Good day, ladies and gentlemen, and welcome to the PDF Solutions, Inc. conference call to discuss its financial results for the fourth quarter and full year ended December 31, 2013. [Operator Instructions] As a reminder, this conference is being recorded. If you have not yet received a copy of the corresponding press releases, they have been posted to PDF's website at www.pdf.com. Some of the statements that will be made in the course of this conference are forward-looking, including statements regarding PDF's future financial results and performance, growth rates and demand for its solutions. PDF's actual results could differ materially. You should refer to the section entitled Risk Factors on Pages 10 through 16 of PDF's annual report on Form 10-K for the fiscal year ended December 31, 2012, and similar disclosures in subsequent SEC filings. The forward-looking statements and risks stated in this conference call are based on information available to PDF today. PDF assumes no obligation to update them. Now I'd like to introduce John Kibarian, PDF's President and Chief Executive Officer; and Greg Walker, PDF's Chief Financial Officer. Mr. Kibarian, please go ahead.

Thank you, and welcome, everyone. 2013 was another successful year for PDF Solutions with continued growth in revenues and greatly improved non-GAAP earnings. During the year, we drove further adoption of our comprehensive solutions for yield enhancement and Design-for-Manufacturability. These solutions and capabilities are more critical as the industry shifts towards newer nodes based on 3D transistors, commonly referred to as FinFET nodes. Increased market acceptance of our solutions was evidenced by the growth in our total revenues for the year. More importantly, the growth of our gainshare revenues evidences the power of our business model where our success aligns with the success of our clients. Interestingly -- I'm sorry, increasingly, clients have more interests in the value that PDF Solutions can bring to production control and volume manufacturing. Accordingly, during the fourth quarter, the company closed the following engagements: a YieldAware-FDC process control engagement for multiple factories at the 28-nanometer and below nodes with an existing client and a YieldAware-FDC process control engagement for another existing client for advanced production. Additionally, the company closed a significant extension to a 28-nanometer project under an existing enterprise agreement reflecting continued strong business at current nodes. Furthermore, business activity at the more advanced nodes was also very strong. As we enter 2014, PDF Solutions and its technologies are accepted by large portions of the industry as the standard for bridging the gap between fabless chip designs and foundry manufacturing. Today, our CV infrastructure is in place at all the major logic foundries in use at many of the top 10 fabless companies. Both our fabless and foundry clients tell us that use of our technology and services enables them to significant -- them to be significantly more effective at bringing up new processes and products. We refer to this effective collaboration as…

Thanks, John. As a reminder, in addition to using GAAP results when evaluating PDF's business, we believe it is also useful to consider our results using other non-GAAP measures. For internal purposes, the company focuses on non-GAAP net income and EBITDAR. Non-GAAP net income excludes stock-based compensation expenses; amortization of expenses related to acquired technology and other intangibles; restructuring charges and their related tax effects, as applicable. Additionally, the income tax provision has been adjusted in our non-GAAP income to reflect -- net income to reflect cash tax expenses only. EBITDAR is equal to earnings before income tax, adjusted to exclude depreciation, amortization, restructuring and stock-based compensation. You can access the earnings press release that contains a reconciliation of EBITDAR and non-GAAP net income to GAAP results in the Investors section of our website located at pdf.com. Now let's turn to a review of the financial results. Total revenues for the quarter were $27.1 million with a GAAP net income of $6.8 million. This resulted in GAAP EPS of $0.21 per fully diluted share, net income on a non-GAAP basis totaled $10.8 million or $0.34 per fully diluted share. Total cash increased by $4.1 million during the quarter. Also for the quarter, cost of sales and operating expenses together were $17.2 million on a GAAP basis and $15.2 million on a non-GAAP basis, which is a decrease in non-GAAP spending of approximately $591,000 from Q3. For the year, total revenues were $101.5 million and non-GAAP net income was $33.8 million. Overall, we are very pleased with the continued strength in the total revenues, earnings and cash for the quarter. Now moving on to revenue details. Total revenues of $27.1 million for the fourth quarter were up approximately $1.6 million as compared to $25.5 million in the prior quarter. Total revenues…

[Operator Instructions] Our first question comes from Tom Diffely with D.A. Davidson. Thomas Diffely - D.A. Davidson & Co., Research Division: I guess just wanted to look at the, actually, the royalties from the gainshare in the quarter. Is that just, I guess, what you'd call natural gainshare? Was there any kind of a catch-up or lump sum onetime event in there?

For the most part, it's natural gainshare. There was a little bit of catch-up. If you remember, last quarter, we talked about customers going through a 32- to 28-nanometer conversion. We saw a little bit of catch-up from that, but it's primarily natural. Thomas Diffely - D.A. Davidson & Co., Research Division: Okay. So if wafer production was flat quarter-over-quarter, will you expect that to dip down a little bit in the first quarter?

Yes, flat to maybe slightly down if the wafer production was flat. Thomas Diffely - D.A. Davidson & Co., Research Division: Okay, all right. And then when you look at the consulting or the solutions part of your business, if we take out the little bit of a jump in the third quarter, you've essentially been flat for the last, I don't know, 4 quarters or so. I'm just like curious how you view that part of your business, if you think it's a growing part of the business going forward? Or if it's just kind of in a steady-state level now that we expect to continue?

Tom, this is John. We -- I think we communicated at the end of 2012 we thought that would be a single-digit growth. That has a couple of components to it. There is some software license revenue, which was down year-over-year and that tends to track capital equipment -- the software piece of it tends to track capital equipment spend. So I think the capital equipment issue was relatively soft in 2013. That piece of it was -- the actual services portion of the business was actually up year-over-year. And there's also some timing effects like the catch-ups that, I think, Greg talked about a little bit. In general, we do expect, as we go through 2014, we'd like to continue -- the solutions revenue is tied to wafer fee business, to grow again at about a single-digit rate and the total contract value to grow substantially because of the wafer fee growth. Thomas Diffely - D.A. Davidson & Co., Research Division: All right. And then I know on the wafer fee side, a lot of times there's transitions that cause a little bit of a disturbance on a quarterly basis. Based on what customers are looking at for migrations to 20-nanometers and then to 16-nanometers, ultimately, do you see some of those disruptions happening over the next few quarters that might impact your gainshare?

We said in my prepared remarks we expect the first half of the year from a gainshare standpoint to be slower than the second half of the year, not due so much to transition, it's just due to, we think, that our utilization to the 28-, 32 nodes will be lower than they were towards the end of last year and then a pickup in the second half of the year. Some of that due to bring up of advanced notes, but a good amount of that just due to the 28 volumes -- primarily 28 volumes, some still 32. Thomas Diffely - D.A. Davidson & Co., Research Division: Okay. And just to clarify, that was the first half lower than the just-recorded second half of '13?

I mean, the first half of '13 lower than the second half of -- the first half of '14 lower than the second half of '14, in other words. And we do expect -- I think the industry overall has said that Q1, Q2 will be below Q4 levels, right? We do expect a little bit of weakness in the first half of the year and then it picks up, but primarily around utilizations. Thomas Diffely - D.A. Davidson & Co., Research Division: Okay, all right. And then, Greg, on the cash tax rate, 16% [ph]. It seems like that's lowered [ph] -- before, were you talking about kind of the low 20s for 2014?

Yes, we were. And what we're saying is we're actually burning off the deferred tax assets at a slower rate than we expected and also we saw the benefit flow-through in this quarter of some higher-than-planned stock-based compensation as the stock price rose throughout the -- particularly in Q4 that actually increased the value of our R&D tax credit that offset some of that. So the rate we're expecting is lower than what we thought even last quarter. Thomas Diffely - D.A. Davidson & Co., Research Division: Okay. And then in 2015, you expect a little bit of a stair step-up again?

Yes, sooner or later that rate is going to start moving up towards the GAAP tax rate. So for '14, we were expecting to really be getting close to it where we thought we'd be in the low to mid-20% range. It's now looking like we're in the high-teens. But '15 will probably be that low to mid-20s rate. Thomas Diffely - D.A. Davidson & Co., Research Division: And then, John, when you look out over the next couple of years, would you expect your customer concentration to come down a bit as you add new clients? Or do you think the ramping gainshare portion of your large clients makes that business go up as a percentage?

Yes, our core clients are building substantial factories. I think, in the last quarter, they -- a couple of them announced very substantial 2014 and '15 capital numbers for incremental facilities that are going up. So that always drives a natural tendency towards consolidation because the dollars that come out of any given factory for us, as a percentage of our total business, is very large even if, for them, it's a relatively small dollar amount compared to the investment level in making that factory. So that's a general trend towards the concentration of numbers. And also a lot of our fab customers that we discussed throughout the year have actually paid for the DFM activities for their fabless to help them attract the fabless to their capacity they've put in. So some of our fabless business this past year has really been funded by the factories themselves, as we've talked on previous calls. And I think the wild card in that is, obviously we do from time-to-time talk to factories who are not directly wafer fee-paying customers about opportunities that they could achieve by becoming clients. And that would work in the other direction. We only plan the concentration side. That other stuff, we never know what's going to happen if it's ever going to happen.

And Tom, this is Greg. One other comment on the concentration. As we had expected and talked about during the year, we did see that the balance between the top customers actually became much closer to parity than it had been last year and we would expect in 2014 that, that would continue to move that way. Thomas Diffely - D.A. Davidson & Co., Research Division: Okay. And then it seems like the linearity of the solutions business, too, has always been a little bit more second half-loaded. I guess, first question is why is that? And second question, do you expect that trend again this year?

This is John. Yes, I hadn't noticed that, myself, Tom. So I think it has at times. We wouldn't expect any particular linearity this year, front half to back half. I think our own look at it, it looks relatively smooth throughout the year.

[Operator Instructions] Your next question comes from Adam Fisher with Samjo Capital.

I wanted to talk a little bit about the process control engagements you signed during the quarter, just maybe give us a little bit more -- what kind of -- what the customer is doing with the product, et cetera?

Yes, sure. Thank you, Adam. This is John. Yes, so we had been running pilots at some of our clients, showing how -- combining our software for process control with the CVs and systems would give the customers better control with these advanced nodes, as we've talked about with investors before. And basically, the whole reason for the investment in the YA-FDC solution was the process windows on these nodes are getting very tight. And using the information that's directly coming off, tools like the etchers and the CMP tools and the fiber key tools, to identify control opportunities is a big opportunity for the customers, right? The capital intensity and production control is the second fastest-growing cost. There's never enough control in these factories. And as is stated [ph] -- that's really -- the problem is you have terabytes of information, where is the needle in the haystack? Our CVs are very useful for thinking about what signals matter of those tools and driving better modeling. So as we've said, 2 customers deployed that this year. Greg also discussed a little bit on the restructuring on our VMS business. We felt that the VMS business would also work well as a solutions business where we deliver the software. It has a mixed element. There's a software license associated with it. There's a fixed fee license revenue associated with it and then there's a wafer fee associated with this. And if these are existing customers, what they tend to do is enhance the wafer fees by either improving the royalty rate or extending the length of time they pay us wafer fees for that solution. And then as you get to the end of the license fee period, when the wafer fees turn off, parts of the system turn off. Some possibly not [ph] for [indiscernible] under [indiscernible] and other parts on modeling, in particular, turn off with the wafer fees.

So theoretically, there should be an accelerator or a gainshare revenue as these products start supporting wafers?

That's correct.

How does it align with the fabless strategy, the process control fee?

Yes, right now, they align a little bit in that both the fabless strategy and this are around improving our overall wafer fee business. There's things we're working on R&D right now, which, if you remember, we have the reduced pattern count DFM technology we called templates, which is finding ways of coming down to a reduced set of layout patterns. Once you get down to a reduced set of patterns, it makes it possible to include those patterns in a more aggressive process control strategy and approach. We are piloting some things in 2014 that would tie much tighter the DFM activity with the process control solution. At this point, it's a little bit rocket science. But these 2 things will get a lot more tighter as we go through 2014. We think it's absolutely required for the industry as you look at the 14 and 10 node. Especially now that the industry has, I think, given up the ghost on EUV, we're going to have very complex production flows in the 14 and 10 nodes. And so coupling a reduced layout set with a more sophisticated control strategy, we think, is going to become a very required solution. And this year, we're going to pilot some of that with some customers.

At this time, there are no more questions.

Thank you, everyone.