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Investing.com -- PDF Solutions (NASDAQ: NASDAQ: PDFS ) shares fell 13% today after the company reported mixed results for the fourth quarter. The data solutions provider for the semiconductor and electronics ecosystem disclosed a fourth-quarter earnings per share (EPS) of $0.25, which was slightly below the analyst estimate of $0.26. However, the company's revenue for the quarter was $50.1 million, surpassing the consensus estimate of $49.3 million.

Despite achieving record quarterly total revenues, which marked a 22% increase from the fourth quarter of the previous year, and record analytics revenue, also up 22% YoY, the stock faced a downturn due to the earnings miss. The company's GAAP gross margin remained stable at 68%, the same as the fourth quarter of 2023, while non-GAAP gross margin was reported at 72%.

For the full year, PDF Solutions reported revenues of $179.5 million, an 8% increase from the previous year, with analytics revenue up 11% YoY. The company's backlog stood at $221.4 million as of December 31, 2024, indicating a solid pipeline of future revenue.

The financial outlook provided by CEO John Kibarian reflected a positive trajectory, with expectations for the company's full-year revenues in 2025 to grow at a rate approaching 15% YoY. This forecast follows a year where the company reported an 8% revenue growth. Kibarian's comments highlighted the completion of an eProbe machine evaluation ahead of schedule, multiple Exensio deals, and growth in the Cimetrix connectivity business.

Analysts have weighed in on the results with cautious optimism. A Rosenblatt Securities analyst commented, "The results show improved gross margins, but as several end-market segments continue to struggle, PDF now expects FY25 revenue growth of ~15% (reported 8% in FY24), before returning towards its ~20% long-term target rate." This sentiment underscores the mixed feelings among investors, acknowledging the company's solid performance in certain areas while remaining aware of the challenges in others.

PDF Solutions' cash position remains strong, with cash, cash equivalents, and short-term investments totaling $114.9 million as of the end of the fourth quarter.

The market's reaction today reflects the delicate balance that companies like PDF Solutions must navigate in an environment where even record revenues and positive future outlooks are tempered by the reality of missed earnings expectations and the ongoing struggles in certain market segments.

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