Document And Entity Information
Document And Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 23, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 000-31311 | ||
Entity Registrant Name | PDF SOLUTIONS INC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 25-1701361 | ||
Entity Address, Address Line One | 2858 De La Cruz Blvd. | ||
Entity Address, City or Town | Santa Clara | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95050 | ||
City Area Code | 408 | ||
Local Phone Number | 280-7900 | ||
Title of 12(b) Security | Common Stock, $0.00015 par value | ||
Trading Symbol | PDFS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1.3 | ||
Entity Common Stock, Shares Outstanding | 38,581,819 | ||
Entity Central Index Key | 0001120914 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Auditor Name | BPM LLP | ||
Auditor Firm ID | 207 | ||
Auditor Location | San Jose, California |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 98,978 | $ 119,624 |
Short-term investments | 36,544 | 19,557 |
Accounts receivable, net of allowance for credit losses | 44,904 | 42,164 |
Prepaid expenses and other current assets | 17,422 | 12,063 |
Total current assets | 197,848 | 193,408 |
Property and equipment, net | 37,338 | 40,174 |
Operating lease right-of-use assets, net | 4,926 | 6,002 |
Goodwill | 15,029 | 14,123 |
Intangible assets, net | 15,620 | 18,055 |
Deferred tax assets, net | 157 | 64 |
Other non-current assets | 19,218 | 6,845 |
Total assets | 290,136 | 278,671 |
Current liabilities: | ||
Accounts payable | 2,561 | 6,388 |
Accrued compensation and related benefits | 14,800 | 16,948 |
Accrued and other current liabilities | 4,633 | 5,581 |
Operating lease liabilities - current portion | 1,529 | 1,412 |
Deferred revenues - current portion | 25,750 | 26,019 |
Billings in excess of recognized revenues | 1,570 | 1,852 |
Total current liabilities | 50,843 | 58,200 |
Long-term income taxes payable | 2,972 | 2,622 |
Non-current portion of operating lease liabilities | 4,657 | 5,932 |
Other non-current liabilities | 2,718 | 1,905 |
Total liabilities | 61,190 | 68,659 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Preferred stock, $0.00015 par value, 5,000 shares authorized, no shares issued and outstanding | ||
Common stock, $0.00015 par value, 70,000 shares authorized; shares issued 49,749 and 48,613, respectively; shares outstanding 38,289 and 37,431, respectively | 6 | 6 |
Additional paid-in-capital | 473,295 | 447,415 |
Treasury stock at cost, 11,460 and 11,182 shares, respectively | (143,923) | (133,709) |
Accumulated deficit | (98,045) | (101,150) |
Accumulated other comprehensive loss | (2,387) | (2,550) |
Total stockholders' equity | 228,946 | 210,012 |
Total liabilities and stockholders' equity | $ 290,136 | $ 278,671 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares shares in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.00015 | |
Preferred stock, shares authorized (in shares) | 5,000 | |
Preferred stock, shares issued (in shares) | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | |
Common stock, par value (in dollars per share) | $ 0.00015 | |
Common stock, shares authorized (in shares) | 70,000 | |
Common stock, shares issued (in shares) | 49,749 | 48,613 |
Common stock, shares outstanding (in shares) | 38,289 | 37,431 |
Treasury stock, shares (in shares) | 11,460 | 11,182 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | |||
Total revenues | $ 165,835 | $ 148,549 | $ 111,060 |
Costs and Expenses: | |||
Costs of revenues | 51,749 | 47,907 | 44,193 |
Research and development | 50,736 | 56,126 | 43,780 |
Selling, general, and administrative | 62,216 | 45,338 | 37,649 |
Amortization of acquired intangible assets | 1,285 | 1,270 | 1,255 |
Write-down in value of property and equipment | 3,183 | ||
Interest and other expense (income), net | (5,020) | (2,562) | (683) |
Income (loss) before income tax expense | 4,869 | 470 | (18,317) |
Income tax expense | (1,764) | (3,899) | (3,171) |
Net income (loss) | 3,105 | (3,429) | (21,488) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments, net of tax | 148 | (1,493) | (825) |
Change in unrealized gain (loss) related to available-for-sale debt securities, net of tax | 15 | 7 | (14) |
Total other comprehensive loss | 163 | (1,486) | (839) |
Comprehensive income (loss) | $ 3,268 | $ (4,915) | $ (22,327) |
Net income (loss) per share: | |||
Basic | $ 0.08 | $ (0.09) | $ (0.58) |
Diluted | $ 0.08 | $ (0.09) | $ (0.58) |
Weighted average common shares used to calculate net income (loss) per share: | |||
Basic | 38,015 | 37,309 | 37,138 |
Diluted | 38,937 | 37,309 | 37,138 |
Analytics | |||
Revenues: | |||
Total revenues | $ 152,085 | $ 130,480 | $ 93,415 |
Integrated Yield Ramp | |||
Revenues: | |||
Total revenues | $ 13,750 | $ 18,069 | $ 17,645 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning Balances at Dec. 31, 2020 | $ 6 | $ 407,173 | $ (96,215) | $ (76,233) | $ (225) | $ 234,506 |
Beginning Balances (shares) at Dec. 31, 2020 | 36,850 | 9,550 | ||||
Repurchase of common stock | $ (4,523) | (4,523) | ||||
Repurchase of common stock (shares) | (251) | 251 | ||||
Issuance of common stock in connection with employee stock purchase plan | 1,035 | 1,035 | ||||
Issuance of common stock in connection with employee stock purchase plan (shares) | 109 | |||||
Issuance of common stock in connection with exercise of options | 1,930 | 1,930 | ||||
Issuance of common stock in connection with exercise of options (shares) | 216 | |||||
Vesting of restricted stock units (shares) | 487 | |||||
Purchases of treasury stock in connection with tax withholdings on vesting of restricted stock | $ (3,967) | (3,967) | ||||
Purchases of treasury stock in connection with tax withholdings on vesting of restricted stock (shares) | 202 | |||||
Stock-based compensation expense | 12,931 | 12,931 | ||||
Comprehensive income (loss) | (21,488) | (839) | (22,327) | |||
Ending Balances at Dec. 31, 2021 | $ 6 | 423,069 | $ (104,705) | (97,721) | (1,064) | 219,585 |
Ending Balances (shares) at Dec. 31, 2021 | 37,411 | 10,003 | ||||
Repurchase of common stock | $ (22,471) | (22,471) | ||||
Repurchase of common stock (shares) | (933) | 933 | ||||
Issuance of common stock in connection with employee stock purchase plan | 3,011 | 3,011 | ||||
Issuance of common stock in connection with employee stock purchase plan (shares) | 187 | |||||
Issuance of common stock in connection with exercise of options | 1,686 | 1,686 | ||||
Issuance of common stock in connection with exercise of options (shares) | 150 | |||||
Vesting of restricted stock units (shares) | 616 | |||||
Purchases of treasury stock in connection with tax withholdings on vesting of restricted stock | $ (6,533) | (6,533) | ||||
Purchases of treasury stock in connection with tax withholdings on vesting of restricted stock (shares) | 246 | |||||
Stock-based compensation expense | 19,649 | 19,649 | ||||
Comprehensive income (loss) | (3,429) | (1,486) | (4,915) | |||
Ending Balances at Dec. 31, 2022 | $ 6 | 447,415 | $ (133,709) | (101,150) | (2,550) | 210,012 |
Ending Balances (shares) at Dec. 31, 2022 | 37,431 | 11,182 | ||||
Repurchase of common stock | $ (743) | (743) | ||||
Repurchase of common stock (shares) | (21) | 21 | ||||
Issuance of common stock in connection with employee stock purchase plan | 3,832 | 3,832 | ||||
Issuance of common stock in connection with employee stock purchase plan (shares) | 224 | |||||
Issuance of common stock in connection with exercise of options | 492 | 492 | ||||
Issuance of common stock in connection with exercise of options (shares) | 30 | |||||
Vesting of restricted stock units (shares) | 625 | |||||
Purchases of treasury stock in connection with tax withholdings on vesting of restricted stock | $ (9,471) | (9,471) | ||||
Purchases of treasury stock in connection with tax withholdings on vesting of restricted stock (shares) | 257 | |||||
Stock-based compensation expense | 21,556 | 21,556 | ||||
Comprehensive income (loss) | 3,105 | 163 | 3,268 | |||
Ending Balances at Dec. 31, 2023 | $ 6 | $ 473,295 | $ (143,923) | $ (98,045) | $ (2,387) | $ 228,946 |
Ending Balances (shares) at Dec. 31, 2023 | 38,289 | 11,460 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 3,105 | $ (3,429) | $ (21,488) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 4,986 | 5,526 | 6,218 |
Stock-based compensation expense | 21,484 | 19,649 | 12,931 |
Amortization of acquired intangible assets | 3,551 | 3,484 | 3,334 |
Amortization of costs capitalized to obtain revenue contracts | 2,142 | 1,550 | 674 |
Net accretion of discounts on short-term investments | (1,174) | (187) | (14) |
Write-down in value of property and equipment | 3,183 | ||
Deferred taxes | (108) | (4) | 1,373 |
Other | (198) | 161 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (2,748) | (2,143) | (5,980) |
Prepaid expenses and other current assets | (7,329) | (5,787) | 1,136 |
Operating lease right-of-use assets | 1,205 | 1,821 | 1,414 |
Other non-current assets | (4,166) | 2,258 | (1,336) |
Accounts payable | (2,145) | (1,423) | (86) |
Accrued compensation and related benefits | (2,188) | 7,720 | 1,264 |
Accrued and other liabilities | 110 | 1,671 | (648) |
Deferred revenues | (358) | 1,822 | 5,028 |
Billings in excess of recognized revenues | (282) | 1,852 | (1,337) |
Operating lease liabilities | (1,287) | (2,082) | (1,584) |
Net cash provided by operating activities | 14,600 | 32,298 | 4,243 |
Cash flows from investing activities: | |||
Proceeds from maturities and sales of short-term investments | 43,800 | 151,500 | 171,000 |
Purchases of short-term investments | (59,598) | (58,321) | (168,560) |
Proceeds from sale of property and equipment | 105 | ||
Purchases of property and equipment | (11,236) | (8,409) | (3,672) |
Prepayment for the purchase of property and equipment | (89) | (21) | (381) |
Purchase of intangible assets | (150) | (150) | |
Payment for business acquisition, net of cash acquired | (1,823) | (3,054) | |
Net cash provided by (used in) investing activities | (28,991) | 84,599 | (4,667) |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options | 492 | 1,686 | 1,930 |
Proceeds from employee stock purchase plan | 3,832 | 3,011 | 1,035 |
Payments for taxes related to net share settlement of equity awards | (9,471) | (6,533) | (3,967) |
Repurchases of common stock | (743) | (22,471) | (4,523) |
Net cash used in financing activities | (5,890) | (24,307) | (5,525) |
Effect of exchange rate changes on cash and cash equivalents | (365) | (650) | (182) |
Net change in cash and cash equivalents | (20,646) | 91,940 | (6,131) |
Cash and cash equivalents at beginning of period | 119,624 | 27,684 | 33,815 |
Cash and cash equivalents at end of period | 98,978 | 119,624 | 27,684 |
Supplemental disclosure of cash flow information: | |||
Cash paid during the year for taxes | 3,783 | 2,850 | 1,873 |
Cash paid for amounts included in the measurement of operating lease liabilities | 1,648 | 1,744 | 1,947 |
Supplemental disclosure of noncash information: | |||
Property and equipment received and accrued in accounts payable and accrued and other liabilities | 1,599 | 3,201 | 1,359 |
Advances for purchase of fixed assets transferred from prepaid assets to property and equipment | 66 | 336 | 963 |
Operating lease liabilities arising from obtaining right-of-use assets | 131 | $ 2,502 | $ 161 |
Property and equipment transferred to sales-type lease | $ 8,076 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business PDF Solutions, Inc. (the “Company” or “PDF”), provides products and services designed to empower organizations across the semiconductor and electronics ecosystem to connect, collect, manage, and analyze data about design, equipment, manufacturing, and test to improve the yield and quality of their products and operational efficiency. The Company’s products, services, and solutions include proprietary software, physical intellectual property (“IP”) for integrated circuit (“IC”) designs, electrical measurement hardware tools, proven methodologies, and professional services. Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after the elimination of all significant intercompany balances and transactions. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include revenue recognition, the estimated useful lives of property and equipment and intangible assets, assumptions made in analysis of allowance for credit losses, fair values of assets acquired and liabilities assumed in business combinations, impairment of goodwill and long-lived assets, valuation for deferred tax assets, and accounting for lease obligations, stock-based compensation expense, and income tax uncertainties and contingencies. Actual results could differ from those estimates and may result in material effects on the Company’s operating results and financial position. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. As of December 31, 2023, and periodically throughout the year, the Company had cash balances in various operating accounts in excess of federally insured limits. The Company maintains its cash and cash equivalents and short-term investments with what it considers high credit quality financial institutions. The Company primarily sells its products and services to companies in Asia, Europe, and North America within the semiconductor industry. As of December 31, 2023, two customers accounted for 50% of the Company’s gross accounts receivable and one customer accounted for 35% of the Company’s total revenues for 2023. As of December 31, 2022, three customers accounted for 53% of the Company’s gross accounts receivable and two customers accounted for 41% of the Company’s revenues for 2022. Two customers accounted for 27% of the Company’s revenues for 2021. See Note 11 for further details. The Company does not require collateral or other security to support accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition. The Company maintains allowances for potential credit losses. The allowance for credit losses, which was based on management’s best estimates, could be adjusted in the near term from current estimates depending on actual experience. Such adjustments could be material to the consolidated financial statements. Supplier Concentration Some of the Company’s vendors provide highly specialized, differentiated products and services related to the Company’s eProbe system and some licensors provide key enabling software for the Company’s products and services. In the event any of these suppliers delay or discontinue providing such products and services to the Company, it may be difficult for the Company to replace such suppliers, software, or parts in a timely manner or at all, which could delay or make impossible the Company’s ability to deliver or adequately support its software systems or to complete and deliver its eProbe systems to its customers, and could negatively impact the Company’s future financial results of operations. Cash and Cash Equivalents, and Short-term Investments The Company considers all highly liquid investments with effective maturities of 90 days or less on the date of purchase to be cash equivalents and investments with effective maturities greater than 90 days but less than one year The Company periodically reviews short-term investments for impairment. For investments in unrealized loss positions, the Company assesses whether any portion of the decline in fair value below the amortized cost basis is due to credit-related factors if the Company neither intends to sell nor anticipates that it is more likely than not that it will be required to sell prior to recovery of the amortized cost basis. The Company considers factors such as the extent to which the market value has been less than the amortized cost basis, any noted failure of the issuer to make scheduled interest or principal payments, changes to the rating of the security by a rating agency and other relevant credit-related factors in determining whether or not a credit loss exists. There was no allowance losses As of December 31, 2023, and 2022, short-term investments consisted solely of U.S. Government securities. The cost of these securities approximated fair value and there was no material gross realized unrealized losses The Company recorded interest income from its cash, cash equivalents, and short-term investments of $5.5 million, $1.5 million and $0.1 million in the years ended December 31 2023, 2022 and 2021, respectively. Accounts Receivable Accounts receivable include amounts that are unbilled at the end of the period that are expected to be billed and collected within a 12-month period. Unbilled accounts receivable are determined on an individual contract basis. Unbilled accounts receivable, included in accounts receivable, totaled $16.4 million and $13.5 million as of December 31, 2023 and 2022, respectively. Unbilled accounts receivable that are not expected to be billed and collected during the succeeding 12-month period are recorded in other non-current assets and totaled $1.1 million and $0.8 million as of December 31, 2023 and 2022, respectively. The Company performs ongoing credit evaluations of its customers’ financial condition. An allowance for credit losses is maintained for probable credit losses based upon the Company’s assessment of the expected collectibility of the accounts receivable. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance. The changes in allowance for credit losses are summarized below (in thousands): Deductions/ Balance at Write-offs Balance at Beginning Charged to of Accounts End of of Period Expense (1) Receivable Period 2023 $ 890 $ 20 $ (20) $ 890 2022 $ 890 $ 11 $ (11) $ 890 2021 $ 963 $ — $ (73) $ 890 (1) Additions to the accounts receivable reserve for credit losses are charged to bad debt expense. Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives (in years) of the related asset as follows: Computer equipment 3 Software 3 Furniture, fixtures, and equipment 5-10 Laboratory and test equipment 3-10 Leasehold improvements Shorter of estimated useful life or term of lease Intangible Assets Intangible assets consist of acquired technology, certain contract rights, customer relationships, patents, trademarks and trade names. These intangible assets may be acquired through business combinations or direct purchases. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from one ten Goodwill The Company records goodwill when the purchase consideration of an acquisition exceeds the fair value of the net tangible and identified intangible assets as of the date of acquisition. The Company has one operating segment and one operating unit. The Company performs a qualitative analysis when testing a reporting unit’s goodwill for impairment. The Company performs an annual impairment assessment of goodwill during the fourth quarter of each calendar year or more frequently, if required to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If the carrying amount exceeds its fair value, an impairment loss would be recognized equal to the amount of excess, limited to the amount of total goodwill. Leases The Company has operating leases for administrative and sales offices, research and development laboratory and clean room. The Company recognizes long-term operating lease rights and commitments as operating lease right-of-use (“ROU”) assets, operating lease liabilities and operating lease liabilities, non-current, respectively, in the Consolidated Balance Sheets. The Company elected to not separate lease and non-lease components for all of its leases. The Company determines if an arrangement is, or contains, a lease at inception. Operating lease ROU assets, and operating lease liabilities are initially recorded based on the present value of lease payments over the lease term. Lease terms include the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. The decision to include these options involves consideration of the Company’s overall future business plans and other relevant business economic factors that may affect its business. Since the determination of the lease term requires an application of judgment, lease terms that differ in reality from the Company’s initial judgment may potentially have a material impact on the Company’s Consolidated Balance Sheets. In addition, the Company’s leases do not provide an implicit rate. In determining the present value of the Company’s expected lease payments, the discount rate is calculated using the Company’s incremental borrowing rate determined based on the information available, which requires additional judgment. Software Development Costs Internally developed software is software developed to meet the Company’s internal needs to provide certain services to the customers. The Company’s capitalized software development costs consist of internal compensation related costs and external direct costs incurred during the application development stage and are amortized over their useful lives, generally five six The costs to develop software that is marketed externally consisting of external direct costs and internal compensation related costs are capitalized once technological feasibility of the software product has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the software product can be produced to meet its design specifications. Capitalization of such costs ceases when the software product is generally available to customers. These software development costs are amortized using the greater of the straight-line method or the usage method over its estimated useful life. Cost of Revenues Costs of revenues consist primarily of costs incurred to provide and support the Company’s services, costs recognized in connection with licensing its software, IT and facilities-related costs and amortization of acquired technology. Service costs include material costs, hardware costs (including cost of leased assets under sales-type leases), personnel-related costs (including compensation, employee benefits, bonus and stock-based compensation expense), subcontractor costs, overhead costs, travel, and allocated facilities-related costs. Software license costs consist of costs associated with cloud-delivery related expenses and licensing third-party software used by the Company in providing services to its customers in solution engagements or sold in conjunction with the Company’s software products. Research and Development Expenses Research and development expenses consist primarily of personnel-related costs (including compensation, employee benefits, bonus and stock-based compensation expense), outside development services, travel, third-party cloud-services related costs, IT and facilities cost allocations to support product development activities. Research and development expenses are charged to operations as incurred. Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of personnel-related costs (including compensation, employee benefits, bonus, commission and stock-based compensation expense for sales, marketing and general and administrative personnel), legal, tax and accounting services, marketing communications and trade conference-related expenses, third-party cloud-services related costs, travel, IT and facilities cost allocations. Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method, which requires the Company to measure stock-based compensation based on the grant-date fair value of the awards and recognize the compensation expense over the requisite service period. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The fair value of the Company’s restricted stock units (“RSUs”) is equal to the market value of the Company’s common stock on the date of the grant. These awards are subject to time-based vesting which generally occurs over a period of four years The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton option-pricing model, which incorporates various assumptions including volatility, expected life and interest rates. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options. The expected life is based on historical experience and on the terms and conditions of the stock options granted. The interest rate assumption is based upon observed Treasury yield curve rates appropriate for the expected life of the Company’s stock options. Income Taxes The Company’s provision for income tax comprises its current tax liability and change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effect of future changes in tax laws or rates are not anticipated. Valuation allowances are provided to reduce deferred tax assets to an amount that in management’s judgment is more likely than not to be recoverable against future taxable income. No U.S. taxes are provided on earnings of non-U.S. subsidiaries, to the extent such earnings are deemed to be permanently invested. The Company’s income tax calculations are based on application of applicable U.S. federal and state or foreign tax laws. The Company’s tax filings, however, are subject to audit by the respective tax authorities. Accordingly, the Company recognizes tax liabilities based upon its estimate of whether, and the extent to which, additional taxes will be due when such estimates are more likely than not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. To the extent the final tax liabilities are different from the amounts originally accrued, the increases or decreases are recorded as income tax expense or benefit in the Consolidated Statements of Comprehensive Income (Loss). Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by weighted average number of common shares outstanding for the period (excluding outstanding stock options and shares subject to repurchase). Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding for the period plus the potential effect of dilutive securities which are convertible into common shares (using the treasury stock method), except in cases in which the effect would be anti-dilutive. Dilutive potential common shares consist of incremental common shares issuable upon exercise of stock options, upon vesting of RSUs, contingently issuable shares for all periods and assumed issuance of shares under the Company’s employee stock purchase plan. No dilutive potential common shares are included in the computation of any diluted per share amount when a loss from continuing operations was reported by the Company. Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the local currency for the respective subsidiary. The assets and liabilities are translated at the period-end exchange rate, and statements of comprehensive income (loss) are translated at the average exchange rate during the year. Gains and losses resulting from foreign currency translations are included as a component of other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Comprehensive Income (Loss). Derivative Financial Instruments The Company operates internationally and is exposed to potentially adverse movements in foreign currency exchange rates. From time to time, the Company enters into foreign currency forward contracts to reduce the exposure to foreign currency exchange rate fluctuations on certain foreign currency denominated monetary assets and liabilities. The Company does not use foreign currency contracts for speculative or trading purposes. The Company records these forward contracts at fair value. The counterparty to these foreign currency forward contracts is a financial institution that the Company believes is creditworthy, and therefore, we believe the credit risk of counterparty non-performance is not significant. These foreign currency forward contracts are not designated for hedge accounting treatment. Therefore, the change in fair value of these derivatives is recorded into earnings as a component of interest and other income (expense), net and offsets the change in fair value of the foreign currency denominated monetary assets and liabilities, which are also recorded in interest and other income (expense), net. The duration of these forward contracts is usually three months. Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values at the date of the business combination. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, estimated replacement costs and future expected cash flows from acquired customers, acquired technology, acquired patents, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects the Company’s amortization expense, as acquired finite-lived intangible assets are amortized over their useful life, whereas any indefinite lived intangible assets, including in-process research and development, and goodwill, are not amortized but tested annually for impairment. During the measurement period, which is not to exceed one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Litigation From time to time, the Company is subject to various claims and legal proceedings that arise in the ordinary course of business. The Company accrues for losses related to litigation when a potential loss is probable and the loss can be reasonably estimated in accordance with Financial Accounting Standards Board (“FASB”) requirements. See Note 6, “Commitments and Contingencies”. Accounting Standards Adopted In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU No. 2016-13”), which requires measurement and recognition of expected credit losses for financial assets held at the reporting date based on internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model, which will result in earlier recognition of credit losses. Subsequent to the issuance of ASU No. 2016-13, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instrument, ASU No. 2019-05, Financial Instruments – Credit Losses (Topic 326) Targeted Transition Relief, ASU No. 2016-13, ASU No. 2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), and ASU No. 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses. The subsequent ASUs do not change the core principle of the guidance in ASU No. 2016-13. Instead, these amendments are intended to clarify and improve operability of certain topics included within ASU No. 2016-13. The Company adopted this standard on January 1, 2023, using a modified retrospective approach, which requires a cumulative-effect adjustment to accumulated deficit as of the beginning of the period of adoption with prior periods not restated. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU is intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2024. Entities are permitted to early adopt the standard for “annual financial statements that have not yet been issued or made available for issuance.” Adoption is either prospectively or retrospectively, the Company will adopt this ASU on a prospective basis. The Company is currently evaluating the impact of the new standard on the consolidated financial statements and related disclosures. Management has reviewed other recently issued accounting pronouncements issued or proposed by the FASB and does not believe any of these accounting pronouncements has had or will have a material impact on the consolidated financial statements. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE | |
REVENUE | 2. REVENUE The Company derives revenue from two sources: Analytics revenue and Integrated Yield Ramp revenue. The Company recognizes revenue in accordance with FASB Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers The Company determines revenue recognition through the following five steps: ● Identification of the contract, or contracts, with a customer ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, performance obligations are satisfied The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Contracts with multiple performance obligations The Company enters into contracts that can include various combinations of licenses, products and services, some of which are distinct and are accounted for as separate performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using the standalone selling price (“SSP”). Analytics Revenue Analytics revenue is derived from the following primary offerings: licenses and services for standalone software (which is primarily Exensio ® ® ® Revenue from standalone software is recognized depending on whether the license is perpetual or time-based. Perpetual (one-time charge) license software is recognized at the time of the inception of the arrangement when control transfers to the customers, if the software license is considered as a separate performance obligation from the services offered by the Company. Revenue from post-contract support is recognized over the contract term on a straight-line basis, because we are providing (i) support and (ii) unspecified software updates on a when-and-if available basis over the contract term. Revenue from time-based-licensed software is allocated to each performance obligation and is recognized either at a point in time or over time as follows. The license component is recognized at the time when control transfers to customers, with the post-contract support component recognized ratably over the committed term of the contract. For contracts with any combination of licenses, support, and other services, distinct performance obligations are accounted for separately. For contracts with multiple performance obligations, we allocate the transaction price of the contract to each performance obligation on a relative basis using the SSP attributed to each performance obligation. Revenue from SaaS arrangements, which allow for the use of a cloud-based software product or service over a contractually determined period of time without the customer having to take possession of software, is accounted for as a subscription and is recognized as revenue ratably, on a straight-line basis, over the subscription period beginning on the date the service is first made available to customers. For contracts with any combination of SaaS and related services, distinct performance obligations are accounted for separately. For contracts with multiple performance obligations, we allocate the transaction price of the contract to each performance obligation on a relative basis using SSP attributed to each performance obligation. Revenue from DFI systems and CV systems (including Characterization services) that do not include performance incentives based on customers’ yield achievement is recognized primarily as services are performed. Where there are distinct performance obligations, the Company allocates revenue to all deliverables based on their SSPs. For those contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using SSP attributed to each performance obligation. Where there are not discrete performance obligations, historically, revenue is primarily recognized as services are performed using a percentage of completion method based on costs or labor-hours inputs, whichever is the most appropriate measure of the progress towards completion of the contract. The estimation of percentage of completion method is complex and subject to many variables that require significant judgement. Please refer to “Significant Judgments” section of this Note for further discussion. The Company also leases some of its DFI system and CV system assets to some customers. The Company determines the existence of a lease when the customer controls the use of these identified assets for a period of time defined in the lease agreement and classifies such leases as operating leases or sales-type leases. A lease is classified as a sales-type lease if it meets certain criteria under Topic 842, Leases; otherwise it is classified as an operating lease. Operating lease revenue is recognized on a straight-line basis over the lease term. Sales-type lease revenue and corresponding lease receivables are recognized at lease commencement based on the present value of the future lease payments, and related interest income on lease receivable is recognized over the lease term and are recorded under Analytics Revenue in the Consolidated Statements of Comprehensive Income (Loss). Payments under sales-type leases are discounted using the interest rate implicit in the lease. When the Company’s leases are embedded in contracts with customers that include non-lease performance obligations, the Company allocates consideration in the contract between lease and non-lease components based on their relative SSPs. Assets subject to operating leases remain in Property and equipment and continue to be depreciated. Assets subject to sales-type leases are derecognized from Property and equipment, net at lease commencement and a net investment in the lease asset is recognized in Prepaid expenses and other current assets and Other non-current assets in the Consolidated Balance Sheets. Integrated Yield Ramp Revenue Integrated Yield Ramp revenue is derived from the Company’s fixed-fee engagements that include performance incentives based on customers’ yield achievement (which consists primarily of Gainshare royalties) typically based on customer’s wafer shipments, pertaining to these fixed-price contracts, which royalties are variable. Revenue under these project–based contracts, which are delivered over a specific period of time, typically for a fixed fee component paid on a set schedule, is recognized as services are performed using a percentage of completion method based on costs or labor-inputs, whichever is the most appropriate measure of the progress towards completion of the contract. Where there are distinct performance obligations, the Company allocates revenue to all deliverables based on their SSPs and allocates the transaction price of the contract to each performance obligation on a relative basis using SSP. Similar to the services provided in connection with DFI systems and CV systems that are contributing to Analytics revenue, due to the nature of the work performed in these arrangements, the estimation of percentage of completion method is complex and subject to many variables that require significant judgement. Please refer to “Significant Judgments” section of this Note for further discussion. The Gainshare royalty contained in Integrated Yield Ramp contracts is a variable fee related to continued usage of the Company’s IP after the fixed-fee service period ends, based on a customer’s yield achievement. Revenue derived from Gainshare is contingent upon the Company’s customers reaching certain defined production yield levels. Gainshare royalty periods are generally subsequent to the delivery of all contractual services and performance obligations. The Company records Gainshare as a usage-based royalty derived from customers’ usage of IP and records it in the same period in which the usage occurs. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into the timing of the transfer of goods and services and the geographical regions. The Company determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The Company’s performance obligations are satisfied either over time or at a point-in-time. The following table represents a disaggregation of revenue by timing of revenue: Year Ended December 31, 2023 2022 2021 Over time 71 % 69 % 65 % Point-in-time 29 % 31 % 35 % Total 100 % 100 % 100 % International revenues accounted for approximately 44%, 50% and 55% of total revenues for the years ended December 31, 2023, 2022 and 2021, respectively. See Note 11, “Customer and Geographic Information”. Significant Judgments Judgments and estimates are required under ASC 606. Due to the complexity of certain contracts, the actual revenue recognition treatment required under ASC 606 for the Company’s arrangements may be dependent on contract-specific terms and may vary in some instances. For revenue under project-based contracts for fixed-price implementation services, revenue is recognized as services are performed using a percentage-of-completion method based on costs or labor-hours input method, whichever is the most appropriate measure of the progress towards completion of the contract. Due to the nature of the work performed in these arrangements, the estimation of percentage of completion method is complex, subject to many variables and requires significant judgment. Key factors reviewed by the Company to estimate costs to complete each contract are future labor and product costs and expected productivity efficiencies. If circumstances arise that change the original estimates of revenues, costs, or extent of progress toward completion, revisions to the estimates are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in revenue on a cumulative catch-up basis in the period in which the circumstances that gave rise to the revision become known. The Company’s contracts with customers often include promises to transfer products, licenses software and provide services, including professional services, technical support services, and rights to unspecified updates to a customer. Determining whether licenses and services are distinct performance obligations that should be accounted for separately, or not distinct and thus accounted for together, requires significant judgment. The Company rarely licenses software on a standalone basis, so the Company is required to estimate the range of SSPs for each performance obligation. In instances where SSP is not directly observable because the Company does not license the software or sell the service separately, the Company determines the SSP using information that may include market conditions and other observable inputs. The Company is required to record Gainshare royalty revenue in the same period in which the usage occurs. Because the Company generally does not receive the acknowledgment reports from its customers during a given quarter within the time frame necessary to adequately review the reports and include the actual amounts in quarterly results for such quarter, the Company accrues the related revenue based on estimates of customers underlying sales achievement. The Company’s estimation process can be based on historical data, trends, seasonality, changes in the contract rate, knowledge of the changes in the industry and changes in the customer’s manufacturing environment learned through discussions with customers and sales personnel. As a result of accruing revenue for the quarter based on such estimates, adjustments will be required in the following quarter to true-up revenue to the actual amounts reported. Contract Balances The Company performs its obligations under a contract with a customer by licensing software or providing services in exchange for consideration from the customer. The timing of the Company’s performance often differs from the timing of the customer’s payment, which results in the recognition of a receivable, a contract asset or a contract liability. The Company classifies the right to consideration in exchange for software or services transferred to a customer as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional, as compared to a contract asset, which is a right to consideration that is conditional upon factors other than the passage of time. The majority of the Company’s contract assets represent unbilled amounts related to fixed-price service contracts when the revenue recognized exceeds the amount billed to the customer. The contract assets are generally classified as current and are recorded on a net basis with deferred revenue (i.e. contract liabilities) at the contract level. As of December 31, 2023 and 2022, contract assets of $6.8 million and $3.3 million, respectively, are included in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets. As of December 31, 2023 and 2022, contract assets of $0.9 million and nil, respectively, are included in other non-current assets in the accompanying Consolidated Balance Sheets. The Company did not record any asset impairment charges related to contract assets during fiscal years 2023, 2022 and 2021. Deferred revenues and billings in excess of recognized revenues consist substantially of amounts invoiced in advance of revenue recognition and are recognized as the revenue recognition criteria are met. Deferred revenues that will be recognized during the succeeding twelve-month period are recorded as current deferred revenues and the remaining portion is recorded in other non-current liabilities in the accompanying Consolidated Balance Sheets. As of December 31, 2023 and 2022, the non-current portion of deferred revenues included in non-current liabilities was $1.8 million and $1.9 million, respectively. Revenue recognized for the years ended December 31, 2023, 2022 and 2021, that was included in the deferred revenues and billings in excess of recognized revenues balances at the beginning of each reporting period was $24.8 million, $24.9 million and $16.9 million, respectively. As of December 31, 2023, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that were unsatisfied or partially unsatisfied was approximately $229.8 million. Given the applicable contract terms with customers, the majority of this amount is expected to be recognized as revenue over the next three years three years The adjustment to revenue recognized in the years ended December 31, 2023, 2022 and 2021 from performance obligations satisfied (or partially satisfied) in previous periods was an increase of $3.7 million, an increase of $0.4 million and a decrease $0.4 million, respectively. These amounts primarily represent changes in estimated percentage-of-completion based contracts and changes in actual versus estimated Gainshare royalty. Costs to obtain or fulfill a contract The Company capitalizes the incremental costs to obtain or fulfill a contract with a customer, including direct sales commissions and related fees, when it expects to recover those costs. Amortization expense related to these capitalized costs is recognized over the period associated with the revenue from which the cost was incurred. Total capitalized direct sales commission costs included in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022 was $2.0 million and $1.7 million, respectively. Total capitalized direct sales commission costs included in other non-current assets in the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022 was $2.6 million and $2.1 million, respectively. Amortization of these assets for each of the years ended December 31, 2023, 2022 and 2021 was $2.1 million, $1.5 Practical Expedients The Company does not adjust transaction price for the effects of a significant financing component when the period between the transfers of the promised good or service to the customer and payment for that good or service by the customer is expected to be one year or less. The Company assessed each of its revenue generating arrangements in order to determine whether a significant financing component exists, and determined its contracts did not include a significant financing component for the years ended December 31, 2023, 2022 and 2021. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 3. PROPERTY AND EQUIPMENT Property and equipment consist of (in thousands): December 31, 2023 2022 Computer equipment $ 12,515 $ 11,853 Software 5,596 5,395 Furniture, fixtures, and equipment 2,501 2,484 Leasehold improvements 6,475 6,467 Laboratory and other equipment 4,891 4,431 Test equipment 25,044 28,403 Property and equipment in progress: DFI™ system assets 22,864 22,231 CV® system and other assets 6,977 5,105 86,863 86,369 Less: Accumulated depreciation and amortization (49,525) (46,195) Total $ 37,338 $ 40,174 Test equipment mainly includes DFI™ systems and CV® systems assets at customer sites that are contributing to revenue. Property and equipment in progress represent the development or construction of property and equipment that have not yet been placed in service for the Company’s intended use and are not depreciated. Depreciation and amortization expense for the years ended December 31, 2023, 2022 and 2021 was $5.0 million, $5.5 million and $6.2 million, respectively. In 2021, the Company wrote down the value of its property and equipment by $3.2 million related to its first-generation of e-beam tools for DFI systems wherein carrying values may not be fully recoverable due to lack of market demand and future needs of its customers for these tools. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | 4. GOODWILL AND INTANGIBLE ASSETS The Company completed the acquisition of Lantern Machinery Analytics, Inc. in the year ended December 31, 2023. Refer to Note 14 for additional information related to the goodwill and intangible assets added from this acquisition. As of December 31, 2023 and 2022, the carrying amount of goodwill was $15.0 million and $14.1 million, respectively. The following table summarizes goodwill transaction for the years ended December 31, 2023, 2022 and 2021 (in thousands): Year Ended December 31, 2023 2022 2021 Balance at beginning of year $ 14,123 $ 14,123 $ 15,774 Addition 895 — — Measurement period acquisition adjustment — — (1,651) Foreign currency translation adjustment 11 — — Balance at end of year $ 15,029 $ 14,123 $ 14,123 Intangible assets balance was $15.6 million and $18.1 million as of December 31, 2023 and 2022, respectively. Intangible assets as of December 31, 2023 and 2022, consist of the following (in thousands): December 31, 2023 December 31, 2022 Amortization Gross Net Gross Net Period Carrying Accumulated Carrying Carrying Accumulated Carrying (Years) Amount Amortization Amount Amount Amortization Amount Acquired identifiable intangibles: Customer relationships 1 - 10 $ 9,508 $ (7,335) $ 2,173 $ 9,407 $ (6,684) $ 2,723 Developed technology 4 - 9 34,650 (22,094) 12,556 33,635 (19,647) 13,988 Tradename and trademarks 2 - 10 1,598 (1,025) 573 1,598 (918) 680 Patent 6 - 10 2,100 (1,782) 318 2,100 (1,696) 404 Noncompetition agreements 3 848 (848) — 848 (588) 260 Total $ 48,704 $ (33,084) $ 15,620 $ 47,588 $ (29,533) $ 18,055 The weighted average amortization period for acquired identifiable intangible assets was 5.3 years as of December 31, 2023. The following table summarizes intangible assets amortization expense in the Consolidated Statements of Comprehensive Income (Loss) (in thousands): Year Ended December 31, 2023 2022 2021 Amortization of acquired technology included under costs of revenues $ 2,266 $ 2,214 $ 2,079 Amortization of acquired intangible assets presented separately under costs and expenses 1,285 1,270 1,255 Total amortization of acquired intangible assets $ 3,551 $ 3,484 $ 3,334 The Company expects annual amortization of acquired identifiable intangible assets to be as follows (in thousands): Year Ending December 31, Amount 2024 $ 3,237 2025 3,072 2026 2,903 2027 2,750 2028 2,445 2029 and thereafter 1,213 Total future amortization expense $ 15,620 There were no impairment charges |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
LEASES | 5. LEASES In 2022, the Company early terminated an office lease contract. The termination of this lease reduced the Company’s operating lease ROU assets and lease liabilities by approximately $0.5 million and $0.6 million, respectively. The gain from the lease termination of approximately $0.1 million was recorded under selling, general and administrative expense in the accompanying Consolidated Statement of Comprehensive Loss for the year ended December 31, 2022. Lease expense was comprised of the following (in thousands): Year Ended December 31, 2023 2022 2021 Operating lease expense (1) $ 1,534 $ 1,457 $ 1,860 Short-term lease and variable lease expense (2) 923 1,032 822 Total lease expense $ 2,457 $ 2,489 $ 2,682 (1) Net of gain recognized upon lease termination of $0.1 million in the year ended December 31, 2022. (2) Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Variable lease expense for the periods presented primarily included common area maintenance charges. Supplemental consolidated balance sheets information related to leases was as follows: December 31, 2023 2022 Weighted average remaining lease term under operating leases (in years) 4.4 5.3 Weighted average discount rate for operating lease liabilities 4.96 % 4.87 % Maturity of operating lease liabilities as of December 31, 2023, are as follows (in thousands): Year Ending December 31, Amount (1) 2024 $ 1,663 2025 1,611 2026 1,355 2027 1,294 2028 929 2029 63 Total future minimum lease payments 6,915 Less: Interest (2) (729) Present value of future minimum lease payments under operating lease liabilities (3) $ 6,186 (1) As of December 31, 2023, the total operating lease liability includes $1.0 million related to an option to extend a lease term that is reasonably certain to be exercised . (2) Calculated using incremental borrowing interest rate for each lease. (3) Includes the current portion of operating lease liabilities of $1.5 million as of December 31, 2023. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Strategic Partnership with Advantest See Note 13 for the discussion about the Company’s commitments under the strategic partnership with Advantest. Operating Leases Refer to Note 5, “Leases”, for the discussion about the Company’s lease commitments. Indemnifications The Company generally provides a warranty to its customers that its software will perform substantially in accordance with documented specifications typically for a period of 90 days following delivery of its products. The Company also indemnifies certain customers from third-party claims of IP infringement relating to the use of its products. Historically, costs related to these guarantees have not been significant. The Company is unable to estimate the maximum potential impact of these guarantees on its future results of operations. Purchase Obligations The Company has purchase obligations with certain suppliers for the purchase of goods and services entered in the ordinary course of business. As of December 31, 2023, total outstanding purchase obligations were $26.2 million, the majority of which are due within the next 2 years. Indemnification of Officers and Directors As permitted by the Delaware general corporation law, the Company has included a provision in its certificate of incorporation to eliminate the personal liability of its officers and directors for monetary damages for breach or alleged breach of their fiduciary duties as officers or directors, other than in cases of fraud or other willful misconduct. In addition, the Bylaws of the Company provide that the Company is required to indemnify its officers and directors even when indemnification would otherwise be discretionary, and the Company is required to advance expenses to its officers and directors as incurred in connection with proceedings against them for which they may be indemnified. The Company has entered into indemnification agreements with its officers and directors containing provisions that are in some respects broader than the specific indemnification provisions contained in the Delaware general corporation law. The indemnification agreements require the Company to indemnify its officers and directors against liabilities that may arise by reason of their status or service as officers and directors other than for liabilities arising from willful misconduct of a culpable nature, to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified, and to obtain directors’ and officers’ insurance if available on reasonable terms. The Company has obtained directors’ and officers’ liability insurance in amounts comparable to other companies of the Company’s size and in the Company’s industry. Since a maximum obligation of the Company is not explicitly stated in the Company’s Bylaws or in its indemnification agreements and will depend on the facts and circumstances that arise out of any future claims, the overall maximum amount of the obligations cannot be reasonably estimated. Litigation From time to time, the Company is subject to various claims and legal proceedings that arise in the ordinary course of business. The Company accrues for losses related to litigation when a potential loss is probable, and the loss can be reasonably estimated in accordance with FASB requirements. As of December 31, 2023, except as disclosed below, the Company was not party to any material legal proceedings for which a loss was probable or an amount was accrued. From time to time, the Company may enter into contingent fee arrangements with external legal firms that may represent the Company in legal proceedings related to disputes. Contingent legal fees are accrued by the Company when they are probable and reasonably estimable. On May 6, 2020, the Company initiated an arbitration proceeding with the Hong Kong International Arbitration Center against SMIC New Technology Research & Development (Shanghai) Corporation (“SMIC”) due to SMIC’s failure to pay fees due to the Company under a series of contracts. The Company seeks to recover the unpaid fees, a declaration requiring SMIC to pay fees under the contracts in the future (or a lump sum payment to end the contract), and costs associated with bringing the arbitration proceeding. SMIC denies liability and an arbitration hearing was held in February 2023. Final written submissions were submitted by the parties at the end of August 2023. A decision is currently expected in 2024. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
STOCKHOLDERS EQUITY | |
STOCKHOLDERS' EQUITY | 7. STOCKHOLDERS’ EQUITY Stock Repurchase Program On June 4, 2020, the Company’s Board of Directors adopted a stock repurchase program (the “2020 Program”) to repurchase up to $25.0 million of the Company’s common stock both on the open market and in privately negotiated transactions, including through Rule 10b5-1 plans, over the next two years. During the year ended December 31, 2022, 218,858 shares were repurchased by the Company under the 2020 Program at an average price of $26.40 per share for an aggregate total price of $5.8 million. During the year ended December 31, 2021, 251,212 shares were repurchased by the Company under the 2020 Program at an average price of $18.01 per share for an aggregate total price of $4.5 million. In total, 470,070 shares were repurchased under the 2020 Program at an average price of $21.91 per share, for an aggregate total price of $10.3 million. On April 11, 2022, the Board of Directors terminated the 2020 Program, and adopted a new program (the “2022 Program”) to repurchase up to $35.0 million of the Company’s common stock both on the open market and in privately negotiated transactions, including through Rule 10b5-1 plans, from time to time, over the next two years. During the year ended December 31, 2023, 21,340 shares were repurchased by the Company under the 2022 Program at an average price of $34.81 per share for an aggregate total price of $0.7 million. During the year ended December 31, 2022, 714,600 shares were repurchased by the Company under the 2022 Program at an average price of $23.36 per share for an aggregate total price of $16.7 million. In total, the Company has repurchased 735,940 shares under the 2022 Program at an average price of $23.69 per share for an aggregate total price of $17.4 million. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2023 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 8. EMPLOYEE BENEFIT PLANS On December 31, 2023, the Company had the following stock-based compensation plans: Employee Stock Purchase Plans In July 2001, the Company’s stockholders initially approved the 2001 Employee Stock Purchase Plan, which was subsequently amended and restated in 2010 (as amended, the “2010 Purchase Plan”) to extend the term of the plan through May 17, 2020. Under the 2010 Purchase Plan, eligible employees can contribute up to 10% of their compensation, as defined in the Purchase Plan, towards the purchase of shares of PDF common stock at a price of 85% of the lower of the fair market value at the beginning of the offering period or the end of the purchase period. The 2010 Purchase Plan provided for twenty-four-month offering periods with four six-month The Company estimated the fair value of purchase rights granted under the Employee Purchase Plans during the period using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions, resulting in the following weighted average fair values: 2021 Purchase Plan Year Ended December 31, 2023 2022 2021 Expected life (in years) 1.25 1.25 1.25 Volatility 43.66 % 48.73 % 48.00 % Risk-free interest rate 5.15 % 2.75 % 0.11 % Expected dividend — — — Weighted average fair value of purchase rights granted during the period $ 15.71 $ 10.00 $ 6.71 During the years ended December 31, 2023 and 2022, a total of 223,608 and 182,083 shares, respectively, were issued under the 2021 Purchase Plan, at a weighted-average purchase price of $17.14 per share and $16.15 per share, respectively. During the years ended December 31, 2022 and 2021 a total of 5,203 and 108,623 shares, respectively, were issued under the 2010 Purchase Plan, at a weighted-average purchase price of $13.40 per share and $9.53 per share, respectively. As of December 31, 2023, unrecognized compensation cost related to the 2021 Purchase Plan was $3.0 million. This estimated unrecognized cost is expected to be recognized over a weighted average period of 1.5 years. As of December 31, 2023, 594,309 shares were available for future issuance under the 2021 Purchase Plan. Stock Incentive Plans On November 16, 2011, the Company’s stockholders initially approved the 2011 Stock Incentive Plan, which has been amended and restated and approved by the Company’s stockholders a number of times since then (as amended, the “2011 Plan”). Under the 2011 Plan, the Company may award stock options, stock appreciation rights (“SARs”), stock grants or stock units covering shares of the Company’s common stock to employees, directors, non-employee directors and contractors. The aggregate number of shares reserved for awards under the 2011 Plan is 13.8 million shares, plus up to 3.5 million shares previously issued under the 2001 Stock Plan adopted by the Company in 2001, which expired in 2011 (the “2001 Plan”) that are either (i) forfeited or (ii) repurchased by the Company or are shares subject to awards previously issued under the 2001 Plan that expire or that terminate without having been exercised or settled in full on or after November 16, 2011. In case of awards other than options or SARs, the aggregate number of shares reserved under the 2011 Plan will be decreased at a rate of 1.33 shares issued pursuant to such awards. The exercise price for stock options must generally be at prices no less than the fair market value at the date of grant. Stock options generally expire ten As of December 31, 2023, 14.3 million shares of common stock were reserved to cover stock-based awards under the 2011 Plan, of which 3.7 million shares were available for future grant. The number of shares reserved and available under the 2011 Plan includes 0.5 million shares that were subject to awards previously made under the 2001 Plan and were forfeited, expired or repurchased by the Company after the adoption of the 2011 Plan through December 31, 2023. As of December 31, 2023, there were no outstanding awards that were granted outside of the 2011 or 2001 Plans (collectively, the “Stock Plans”). The Company has elected to use the Black-Scholes-Merton option-pricing model, which incorporates various assumptions including volatility, expected life, interest rate and expected dividend. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options. The expected life of an award is based on historical experience and on the terms and conditions of the stock awards granted to employees. The interest rate assumption is based upon observed Treasury yield curve rates appropriate for the expected life of the Company’s stock options. No stock options Stock-based compensation is estimated at the grant date based on the award’s fair value and is recognized on a straight-line basis over the vesting periods, generally four Stock-based compensation expenses related to the Company’s stock plans and employee stock purchase plans were allocated as follows (in thousands): Year Ended December 31, 2023 2022 2021 Costs of revenues $ 4,169 $ 2,974 $ 2,563 Research and development 7,711 9,391 5,515 Selling, general, and administrative 9,604 7,284 4,853 Stock-based compensation expense $ 21,484 $ 19,649 $ 12,931 Stock-based compensation capitalized in the capitalized software development costs included in property and equipment, net, was $0.1 million for the year ended December 31, 2023, and nil for Additional information with respect to options under the Plans is as follows: Outstanding Options Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value (in thousands) per Share (Years) (in thousands) Outstanding, January 1, 2023 68 $ 16.11 Granted — — Exercised (30) 16.36 Canceled — — Expired — — Outstanding, December 31, 2023 38 $ 15.92 4.05 $ 619 Vested and expected to vest, December 31, 2023 38 $ 15.91 4.05 $ 619 Exercisable, December 31, 2023 37 $ 15.84 3.97 $ 599 The aggregate intrinsic value in the table above represents the total intrinsic value based on the Company’s closing stock price of $32.14 as of December 31, 2023, which would have been received by the option holders had all option holders exercised their options as of that date. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021 was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Intrinsic value of options exercised $ 630 $ 2,287 $ 2,972 Total remaining unrecognized compensation cost related to unvested stock options as of December 31, 2023, which is expected to be fully recognized in 2024, and total fair value of shares vested during the year ended December 31, 2023, was immaterial. Nonvested shares (restricted stock units) were as follows: Weighted Average Grant Shares Date Fair Value (in thousands) Per Share Nonvested, January 1, 2023 2,124 $ 21.29 Granted 783 43.46 Vested (882) 21.00 Forfeited (30) 27.60 Nonvested, December 31, 2023 1,995 $ 30.03 The weighted average grant date fair values of restricted stock units granted during fiscal 2023, 2022 and 2021 were $43.46, $23.23 and $19.43, respectively. The total fair value of restricted stock units vested during fiscal 2023, 2022 and 2021 was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Fair value of restricted stock units vested $ 32,786 $ 22,676 $ 13,617 As of December 31, 2023, there was $45.4 million of total unrecognized compensation cost related to restricted stock units. That cost is expected to be recognized over a weighted average period of 2.5 years. Restricted stock units do not have rights to dividends prior to vesting. 401(k) Savings Plan The Company sponsors a 401(k) Retirement Savings Plan (the “401(k) Plan”) covering substantially all of its US employees. The Company’s 401(k) Plan is a defined contribution plan with a 401(k) salary deferral arrangement qualified under appropriate provisions of the Internal Revenue Code (the “Code”) and applicable state laws. Under the 401(k) Plan, eligible employees may make pre-tax salary or after-tax contributions up to 60% of annual compensation, as defined by the 401(k) Plan. In addition, participants who have reached the age of 50 can elect to withhold additional catch-up contributions subject to the Code and the 401(k) Plan limits. Participants may also contribute amounts representing distributions from other qualified plans (rollovers). The Company may make discretionary matching contributions. In fiscal 2023 and 2022, the Company matched from 50% to 100% of each employee’s contribution up to a maximum of 4% of the employee’s total eligible earnings. The Company’s matching contributions to the 401(k) Plan aggregated $1.7 million and $1.6 million for the years ended December 31, 2023 and 2022. No discretionary Company contributions were made to the Plan through December 31, 2021. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES During the years ended December 31, 2023, 2022 and 2021, income (loss) before income tax expense from U.S. operations was $3.2 million, ($1.2) million and ($19.7) million, respectively, and income before income tax expense from foreign operations was $1.7 million, $1.7 million and $1.4 million, respectively. Year Ended December 31, 2023 2022 2021 (In thousands) U.S. Current $ (353) $ 1,210 $ (67) Deferred 3 13 1,318 Foreign Current 453 577 237 Withholding 1,770 2,111 1,591 Deferred (109) (12) 92 Total income tax expense $ 1,764 $ 3,899 $ 3,171 The income tax expense differs from the amount estimated by applying the statutory federal income tax rate (21% for 2023, 2022 and 2021) for the following reasons (in thousands): Year Ended December 31, 2023 2022 2021 Federal statutory tax expense $ 1,016 $ 106 $ (3,847) State tax provision (65) 949 239 Stock compensation expense (1,747) (898) (499) Tax credits (3,214) (2,877) (2,676) Foreign tax, net 1,859 2,195 1,653 Foreign-derived intangible income (FDII) deduction (1,612) (830) — Change in valuation allowance 5,043 5,122 8,099 Section 162(m) limitation 424 92 — Unrealized tax benefit reserve changes 99 136 (151) Other (39) (96) 353 Total income tax expense $ 1,764 $ 3,899 $ 3,171 As of December 31, 2023, the Company had federal and California net operating loss carry-forwards (“NOLs”) of approximately $7.2 million and $12.7 million, respectively. Some of the federal NOLs, acquired as part of a past acquisition, have expirations at the end of this fiscal year and onwards, and the California NOLs begin expiring in 2028 onwards. As of December 31, 2023, the Company had federal and state research and experimental and other tax credit (“R&D credits”) carry-forwards of approximately $23.7 million and $24.5 million, respectively. The federal credits began to expire in 2022, while the California credits have no expiration. The extent to which the federal and state credit carry-forwards can be used to offset future tax liabilities, respectively, may be limited, depending on the extent of ownership changes within any three-year period as provided in the Tax Reform Act of 1986 and the California Conformity Act of 1987. The Company assesses its deferred tax assets for recoverability on a regular basis, and where applicable, a valuation allowance is recorded to reduce the total deferred tax asset to an amount that will, more likely than not, be realized in the future. Based on all available evidence, both positive and negative, the Company determined a full valuation allowance was still appropriate for its federal and state net deferred tax assets (“DTAs”) as of December 31, 2023, primarily driven by a cumulative loss incurred over the 12-quarter period ended December 31, 2023 and the likelihood that the Company will not utilize tax attributes before they begin to expire. The valuation allowance was approximately $64.2 million and $59.2 million as of December 31, 2023 and 2022, respectively. The increase in the valuation allowance from December 31, 2022 to December 31, 2023 was primarily driven by an increase in capitalized research and experimental expenses and credits generated in the current year which require a valuation allowance. Management will continue to evaluate the need for a valuation allowance and may change its conclusion in a future period based on any change in facts (e.g. 12-quarter cumulative profit, significant new revenue, and other relevant factors). If the Company concludes that it is more likely than not to utilize some or all of its U.S. DTAs, it will release some or all of its valuation allowance and the Company’s tax provision will decrease in the period in which such determination is made. Net deferred tax assets, after the U.S. valuation allowance, were immaterial as of December 31, 2023 and 2022. The components of the net deferred tax assets are comprised of (in thousands): December 31, 2023 2022 Deferred tax assets Net operating loss carry forward $ 3,005 $ 3,861 Research and development and other credit carry forward 30,633 28,046 Foreign tax credit carry forward 7,611 11,764 Capitalized research and experimental expenses 20,403 10,069 Accruals deductible in different periods 4,037 7,713 Leases 1,282 1,623 Stock-based compensation 1,882 1,948 Total deferred tax assets 68,853 65,024 Less: valuation allowance (64,152) (59,215) Deferred tax assets, net of valuation allowance 4,701 5,809 Deferred tax liabilities Property and equipment, net (612) (540) Operating lease right-of-use assets (1,266) (1,635) Intangible assets (2,995) (3,617) Deferred tax liabilities (4,873) (5,792) Net deferred tax assets (liabilities) $ (172) $ 17 The Company classifies its liabilities for income tax exposures as long-term. The Company includes interest related to unrecognized tax benefits within the Company’s income tax provision. As of December 31, 2023, 2022 and 2021, the Company had accrued interest related to unrecognized tax benefits of $0.7 million. In the years ended December 31, 2023, 2022 and 2021, the Company recognized (reversal of) charges for interest related to unrecognized tax benefits of ($15,000), ($61,000) and ($89,000) respectively, in the Consolidated Statements of Comprehensive Income (Loss). The Company’s total amount of unrecognized tax benefits, excluding interest, as of December 31, 2023 was $15.9 million, of which $2.0 million, if recognized, would impact the Company’s effective tax rate. As of December 31, 2023, the Company has recorded unrecognized tax benefits of $2.6 million, including interest of $0.7 million, as long-term income taxes payable in its Consolidated Balance Sheet. The remaining $14.0 million has been recorded within DTAs, which is subject to a full valuation allowance. The Company does not expect the change in unrecognized tax benefits over the next twelve months to materially impact its results of operations and financial position. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Amount Gross unrecognized tax benefits, January 1, 2021 $ 14,300 Increases in tax positions for current year 853 Increases in tax positions for prior years 1 Lapse in statute of limitations (411) Gross unrecognized tax benefits, December 31, 2021 14,743 Increases in tax positions for current year 988 Increases in tax positions for prior years — Lapse in statute of limitations (622) Gross unrecognized tax benefits, December 31, 2022 15,109 Increases in tax positions for current year 1,469 Increases in tax positions for prior years 91 Lapse in statute of limitations (732) Gross unrecognized tax benefits, December 31, 2023 $ 15,937 The Company does not provide deferred taxes on undistributed earnings of its foreign subsidiaries as it intends to indefinitely reinvest those earnings. The Company conducts business globally and, as a result, files numerous consolidated and separate income tax returns in the U.S. federal, various state and foreign jurisdictions. For U.S. federal and California income tax purposes, the statute of limitations currently remains open for the years ended 2020 to present and 2019 to present, respectively. In addition, all of the NOLs and R&D credit carry-forwards that may be utilized in future years may be subject to federal and state examination. The Company is not currently under income tax examinations in the U.S. or in any other of its major foreign subsidiaries’ jurisdictions. Valuation allowance for DTAs is summarized (in thousands): Balance at Charged to Deductions/ Balance at Beginning Income Tax Write-offs of End of of Period Expense Accounts Period 2023 $ 59,215 $ 4,937 $ — $ 64,152 2022 $ 51,586 $ 7,629 $ — $ 59,215 2021 $ 41,859 $ 9,727 $ — $ 51,586 |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
NET INCOME (LOSS) PER SHARE | |
NET INCOME (LOSS) PER SHARE | 10. NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) by weighted average number of common shares outstanding for the period (excluding outstanding stock options and shares subject to repurchase). Diluted net income (loss) per share is computed using the weighted average number of common shares outstanding for the period plus the potential effect of dilutive securities which are convertible into common shares (using the treasury stock method), except in cases in which the effect would be anti-dilutive. The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income (loss) per share (in thousands except per share amount): Year Ended December 31, 2023 2022 2021 Numerator: Net income (loss) $ 3,105 $ (3,429) $ (21,488) Denominator: Basic weighted average shares outstanding 38,015 37,309 37,138 Effect of dilutive stock options, unvested restricted stock units, and shares of common stock expected to be issued under employee stock purchase plan(s) 922 — — Diluted weighted average shares outstanding 38,937 37,309 37,138 Net income (loss) per share: Basic $ 0.08 $ (0.09) $ (0.58) Diluted $ 0.08 $ (0.09) $ (0.58) For the years ended December 31, 2022 and 2021, because the Company was in a loss position, basic net loss per share is the same as diluted net loss per share as the inclusion of the potential common shares would have been anti-dilutive. The following table sets forth potential shares of common stock that are not included in the diluted net income (loss) per share calculation above because to do so would be anti-dilutive for the periods indicated (in thousands): Year Ended December 31, 2023 2022 2021 Outstanding options — 56 170 Non-vested restricted stock units 351 787 968 Employee Stock Purchase Plan — 84 33 Total 351 927 1,171 |
CUSTOMER AND GEOGRAPHIC INFORMA
CUSTOMER AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
CUSTOMER AND GEOGRAPHIC INFORMATION | |
CUSTOMER AND GEOGRAPHIC INFORMATION | 11. CUSTOMER AND GEOGRAPHIC INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker, the chief executive officer, reviews discrete financial information presented on a consolidated basis for purposes of regularly making operating decisions, allocation of resources, and assessing financial performance. Accordingly, the Company considers itself to be in one operating and reporting Revenues from individual customers that are approximately 10% or more of the Company’s consolidated total revenues are as follows: Year Ended December 31, Customer 2023 2022 2021 A 35 % 31 % 17 % B * % 10 % * % D * % * % 10 % Gross accounts receivable balances (including amounts that are unbilled) from individual customers that are approximately 10% or more of the Company’s gross accounts receivable balance are as follows: December 31, Customer 2023 2022 A 39 % 29 % B * % 12 % C * % 12 % G 11 % * % * represents less than 10% Revenues from customers by geographic area based on the location of the customers’ work sites are as follows (in thousands): Year Ended December 31, 2023 2022 2021 Percentage Percentage Percentage Revenues of Revenues $ Revenues of Revenues $ Revenues of Revenues United States $ 92,798 56 % $ 73,625 50 % $ 50,374 45 % China 26,488 16 24,494 16 14,267 13 Japan 10,465 6 13,916 9 11,097 10 Rest of the world 36,084 22 36,514 25 35,322 32 Total revenue $ 165,835 100 % $ 148,549 100 % $ 111,060 100 % Long-lived assets, net by geographic area is as follows (in thousands): December 31, 2023 2022 United States (1) $ 45,619 $ 44,730 Rest of the world 1,362 1,446 Total long-lived assets, net $ 46,981 $ 46,176 (1) Includes assets deployed at customer sites which could be outside the U.S. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 12. FAIR VALUE MEASUREMENTS Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The multiple assumptions used to value financial instruments are referred to as inputs, and a hierarchy for inputs used in measuring fair value is established, that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. These inputs are ranked according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3 - Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The following table represents the Company’s assets measured at fair value on a recurring basis as of December 31, 2023 and the basis for that measurement (in thousands): Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Identical Observable Significant December 31, Assets Inputs Unobservable Assets 2023 (Level 1) (Level 2) Inputs (Level 3) Cash equivalents Money market mutual funds $ 83,810 $ 83,810 $ — $ — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 36,544 36,544 — — Total $ 120,354 $ 120,354 $ — $ — The following table represents the Company’s assets measured at fair value on a recurring basis as of December 31, 2022 and the basis for that measurement (in thousands): Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable December 31, Assets Inputs Inputs Assets 2022 (Level 1) (Level 2) (Level 3) Cash equivalents Money market mutual funds $ 75,738 $ 75,738 $ — $ — U.S. Government securities (1) 1,990 1,990 — — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 19,557 19,557 — — Total $ 97,285 $ 97,285 $ — $ — (1) The carrying amount of the Company’s investments in U.S. Government securities approximate fair value due to their short-term maturities, and there have been no events or changes in circumstances that would have had a significant effect on the fair value of these securities as of December 31, 2023 and 2022. |
STRATEGIC PARTNERSHIP AGREEMENT
STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS | |
STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS | 13. STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS In July 2020, the Company entered into a long-term strategic partnership with Advantest Corporation through its wholly-owned subsidiary, Advantest America, Inc. (collectively referred to herein as “Advantest”), which includes: (i) a Securities Purchase Agreement wherein the Company issued and sold to Advantest America, Inc., an aggregate of 3,306,924 shares of its common stock, for aggregate gross proceeds of $65.2 million; (ii) a significant agreement for its assistance in development of cloud-based applications for Advantest tools that leverages our Exensio analytics software ; (iii) a commercial agreement providing for the license to third parties of solutions that result from the development work that combine Advantest’s testing applications and our Exensio platform; and (iv) a 5-year cloud-based subscription for Exensio analytics software and related services. Analytics revenue recognized from Advantest during the years ended December 31, 2023, 2022 and 2021 was $9.0 million, $10.3 million and $10.6 million, respectively. Accounts receivable from Advantest were not material as of December 31, 2023 and amounted to $0.3 million as of December 31, 2022. Deferred revenue amounted to $9.4 million and $7.1 million as of December 31, 2023 and 2022, respectively. The Company carries out transactions with Advantest on arm’s length commercial customary terms. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2023 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | 14. BUSINESS COMBINATION On July 5, 2023 (the “Acquisition Date”), the Company, through its wholly-owned subsidiary in Canada, PDF Solutions Canada, Ltd., acquired 100% of the equity interest in Lantern Machinery Analytics, Inc. headquartered in Canada, a privately-held provider of automated image analysis and feature extraction AI/ML software for critical inspection and metrology steps at battery cell development and manufacturing processes for the electric vehicle industry. This software will enhance the Company’s Exensio analytics software and product offerings to new and existing battery manufacturer customers. The total cash consideration for this acquisition was $1.8 million, net of cash acquired, for all of the outstanding equity of Lantern Machinery Analytics, Inc. The Company accounted for this acquisition as a business combination in accordance with FASB ASC Topic 805, Business Combinations The allocation of the purchase price for this acquisition, as of the date of the acquisition, is as follows (in thousands, except amortization period): Amortization Amount Period (Years) Allocation of Purchase Price: Assets Fair value of tangible assets (including cash of $265) $ 450 Fair value of intangible assets: Developed technology 1,010 8 Customer relationships 100 6 Goodwill 895 N/A Total assets acquired 2,455 Liabilities Deferred tax liabilities 294 Accounts payable and accrued expenses 73 Total liabilities assumed 367 Total purchase price allocation $ 2,088 Pro forma results of operations have not been presented because the effect of the acquisition was not material to the Company’s financial results. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Description of Business, Policy | Description of Business PDF Solutions, Inc. (the “Company” or “PDF”), provides products and services designed to empower organizations across the semiconductor and electronics ecosystem to connect, collect, manage, and analyze data about design, equipment, manufacturing, and test to improve the yield and quality of their products and operational efficiency. The Company’s products, services, and solutions include proprietary software, physical intellectual property (“IP”) for integrated circuit (“IC”) designs, electrical measurement hardware tools, proven methodologies, and professional services. |
Basis of Presentation, Policy | Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after the elimination of all significant intercompany balances and transactions. |
Use of Estimates, Policy | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include revenue recognition, the estimated useful lives of property and equipment and intangible assets, assumptions made in analysis of allowance for credit losses, fair values of assets acquired and liabilities assumed in business combinations, impairment of goodwill and long-lived assets, valuation for deferred tax assets, and accounting for lease obligations, stock-based compensation expense, and income tax uncertainties and contingencies. Actual results could differ from those estimates and may result in material effects on the Company’s operating results and financial position. |
Concentration of Credit Risk, Policy | Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. As of December 31, 2023, and periodically throughout the year, the Company had cash balances in various operating accounts in excess of federally insured limits. The Company maintains its cash and cash equivalents and short-term investments with what it considers high credit quality financial institutions. The Company primarily sells its products and services to companies in Asia, Europe, and North America within the semiconductor industry. As of December 31, 2023, two customers accounted for 50% of the Company’s gross accounts receivable and one customer accounted for 35% of the Company’s total revenues for 2023. As of December 31, 2022, three customers accounted for 53% of the Company’s gross accounts receivable and two customers accounted for 41% of the Company’s revenues for 2022. Two customers accounted for 27% of the Company’s revenues for 2021. See Note 11 for further details. The Company does not require collateral or other security to support accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition. The Company maintains allowances for potential credit losses. The allowance for credit losses, which was based on management’s best estimates, could be adjusted in the near term from current estimates depending on actual experience. Such adjustments could be material to the consolidated financial statements. |
Supplier Concentration, Policy | Supplier Concentration Some of the Company’s vendors provide highly specialized, differentiated products and services related to the Company’s eProbe system and some licensors provide key enabling software for the Company’s products and services. In the event any of these suppliers delay or discontinue providing such products and services to the Company, it may be difficult for the Company to replace such suppliers, software, or parts in a timely manner or at all, which could delay or make impossible the Company’s ability to deliver or adequately support its software systems or to complete and deliver its eProbe systems to its customers, and could negatively impact the Company’s future financial results of operations. |
Cash and Cash Equivalents, and Short-term Investments, Policy | Cash and Cash Equivalents, and Short-term Investments The Company considers all highly liquid investments with effective maturities of 90 days or less on the date of purchase to be cash equivalents and investments with effective maturities greater than 90 days but less than one year The Company periodically reviews short-term investments for impairment. For investments in unrealized loss positions, the Company assesses whether any portion of the decline in fair value below the amortized cost basis is due to credit-related factors if the Company neither intends to sell nor anticipates that it is more likely than not that it will be required to sell prior to recovery of the amortized cost basis. The Company considers factors such as the extent to which the market value has been less than the amortized cost basis, any noted failure of the issuer to make scheduled interest or principal payments, changes to the rating of the security by a rating agency and other relevant credit-related factors in determining whether or not a credit loss exists. There was no allowance losses As of December 31, 2023, and 2022, short-term investments consisted solely of U.S. Government securities. The cost of these securities approximated fair value and there was no material gross realized unrealized losses The Company recorded interest income from its cash, cash equivalents, and short-term investments of $5.5 million, $1.5 million and $0.1 million in the years ended December 31 2023, 2022 and 2021, respectively. |
Accounts Receivable, Policy | Accounts Receivable Accounts receivable include amounts that are unbilled at the end of the period that are expected to be billed and collected within a 12-month period. Unbilled accounts receivable are determined on an individual contract basis. Unbilled accounts receivable, included in accounts receivable, totaled $16.4 million and $13.5 million as of December 31, 2023 and 2022, respectively. Unbilled accounts receivable that are not expected to be billed and collected during the succeeding 12-month period are recorded in other non-current assets and totaled $1.1 million and $0.8 million as of December 31, 2023 and 2022, respectively. The Company performs ongoing credit evaluations of its customers’ financial condition. An allowance for credit losses is maintained for probable credit losses based upon the Company’s assessment of the expected collectibility of the accounts receivable. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance. The changes in allowance for credit losses are summarized below (in thousands): Deductions/ Balance at Write-offs Balance at Beginning Charged to of Accounts End of of Period Expense (1) Receivable Period 2023 $ 890 $ 20 $ (20) $ 890 2022 $ 890 $ 11 $ (11) $ 890 2021 $ 963 $ — $ (73) $ 890 (1) Additions to the accounts receivable reserve for credit losses are charged to bad debt expense. |
Property and Equipment, Policy | Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives (in years) of the related asset as follows: Computer equipment 3 Software 3 Furniture, fixtures, and equipment 5-10 Laboratory and test equipment 3-10 Leasehold improvements Shorter of estimated useful life or term of lease |
Intangible Assets, Policy | Intangible Assets Intangible assets consist of acquired technology, certain contract rights, customer relationships, patents, trademarks and trade names. These intangible assets may be acquired through business combinations or direct purchases. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from one ten |
Goodwill, Policy | Goodwill The Company records goodwill when the purchase consideration of an acquisition exceeds the fair value of the net tangible and identified intangible assets as of the date of acquisition. The Company has one operating segment and one operating unit. The Company performs a qualitative analysis when testing a reporting unit’s goodwill for impairment. The Company performs an annual impairment assessment of goodwill during the fourth quarter of each calendar year or more frequently, if required to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If the carrying amount exceeds its fair value, an impairment loss would be recognized equal to the amount of excess, limited to the amount of total goodwill. |
Leases, Policy | Leases The Company has operating leases for administrative and sales offices, research and development laboratory and clean room. The Company recognizes long-term operating lease rights and commitments as operating lease right-of-use (“ROU”) assets, operating lease liabilities and operating lease liabilities, non-current, respectively, in the Consolidated Balance Sheets. The Company elected to not separate lease and non-lease components for all of its leases. The Company determines if an arrangement is, or contains, a lease at inception. Operating lease ROU assets, and operating lease liabilities are initially recorded based on the present value of lease payments over the lease term. Lease terms include the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. The decision to include these options involves consideration of the Company’s overall future business plans and other relevant business economic factors that may affect its business. Since the determination of the lease term requires an application of judgment, lease terms that differ in reality from the Company’s initial judgment may potentially have a material impact on the Company’s Consolidated Balance Sheets. In addition, the Company’s leases do not provide an implicit rate. In determining the present value of the Company’s expected lease payments, the discount rate is calculated using the Company’s incremental borrowing rate determined based on the information available, which requires additional judgment. |
Software Development Costs, Policy | Software Development Costs Internally developed software is software developed to meet the Company’s internal needs to provide certain services to the customers. The Company’s capitalized software development costs consist of internal compensation related costs and external direct costs incurred during the application development stage and are amortized over their useful lives, generally five six The costs to develop software that is marketed externally consisting of external direct costs and internal compensation related costs are capitalized once technological feasibility of the software product has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the software product can be produced to meet its design specifications. Capitalization of such costs ceases when the software product is generally available to customers. These software development costs are amortized using the greater of the straight-line method or the usage method over its estimated useful life. |
Costs to obtain or fulfill a contract | Cost of Revenues Costs of revenues consist primarily of costs incurred to provide and support the Company’s services, costs recognized in connection with licensing its software, IT and facilities-related costs and amortization of acquired technology. Service costs include material costs, hardware costs (including cost of leased assets under sales-type leases), personnel-related costs (including compensation, employee benefits, bonus and stock-based compensation expense), subcontractor costs, overhead costs, travel, and allocated facilities-related costs. Software license costs consist of costs associated with cloud-delivery related expenses and licensing third-party software used by the Company in providing services to its customers in solution engagements or sold in conjunction with the Company’s software products. |
Research and Development Expenses, Policy | Research and Development Expenses Research and development expenses consist primarily of personnel-related costs (including compensation, employee benefits, bonus and stock-based compensation expense), outside development services, travel, third-party cloud-services related costs, IT and facilities cost allocations to support product development activities. Research and development expenses are charged to operations as incurred. |
Selling, General and Administrative Expenses, Policy | Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of personnel-related costs (including compensation, employee benefits, bonus, commission and stock-based compensation expense for sales, marketing and general and administrative personnel), legal, tax and accounting services, marketing communications and trade conference-related expenses, third-party cloud-services related costs, travel, IT and facilities cost allocations. |
Stock-Based Compensation, Policy | Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method, which requires the Company to measure stock-based compensation based on the grant-date fair value of the awards and recognize the compensation expense over the requisite service period. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The fair value of the Company’s restricted stock units (“RSUs”) is equal to the market value of the Company’s common stock on the date of the grant. These awards are subject to time-based vesting which generally occurs over a period of four years The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton option-pricing model, which incorporates various assumptions including volatility, expected life and interest rates. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options. The expected life is based on historical experience and on the terms and conditions of the stock options granted. The interest rate assumption is based upon observed Treasury yield curve rates appropriate for the expected life of the Company’s stock options. |
Income Taxes, Policy | Income Taxes The Company’s provision for income tax comprises its current tax liability and change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effect of future changes in tax laws or rates are not anticipated. Valuation allowances are provided to reduce deferred tax assets to an amount that in management’s judgment is more likely than not to be recoverable against future taxable income. No U.S. taxes are provided on earnings of non-U.S. subsidiaries, to the extent such earnings are deemed to be permanently invested. The Company’s income tax calculations are based on application of applicable U.S. federal and state or foreign tax laws. The Company’s tax filings, however, are subject to audit by the respective tax authorities. Accordingly, the Company recognizes tax liabilities based upon its estimate of whether, and the extent to which, additional taxes will be due when such estimates are more likely than not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. To the extent the final tax liabilities are different from the amounts originally accrued, the increases or decreases are recorded as income tax expense or benefit in the Consolidated Statements of Comprehensive Income (Loss). |
Net Income (Loss) Per Share, Policy | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by weighted average number of common shares outstanding for the period (excluding outstanding stock options and shares subject to repurchase). Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding for the period plus the potential effect of dilutive securities which are convertible into common shares (using the treasury stock method), except in cases in which the effect would be anti-dilutive. Dilutive potential common shares consist of incremental common shares issuable upon exercise of stock options, upon vesting of RSUs, contingently issuable shares for all periods and assumed issuance of shares under the Company’s employee stock purchase plan. No dilutive potential common shares are included in the computation of any diluted per share amount when a loss from continuing operations was reported by the Company. |
Foreign Currency Translation, Policy | Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the local currency for the respective subsidiary. The assets and liabilities are translated at the period-end exchange rate, and statements of comprehensive income (loss) are translated at the average exchange rate during the year. Gains and losses resulting from foreign currency translations are included as a component of other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Comprehensive Income (Loss). |
Derivative Financial Instruments, Policy | Derivative Financial Instruments The Company operates internationally and is exposed to potentially adverse movements in foreign currency exchange rates. From time to time, the Company enters into foreign currency forward contracts to reduce the exposure to foreign currency exchange rate fluctuations on certain foreign currency denominated monetary assets and liabilities. The Company does not use foreign currency contracts for speculative or trading purposes. The Company records these forward contracts at fair value. The counterparty to these foreign currency forward contracts is a financial institution that the Company believes is creditworthy, and therefore, we believe the credit risk of counterparty non-performance is not significant. These foreign currency forward contracts are not designated for hedge accounting treatment. Therefore, the change in fair value of these derivatives is recorded into earnings as a component of interest and other income (expense), net and offsets the change in fair value of the foreign currency denominated monetary assets and liabilities, which are also recorded in interest and other income (expense), net. The duration of these forward contracts is usually three months. |
Business Combinations, Policy | Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values at the date of the business combination. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, estimated replacement costs and future expected cash flows from acquired customers, acquired technology, acquired patents, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects the Company’s amortization expense, as acquired finite-lived intangible assets are amortized over their useful life, whereas any indefinite lived intangible assets, including in-process research and development, and goodwill, are not amortized but tested annually for impairment. During the measurement period, which is not to exceed one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. |
Litigation, Policy | Litigation From time to time, the Company is subject to various claims and legal proceedings that arise in the ordinary course of business. The Company accrues for losses related to litigation when a potential loss is probable and the loss can be reasonably estimated in accordance with Financial Accounting Standards Board (“FASB”) requirements. See Note 6, “Commitments and Contingencies”. |
Accounting Standards Adopted, Policy | Accounting Standards Adopted In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU No. 2016-13”), which requires measurement and recognition of expected credit losses for financial assets held at the reporting date based on internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. ASU No. 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model, which will result in earlier recognition of credit losses. Subsequent to the issuance of ASU No. 2016-13, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instrument, ASU No. 2019-05, Financial Instruments – Credit Losses (Topic 326) Targeted Transition Relief, ASU No. 2016-13, ASU No. 2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), and ASU No. 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses. The subsequent ASUs do not change the core principle of the guidance in ASU No. 2016-13. Instead, these amendments are intended to clarify and improve operability of certain topics included within ASU No. 2016-13. The Company adopted this standard on January 1, 2023, using a modified retrospective approach, which requires a cumulative-effect adjustment to accumulated deficit as of the beginning of the period of adoption with prior periods not restated. The adoption of ASU No. 2016-13 did not have a material impact on the Company’s consolidated financial statements. |
Recently Issued Accounting Pronouncements, Policy | Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU is intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2024. Entities are permitted to early adopt the standard for “annual financial statements that have not yet been issued or made available for issuance.” Adoption is either prospectively or retrospectively, the Company will adopt this ASU on a prospective basis. The Company is currently evaluating the impact of the new standard on the consolidated financial statements and related disclosures. Management has reviewed other recently issued accounting pronouncements issued or proposed by the FASB and does not believe any of these accounting pronouncements has had or will have a material impact on the consolidated financial statements. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Accounts Receivable Reserves | Deductions/ Balance at Write-offs Balance at Beginning Charged to of Accounts End of of Period Expense (1) Receivable Period 2023 $ 890 $ 20 $ (20) $ 890 2022 $ 890 $ 11 $ (11) $ 890 2021 $ 963 $ — $ (73) $ 890 (1) Additions to the accounts receivable reserve for credit losses are charged to bad debt expense. |
Schedule of Property, Plant and Equipment Estimated Useful Lives | Computer equipment 3 Software 3 Furniture, fixtures, and equipment 5-10 Laboratory and test equipment 3-10 Leasehold improvements Shorter of estimated useful life or term of lease |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE | |
Schedule of Disaggregated Revenues | Year Ended December 31, 2023 2022 2021 Over time 71 % 69 % 65 % Point-in-time 29 % 31 % 35 % Total 100 % 100 % 100 % |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property, Plant and Equipment | December 31, 2023 2022 Computer equipment $ 12,515 $ 11,853 Software 5,596 5,395 Furniture, fixtures, and equipment 2,501 2,484 Leasehold improvements 6,475 6,467 Laboratory and other equipment 4,891 4,431 Test equipment 25,044 28,403 Property and equipment in progress: DFI™ system assets 22,864 22,231 CV® system and other assets 6,977 5,105 86,863 86,369 Less: Accumulated depreciation and amortization (49,525) (46,195) Total $ 37,338 $ 40,174 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of Goodwill | Year Ended December 31, 2023 2022 2021 Balance at beginning of year $ 14,123 $ 14,123 $ 15,774 Addition 895 — — Measurement period acquisition adjustment — — (1,651) Foreign currency translation adjustment 11 — — Balance at end of year $ 15,029 $ 14,123 $ 14,123 Intangible assets balance was $15.6 million and $18.1 million as of December 31, 2023 and 2022, respectively. |
Schedule of Finite-Lived Intangible Assets, Net | December 31, 2023 December 31, 2022 Amortization Gross Net Gross Net Period Carrying Accumulated Carrying Carrying Accumulated Carrying (Years) Amount Amortization Amount Amount Amortization Amount Acquired identifiable intangibles: Customer relationships 1 - 10 $ 9,508 $ (7,335) $ 2,173 $ 9,407 $ (6,684) $ 2,723 Developed technology 4 - 9 34,650 (22,094) 12,556 33,635 (19,647) 13,988 Tradename and trademarks 2 - 10 1,598 (1,025) 573 1,598 (918) 680 Patent 6 - 10 2,100 (1,782) 318 2,100 (1,696) 404 Noncompetition agreements 3 848 (848) — 848 (588) 260 Total $ 48,704 $ (33,084) $ 15,620 $ 47,588 $ (29,533) $ 18,055 The weighted average amortization period for acquired identifiable intangible assets was 5.3 years as of December 31, 2023. The following table summarizes intangible assets amortization expense in the Consolidated Statements of Comprehensive Income (Loss) (in thousands): |
Schedule of Finite-lived Intangible Assets Amortization Expense | Year Ended December 31, 2023 2022 2021 Amortization of acquired technology included under costs of revenues $ 2,266 $ 2,214 $ 2,079 Amortization of acquired intangible assets presented separately under costs and expenses 1,285 1,270 1,255 Total amortization of acquired intangible assets $ 3,551 $ 3,484 $ 3,334 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Year Ending December 31, Amount 2024 $ 3,237 2025 3,072 2026 2,903 2027 2,750 2028 2,445 2029 and thereafter 1,213 Total future amortization expense $ 15,620 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
Schedule of Lease Expenses | Year Ended December 31, 2023 2022 2021 Operating lease expense (1) $ 1,534 $ 1,457 $ 1,860 Short-term lease and variable lease expense (2) 923 1,032 822 Total lease expense $ 2,457 $ 2,489 $ 2,682 (1) Net of gain recognized upon lease termination of $0.1 million in the year ended December 31, 2022. (2) Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Variable lease expense for the periods presented primarily included common area maintenance charges. |
Schedule of Supplemental Operating Lease Information | December 31, 2023 2022 Weighted average remaining lease term under operating leases (in years) 4.4 5.3 Weighted average discount rate for operating lease liabilities 4.96 % 4.87 % |
Schedule of Operating Lease Liabilities and Maturities | Year Ending December 31, Amount (1) 2024 $ 1,663 2025 1,611 2026 1,355 2027 1,294 2028 929 2029 63 Total future minimum lease payments 6,915 Less: Interest (2) (729) Present value of future minimum lease payments under operating lease liabilities (3) $ 6,186 (1) As of December 31, 2023, the total operating lease liability includes $1.0 million related to an option to extend a lease term that is reasonably certain to be exercised . (2) Calculated using incremental borrowing interest rate for each lease. (3) Includes the current portion of operating lease liabilities of $1.5 million as of December 31, 2023. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of Employee Stock Purchase Plan, Black-Scholes-Merton Valuation Assumptions | 2021 Purchase Plan Year Ended December 31, 2023 2022 2021 Expected life (in years) 1.25 1.25 1.25 Volatility 43.66 % 48.73 % 48.00 % Risk-free interest rate 5.15 % 2.75 % 0.11 % Expected dividend — — — Weighted average fair value of purchase rights granted during the period $ 15.71 $ 10.00 $ 6.71 |
Schedule of Stock-Based Compensation Expenses | Year Ended December 31, 2023 2022 2021 Costs of revenues $ 4,169 $ 2,974 $ 2,563 Research and development 7,711 9,391 5,515 Selling, general, and administrative 9,604 7,284 4,853 Stock-based compensation expense $ 21,484 $ 19,649 $ 12,931 |
Schedule of Outstanding Options Vested and Expected to Vest | Outstanding Options Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value (in thousands) per Share (Years) (in thousands) Outstanding, January 1, 2023 68 $ 16.11 Granted — — Exercised (30) 16.36 Canceled — — Expired — — Outstanding, December 31, 2023 38 $ 15.92 4.05 $ 619 Vested and expected to vest, December 31, 2023 38 $ 15.91 4.05 $ 619 Exercisable, December 31, 2023 37 $ 15.84 3.97 $ 599 |
Schedule of Options Exercised Intrinsic Value | Year Ended December 31, 2023 2022 2021 Intrinsic value of options exercised $ 630 $ 2,287 $ 2,972 |
Schedule of Restricted Stock Unit Activity | Nonvested shares (restricted stock units) were as follows: Weighted Average Grant Shares Date Fair Value (in thousands) Per Share Nonvested, January 1, 2023 2,124 $ 21.29 Granted 783 43.46 Vested (882) 21.00 Forfeited (30) 27.60 Nonvested, December 31, 2023 1,995 $ 30.03 |
Schedule of Vested Restricted Stock Unit Fair Value | Year Ended December 31, 2023 2022 2021 Fair value of restricted stock units vested $ 32,786 $ 22,676 $ 13,617 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Schedule of Components of Income Tax Expense (Benefit) | Year Ended December 31, 2023 2022 2021 (In thousands) U.S. Current $ (353) $ 1,210 $ (67) Deferred 3 13 1,318 Foreign Current 453 577 237 Withholding 1,770 2,111 1,591 Deferred (109) (12) 92 Total income tax expense $ 1,764 $ 3,899 $ 3,171 |
Schedule of Effective Income Tax Rate Reconciliation | Year Ended December 31, 2023 2022 2021 Federal statutory tax expense $ 1,016 $ 106 $ (3,847) State tax provision (65) 949 239 Stock compensation expense (1,747) (898) (499) Tax credits (3,214) (2,877) (2,676) Foreign tax, net 1,859 2,195 1,653 Foreign-derived intangible income (FDII) deduction (1,612) (830) — Change in valuation allowance 5,043 5,122 8,099 Section 162(m) limitation 424 92 — Unrealized tax benefit reserve changes 99 136 (151) Other (39) (96) 353 Total income tax expense $ 1,764 $ 3,899 $ 3,171 |
Schedule of Deferred Tax Assets and Liabilities | December 31, 2023 2022 Deferred tax assets Net operating loss carry forward $ 3,005 $ 3,861 Research and development and other credit carry forward 30,633 28,046 Foreign tax credit carry forward 7,611 11,764 Capitalized research and experimental expenses 20,403 10,069 Accruals deductible in different periods 4,037 7,713 Leases 1,282 1,623 Stock-based compensation 1,882 1,948 Total deferred tax assets 68,853 65,024 Less: valuation allowance (64,152) (59,215) Deferred tax assets, net of valuation allowance 4,701 5,809 Deferred tax liabilities Property and equipment, net (612) (540) Operating lease right-of-use assets (1,266) (1,635) Intangible assets (2,995) (3,617) Deferred tax liabilities (4,873) (5,792) Net deferred tax assets (liabilities) $ (172) $ 17 |
Schedule of Unrecognized Tax Benefits Roll Forward | Amount Gross unrecognized tax benefits, January 1, 2021 $ 14,300 Increases in tax positions for current year 853 Increases in tax positions for prior years 1 Lapse in statute of limitations (411) Gross unrecognized tax benefits, December 31, 2021 14,743 Increases in tax positions for current year 988 Increases in tax positions for prior years — Lapse in statute of limitations (622) Gross unrecognized tax benefits, December 31, 2022 15,109 Increases in tax positions for current year 1,469 Increases in tax positions for prior years 91 Lapse in statute of limitations (732) Gross unrecognized tax benefits, December 31, 2023 $ 15,937 |
Summary of Deferred Tax Assets Valuation Allowance | Balance at Charged to Deductions/ Balance at Beginning Income Tax Write-offs of End of of Period Expense Accounts Period 2023 $ 59,215 $ 4,937 $ — $ 64,152 2022 $ 51,586 $ 7,629 $ — $ 59,215 2021 $ 41,859 $ 9,727 $ — $ 51,586 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
NET INCOME (LOSS) PER SHARE | |
Schedule of Earnings Per Share, Basic and Diluted | Year Ended December 31, 2023 2022 2021 Numerator: Net income (loss) $ 3,105 $ (3,429) $ (21,488) Denominator: Basic weighted average shares outstanding 38,015 37,309 37,138 Effect of dilutive stock options, unvested restricted stock units, and shares of common stock expected to be issued under employee stock purchase plan(s) 922 — — Diluted weighted average shares outstanding 38,937 37,309 37,138 Net income (loss) per share: Basic $ 0.08 $ (0.09) $ (0.58) Diluted $ 0.08 $ (0.09) $ (0.58) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Year Ended December 31, 2023 2022 2021 Outstanding options — 56 170 Non-vested restricted stock units 351 787 968 Employee Stock Purchase Plan — 84 33 Total 351 927 1,171 |
CUSTOMER AND GEOGRAPHIC INFOR_2
CUSTOMER AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
CUSTOMER AND GEOGRAPHIC INFORMATION | |
Schedule of Revenue by Major Customers by Reporting Segments | Revenues from individual customers that are approximately 10% or more of the Company’s consolidated total revenues are as follows: Year Ended December 31, Customer 2023 2022 2021 A 35 % 31 % 17 % B * % 10 % * % D * % * % 10 % Gross accounts receivable balances (including amounts that are unbilled) from individual customers that are approximately 10% or more of the Company’s gross accounts receivable balance are as follows: December 31, Customer 2023 2022 A 39 % 29 % B * % 12 % C * % 12 % G 11 % * % * represents less than 10% |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | Year Ended December 31, 2023 2022 2021 Percentage Percentage Percentage Revenues of Revenues $ Revenues of Revenues $ Revenues of Revenues United States $ 92,798 56 % $ 73,625 50 % $ 50,374 45 % China 26,488 16 24,494 16 14,267 13 Japan 10,465 6 13,916 9 11,097 10 Rest of the world 36,084 22 36,514 25 35,322 32 Total revenue $ 165,835 100 % $ 148,549 100 % $ 111,060 100 % |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country | December 31, 2023 2022 United States (1) $ 45,619 $ 44,730 Rest of the world 1,362 1,446 Total long-lived assets, net $ 46,981 $ 46,176 (1) Includes assets deployed at customer sites which could be outside the U.S. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | |
Schedule of Fair Value, Assets Measured on Recurring Basis | Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Identical Observable Significant December 31, Assets Inputs Unobservable Assets 2023 (Level 1) (Level 2) Inputs (Level 3) Cash equivalents Money market mutual funds $ 83,810 $ 83,810 $ — $ — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 36,544 36,544 — — Total $ 120,354 $ 120,354 $ — $ — Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable December 31, Assets Inputs Inputs Assets 2022 (Level 1) (Level 2) (Level 3) Cash equivalents Money market mutual funds $ 75,738 $ 75,738 $ — $ — U.S. Government securities (1) 1,990 1,990 — — Short-term investments (available-for-sale debt securities) U.S. Government securities (1) 19,557 19,557 — — Total $ 97,285 $ 97,285 $ — $ — (1) The carrying amount of the Company’s investments in U.S. Government securities approximate fair value due to their short-term maturities, and there have been no events or changes in circumstances that would have had a significant effect on the fair value of these securities as of December 31, 2023 and 2022. |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Notes Tables | |
Schedule of Purchase Price Allocation in Business Acquisition | Amortization Amount Period (Years) Allocation of Purchase Price: Assets Fair value of tangible assets (including cash of $265) $ 450 Fair value of intangible assets: Developed technology 1,010 8 Customer relationships 100 6 Goodwill 895 N/A Total assets acquired 2,455 Liabilities Deferred tax liabilities 294 Accounts payable and accrued expenses 73 Total liabilities assumed 367 Total purchase price allocation $ 2,088 |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 | |
Number of operating segments | 1 | ||
Number of reporting units | 1 | ||
Stock option vesting period | 4 years | ||
Minimum | |||
Intangible asset amortization period | 1 year | ||
Capitalized computer software, useful life | 5 years | ||
Maximum | |||
Intangible asset amortization period | 10 years | ||
Capitalized computer software, useful life | 6 years | ||
Receivables Benchmark | |||
Unbilled receivables | $ 16.4 | $ 13.5 | |
Other Non-current Assets | |||
Unbilled receivables not expected to be collected | $ 1.1 | $ 0.8 | |
Customer Concentration Risk | Receivables Benchmark | |||
Number of major customers | 2 | 3 | |
Customer Concentration Risk | Receivables Benchmark | Two Significant Customers | |||
Significant customer concentration (percentage) | 50% | ||
Customer Concentration Risk | Receivables Benchmark | Three Significant Customers | |||
Significant customer concentration (percentage) | 53% | ||
Customer Concentration Risk | Revenue Benchmark | |||
Number of major customers | 1 | 2 | 2 |
Customer Concentration Risk | Revenue Benchmark | One Significant Customer | |||
Significant customer concentration (percentage) | 35% | ||
Customer Concentration Risk | Revenue Benchmark | Two Significant Customers | |||
Significant customer concentration (percentage) | 41% | 27% |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents and Short-term Investments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash and Cash Equivalents, and Short-term Investments [Line Items] | |||
Allowance for credit losses on investments | $ 0 | $ 0 | $ 0 |
Realized gains (losses) on investments | 0 | 0 | |
Unrealized gains (losses) on investments | 0 | 0 | |
Interest income from cash, cash equivalents and short-term investments | $ 5,500,000 | $ 1,500,000 | $ 100,000 |
Minimum | |||
Cash and Cash Equivalents, and Short-term Investments [Line Items] | |||
Short-term investments, effective maturity threshold | 90 days | ||
Maximum | |||
Cash and Cash Equivalents, and Short-term Investments [Line Items] | |||
Cash equivalents, effective maturity threshold | 90 days | ||
Short-term investments, effective maturity threshold | 1 year |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance for Doubtful Accounts (Details) - Allowance for Credit Loss - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Balance, beginning | $ 890 | $ 890 | $ 963 | |
Charged to Expense | [1] | 20 | 11 | |
Deductions/ Write-offs of Accounts Receivable | (20) | (11) | (73) | |
Balance, ending | $ 890 | $ 890 | $ 890 | |
[1] Additions to the accounts receivable reserve for credit losses are charged to bad debt expense. |
DESCRIPTION OF BUSINESS AND S_6
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives of Property and Equipment (Details) | Dec. 31, 2023 |
Computer Equipment | |
Property and equipment useful life | 3 years |
Software | |
Property and equipment useful life | 3 years |
Furniture, Fixtures and Equipment | Minimum | |
Property and equipment useful life | 5 years |
Furniture, Fixtures and Equipment | Maximum | |
Property and equipment useful life | 10 years |
Laboratory and Test Equipment | Minimum | |
Property and equipment useful life | 3 years |
Laboratory and Test Equipment | Maximum | |
Property and equipment useful life | 10 years |
REVENUE (Details)
REVENUE (Details) | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) | |
Number of revenue sources | item | 2 | |||
Capitalized contract cost, impairment loss | $ 0 | $ 0 | $ 0 | |
Revenue, remaining performance obligation | $ 229,800,000 | 229,800,000 | ||
Revenue performance obligations satisfied in previous period | 3,700,000 | 400,000 | (400,000) | |
Prepaid Expenses and Other Current Assets | ||||
Revenue, net contract assets | 6,800,000 | 3,300,000 | 6,800,000 | |
Capitalized contract cost, net | 2,000,000 | 1,700,000 | 2,000,000 | |
Other Non-current Assets | ||||
Revenue, net contract assets | 900,000 | 0 | 900,000 | |
Capitalized contract cost, net | 2,600,000 | 2,100,000 | 2,600,000 | |
Non-current Liabilities | ||||
Noncurrent deferred revenue | 1,800,000 | 1,900,000 | $ 1,800,000 | |
Deferred Revenue and Billings in Excess of Recognized Revenue | ||||
Recognized revenue from the beginning balance | $ 24,800,000 | $ 24,900,000 | $ 16,900,000 | |
Geographic Concentration Risk | Revenue Benchmark | ||||
Significant customer concentration (percentage) | 100% | 100% | 100% | |
Geographic Concentration Risk | Revenue Benchmark | Non-US | ||||
Significant customer concentration (percentage) | 44% | 50% | 55% |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Performance obligations, percentage of revenues | 100% | 100% | 100% |
Over Time | |||
Performance obligations, percentage of revenues | 71% | 69% | 65% |
Point-in-time | |||
Performance obligations, percentage of revenues | 29% | 31% | 35% |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) - Software License and Related Services Agreement - Advantest America, Inc. | Dec. 31, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Minimum | |
The majority of the remaining performance obligations | 3 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Maximum | |
The remainder of the remaining performance obligations | 3 years |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Write-down in value of property and equipment | $ 3,183 | ||
DFI Test Equipment | |||
Depreciation and amortization | $ 5,000 | $ 5,500 | 6,200 |
Write-down in value of property and equipment | $ 3,200 |
PROPERTY AND EQUIPMENT - Proper
PROPERTY AND EQUIPMENT - Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property and equipment, gross | $ 86,863 | $ 86,369 |
Less: accumulated depreciation and amortization | (49,525) | (46,195) |
Total property and equipment | 37,338 | 40,174 |
Computer Equipment | ||
Property and equipment, gross | 12,515 | 11,853 |
Software | ||
Property and equipment, gross | 5,596 | 5,395 |
Furniture, Fixtures and Equipment | ||
Property and equipment, gross | 2,501 | 2,484 |
Leasehold Improvements | ||
Property and equipment, gross | 6,475 | 6,467 |
Laboratory and Other Equipment | ||
Property and equipment, gross | 4,891 | 4,431 |
Test Equipment | ||
Property and equipment, gross | 25,044 | 28,403 |
DFI System Assets | ||
Property and equipment, gross | 22,864 | 22,231 |
CV System and Other Assets | ||
Property and equipment, gross | $ 6,977 | $ 5,105 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill | $ 15,029,000 | $ 14,123,000 | $ 14,123,000 | $ 15,774,000 |
Intangible assets excluding Goodwill | $ 15,620,000 | 18,055,000 | ||
Intangible assets, weighted-average amortization period | 5 years 3 months 18 days | |||
Amortization of acquired intangible assets | $ 1,285,000 | 1,270,000 | 1,255,000 | |
Total amortization of acquired intangible assets | 3,551,000 | 3,484,000 | 3,334,000 | |
Impairment charged against intangible assets | 0 | 0 | 0 | |
Costs of Revenues | ||||
Amortization of acquired intangible assets | 2,266,000 | 2,214,000 | 2,079,000 | |
Costs and Expenses | ||||
Amortization of acquired intangible assets | $ 1,285,000 | $ 1,270,000 | $ 1,255,000 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Change in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
GOODWILL AND INTANGIBLE ASSETS | |||
Goodwill, beginning balance | $ 14,123 | $ 14,123 | $ 15,774 |
Addition | 895 | ||
Measurement period acquisition adjustment | 0 | 0 | (1,651) |
Foreign currency translation adjustment | 11 | ||
Goodwill, ending balance | $ 15,029 | $ 14,123 | $ 14,123 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Gross Carrying Amount | $ 48,704 | $ 47,588 |
Accumulated Amortization | (33,084) | (29,533) |
Net Carrying Amount | 15,620 | 18,055 |
Customer Relationships | ||
Gross Carrying Amount | 9,508 | 9,407 |
Accumulated Amortization | (7,335) | (6,684) |
Net Carrying Amount | $ 2,173 | 2,723 |
Customer Relationships | Minimum | ||
Amortization Period (Years) | 1 year | |
Customer Relationships | Maximum | ||
Amortization Period (Years) | 10 years | |
Developed Technology | ||
Gross Carrying Amount | $ 34,650 | 33,635 |
Accumulated Amortization | (22,094) | (19,647) |
Net Carrying Amount | $ 12,556 | 13,988 |
Developed Technology | Minimum | ||
Amortization Period (Years) | 4 years | |
Developed Technology | Maximum | ||
Amortization Period (Years) | 9 years | |
Tradename and Trademarks | ||
Gross Carrying Amount | $ 1,598 | 1,598 |
Accumulated Amortization | (1,025) | (918) |
Net Carrying Amount | $ 573 | 680 |
Tradename and Trademarks | Minimum | ||
Amortization Period (Years) | 2 years | |
Tradename and Trademarks | Maximum | ||
Amortization Period (Years) | 10 years | |
Patents | ||
Gross Carrying Amount | $ 2,100 | 2,100 |
Accumulated Amortization | (1,782) | (1,696) |
Net Carrying Amount | $ 318 | 404 |
Patents | Minimum | ||
Amortization Period (Years) | 6 years | |
Patents | Maximum | ||
Amortization Period (Years) | 10 years | |
Noncompetition Agreements | ||
Amortization Period (Years) | 3 years | |
Gross Carrying Amount | $ 848 | 848 |
Accumulated Amortization | $ (848) | (588) |
Net Carrying Amount | $ 260 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Annual Amortization of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
GOODWILL AND INTANGIBLE ASSETS | ||
2024 | $ 3,237 | |
2025 | 3,072 | |
2026 | 2,903 | |
2027 | 2,750 | |
2028 | 2,445 | |
2029 and thereafter | 1,213 | |
Total future amortization expense | $ 15,620 | $ 18,055 |
LEASES - Other (Details)
LEASES - Other (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
LEASES | ||
Operating Lease, Liability, Amount Related to Extension of Lease Term | $ 1,000 | |
Operating Lease, Liability, Current | 1,529 | $ 1,412 |
Operating lease right of use assets decrease from early lease termination | 500 | |
Operating lease liability decrease from early lease termination | 600 | |
Lease termination gain | $ 100 |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | |||
Operating lease expense | $ 1,534 | $ 1,457 | $ 1,860 |
Short-term lease and variable lease expense | 923 | 1,032 | 822 |
Total lease expense | $ 2,457 | $ 2,489 | 2,682 |
Weighted average remaining lease term under operating ROU leases (in years) (Year) | 4 years 4 months 24 days | 5 years 3 months 18 days | |
Weighted average discount rate for operating lease liabilities | 4.96% | 4.87% | |
Right Of Use Assets Obtained In Exchange For Operating Lease Liability | $ 131 | $ 2,502 | $ 161 |
LEASES - Maturity of Operating
LEASES - Maturity of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
LEASES | |
2024 | $ 1,663 |
2025 | 1,611 |
2026 | 1,355 |
2027 | 1,294 |
2028 | 929 |
2029 and thereafter | 63 |
Total future minimum lease payments | 6,915 |
Less: Interest (2) | (729) |
Present value of future minimum lease payments under operating lease liabilities (3) | $ 6,186 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Future Lease payments | $ 6,915 |
Term of Product Warranty | 90 days |
Purchase Obligation, Total | $ 26,200 |
Period over which the majority of purchase obligations become due | 2 years |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 21 Months Ended | 31 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Apr. 11, 2022 | Jun. 04, 2020 | |
2020 Stock Repurchase Program | |||||||
Stock Repurchase Program, Authorized Amount | $ 25 | ||||||
Repurchase of common stock (shares) | 218,858 | 251,212 | 470,070 | ||||
Repurchase of common stock, weighted-average price per share | $ 26.40 | $ 18.01 | $ 21.91 | ||||
Repurchases of common stock, cost | $ 5.8 | $ 4.5 | $ 10.3 | ||||
2022 Stock Repurchase Program | |||||||
Stock Repurchase Program, Authorized Amount | $ 35 | ||||||
Repurchase of common stock (shares) | 21,340 | 714,600 | 735,940 | ||||
Repurchase of common stock, weighted-average price per share | $ 34.81 | $ 23.36 | $ 23.69 | ||||
Repurchases of common stock, cost | $ 0.7 | $ 16.7 | $ 17.4 |
EMPLOYEE BENEFIT PLANS - Narrat
EMPLOYEE BENEFIT PLANS - Narrative (Details) - USD ($) | 12 Months Ended | 270 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Stock option vesting period | 4 years | |||
Software Development | ||||
Share-based Payment Arrangement, Amount Capitalized | $ 100,000 | $ 0 | $ 0 | |
Restricted Stock Units (RSUs) | ||||
Unrecognized Compensation | $ 45,400,000 | $ 45,400,000 | ||
Unrecognized Compensation Recognition Period | 2 years 6 months | |||
Fair value of restricted stock units vested | $ 32,786,000 | 22,676,000 | $ 13,617,000 | |
401(k) Savings Plan | ||||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 1,700,000 | $ 1,600,000 | ||
401(k) Savings Plan | Minimum | ||||
Defined Contribution Plan, Percentage of Employee Gross Pay Match | 50% | |||
401(k) Savings Plan | Maximum | ||||
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 60% | |||
Defined Contribution Plan, Percentage of Employee Gross Pay Match | 100% | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 4% | |||
Expired Stock Incentive Plans | Stock Grants and Awards | ||||
Stock Incentive Plans, Common Shares Reserved for Future Issuance | 3,500,000 | 3,500,000 | ||
Stock Incentive Plans, Cumulative Share Forfeitures, Expirations and Repurchases | 500,000 | |||
Stock Incentive Plans, Stock Option Awards Outstanding | 0 | 0 | ||
2010 Employee Stock Purchase Plan | ||||
Shares Issued During Period | 5,203 | 108,623 | ||
Weighted Average Purchase Price | $ 13.40 | $ 9.53 | ||
2010 and 2021 Employee Stock Purchase Plans | ||||
Eligible Employee Contribution Rate, Percentage of Compensation | 10% | 10% | ||
Eligible Employee Share Purchase Price, Percentage of Fair Market Value | 85% | |||
ESPP, Share Offering Period Duration | 24 months | |||
ESPP, Share Purchase Periods Within Each Offering Period | 4 | |||
ESPP, Share Purchase Period Duration | 6 months | |||
ESPP, Purchase Plan Term | 10 years | |||
2011 Stock Incentive Plan | ||||
Common Stock, Closing Share Price | $ 32.14 | $ 32.14 | ||
2011 Stock Incentive Plan | Employee Stock Option | ||||
Stock Option Expiration Period | 10 years | |||
Stock option vesting period | 4 years | |||
Stock Incentive Plans, Stock Options and Awards Granted | 0 | 0 | 0 | |
2011 Stock Incentive Plan | Stock Grants and Awards | ||||
Stock Incentive Plans, Common Shares Reserved for Future Issuance | 13,800,000 | 13,800,000 | ||
Stock Incentive Plans, Rate Decrease in Reserved Plan-Shares Pursuant to Awards Other Than Options or SARs | (1.33) | |||
Number of additional common stock capital shares reserved for future issuance | 14,300,000 | |||
Stock Incentive Plans, Shares Available for Future Grant | 3,700,000 | 3,700,000 | ||
2021 Employee Stock Purchase Plan | ||||
Shares Issued During Period | 223,608 | 182,083 | ||
Weighted Average Purchase Price | $ 17.14 | $ 16.15 | ||
ESPP, Unrecognized Compensation | $ 3,000,000 | $ 3,000,000 | ||
ESPP, Unrecognized Compensation Recognition Period | 1 year 6 months | |||
Shares Available for Future Issuance | 594,309 | 594,309 |
EMPLOYEE BENEFIT PLANS - Valuat
EMPLOYEE BENEFIT PLANS - Valuation Assumptions for ESPP (Details) - 2021 Employee Stock Purchase Plan - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Expected life (in years) | 1 year 3 months | 1 year 3 months | 1 year 3 months |
Volatility | 43.66% | 48.73% | 48% |
Risk-free interest rate | 5.15% | 2.75% | 0.11% |
Expected dividend | 0% | 0% | 0% |
Weighted average fair value of purchase rights granted during the period | $ 15.71 | $ 10 | $ 6.71 |
EMPLOYEE BENEFIT PLANS - Alloca
EMPLOYEE BENEFIT PLANS - Allocation of Recognized Period Costs (Details) - Employee Benefit Plans - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation expenses | $ 21,484 | $ 19,649 | $ 12,931 |
Costs of Revenues | |||
Stock-based compensation expenses | 4,169 | 2,974 | 2,563 |
Research and Development | |||
Stock-based compensation expenses | 7,711 | 9,391 | 5,515 |
Selling, General, and Administrative | |||
Stock-based compensation expenses | $ 9,604 | $ 7,284 | $ 4,853 |
EMPLOYEE BENEFIT PLANS - Stock
EMPLOYEE BENEFIT PLANS - Stock Options Activity (Details) - Employee Benefit Plans - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Options Outstanding, Beginning Balance | 68 | ||
Options Exercised | (30) | ||
Options Outstanding, Ending Balance | 38 | 68 | |
Options Vested and Expected to Vest | 38 | ||
Options Exercisable | 37 | ||
Options Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 16.11 | ||
Options Exercised, Weighted Average Exercise Price | 16.36 | ||
Options Outstanding, Weighted Average Exercise Price, Ending Balance | 15.92 | $ 16.11 | |
Options Vested and Expected to Vest, Weighted Average Exercise Price | 15.91 | ||
Options Exercisable, Weighted Average Exercise Price | $ 15.84 | ||
Options Outstanding, Weighted Average Remaining Contractual Term | 4 years 18 days | ||
Options Vested and Expected to Vest, Weighted Average Remaining Contractual Term | 4 years 18 days | ||
Options Exercisable, Weighted Average Remaining Contractual Term | 3 years 11 months 19 days | ||
Options Outstanding, Aggregate Intrinsic Value | $ 619 | ||
Options Vested and Expected to Vest, Aggregate Intrinsic Value | 619 | ||
Options Exercisable, Aggregate Intrinsic Value | 599 | ||
Intrinsic value of options exercised | $ 630 | $ 2,287 | $ 2,972 |
EMPLOYEE BENEFIT PLANS - Nonves
EMPLOYEE BENEFIT PLANS - Nonvested Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Non-vested RSUs, Opening Balance | 2,124 | ||
RSUs Granted | 783 | ||
RSUs Vested | (882) | ||
RSUs Forfeited | (30) | ||
Non-vested RSUs, Ending Balance | 1,995 | 2,124 | |
Non-vested RSUs Opening, Weighted Average Grant Date Fair Value | $ 21.29 | ||
RSUs Granted, Weighted Average Grant Date Fair Value | 43.46 | $ 23.23 | $ 19.43 |
RSUs Vested, Weighted Average Grant Date Fair Value | 21 | ||
RSUs Forfeited, Weighted Average Grant Date Fair Value | 27.60 | ||
Non-vested RSUs Ending, Weighted Average Grant Date Fair Value | $ 30.03 | $ 21.29 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Income (Loss) from Continuing Operations before Income Taxes, Domestic | $ 3,200 | $ (1,200) | $ (19,700) | |
Income (Loss) from Continuing Operations before Income Taxes, Foreign | 1,700 | 1,700 | $ 1,400 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% | |||
Deferred Tax Assets, Valuation Allowance, Total | 64,152 | 59,215 | $ 64,152 | |
Net deferred tax asset | 17 | |||
California R&D Tax Credits | ||||
Deferred Tax Assets, Valuation Allowance, Total | 64,200 | $ 59,200 | 64,200 | |
U.S. | ||||
Tax Credit Carryforward, Amount | 23,700 | 23,700 | ||
U.S. | IRS | ||||
Operating Loss Carryforwards, Total | 7,200 | 7,200 | ||
U.S. | California Franchise Tax Board | ||||
Operating Loss Carryforwards, Total | 12,700 | 12,700 | ||
State and Local | ||||
Tax Credit Carryforward, Amount | $ 24,500 | $ 24,500 |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Total income tax expense | $ 1,764 | $ 3,899 | $ 3,171 |
U.S. | |||
Current | (353) | 1,210 | (67) |
Deferred | 3 | 13 | 1,318 |
Foreign | |||
Current | 453 | 577 | 237 |
Withholding | 1,770 | 2,111 | 1,591 |
Deferred | $ (109) | $ (12) | $ 92 |
INCOME TAXES - Income Tax Recon
INCOME TAXES - Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | |||
Federal statutory tax provision | $ 1,016 | $ 106 | $ (3,847) |
State tax provision | (65) | 949 | 239 |
Stock compensation expense | (1,747) | (898) | (499) |
Tax credits | (3,214) | (2,877) | (2,676) |
Foreign tax, net | 1,859 | 2,195 | 1,653 |
Foreign-derived intangible income (FDII) deduction | (1,612) | (830) | |
Change in valuation allowance | 5,043 | 5,122 | 8,099 |
Section 162(m) Limitation | 424 | 92 | |
Unrealized tax benefit reserve changes | 99 | 136 | (151) |
Other | (39) | (96) | 353 |
Total income tax expense | $ 1,764 | $ 3,899 | $ 3,171 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carry forward | $ 3,005 | $ 3,861 |
Research and development and other credit carry forward | 30,633 | 28,046 |
Foreign tax credit carry forward | 7,611 | 11,764 |
Capitalized research and experimental expenses | 20,403 | 10,069 |
Accruals deductible in different periods | 4,037 | 7,713 |
Leases | 1,282 | 1,623 |
Stock-based compensation | 1,882 | 1,948 |
Total deferred tax assets | 68,853 | 65,024 |
Less: valuation allowance | (64,152) | (59,215) |
Deferred tax assets, net of valuation allowance | 4,701 | 5,809 |
Deferred tax liabilities: | ||
Property and equipment, net | (612) | (540) |
Operating lease right-of-use assets | (1,266) | (1,635) |
Intangible assets | (2,995) | (3,617) |
Deferred tax liabilities | (4,873) | (5,792) |
Net deferred tax assets (liabilities): | ||
Net deferred tax asset | $ 17 | |
Net deferred tax liability | $ (172) |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | |||
Unrecognized tax benefits accrued | $ 700,000 | ||
Unrecognized tax benefits (expense reversal) | (15,000) | $ (61,000) | $ (89,000) |
Unrecognized tax benefits, excluding interest | 15,900,000 | ||
Unrecognized tax benefits that would impact effective tax rate | 2,000,000 | ||
Unrecognized tax benefits, interest accrued | 2,600,000 | ||
Unrecognized tax benefits subject to full DTA valuation allowance | $ 14,000,000 |
INCOME TAXES - Unrecognized T_2
INCOME TAXES - Unrecognized Tax Benefits Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | |||
Gross unrecognized tax benefits, Beginning Balance | $ 15,109 | $ 14,743 | $ 14,300 |
Increases in tax positions for current year | 1,469 | 988 | 853 |
Increases in tax positions for prior years | 91 | 0 | 1 |
Lapse in statute of limitations | (732) | (622) | (411) |
Gross unrecognized tax benefits, Ending Balance | $ 15,937 | $ 15,109 | $ 14,743 |
INCOME TAXES - Valuation Allowa
INCOME TAXES - Valuation Allowance of Deferred Tax Assets (Details) - SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Balance, beginning | $ 59,215 | $ 51,586 | $ 41,859 |
Charged to Expense | 4,937 | 7,629 | 9,727 |
Balance, ending | $ 64,152 | $ 59,215 | $ 51,586 |
NET INCOME (LOSS) PER SHARE - C
NET INCOME (LOSS) PER SHARE - Calculation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
NET INCOME (LOSS) PER SHARE | |||
Net loss | $ 3,105 | $ (3,429) | $ (21,488) |
Basic weighted average shares outstanding | 38,015 | 37,309 | 37,138 |
Effect of dilutive stock options, unvested restricted stock units, and shares of common stock expected to be issued under Employee Purchase Plan | 922 | ||
Diluted weighted average shares outstanding | 38,937 | 37,309 | 37,138 |
Basic | $ 0.08 | $ (0.09) | $ (0.58) |
Diluted | $ 0.08 | $ (0.09) | $ (0.58) |
NET INCOME (LOSS) PER SHARE - A
NET INCOME (LOSS) PER SHARE - Anti-dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive securities excluded from EPS | 351 | 927 | 1,171 |
Outstanding Options | |||
Antidilutive securities excluded from EPS | 56 | 170 | |
Non-vested Restricted Stock Units | |||
Antidilutive securities excluded from EPS | 351 | 787 | 968 |
Employee Stock Purchase Plan | |||
Antidilutive securities excluded from EPS | 84 | 33 |
CUSTOMER AND GEOGRAPHIC INFOR_3
CUSTOMER AND GEOGRAPHIC INFORMATION - Other (Details) | 12 Months Ended |
Dec. 31, 2023 | |
CUSTOMER AND GEOGRAPHIC INFORMATION | |
Number of operating segments | 1 |
Number of Reportable Segments | 1 |
CUSTOMER AND GEOGRAPHIC INFOR_4
CUSTOMER AND GEOGRAPHIC INFORMATION - Revenue Percentage by Major Customers (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue Benchmark | Customer A | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Significant customer concentration (percentage) | 35% | 31% | 17% |
Revenue Benchmark | Customer B | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Significant customer concentration (percentage) | 10% | ||
Revenue Benchmark | Customer D | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Significant customer concentration (percentage) | 10% | ||
Receivables Benchmark | Customer A | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Significant customer concentration (percentage) | 39% | 29% | |
Receivables Benchmark | Customer B | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Significant customer concentration (percentage) | 12% | ||
Receivables Benchmark | Customer C | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Significant customer concentration (percentage) | 12% | ||
Receivables Benchmark | Customer G | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Significant customer concentration (percentage) | 11% |
CUSTOMER AND GEOGRAPHIC INFOR_5
CUSTOMER AND GEOGRAPHIC INFORMATION - Revenues by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 165,835 | $ 148,549 | $ 111,060 |
Geographic Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 165,835 | $ 148,549 | $ 111,060 |
Percentage of Revenues | 100% | 100% | 100% |
Geographic Concentration Risk | Revenue Benchmark | United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 92,798 | $ 73,625 | $ 50,374 |
Percentage of Revenues | 56% | 50% | 45% |
Geographic Concentration Risk | Revenue Benchmark | China | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 26,488 | $ 24,494 | $ 14,267 |
Percentage of Revenues | 16% | 16% | 13% |
Geographic Concentration Risk | Revenue Benchmark | JAPAN | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 10,465 | $ 13,916 | $ 11,097 |
Percentage of Revenues | 6% | 9% | 10% |
Geographic Concentration Risk | Revenue Benchmark | Rest of the World | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 36,084 | $ 36,514 | $ 35,322 |
Percentage of Revenues | 22% | 25% | 32% |
CUSTOMER AND GEOGRAPHIC INFOR_6
CUSTOMER AND GEOGRAPHIC INFORMATION - Long-lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, net | $ 46,981 | $ 46,176 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, net | 45,619 | 44,730 |
Rest of the World | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets, net | $ 1,362 | $ 1,446 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Assets measured at fair value, total | $ 120,354 | $ 97,285 | |
Quoted Prices in Active Markets for Identical Assets (level 1) | |||
Assets measured at fair value, total | 120,354 | 97,285 | |
Money Market Mutual Funds | |||
Cash equivalents | 83,810 | 75,738 | |
Money Market Mutual Funds | Quoted Prices in Active Markets for Identical Assets (level 1) | |||
Cash equivalents | 83,810 | 75,738 | |
U.S. Government Securities | |||
Cash equivalents | 1,990 | ||
Short-term investments (available-for-sale debt securities) | 36,544 | [1] | 19,557 |
U.S. Government Securities | Quoted Prices in Active Markets for Identical Assets (level 1) | |||
Cash equivalents | 1,990 | ||
Short-term investments (available-for-sale debt securities) | $ 36,544 | [1] | $ 19,557 |
[1] The carrying amount of the Company’s investments in U.S. Government securities approximate fair value due to their short-term maturities, and there have been no events or changes in circumstances that would have had a significant effect on the fair value of these securities as of December 31, 2023 and 2022. |
FAIR VALUE MEASUREMENTS - Other
FAIR VALUE MEASUREMENTS - Other (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |||
Interest income from cash, cash equivalents and short-term investments | $ 5.5 | $ 1.5 | $ 0.1 |
STRATEGIC PARTNERSHIP AGREEME_2
STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS (Details) - Advantest America, Inc. - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related party receivables | $ 0 | $ 300,000 | ||
Analytics | ||||
Related party revenue | 9,000,000 | 10,300,000 | $ 10,600,000 | |
Related party deferred revenue | $ 9,400,000 | $ 7,100,000 | ||
Securities Purchase Agreement | ||||
Common stock shares issued | 3,306,924 | |||
Proceeds from Issuance of Common Stock | $ 65,200,000 | |||
Term of cloud-based subscription for Exensio analytics software | 5 years |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narrative (Details) - Lantern Machinery Analytics, Inc. $ in Millions | Jul. 05, 2023 USD ($) |
Business Acquisition [Line Items] | |
Equity interest acquired in business combination | 100% |
Consideration to acquire business, net of cash acquired | $ 1.8 |
BUSINESS COMBINATION - Fair Val
BUSINESS COMBINATION - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jul. 05, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | |||||
Goodwill | $ 15,029 | $ 14,123 | $ 14,123 | $ 15,774 | |
Lantern Machinery Analytics, Inc. | |||||
Assets | |||||
Cash assumed | $ 265 | ||||
Fair value of tangible assets (including cash of $265) | 450 | ||||
Goodwill | 895 | ||||
Total assets acquired | 2,455 | ||||
Liabilities | |||||
Deferred tax liabilities | 294 | ||||
Accounts payable and accrued expenses | 73 | ||||
Total liabilities assumed | 367 | ||||
Total purchase price allocation | 2,088 | ||||
Lantern Machinery Analytics, Inc. | Developed Technology | |||||
Assets | |||||
Fair value of intangible assets | $ 1,010 | ||||
Intangible asset amortization period | 8 years | ||||
Lantern Machinery Analytics, Inc. | Customer Relationships | |||||
Assets | |||||
Fair value of intangible assets | $ 100 | ||||
Intangible asset amortization period | 6 years |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 3,105 | $ (3,429) | $ (21,488) |
Insider Trading Arrangements
Insider Trading Arrangements | 12 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |