PDF SOLUTIONS INC 10-K

Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of PDF Solutions, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of PDF Solutions, Inc. (a Delaware corporation) and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission , and our report dated February 24, 2026 expressed an unqualified opinion. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. Revenue Recognition As described in Note 2 to the consolidated financial statements, the Company derives revenue from Platform and Volume-based revenue. Contracts with customers can include various combinations of licenses, subscriptions, products and services, some of which are distinct and are accounted for as separate performance obligations. Significant judgment is exercised by the Company in determining revenue recognition for customer agreements, including determining whether licenses, subscriptions and services are distinct performance obligations, determining the standalone selling price (“SSP”) attributed to each performance obligation, establishing the pattern of delivery for each distinct performance obligation and estimating variable consideration when determining the amount of revenue to recognize. In addition, for revenue under project-based contracts for fixed-price services, revenue is recognized as services are performed using a percentage-of-completion (“POC”) method based on costs or the labor-hours input method. 50 Table of Contents Estimated costs to complete each contract are based on i) future labor and product costs and ii) expected productivity efficiencies. Changes in these estimates can have a material effect on revenue recognized and/or the related costs. Finally, the Company recognizes Gainshare revenue in the same period in which the usage occurs. The Company accrues the related revenue based on estimates of customers’ underlying sales achievements. These estimates are based on historical data, trends, seasonality, changes in contract rate, knowledge of changes in the industry and changes in the customer’s manufacturing environment learned through discussions with customers and sales personnel. The principal audit considerations for our determination that performing procedures related to the Company’s revenue recognition for customer agreements is a critical audit matter are the significant amount of judgment required by management in this process. Significant judgment is required in determining SSP as the Company rarely licenses software on a standalone basis, so the Company is required to estimate the range of SSPs for each performance obligation, which in turn leads to significant auditor judgment, subjectivity and effort in performing audit procedures in assessing the allocation of SSPs to performance obligations. In addition, significant judgment is required in determining the total estimated contract costs for fixed-price contracts, which in turn leads to significant auditor judgment, subjectivity and effort in performing audit procedures and in evaluating audit evidence relating to the total estimated contract costs. Significant judgment is also required in recording Gainshare revenue in the same period in which the usage occurs. The Company generally does not receive acknowledgment reports from customers during a given quarter, so the Company is required to accrue the related revenue based on estimates of customers’ underlying sales achievements, which in turn leads to significant auditor judgment, subjectivity and effort in evaluating the reasonableness of these estimates based on historical data, trends, seasonality and other factors. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls related to (1) the identification of distinct performance obligations and data used to establish SSP for licenses, subscriptions, products and services, (2) project estimates to completion for fixed-fee arrangements accounted for under POC and (3) estimates of Gainshare revenue accrual and subsequent true-ups. These procedures also included, among others, evaluating management’s significant accounting policies related to these customer agreements for reasonableness. In addition, for a sample of customer agreements, we obtained and read contract source documents, including master agreements and other documents that were part of the agreement, tested management’s identification of significant terms for completeness, including the identification of distinct performance obligations and variable consideration, assessed the terms in the customer agreements and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions and tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the consolidated financial statements. In addition, we evaluated the reasonableness of management’s estimates of SSP for projects and services that are not sold separately and, where applicable, costs to complete for project-based contracts for fixed-price services and customers’ underlying achievements for Gainshare revenue. /s/ BPM LLP We have served as the Company’s auditor since 2018. San Jose, California February 24, 2026 51 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of PDF Solutions, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of PDF Solutions, Inc. (a Delaware corporation) and its subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2025 and 2024 and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”) of the Company, and our report dated February 24, 2026, expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ BPM LLP San Jose, California February 24, 2026 52 Table of Contents PDF SOLUTIONS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except par values) December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 42,220 $ 90,594 Short-term investments — 24,291 Accounts receivable, net of allowance for credit losses 82,938 73,649 Prepaid expenses and other current assets 38,735 17,445 Total current assets 163,893 205,979 Property and equipment, net 81,609 48,465 Operating lease right-of-use assets, net 4,778 4,029 Goodwill 95,005 14,953 Intangible assets, net 52,194 12,307 Deferred tax assets, net 69 43 Other non-current assets 21,149 29,513 Total assets $ 418,697 $ 315,289 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 17,076 $ 8,255 Accrued compensation and related benefits 22,437 16,855 Accrued and other current liabilities 8,719 8,752 Operating lease liabilities – current portion 1,982 1,675 Deferred revenues – current portion 19,441 25,005 Current portion of long-term debt, net 2,236 — Total current liabilities 71,891 60,542 Long-term income taxes 4,273 2,915 Operating lease liabilities – non-current portion 3,838 3,504 Long-term debt, net 64,763 — Other non-current liabilities 2,910 2,291 Total liabilities 147,675 69,252 Commitments and contingencies (Note 8) Stockholders’ equity: Preferred stock, $ 0.00015 par value, 5,000 shares authorized, no shares issued and outstanding — — Common stock, $ 0.00015 par value, 70,000 shares authorized; shares issued 51,726 and 50,717 , respectively; shares outstanding 39,541 and 38,801 , respectively 6 6 Additional paid-in capital 533,503 502,902 Treasury stock, at cost, 12,185 and 11,916 shares, respectively ( 165,808 ) ( 159,352 ) Accumulated deficit ( 94,628 ) ( 93,988 ) Accumulated other comprehensive loss ( 2,051 ) ( 3,531 ) Total stockholders’ equity 271,022 246,037 Total liabilities and stockholders’ equity $ 418,697 $ 315,289 See Accompanying Notes to Consolidated Financial Statements. 53 Table of Contents PDF SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except per share amounts) Year Ended December 31, 2025 2024 2023 Revenues: Platform $ 181,025 $ 157,166 $ 147,509 Volume-based 37,999 22,299 18,326 Total revenues 219,024 179,465 165,835 Costs and Expenses: Costs of revenues 60,623 54,144 51,749 Research and development 64,234 53,566 50,736 Selling, general, and administrative 84,736 69,924 62,216 Amortization of acquired intangible assets 3,584 896 1,285 Income (loss) from operations 5,847 935 ( 151 ) Interest expense ( 3,955 ) — — Interest income and other, net 1,309 5,644 5,020 Income before income tax expense 3,201 6,579 4,869 Income tax expense ( 3,841 ) ( 2,522 ) ( 1,764 ) Net income (loss) $ ( 640 ) $ 4,057 $ 3,105 Other comprehensive income (loss): Foreign currency translation adjustments, net of tax 1,489 ( 1,143 ) 148 Change in unrealized loss related to available-for-sale debt securities, net of tax ( 9 ) ( 1 ) 15 Total other comprehensive income (loss) 1,480 ( 1,144 ) 163 Comprehensive income $ 840 $ 2,913 $ 3,268 Net income (loss) per share: Basic $ ( 0.02 ) $ 0.11 $ 0.08 Diluted $ ( 0.02 ) $ 0.10 $ 0.08 Weighted average common shares used to calculate net income (loss) per share: Basic 39,317 38,602 38,015 Diluted 39,317 39,047 38,937 See Accompanying Notes to Consolidated Financial Statements. 54 Table of Contents PDF SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY (in thousands) Accumulated Additional Other Total Common Stock Paid-In Treasury Stock Accumulated Comprehensive Stockholders’ Shares Amount Capital Shares Amount Deficit Loss Equity Balances, January 1, 2023 37,431 $ 6 $ 447,415 11,182 $ ( 133,709 ) $ ( 101,150 ) $ ( 2,550 ) $ 210,012 Shares issued under equity plans 879 — 4,324 — — — — 4,324 Shares withheld for taxes related to shares issued under equity plans — — — 257 ( 9,471 ) — — ( 9,471 ) Repurchase of common stock ( 21 ) — — 21 ( 743 ) — — ( 743 ) Stock-based compensation expense — — 21,556 — — — — 21,556 Comprehensive income — — — — — 3,105 163 3,268 Balances, December 31, 2023 38,289 6 473,295 11,460 ( 143,923 ) ( 98,045 ) ( 2,387 ) 228,946 Shares issued under equity plans 714 — 4,196 — — — — 4,196 Shares withheld for taxes related to shares issued under equity plans — — — 254 ( 8,530 ) — — ( 8,530 ) Repurchase of common stock ( 202 ) — — 202 ( 6,899 ) — — ( 6,899 ) Stock-based compensation expense — — 25,411 — — — — 25,411 Comprehensive income (loss) — — — — — 4,057 ( 1,144 ) 2,913 Balances, December 31, 2024 38,801 6 502,902 11,916 ( 159,352 ) ( 93,988 ) ( 3,531 ) 246,037 Shares issued under equity plans 753 — 4,244 — — — — 4,244 Shares withheld for taxes related to shares issued under equity plans — — — 256 ( 6,212 ) — — ( 6,212 ) Repurchase of common stock ( 13 ) — — 13 ( 244 ) — — ( 244 ) Stock-based compensation expense — — 26,357 — — — — 26,357 Comprehensive income (loss) — — — — — ( 640 ) 1,480 840 Balances, December 31, 2025 39,541 $ 6 $ 533,503 12,185 $ ( 165,808 ) $ ( 94,628 ) $ ( 2,051 ) $ 271,022 See Accompanying Notes to Consolidated Financial Statements. 55 Table of Contents PDF SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ ( 640 ) $ 4,057 $ 3,105 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation expense 25,925 25,047 21,484 Depreciation and amortization 4,085 3,628 4,986 Amortization of acquired intangible assets 7,255 3,231 3,551 Amortization of costs capitalized to obtain revenue contracts 3,155 2,674 2,142 Net accretion of discounts on short-term investments ( 279 ) ( 1,542 ) ( 1,174 ) Loss on damaged equipment in-transit, net of (recovery) from previously written-off property and equipment ( 641 ) 586 — Deferred taxes 895 ( 74 ) ( 108 ) Other ( 103 ) 2,386 ( 198 ) Changes in operating assets and liabilities: Accounts receivable ( 6,343 ) ( 28,800 ) ( 2,748 ) Prepaid expenses and other current assets ( 16,361 ) ( 2,033 ) ( 7,329 ) Operating lease right-of-use assets 1,589 1,580 1,205 Other non-current assets 6,574 ( 3,577 ) ( 4,166 ) Accounts payable 4,882 2,791 ( 2,145 ) Accrued compensation and related benefits 5,255 2,288 ( 2,188 ) Accrued and other liabilities ( 2,630 ) 1,780 110 Deferred revenues ( 6,866 ) ( 2,629 ) ( 640 ) Operating lease liabilities ( 1,699 ) ( 1,690 ) ( 1,287 ) Net cash provided by operating activities 24,053 9,703 14,600 Cash flows from investing activities: Proceeds from maturities and sales of short-term investments 27,498 68,125 43,800 Purchases of short-term investments ( 2,937 ) ( 54,331 ) ( 59,598 ) Purchase of convertible promissory note — ( 2,000 ) — Purchases of property and equipment ( 32,631 ) ( 17,155 ) ( 11,236 ) Prepayment for the purchase of property and equipment ( 214 ) ( 630 ) ( 89 ) Proceeds from sale and recovery from previously written-off property and equipment 641 55 105 Purchases of intangible assets — — ( 150 ) Payment for business acquisition, net of cash acquired ( 129,718 ) — ( 1,823 ) Net cash used in investing activities ( 137,361 ) ( 5,936 ) ( 28,991 ) Cash flows from financing activities: Proceeds from long-term debt, net of debt discount 69,550 — — Payments of debt issuance costs ( 900 ) — — Repayments of long-term debt ( 1,875 ) — — Proceeds from exercise of stock options and employee stock purchase plan 4,244 4,196 4,324 Payments for taxes related to net share settlement of equity awards ( 6,212 ) ( 8,530 ) ( 9,471 ) Repurchases of common stock ( 244 ) ( 6,899 ) ( 743 ) Net cash provided by (used in) financing activities 64,563 ( 11,233 ) ( 5,890 ) Effect of exchange rate changes on cash and cash equivalents 371 ( 918 ) ( 365 ) Net change in cash and cash equivalents ( 48,374 ) ( 8,384 ) ( 20,646 ) Cash and cash equivalents at beginning of year 90,594 98,978 119,624 Cash and cash equivalents at end of year $ 42,220 $ 90,594 $ 98,978 Continued on next page. 56 Table of Contents PDF SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED (in thousands) Year Ended December 31, 2025 2024 2023 Supplemental disclosure of cash flow information: Cash payments for: Income taxes $ 2,701 $ 2,562 $ 3,783 Amounts included in the measurement of operating lease liabilities $ 1,960 $ 1,784 $ 1,648 Interest on long-term debt $ 3,720 $ — $ — Supplemental disclosure of noncash information: Prepayments for purchase of property and equipment transferred from prepaid assets to property and equipment $ 505 $ 89 $ 66 Property and equipment received and accrued in accounts payable and accrued and other current liabilities $ 12,291 $ 7,272 $ 1,599 Net carrying value of property and equipment sold and expensed in cost of revenues, and property and equipment transferred to sales-type leases and from other non-current assets, net $ 3,242 $ 7,157 $ 8,076 Stock-based compensation capitalized as property and equipment $ 432 $ 364 $ 72 Operating lease liabilities arising from obtaining right-of-use assets $ 2,292 $ 718 $ 131 See A ccompanying Notes to Consolidated Financial Statements. 57 Table of Contents PDF SOLUTIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business PDF Solutions, Inc. (the “Company” or “PDF”), provides products and services designed to empower organizations across the semiconductor and electronics ecosystem to connect, collect, manage, and analyze data about design, equipment, manufacturing, and test to improve the yield and quality of their products and operational efficiency. The Company’s products, services, and solutions include proprietary software, physical intellectual property (“IP”) for integrated circuit (“IC”) designs, electrical measurement hardware tools, proven methodologies, and professional services. Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after the elimination of all significant intercompany balances and transactions. Reclassification Certain immaterial prior period amounts have been reclassified to conform with current period presentation with no effect on previously reported total assets, total liabilities, stockholders' equity or net income. Change in Presentation of Revenues As the Company’s business has evolved to include revenue from a broader portfolio of products and services, as a result of organic and inorganic expansion, beginning with this Annual Report on Form 10 -K, the Company updated its presentation of revenue categories. Previously, the Company presented revenue in two categories: Analytics and Integrated Yield Ramp. Analytics revenue was derived from the following offerings: licenses and services for on-premise software, software-as-a-service (“SaaS”), licenses and purchase contracts for DirectScan™ systems (formerly known as “DFI systems”), and Characterization Vehicle® systems that did not include performance incentives based on customers’ yield achievement. Integrated Yield Ramp revenue was comprised of all fees from the Company’s contracts that included any performance incentives based on customers’ yield achievement. The Company now presents revenue in the following categories: Platform and Volume-based. Platform revenue is derived from the Company's following offerings: licenses for software (other than Cimetrix® runtime licenses) and related software maintenance and technical support services; SaaS; engineering services; fixed fees associated with CV® systems; and licenses and purchase contracts for DirectScan systems. Volume-based revenue is derived from Cimetrix runtime licenses, secureWISE® data, and Gainshare. See Note 2, “Revenue from Contracts with Customers.” The change in presentation of revenues does not change the Company’s total revenues or total costs of revenues. The following table presents reclassified historical amounts to conform to the current period’s presentation (in thousands): Year Ended December 31, 2024 2023 Previously Reported Change in Presentation Reclassification Current Presentation Previously Reported Change in Presentation Reclassification Current Presentation Revenues: Analytics $ 169,253 $ ( 169,253 ) $ — $ 152,085 $ ( 152,085 ) $ — Integrated Yield Ramp 10,212 ( 10,212 ) — 13,750 ( 13,750 ) — Platform N/A 157,166 157,166 N/A 147,509 147,509 Volume-based N/A 22,299 22,299 N/A 18,326 18,326 $ 179,465 $ — $ 179,465 $ 165,835 $ — $ 165,835 58 Table of Contents Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these consolidated financial statements include revenue recognition, the estimated useful lives of property and equipment and intangible assets, assumptions made in analysis of allowance for credit losses, fair values of assets acquired and liabilities assumed in business combinations, impairment of goodwill and long-lived assets, valuation for deferred tax assets, and accounting for lease obligations, stock-based compensation expense, and income tax uncertainties and contingencies. 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. The Company’s policy is to accrue contingent legal fees when they are probable and reasonably estimable. Actual results could differ from those estimates and may result in material effects on the Company’s operating results and financial position. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, and accounts receivable. As of December 31, 2025 and 2024, and periodically throughout the year, the Company had cash balances in various operating accounts in excess of federally insured limits. The Company maintains its cash and cash equivalents with what it considers high credit quality financial institutions. The Company primarily sells its products and services to companies in Asia, Europe, and North America within the semiconductor industry. As of December 31, 2025 , two customers accounted for 64 % of the Company’s gross accounts receivable and three customers accounted for 53 % of the Company’s total revenues for 2025 . As of December 31, 2024 , four customers accounted for 57 % of the Company’s gross accounts receivable and two customers accounted for 31 % of the Company’s total revenues for 2024 . One customer accounted for 35 % of the Company’s revenues for 2023. See Note 13, “Customer and Geographic Information” for further details. The Company does not require collateral or other security to support accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition. The Company maintains allowances for potential credit losses. The allowance for credit losses, which was based on management’s best estimates, could be adjusted in the near term from current estimates depending on actual experience. Such adjustments could be material to the consolidated financial statements. Supplier Concentration Some of the Company’s vendors provide highly specialized, differentiated products and services related to the Company’s DirectScan system and some licensors provide key enabling software for the Company’s products and services. In the event any of these suppliers delay or discontinue providing such products and services to the Company, it may be difficult for the Company to replace such suppliers, software, or parts in a timely manner or at all, which could delay or make impossible the Company’s ability to deliver or adequately support its software systems or to complete and deliver its DirectScan systems to its customers, and could negatively impact the Company’s future financial results of operations. 59 Table of Contents Cash, Cash Equivalents, and Investments The Company considers all highly liquid investments with effective maturities of 90 days or less on the date of purchase to be cash equivalents. Investments with effective maturities greater than 90 days but less than one year are considered short-term investments, while investments with effective maturities greater than one year are considered long-term investments. The Company classifies its securities as available-for-sale investments and are carried at estimated fair value, with the unrealized gains and unrealized non-credit-related losses, net of tax, reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Unrealized credit-related losses are recorded to interest income and other, net in the Consolidated Statements of Operations and Comprehensive Income (Loss) with a corresponding allowance for credit-related losses in the Consolidated Balance Sheets. Realized gains and losses are based on the specific identification method and are included as a component of interest income and other, net in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company periodically reviews its investments for impairment. For investments in unrealized loss positions, the Company assesses whether any portion of the decline in fair value below the amortized cost basis is due to credit-related factors if the Company neither intends to sell nor anticipates that it is more likely than not that it will be required to sell prior to recovery of the amortized cost basis. The Company considers factors such as the extent to which the market value has been less than the amortized cost basis, any noted failure of the issuer to make scheduled interest or principal payments, changes to the rating of the security by a rating agency and other relevant credit-related factors in determining whether or not a credit loss exists. There was no allowance for credit-related losses on any of the Company’s investments recognized during the years ended December 31, 2025 and 2024 . Short-term investments consisted solely of U.S. Government securities and other current investments consisted of a non-marketable convertible promissory note. The cost of these securities approximated fair value and there was no material gross realized or unrealized gains or losses as of December 31, 2025 and 2024 . See Note 14, “Fair Value Measurements” for further discussion on the Company’s investments. The Company recorded interest income from its cash, cash equivalents, and short-term investments of $ 1.5 million, $ 5.6 million and $ 5.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Accounts Receivable Accounts receivable includes amounts that are unbilled at the end of the period that are expected to be billed and collected within a 12‑month period. Unbilled accounts receivable are determined on an individual contract basis. Unbilled accounts receivable, included in accounts receivable, totaled $ 44.8 million and $ 23.0 million as of December 31, 2025 and 2024 , respectively. Unbilled accounts receivable that are not expected to be billed and collected during the succeeding 12‑month period are recorded in other non-current assets and totaled $ 8.7 million and $ 9.0 million as of December 31, 2025 and 2024 , respectively. The Company performs ongoing credit evaluations of its customers’ financial condition. An allowance for credit losses is maintained for probable credit losses based upon the Company’s assessment of the expected collectibility of the accounts receivable. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance. The changes in allowance for credit losses are summarized below (in thousands): Deductions/ Balance at Write-offs Balance at Beginning Charged to of Accounts End of of Year Expense (1) Receivable Year 2025 $ 890 $ 168 $ ( 168 ) $ 890 2024 $ 890 $ — — $ 890 2023 $ 890 $ 20 $ ( 20 ) $ 890 ( 1 ) Additions to the accounts receivable reserve for credit losses are charged to bad debt expense. 60 Table of Contents Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives (in years) of the related asset as follows: Computer equipment 3 Software and capitalized software development cost 3 - 5 Furniture, fixtures, and equipment 5 - 10 Laboratory and test equipment 3 - 10 Leasehold improvements Shorter of estimated useful life or term of lease Intangible Assets Intangible assets consist of acquired technology, certain contract rights, customer relationships, patents, trademarks and trade names. These intangible assets may be acquired through business combinations or direct purchases. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from one to ten years. The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets, including property and equipment and intangible assets, may not be recoverable. When such events or changes in circumstances occur, the Company assesses the recoverability of long-lived assets. Recoverability of an asset group is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset group is expected to generate. If it is determined that an asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset group exceeds its fair value. Goodwill The Company records goodwill when the purchase consideration of an acquisition exceeds the fair value of the net tangible and identified intangible assets as of the date of acquisition. The Company has one operating segment and one operating unit. The Company performs a qualitative analysis when testing a reporting unit’s goodwill for impairment. The Company performs an annual impairment assessment of goodwill during the fourth quarter of each calendar year or more frequently, if required to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If the carrying amount exceeds its fair value, an impairment loss would be recognized equal to the amount of excess, limited to the amount of total goodwill. Leases The Company has operating leases for administrative and sales offices, research and development laboratory and clean room. The Company recognizes long-term operating lease rights and commitments as operating lease right-of-use (“ROU”) assets and operating lease liabilities, respectively, in the Consolidated Balance Sheets. The Company elected to not separate lease and non-lease components for all of its leases. The Company determines if an arrangement is, or contains, a lease at inception. Operating lease ROU assets, and operating lease liabilities are initially recorded based on the present value of lease payments over the lease term. Lease terms include the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. The decision to include these options involves consideration of the Company’s overall future business plans and other relevant business economic factors that may affect its business. Since the determination of the lease term requires an application of judgment, lease terms that differ in reality from the Company’s initial judgment may potentially have a material impact on the Company’s Consolidated Balance Sheets. In addition, the Company’s leases do not provide an implicit rate. In determining the present value of the Company’s expected lease payments, the discount rate is calculated using the Company’s incremental borrowing rate determined based on the information available, which requires additional judgment. 61 Table of Contents Software Development Costs Internally developed software is software developed to meet the Company’s internal needs to provide certain services to the customers. The Company’s capitalized software development costs consist of internal compensation related costs and external direct costs incurred during the application development stage and are amortized over their useful lives, generally for five years. The costs to develop software that is marketed externally consisting of external direct costs and internal compensation related costs are capitalized once technological feasibility of the software product has been established. Costs incurred prior to establishing technological feasibility are expensed as incurred. Technological feasibility is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the software product can be produced to meet its design specifications. Capitalization of such costs ceases when the software product is generally available to customers. These software development costs are amortized using the greater of the straight-line method or the usage method over its estimated useful life. Costs of Revenues Costs of revenues consist primarily of costs incurred to provide and support the Company’s services, costs recognized in connection with licensing its software, information technology (“IT”) and facilities-related costs and amortization of acquired technology. Service costs include material costs, hardware costs (including cost of leased assets under sales-type leases), personnel-related costs (including compensation, employee benefits, bonus and stock-based compensation expense), subcontractor costs, overhead costs, travel, allocated facilities-related costs and product warranty expense. Software license costs consist of costs associated with cloud-delivery related expenses and licensing third -party software used by the Company in providing services to its customers in solution engagements or sold in conjunction with the Company’s software products. Research and Development Expenses Research and development expenses consist primarily of personnel-related costs (including compensation, employee benefits, bonus and stock-based compensation expense), outside development services, travel, third -party cloud-services related costs, IT and facilities cost allocations to support product development activities. Research and development expenses are charged to operations as incurred. Selling, General and Administrative Expenses Selling, general and administrative expenses consist primarily of personnel-related costs (including compensation, employee benefits, bonus, commission and stock-based compensation expense for sales, marketing and general and administrative personnel), legal, tax and accounting services, marketing communications and trade conference-related expenses, third -party cloud-services related costs, travel, IT and facilities cost allocations. Stock-Based Compensation The Company accounts for stock-based compensation using the fair value method, which requires the Company to measure stock-based compensation based on the grant-date fair value of the awards and recognize the compensation expense over the requisite service period. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The fair value of the Company’s restricted stock units (“RSUs”) is equal to the market value of the Company’s common stock on the date of the grant. These awards are subject to time-based vesting which generally occurs over a period of four years. The fair value of the Company’s stock options and purchase rights granted under employee stock purchase plan is estimated using the Black-Scholes-Merton option-pricing model, which incorporates various assumptions including volatility, expected life and interest rates. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options and purchase rights granted under employee stock purchase plan. The expected life is based on historical experience and on the terms and conditions of the stock options granted and purchase rights granted under employee stock purchase plan. The interest rate assumption is based upon observed Treasury yield curve rates appropriate for the expected life of the Company’s stock options and purchase rights granted under employee stock purchase plan. 62 Table of Contents Income Taxes The Company’s income tax expense comprises current tax liability and changes in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effect of future changes in tax laws or rates are not anticipated. Valuation allowances are provided to reduce deferred tax assets to an amount that in management’s judgment is more likely than not to be recoverable against future taxable income. No U.S. taxes are provided on earnings of non-U.S. subsidiaries, to the extent such earnings are deemed to be permanently invested. The Company’s income tax calculations are based on application of applicable U.S. federal and state or foreign tax laws. The Company’s tax filings, however, are subject to audit by the respective tax authorities. Accordingly, the Company recognizes tax liabilities based upon its estimate of whether, and the extent to which, additional taxes will be due when such estimates are more likely than not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. To the extent the final tax liabilities are different from the amounts originally accrued, the increases or decreases are recorded as income tax expense or benefit in the Consolidated Statements of Operations and Comprehensive Income (Loss). Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share is computed using the weighted average number of common shares outstanding for the period plus the potential effect of dilutive securities which are convertible into common shares (using the treasury stock method), except in cases in which the effect would be anti-dilutive. Dilutive potential common shares consist of incremental common shares issuable upon exercise of stock options, upon vesting of RSUs, contingently issuable shares for all periods and assumed issuance of shares under the Company’s employee stock purchase plan. No dilutive potential common shares are included in the computation of any diluted per share amount when a loss from continuing operations is reported by the Company. Foreign Currency Translation The functional currency of the Company’s foreign subsidiaries is the local currency for the respective subsidiary. The assets and liabilities are translated at the period-end exchange rate, and Statements of Operations and Comprehensive Income (Loss) are translated at the average exchange rate during the year. Gains and losses resulting from foreign currency translations are included as a component of other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Operations and Comprehensive Income (Loss). Business Combinations The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values at the date of the business combination. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, estimated replacement costs and future expected cash flows from acquired customers, acquired technology, acquired patents, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects the Company’s amortization expense, as acquired finite-lived intangible assets are amortized over their useful life, whereas any indefinite lived intangible assets, including in-process research and development, and goodwill, are not amortized but tested annually for impairment. During the measurement period, which is not to exceed one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings in the Consolidated Statements of Operations and Comprehensive Income (Loss). Litigation From time to time, the Company is subject to various claims and legal proceedings that arise in the ordinary course of business. The Company accrues for losses related to litigation when a potential loss is probable and the loss can be reasonably estimated, and recognizes gains related to litigation at the earlier of when the gain has been realized or when it is realizable in accordance with Financial Accounting Standards Board (“FASB”) requirements. See Note 8, “Commitments and Contingencies.” 63 Table of Contents Recently Adopted Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures (“ASU 2023 - 09” ). This ASU included amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The Company adopted this ASU on January 1, 2025 prospectively. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. See required disclosures in Note 11, “Income Taxes.” Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024 - 03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses . 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. 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. This ASU may be applied either prospectively or retrospectively. The Company is currently evaluating the impact of the new standard on the consolidated financial statements and related disclosures. In July 2025 , the FASB issued ASU 2025 - 05, Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient to measure credit losses on accounts receivable and contract assets. This ASU is effective for annual periods beginning after December 15, 2025 , and interim periods within those annual reporting periods. Early adoption is permitted. 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. 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. 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. This ASU is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, and permits prospective, modified prospective or retrospective adoption. The Company is currently evaluating the effects of this guidance on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025 - 11, Interim Reporting (Topic 270 ): Narrow-Scope Improvements, which intends to improve the navigability of the guidance in Accounting Standards Codification (“ASC”) 270, Interim Reporting , and clarify when it applies. The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods. This ASU is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, and permits prospective or full retrospective adoption. Early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025 - 12, Codification Improvements , which addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260, Earnings Per Share , retrospectively. All other amendments may be applied prospectively or retrospectively. Early adoption is permitted. The Company is evaluating the impact of this guidance on its 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 have had or will have a material impact on the consolidated financial statements. 64 Table of Contents 2. REVENUE The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers , and its related amendments (collectively known as “ASC 606” ). ASC 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. Revenue is recognized when control of products or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those promised products or services. The Company determines revenue recognition through the following five steps: ● Identification of the contract, or contracts, with a customer ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, performance obligations are satisfied The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectibility of consideration is probable. The Company enters into contracts that can include various combinations of licenses, products and services, some of which are distinct and are accounted for as separate performance obligations. For contracts with any combination of the Company’s products and services, distinct performance obligations are accounted for separately. For contracts with these multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using the standalone selling price (“SSP”) attributed to each performance obligation. Revenue for each of these components is recognized as described below and reported as either Platform or Volume-based revenue. Platform Revenue Platform revenue is derived from the following primary offerings: licenses for software (other than Cimetrix runtime licenses) and related software maintenance and technical support services; SaaS; engineering services; fixed fees associated with CV systems; and licenses and purchase contracts for DirectScan systems. Revenue from licenses for software, other than Cimetrix runtime licenses, is recognized depending on whether the license is perpetual or time-based. Perpetual ( one -time charge) license software is recognized at the time of the inception of the arrangement when control transfers to the customers as the software license is considered as a separate performance obligation from the services offered by the Company. Revenue from time-based-licensed software is allocated to each performance obligation and is recognized either at a point in time or over time as follows. The license component is recognized at the time when control transfers to customers. Revenue from related software maintenance and technical support services, or post-contract support, is recognized over the contract term on a straight-line basis because the Company generally provides (i) support and (ii) certain software updates on a when-and-if available basis over the contract term. Revenue from SaaS arrangements, which allow for the use of a software product or service over a contractually determined period of time without the customer taking possession of the software, e.g., cloud-based or via a network of secureWISE servers, is accounted for as a subscription and is recognized as revenue ratably, on a straight-line basis, over the subscription period beginning on the date the service is first made available to customers. Revenue from engineering services and fixed fees associated with CV systems (including Characterization services) is recognized primarily as services are performed, using a percentage of completion method based on costs or labor-hours inputs, whichever is the most appropriate measure of the progress towards completion of the contract. The estimation of percentage of completion method is complex and subject to many variables that require significant judgment. Please refer to the “Significant Judgments” section of this Note for further discussion. When a CV system engagement includes CV test chip designs that were previously developed by the Company and reused with only minimal rework or were previously developed by the Company and adapted to different customer applications with limited rework, the revenue allocated to these CV test chip designs is recognized when the rework is completed at a point in time upon delivery or contract signature, whichever is later. All revenue associated with other CV test chip designs are recognized over time using a percentage of completion method. 65 Table of Contents Revenue from purchase contracts for DirectScan systems is recognized at a point in time when the Company’s performance obligations have been completed, and the customer has accepted the product. Revenue from licenses for hardware is recognized depending on whether the Company classifies the contract as an operating or a sales-type lease. Where the customer controls the use of identified assets for a period of time defined in a contract, it will be classified as a sales-type lease if it meets certain criteria under ASC Topic 842, Leases , otherwise, it will be classified as an operating lease. Operating lease revenue is recognized on a straight-line basis over the lease term. Sales-type lease revenue and corresponding lease receivables are recognized at lease commencement based on the present value of the future lease payments, and related interest income on lease receivable is recognized over the lease term and recorded under Platform revenue in the Consolidated Statements of Operations and Comprehensive Income (Loss). Payments under sales-type leases are discounted using the interest rate implicit in the lease. When the Company’s leases are embedded in contracts with customers that include non-lease performance obligations, the Company allocates consideration in the contract between lease and non-lease components based on their relative SSPs. Assets subject to operating leases are included in property and equipment and subject to depreciation. Assets subject to sales-type leases are derecognized from property and equipment, net at lease commencement and a net investment in the lease asset is recognized in prepaid expenses and other current assets and other non-current assets in the Consolidated Balance Sheets. Volume-based Revenue Volume-based revenue is derived from Cimetrix runtime licenses, secureWISE data, and Gainshare. Accordingly, this revenue typically fluctuates based on customers’ production tool shipments and deployment cycles, data transferred through the secureWISE network, and wafer manufacturing volume, as applicable. Revenue from Cimetrix runtime licenses is recognized at a point in time when the software is delivered via issuance of a license file. Revenue from secureWISE data is recognized over the period the data transfer is incurred. Revenue from Gainshare is typically recognized at a point in time based on customers’ wafer manufacturing volumes. Please refer to the “Significant Judgments” section of this Note for discussion about the Company’s judgments and estimates pertaining to Gainshare revenue. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into categories which depict how the nature, amount, timing, uncertainty of revenue and cash flows are affected by economic factors, and how it could provide meaningful information to its management and investors. The following table shows the percentage of total revenue that is classified as recurring and upfront for the periods presented: Year Ended December 31, 2025 2024 2023 Recurring revenue (1) 94 % 81 % 87 % Upfront revenue (2) 6 % 19 % 13 % Total 100 % 100 % 100 % ( 1 ) Recurring revenue is comprised of revenue that either recurs on a regular schedule (e.g., SaaS and other services and time-based licenses) or is a type of revenue that generally has often re-occurred in the past (e.g., Cimetrix runtime licenses, secureWISE data, and Gainshare), and that is not Upfront revenue. Though these types of revenue have re-occurred in the past, past events are not necessarily indicative of future results and no assurance can be provided that they will occur in the future. ( 2 ) Upfront revenue is comprised of revenue from Exensio perpetual licenses, certain CV test chip designs, and hardware-related sales-type leases or sales. 66 Table of Contents The following table shows revenues from contracts with customers from geographical regions, based on billing address of the customer (amounts in thousands): Year Ended December 31, 2025 2024 2023 Percentage Percentage Percentage Revenues of Revenues Revenues of Revenues Revenues of Revenues United States $ 104,764 48 % $ 74,341 41 % $ 92,798 56 % Japan 39,287 18 % 37,427 21 % 10,465 6 % China 33,941 15 % 22,102 12 % 26,488 16 % Rest of the world 41,032 19 % 45,595 26 % 36,084 22 % Total revenue $ 219,024 100 % $ 179,465 100 % $ 165,835 100 % International revenues accounted for approximately 52 %, 59 %, and 44 % of total revenues for the years ended December 31, 2025, 2024 and 2023, respectively. Significant Judgments Judgments and estimates are required under ASC 606. Due to the complexity of certain contracts, the actual revenue recognition treatment required under ASC 606 for the Company’s arrangements may be dependent on contract-specific terms and may vary in some instances. For revenue under project-based contracts for fixed-price services, revenue is recognized as services are performed using a percentage-of-completion method based on costs or labor-hours input method, whichever is the most appropriate measure of the progress towards completion of the contract. Due to the nature of the work performed in these arrangements, the estimation of percentage of completion method is complex, subject to many variables and requires significant judgment. Key factors reviewed by the Company to estimate costs to complete each contract are future labor and product costs and expected productivity efficiencies. If circumstances arise that change the original estimates of revenues, costs, or extent of progress toward completion, revisions to the estimates are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in revenue on a cumulative catch-up basis in the period in which the circumstances that gave rise to the revision become known. The Company’s contracts with customers often include promises to transfer products, software licenses and provide services, including professional services, technical support services, and rights to unspecified updates to a customer. Determining whether licenses and services are distinct performance obligations that should be accounted for separately, or not distinct and thus accounted for together, requires significant judgment. The Company rarely licenses software on a standalone basis, so the Company is required to estimate the range of SSPs for each performance obligation. In instances where the SSP is not directly observable because the Company does not license the software or sell the service separately, the Company determines the SSP using information that may include market conditions and other observable inputs. The Company typically recognizes Gainshare revenue in the same period in which the usage occurs. Because the Company generally does not receive the acknowledgment reports from its customers during a given quarter within the time frame necessary to adequately review the reports and include the actual amounts in quarterly results for such quarter, the Company accrues the related revenue based on estimates of customers underlying sales achievement. The Company’s estimation process can be based on historical data, trends, seasonality, changes in the contract rate, knowledge of the changes in the industry and changes in the customer’s manufacturing environment learned through discussions with customers and sales personnel. As a result of accruing revenue for the quarter based on such estimates, adjustments will be required in the following quarter to true-up revenue to the actual amounts reported. 67 Table of Contents Contract Balances The Company performs its obligations under a contract with a customer by licensing software or providing services in exchange for consideration from the customer. The timing of the Company’s performance often differs from the timing of the customer’s payment, which results in the recognition of a receivable, a contract asset or a contract liability. The Company classifies the right to consideration in exchange for software or services transferred to a customer as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional, as compared to a contract asset, which is a right to consideration that is conditional upon factors other than the passage of time. The majority of the Company’s contract assets represent unbilled amounts related to fixed-price service contracts when the revenue recognized exceeds the amount billed to the customer. The $ 7.4 million increase in contract assets as of December 31, 2025 compared to December 31, 2024 was primarily due to revenue recognized in 2025 for which the payment is subject to conditions other than the passage of time. The contract assets are generally classified as current and are recorded on a net basis with deferred revenues (i.e. contract liabilities) at the contract level. The contract assets consisted of the following (in thousands): December 31, 2025 2024 Current (included in Prepaid expenses and other current assets) $ 11,267 $ 3,224 Non-current (included in Other non-current assets) — 617 Total contract assets $ 11,267 $ 3,841 There was no asset impairment charge related to contract assets for the years presented. Deferred revenues and billings in excess of recognized revenues consist substantially of amounts invoiced in advance of revenue recognition and are recognized as the revenue recognition criteria are met. Deferred revenues that will be recognized during the succeeding twelve -month period are recorded as current deferred revenues and the remaining portion is recorded in other non-current liabilities in the Consolidated Balance Sheets. The $ 6.2 million decrease in contract liabilities as of December 31, 2025 compared to December 31, 2024 was primarily driven by revenue recognized in 2025, partially offset by new billing from products and services from which there are unsatisfied performance obligations to customers, and revenue had not yet been recognized as of December 31, 2025, and increase in deferred revenue from the acquisition of SecureWise. Deferred revenues were as follows (in thousands): December 31, 2025 2024 Current $ 19,441 $ 25,005 Non-current (included in Other non-current liabilities) 865 1,512 Total deferred revenues $ 20,306 $ 26,517 Additional information related to deferred revenues was as follows (in thousands): Year Ended December 31, 2025 2024 2023 Revenue recognized that was included in the deferred revenues and billings in excess of recognized revenues balances at the beginning of each year $ 24,717 $ 27,654 $ 24,776 68 Table of Contents As of December 31, 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 $ 254.2 million. Given the applicable contract terms with customers, the majority of this amount is expected to be recognized as revenue over the next two years, with the remainder recognized thereafter. This amount does not include significant contracts to which the customer is not committed, future sales-based or usage-based royalty payments in exchange for a license of IP, and future payments for performance obligations from on-demand arrangements. This amount is subject to change due to future revaluations of variable consideration, terminations, other contract modifications, or currency adjustments. 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. The adjustment to revenue recognized for the years ended December 31, 2025, 2024 and 2023 from performance obligations satisfied (or partially satisfied) in previous periods were increases of $ 0.2 million, $ 2.5 million, and $ 3.7 million, respectively. These amounts primarily represent changes in estimated percentage-of-completion based contracts and changes in actual versus estimated Gainshare revenue. Costs to Obtain or Fulfill a Contract The Company capitalizes the incremental costs to obtain or fulfill a contract with a customer, including direct sales commissions and related fees, when it expects to recover those costs. The Company determined the period of benefit by taking into consideration the terms of its customer contracts, generally, from one to five years. Amortization expense related to these capitalized costs is recognized over the period associated with the revenue from which the cost was incurred. Total capitalized direct sales commission costs were as follows (in thousands): December 31, 2025 2024 Current (included in Prepaid expenses and other current assets) $ 2,489 $ 2,929 Non-current (included in Other non-current assets) 3,395 2,385 Total capitalized direct sales commission costs $ 5,884 $ 5,314 The amortization of capitalized direct sales commission costs were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Amortization of capitalized direct sales commission costs $ 3,155 $ 2,674 $ 2,142 There was no impairment loss related to the capitalized direct sales commission costs for the years presented. Practical Expedients The Company does not adjust transaction price for the effects of a significant financing component when the period between the transfers of the promised good or service to the customer and payment for that good or service by the customer is expected to be one year or less. The Company assessed each of its revenue generating arrangements in order to determine whether a significant financing component exists, and determined its contracts did not include a significant financing component for the years ended December 31, 2025, 2024 and 2023. 69 Table of Contents 3. BALANCE SHEET COMPONENTS Prepaid expenses and other current assets Prepaid and other current assets were as follows (in thousands): December 31, 2025 2024 Net investments in sales-type leases - current portion (1) $ 14,248 $ 4,526 Contract assets (2) 11,267 3,224 Prepaid expense 6,595 5,824 Costs capitalized to obtain revenue contracts (3) 2,489 2,929 Other 4,136 942 Total prepaid expenses and other current assets $ 38,735 $ 17,445 ( 1 ) See Note 5, “Other Non-Current Assets.” ( 2 ) See “Contract Balances” section of Note 2, “Revenue from Contracts with Customers.” ( 3 ) See “Costs to Obtain or Fulfill a Contract” section of Note 2, “Revenue from Contracts with Customers.” Property and Equipment Property and equipment were as follows (in thousands): December 31, 2025 2024 Computer equipment $ 14,547 $ 10,799 Software and capitalized software development cost 10,408 5,617 Furniture, fixtures, and equipment 2,668 2,529 Leasehold improvements 7,033 6,691 Laboratory and other equipment 6,737 5,734 Test equipment 33,268 22,680 Property and equipment in progress: DirectScan system assets 49,184 34,935 CV system and other assets 8,621 6,431 Total property and equipment 132,466 95,416 Less: Accumulated depreciation and amortization ( 50,857 ) ( 46,951 ) Total property and equipment, net $ 81,609 $ 48,465 Test equipment mainly includes DirectScan systems and CV systems assets at customer sites that are contributing to revenue. Property and equipment in progress represent the development or construction of property and equipment that have not yet been placed in service for the Company’s intended use and are not depreciated. Depreciation and amortization expense for the years ended December 31, 2025, 2024 and 2023 were $ 4.1 million, $ 3.6 million, and $ 5.0 million, respectively. 70 Table of Contents Accrued and other current liabilities Accrued and other current liabilities were as follows (in thousands): December 31, 2025 2024 Accrued expenses $ 7,061 $ 7,156 Accrued income taxes 297 365 Other 1,361 1,231 Total accrued and other current liabilities $ 8,719 $ 8,752 4. GOODWILL AND INTANGIBLE ASSETS The Company completed the acquisition of SecureWise LLC (“SecureWise”) on March 7, 2025. See Note 16, “Business Combination” for additional information related to the goodwill and intangible assets added from this acquisition. The changes in goodwill were as follows (in thousands): Year Ended December 31, 2025 2024 Balance at the beginning of year $ 14,953 $ 15,029 Addition 81,686 — Measurement period acquisition adjustment ( 1,677 ) — Foreign currency translation adjustment 44 ( 76 ) Balance at the end of year $ 95,005 $ 14,953 Intangible assets were as follows (in thousands): December 31, 2025 December 31, 2024 Amortization Gross Net Gross Net Period Carrying Accumulated Carrying Carrying Accumulated Carrying (Years) Amount Amortization Amount Amount Amortization Amount Acquired intangible assets: Customer relationships 1 - 13 $ 38,404 $ ( 10,034 ) $ 28,370 $ 9,499 $ ( 7,866 ) $ 1,633 Developed technology 4 - 9 46,215 ( 28,466 ) 17,749 34,566 ( 24,601 ) 9,965 Tradename and trademarks 2 - 10 8,198 ( 2,267 ) 5,931 1,598 ( 1,120 ) 478 Patent 6 - 10 2,100 ( 1,956 ) 144 2,100 ( 1,869 ) 231 Noncompetition agreements 3 848 ( 848 ) — 848 ( 848 ) — Total $ 95,765 $ ( 43,571 ) $ 52,194 $ 48,611 $ ( 36,304 ) $ 12,307 71 Table of Contents The weighted average amortization period for acquired identifiable intangible assets was 8.6 years as of December 31, 2025 . The amortization expense related to intangible assets was as follows (in thousands): Year Ended December 31, 2025 2024 2023 Amortization of acquired technology (included in costs of revenues) $ 3,671 $ 2,335 $ 2,266 Amortization of acquired intangible assets (presented separately under costs and expenses) 3,584 896 1,285 Total amortization expense $ 7,255 $ 3,231 $ 3,551 The estimated future amortization expense of acquired intangible assets were as follows (in thousands): Year Ending December 31, Amount 2026 $ 8,098 2027 7,945 2028 7,640 2029 5,954 2030 4,511 2031 and thereafter 18,046 Total future amortization expense $ 52,194 There were no impairment charges for goodwill and intangible assets for the years ended December 31, 2025, 2024 and 2023. 5. OTHER NON-CURRENT ASSETS Other non-current assets were as follows (in thousands): December 31, 2025 2024 Unbilled accounts receivable (1) $ 8,719 $ 8,983 Costs capitalized to obtain revenue contracts (2) 3,395 2,385 Contract assets (2) — 617 Net investments in sales-type leases (3) 7,588 13,226 Other 1,447 4,302 Total other non-current assets $ 21,149 $ 29,513 ( 1 ) See “Accounts Receivable” section of Note 1, “Description of Business and Summary of Significant Accounting Policies . ” ( 2 ) See Note 2, “Revenue from Contracts with Customers.” 72 Table of Contents ( 3 ) The Company had net investments in sales-type leases for its DirectScan system and CV system assets. The following table summarizes the components of the net investments in sales-type leases in the Consolidated Balance Sheets (in thousands): December 31, 2025 2024 Present value of lease receivables $ 10,890 $ 13,238 Less: Contract liability — ( 3,235 ) Net lease receivables 10,890 10,003 Unguaranteed residual assets 10,946 7,749 Total net investments in sales-type leases $ 21,836 $ 17,752 Reported as: Current (included in Prepaid expenses and other current assets) $ 14,248 $ 4,526 Non-current (included in Other non-current assets) 7,588 13,226 Total net investments in sales-type leases $ 21,836 $ 17,752 Maturities of leases payments under sales-type leases as of December 31, 2025 were as follows (in thousands): Year Ending December 31, Amount 2026 $ 8,802 2027 2,100 2028 10 2029 10 2030 and thereafter 36 Total future sales-type lease payments 10,958 Less: Implied interest (1) ( 68 ) Present value of lease receivables $ 10,890 ( 1 ) Calculated using the rate implicit in the lease determined for each lease. There was no allowance for credit losses on lease receivables as of December 31, 2025 and 2024 . The Company’s ongoing risk management strategy for residual assets includes performing regular reviews of estimated residual values. 6. LEASES Lease expense was comprised of the following (in thousands): Year Ended December 31, 2025 2024 2023 Operating lease expense $ 1,790 $ 1,577 $ 1,534 Short-term lease and variable lease expense (1) 730 1,049 923 Total lease expense $ 2,520 $ 2,626 $ 2,457 ( 1 ) Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Variable lease expense for the periods presented primarily included common area maintenance charges. 73 Table of Contents Supplemental information related to operating leases were as follows: December 31, 2025 2024 Weighted average remaining lease term under operating leases (in years) 3.2 3.3 Weighted average discount rate for operating lease liabilities 6.2 % 6.0 % Maturity of operating lease liabilities as of December 31, 2025 were as follows (in thousands): Year Ending December 31, Amount 2026 $ 2,218 2027 2,126 2028 1,357 2029 357 2030 283 2031 and thereafter 95 Total future minimum lease payments 6,436 Less: Interest (1) ( 616 ) Present value of future minimum lease payments under operating lease liabilities $ 5,820 Reported as of December 31, 2025: Operating lease liabilities – current $ 1,982 Operating lease liabilities – non-current 3,838 Total operating lease liabilities $ 5,820 ( 1 ) Calculated using incremental borrowing interest rate for each lease. 7. DEBT Long-term debt was as follows (in thousands): December 31, 2025 Term loan $ 23,125 Revolving credit facility 45,000 Total debt (principal amount) 68,125 Unamortized debt discount and issuance costs ( 1,126 ) Total debt, net of unamortized debt discount and issuance costs $ 66,999 Reported as: Current portion of long-term debt, net $ 2,236 Long-term debt, net 64,763 Total debt, net $ 66,999 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”). 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”). The principal of the Revolving Credit facility is due as a balloon payment of $ 45.0 million in March 2030. 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. 74 Table of Contents 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. 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. 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. 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. The Company’s weighted average annual interest rate on its outstanding debt was 6.47 % for the year ended December 31, 2025. The Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants. 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. 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. As of December 31, 2025, the Company was in compliance with the covenants contained in the Credit Agreement. The Credit Agreement contains customary events of default. 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. 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. 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 16, “Business Combination.” Future Payments on Total Debt As of December 31, 2025 , the estimated future principal payments of the total long-term debt were as follows (in thousands): Year Ending December 31, Amount 2026 $ 2,500 2027 2,500 2028 2,500 2029 2,500 2030 58,125 Total future principal payments of long-term debt $ 68,125 8. COMMITMENTS AND CONTINGENCIES Strategic Partnership with Advantest See Note 15, “Strategic Partnership Agreement with Advantest and Related Party Transactions” for the discussion about the Company’s commitments under the strategic partnership with Advantest. Operating Leases See Note 6, “Leases” for the discussion about the Company’s lease commitments. 75 Table of Contents Indemnifications The Company generally provides a warranty to its customers that its software will perform substantially in accordance with documented specifications typically for a period of 90 days following delivery of its products. The Company also indemnifies certain customers from third -party claims of IP infringement relating to the use of its products. Historically, costs related to these guarantees have not been significant. The Company is unable to estimate the maximum potential impact of these guarantees on its future results of operations. The Company’s standard product warranty terms for the sale of its DirectScan system product generally include post-sales support and repairs or replacement of a product at no additional charge for a contractually agreed period of time. 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. The standard warranty reserve was nil and immaterial as of December 31, 2025 and 2024 , respectively. Purchase Obligations The Company has purchase obligations with certain suppliers for the purchase of goods and services entered in the ordinary course of business. As of December 31, 2025 , total outstanding purchase obligations were $ 65.3 million, the majority of which are due within the next 2 years. Indemnification of Officers and Directors As permitted by the Delaware general corporation law, the Company has included a provision in its certificate of incorporation to eliminate the personal liability of its officers and directors for monetary damages for breach or alleged breach of their fiduciary duties as officers or directors, other than in cases of fraud or other willful misconduct. In addition, the Bylaws of the Company provide that the Company is required to indemnify its officers and directors even when indemnification would otherwise be discretionary, and the Company is required to advance expenses to its officers and directors as incurred in connection with proceedings against them for which they may be indemnified. The Company has entered into indemnification agreements with its officers and directors containing provisions that are in some respects broader than the specific indemnification provisions contained in the Delaware general corporation law. The indemnification agreements require the Company to indemnify its officers and directors against liabilities that may arise by reason of their status or service as officers and directors other than for liabilities arising from willful misconduct of a culpable nature, to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified, and to obtain directors’ and officers’ insurance if available on reasonable terms. The Company has obtained directors’ and officers’ liability insurance in amounts comparable to other companies of the Company’s size and in the Company’s industry. Since a maximum obligation of the Company is not explicitly stated in the Company’s Bylaws or in its indemnification agreements and will depend on the facts and circumstances that arise out of any future claims, the overall maximum amount of the obligations cannot be reasonably estimated. Litigation From time to time, the Company is subject to various claims and legal proceedings that arise in the ordinary course of business. As of December 31, 2025 , except as disclosed below, the Company was not party to any material legal proceedings. On May 6, 2020, the Company initiated an arbitration proceeding with the Hong Kong International Arbitration Center (the “Tribunal”) against SMIC New Technology Research & Development (Shanghai) Corporation (“SMIC”) due to SMIC’s failure to pay fees due to the Company under a series of contracts. The Company sought to recover the unpaid fees, a declaration requiring SMIC to pay fees under the contracts in the future (or a lump sum payment to end the contract), and costs associated with bringing the arbitration proceeding. SMIC denied liability and an arbitration hearing was held in February 2023. On November 12, 2025, the Tribunal issued a confidential arbitration award (the “Award”), which is in favor of the Company. The Company is separately pursuing an award as to costs. No payments under the Award have been received by the Company to date and in February 2026, SMIC filed an application with the High Court of Hong Kong seeking to set the Award aside. The Company believes the set aside application is without merit and intends to defend it, and is pursuing judicial enforcement of the Award. There can be no assurances that the Company will receive all or any part of the Award. Accordingly, no amounts have been recognized in connection with the Award as of December 31, 2025 . 76 Table of Contents 9. STOCKHOLDERS’ EQUITY Stock Repurchase Program 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 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. During the year ended December 31, 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. The 2022 Program expired on April 11, 2024. On April 15, 2024, the Board of Directors adopted a 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. During the year ended December 31, 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. As of December 31, 2025 , approximately $ 39.8 million remained available under the 2024 Program authorization. 10. EMPLOYEE BENEFIT PLANS Employee Stock Purchase Plan On June 15, 2021, the Company’s stockholders initially approved the 2021 Employee Stock Purchase Plan, which has been amended and restated by the Board of Directors and approved by the Company’s stockholders since then (as amended through the date of this report, the “2021 Purchase Plan”). Under the 2021 Purchase Plan, eligible employees can contribute up to 10 % of their compensation, as defined in the 2021 Purchase Plan, towards the purchase of shares of PDF common stock at a price of 85 % of the lower of the fair market value at the beginning of the offering period or the end of the purchase period. The 2021 Purchase Plan commenced on August 1, 2021, and provides for twenty-four -month offering periods with four six -month purchase periods in each offering period. The Company estimated the fair value of purchase rights granted under the 2021 Purchase Plan during the year using the Black-Scholes-Merton option-pricing model with the following weighted average assumptions, resulting in the following weighted average fair values: Year Ended December 31, 2025 2024 2023 Expected life (in years) 1.25 1.25 1.25 Volatility 44.70 % 40.97 % 43.66 % Risk-free interest rate 4.07 % 4.61 % 5.15 % Expected dividend — — — Weighted average fair value of purchase rights granted during the period $ 8.78 $ 10.91 $ 15.71 For the years ended December 31, 2025, 2024 and 2023, a total of 197,414 , 155,828 , and 223,608 shares, respectively, were issued under the 2021 Purchase Plan, at a weighted average purchase price of $ 21.08 per share, $ 26.14 per share, and $ 17.4 per share, respectively. As of December 31, 2025 , unrecognized compensation cost related to the 2021 Purchase Plan was $ 2.8 million, which is expected to be recognized over a weighted average period of 1.6 years. As of December 31, 2025 , 641,067 shares were available for future issuance under the 2021 Purchase Plan. 77 Table of Contents Stock Incentive Plans On November 16, 2011, the Company’s stockholders initially approved the 2011 Stock Incentive Plan, which has been amended and restated and approved by the Company’s stockholders a number of times since then (as amended through the date of this report, the “2011 Plan”). Under the 2011 Plan, the Company may award stock options, stock appreciation rights (“SARs”), stock grants or stock units covering shares of the Company’s common stock to employees, directors, non-employee directors and contractors. The aggregate number of shares reserved for awards under the 2011 Plan is 15.9 million shares, plus up to 3.5 million shares previously issued under the 2001 Stock Plan adopted by the Company in 2001, which expired in 2011 (the “2001 Plan”) that are either (i) forfeited or (ii) repurchased by the Company or are shares subject to awards previously issued under the 2001 Plan that expire or that terminate without having been exercised or settled in full on or after November 16, 2011. In case of awards other than options or SARs, the aggregate number of shares reserved under the 2011 Plan will be decreased at a rate of 1.33 shares issued pursuant to such awards. The exercise price for stock options must generally be at prices no less than the fair market value at the date of grant. Stock options generally expire ten years from the date of grant and become vested and exercisable over a four -year period. As of December 31, 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. The number of shares reserved and available under the 2011 Plan includes 0.5 million shares that were subject to awards previously made under the 2001 Plan and were forfeited, expired or repurchased by the Company after the adoption of the 2011 Plan through December 31, 2025 . As of December 31, 2025 , there were no outstanding awards granted outside of the 2011 Plan. The Company estimated the fair value of share-based awards granted under the 2011 Plan during the period using the Black-Scholes-Merton option-pricing model. There were no stock options granted during the years ended December 31, 2025, 2024 and 2023. Stock-based Compensation Expense Stock-based compensation is estimated at the grant date based on the award’s fair value and is recognized on a straight-line basis over the vesting periods, generally four years. As stock-based compensation expense recognized is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Stock-based compensation expenses related to the Company’s stock plans and employee stock purchase plans were allocated as follows (in thousands): Year Ended December 31, 2025 2024 2023 Costs of revenues $ 5,252 $ 5,087 4,169 Research and development 9,460 8,958 7,711 Selling, general, and administrative 11,213 11,002 9,604 Total stock-based compensation expense $ 25,925 $ 25,047 $ 21,484 78 Table of Contents Restricted Stock Units Activity Nonvested restricted stock units were as follows: Weighted Average Grant Shares Date Fair Value (in thousands) Per Share Nonvested, January 1, 2025 1,885 $ 33.14 Granted 1,009 22.12 Vested ( 805 ) 29.57 Forfeited ( 84 ) 31.69 Nonvested, December 31, 2025 2,005 $ 29.08 The weighted average grant date fair values of restricted stock units granted for the years ended December 31, 2025, 2024 and 2023 were $ 22.12 , $ 35.30 , and $ 43.46 , respectively. Additional information related to restricted stock units were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Total fair value of restricted stock units vested $ 19,421 $ 26,963 $ 32,786 As of December 31, 2025 , there was $ 44.6 million of total unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted average period of 2.6 years. Restricted stock units do not have rights to dividends prior to vesting. Stock Options Activity As of December 31, 2025, the outstanding and exercisable stock options totaled 19,636 shares, with a weighted average exercise price of $ 16.68 per share, aggregate intrinsic value of $ 0.2 million, and weighted average remaining contractual term of 3.1 years. During the year ended December 31, 2025, there were no stock option grants and stock option exercises were immaterial. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 0.1 million, $ 0.2 million and $ 0.6 million, respectively. Total fair value of stock options vested was nil during the year ended December 31, 2025, and immaterial during the years ended December 31, 2024 and 2023. As of December 31, 2025, there was no remaining unrecognized compensation cost related to unvested stock options. 401 (k) Savings Plan The Company sponsors a 401 (k) Retirement Savings Plan (the “401 (k) Plan”) covering substantially all of its U.S. employees. The Company’s 401 (k) Plan is a defined contribution plan with a 401 (k) salary deferral arrangement qualified under appropriate provisions of the Internal Revenue Code (the “Code”) and applicable state laws. Under the 401 (k) Plan, eligible employees may make pre-tax salary or after-tax contributions up to 60 % of annual compensation, as defined by the 401 (k) Plan. In addition, participants who have reached the age of 50 can elect to withhold additional catch-up contributions subject to the Code and the 401 (k) Plan limits. Participants may also contribute amounts representing distributions from other qualified plans (rollovers). The Company may make discretionary matching contributions. For the years ended December 31, 2025, 2024 and 2023, the Company matched from 50 % to 100 % of each employee’s contribution up to a maximum of 4 % of the employee’s total eligible earnings. The Company’s matching contributions to the 401 (k) Plan aggregated $ 2.1 million, $ 1.8 million and $ 1.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. 79 Table of Contents 11. INCOME TAXES Income before income tax expense was as follows (in thousands): Year Ended December 31, 2025 2024 2023 U.S. $ 2,691 $ 4,765 $ 3,220 Foreign 510 1,814 1,649 Income before income tax expense $ 3,201 $ 6,579 $ 4,869 The components of income tax expense were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Current tax expense: Federal $ 398 $ 213 $ 1,854 State 333 286 ( 437 ) Foreign 2,228 1,976 452 Total current tax expense 2,959 2,475 1,869 Deferred tax expense: Federal 926 6 6 State 35 3 ( 3 ) Foreign ( 79 ) 38 ( 108 ) Total deferred tax expense 882 47 ( 105 ) Total income tax expense $ 3,841 $ 2,522 $ 1,764 On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. 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. 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. OBBBA contained U.S. corporate tax provisions under which the Company elected to expense U.S. incurred research or experimental expenditures immediately. As a result of this election, the Company recognized a favorable cash tax benefit of approximately $ 1.3 million and reduction of effective tax rate by approximately 40 % in 2025. The OBBBA includes multiple effective dates, with certain provisions effective in 2025 and others phased in through 2027. The Company will continue to assess the impact on the effective tax rate for future periods. During the year ended December 31, 2025, the Company adopted ASU 2023 - 09 prospectively to enhance the income taxes disclosures regarding income taxes paid and the rate reconciliation disclosure. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. Income taxes paid by jurisdiction, net of refunds received were as follows (in thousands): Year Ended December 31, 2025 US Federal $ — State and Local: US State 111 Total State and Local 111 Foreign: China 1,311 Taiwan 665 Japan 252 Other 144 Total Foreign 2,372 Total income taxes paid, net of refunds $ 2,483 80 Table of Contents The reconciliation between the statutory federal income tax expense and the Company’s effective income tax expense after the adoption of ASU 2023 - 09 were as follows (amounts in thousands): Year Ended December 31, 2025 Federal statutory income tax expense $ 676 21 % State and local income taxes, net of federal income tax effect 7 — * Change in valuation allowance 965 30 Nontaxable or nondeductible items: Stock compensation expense 2,093 65 Meals expense 100 3 Section 162(m) limitation 64 2 U.S. branch income 70 2 Sales-type lease interest income ( 83 ) ( 3 ) Other nontaxable or nondeductible items 14 — * Tax credits: Foreign tax credits ( 1,995 ) ( 62 ) Other tax credits ( 10 ) — * Cross-border tax laws: Foreign-derived intangible income deduction ( 403 ) ( 13 ) Worldwide changes in unrecognized tax benefits 575 18 Foreign tax effects: Taiwan Foreign permanent differences 61 2 Prior year true up ( 35 ) ( 1 ) Foreign withholding tax 567 18 Other adjustment ( 4 ) — * China Foreign permanent differences ( 133 ) ( 4 ) Foreign withholding tax 1,306 41 Other adjustment 23 1 Canada Foreign permanent differences 247 8 Tax rate differential ( 64 ) ( 2 ) Other adjustment ( 1 ) — * Malaysia Foreign withholding tax 55 2 Other foreign jurisdictions 20 1 Other: Deferred tax asset adjustment ( 88 ) ( 3 ) Transaction costs ( 198 ) ( 6 ) Other adjustment 12 — * Global effective income tax expense $ 3,841 120 % * Percentage rounds to less than 1.0%. 81 Table of Contents The reconciliation between the statutory federal income tax expense and the Company’s effective income tax expense for the years prior to the adoption of ASU 2023 - 09 were as follows (in thousands): Year Ended December 31, 2024 2023 Federal statutory income tax expense $ 1,382 $ 1,016 State income tax expense 738 ( 65 ) Stock compensation expense 286 ( 1,747 ) Tax credits ( 2,795 ) ( 3,214 ) Foreign taxes, net 1,707 1,859 Foreign-derived intangible income deduction ( 2,052 ) ( 1,612 ) Change in valuation allowance 2,882 5,043 Section 162(m) limitation 148 424 Unrealized tax benefit reserve changes 232 99 Other ( 6 ) ( 39 ) Global effective income tax expense $ 2,522 $ 1,764 As of December 31, 2025 , the Company had federal and California net operating loss carry-forwards (“NOLs”) of $ 2.0 million and $ 13.0 million, respectively. Some of the federal NOLs, acquired as part of past acquisitions, have expirations in 2025 onwards, and approximately $ 0.9 million of the federal NOLs have no expiration. The California NOLs begin expiring in 2028 onwards. As of December 31, 2025 , the Company had federal and state research and experimental and other tax credit (“R&D credits”) carry-forwards of $ 24.7 million and $ 26.5 million, respectively. The federal credits began to expire in 2022, while the California credits have no expiration. The extent to which the federal and state credit carry-forwards can be used to offset future tax liabilities, respectively, may be limited, depending on the extent of ownership changes within any three -year period as provided in the Tax Reform Act of 1986 and the California Conformity Act of 1987. The Company assesses its deferred tax assets for recoverability at each reporting period, and where applicable, a valuation allowance is recorded to reduce the total deferred tax assets to an amount that will, more likely than not, be realized in the future. Based on all available evidence, both positive and negative, the Company determined a full valuation allowance was still appropriate for its U.S. federal and state net deferred tax assets (“DTAs”) as of December 31, 2025 . The valuation allowance was $ 69.9 million and $ 67.9 million as of December 31, 2025 and 2024 , respectively. The increase in the valuation allowance from December 31, 2024 to December 31, 2025 was primarily driven by an increase in deferred revenues and various accrual items in the current year which require a valuation allowance. Management will continue to evaluate the need for a valuation allowance and may change its conclusion in a future period based on any change in facts (e.g., significant new revenue and other relevant factors). If the Company concludes that it is more likely than not to utilize some or all of its U.S. DTAs, it will release some or all of its valuation allowance and the Company’s income tax expense will decrease in the period in which such determination is made. Net DTAs, after the U.S. valuation allowance, were immaterial as of December 31, 2025 and 2024 . 82 Table of Contents The components of the net DTAs and liabilities consisted of the following (in thousands): December 31, 2025 2024 Deferred tax assets: Net operating loss carry-forwards $ 1,880 $ 2,414 Research and development and other credit carry-forwards 32,657 31,988 Foreign tax credit carry-forwards 2,256 1,977 Capitalized research and experimental expenses 24,932 26,426 Accruals deductible in different periods 8,717 6,049 Leases 952 1,113 Stock-based compensation 2,066 2,087 Total deferred tax assets 73,460 72,054 Less: valuation allowance ( 69,874 ) ( 67,946 ) Total deferred tax assets, net of valuation allowance 3,586 4,108 Deferred tax liabilities: Property and equipment, net ( 1,233 ) ( 752 ) Operating lease right-of-use assets ( 922 ) ( 1,082 ) Intangible assets ( 2,418 ) ( 2,366 ) Total deferred tax liabilities ( 4,573 ) ( 4,200 ) Net deferred tax liabilities $ ( 987 ) $ ( 92 ) The Company classifies its liabilities for income tax exposures as long-term. The Company includes interest related to unrecognized tax benefits within the Company’s income tax expense. As of December 31, 2025 and 2024 , the Company had accrued interest related to unrecognized tax benefits of $ 0.7 million and $ 0.6 million, respectively. For the years ended December 31, 2025, 2024 and 2023, the Company recognized changes in interest charges related to unrecognized tax benefits of $( 75,000 ), $( 20,000 ), and $( 15,000 ), respectively, in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company’s total amount of unrecognized tax benefits, excluding interest, as of December 31, 2025 was $ 17.1 million, of which $ 2.5 million, if recognized, would impact the Company’s effective tax rate. As of December 31, 2025 , the Company has recorded unrecognized tax benefits of $ 3.2 million, including interest of $ 0.7 million, as long-term income taxes payable in its Consolidated Balance Sheet. The remaining $ 14.6 million has been recorded within DTAs, which is subject to a full valuation allowance. The Company does not expect the change in unrecognized tax benefits over the next twelve months to materially impact its results of operations and financial position. A reconciliation of the beginning and ending amount of unrecognized tax benefits were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Gross unrecognized tax benefits, beginning of year $ 16,569 $ 15,937 $ 15,109 Increases in tax positions for current year 1,171 1,290 1,469 Increases in tax positions for prior years — — 91 Lapse in statute of limitations ( 615 ) ( 658 ) ( 732 ) Gross unrecognized tax benefits, end of year $ 17,125 $ 16,569 $ 15,937 The Company does not provide deferred taxes on undistributed earnings of its foreign subsidiaries as it intends to indefinitely reinvest those earnings. The Company conducts business globally and, as a result, files numerous consolidated and separate income tax returns in the U.S. federal, various state and foreign jurisdictions. For U.S. federal and California income tax purposes, the statute of limitations currently remains open for the years ended 2022 to present and 2021 to present, respectively. In addition, all of the NOLs and R&D credit carry-forwards that may be utilized in future years may be subject to federal and state examination. The Company is not currently under income tax examinations in the U.S. or in any other of its major foreign subsidiaries’ jurisdictions. 83 Table of Contents Valuation allowance for DTAs is summarized as follows (in thousands): Balance at Beginning of Year Charged to Income Tax Expense Deductions/ Write-offs of Accounts Balance at End of Year 2025 $ 67,946 $ 1,928 $ — $ 69,874 2024 $ 64,152 $ 3,794 $ — $ 67,946 2023 $ 59,215 $ 4,937 $ — $ 64,152 12. NET INCOME (LOSS) PER SHARE The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income (loss) per share (in thousands, except per share amount): Year Ended December 31, 2025 2024 2023 Numerator: Net income (loss) $ ( 640 ) $ 4,057 $ 3,105 Denominator: Basic weighted average common shares outstanding 39,317 38,602 38,015 Effect of dilutive stock options, unvested restricted stock units, and shares of common stock expected to be issued under employee stock purchase plan — 445 922 Diluted weighted average common shares outstanding 39,317 39,047 38,937 Net income (loss) per share: Basic $ ( 0.02 ) $ 0.11 $ 0.08 Diluted $ ( 0.02 ) $ 0.10 $ 0.08 For the year ended December 31, 2025 , because the Company was in a loss position, basic net loss per share was the same as diluted 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 are not included in the diluted net income (loss) per share calculation above because to do so would be anti-dilutive for the periods presented (in thousands): Year Ended December 31, 2025 2024 2023 Non-vested restricted stock units 2,005 843 351 Outstanding stock options 20 — — Shares issuable under employee stock purchase plan 71 69 — Total 2,096 912 351 13. CUSTOMER AND GEOGRAPHIC INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in deciding how to allocate resources and in assessing performance. 84 Table of Contents The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, reviews discrete financial information including total revenues, gross profit, and net income (loss) presented on a consolidated basis for purposes of regularly making operating decisions about allocation of resources and financial performance assessment. 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. Other segment items included in consolidated net income (loss) are amortization of acquired intangible assets, interest and other expense (income), net and income tax expense, which are reflected in the Consolidated Statements of Operations and Comprehensive Income (Loss). 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. The following table presents segment total revenues, gross profit, and net income (loss) for the periods presented (in thousands): Year Ended December 31, 2025 2024 2023 Total revenues $ 219,024 $ 179,465 $ 165,835 Costs of revenues $ 60,623 $ 54,144 $ 51,749 Gross profit $ 158,401 $ 125,321 $ 114,086 Net income (loss) $ ( 640 ) $ 4,057 $ 3,105 Revenues from individual customers that are approximately 10% or more of the Company’s consolidated total revenues are as follows: Year Ended December 31, Customer 2025 2024 2023 A 30 % 19 % 35 % B 13 % 12 % * % C 10 % * % * % * 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 are as follows: December 31, Customer 2025 2024 A 39 % 21 % B * % 13 % C 25 % 11 % E * % 12 % * represents less than 10% Long-lived assets, net by geographic area were as follows (in thousands): December 31, 2025 2024 United States (1) $ 94,426 $ 58,782 Rest of the world 2,907 1,461 Total long-lived assets, net $ 97,333 $ 60,243 ( 1 ) Includes assets deployed at customer sites which could be outside the U.S. 85 Table of Contents 14. FAIR VALUE MEASUREMENTS Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The multiple assumptions used to value financial instruments are referred to as inputs, and a hierarchy for inputs used in measuring fair value is established, that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. These inputs are ranked according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 - Inputs are quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3 - Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The following table summarizes the fair value of the Company’s financial instruments (in thousands): Fair Value Measurements Using Balance Sheet December 31, Assets Classification 2025 (Level 1) (Level 2) (Level 3) Money market mutual funds Cash equivalents $ 14,535 $ 14,535 $ — $ — Available-for-sale debt securities: Convertible note receivable (1) Other current assets 2,138 — — 2,138 Total $ 16,673 $ 14,535 $ — $ 2,138 Fair Value Measurements Using Balance Sheet December 31, Assets Classification 2024 (Level 1) (Level 2) (Level 3) Money market mutual funds Cash equivalents $ 66,213 $ 66,213 $ — $ — Available-for-sale debt securities: U.S. Government securities (2) Short-term investments 24,291 24,291 — — Convertible note receivable (1) Other non-current assets 2,038 — — 2,038 Total $ 92,542 $ 90,504 $ — $ 2,038 ( 1 ) 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. ( 2 ) The carrying amount of the Company’s investments in U.S. Government securities approximate fair value due to their short-term maturities, and there have been no events or changes in circumstances that would have had a significant effect on the fair value of these securities as of December 31, 2024. 86 Table of Contents 15. STRATEGIC PARTNERSHIP AGREEMENT WITH ADVANTEST AND RELATED PARTY TRANSACTIONS In July 2020, the Company entered into a long-term strategic partnership with Advantest Corporation through its wholly-owned subsidiary, Advantest America, Inc. (collectively referred to herein as “Advantest”), which includes: (i) a Securities Purchase Agreement wherein the Company issued and sold to Advantest America, Inc., an aggregate of 3,306,924 shares of its common stock, for aggregate gross proceeds of $ 65.2 million; (ii) a significant agreement for its assistance in development of cloud-based applications for Advantest tools that leverages our Exensio analytics software; (iii) a commercial agreement providing for the license to third parties of solutions that result from the development work that combine Advantest’s testing applications and our Exensio platform; and (iv) a 5 -year cloud-based subscription that expired in July 2025 for Exensio analytics software and related services. Platform revenue recognized from Advantest during the years ended December 31, 2025, 2024 and 2023 was $ 8.8 million, $ 12.7 million, and $ 9.0 million, respectively. Accounts receivable from Advantest were not material as of December 31, 2025 and 2024 . Deferred revenue amounted to $ 0.7 million and $ 8.3 million as of December 31, 2025 and 2024 , respectively. The Company carries out transactions with Advantest on arm’s length commercial customary terms. 16. BUSINESS COMBINATION SecureWise LLC On February 19, 2025, the Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Telit IOT Solutions Inc., a Delaware corporation (the “Seller”), and SecureWise, pursuant to which the Company agreed to acquire the Seller’s SecureWise business (the “Business”) by means of a purchase of all of the outstanding equity interests of SecureWise held by the Seller (the “Transaction”). On March 7, 2025, the Company completed the acquisition of the Business from the Seller pursuant to the Purchase Agreement for a cash purchase price of $ 130.0 million, subject to customary adjustments in respect of indebtedness, transaction expenses, cash and working capital of the Business, in each case, in accordance with the terms of the Purchase Agreement. The Company financed the Transaction using a combination of cash on hand and borrowings under the Credit Facilities. 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. The Company accounted for the Transaction as a business combination in accordance with FASB 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. The Company allocated the purchase price to identifiable assets acquired based on their estimated fair values. The fair value of the consideration transferred and the assets acquired and liabilities assumed was determined by the Company and in doing so management engaged a third -party valuation specialist to assist with the measurement of the fair value of identifiable intangible assets. The estimated fair value of the identifiable assets acquired and liabilities assumed was based on management’s best estimates. The fair value of the customer relationships was determined using the multi-period excess earnings income approach or cost approach. The fair value of trade names and developed technology was determined using the relief-from-royalty method. The fair value of acquired technology was determined using the cost approach. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The goodwill recorded from this acquisition represents business benefits the Company anticipates from the acquired workforce and expectation for expanded sales opportunities to foster further business growth. The goodwill associated with the acquisition is deductible for tax purposes. The Company expensed all transaction costs in the period in which they were incurred. The total acquisition and integration costs related to the acquisition of SecureWise amounted to $ 5.4 million, of which $ 4.5 million was recorded for the year ended December 31, 2025 , and $ 0.9 million in the fourth quarter of 2024. 87 Table of Contents The purchase price allocation for the acquisition of SecureWise were as follows (in thousands, except amortization period): Amortization Amount Period (Years) Allocation of Purchase Price: Fair value estimates of assets acquired and liabilities assumed Cash $ 1,049 Accounts receivable 2,970 Prepaid and other assets 2,896 Property and equipment 1,535 Fair value of intangible assets: Trademark 6,600 5 Customer relationships 28,900 13 Developed technology 11,600 7 Goodwill 80,008 N/A Accounts payable and other current liabilities ( 4,791 ) Total purchase price allocation $ 130,767 The estimated fair value of the accounts receivable acquired approximates the contractual value of $ 3.0 million. The purchase price has been allocated to assets acquired and liabilities assumed based on the Company’s best estimates and assumptions using the information available as of the acquisition date and throughout measurement period, not to exceed one year from the acquisition date. The provisional measurements of identifiable assets and liabilities, and the resulting goodwill related to the acquisition are subject to adjustments in subsequent periods as the Company finalizes its purchase price allocation to the individual assets acquired. The Company believes that information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The Company expects to finalize the valuation as soon as practicable, but no later than one year from the acquisition date. The purchase price allocation has been updated for measurement period adjustments which decreased goodwill by $ 1.7 million, primarily related to revised assessments of pre-acquisition amounts including prepaid and other current assets, and other current liabilities adjustment. Pro forma information reflecting the impact of the Transaction has not been presented as the Transaction was not material to the Company’s financial results. 88 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.