Quick Verdict
The latest PDF Solutions Q2 2026 Earnings report showed the company posted Q2 2026 revenue of $61.5 million and non-GAAP EPS of $0.27, both modestly above consensus estimates. GAAP EPS was $0.10. Shares rose 1.84% after hours to $46.74 following the release, partly reversing a 7.2% regular-session decline.
About PDF Solutions
PDF Solutions, Inc. (Nasdaq: PDFS) is a Santa Clara, California-based provider of data, analytics, connectivity and manufacturing solutions for the semiconductor and electronics ecosystem. Founded in 1991, the company helps chipmakers, equipment suppliers and electronics manufacturers improve yield, quality and operating efficiency through software, data infrastructure, analytics, machine learning and inspection-related systems. Its portfolio includes Exensio analytics, secureWISE connectivity, Cimetrix equipment connectivity, DirectScan and eProbe tools.
PDF Solutions serves customers across North America, Europe and Asia, including companies pursuing smart-manufacturing initiatives and AI-enabled semiconductor production. As of August 7, PDFS had a market capitalization of roughly $2.07 billion, a share price near $50, a trailing P/E ratio of about 267.7, and approximately 600 employees. The company does not currently present a regular dividend yield in the cited market-data snapshot.
Top Financial Highlights
- Total Q2 revenue reached $61.5 million, up 19% from $51.7 million in Q2 2025.
- GAAP net income rose to $4.3 million, versus $1.1 million a year earlier.
- GAAP diluted EPS was $0.10, compared with $0.03 in Q2 2025.
- Non-GAAP net income was $11.4 million, or $0.27 per diluted share, versus $7.3 million, or $0.19, in the prior-year quarter.
- GAAP gross margin was 69%, down from 71% in Q2 2025.
- Non-GAAP gross margin was 73%, down from 76% a year earlier and from 76% in Q1, largely reflecting product mix.
- GAAP operating margin improved to 8%, from 2% in Q2 2025.
- Non-GAAP operating margin increased to 22%, from 19% a year earlier.
- Platform revenue totaled $49.1 million, up 14% year over year.
- Volume-based revenue was $12.4 million, up 45% year over year, supported by Gainshare and Cimetrix runtime-license activity.
- Operating cash flow was $16.4 million; capital expenditures were $14.1 million, mainly for eProbe tools and longer-lead-time components.
- Cash and cash equivalents ended the quarter at $114.9 million, while outstanding debt was $67.5 million.
- Ending backlog reached $270.7 million, up 10% sequentially and 16% year over year.
- Management reaffirmed its 20% full-year 2026 revenue-growth target. It did not issue a specific Q3 revenue or EPS range, although it expects gross margin to improve sequentially.
Beat or Miss?
| Metric | Reported | Difference/Analysis |
| Non-GAAP diluted EPS | $0.27 | Beat the $0.26 consensus estimate by $0.01, or about 3.9%. |
| Revenue | $61.52 million | Beat the $60.96 million consensus estimate by $0.56 million, or about 0.9%. |
| GAAP diluted EPS | $0.10 | N/A; the cited consensus comparison refers to adjusted/non-GAAP EPS. |
| Full-year revenue outlook | 20% growth target reaffirmed | Management maintained its prior annual growth target rather than raising it. |
The earnings beat was narrow but came with 19% revenue growth, a rising backlog and management’s reaffirmation of its annual growth objective.
Key Financial and Operating Metrics
(Source: ir.pdf.com)
Revenue by Geographic Area
- The image presents the company’s quarterly revenue by geographic market from Q2’25 to Q2’26, with values reported in USD thousands. Total revenue reached USD 61.53 million in Q2’26, compared with USD 51.73 million in Q2’25, representing an increase of approximately 18.9% year-over-year. However, quarterly revenue remained slightly below the USD 62.40 million recorded in Q4’25.
- The United States emerged as the largest revenue contributor in Q2’26, generating USD 34.04 million, or 55% of total revenue. This was significantly higher than USD 19.95 million and 39% in Q2’25, indicating strong expansion in the U.S. business. Revenue from the United States also increased sharply from USD 24.51 million in Q1’26, strengthening its importance within the company’s geographic portfolio.
- China recorded USD 8.72 million in Q2’26, accounting for 14% of total revenue. Revenue improved slightly from USD 8.51 million in Q1’26, but remained considerably below the USD 12.19 million recorded in Q2’25. China’s contribution therefore declined from 23% to 14% over the year, indicating reduced dependence on the Chinese market.
- Japan contributed USD 6.56 million, or 11% of total revenue, in Q2’26, making it the smallest of the separately reported geographic markets. Revenue declined from USD 9.30 million in Q2’25 and USD 8.68 million in Q1’26. Japan’s share of total revenue consequently fell from 18% in Q2’25 to 11% in Q2’26.
- The Rest of the World generated USD 12.21 million in Q2’26, representing 20% of total revenue. This was below the unusually high USD 18.43 million and 31% share recorded in Q1’26, although it remained above the USD 10.28 million generated in Q2’25.
- Overall, the data indicates a clear shift in the company’s geographic revenue concentration toward the United States. While total revenue has expanded year-over-year, growth has been primarily supported by the U.S. market, whereas Japan and China have contributed a smaller proportion of revenue. This rising U.S. concentration may strengthen performance when domestic demand is favorable, but it also increases the company’s exposure to changes in U.S. market conditions.
(Source: ir.pdf.com)
What Leadership Is Saying
“The second quarter built on a strong Q1, providing great progress on our objective to position PDF Solutions as the leading commercial data analytics and mission-critical platform for the semiconductor industry.” — John Kibarian, President and CEO
“We expect our gross margin to increase next quarter towards the higher levels we have seen during the prior quarters, and we have line of sight to our long-term gross margin target model of 77%.” — Adnan Raza, CFO
Historical Performance
| Category | Q2 2026 | Q2 2025 | Change (%) |
| Revenue | $61.5 million | $51.7 million | 19.00% |
| GAAP net income | $4.3 million | $1.1 million | 272.70% |
| GAAP operating expenses* | $37.4 million | $35.7 million | 4.60% |
Operating expenses comprise R&D, SG&A and acquired-intangible amortization; they exclude cost of revenue. The relatively modest operating-expense increase, alongside revenue growth, contributed to the expansion in GAAP operating margin.
Competitor Historical Performance
PDF Solutions is a much smaller, specialized semiconductor-data company than EDA leaders Cadence and Synopsys, so this is a directional peer benchmark rather than a like-for-like comparison. Synopsys’ Q2 is its fiscal Q2 ended April 30, while Cadence and PDF Solutions reported June-quarter results.
| Category | Current Quarter | Previous-Year Same Quarter | Change (%) |
| Cadence revenue | $1.584 billion | $1.275 billion | 24.20% |
| Cadence GAAP net income | $367.1 million | $160.1 million | 129.40% |
| Cadence GAAP operating margin | 28.40% | 19.00% | +9.4 percentage points |
| Synopsys revenue | $2.276 billion | $1.604 billion | 41.90% |
| Synopsys GAAP net income | $17.1 million | $349.2 million | -95.10% |
| Synopsys total GAAP costs and expenses | $2.156 billion | N/A in cited release summary | N/A |
Cadence paired strong revenue growth with materially higher profitability, while Synopsys’ revenue growth was boosted by portfolio expansion but GAAP profit was pressured by acquisition-related amortization, stock compensation and restructuring costs.
How the Market Reacted?
PDFS shares fell 7.2% during the August 6 regular session, closing at $45.90, then rose 1.84% after the earnings release to $46.74. The after-hours rebound indicates a positive response to the small earnings and revenue beat, backlog growth, and maintained annual-growth target.
However, the limited recovery suggests investors remained focused on lower sequential gross margin, elevated capital spending, and the absence of a more explicit quarterly outlook.
Sources
