PDF Solutions, Inc. reports 168% EBITDA decline in 2018 and 10.4 pp EBITDA Margin decline from 5.7% to -4.6%
02/14/2019 • About PDF Solutions, Inc. (
$PDFS) • By InTwits
PDF Solutions, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- PDF Solutions, Inc. is a company in decline: 2018 revenue growth was -15.8%, 5 years revenue CAGR was -3.3%
- EBITDA Margin is declining: -4.6% in 2018 vs. 5.7% in 2017 vs. 29.8% in 2014
- EBITDA Margin is quite volatile: -4.6% in 2018, 5.7% in 2017, 16.2% in 2016, 22.7% in 2015, 29.8% in 2014
- PDF Solutions, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.9%. At the same time it's in pair with industry average of 8.7%
- CAPEX is quite volatile: $13m in 2018, $10m in 2017, $11m in 2016, $5m in 2015, $4m in 2014
- The company has unprofitable business model: ROIC is -5.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
PDF Solutions, Inc.'s Revenue dropped on 15.8%. Revenue decline showed acceleration in 18Q4 - it was 26.3% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.4 pp from 5.7% to -4.6% in 2018. EBITDA Margin declined at -8.6 pp per annum in 2014-2018.
Gross Margin decreased on 3.2 pp from 53.4% to 50.1% in 2018. Gross Margin followed a declining trend at -3.1 pp per annum in the last 5 years. SG&A as a % of Revenue increased on 4.6 pp from 23.2% to 27.9% in 2018. SG&A as a % of Revenue followed a growing trend at 2.1 pp per annum in the last 5 years.
Net Income margin decreased on 7.7 pp from -1.3% to -9.0% in 2018. Net Income margin stuck to a declining trend at -6.9 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In 2018 PDF Solutions, Inc. had CAPEX/Revenue of 15.3%. CAPEX/Revenue surged on 10.4 pp from 4.9% in 2015 to 15.3% in 2018. Average CAPEX/Revenue for the last three years was 12.0%. CAPEX as a % of Revenue stuck to a growing trend at 2.8 pp per annum in 2014-2018.
Return on investment
The company operates at negative ROIC (-5.5%) and ROE (-3.9%). ROIC decreased on 5.6 pp from 0.10% to -5.5% in 2018. ROE decreased on 3.2 pp from -0.67% to -3.9% in 2018. ROIC stuck to a declining trend at -6.2 pp per annum in the last 5 years. ROE followed a declining trend at -4.1 pp per annum in the last 5 years.
Leverage (Debt)
The company has no debt. Cash decreased on 5.1%.
Management team
The company's CEO is John K Kibarian. John K Kibarian is a founder and has 19 years tenure with the company. Christine A Russell is a the company's CFO. Christine A Russell has spent 1 year at the company.
Financial and operational results
FY ended 12/31/2018
PDF Solutions, Inc. ($PDFS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 100.2 | 98.0 | 107.5 | 101.9 | 85.8 | -15.8% |
| Gross Profit | 62.3 | 59.0 | 63.0 | 54.4 | 43.0 | -20.9% |
| SG&A | 18.5 | 20.4 | 22.1 | 23.7 | 23.9 | 1.1% |
| EBITDA | 29.9 | 22.3 | 17.4 | 5.8 | -4.0 | -168.0% |
| Net Income | 18.5 | 12.4 | 9.1 | -1.3 | -7.7 | |
Balance Sheet
|
|---|
| Cash | 115.5 | 126.2 | 116.8 | 101.3 | 96.1 | -5.1% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 4.0 | 4.8 | 11.3 | 10.3 | 13.1 | 27.9% |
Ratios
|
|---|
| Revenue growth | -1.3% | -2.2% | 9.7% | -5.2% | -15.8% | |
| EBITDA growth | -9.0% | -25.5% | -22.0% | -66.3% | -168.0% | |
|
|---|
| Gross Margin | 62.2% | 60.2% | 58.6% | 53.4% | 50.1% | -3.2% |
| EBITDA Margin | 29.8% | 22.7% | 16.2% | 5.7% | -4.6% | -10.4% |
| SG&A, % of revenue | 18.4% | 20.8% | 20.5% | 23.2% | 27.9% | 4.6% |
| Net Income Margin | 18.4% | 12.7% | 8.5% | -1.3% | -9.0% | -7.7% |
| CAPEX, % of revenue | 4.0% | 4.9% | 10.5% | 10.1% | 15.3% | 5.2% |
|
|---|
| ROIC | 19.5% | 11.9% | 7.3% | 0.1% | -5.5% | -5.6% |
| ROE | 12.5% | 7.4% | 4.9% | -0.7% | -3.9% | -3.2% |
| Net Debt/EBITDA | -3.9x | -5.7x | -6.7x | -17.3x | |
PDF Solutions, Inc. ($PDFS) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 25 | 21 | 20 | 20 | | 1.8% | -13.1% | -23.8% | -26.3% |
| EBITDA | 1 | -1 | -1 | -2 | | 20.4% | -292.2% | -174.1% | -193.8% |
| Net Income | -0 | -2 | -2 | -3 | | -182.0% | -1,209.0% | -452.9% | |
Balance Sheet
|
|---|
| Cash | 99 | 101 | 97 | 96 | | -14.3% | -7.4% | -3.9% | -5.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 53.6% | 48.3% | 47.1% | 50.7% | | 0.6% | -4.8% | -6.0% | -3.4% |
| EBITDA Margin | 4.2% | -6.6% | -7.1% | -11.1% | | 0.6% | -9.6% | -14.3% | -19.7% |
| Net Income Margin | -1.7% | -9.9% | -10.3% | -15.8% | | -3.8% | -10.7% | -12.5% | -5.9% |
Peers in Semiconductor Equipment
Below you can find PDF Solutions, Inc. benchmarking vs. other companies in Semiconductor Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -0.5% | 6.5% | 24.7% | 15.5% |
|---|
| PDF Solutions, Inc. ($PDFS) | | -2.2% | 9.7% | -5.2% | -15.8% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.4% | 38.3% | 37.3% | 43.2% | 40.2% |
|---|
| PDF Solutions, Inc. ($PDFS) | 62.2% | 60.2% | 58.6% | 53.4% | 50.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 6.8% | 9.8% | 11.4% | 16.2% | 16.6% |
|---|
| PDF Solutions, Inc. ($PDFS) | 29.8% | 22.7% | 16.2% | 5.7% | -4.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.2% | 2.7% | 2.2% | 2.8% | 2.9% |
|---|
| PDF Solutions, Inc. ($PDFS) | 4.0% | 4.9% | 10.5% | 10.1% | 15.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.4% | 5.2% | 7.1% | 13.1% | 12.1% |
|---|
| PDF Solutions, Inc. ($PDFS) | 19.5% | 11.9% | 7.3% | 0.1% | -5.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| |
|---|
| Median (32 companies) | -1.2x | -1.0x | -1.2x | -0.7x | -1.0x |
|---|
