 10 years past the deployment date. So this will carry us sometime into the middle of 2030s. For a customer who we're already generating Gainshare from, and we're seeing their Gainshare trickle up on the nodes that they've already deployed, so it's a customer that we have some confidence in. And yet we're able to close that contract remotely. And I think that was probably the most difficult, right, just from a language barriers and many other things. So, yeah, we do feel good about our ability to close more complex contracts in the second half of this year remotely.
spk04: Great. That's good to hear. And thanks for your time today. Thank you.
spk00: Thank you. And again, to ask a question, please press star one on your phone's keypad. Your next question comes from the line of Mr. Christian Schwab from Craig Hallam Capital. Your line is now open.
spk07: Good quarter, guys. Back to the Chinese large customer that you, you know, ramped, you know, and drove strength in IYR, and it sounds like you have a 10-year contract. Can you kind of give us an idea of, you know, A, potentially how big that customer could get over that timeframe? And secondly, how many other, you know, new potential Chinese manufacturers are you talking to about using your products?
spk03: Okay, sure. I'll take it in reverse order, Christian. So there's been a number of customers in China. Generally, we don't take them on a gainshare basis because we deploy them basically on a system basis. The gainshare means we're going to provide teams with the technology and help them ramp yields, and that's a big invest on our part too. So we've been very selective on where we've taken those and places where we've seen good potential. Those customers are We've been working with for a number of years in the early nodes. They did take longer to get to Gainshare than we would have liked, but we did start seeing their Gainshare numbers trickle up towards the second half of last year and into this year. And that gave us some confidence that they would be a good partner on a Gainshare basis. This contract, the solutions part of it, the booking is in the eight-figure range. And, you know, there's a deployment period, which is, you know, on the order of a few years, and then there is a gainshare period, which is 10 years. So the total length of the contract is actually longer than 10 years. So it's quite a substantial activity. In terms of how much the contract has eventually worked, Christian, that's still hard for us to estimate. We have very little history with our Chinese customers in terms of how much volume they get to. Historically, they've been very, very slow to ramp volumes, but we are seeing some improvements there. I think as they started advancing their ability to manufacture more advanced semiconductor technologies than they have in the past.
spk07: Okay. I guess my second question is, could you give us an update on any other potential meaningful new customers and where you sit, if there's anything you could share either with you know, other manufacturers and partnering with the likes of another advanced test or, you know, any type of update on anything that can happen with, you know, some large manufacturers out there who decided that they were going to, you know, get more efficient debt manufacturing and kind of make the fab to foundry switch. Any update there would be great.
spk03: Yeah, of course, it's super, you know, it's like the old running joke of consulting for a large ketchup manufacturer in the greater Pittsburgh area. Everyone pretty much knows what you mean when you say that. So, you know, we're always super careful about how we talk about customers and potential customers. Christian, I know that you understand why. That said, you know, we both with existing customers and customers that have historically not been big customers of PDFs in the past, We have a tremendous level of activity. The bookings in the first quarter, the first half of the year already reflect some of those opportunities. And, you know, as I said in my prepared remarks, we expect both, you know, companies that have been historically PDF customers as well as ones that have not to have increased bookings with the broader community in the second half of the year.
spk07: Great. No other questions.
spk00: Thank you. And again, to ask a question, please press star one on your phone's keypad. Your next question comes from the line of Andrew Weiner from Sancho Capital. Your line is now open.
spk08: Hi, good afternoon, John. Went by pretty quickly. I just wanted to make sure I heard it correctly. Is the Chinese multi-node deal, does that include a DFI tool?
spk03: There are other contracts we have with that customer which does have a DFI tool on site, and they have the right to use some of that in part of this contract as well.
spk08: Okay. And then you also referenced a quick start contract that I think you said was DFI and Accentio. So is that a contract?
spk03: And characterization vehicles as well.
spk08: So that contract contemplates the shipping of a DFI tool to that customer.
spk03: That's correct. And if I could get that machine shipped up there while we negotiate the remaining terms, as I said in my prepared remarks.
spk08: Okay. And so, again, if I heard that correctly, the quick start contract had meaningful revenues associated with it, but you're in discussions about a much more significant contract that would be a broader deployment of your technology. Is that fair? That's correct.
spk03: That's correct.
spk08: Okay. Okay. Um, secondarily, um, I just wanted to talk, you didn't mention it on this call, but we've talked in the past about your decks networks. Uh, maybe you could talk about, um, you know, how that, how the deployment of that's going, how decks networks fit in around some of the industry issues about sort of supply chain transparency and reliability. And, you know, maybe some goals you've set for this year as far as driving either commercial deployments or driving, you know, broader adoption that would ultimately lead to commercial revenues.
spk03: Sure. Yeah. So just always, we always have three letter acronyms here at PDF. So let me indexes data exchange network. These are, you know, similar, these are outposts that we put at the, you know, factories, primarily right now, OSAT test facilities, where, you know, they run a series of things, communications with our software that lies resident on the equipment in the facilities, a cache database, you can think of that as like a short-term database, and then an element to run business logic for evaluating rules, for quality screening on chips as they're produced. Disproportionately, this has been done for Fabless customers as they want to be able to get to the ultimate product quality, running more and more advanced models and screening. But they don't actually run the testers. Those are run by third-party suppliers for them, referred to as OSATs. And we've got under 10 of those out of the OSATs now growing number, and we expect to grow that substantially as we get to the second half of this year. As we have more and more fabulous customers who like the ability to see their production in real time, be able to establish more complex models and rules, some of the edge compute is involved with that. And this is also very much involved with our activity with Adventest, who have an edge compute box that they are shipping on the equipment and now communicating between that edge compute element and the cloud. is becoming important as that kind of application is being accepted in the test community. So that's, you know, and our goal for this year, you know, I think is to over double our deployments that we have already. I said it's under 10 now, and we'd like to see that about double.
spk08: Okay. And are you generating meaningful revenue from that today, or do you need to get to a certain scale? And, you know, what sort of transitions is this to be a commercial driver of, you know, extend to yourself?
spk03: That's a great question, Andrew. And as Adnan has communicated in many of his prepared remarks over the past quarter, a lot of our rollout has been deploying these DEX nodes. It's a relatively meaningful fixed cost to deploy the nodes out there, and they are owned and operated by PDF, and they are multi-tenant in the way that they shift data around for multiple phallus customers. So, yes, as you get more and more to scale, i.e. more customers, that there is some incremental change capacity build-out we have to do at each OSAT if they were to grow quite substantially. But, you know, it's kind of a Y equals NX plus B, and the B is kind of the fixed cost of deploying that system there. And that's, you know, a big piece of the cost. So, yes, as we get to scale, that becomes a more and more important part of our overall Accenture Cloud offering. It is generating revenue for us today, and we anticipate it generating more in the coming years.
spk08: Okay, great. All right, terrific. Thank you.
spk00: Thank you. And your next question comes from the line of Mr. Gary Shiniro from River Park. Your line is now open, sir.
spk06: Hey, guys. I wanted to follow up on the DFI, and it looks like your CV and DFI revenue was down, as you said, like... you know, I think it was 4.6 million year over year. Can you put that in context of how big that is today? And it also sounds like the DFI and the E-Probes is, business is moving positively. So kind of explain those two issues and give a little bit more color on where you are on the DFI equipment that you were talking about a minute ago?
spk03: Sure, Gary. Yeah, so I'll try to handle that. So we've, these are very large, lumpy contracts that have in the past, you know, been relatively short duration. This quick start is in part to deploy that, you know, those systems in the second half of this year, the value of the Quick Start from a booking standpoint was substantially larger than the revenue rec in the quarter. And as a result, you can see that the revenue in the first half of the year was lower than the bookings would give you belief. When we look at our model for the year, we anticipate DFI and characterization revenues to be up substantially in the second half of the year versus the first half of the year. And overall, as we look out over a kind of a four-quarter rolling time period, we expect that to be a meaningful part of the analytics revenue. As we described in Adnan's prepared remarks, this is really a bundle of Accentio characterization vehicle infrastructure, which includes some hardware test capabilities, as well as the DFI infrastructure, which is also a combination of software and IP and hardware capability. So, you know, I think when you look back out, let's say this time next year, you're going to see quite a substantial growth in that piece of the revenue stream we anticipate over the first half of the year. And this is a little bit just timing on contract bookings on what's a very nascent business at this point.
spk06: Okay, great. And on the IYR, it Sounds like you had a bump to that in the quarter from a fixed fee business that was weighed down by a continued decline in gain share. At the same time, you expect the IYR line to be lower in the second half of the year than the first half. Is the way to think of that that the fixed fee business is pretty consistent at this point and the gain share continues to drop off?
spk03: Yeah, roughly that's a reasonable way to think about it. It's the building up of some unique opportunities we see in China where we think there's real opportunities there, while some legacy older contracts that have been around for many, many years are starting to come to their end of life.
spk06: Got it. Okay. Makes sense. If I look at IAYR that way and offset it by continued growth in analytics to get to your annual guidance, it seems, if I'm doing the math right, it seems that analytics should be comfortably greater than 30% growth. Am I doing that right? You must have been a high math SAT scholar. Okay. And whatever the growth rate is for analytics this year, given the recurring nature and the fact that bookings and billings are so much higher than revenue growth, I assume it's fair to say that analytics growth next year should be, if not accelerating from this year, at least relatively consistent with this year.
spk03: yeah so um i think when you did that first set of math you asked that question too um and yeah i think gary from our perspective right now we've kind of got our head down on executing this year as we as we get through the second half of the year we're going to refine our models a little bit more and understand how we're going to go in and forecast because we've gotten asked this question a number of times um you know how we're going to go and forecast 2022 And then we'll come back with what we feel the long-term growth numbers look like for analytics and overall business. We've been very happy with the growth this year. We obviously like to always make it better. And we're still tuning to try to make it better. So as we get through this year, we'll come back to you with some more thoughts around that for next year.
spk06: Okay, sounds great. Thanks so much for the time.
spk00: Again, to ask a question, please press star 1 on your phone's keypad. You have a follow-up question comes from the line of Mr. John McPeak from Rosenblatt Securities. Your line is now open, sir.
spk03: Hi, John.
spk05: Sorry, I'm playing the mute thing back and forth again. Yeah, a lot of these calls are dominated by component constraints. we would have had this revenue number, we could have this revenue number, but we weren't able to get components. You guys only have a relatively small percentage of your revenues coming from that, but I just want to get on the record that in the customer base that's taking delivery of, in some cases, equipment that may be running Symmetrix or connecting into the infrastructure that connects into Accentio, you're not seeing that as any kind of a risk. You are pretty much divorced from that, particularly in the analytics part of your business, right?
spk03: On the analytics, even on the DFI side, for the most part, we're divorced from all of that. On Symmetrix, of course, every time an equipment company ships equipment, then that generates a runtime license. And if those companies were to be short of components so they could not ship, then that would impact you know, could impact the metrics. We have not seen that so far in our runtime license revenue. We do watch it. And I think, you know, greatly, and I've had a number of dialogues with our partners that are in the test equipment business and in the semiconductor capital equipment business, and they sell equipment to chip companies who also provide them critical pieces of chips. And so I think everybody, and I was meeting with a SVP of operations, one of the larger chip manufacturers and a customer of ours, who said, yeah, we know very fully well that we need to ship chips to our test equipment providers, otherwise we can't get the equipment we need to test our chips. So I think there is an understanding within the industry so far to make sure that we don't eat the seed corn. And so we haven't seen that impact on the Symmetrix business yet. That would be the one place we may see it on runtime licenses. Frankly, it's been up very, very substantially year over year, and we don't expect it to impact us in the second half of the year.
spk05: That all makes sense. Thank you.
spk00: Thank you. And no questions on cue. I would like to turn it all over to Mr. John Kibarian for closing remarks. Sorry?
spk03: Thank you for participating on our Q2 call. We look forward to talking with you again soon. Stay safe and have a great day. Goodbye.
spk00: This concludes today's conference call. You may now disconnect.
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