PDF Solutions, Inc.

Good day. Thank you for standing by. Welcome to PDF Solutions' third quarter 2021 conference call. At this time, all participants' line are in a 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 now like to hand the call over to Joseph Diaz of Decent Partners. Please go ahead, sir.

Thank you, Operator, and thanks to all of you for joining us today on this call. We appreciate your time and your ongoing interest in PDF solutions. As the operator indicated, my name is Joseph Diaz. I'm with Lippin 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 PDF.com. Some of the statements made during this conference call will be forward-looking within the meeting 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. The forward-looking statements and risks referred on this call are based on information available to PDF today. The company has no obligation to update them. You are advised to refer to the section titled 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. With that, I'd like to introduce John Kabarian, PDF Solutions President and Chief Executive Officer He'll 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 Kavarian, President and CEO of PDF Solutions. John.

Thank you for joining us on today's call. If you've not already seen our earnings press release management report and 10Q for the quarter, Please go to the investor section of our website where each has been posted. I will start the discussion by providing commentary on the third quarter. From there, I'll provide our impressions of the semiconductor industry and conclude with our expectations for PDF's business for the remainder of the year before handing the call over to Adnan for more detailed financial update. Highlights for the third quarter demonstrate the progress the PDF team has made over the last few years. As we have discussed over many quarters, some significant legacy gainshare contracts ended in the first half of this year. This meant that Q3 for us could have been a challenging quarter. That said, by the second quarter of this year, we had expressed confidence that given our strong bookings and ratable nature of our analytics business, we anticipated that Q3, despite the gainshare headwind, would be up modestly in terms of revenue versus Q2. Now, with the third quarter behind us, we can report that the company achieved record revenue with meaningful quarter-over-quarter growth. Despite the significant drop in very high margin gainshare revenue, we also saw improvements in our gross margins and net margins. This is due to achieving more scale on our analytic subscriptions. As a result, even with the headwind of decrease in gainshare, we made progress towards our target gross margins. Turning to bookings, the third quarter was particularly strong and exceeded even last year's third quarter bookings. As some of you remember, it was one year ago that we closed the Adventest partnership and with it a $50 million contract. At the time, we reported that it was a remarkable quarter as the partnership had taken years of meaningful discussions to bring to fruition. We communicated then that we did not expect to meet or exceed that performance level for a while. Exceeding the previous bookings milestone in just four quarters speaks to the demand of our products and services. When we consider all of these factors, we believe that from a financial metrics perspective, this quarter has demonstrated that the company's transition to analytics will lead to improved growth in financial leverage as we bring the business to scale. Now let me provide a little more detail about the bookings in the quarter. Our bookings in Q3 primarily came from analytics. We had a strong quarter in Accentio bookings with the majority of Accentio bookings on a dollar basis continuing to be from customers moving to the cloud. This included another eight-figure cloud bookings as an enterprise customer moved from on-premise to cloud deployment in order to leverage the benefits of Accentio's big data storage and end-to-end performance. This quarter also included a Tier 1 auto supplier that renewed its initial Accentio cloud deployment as it expands the use of silicon in the electrification of car drivetrains. As semiconductors become more critical to automobile manufacturing, we are seeing manufacturers look to use Accentio's capabilities to improve visibility in their technology and supply chain. We also had a strong Accentio bookings from front-end fabs. deploying Accentio process control, as the demand for the additional FAD capacity drove further deployments of Accentio. Building with the demand for semiconductor capital equipment, we experienced another quarter of strong Symmetrix runtime license bookings, as equipment companies ordered Symmetrix connectivity and equipment control software licenses to ship with their products. As I discussed earlier, Yield ramp revenue was down significantly as legacy gainshare contracts completed. While we are not emphasizing integrated yield ramp contracts, we have started to see some increases in the volume reports from customers, including Chinese VABs, where we are seeing significant equipment installs. We anticipate modest improvements in integrated yield ramp revenue going forward. Lastly, as some of you may remember, we reported a quick start analytics contract that's signed in Q2. We completed the follow-on multi-year contract in Q3. This contract includes use of our characterization systems for electrical test, a DFI e-beam system, and Accentio systems including our DFM software. As a result, we began shipment of our PD-FAST test and e-probe DFI measurement systems to their facility. For customers innovating on the leading edge, Speed comes from having huge relevant data sets to be able to see failures in the parts per billion level. We believe that our DFI and CV systems provide the largest data sets, which enables superior learning using our Accenture analytics software. Our DFM capabilities allow our customers to anticipate how improvements in manufacturing will impact future products, which is particularly important for foundries. which must support a rich set of designs. With the strong bookings spanning our Accentio Symmetrix connectivity characterization vehicles and DFI systems, the third quarter demonstrates that PDF's broad value and strategic relevance across various industries, from high-voltage power IC manufacturing to the most advanced process technology development, from equipment companies to system manufacturers, PDF's manufacturing analytics platform is becoming ubiquitous in the IC industry. Now let me turn to our perspective on the IC industry and expectations for the fourth quarter. The industry continues to operate at a high level for manufacturing and R&D. Maximizing existing operational effectiveness, as well as developing new products and processes, is critical to the industry in this setting. As a result, customer interest in our products and solutions remains strong. We are pleased with the progress in the first three quarters of the year in making PDF Solutions the manufacturing analytics platform for the industry. This enables us to build recurring revenue streams to provide greater visibility and predictability to 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'll turn the call over to Adnan for review of the financials, after which we will open the call up to your questions. Adnan?