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Exhibit 99.2

Q2 2023
Management Report
August 8, 2023

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Contents

◼ Q2 2023 Results
– Overview
– Key Financial & Operating Metrics
– Revenue by Geographic Area

◼ Q2 2023 Non-GAAP Results

– Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
– Reconciliation of GAAP to Non-GAAP Spending by Function

◼ Related Information
The following commentary is provided by management and should be referenced in conjunction with PDF
Solutions’ Second Quarter 2023 financial results press release available on its Investor Relations website at
http://www.pdf.com/financial-news. These remarks represent management’s current views of the Company’s
financial and operational performance and are provided to give investors and analysts further insight into its
performance in advance of the earnings call webcast. The Company disclaims any duty to update this information
for future events.

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PDF Solutions Reports Second Quarter 2023 Results

Q2 2023 Key Metrics FINANCIAL RESULTS SUMMARY

Revenue: $41.6M

GAAP Gross Margin: 70% ◼ Q2 2023 Total revenues of $41.6M, up

2% over Q1 2023, and up 20% over Q2
Non-GAAP Gross Margin: 74% 2022.
◼ Q2 2023 Analytics revenue of $37.1M,
GAAP Diluted EPS: $0.17 up 2% over Q1 2023, and up 19% over
Q2 2022.
Non-GAAP Diluted EPS: $0.19
◼ Q2 2023 Integrated yield ramp revenue
Operating Cash Flow: ($5.6M) of $4.5M, up 1% over Q1 2023, and up
26% over Q2 2022.
Cash Used for Capital Expenditures: $3.1M

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Key Financial & Operating Metrics – Quarterly
(in thousands, except share data, which is in millions, and percentages)

Q2’23 Q1’23 Q4’22 Q3’22 Q2’22

Revenues $ 41,601 $ 40,759 $ 40,523 $ 39,860 $ 34,668

GAAP Gross Margin 70% 71% 71% 69% 65%

Non-GAAP Gross Margin 74% 75% 74% 72% 69%

Outstanding Debt $- $- $- $- $-

Operating Cash Flow ($ 5,633) ($ 982) $ 24,275 $ 1,403 $ 3,624

Cash Used for Capital Expenditures (CAPEX) $ 3,099 $ 2,902 $ 1,725 $ 2,118 $ 2,822

$ Shares Repurchased $- $- $- $- $ 16,693

Weighted Average Common Shares Outstanding 37.9 37.7 37.4 37.2 37.0

Effective Tax Rate Expense (Benefit) (132)% 52% 55% 37% 821%

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Key Financial & Operating Metrics – Year to Date
(in thousands, except share data, which is in millions, and percentages)

Six Months Ended June 30,

2023 2022 2021

Revenues $ 82,360 $ 68,166 $ 51,619

GAAP Gross Margin 71% 65% 58%

Non-GAAP Gross Margin 74% 69% 63%

Outstanding Debt $- $- $-

Operating Cash Flow ($ 6,615) $ 6,620 ($ 195)

Cash Used for CAPEX $ 6,001 $ 4,587 $ 1,121

$ Shares Repurchased $- $ 22,471 $ 4,523

Weighted Average Common Shares Outstanding 37.8 37.3 37.0

Effective Tax Rate Expense (Benefit) (95)% 89% 9%

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Revenue by Geographic Area – Quarterly
(Dollars in thousands)

Q2’23 Q1’23 Q4’22 Q3’22 Q2’22

United States $ 22,339 $ 23,274 $ 20,756 $ 18,292 $ 17,086

% of Total 54% 57% 51% 46% 49%

China $ 7,421 $ 6,956 $ 6,280 $ 9,555 $ 4,539

% of Total 18% 17% 16% 24% 13%

Rest of the world $ 11,841 $ 10,529 $ 13,487 $ 12,013 $ 13,043

% of Total 28% 26% 33% 30% 38%

Total revenues $ 41,601 $ 40,759 $ 40,523 $ 39,860 $ 34,668

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Revenue by Geographic Area – Year to Date
(Dollars in thousands)

Six Months Ended June 30,

2023 2022 2021

United States $ 45,613 $ 34,577 $ 20,651

% of Total 55% 51% 40%

China $ 14,378 $ 8,659 $ 6,028

% of Total 18% 13% 12%

Rest of the world $ 22,369 $ 24,930 $ 24,940

% of Total 27% 36% 48%

Total revenues $ 82,360 $ 68,166 $ 51,619

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GAAP / Non-GAAP Presentation

In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles
in the United States of America (GAAP), the Company also provides certain non-GAAP financial measures. Non-
GAAP gross profit excludes stock-based compensation expense and the amortization of acquired technology.
Non-GAAP net income (loss) excludes the effects of certain non-recurring items, expenses related to an
arbitration proceeding for a disputed customer contract, acquisition-related costs, stock-based compensation
expense, amortization of acquired technology and other acquired intangible assets, and their related income tax
effects, as applicable, as well as adjustments for the valuation allowance for deferred tax assets. These non-GAAP
financial measures are used by management internally to measure the Company’s profitability and performance.
PDF Solutions’ management believes that these non-GAAP measures provide useful supplemental measures to
investors regarding the Company’s ongoing operations in light of the fact that none of these categories of
expense has a current effect on the future uses of cash (with the exception of expenses related to an arbitration
proceeding for a disputed customer contract, and acquisition related costs) nor do they impact the generation
of current or future revenues. These non-GAAP results should not be considered an alternative to, or a substitute
for, GAAP financial information, and may be different from similarly titled non-GAAP measures used by other
companies. In particular, these non-GAAP financial measures are not a substitute for GAAP measures of income
or loss as a measure of performance, or to cash flows from operating, investing and financing activities as a
measure of liquidity. Management uses these non-GAAP financial measures internally to measure profitability
and performance; these non-GAAP measures are presented here to give investors an opportunity to see the
Company’s financial results as viewed by management. A detailed reconciliation of the adjustments made to
comparable GAAP measures is included herein.

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Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
(in thousands, except for per share amounts)
Quarterly
Q2’23 Q1’23 Q4’22 Q3’22 Q2’22

GAAP net income (loss) $ 6,835 $ 355 $ 483 $ 1,385 ($ 1,147)

Adjustments to reconcile GAAP net income (loss) to non-GAAP
net income:

Stock-based compensation expense 4,678 4,884 5,088 5,136 3,872

Amortization of acquired technology 553 553 553 553 553

Amortization of other acquired intangible assets 326 325 325 318 314

Expenses of arbitration (1) 166 2,133 852 556 36

Acquisition-related costs (2) 176 — — — —

Tax impact of valuation allowance for deferred tax assets and
reconciling items (3) (5,238) (980) 98 (373) 664

Non-GAAP net income $ 7,496 $ 7,270 $ 7,399 $ 7,575 $ 4,292

GAAP net income (loss) per diluted share $ 0.17 $ 0.01 $ 0.01 $ 0.04 ($ 0.03)

Non-GAAP net income per diluted share $ 0.19 $ 0.19 $ 0.19 $ 0.20 $ 0.11
Weighted average common shares used in GAAP net income
(loss) per diluted share calculation 39,076 38,859 38,276 38,054 37,028
Weighted average common shares used in Non-GAAP net
income per diluted share calculation 39,076 38,859 38,276 38,054 37,615

(1) Represents expenses related to an arbitration proceeding over a disputed customer contract, which expenses are expected to continue until
the arbitration is resolved.
(2) Acquisition-related costs are incremental expenses related to a business or asset acquisition transaction(s). These expenses may include
consulting, legal and other fees. For the three months ended June 30, 2023, the charges were related to the acquisition of Lantern Machinery
Analytics, Inc.
(3) The difference between the GAAP and non-GAAP income tax provisions is primarily due to the valuation allowance on a GAAP basis and non-
GAAP adjustments. For example, on a GAAP basis, the Company does not receive a deferred tax benefit for foreign tax credits or research and
development credits after the valuation allowance. The Company’s non-GAAP tax rate and resulting non-GAAP tax expense is not calculated
with a full U.S. federal or state valuation allowance due to the Company’s cumulative non-GAAP income and management’s conclusion that it
is more likely than not to utilize its net deferred tax assets (DTAs). Each reporting period, management evaluates the need for a valuation
allowance and may place a valuation allowance against its U.S. net DTAs on a non-GAAP basis if it concludes it is more likely than not that it
will not be able to utilize some or all of its US DTAs on a non-GAAP basis.

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Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
(Loss)
(in thousands, except for per share amounts)
Year to Date
Six Months Ended June 30,
2023 2022 2021

GAAP net income (loss) $ 7,190 ($ 5,297) ($ 12,081)

Adjustments to reconcile GAAP net income (loss) to non-GAAP net income:

Stock-based compensation expense 9,562 9,425 6,111

Amortization of acquired technology 1,106 1,106 1,071

Amortization of other acquired intangible assets 651 628 628

Expenses of arbitration (1) 2,299 487 853

Acquisition-related costs (2) 176 — —

Tax impact of valuation allowance for deferred tax assets and reconciling items
(3) (6,218) 1,601 1,218

Non-GAAP net income (loss) $ 14,766 $ 7,950 ($ 2,200)

GAAP net income (loss) per diluted share $ 0.19 ($ 0.14) ($ 0.33)

Non-GAAP net income (loss) per diluted share $ 0.38 $ 0.21 ($ 0.06)
Weighted average common shares used in GAAP net income (loss) per diluted
share calculation 38,968 37,316 36,989
Weighted average common shares used in Non-GAAP net income (loss) per
diluted share calculation 38,968 38,096 36,989

(1) Represents expenses related to an arbitration proceeding over a disputed customer contract, which expenses are expected to continue until
the arbitration is resolved.
(2) Acquisition-related costs are incremental expenses related to the business or asset acquisition transaction(s). These expenses may include
consulting, legal and other fees. For the six months ended June 30, 2023, the charges were related to the acquisition of Lantern Machinery
Analytics, Inc.
(3) The difference between the GAAP and non-GAAP income tax provisions is primarily due to the valuation allowance on a GAAP basis and non-
GAAP adjustments. For example, on a GAAP basis, the Company does not receive a deferred tax benefit for foreign tax credits or research and
development credits after the valuation allowance. The Company’s non-GAAP tax rate and resulting non-GAAP tax expense is not calculated
with a full U.S. federal or state valuation allowance due to the Company’s cumulative non-GAAP income and management’s conclusion that it
is more likely than not to utilize its net deferred tax assets (DTAs). Each reporting period, management evaluates the need for a valuation
allowance and may place a valuation allowance against its U.S. net DTAs on a non-GAAP basis if it concludes it is more likely than not that it
will not be able to utilize some or all of its US DTAs on a non-GAAP basis.

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Reconciliation of GAAP to Non-GAAP Spending by Function
Quarterly
(in thousands)
Q2’23 Q1’23 Q4’22 Q3’22 Q2’22

Cost of Revenue - GAAP $ 12,369 $ 11,904 $ 11,791 $ 12,545 $ 12,042

Adjustments to reconcile GAAP Cost of Revenue to Non-GAAP
Cost of Revenue:
Stock-based compensation expense (938) (964) (737) (854) (655)

Amortization of acquired technology (553) (553) (553) (553) (553)

Cost of Revenue - Non-GAAP $ 10,878 $ 10,387 $ 10,501 $ 11,138 $ 10,834

Research & Development - GAAP $ 12,264 $ 13,051 $ 14,360 $ 14,303 $ 13,374

Adjustments to reconcile GAAP R&D to Non-GAAP R&D:

Stock-based compensation expense (1,619) (1,794) (2,233) (2,180) (1,810)

Research & Development - Non-GAAP $ 10,645 $ 11,257 $ 12,127 $ 12,123 $ 11,564

Selling, General, & Administrative - GAAP $ 14,766 $ 15,645 $ 12,724 $ 12,005 $ 9,770

Adjustment to reconcile GAAP SG&A to Non-GAAP SG&A:

Stock-based compensation expense (2,121) (2,126) (2,118) (2,102) (1,407)

Expenses of arbitration (1) (166) (2,133) (852) (556) (36)

Acquisition-related costs (2) (176) — — — —

Selling, General, & Administrative - Non-GAAP $ 12,303 $ 11,386 $ 9,754 $ 9,347 $ 8,327

(1) Represents expenses related to an arbitration proceeding over a disputed contract with a customer, which expenses are expected to
continue until the arbitration is resolved.
(2) Acquisition-related costs are incremental expenses related to a business or asset acquisition transaction(s). These expenses may include
consulting, legal and other fees. For the three months ended June 30, 2023, the charges were related to the acquisition of Lantern
Machinery Analytics, Inc.

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Reconciliation of GAAP to Non-GAAP Spending by Function
Year to Date
(in thousands)
Six Months Ended June 30,
2023 2022 2021

Cost of Revenue - GAAP $ 24,273 $ 23,571 $ 20,848

Adjustments to reconcile GAAP Cost of Revenue to Non-GAAP Cost of Revenue:

Stock-based compensation expense (1,902) (1,383) (1,190)

Amortization of acquired technology (1,106) (1,106) (1,071)

Cost of Revenue - Non-GAAP $ 21,265 $ 21,082 $ 18,587

Research & Development - GAAP $ 25,315 $ 27,463 $ 21,905

Adjustments to reconcile GAAP R&D to Non-GAAP R&D:

Stock-based compensation expense (3,413) (4,978) (2,714)

Research & Development - Non-GAAP $ 21,902 $ 22,485 $ 19,191

Selling, General, & Administrative - GAAP $ 30,411 $ 20,609 $ 18,874

Adjustment to reconcile GAAP SG&A to Non-GAAP SG&A:

Stock-based compensation expense (4,247) (3,064) (2,207)

Expenses of arbitration (1) (2,299) (487) (853)

Acquisition-related costs (2) (176) — —

Selling, General, & Administrative - Non-GAAP $ 23,689 $ 17,058 $ 15,814

(1) Represents expenses related to an arbitration proceeding over a disputed contract with a customer, which expenses are expected to
continue until the arbitration is resolved.
(2) Acquisition-related costs are incremental expenses related to a business or asset acquisition transaction(s). These expenses may include
consulting, legal and other fees. For the six months ended June 30, 2023, the charges were related to the acquisition of Lantern Machinery
Analytics, Inc.

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