Good day, everyone, and welcome to the PDF Solutions, Inc. Conference Call to discuss its Financial Results for the Third Quarter ending Saturday, September 30, 2023. [Operator Instructions]. As a reminder, this conference is being recorded. If you have not yet received a copy of the corresponding press release, it has been posted to PDFs 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 PDFs future financial results and performance, growth rates and demand for its solutions. PDFs actual results could differ materially. You should refer to the section entitled Risk Factors on Pages 15 through 29 of PDFs annual report on Form 10-K for the fiscal year ended December 31, 2022, 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, PDFs President and Chief Executive Officer; and Adnan Raza, PDFs Chief Financial Officer. Mr. Kibarian, please go ahead.

Thank you for joining us on today's call. If you've not already seen our earnings press release and management report for the third quarter, please go to the Investors section of our website where each has been posted. Before Adnan discusses the financials in detail, I have some comments about our observations from the third quarter, a summary of our Users Conference and our perceptions on the market for the remainder of the year. The third quarter was very similar to the first two quarters of the year. Revenue was strong as we experienced continued adoption of our end-to-end analytics by our customers. Bookings in the third quarter remained weak, even while we continued to experience a high level of presales activities, particularly for larger contracts. Significant contracts that closed in the quarter include a cloud provider, multiple existing and new customers deploying Exensio Analytics on the cloud for their own production and deployment of our Characterization infrastructure for a mature node in Asia. Bookings for Cimetrix Connectivity, run-time licenses continued to show modest improvements in Q3 versus Q2 as our customers' equipment shipments increased. Our yield ramp revenue decreased meaningfully as volumes in Asia declined and reduced gain share. Analytics revenue accelerated in the quarter because of the success of the second eProbe installed at the lead customer and increased applications deployed. We're very excited about the progress we are making with DFI and expect to ship our third tool to a new customer beginning a manufacturing evaluation this quarter. Overall, given our strong backlog and business model where most of the revenue is typically viably recognized, we continue to deliver strong results in revenue and earnings. On October 24 through to 26, we held our Users Conference and Analyst Day. Registration from over 100 companies was twice the…

Thank you, John. Good afternoon, everyone. Good to speak with you again today, and I hope all of you and your families are well. We are pleased to review the financial results of the third quarter and to bring you up to date on the progress of the business. We posted our earnings release and management report on the Investor Relations section of our website. Our Form 10-Q has also been filed with the SEC today. Please note that all of the financial results we discuss in today's call will be on a non-GAAP basis, and a reconciliation to GAAP financials is provided in the materials on our website. Financial results for the third quarter of 2023 came in strong with record revenues and strong bottom line EPS. We are pleased with the increasing platform level engagement we are seeing with our customers, utilizing the various product offerings from PDF Solutions. Third quarter total revenue was $42.4 million, up 6% from the comparable quarter last year, and incrementally up 2% versus the prior quarter of this year. Our Q3 performance demonstrates the continued business shift towards Analytics revenue, which accounted for 93% of the total revenue this quarter. Analytics revenue grew at 20% for Q3 compared to the same quarter of prior year. On a year-to-date basis, our Analytics revenue also grew a similar 20% compared to the similar period of last year. Within Analytics, during the quarter, we closed multiple Exensio deals greater than $1 million, mostly for cloud deployments, which helped grow our ratable revenue stream. For leading-edge, we're happy with the engagement we're seeing with our key customer and the installation of a second eProbe machine during this quarter with the same customer. As John mentioned, we are also preparing to ship an eProbe machine within this…

Thank you Mr. Raza. [Operator Instructions] Our first question comes from Blair Abernethy with Rosenblatt Securities. You may proceed.

Hi guys, nice quarter. Just want to ask you a little bit -- a couple of things. First is Cimetrix. I looked in your 10-Q, it sort of says it was a little lower year-over-year. Is that right, but sequentially, it was a little stronger?

Sequentially, it is a little bit stronger, both on the total revenue as well as we're starting to see strength throughout the year, frankly, even in the run-time licenses. On a year-over-year basis, Cimetrix, yes, just given the capex purchase cycles and the equipment shipments that we have seen, we have seen that come down as alluded to in our prior calls, particularly in the last Q2 call when we spoke about the rest of the year.

Okay. Okay. Great. So it sounds like -- then is that business bottoming out here then?

Yeah, we believe so, Blair. We track the backlog, in other words, like, run-time licenses that the customer takes from us, but they have not shipped the equipment and that bottomed out in Q1, the backlog has been slowly building up. In other words, customers expect to be shipping more equipment back out in the subsequent quarters. We still remain a little bit cautious about Q4. We don't know that it will improve all that much in Q4 over Q3. But as we look into 2024, we do anticipate it building.

Okay. Great. And just shifting to end markets, John, just with the increased U.S. export controls shipping into China in various shapes and forms over the last year or so. Is there any direct or indirect impact on you guys this year?

Yeah, I mean so far we've been kind of been a beneficiary of that. As we see a lot of activity in China, we see the run-time licenses for Cimetrix, a lot of it is going into China; Chinese equipment companies that use our software that are shipping in that country. So there's been benefits there. We've also had a fair number of fabless customers in China that use Exensio and manufacturers as well, factories that have tended to deploy Exensio. So, so far, that's been -- the kind of the accelerated rate of investment in China has been beneficial for our business in China. We did not see much impact for us on the leading-edge because most of our business in China has been on the trailing-edge, to be candid with you. We are waiting for that same effect to happen in the United States and in Europe as folks are starting to get access to their chipset money, and we start to see some behavior from customers, maybe a little bit more positive reactions. But we haven't seen that kind of government stimulus as being as big a factor in the West as we've seen it in China so far.

Okay, great. Thanks guys.

[Operator Instructions] And at this time, there are no more questions. Ladies and gentlemen, this concludes the program. Thank you for joining us on today's call.