3 unchanged sentences
(in thousands, except par value)
+Added: September 30,
Current assets:
57 unchanged sentences
PDF SOLUTIONS, INC.
−Removed: CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
+Added: CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share amounts)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Integrated Yield Ramp
5 unchanged sentences
Amortization of acquired intangible assets
−Removed: Income (loss) from operations
+Added: Income from operations
Interest expense
−Removed: Interest income and other, net
−Removed: Income (loss) before income tax benefit (expense)
−Removed: Income tax benefit (expense)
+Added: Other income (expense), net
+Added: Income before income tax expense
+Added: Income tax expense
Net income (loss)
3 unchanged sentences
Total other comprehensive income (loss)
−Removed: Comprehensive income (loss)
+Added: Comprehensive income
Net income (loss) per share:
4 unchanged sentences
(in thousands)
−Removed: Three-Month Periods in the Six Months Ended June 30, 2025
+Added: Three-Month Periods in the Nine Months Ended September 30, 2025
Treasury Stock
2 unchanged sentences
Balances, December 31, 2024
+Added: 38,801 $ 6 $ 502,902 11,916 $ ( 159,352 ) $ ( 93,988 ) $ ( 3,531 ) $ 246,037
Shares issued under equity plans
+Added: 329 — 2,128 — — — — 2,128
Shares withheld for taxes related to shares issued under equity plans
+Added: — — — 124 ( 3,320 ) — — ( 3,320 )
Stock-based compensation expense
+Added: — — 6,715 — — — — 6,715
Comprehensive income (loss)
+Added: — — — — — ( 3,032 ) 452 ( 2,580 )
Balances, March 31, 2025
+Added: 39,130 6 511,745 12,040 ( 162,672 ) ( 97,020 ) ( 3,079 ) 248,980
Shares issued under equity plans
+Added: 33 — 27 — — — — 27
Shares withheld for taxes related to shares issued under equity plans
+Added: — — — 11 ( 215 ) — — ( 215 )
Stock-based compensation expense
+Added: — — 6,283 — — — — 6,283
Comprehensive income
+Added: — — — — — 1,146 1,299 2,445
Balances, June 30, 2025
−Removed: Three-Month Periods in the Six Months Ended June 30, 2024
+Added: 39,163 6 518,055 12,051 ( 162,887 ) ( 95,874 ) ( 1,780 ) 257,520
+Added: Shares issued under equity plans
+Added: 357 — 2,088 — — — — 2,088
+Added: Shares withheld for taxes related to shares issued under equity plans
+Added: — — — 111 ( 2,411 ) — — ( 2,411 )
+Added: Repurchase of common stock
+Added: ( 13 ) — — 13 ( 244 ) — — ( 244 )
+Added: Stock-based compensation expense
+Added: — — 6,383 — — — — 6,383
+Added: Comprehensive income (loss)
+Added: — — — — — 1,294 ( 248 ) 1,046
+Added: Balances, September 30, 2025
+Added: 39,507 $ 6 $ 526,526 12,175 $ ( 165,542 ) $ ( 94,580 ) $ ( 2,028 ) $ 264,382
+Added: Three-Month Periods in the Nine Months Ended September 30, 2024
Treasury Stock
2 unchanged sentences
Balances, December 31, 2023
+Added: 38,289 $ 6 $ 473,295 11,460 $ ( 143,923 ) $ ( 98,045 ) $ ( 2,387 ) $ 228,946
Shares issued under equity plans
+Added: 306 — 1,941 — — — — 1,941
Shares withheld for taxes related to shares issued under equity plans
+Added: — — — 118 ( 3,794 ) — — ( 3,794 )
Repurchase of common stock
+Added: ( 202 ) — — 202 ( 6,899 ) — — ( 6,899 )
Stock-based compensation expense
+Added: — — 6,154 — — — — 6,154
Comprehensive loss
+Added: — — — — — ( 393 ) ( 542 ) ( 935 )
Balances, March 31, 2024
+Added: 38,393 6 481,390 11,780 ( 154,616 ) ( 98,438 ) ( 2,929 ) 225,413
Shares issued under equity plans
+Added: 38 — 67 — — — — 67
Shares withheld for taxes related to shares issued under equity plans
+Added: — — — 13 ( 468 ) — — ( 468 )
Stock-based compensation expense
+Added: — — 5,762 — — — — 5,762
Comprehensive income (loss)
+Added: — — — — — 1,705 ( 326 ) 1,379
Balances, June 30, 2024
+Added: 38,431 6 487,219 11,793 ( 155,084 ) ( 96,733 ) ( 3,255 ) 232,153
+Added: Shares issued under equity plans
+Added: 332 — 2,179 — — — — 2,179
+Added: Shares withheld for taxes related to shares issued under equity plans
+Added: — — — 112 ( 3,934 ) — — ( 3,934 )
+Added: Stock-based compensation expense
+Added: — — 6,857 — — — — 6,857
+Added: Comprehensive income
+Added: — — — — — 2,206 1,003 3,209
+Added: Balances, September 30, 2024
+Added: 38,763 $ 6 $ 496,255 11,905 $ ( 159,018 ) $ ( 94,527 ) $ ( 2,252 ) $ 240,464
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)
2 unchanged sentences
(in thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Cash flows from operating activities:
Net income (loss)
−Removed: Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
+Added: Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation expense
15 unchanged sentences
Operating lease liabilities
−Removed: Net cash provided by (used in) operating activities
+Added: Net cash provided by operating activities
Cash flows from investing activities:
1 unchanged sentence
Purchases of short-term investments
+Added: Purchase of convertible promissory note
Purchases of property and equipment
19 unchanged sentences
(in thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Supplemental disclosure of cash flow information:
41 unchanged sentences
This ASU requires the disaggregation of certain expenses in the notes to the consolidated financial statements, to provide enhanced transparency into the expense captions presented on the face of the income statement.
−Removed: This ASU is effective on a prospective basis for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027, with early adoption permitted.
−Removed: This ASU may be applied either prospectively or retrospectively.
+Added: Additionally, in January 2025, FASB issued ASU 2025 - 01 , Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ):
+Added: Clarifying the Effective Date to clarify the effective date of ASU 2024 - 03.
+Added: This ASU is effective for annual periods beginning after December 15, 2026 and for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.
The Company is currently evaluating the impact of the new standard on the consolidated financial statements and related disclosures.
3 unchanged sentences
The Company is currently evaluating the timing of the adoption and the impact of the new standard on the consolidated financial statements and related disclosures.
+Added: In September 2025, the FASB issued ASU 2025 - 06 , Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350 - 40 ), related to accounting for internal-use software costs.
+Added: The amendments in this ASU improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods.
+Added: This update is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, though early adoption is permitted.
+Added: The Company is currently evaluating the effects 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 condensed consolidated financial statements.
17 unchanged sentences
Analytics revenue is derived from the following primary offerings:
−Removed: licenses and services for on-premise software (which is primarily Exensio ® and Cimetrix ® products, and includes some secureWISE ® products), software-as-a-service (“SaaS”) (which is primarily Exensio products, and includes some secureWISE products and services), and Design-for-Inspection™ (“DFI™”) systems and Characterization Vehicle ® (“CV ® ”) systems that do not include performance incentives based on customers’ yield achievement.
+Added: licenses and services for on-premise software (which is primarily Exensio ® and Cimetrix ® products, and includes some secureWISE ® products), software-as-a-service (“SaaS”) (which is primarily Exensio products, and includes some secureWISE products and services), and Design-for-Inspection™ (or DFI™) systems and Characterization Vehicle ® (or CV ® ) systems that do not include performance incentives based on customers’ yield achievement.
Revenue from on-premise software is recognized depending on whether the license is perpetual or time-based.
39 unchanged sentences
The following table represents a disaggregation of revenue percentage by timing of revenue:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
80 % 64 % 71 % 67 %
2 unchanged sentences
100 % 100 % 100 % 100 %
−Removed: International revenues accounted for approximately 61 % and 54 % of the Company’s total revenues during the three months ended June 30, 2025 and 2024 , respectively, and approximately 62 % and 55 % of the Company’s total revenues during the six months ended June 30, 2025 and 2024 , respectively.
+Added: International revenues accounted for approximately 47 % and 55 % of the Company’s total revenues during the three months ended September 30, 2025 and 2024 , respectively, and approximately 57 % and 55 % of the Company’s total revenues during the nine months ended September 30, 2025 and 2024 , respectively.
See Note 10, Customer and Geographic Information .
22 unchanged sentences
The contract assets were as follows (in thousands):
+Added: September 30,
Current (included in Prepaid expenses and other current assets)
7 unchanged sentences
Deferred revenues were as follows (in thousands):
+Added: September 30,
$ 21,247 $ 25,005
3 unchanged sentences
Additional information related to deferred revenue were as follows (in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
−Removed: Revenue recognized that was included in the deferred revenues and billings in excess of recognized revenues balances at the beginning of each year
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
+Added: Revenue recognized that was included in the deferred revenues and billings in excess of recognized revenues balances at the beginning of each period
$ 10,542 $ 12,040 $ 23,516 $ 24,669
−Removed: As of June 30, 2025 , 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 $ 232.6 million.
+Added: As of September 30, 2025 , the aggregate amount of the transaction prices allocated to the remaining performance obligations related to customer contracts that were unsatisfied or partially unsatisfied was approximately $ 292.0 million.
Given the applicable contract terms with customers, more than half of this amount is expected to be recognized as revenue over the next two years with the remainder to be recognized thereafter.
2 unchanged sentences
The estimated timing of the recognition of remaining unsatisfied performance obligations is subject to change and is affected by changes to the scope, change in timing of delivery of products and services, or contract modifications.
−Removed: The adjustment to revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods was a decrease of $ 1.5 million and a decrease of $ 0.3 million during the three months ended June 30, 2025 and 2024 , respectively, and an increase of $ 0.2 million and a decrease of $ 1.1 million during the six months ended June 30, 2025 and 2024 , respectively.
+Added: The adjustment to revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods was a decrease of $ 1.0 million and a decrease of $ 0.7 million during the three months ended September 30, 2025 and 2024 , respectively, and an increase of $ 0.2 million and a decrease of $ 1.4 million during the nine months ended September 30, 2025 and 2024 , respectively.
These amounts primarily represent changes in estimated percentage-of-completion based contracts and changes in actual versus estimated Gainshare.
3 unchanged sentences
Total capitalized direct sales commission costs and related fees were as follows (in thousands):
+Added: September 30,
Current (included in Prepaid expenses and other current assets)
4 unchanged sentences
Amortization of capitalized direct sales commission costs were as follows (in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Amortization of capitalized direct sales commission costs
3 unchanged sentences
The Company does not adjust the 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.
−Removed: 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 material significant financing component during the six months ended June 30, 2025 and 2024 .
+Added: 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 material significant financing component during the nine months ended September 30, 2025 and 2024 .
BALANCE SHEET COMPONENTS
1 unchanged sentence
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.
−Removed: Unbilled accounts receivable, included in accounts receivable, totaled $ 29.3 million and $ 23.0 million as of June 30, 2025 , and December 31, 2024 , respectively.
−Removed: 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 $ 8.7 million and $ 9.0 million as of June 30, 2025 , and December 31, 2024 , respectively.
+Added: Unbilled accounts receivable, included in accounts receivable, totaled $ 39.8 million and $ 23.0 million as of September 30, 2025 , and December 31, 2024 , respectively.
+Added: 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 $ 10.6 million and $ 9.0 million as of September 30, 2025 , and December 31, 2024 , respectively.
The Company performs ongoing credit evaluations of its customers’ financial condition.
1 unchanged sentence
The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance.
−Removed: The allowance for credit losses was $ 0.9 million as of June 30, 2025 and December 31, 2024 .
+Added: The allowance for credit losses was $ 0.9 million as of September 30, 2025 and December 31, 2024 .
Prepaid expenses and other current assets
Prepaid expenses and other current assets consist of the following (in thousands):
+Added: September 30,
Prepaid expense
4 unchanged sentences
Income tax receivable
+Added: Convertible note receivable (1)
Total prepaid expenses and other current assets
$ 35,292 $ 17,445
+Added: See Note 11, Fair Value Measurements .
Property and Equipment
Property and equipment, net consist of the following (in thousands):
+Added: September 30,
Computer equipment
17 unchanged sentences
Test equipment mainly includes DFI™ system and CV® system assets at customer sites that are contributing to revenue.
−Removed: 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.
−Removed: Depreciation and amortization expense was $ 0.8 million and $ 1.1 million for the three months ended June 30, 2025 and 2024 , respectively, and $ 1.5 million and $ 2.1 million for the six months ended June 30, 2025 and 2024 , respectively.
+Added: Property and equipment in progress represent mainly 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.
+Added: Depreciation and amortization expense was $ 1.1 million and $ 0.8 million for the three months ended September 30, 2025 and 2024 , respectively, and $ 2.6 million and $ 2.9 million for the nine months ended September 30, 2025 and 2024 , respectively.
Goodwill and Intangible Assets, Net
The changes in goodwill were as follows (in thousands):
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Balance at the beginning of period
−Removed: $ 14,953 $ 15,029
Foreign currency translation adjustment
Balance at the end of period
−Removed: $ 96,798 $ 14,953
The Company completed the acquisition of SecureWise LLC (“SecureWise”) on March 7, 2025.
1 unchanged sentence
Intangible assets, net, consisted of the following (in thousands):
−Removed: June 30, 2025
+Added: September 30, 2025
December 31, 2024
10 unchanged sentences
$ 95,746 $ ( 41,500 ) $ 54,246 $ 48,611 $ ( 36,304 ) $ 12,307
−Removed: The weighted average amortization period for acquired identifiable intangible assets was 8.9 years as of June 30, 2025 .
+Added: The weighted average amortization period for acquired identifiable intangible assets was 8.8 years as of September 30, 2025 .
The amortization expense related to intangible assets were as follows (in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Amortization of acquired technology (included in costs of revenues)
6 unchanged sentences
Year Ending December 31,
−Removed: 2025 (remaining six months)
+Added: 2025 (remaining three months)
2030 and thereafter
Total future amortization expense
−Removed: There was no impairment charges for goodwill and intangible assets during the three and six months ended June 30, 2025 and 2024 .
+Added: There was no impairment charges for goodwill and intangible assets during the three and nine months ended September 30, 2025 and 2024 .
Other Non-current Assets
Other non-current assets consisted of the following (in thousands):
+Added: September 30,
Net investments in sales-type leases (3)
9 unchanged sentences
The components of net investments in sales-type leases were as follows (in thousands):
+Added: September 30,
Present value of lease receivables
12 unchanged sentences
$ 24,816 $ 17,752
−Removed: Maturities of leases payments under sales-type leases as of June 30, 2025 , were as follows (in thousands):
+Added: Maturities of leases payments under sales-type leases as of September 30, 2025 , were as follows (in thousands):
Year Ending December 31,
−Removed: 2025 (remaining six months)
+Added: 2025 (remaining three months)
2029 and thereafter
3 unchanged sentences
Calculated using the rate implicit in the lease determined for each lease.
−Removed: There was no allowance for credit losses on lease receivables as of June 30, 2025 , and December 31, 2024 .
+Added: There was no allowance for credit losses on lease receivables as of September 30, 2025 , and December 31, 2024 .
The Company’s ongoing risk management strategy for residual assets includes performing regular reviews of estimated residual values.
+Added: Accrued and other current liabilities
+Added: Accrued and other current liabilities consisted of the following (in thousands):
+Added: September 30,
+Added: Accrued expenses
+Added: $ 7,021 $ 7,156
+Added: Accrued income taxes
+Added: Total accrued and other current liabilities
+Added: $ 8,661 $ 8,752
The Company leases administrative and sales offices and certain equipment under non-cancellable operating leases, which contain various renewal or termination options and, in some cases, require payment of common area costs, taxes and utilities.
These operating leases expire at various dates through 2031.
−Removed: The Company had no leases that were classified as a financing lease as of June 30, 2025 , and December 31, 2024 .
+Added: The Company had no leases that were classified as a financing lease as of September 30, 2025 , and December 31, 2024 .
Lease expense was comprised of the following (in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Operating lease expense
7 unchanged sentences
Supplemental condensed consolidated balance sheets information related to operating leases was as follows:
+Added: September 30,
Weighted average remaining lease term under operating leases (in years)
Weighted average discount rate for operating lease liabilities
−Removed: Maturities of operating lease liabilities as of June 30, 2025 , were as follows (in thousands):
+Added: Maturities of operating lease liabilities as of September 30, 2025 , were as follows (in thousands):
Year Ending December 31,
−Removed: 2025 (remaining six months)
+Added: 2025 (remaining three months)
2030 and thereafter
1 unchanged sentence
Present value of future minimum lease payments under operating lease liabilities
−Removed: Reported as of June 30, 2025:
+Added: Reported as of September 30, 2025:
Operating lease liabilities – current
2 unchanged sentences
Calculated using incremental borrowing interest rate for each lease.
+Added: Debt as of September 30, 2025 , consisted of (in thousands):
+Added: September 30,
+Added: Revolving credit facility
+Added: Total debt (principal amount)
+Added: Unamortized debt discount and financing costs
+Added: Total debt, net of unamortized debt discount and financing costs
+Added: Current portion of long-term debt, net
+Added: Long-term debt, net
+Added: Total debt, net
+Added: On March 7, 2025, the Company entered into a Credit Agreement (the “Credit Agreement”) with the lenders who are party to the Credit Agreement and the lenders who may become a party to the Credit Agreement pursuant to the terms thereof (the “Lenders”) and Wells Fargo Bank, National Association, as administrative agent to the Lenders (the “Agent”).
+Added: The Credit Agreement provides for (a) a revolving credit facility in an aggregate principal amount of $ 45.0 million (the “Revolving Credit Facility”) and (b) a term loan facility in an aggregate principal amount of $ 25.0 million (the “Term Loan” and together with the Revolving Credit Facility, the “Credit Facilities”).
+Added: The principal of the Revolving Credit Facility is due as a balloon payment of $ 45.0 million in March 2030.
+Added: The principal of the Term Loan is due in the amount of $ 0.6 million quarterly and a balloon payment of $ 13.1 million in March 2030.
+Added: Borrowings under the Credit Facilities will accrue interest at rates equal, at the Company’s election, to (i) the alternate base rate, which is defined as the highest of (a) the federal funds effective rate in effect from time to time plus 0.50 %, (b) the prime commercial lending rate in effect from time to time, and (c) the daily simple secured overnight financing rate (“SOFR”) plus 1.00 % or (ii) SOFR, plus, in each case, the applicable margin.
+Added: The applicable margin for the Revolving Credit Facility borrowings bearing interest at the alternate base rate ranges from 1.00 % to 1.75 %, and the applicable margin for Revolving Credit Facility borrowings bearing interest based on the SOFR ranges from 2.00 % to 2.75 %, in each case, based on the Company’s consolidated total net leverage ratio as of the most recently ended fiscal quarter.
+Added: The applicable margin for Term Loan borrowings bearing interest at the alternate base rate ranges from 1.00 % to 1.75 %, and the applicable margin for Term Loan borrowings bearing interest based on the SOFR ranges from 2.00 % to 2.75 %, in each case, based on the Company’s consolidated total net leverage ratio as of the most recently ended fiscal quarter.
+Added: The Company will pay an annual commitment fee during the term of the Credit Agreement at a rate per annum equal to 0.50 % for any undrawn portion of the Revolving Credit Facility.
+Added: The Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants.
+Added: Negative covenants include, among others, restrictions on the incurrence of debt, the incurrence of liens, the making of investments and distributions, dividends, and stock buy-backs.
+Added: In addition, the Credit Agreement requires that the Company maintain a consolidated total net leverage ratio of not greater than 3.00 to 1.00, and a consolidated fixed charge coverage ratio of not less than 1.25 to 1.00.
+Added: As of September 30, 2025 , the Company was in compliance with the covenants contained in the Credit Agreement.
+Added: The Credit Agreement contains customary events of default.
+Added: Upon the occurrence and during the continuance of an event of default, the Agent may declare the outstanding advances and all other obligations under the Credit Agreement immediately due and payable.
+Added: The obligations under the Credit Agreement are guaranteed by all present and future material domestic subsidiaries of the Company (collectively with the Company referred to herein as the “Credit Parties”), subject to customary exceptions, and are secured by the equity interests of the Credit Parties (other than the Company) and substantially all of the personal property owned by the Credit Parties, including 65% of the equity interests of certain foreign subsidiaries owned by the Credit Parties.
+Added: The Company used the amounts borrowed under the Credit Facilities to finance, in part, the purchase price paid for the acquisition of SecureWise (see Note 14, Business Combination ).
+Added: Future Payments on Total Debt
+Added: As of September 30, 2025 , the estimated future principal payments of the total long-term debt were as follows (in thousands):
+Added: Year Ending December 31,
+Added: 2025 (remaining three months)
+Added: Total future principal payments of long-term debt
STOCKHOLDERS ’ EQUITY
1 unchanged sentence
On April 11, 2022, the Board of Directors adopted a stock repurchase 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 from the adoption date.
−Removed: During the six months ended June 30, 2024, 201,561 shares were repurchased by the Company under the 2022 Program at an average price of $ 34.23 per share for an aggregate total price of $ 6.9 million.
+Added: During the nine months ended September 30, 2024, 201,561 shares were repurchased by the Company under the 2022 Program at an average price of $ 34.23 per share for an aggregate total price of $ 6.9 million.
In total, the Company repurchased 937,501 shares under the 2022 Program at an average price of $ 25.96 per share for an aggregate total price of $ 24.3 million.
1 unchanged sentence
On April 15, 2024, the Board of Directors adopted a new stock repurchase program (the “2024 Program”) to repurchase up to $ 40.0 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 from the adoption date.
−Removed: The Company has not repurchased any shares under the 2024 Program as of June 30, 2025 .
+Added: During the nine months ended September 30, 2025, 12,500 shares were repurchased by the Company under the 2024 Program at an average price of $ 19.55 per share for an aggregate total price of $ 0.2 million.
+Added: During the nine months ended September 30, 2024, the Company did not repurchase any shares under the 2024 Program.
+Added: As of September 30, 2025 , approximately $ 39.8 million remained available under the 2024 Program authorization.
EMPLOYEE BENEFIT PLANS
4 unchanged sentences
The Company estimated the fair value of purchase rights granted under the 2021 Purchase Plan 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:
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Expected life (in years)
5 unchanged sentences
$ 8.78 $ 10.91
−Removed: During the six months ended June 30, 2025 and 2024 , a total of 90,076 shares and 73,854 shares, respectively, were issued under the 2021 Purchase Plan, at a weighted average purchase price of $ 23.68 per share and $ 25.94 per share, respectively.
−Removed: As of June 30, 2025 , unrecognized compensation cost related to the 2021 Purchase Plan was $ 3.7 million, which is expected to be recognized over a weighted average period of 1.6 years.
−Removed: As of June 30, 2025 , 748,405 shares were available for future issuance under the 2021 Purchase Plan.
+Added: During the nine months ended September 30, 2025 and 2024 , a total of 197,414 shares and 81,974 shares, respectively, were issued under the 2021 Purchase Plan, at a weighted average purchase price of $ 21.08 per share and $ 26.31 per share, respectively.
+Added: As of September 30, 2025 , unrecognized compensation cost related to the 2021 Purchase Plan was $ 3.2 million, which is expected to be recognized over a weighted average period of 1.8 years.
+Added: As of September 30, 2025 , 641,067 shares were available for future issuance under the 2021 Purchase Plan.
Stock Incentive Plan
5 unchanged sentences
Stock options generally expire ten years from the date of grant and become vested and exercisable over a four -year period.
−Removed: As of June 30, 2025 , 15.9 million shares of common stock were reserved to cover stock-based awards under the 2011 Plan, of which 4.3 million shares were available for future grant.
−Removed: 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 June 30, 2025 .
−Removed: As of June 30, 2025 , there were no outstanding awards that had been granted outside of the 2011 Plan.
+Added: As of September 30, 2025 , 15.9 million shares of common stock were reserved to cover stock-based awards under the 2011 Plan, of which 3.2 million shares were available for future grant.
+Added: 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 September 30, 2025 .
+Added: As of September 30, 2025 , there were no outstanding awards that had been granted outside of the 2011 Plan.
The Company estimated the fair value of share-based awards granted under the 2011 Stock Plan during the period using the Black-Scholes-Merton option-pricing model.
−Removed: There were no stock options granted during the six months ended June 30, 2025 and 2024 .
+Added: There were no stock options granted during the nine months ended September 30, 2025 and 2024 .
Stock-Based Compensation
1 unchanged sentence
Stock-based compensation expense before taxes related to the Company’s stock plan and employee stock purchase plan was allocated as follows (in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Costs of revenues
15 unchanged sentences
( 761 ) 29.58
−Removed: Nonvested, June 30, 2025
+Added: Nonvested, September 30, 2025
2,011 $ 29.14
−Removed: The weighted average grant date fair values of RSUs granted during the six months ended June 30, 2025 and 2024 were $ 23.66 and $ 33.63 , respectively.
+Added: The weighted average grant date fair values of RSUs granted during the nine months ended September 30, 2025 and 2024 were $ 21.85 and $ 35.42 , respectively.
The total fair value of RSUs vested were as follows (in thousands):
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Fair value of restricted stock units vested
$ 18,232 $ 25,483
−Removed: As of June 30, 2025 , there was $ 38.0 million of total unrecognized compensation cost related RSUs which is expected to be recognized over a weighted average period of 2.3 years.
+Added: As of September 30, 2025 , there was $ 49.1 million of total unrecognized compensation cost related RSUs which is expected to be recognized over a weighted average period of 2.8 years.
RSUs do not have rights to dividends prior to vesting.
Stock Options
−Removed: As of June 30, 2025 , the outstanding stock options totaled 25,761 shares.
−Removed: Total fair value of shares vested during the six months ended June 30, 2025 was immaterial.
−Removed: As of June 30, 2025 , there was no remaining unrecognized compensation cost related to unvested stock options.
−Removed: Income tax expense decreased by $ 1.2 million for the six months ended June 30, 2025 , to $ 1.1 million tax benefit as compared to ($ 0.2 ) million income tax expense for the six months ended June 30, 2024 .
−Removed: The Company’s effective tax rate was 36 % for the six months ended June 30, 2025 , compared to 11 % for the six months ended June 30, 2024 .
+Added: As of September 30, 2025 , the outstanding stock options totaled 20,761 shares.
+Added: Total fair value of shares vested during the nine months ended September 30, 2025 was immaterial.
+Added: As of September 30, 2025 , there was no remaining unrecognized compensation cost related to unvested stock options.
+Added: Income tax expense decreased by $ 0.4 million for the nine months ended September 30, 2025 , to $ 1.2 million as compared to $ 1.6 million income tax expense for the nine months ended September 30, 2024 .
+Added: The Company’s effective tax rate was 205 % for the nine months ended September 30, 2025 , compared to 31 % for the nine months ended September 30, 2024 .
The increase was primarily due to changes in the foreign, federal and state taxes and year-to-date recognition of worldwide pre-tax income (loss) in relation to their forecasted amounts for the full year.
−Removed: The Company’s provision for income taxes for the six months ended June 30, 2025 , was primarily attributable to federal, state and foreign taxes.
−Removed: The Company’s total amount of unrecognized tax benefits, excluding interest, as of June 30, 2025 , was $ 17.3 million, of which $ 2.4 million, if recognized, would affect the Company’s effective tax rate.
+Added: The Company’s provision for income taxes for the nine months ended September 30, 2025 , was primarily attributable to state and foreign taxes.
+Added: The Company’s total amount of unrecognized tax benefits, excluding interest, as of September 30, 2025 , was $ 17.0 million, of which $ 2.3 million, if recognized, would affect the Company’s effective tax rate.
The Company’s total amount of unrecognized tax benefits, excluding interest, as of December 31, 2024 , was $ 16.6 million, of which $ 2.1 million, if recognized, would affect the Company’s effective tax rate.
−Removed: As of June 30, 2025 , the Company has recorded unrecognized tax benefits of $ 3.0 million, including interest of $ 0.6 million, as long-term taxes payable in the condensed consolidated balance sheets.
+Added: As of September 30, 2025 , the Company has recorded unrecognized tax benefits of $ 2.9 million, including interest of $ 0.6 million, as long-term taxes payable in the condensed consolidated balance sheets.
The remaining $ 14.7 million has been recorded within the Company’s DTAs, which is subject to a full valuation allowance.
−Removed: The valuation allowance was approximately $ 67.9 million as of June 30, 2025 , and December 31, 2024 , which was related to U.S.
+Added: The valuation allowance was approximately $ 67.9 million as of September 30, 2025 , and December 31, 2024 , which was related to U.S.
net federal and state DTAs.
−Removed: The worldwide net DTAs balance were immaterial as of June 30, 2025 , and December 31, 2024 .
+Added: The worldwide net DTAs balance were immaterial as of September 30, 2025 , and December 31, 2024 .
The Company conducts business globally and, as a result, files numerous consolidated and separate income tax returns in the U.S.
5 unchanged sentences
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.
−Removed: The OBBBA includes significant provisions regarding corporate taxes, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions.
−Removed: The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.
−Removed: The Company is currently assessing the impact on the Company's consolidated financial statements.
−Removed: As the OBBBA was signed into law after the close of the Company's second quarter, no impact has been included in the Company's operating results for the six months ended June 30, 2025.
+Added: The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.
+Added: ASC 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.
+Added: The Company has completed its initial assessment of the OBBBA corporate tax provisions in the third quarter of 2025.
+Added: OBBBA contained U.S.
+Added: corporate tax provisions under which the Company elected to expense U.S.
+Added: incurred research or experimental expenditures immediately.
+Added: As a result of the Company’s elections, it anticipates a favorable cash tax benefit of approximately $ 0.9 million and a reduction to its effective tax rate by approximately 19 % in 2025.
NET INCOME (LOSS) PER SHARE
2 unchanged sentences
The following is a reconciliation of the numerators and denominators used in computing basic and diluted net loss per share (in thousands except per share amount):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Net income (loss)
−Removed: $ 1,146 $ 1,705 $ ( 1,886 ) $ 1,312
Basic weighted average common shares outstanding
−Removed: 39,148 38,619 39,118 38,456
Effect of dilutive stock options, unvested restricted stock units, and shares of common stock expected to be issued under employee stock purchase plan
−Removed: 112 513 — 533
Diluted weighted average common shares outstanding
−Removed: 39,260 39,132 39,118 38,989
Net income (loss) per share:
−Removed: $ 0.03 $ 0.04 $ ( 0.05 ) $ 0.03
−Removed: $ 0.03 $ 0.04 $ ( 0.05 ) $ 0.03
−Removed: For the six months ended June 30, 2025 , because the Company was in a loss position, diluted net loss per share is the same as basic net loss per share as the inclusion of the potential common shares would have been anti-dilutive.
+Added: For the nine months ended September 30, 2025 , because the Company was in a loss position, diluted net loss per share is the same as basic net loss per share as the inclusion of the potential common shares would have been anti-dilutive.
The following table summarizes the potential shares of common stock that were not included in the diluted net loss per share calculation above because to do so would be anti-dilutive for the periods indicated (in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Non-vested restricted stock units
−Removed: 1,164 556 1,518 571
Outstanding stock options
Shares issuable under employee stock purchase plan
−Removed: 1,438 556 1,812 571
CUSTOMER AND GEOGRAPHIC INFORMATION
2 unchanged sentences
Further, the CODM reviews and utilizes functional expenses (costs of revenues, research and development, and selling, general and administrative) at the consolidated level to manage the Company’s operations.
−Removed: Other segment items included in the condensed consolidated net income (loss) are amortization of acquired intangible assets, interest expense, interest income and other, net and income tax expense, which are reflected in the condensed consolidated statements of comprehensive income (loss).
+Added: Other segment items included in the condensed consolidated net income (loss) are amortization of acquired intangible assets, interest expense, interest income and other, net and income tax expense, which are reflected in the condensed consolidated statements of operations and comprehensive income.
Accordingly, the Company considers itself as one operating and reporting segment because it does not distinguish between markets, specifically the provision of services for differentiated data and analytics solutions to the semiconductor and electronics industries.
−Removed: The following table presents segment total revenues, costs of revenues, gross profit, and net loss for the periods presented (in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: The following table presents segment total revenues, costs of revenues, gross profit, income from operations, and net income (loss) for the periods presented (in thousands):
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Total revenues
3 unchanged sentences
$ 41,275 $ 33,925 $ 112,940 $ 91,137
+Added: Income from operations
+Added: $ 4,827 $ 2,119 $ 2,389 $ 423
Net income (loss)
1 unchanged sentence
Revenues from an individual customer that are approximately 10% or more of the Company’s consolidated total revenues were as follows:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
38 % 19 % 24 % 21 %
1 unchanged sentence
* % * % 11 % * %
+Added: * % 13 % * % * %
* represents less than 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 were as follows:
+Added: September 30,
* represents less than 10%
Revenues from customers by geographic area based on the location of the customers’ work sites were as follows (amounts in thousands):
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
United States
2 unchanged sentences
5,842 10 5,673 12 26,075 17 17,526 14
+Added: 1,238 2 6,273 14 4,235 3 8,107 6
Rest of the world
3 unchanged sentences
Long-lived assets, net by geographic area were as follows (in thousands):
+Added: September 30,
United States (1)
15 unchanged sentences
Balance Sheet
+Added: September 30,
Classification
3 unchanged sentences
Available-for-sale debt securities:
−Removed: Government securities (1)
−Removed: Short-term investments
−Removed: 2,987 2,987 — —
Convertible note receivable (1)
−Removed: Other non-current assets
+Added: Other current assets
2,113 — — 2,113
14 unchanged sentences
$ 92,542 $ 90,504 $ — $ 2,038
−Removed: The amortized cost of the Company’s investments in U.S.
−Removed: Government securities approximated their 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 in the periods presented.
−Removed: For the three and six months ended June 30, 2025 and 2024 , there were no material realized or unrealized gains or losses, either individually or in the aggregate.
In August 2024, the Company purchased a $ 2.0 million non-marketable convertible promissory note from an unrelated third party (the “convertible note”).
The convertible note bears a 5 % interest rate annually and will mature in August 2026.
+Added: The amortized cost of the Company’s investments in U.S.
+Added: Government securities approximated their 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 in the periods presented.
+Added: For the three and nine months ended September 30, 2025 and 2024 , there were no material realized or unrealized gains or losses, either individually or in the aggregate.
COMMITMENTS AND CONTINGENCIES
7 unchanged sentences
The standard warranty reserve is based on estimated total expected costs to fulfill our warranty obligation based on best available information as of the reporting date.
−Removed: The standard warranty reserve was immaterial as of June 30, 2025 , and December 31, 2024 .
+Added: The standard warranty reserve was immaterial as of September 30, 2025 , and December 31, 2024 .
Purchase Obligations — The Company has purchase obligations with certain suppliers for the purchase of goods and services entered into in the ordinary course of business.
−Removed: As of June 30, 2025 , total outstanding purchase obligations were $ 36.1 million, the majority of which is due within the next 12 months.
+Added: As of September 30, 2025 , total outstanding purchase obligations were $ 39.3 million, the majority of which is due within the next 12 months.
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.
6 unchanged sentences
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.
−Removed: As of June 30, 2025 , the Company was not party to any material legal proceedings for which a loss was probable or an amount was accrued.
+Added: As of September 30, 2025 , 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.
11 unchanged sentences
(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;
−Removed: and (iv) a 5 -year cloud-based subscription for Exensio analytics software and related services.
−Removed: Analytics revenue recognized from Advantest was $ 3.5 million and $ 3.0 million during the three months ended June 30, 2025 and 2024 , respectively, and $ 7.1 million and $ 5.9 million during the six months ended June 30, 2025 and 2024 , respectively.
−Removed: Accounts receivable from Advantest were not material as of June 30, 2025 , and December 31, 2024 .
−Removed: Deferred revenue amounted to $ 2.3 million and $ 8.3 million as of June 30, 2025 , and December 31, 2024 , respectively.
−Removed: Debt as of June 30, 2025 , consisted of (in thousands):
−Removed: Revolving credit facility
−Removed: Total debt (principal amount)
−Removed: Unamortized debt discount and financing costs
−Removed: Total debt, net of unamortized debt discount and financing costs
−Removed: Current portion of long-term debt, net
−Removed: Long-term debt, net
−Removed: Total debt, net
−Removed: On March 7, 2025, the Company entered into a Credit Agreement (the “Credit Agreement”) with the lenders who are party to the Credit Agreement and the lenders who may become a party to the Credit Agreement pursuant to the terms thereof (the “Lenders”) and Wells Fargo Bank, National Association, as administrative agent to the Lenders (the “Agent”).
−Removed: The Credit Agreement provides for (a) a revolving credit facility in an aggregate principal amount of $ 45.0 million (the “Revolving Credit Facility”) and (b) a term loan facility in an aggregate principal amount of $ 25.0 million (the “Term Loan” and together with the Revolving Credit Facility, the “Credit Facilities”).
−Removed: The principal of the Revolving Credit facility is due as a balloon payment of $ 45.0 million in March 2030.
−Removed: The principal of the Term Loan is due in the amount of $ 0.6 million quarterly and a balloon payment of $ 13.1 million in March 2030.
−Removed: Borrowings under the Credit Facilities will accrue interest at rates equal, at the Company’s election, to (i) the alternate base rate, which is defined as the highest of (a) the federal funds effective rate in effect from time to time plus 0.50 %, (b) the prime commercial lending rate in effect from time to time, and (c) the daily simple secured overnight financing rate (“SOFR”) plus 1.00 % or (ii) SOFR, plus, in each case, the applicable margin.
−Removed: The applicable margin for the Revolving Credit Facility borrowings bearing interest at the alternate base rate ranges from 1.00 % to 1.75 %, and the applicable margin for Revolving Credit Facility borrowings bearing interest based on the SOFR ranges from 2.00 % to 2.75 %, in each case, based on the Company’s consolidated total net leverage ratio as of the most recently ended fiscal quarter.
−Removed: The applicable margin for Term Loan borrowings bearing interest at the alternate base rate ranges from 1.00 % to 1.75 %, and the applicable margin for Term Loan borrowings bearing interest based on the SOFR ranges from 2.00 % to 2.75 %, in each case, based on the Company’s consolidated total net leverage ratio as of the most recently ended fiscal quarter.
−Removed: The Company will pay an annual commitment fee during the term of the Credit Agreement at a rate per annum equal to 0.50 % for any undrawn portion of the Revolving Credit Facility.
−Removed: The Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants.
−Removed: Negative covenants include, among others, restrictions on the incurrence of debt, the incurrence of liens, the making of investments and distributions, dividends, and stock buy-backs.
−Removed: In addition, the Credit Agreement requires that the Company maintain a consolidated total net leverage ratio of not greater than 3.00 to 1.00, and a consolidated fixed charge coverage ratio of not less than 1.25 to 1.00.
−Removed: As of June 30, 2025 , the Company was in compliance with the covenants contained in the Credit Agreement.
−Removed: The Credit Agreement contains customary events of default.
−Removed: Upon the occurrence and during the continuance of an event of default, the Agent may declare the outstanding advances and all other obligations under the Credit Agreement immediately due and payable.
−Removed: The obligations under the Credit Agreement are guaranteed by all present and future material domestic subsidiaries of the Company (collectively with the Company referred to herein as the “Credit Parties”), subject to customary exceptions, and are secured by the equity interests of the Credit Parties (other than the Company) and substantially all of the personal property owned by the Credit Parties, including 65% of the equity interests of certain foreign subsidiaries owned by the Credit Parties.
−Removed: The Company used the amounts borrowed under the Credit Facilities to finance, in part, the purchase price paid for the acquisition of SecureWise (see Note 14, Business Combination ).
−Removed: Future Payments on Total Debt
−Removed: As of June 30, 2025 , the estimated future principal payments of the total long-term debt were as follows (in thousands):
−Removed: Year Ending December 31,
−Removed: 2025 (remaining six months)
−Removed: Total future principal payments of long-term debt
+Added: and (iv) a 5 -year cloud-based subscription that expired in July 2025 for Exensio analytics software and related services.
+Added: Analytics revenue recognized from Advantest was $ 1.4 million and $ 3.3 million during the three months ended September 30, 2025 and 2024 , respectively, and $ 8.5 million and $ 9.2 million during the nine months ended September 30, 2025 and 2024 , respectively.
+Added: Accounts receivable from Advantest were not material as of September 30, 2025 , and December 31, 2024 .
+Added: Deferred revenue amounted to $ 1.0 million and $ 8.3 million as of September 30, 2025 , and December 31, 2024 , respectively.
BUSINESS COMBINATION
3 unchanged sentences
The Company expects the Transaction to accelerate equipment makers’ ability to derive value from equipment data by enabling them to leverage the Company’s Exensio analytics software and to expand the capability of the Company’s secure data exchange (“DEX”) outsourced semiconductor assembly and test (“OSAT”) network by allowing equipment makers, fab operators, and fabless companies to collaborate to optimize chip manufacturing and test.
−Removed: The Company accounted for the Transaction as a business combination in accordance with FASB ASC Topic 805, Business Combinations .
+Added: The Company accounted for the Transaction as a business combination in accordance with ASC Topic 805, Business Combinations.
This method requires that assets acquired and liabilities assumed in a business combination be recognized at their respective estimated fair values as of the acquisition date.
9 unchanged sentences
The Company expensed all transaction costs in the period in which they were incurred.
−Removed: The total non-recurring legal, finance, integration and other costs related to the acquisition of SecureWise amounted to $ 5.4 million, of which $ 4.5 million was recorded in the six months ended June 30, 2025, and $ 0.9 million in the fourth quarter of 2024.
+Added: The total acquisition-related and integration costs related to the acquisition of SecureWise amounted to $ 5.5 million, of which $ 4.6 million was recorded in the nine months ended September 30, 2025, and $ 0.9 million in the fourth quarter of 2024.
The preliminary allocation of the purchase price for the acquisition of SecureWise, as of the date of the completion of the Transaction, is as follows (in thousands, except amortization period):
105 unchanged sentences
More recently, increased volatility has appeared in controls as economic transactional views compete with traditional national security views in the U.S.
−Removed: For illustration, in late May 2025, the government issued orders (known as “is-informed” letters) further restricting electronic design automation products intended for P.R.C.
−Removed: The government rescinded these orders in early July 2025, according to news reports.
+Added: In the third quarter, the U.S.
+Added: government issued a new “50% Rule” extending export control restrictions to a large number of unlisted subsidiaries of companies that are named on restricted party lists, a change that impinges on markets for U.S.
+Added: items and requires expenditure of additional due diligence resources.
+Added: Soon thereafter, the P.R.C.
+Added: announced plans to restrict export and foreign re-export of certain P.R.C.-origin or -linked rare earth materials and technologies that are important to many global industries, followed immediately by U.S.
+Added: threats to increment tariffs on China-origin goods by another 100%.
+Added: In late October, the U.S.
+Added: governments were moving toward de-escalation of the trade confrontation, but the episode underscored the salient instability and risk of shocks in global trade at this time.
Other jurisdictions with important roles in our industry continue to update some of their export control regulations to further align with the U.S.
5 unchanged sentences
For example, the U.S.
−Removed: recently imposed additional tariffs on imports from China, Canada, and Mexico.
+Added: imposed additional tariffs on imports from China, Canada, and Mexico.
We do not import into the U.S.
1 unchanged sentence
Trade conflict through exchange of tariffs and other retaliatory actions are expected to impact worldwide supply chains, increase prices and put downward pressure on economic activity, and could negatively affect our future sales in various geographic markets.
−Removed: The uncertainty caused by these recent regulations and the potential for additional future restrictions could negatively affect our future sales, including in but not limited to the P.R.C.
+Added: The uncertainty caused by these regulations and the potential for additional future restrictions could negatively affect our future sales, including in but not limited to the P.R.C.
Tax legislation continues to evolve globally with new laws and regulations that create uncertainty in the global economy.
2 unchanged sentences
The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.
−Removed: These legislative changes could have a material impact on our future effective tax rate, tax liabilities, and cash tax, which we are currently assessing the impact on our consolidated financial statements.
+Added: We completed our initial assessment of the OBBBA corporate tax provisions during the third quarter of 2025.
+Added: OBBBA contained U.S.
+Added: corporate tax provisions under which the Company elected to expense U.S.
+Added: incurred research or experimental expenditures immediately.
+Added: As a result of these elections, we anticipate a favorable cash tax benefit of approximately $0.9 million and reduction of effective tax rate by approximately 19% in 2025.
Geopolitical tensions/conflicts .
4 unchanged sentences
Financial Highlights
−Removed: Financial highlights for the three months ended June 30, 2025, are as follows:
−Removed: Total revenues were $51.7 million, an increase of $10.1 million, or 24%, compared to the three months ended June 30, 2024.
−Removed: Analytics revenue was $48.8 million, an increase of $10.7 million, or 28%, compared to the three months ended June 30, 2024.
−Removed: The increase in Analytics revenue was primarily driven by an increase in revenues from CV systems, the addition of revenues related to secureWISE products and services, and an increase in revenues from DFI systems, partially offset by a decrease in revenues from Exensio software licenses.
−Removed: Integrated Yield Ramp revenue was $2.9 million, a decrease of $0.6 million, or 18%, compared to the three months ended June 30, 2024.
−Removed: The decrease in Integrated Yield Ramp revenue was primarily due to decrease in hours worked on fixed-fees engagements, partially offset by higher Gainshare from increased customer wafer shipments at non-leading-edge nodes.
−Removed: Costs of revenues increased by $2.7 million, compared to the three months ended June 30, 2024, primarily due to increases in subcontractor costs, facilities and IT-related costs including depreciation and amortization expense, hardware costs and personnel-related costs.
−Removed: Net income was $1.1 million, compared to a net income of $1.7 million for the three months ended June 30, 2024.
−Removed: The decrease in net income was primarily attributable to an increase in overall costs and expenses mainly due to acquisition costs related to the acquisition of SecureWise, partially offset by increase in total revenues and recognized income tax benefits during the quarter.
−Removed: Financial highlights for the six months ended June 30, 2025, are as follows:
−Removed: Total revenues were $99.5 million, an increase of $16.5 million, or 20%, compared to the six months ended June 30, 2024.
−Removed: Analytics revenue was $91.3 million, an increase of $14.7 million, or 19%, compared to the six months ended June 30, 2024.
−Removed: The increase in Analytics revenue was primarily driven by an increase in revenues from CV systems, the addition of revenues related to secureWISE products and services, and an increase in revenues from Cimetrix software licenses, partially offset by a decrease in revenues from DFI systems.
−Removed: Integrated Yield Ramp revenue was $8.2 million, an increase of $1.8 million, or 28%, compared to the six months ended June 30, 2024.
−Removed: The increase in Integrated Yield Ramp revenue was primarily due to higher Gainshare from increased customer wafer shipments at non-leading-edge nodes;
+Added: Financial highlights for the three months ended September 30, 2025, are as follows:
+Added: Total revenues were $57.1 million, an increase of $10.7 million, or 23%, compared to the three months ended September 30, 2024.
+Added: Analytics revenue was $54.7 million, an increase of $9.9 million, or 22%, compared to the three months ended September 30, 2024.
+Added: The increase in Analytics revenue year-over-year was primarily driven by an increase in revenues from CV systems, the addition of revenues related to secureWISE products and services, and an increase in revenues from DFI systems, partially offset by a decrease in revenues from Exensio software licenses.
+Added: Integrated Yield Ramp revenue was $2.5 million, an increase of $0.8 million, or 48%, compared to the three months ended September 30, 2024.
+Added: The increase in Integrated Yield Ramp revenue year-over-year was primarily due to higher Gainshare from increased customer wafer shipments at non-leading-edge nodes, partially offset by decrease in hours worked on fixed-fees engagements.
+Added: Costs of revenues increased by $3.4 million, compared to the three months ended September 30, 2024, primarily due to increases in personnel-related costs, subcontractor costs, facilities and IT-related costs, including depreciation and amortization expense, amortization of acquired technology, third-party cloud delivery costs, and software license and maintenance costs.
+Added: Net income was $1.3 million, compared to a net income of $2.2 million for the three months ended September 30, 2024.
+Added: The decrease in net income was primarily attributable to (i) an increase in overall costs and expenses mainly due to increase in personnel-related expenses, increased costs related to the operation of SecureWise, increase in amortization of acquired intangible assets, facilities and IT-related costs, travel expenses, subcontractor fees, (ii) an increase in interest expense from our long-term debt, (iii) an increase in income tax expense, and (iv) a decrease in interest income during the quarter, partially offset by an increase in total revenues, and a decrease in legal fees.
+Added: Financial highlights for the nine months ended September 30, 2025, are as follows:
+Added: Total revenues were $156.6 million, an increase of $27.2 million, or 21%, compared to the nine months ended September 30, 2024.
+Added: Analytics revenue was $146.0 million, an increase of $24.6 million, or 20%, compared to the nine months ended September 30, 2024.
+Added: The increase in Analytics revenue year-over-year was primarily driven by an increase in revenues from CV systems, the addition of revenues related to secureWISE products and services, and an increase in revenues from Cimetrix software licenses, partially offset by a decrease in revenues from DFI systems.
+Added: Integrated Yield Ramp revenue was $10.7 million, an increase of $2.6 million, or 32%, compared to the nine months ended September 30, 2024.
+Added: The increase in Integrated Yield Ramp revenue year-over-year was primarily due to higher Gainshare from increased customer wafer shipments at non-leading-edge nodes;
partially offset by a decrease in hours worked on fixed-fees engagements.
−Removed: Costs of revenues increased by $2.1 million, compared to the six months ended June 30, 2024, primarily due to increases in subcontractor costs, personnel-related costs, and facilities and IT-related costs including depreciation and amortization expense, partially offset by hardware costs.
−Removed: Net loss was $1.9 million, compared to a net income of $1.3 million for the six months ended June 30, 2024.
−Removed: The decrease in net income was primarily attributable to (i) an increase in sales and marketing activities, and general and administrative expenses, which was primarily due to acquisition costs related to the acquisition of SecureWise, and (ii) an increase in research and development expenses, partially offset by an increase in total revenues.
+Added: Costs of revenues increased by $5.4 million, compared to the nine months ended September 30, 2024, primarily due to increases in personnel-related costs, amortization of acquired technology, software license and maintenance costs, third-party cloud-delivery costs, partially offset by a decrease in hardware costs.
+Added: Net loss was $0.6 million, compared to a net income of $3.5 million for the nine months ended September 30, 2024.
+Added: The decrease in net income was primarily attributable to (i) an increase in overall costs and expenses mainly due to increase in personnel-related expenses, costs related to the acquisition and operation of SecureWise, increase in subcontractor fees, amortization of acquired intangible assets, travel expenses, third-party cloud-services related costs, facilities and IT-related costs, software license and maintenance costs, (ii) an increase in interest expense from our long-term debt, (iii) a decrease in interest income, and (iv) net unfavorable fluctuations in foreign currency exchange rates, partially offset by an increase in total revenues, recovery from previously written-off property and equipment, and decrease in legal fees, hardware costs, and income tax expense.
Critical Accounting Policies
5 unchanged sentences
For additional information about our critical accounting policies, see Note 1, Basis of Presentation and Summary of Significant Accounting Policies , and Note 2, Revenue from Contracts with Customers to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10‑Q and Part II Item 7 , Management ’ s Discussion and Analysis of Financial Condition and Results of Operation, under the heading of “ Critical Accounting Estimates ” in our Annual Report.
−Removed: There were no material changes during the three and six months ended June 30, 2025, to the items that we disclosed as our critical accounting policies and estimates in Part II, Item 7 of the Annual Report.
+Added: There were no material changes during the three and nine months ended September 30, 2025, to the items that we disclosed as our critical accounting policies and estimates in Part II, Item 7 of the Annual Report.
Recent Accounting Pronouncements and Accounting Changes
1 unchanged sentence
Results of Operations
−Removed: Discussion of Financial Data for the Three and Six Months ended June 30, 2025 and 2024
+Added: Discussion of Financial Data for the Three and Nine Months ended September 30, 2025 and 2024
Revenues, Costs of Revenues, and Gross Margin
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
(Dollars in thousands)
5 unchanged sentences
Analytics Revenue
−Removed: Analytics revenue increased $10.7 million for the three months ended June 30, 2025, compared to the same period in 2024.
+Added: Analytics revenue increased $9.9 million for the three months ended September 30, 2025, compared to the same period in 2024.
The increase in Analytics revenue was primarily driven by an increase in revenues from CV systems, the addition of revenues related to secureWISE products and services, and an increase in revenues from DFI systems, partially offset by a decrease in revenues from Exensio software licenses.
−Removed: Analytics revenue increased $14.7 million for the six months ended June 30, 2025, compared to the same period in 2024.
−Removed: The increase in Analytics revenue was primarily driven by an increase in revenues from CV systems, the addition of revenues related to secureWISE products and services, and an increase in revenues from Cimetrix software licenses, partially offset by a decrease in revenues from DFI systems.
+Added: Analytics revenue increased $24.6 million for the nine months ended September 30, 2025, compared to the same period in 2024.
+Added: The increase in Analytics revenue was primarily driven by an increase in revenues from CV systems, the addition of revenues related to secureWISE products and services, increase in revenues from DFI systems, and an increase in revenues from Cimetrix software licenses, partially offset by a decrease in revenues from Exensio software licenses.
Integrated Yield Ramp Revenue
−Removed: Integrated Yield Ramp revenue decreased $0.6 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to decrease in hours worked on fixed fee engagements, partially offset by higher Gainshare from increased customer wafer shipments at non-leading-edge nodes.
−Removed: Integrated Yield Ramp revenue increased $1.8 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher Gainshare from increased customer wafer shipments at non-leading-edge nodes, partially offset by a decrease in hours worked on fixed-fees engagements.
+Added: Integrated Yield Ramp revenue increased $0.8 million for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to higher Gainshare from increased customer wafer shipments at non-leading-edge nodes, partially offset by decrease in hours worked on fixed fee engagements.
+Added: Integrated Yield Ramp revenue increased $2.6 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to higher Gainshare from increased customer wafer shipments at non-leading-edge nodes, partially offset by a decrease in hours worked on fixed-fees engagements.
Our Integrated Yield Ramp revenue may continue to fluctuate from period to period primarily due to the contribution of Gainshare, which is dependent on many factors that are outside our control, including among others, continued production of ICs by our customers at facilities at which we generate Gainshare, sustained yield improvements by our customers, and whether we enter into new contracts containing Gainshare.
−Removed: Our Analytics and Integrated Yield Ramp revenues may also fluctuate in the future and are dependent on a number of factors, including the semiconductor industry’s continued acceptance of our products, services and solutions, the timing of purchases by existing and new customers, cancellations by existing customers, and our ability to attract new customers and penetrate new markets, supply chain challenges and further penetration of our current customer base.
+Added: Our Analytics and Integrated Yield Ramp revenues may also fluctuate in the future and are dependent on a number of factors, including the semiconductor industry’s continued acceptance of our products, services and solutions, customers’ decisions on whether to purchase or lease DFI systems, the timing of purchases by existing and new customers, cancellations by existing customers, and our ability to attract new customers and penetrate new markets, supply chain challenges and further penetration of our current customer base.
Fluctuations in future results may also occur if any of our significant customers renegotiate pre-existing contractual commitments, including due to adverse changes in their own business.
Costs of Revenues
−Removed: Costs of revenues consist primarily of costs incurred to provide and support our services, costs recognized in connection with licensing our software, IT and facilities-related costs, and amortization of acquired technology.
+Added: Costs of revenues consist primarily of costs incurred to provide and support our services, costs recognized in connection with licensing our software, IT and facilities-related costs, and amortization of acquired technology from business acquisitions.
Service costs include material costs, hardware costs (including cost of leased assets under sales-type lease), personnel-related costs (including compensation, employee benefits, bonus and stock-based compensation expense), subcontractor costs, overhead costs, travel expenses, and allocated facilities-related costs.
Software license costs consist of costs associated with third-party cloud-delivery related expenses and licensing third-party software used by us in providing services to our customers in solution engagements or sold in conjunction with our software products.
−Removed: The increase in costs of revenues of $2.7 million for the three months ended June 30, 2025, compared to the same period in 2024, was primarily due to (i) a $0.9 million increase in subcontractor costs, (ii) a $0.6 million increase in facilities and IT-related costs including depreciation and amortization expense, (iii) a $0.6 million increase in hardware costs, (iv) a $0.4 million increase in third-party cloud-delivery costs, and (v) a $0.1 million increase in personnel-related costs due to increased headcount and worldwide salary increases.
−Removed: The increase in costs of revenues of $2.1 million for the six months ended June 30, 2025, compared to the same period in 2024, was primarily due to (i) a $1.3 million increase in subcontractor costs, (ii) a $0.8 million increase in personnel-related costs due to higher wages, and (iii) a $0.3 million increase in facilities and IT-related costs including depreciation and amortization expense, partially offset by a $0.4 million decrease in hardware costs.
−Removed: Gross margin was flat at 71% for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher Analytics revenue and contributions to revenue from Gainshare, offset by corresponding increases in costs of revenues.
−Removed: Gross margin increased three percentage points for the six months ended June 30, 2025, to 72%, compared to 69% for the same period in 2024.
−Removed: The higher gross margin during the six months ended June 30, 2025, was primarily due to higher contribution to revenue from Gainshare for the six months ended June 30, 2025.
+Added: The increase in costs of revenues of $3.4 million for the three months ended September 30, 2025, compared to the same period in 2024, was primarily due to (i) a $1.0 million increase in personnel-related costs due to worldwide salary increases, increased headcount and bonus expense, (ii) a $0.7 million increase in subcontractor costs, (iii) a $0.4 million increase in facilities and IT-related costs, including depreciation and amortization expense, (iv) a $0.4 million increase in amortization of acquired technology, (v) a $0.3 million increase in third-party cloud-delivery related costs, and (vi) a $0.3 million increase in software license and maintenance costs.
+Added: The increase in costs of revenues of $5.4 million for the nine months ended September 30, 2025, compared to the same period in 2024, was primarily due to (i) a $2.0 million increase in subcontractor costs, (ii) a $1.8 million increase in personnel-related costs due to worldwide salary increases, higher fringe benefits expense and bonus expense, (iii) a $0.9 million increase in amortization of acquired technology, (iv) a $0.9 million increase in software license and maintenance costs, and (v) a $0.8 million increase in third-party cloud-delivery related costs, partially offset by a $1.2 million decrease in hardware costs.
+Added: Gross margin decreased one percentage point for the three months ended September 30, 2025, to 72% compared to 73% for the same period in 2024, primarily due to higher costs.
+Added: Gross margin increased two percentage points for the nine months ended September 30, 2025, to 72% compared to 70% for the same period in 2024.
+Added: The higher gross margin during the nine months ended September 30, 2025, was primarily due to higher Analytics revenue and contribution to revenue from Gainshare for the nine months ended September 30, 2025.
Operating Expenses:
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
(Dollars in thousands)
2 unchanged sentences
Research and development expenses consist primarily of personnel-related costs (including compensation, employee benefits, bonus and stock-based compensation expense), outside development services, travel expenses, third-party cloud-services related costs, IT and facilities cost allocations to support product development activities.
−Removed: Research and development expenses increased $2.3 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to (i) a $1.4 million increase in personnel-related costs due to increased headcount, worldwide salary increases, bonus and stock-based compensation expense, (ii) a $0.4 million increase in subcontractor fees primarily related to Cimetrix software, and (iii) a $0.4 million increase in facilities and IT-related costs.
−Removed: Research and development expenses increased $3.9 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to (i) a $1.7 million increase in personnel-related costs due to increased headcount, worldwide salary increases, bonus and stock-based compensation expense, (ii) a $1.1 million increase in subcontractor fees primarily related to Cimetrix software, (iii) a $0.8 million increase in facilities and IT-related costs, and (iv) a $0.3 million increase in travel expenses.
+Added: Research and development expenses increased $1.9 million for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to (i) a $0.6 million increase in personnel-related costs due to increased headcount, worldwide salary increases, and higher bonus expense and stock-based compensation expense, (ii) a $0.6 million increase in subcontractor fees primarily related to secureWISE products and Exensio software, (iii) a $0.5 million increase in facilities and IT-related costs, including depreciation and amortization expense, and (iv) a $0.2 million increase in travel expenses.
+Added: Research and development expenses increased $5.8 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to (i) a $2.3 million increase in personnel-related costs due to increased headcount, worldwide salary increases, and higher bonus and stock-based compensation expense, (ii) a $1.7 million increase in subcontractor fees primarily related to secureWISE products and Exensio software, (iii) a $1.3 million increase in facilities and IT-related costs, including depreciation and amortization expense, and (iv) a $0.5 million increase in travel expenses.
We anticipate our expenses in research and development will fluctuate in absolute dollars from period to period as a result of the size and the timing of product development projects.
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
(Dollars in thousands)
2 unchanged sentences
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, business acquisition costs, IT and facilities cost allocations.
−Removed: Selling, general, and administrative expenses increased $3.5 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to (i) a $3.1 million increase in personnel-related costs mainly resulting from increased headcount, worldwide salary increases, bonus expense, and stock-based compensation expense, (ii) a $0.5 million increase in subcontractor fees, (iii) $0.2 million in non-recurring legal, finance, integration, and other costs related to the acquisition of SecureWise, and (iv) a $0.2 million travel expense, partially offset by a $0.6 million decrease in general legal and professional fees.
−Removed: Selling, general, and administrative expenses increased $10.4 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to (i) a $5.3 million increase in personnel-related costs mainly resulting from increased headcount, worldwide salary increases, bonus expense, and stock-based compensation expense, (ii) a $0.4 million increase in subcontractor fees, (iii) a $1.2 million increase in facilities and IT-related costs including shipping costs and depreciation expense, (iv) $4.5 million in non-recurring legal, finance, integration, and other costs related to the acquisition of SecureWise, and (v) $0.3 million of travel expense, partially offset by a $1.3 million decrease in general legal and professional fees.
+Added: Selling, general, and administrative expenses increased $1.9 million for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to (i) a $1.8 million increase in personnel-related costs mainly driven by increased headcount, worldwide salary increases, and higher bonus expense, partially offset by a decrease in stock-based compensation expense, (ii) a $0.4 million increase in travel expense, and (iii) a $0.3 million increase in subcontractor fees, partially offset by a $0.4 million decrease in legal fees, and a $0.2 million decrease in facilities and IT-related costs.
+Added: Selling, general, and administrative expenses increased $12.2 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to (i) a $7.0 million increase in personnel-related costs mainly driven by increased headcount, worldwide salary increases, and higher bonus expense and stock-based compensation expense, (ii) a $4.5 million in non-recurring legal, finance, integration, and other costs related to the acquisition of SecureWise, (iii) a $1.3 million increase in subcontractor fees, (iv) a $0.7 million increase in travel expense, (v) $0.3 million increase in facilities and IT-related costs, including shipping costs and depreciation expense, and (vi) a $0.3 million increase in third-party cloud-services related costs, partially offset by a $2.0 million decrease in legal and professional fees.
We anticipate our selling, general, and administrative expenses will fluctuate in absolute dollars from period to period as a result of cost control initiatives and to support increased selling efforts in the future.
1 unchanged sentence
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
(Dollars in thousands)
Amortization of acquired intangible assets
−Removed: Amortization of acquired intangible assets primarily consists of amortization of intangibles acquired from prior business combinations.
+Added: Amortization of acquired intangible assets represents amortization expense on intangibles assets acquired from prior and current year business combinations.
Interest Expense
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
(Dollars in thousands)
1 unchanged sentence
Interest expense is from our long-term debt that was used in financing the acquisition of SecureWise, and amortization of debt discount and financing costs.
−Removed: Interest Income and Other, Net
+Added: Other Income (Expense), Net
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
(Dollars in thousands)
−Removed: Interest income and other, net
−Removed: Interest income and other, net, primarily consists of interest income and foreign currency transaction exchange gains and losses.
−Removed: Interest income and other, net decreased $1.3 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to (i) $1.3 million decrease in interest income from cash, cash equivalents and short-term investments, and (ii) $0.8 million net unfavorable fluctuations in foreign currency exchange rates, partially offset by a $0.6 million recovery from previously written-off property and equipment.
−Removed: Interest income and other, net decreased $2.1 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to (i) a $1.9 million decrease in interest income from cash, cash equivalents and short-term investments, and (ii) $1.0 million net unfavorable fluctuations in foreign currency exchange rates, partially offset by a $0.6 million recovery from previously written-off property and equipment.
+Added: Other income (expense), net
+Added: Other income (expense), net, primarily consists of interest income and foreign currency transaction exchange gains and losses.
+Added: Other income (expense), net decreased $1.6 million for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to (i) $1.5 million decrease in interest income from cash, cash equivalents and short-term investments, and (ii) $0.1 million net unfavorable fluctuations in foreign currency exchange rates.
+Added: Other income (expense), net decreased $3.7 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to (i) a $3.4 million decrease in interest income from cash, cash equivalents and short-term investments, and (ii) $1.1 million net unfavorable fluctuations in foreign currency exchange rates, partially offset by a $0.6 million recovery from previously written-off property and equipment.
Income Tax Expense
Three Months Ended
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
+Added: September 30,
(Dollars in thousands)
−Removed: Income tax benefit (expense)
−Removed: Income tax expense decreased for the three and six months ended June 30, 2025, compared to the same period in 2024, primarily due to changes in the foreign, federal and state taxes and year-to-date recognition of worldwide pre-tax income in relation to their forecasted amounts for full years.
+Added: Income tax expense
+Added: Income tax expense increased for the three months ended September 30, 2025, and decreased for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to the impact of enacted U.S.
+Added: federal tax legislation, changes in the foreign, federal and state taxes and year-to-date recognition of worldwide pre-tax income in relation to their forecasted amounts for the full year.
Any significant change in our future effective tax rates could adversely impact our consolidated financial position, results of operations and cash flows.
1 unchanged sentence
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.
−Removed: The OBBBA includes significant provisions regarding corporate taxes, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions.
−Removed: The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.
−Removed: We are currently assessing the impact on our consolidated financial statements.
−Removed: As the OBBBA was signed into law after the close of our second quarter, no impact has been included in our operating results for the six months ended June 30, 2025.
+Added: The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.
+Added: ASC 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted.
+Added: We completed our initial assessment of the OBBBA corporate tax provisions during the third quarter of 2025.
+Added: OBBBA contained U.S.
+Added: corporate tax provisions under which the Company elected to expense U.S.
+Added: incurred research or experimental expenditures immediately.
+Added: As a result of these elections, we anticipate a favorable cash tax benefit of approximately $0.9 million and reduction of effective tax rate by approximately 19% in 2025.
Liquidity and Capital Resources
−Removed: As of June 30, 2025, our working capital, defined as total current assets less total current liabilities, was $77.8 million, compared to $145.4 million as of December 31, 2024.
−Removed: Total cash, cash equivalents, and short-term investments were $40.4 million as of June 30, 2025, compared to cash, cash equivalents, and short-term investments of $114.9 million as of December 31, 2024.
−Removed: As of June 30, 2025, and December 31, 2024, cash and cash equivalents held by our foreign subsidiaries were $13.1 million and $13.3 million, respectively.
+Added: As of September 30, 2025, our working capital, defined as total current assets less total current liabilities, was $80.0 million, compared to $145.4 million as of December 31, 2024.
+Added: Total cash, cash equivalents, and short-term investments were $35.9 million as of September 30, 2025, compared to $114.9 million as of December 31, 2024.
+Added: As of September 30, 2025, and December 31, 2024, cash and cash equivalents held by our foreign subsidiaries were $4.8 million and $13.3 million, respectively.
Our material cash requirements include principal and interest payments on our debt, operating lease payments, and purchase obligations to support our operations.
−Removed: Refer to Part I, Item 1, Financial Statements, Note 13, Debt , Note 4, Leases , Note 14, Business Combination and Note 11, Commitments and Contingencies for details relating to our material cash requirements for debt, leasing arrangements, including future maturities of operating lease liabilities, and purchase obligations, respectively.
+Added: Refer to Part I, Item 1, Financial Statements, Note 4, Leases , Note 5, Debt , Note 12, Commitments and Contingencies and Note 14, Business Combination for details relating to our material cash requirements for debt, leasing arrangements, including future maturities of operating lease liabilities, and purchase obligations, respectively.
We believe that our existing cash resources and anticipated funds from operations will satisfy our cash requirements to fund our operating activities, capital expenditures, other obligations including repayment of long-term debt and corresponding interest for at least the next twelve months, and thereafter for the foreseeable future;
12 unchanged sentences
In addition, the Credit Agreement requires that we maintain a consolidated total net leverage ratio of not greater than 3.00 to 1.00, and a consolidated fixed charge coverage ratio of not less than 1.25 to 1.00.
−Removed: As of June 30, 2025, we were in compliance with the covenants contained in the Credit Agreement.
+Added: As of September 30, 2025, we were in compliance with the covenants contained in the Credit Agreement.
The Credit Agreement contains customary events of default.
6 unchanged sentences
The 2024 Program does not obligate the Company to acquire a minimum amount of shares and may be modified, suspended or terminated without prior notice.
−Removed: The Company has not repurchased any shares under the 2024 Program as of June 30, 2025.
+Added: During the nine months ended September 30, 2025, 12,500 shares were repurchased by the Company under the 2024 Program at an average price of $19.55 per share for an aggregate total price of $0.2 million.
+Added: During the nine months ended September 30, 2024, the Company did not repurchase any shares under the 2024 Program.
+Added: As of September 30, 2025, approximately $39.8 million remained available under the 2024 Program authorization.
Cash Flow Data
The following table summarizes our cash flows for the periods presented:
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
(In thousands)
5 unchanged sentences
Net change in cash and cash equivalents
−Removed: Net Cash Flows Provided by (Used in) Operating Activities
−Removed: Cash flows provided by operating activities during the six months ended June 30, 2025, consisted of net loss, adjusted for certain non-cash items which primarily consisted of depreciation and amortization, stock-based compensation expense, amortization of acquired intangible expense, amortization of costs capitalized to obtain revenue contracts, net accretion of discounts on short-term investments, accretion of unguaranteed residual assets and net change in operating assets and liabilities.
−Removed: Net cash flows provided by operating activities was $3.4 million for the six months ended June 30, 2025, compared to net cash used in operating activities of $1.2 million for the six months ended June 30, 2024.
−Removed: The increase in net cash provided by operating activities between the periods was driven primarily by higher collections from customers, partially offset by (i) an increase in bonus payments under the Company’s bonus plan, and (ii) increases in payments of personnel-related costs and vendor invoices.
+Added: Net Cash Flows Provided by Operating Activities
+Added: Cash flows provided by operating activities during the nine months ended September 30, 2025, consisted of a net loss, adjusted for certain non-cash items which primarily consisted of depreciation and amortization, stock-based compensation expense, amortization of acquired intangible expense, amortization of costs capitalized to obtain revenue contracts, net accretion of discounts on short-term investments, accretion of unguaranteed residual assets, and net change in operating assets and liabilities.
+Added: Net cash flows provided by operating activities were $6.7 million for the nine months ended September 30, 2025, compared to net cash flows provided by operating activities of $8.1 million for the nine months ended September 30, 2024.
+Added: The decrease in net cash flows provided by operating activities between the periods was primarily driven by (i) an increase in bonus payments under the Company’s bonus plan, (ii) increases in payments of personnel-related costs and vendor invoices, including business acquisition-related costs, and (iii) payments of interest related to bank loans, partially offset by higher collections from customers.
Net Cash Flows Provided by (Used in) Investing Activities
−Removed: Net cash used in investing activities was $124.2 million for the six months ended June 30, 2025, compared to net cash provided by investing activities of $4.2 million for the six months ended June 30, 2024.
−Removed: For the six months ended June 30, 2025, net cash used in investing activities primarily related to $129.7 million payments for the acquisition of SecureWise, net of cash acquired and $16.7 million purchases and prepayments of property and equipment primarily related to our DFI systems, partially offset by $21.6 million proceeds from maturities and sales, net of purchases of short-term investments and $0.6 million recovery from previously written-off property and equipment.
−Removed: For the six months ended June 30, 2024, net cash provided by investing activities primarily related to proceeds from maturities and sales of short-term investments of $37.0 million, partially offset by purchases of short-term investments of $25.5 million and purchases of property and equipment of $7.3 million primarily related to our DFI systems.
+Added: Net cash flows used in investing activities were $127.6 million for the nine months ended September 30, 2025, compared to net cash flows provided by investing activities of $0.2 million for the nine months ended September 30, 2024.
+Added: For the nine months ended September 30, 2025, net cash flows used in investing activities primarily related to $129.7 million payments for the acquisition of SecureWise, net of cash acquired and $23.1 million purchases and prepayments of property and equipment primarily related to our DFI systems, partially offset by $24.6 million proceeds from maturities and sales, net of purchases of short-term investments, and $0.6 million recovery from previously written-off property and equipment.
+Added: For the nine months ended September 30, 2024, net cash flows provided by investing activities primarily related to proceeds from maturities and sales of short-term investments of $57.1 million, partially offset by purchases of short-term investments of $43.1 million, purchases of property and equipment of $11.9 million primarily related to our DFI systems, and purchase of a convertible promissory note of $2.0 million.
Net Cash Flows Provided by (Used in) Financing Activities
−Removed: Net cash provided by financing activities was $66.6 million for the six months ended June 30, 2025, compared to net cash used in financing activities of $9.2 million for the six months ended June 30, 2024.
−Removed: For the six months ended June 30, 2025, net cash provided by financing activities primarily consisted of $69.6 million proceeds from long-term debt, net of debt discount, that was used in financing the acquisition of SecureWise and $2.2 million proceeds from our employee stock purchase plan, partially offset by (i) $3.5 million in cash payments for taxes related to net share settlement of equity awards, (ii) $0.9 million payments of debt issuance costs, and (iii) $0.6 million repayment of long-term debt.
−Removed: For the six months ended June 30, 2024, net cash used in financing activities primarily consisted of repurchases of common stock of $6.9 million, and $4.3 million in cash payments for taxes related to net share settlement of equity awards, partially offset by $2.0 million of proceeds from our employee stock purchase plan and exercise of stock options.
+Added: Net cash flows provided by financing activities were $65.5 million for the nine months ended September 30, 2025, compared to net cash flows used in financing activities of $10.9 million for the nine months ended September 30, 2024.
+Added: For the nine months ended September 30, 2025, net cash flows provided by financing activities primarily consisted of $69.6 million proceeds from long-term debt, net of debt discount, that was used in financing the acquisition of SecureWise, and $4.2 million proceeds from our employee stock purchase plan and exercise of stock options, partially offset by (i) $5.9 million in cash payments for taxes related to net share settlement of equity awards, (ii) $1.3 million repayment of long-term debt, (iii) $0.9 million payments of debt issuance costs, and (iv) $0.2 million repurchases of our common stock.
+Added: For the nine months ended September 30, 2024, net cash flows used in financing activities primarily consisted of $8.2 million in cash payments for taxes related to net share settlement of equity awards, repurchases of common stock of $6.9 million, partially offset by $4.2 million of proceeds from our employee stock purchase plans and exercise of stock options.
Related Party Transactions
1 unchanged sentence
Off-Balance Sheet Agreements
−Removed: As of June 30, 2025, we do not have any off-balance sheet arrangements, investments in special purpose entities or undisclosed borrowings or debt.
+Added: As of September 30, 2025, we do not have any off-balance sheet arrangements, investments in special purpose entities or undisclosed borrowings or debt.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.