Good day, ladies and gentlemen, and welcome to the PDF Solutions, Inc. conference call to discuss its financial results for the Q3 ending Wednesday, August 31, 2022. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session for which instructions will be given at that time. If you need assistance during the conference, please press star then 0 on your telephone keypad. As a reminder, this call is being recorded. If you have not yet received a copy of the corresponding press release, it has been posted to PDF's website at www.pdf.com. Some of the statements that will be made in the course of the 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 17 through 30 of the PDF's annual report on Form 10-K for the fiscal year ended December 31, 2021, 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 Adnan Raza, PDF's 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, management report, and 10-Q for the Q3, please go to the investor section of our website, where each has been posted. I will start the discussion by providing commentary on the Q3 and early part of the Q4. From there, I'll provide our impressions of the current state of the semiconductor industry, the situation with respect to geopolitical factors, and the potential impact of the general economy on our business. I will conclude with our expectations for PDF business for the remainder of the year before handing the call over to Adnan Raza for more detailed financial update. On our last quarter's call, we expressed our confidence in the second half of 2022 bookings. We pointed out that protracted nature of some of our larger multi-element engagements with customers would mean that back-bookings would be lumpy and generally stronger in the second half than the first half. The third and early Q4 bookings show that we are realizing that prediction. Notable events include bookings of Cimetrix runtime licenses were near all-time highs, even as our equipment partners continued to experience parts shortages that limited some of their shipments. Bookings of Exensio in the quarter included an eight-figure contract with a large integrated device manufacturer to renew cloud-hosted manufacturing analytics for a number of additional years, and to add deployment of test operations for both the customer's internal test floors and multiple OSAT, which enables this customer to leverage the platform benefits. At the beginning of the Q4, we booked a multi-year renewal for characterization and DFI infrastructure and for services for a customer using PDF Solutions on the leading edge. The last contract enables our customers' engineers to use in the cloud Exensio Analytics and our software for IP hardening and design manufacturing co-optimization, as well as characterization vehicle test chips and our DFI systems on-premise. The contract term is through 2027, and while the total value of the contract is the largest in our history, it is also just the minimum commitment by the customer. Underlying the contract is a mechanism that allows the customer to order additional elements such as additional cloud capacity or additional eProbe tools on a subscription basis. Revenue in the quarter was a significant step up over Q2, and Adnan will go through the details. This included additional revenue from organic growth in gainshare at 28-nanometer volumes at multiple customers, particularly in China, that grew substantially for the Q3. Gainshare from the most significant 28-nanometer contract runs through the end of the decade and is not subject to any current geopolitical restrictions. A year ago, when our legacy gainshare contracts ended, we felt that Q3 2021 would be the bottom for gainshare revenue, and we expected to see a rebound. For years, we have said that we expected gainshare on 28-nanometer, particularly in China, would increase at some point. We are pleased to see the increase this year. Turning to partnerships, we continue to increase activity. As you may have seen, Advantest announced their app store with 4 Exensio apps already available. We anticipate releasing additional apps to the Advantest store in the Q4 this year and early next year. We booked additional licenses for our first integrated product, dynamic parametric tests or DPT, that was originally released in 2021. With the success of DPT and these new apps available for the ACS Edge Box, we believe our relationship with Advantest will continue to progress. You may have also seen that Exensio is now featured on the manufacturing intelligence section of the Amazon website, covering AWS solutions for high-tech electronics and semiconductors. Overall, we anticipate our investments in strategic collaborations will bear more fruit in the coming years. With strong bookings in Exensio, Cimetrix connectivity, characterization, and DFI systems, as well as continued progress with our partners, the Q3 demonstrated PDF Solutions' broad value and strategic relevance across the IC ecosystem. From equipment companies to system manufacturers, PDF's data analytics platform is becoming ubiquitous in the IC industry. Moreover, our strong bookings in the year so far means we will end 2022 with strong backlog. Remember that our backlog does not include gain share, Cimetrix runtime licenses, or overage charges for Exensio usage. When factoring in our expectations for these, as well as our committed backlog, we expect to enter 2023 in our strongest position ever. Now let me turn to our perspective on the geopolitical situation, IC industry, and the general economy. As many of you have seen, as of October 7, the U.S. government placed restrictions on U.S. entities and persons from supporting leading-edge logic, DRAM, or flash facilities in China that are not owned by multinationals. We have been studying these regulations closely and have worked with outside counsel and the U.S. government for clarification. In addition to any potential impact on our ability to sell or support our products and services, we believe these new regulations may impact our customers in China that are developing advanced nodes and change their buying habits. In the least, it may delay some buying decisions on their part. As a result, although our current business is not immediately impacted significantly, we are being conservative in estimating the potential impact on our future business in 2023 at this time. There is a silver lining here, and you see it in our revenue from China this year when compared to last. China's revenue in the Q3 of this year is up 80% over last year, last year's comparable quarter, primarily due to Cimetrix licenses, Exensio, and gain share, even after adjusting for one-time gain share in Q3. Moreover, PDF has been in China since 2006, and particularly through the pandemic, has built out a team that can support and serve our customers locally. We have not had any U.S. expats in China since 2018. Hence, while there may be restrictions on some of our products, we anticipate our Chinese customers investing less in the leading-edge technologies and more in 28 and above, as well as in fabless entities moving to production. We therefore expect that we will have important products we can sell them, complete with fully local support. We believe China is an important market for PDF to continue to serve while ensuring full compliance with the U.S. rules and regulations. As for the IC industry and general economy, it is clear that our customers, to varying degrees, whether they are in the equipment, foundry, fabless, or system business, are either experiencing or anticipating a slowdown. At the same time, the economic slowdown is occurring, the CHIPS Acts have passed in the U.S. and other countries, and there are big movements in supply chain with customers expanding capacity globally. As a result, it is a particularly active time in the industry with both benefits for and pressures on our business. Far, the benefits have greatly outweighed the pressures. We believe this is due in part to the choices we have made over the years that have made our business more resilient. This is the evidence that PDF Solutions is well on the way to becoming the platform of choice for advanced data and analytic solutions for the IC ecosystem. I want to thank our employees for their commitment to the company, our customers, and their colleagues, which has helped us thrive through the COVID lockdown, grow through the chip shortage, navigate the geopolitical landscape, and the chip supply corrections. With a large backlog, a strong PDF team located around the world, valued products and services, and committed customers, we expect to continue success in driving adoption of our solutions. Now I'll turn the call over to Adnan for review of the financials, after which we will open the call for your questions. Adnan? Thank you, John. Good afternoon, everyone. Good to speak again with you today, and I hope all of you and your families are keeping safe. We're pleased to review the financial results of Q3 and to bring you up to date on the progress of the business. We have 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 Q3 of 2022 were strong and continued our momentum with record revenue and solid year-over-year performance. It is worth noting that with the Cimetrix acquisition, which closed in 2020, this year, 2022, will reflect an entirely organic revenue growth year versus last year's. We are pleased to report that Q3 total revenue was $39.9 million. Up 35% from the comparable quarter last year and up 15% versus the prior quarter of Q2 this year. Our strong results were positively impacted by four factors. First, our 2022 bookings through today surpass our full-year 2021 bookings. The largest deal for the Q3 was a multi-year $10+ million Exensio deal with revenue recognition over time, which we believe has the opportunity to expand over the contract term and sets us up well for renewal from future elevated levels. Q4 bookings through today exceed $100 million and will be recognized over multiple years. Including this, bookings for the second half of the year are already 2x larger than bookings for the first half of the year. Second, we experienced one-time increases this quarter in customer reported gainshare shipments of approximately $2 million related to customer production periods earlier in the year. Third, our Exensio business also had one-time services related revenues recognized this quarter, which were significantly smaller than the one-time increases in gainshare I just mentioned. Fourth, our gainshare during Q3 was more than 3 times the gainshare in the year-ago quarter, even after adjusting for the one-time gainshare this quarter. While quarter-to-quarter, we may experience fluctuations due to customer production driven by two factors: internal constraints and end market demands. Over the longer term, we expect gainshare to be a strong contributor to our results through the end of the decade. Turning to the components of our revenue, analytics revenue was up 21% to $32.9 million in Q3 this quarter versus same quarter last year, was up 6% sequentially versus the prior quarter of this year. Across the board, we are pleased with the strong year-over-year growth from all pieces of our analytics platform, Exensio Analytics, Leading Edge, and Cimetrix Connectivity. IYR revenue for the quarter was $7 million, a strong increase of 196% for the same quarter on a year-over-year basis and 97% versus Q2 of the year. All this said, we look at 2023, we remain cautious about the macro, geopolitical, and regulatory environment and continue to evaluate the various restrictions, especially U.S.-China relations. On expenses, our combined spend from cost of sales and operating expenses for the quarter was up $1.9 million over the last quarter, driven primarily by increases in headcount to support our growing business, some cloud costs, and small increases in travel expenses as we visit customers. Our gross margin for the quarter of 72% benefited from the one-time high margin gainshare during this quarter. As we have said before, while we have a strong focus on managing expenses from quarter to quarter, we will make the necessary investments to enhance our technological capabilities and competitive position to further cement the strategic relevance of our data analytics platform. We are pleased with the positive $0.20 of non-GAAP EPS reported this quarter as a result of combination of both items, strong revenues, and management of expenses. For the year to date through Q3, we have now generated $0.41 of non-GAAP EPS. We look forward to Q4 and delivering on a strong year. Given the strong bookings growth, we expect to close this year with a record backlog meaningfully above last year's level. We also track uncontracted backlog or what we internally call shadow backlog, which is not reported in our committed backlog numbers and encompasses estimates for gainshare, Cimetrix licenses, and overages on Exensio Cloud usage. While strong backlog will position us well for the coming years with multiple macroeconomic and regulatory changes, we are evaluating our models for 2023 and will provide an update on the next earnings call concluding fiscal year 2022 results. Turning to the balance sheet, we ended the quarter with cash equivalents and short-term investments of approximately $116 million. Please stand by while we reconnect your presenters. Again, please hold the line while we try to reconnect your presenters. You may proceed. Hello? Are we back on? Yes, you may proceed. Great. Sorry about that. After it something of these I've done, this is the first time it's ever happened to us. Apologize for the drop. I hope all of Adnan's prepared remarks were communicated; then we can go right to Q&A. We weren't really paying attention when we got dropped off. Hello. If you would like to ask a question, simply press the star key followed by the digit 1 on your telephone keypad. Also, if you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, press star 1 at this time. We'll pause for a moment. As a reminder, it's star 1 if you'd like to ask a question or make a comment. It appears there are no questions at this time. I'll turn the call back over to our presenters for any additional or closing comments. Are you sure about that? Is there anybody actually dialed in right now? 'Cause when we dropped off or they dropped off as well, it's. I've also done it something of these, and I've never had a call with no questions. Seems off. we have quite a few participants. We didn't lose anyone else when your line disconnected. For a test, maybe can we have- My internal team is telling me there were five more paragraphs when my line dropped. I don't know if anyone can listen. Do we know if other listeners are on the call? Yes, there are. You're in conference with them. Okay. Maybe we can confirm that by going to Q&A, and then, as we confirm that, we will just repeat the script, the last piece. Sure. Maybe you can open up the Q&A session and see if anyone has questions. Absolutely. Again, star 1 to ask a question or make a comment. If someone can signal just to confirm you can hear us. Again, star 1to. Andrew, your line is open. Can you confirm you can hear us? Yes, I can hear you. John, Adnan, can you hear me? I hear you, Andrew. Good. Okay. Well, first of all, you got cut off when you were starting to talk about the cash on the balance sheet. Okay. I don't know what was in the prepared remarks after that, but that's when I got off at least. No, it is only one paragraph left after, which may be worthwhile repeating. If you'd allow me, I'll just read it off quickly, Andrew, just to kind of keep the continuation going, and then I'll turn it back to you as the first question. Just to finish it off, and thank you everybody else for your patience. Turning to the balance sheet, we ended the quarter with cash equivalents and short-term investments of approximately $116 million and no debt. Now turning to forecast for the full year revenue for 2022, we believe we can close out 2022 with year-over-year growth rates approaching 30%, purely organically, which would be better than the 26% year-over-year growth we delivered for 2021. We believe we are at the start of a multi-year growth cycle for PDF and our stockholders, where we've established our data analytics collection and connectivity platforms and are starting to garner attention and recognition from the leading cloud infrastructure players, ERP leaders, and Semiconductor test software and hardware platforms. Then we turn to questions. Andrew, if you're still there, back to you then. Thanks for your patience. Again, it's star 1 to ask a question. Andrew, do you have a question? Yes. Hello, John. Can you still hear me? Yep. Yes, we can. Can you hear us, Andrew? Hello? Hear me? Andrew, please proceed. Hello? John? We can hear you. We can hear you. Okay. Sorry about that. On the last call,, you talked about having identified,, I think,, a valuable application of DFI and that,, sort of your initial customer,, was usage had,, noticeably risen, and you sort of expressed some enthusiasm for,, selling either additional tools,, and driving sort of further,, adoption or commercialization. Perhaps you could give us a little bit more of an update. Did that deal,, in that you signed in early Q4, did that include an additional machine? A ny other sort of color you could provide on that would be great. Sure, Andrew. The contract that we described that we signed in early Q4 does include, and is actually a big piece of it, these applications, particular one that we talked about on the last call for design for inspection in the eProbe, and does include eProbe shipment in the contract. As I said in the prepared remarks, it also includes the ability to consume additional machines, as negotiated in the terms of the contract as well. They have the ability to expand beyond what is minimally committed in the contract. That's why I spoke with some confidence on the last call. As I said in prepared remarks, these are very large, significant contracts. The bookings tend to be lumpy. 1/8 -figure contract closed in the quarter in Q3 and the other contracts that we talked about, the total bookings value of for the other contracts in excess of $100 million in Q4, those signed in the early part of Q4. Okay. Second, that 8-figure, I think IDM. Exensio deal sounded like it was both for, to work internally as well as at their OSAT. Is this... I think you've talked in the past about, sort of trying to secure some like beachhead customers for, to really ramp or expand the DEX networks, at OSAT, to create this, sort of virtuous, this ability to, share information throughout the ecosystem. Is that involved here? Is this, am I reading too much into that? No, you're correct, Andrew. Yes, this does include both support for their internal test floors, which is a closed world, as well as PDF supporting fully DEX nodes at their OSATs run on PDF's environment, so that they, as well as others, can enjoy real-time access to their test flow. This, as well as some other contracts that we've been doing, some of which we'll talk about in the future, expand the network of DEX nodes, and I think give customers more real-time access to their data around the world. I guess maybe the last question I had was, obviously great to see the strength in the bookings, through this call. What are you seeing activity-wise, sort of as you look through the balance of the quarter? Is there still strong demand? Is there been a change in behavior at all? it's been, obviously, the Q4 started out very strong. We still have a number of contracts in discussion, negotiation with customers, and we expect we're not done yet for the quarter. We're not sending everyone home on holiday on November tenth or whatever it is today. There's enough, there's quite a bit to get done for the remainder of the year. We do see a lot of activity on the part of our customers and a desire to move forward. obviously we're not immune to and not oblivious to the slowdown in the chip industry overall and the economy. So far it's been very good for us and continues to be. We just don't know what that means for 2023. you could look at it and say, "Well, it's great. Everything's gonna be super great." Or you could look at it and say, "Okay, the general economy is gonna be bad." At this point,, we have no reason to change our own outlook internally. I don't know how you guys are all gonna build your models, but I don't know under what data you could use to meaningfully move models up or down in this environment 'cause it's, there's been a lot of local things that are quite good for us, and you look in the general market and say there's a lot of troubling things out there geopolitically and general economy anyway. Okay. Great. Thank you. As a reminder, it's star 1. If you would like to ask a question or make a comment, please signal by pressing star 1 at this time. We'll now hear from Tom Diffely of D.A. Davidson. Yes, hello. Good afternoon. It turns out that I pressed star 1, like, 20x, and the last time it finally worked, so there was a little something wrong with the system getting to go. I'm sure there's probably others that have been pushing star 1 as well. Yes. Anyway, John, I was wondering if you could just give us a little bit more of your view of how the geopolitical restrictions are gonna impact you in kind of the mid to long term. I know there's a lot of crosscurrents that are going on right now, but just from a big picture point of view? It's from a big picture perspective, Tom, we've been trying to square the circle. Of course, there's the specific things with respect to our products, which ones,, what we can and can't do in China and how we can operate in China. There's a number of layers to that. Not only do the products need to have no U.S. content, but also the way you operate needs to be in situations where you don't have U.S. people involved if you're gonna work with ABC factories, what are called ABC, advanced node factories. We believe most of our activity with customers is not on leading edge, but actually on trailing edge facilities, fabless companies accessing trailing edge fabs, and, other parts of the supply chain. When we looked at our forecast out in 2020 for bookings in 2023 and 2024, we think some of the things that were associated with leading edge probably won't happen because for a variety of reasons,, not the least of which they can't get equipment to do what they need to do. at the same time, we see customers accelerating what they're doing on trailing edge nodes in China. We think it's gonna change their buying behavior, which is kind of what we put in my prepared remarks. We think we have plenty to sell them on those nodes and capabilities. Kind of irrespective of what we are able to do with leading edge nodes, it doesn't really matter very much. We think most of the market for us in China will be on the mature nodes in 2023. Then what we don't know is just how will the buying patterns change in China? Obviously, U.S. has been very aggressive with these restrictions. We don't know how the Chinese government will react and what that means. You know it gives us a moment of pause just to think, okay, even if we have customers that wanna buy, and we have things that we can sell them and ways of delivering, et cetera, we don't know what it really means over the long term. In the short and medium term, it's been quite good for us. On 28-nanometers, we talked about in the gain share on Exensio usage, et cetera. When we look further out, we're going to assess what really is going to happen. I think it's very hard to forecast the future in this regard, right? 'Cause it's- Okay. No, it's very helpful. When you look at the mature nodes, is it across the board of the mature nodes, or is there a particular sector like power or silicon carbide that's really driving a lot of that activity level right now? Data across the board there. They have a big effort on auto, on electrification of automobiles in China. You do see a lot of the high voltage stuff going on in China. You also see 28-nanometer and microcontrollers and IoT of things, and stuff like that, and everything in between. We do see quite a bit of activity with customers across many product families that are not subject to U.S. restrictions at this time. Okay. Then moving over to the gain share, it sounded like there was about a $2 million one-time piece of that. Was that just for work done in prior quarters, a catch-up period as well, or is there something more to it? First of all, we are happy that gain share number is much higher than we expected, and overall, it helps the trend compared to Q3 of last year for what we're seeing. I think the right way to think about it is on a year-to-date basis, in terms of progress. Yes, it related to later reporting from the customer, particularly some of those customers were experiencing some COVID-related shutdowns. From a reporting standpoint, they're caught up with the reporting during this quarter. Okay. It looks like even if you take out that $2 million. Oh, go ahead, John. It's a production in 2022, right? are caught up on reporting in Q3, in part because I think some of their ability to operate their offices during the COVID shutdowns. Okay. Even if you take out the $2 million, you're still showing some nice growth in that line item. Oh, I mean, Q3, just for that particular customer in and of itself, even if you took out the one-time adjustments, was a very respectable growth compared to Q1 and Q2 of this year. Overall, from this customer, we're starting to see the volumes ramp up, and similar to what John said earlier, that it's trailing edge volumes that we see picking up. Great. Finally, obviously nice to see the Advantest for the DPT come out. How many such projects do you have that are gonna, you think, roll out over the next several years? Well, several years is hard to forecast, Tom, but I can say over the next couple of quarters, we expect to put out a number of additional applications for Advantest that you will see us announce. There's also other activities with Siemens Tessent, a productization going on, work with Kulicke & Soffa on productization work there, activities with SAP and the productization of the integration of Exensio Analytics with ERP systems. each one of these partnerships, when we take them on, we make a commitment on the development side, not just the kind of marketing and press release side of it. There will be products associated, at least one product associated with each one of these releases. In the case of Advantest, where we have the most work going on,, we are already at,, the 4 on the website plus DPT and a handful more of them in the next couple of quarters that we'll quickly be approaching 10 apps at across just for them. Oh, great to hear. Okay. Well, thank you both for your time today. Next, we'll hear from Gus Richard of Northland. Yes. Thanks for taking the question. I think I beat Tom on the number of times I hit star 1. Real quick on this new contract, you've got a part of it is DFI. It sounded like it is a subscription service or are you shipping a tool? sort of, what does that do to the availability of DFI tools after this transaction? Sure. It does include shipping a tool. As I said in my prepared remarks, Exensio and our IP hardening software we call Templatizer, our design-manufacturing optimization software we call FIRE, those are available on the Exensio Cloud, so they access that from the cloud. But obviously the characterization vehicles and the DFI infrastructure needs to be on-premise. Those are on-premise, and that will ship. That will, of course, reduce. we'll have fewer machines that we could ship. to be candid with you, Gus, we have really only a couple that we could truly ship to customers at this point beyond what we're committed to in 2023. We're very careful to make sure we've got customers really fully getting maximum value of what we shipped, and moving appropriately. We think there's plenty of revenue growth in the way we've structured the business so that we can make sure we support the customer well, and they get the full leverage on the capability. I think we're well on the way to making that work with this existing installed base as well as being able to take on additional customer. Got it. On the 8-figure deal that was an existing customer. It sounded like it was a new contract. Could you give me a sense of,, they were at a certain run rate, how much did it increase, in this new contract? do you have other ones like it teed up? the specifics on how much it increased, it was in the tens of%. The specific number I don't know off the top of my head. It is an expansion on all their test floors. It is a movement to the cloud for the infrastructure from a very distributed on-premise deployment. It also includes the ability for them to expand into advanced AI and analytics connections to their ERP and other things that are upsells as well as expansions on number of testers and cloud capacity, et cetera. While it is an eight-figure deal, and it is I think the largest contract with the exception of Advantest that we've ever closed for Exensio, it has the ability to grow pretty substantially. Secondly, do we have others like this? Yes. Many of the customers, I should say all, that are on Exensio Cloud or on their manufacturing analytics are starting to see the potential of connecting their cloud to the edge with our DEX nodes and edge capability as ability for them to get higher operational efficiency on their manufacturing assets, better product quality and better product yields. In this case, we're able to demonstrate that to the customer, and we're really psyched about the commitment they made to Exensio, and we are engaged with other customers on similar expansions. Some of them are partway through their contract. This is a customer that was at the end of their time-based licenses, it all got done as one renewal. Other customers, you may see them just tack on,, a contract value, but the annual recurring run rate will be similar in size, if not larger. Okay, this was a transition from TBL to perpetual. No, to cloud. To cloud, rather. not perpetual. My bad. Last one for me on the deferred revenue line, it was up quite a bit sequentially, and I was just wondering what that was relate to? I mean, part of it is going to be billings that happened within the quarter. we have some big customers, one of whom that John mentioned, related to Advantest, right? So when we do billing, then the deferred revenue will move up because of that, and then we'll work our way through consuming that. Of course, some of the bookings number, if they've been billed, will also start to reflect on that. So,, overall, it's the billings-related impact that you will start to see in the deferred revenue, which we're happy about. Got it. All right. Thanks so much. Thanks. Sorry about the snafus. It happens. Again, star one to ask a question. Next, we'll hear from Christian Schwab of Craig-Hallum Capital Group. Hey, guys. Just a quick question. Maybe it was in the prepared comments. I know we talked about greater than $100 million in bookings. I think last quarter you said your backlog was at $184 million. Do you have an updated number for us? Yes. We put it in the filing. It's about $185 million, which by the way, yes, it's only up about $1 million or so, but the reality is the fact that we had a record revenue quarter and still were able to incrementally move up the backlog is something that makes us. The $100 million of bookings that we discussed on the call, Christian, you might have missed, was for Q4. Got it. What Adnan Raza is referring to is the value at the end of Q3. You would take that booking and make it additive to that backlog number. Wow. Excellent. Okay, perfect. That's where I was slightly confused. Then, I appreciate. I think in the beginning of the prepared comments, I think you guys were gonna wait one more quarter to given the situation in China and slow down and dislocation certain high volume markets that the semiconductor industry is facing. That being said, we started the year thinking that we were at 20%-25% business. We're gonna end up at 30%. We've added new partners. We've just talked about big, huge deals. We talked about the huge bookings that are gonna happen in Q4. I mean, as a baseline, I assume it's safe for us to still think about 20%-25% for 2023. I mean, at this point, Christian, we really would give this perspective in our February call, and we still wanna, now we've been in a year where there's kind of more visibility. This is a pretty crazy year. I jokingly said, I like our house. I'm not sure about the neighborhood. WhenIf you just look around, we don't know how that's how that stuff isn't going to affect us at some point. So far it hasn't. We had obviously a great year on the podcast. Have a great year. We are just being cautious. if I were you. We're not changing our internal models. I don't know why someone would change models on the outside, yet until we get a little further along. It's very easy to just go back and change them because I understand what you're talking about. It's all. When you look at our stock pattern, it's very positive, and it's easy to get excited. but at this point,, prudence may be to not change things until we understand more about the world. Great. My last question is just for the clarity on China. You have limited exposure on leading edge memory or foundry logic customers, where the government has stopped the ability of U.S. companies to work with. Did I hear that correct first? Roughly, of your Chinese exposure,, speaking nationalistically, non-Chinese manufacturers have facilities there who already have received licenses. nationalistic Chinese-based companies, do you have a rough estimate of your exposure to the leading edge? We do. we believe that we're relatively insulated from the leading edge on that piece, and we do look at places where our own team had forecasted selling into leading-edge facilities that we have to go back and look at. I think the bigger factor than whether we can sell or not and what we can do or not is,, if you can't get lithography systems, if you can't get etchers,, if you can't get deposition tools, then there's not a lot of data to analyze, and there's nothing you can run a vehicle through. we think that's gonna change our. We're already seeing the way customers are reacting a little bit. We believe they're gonna pivot a lot more to mature nodes where their ability to execute is unfettered and they're able to execute, as you can see by nature of our gainshare report this quarter. We expect that, naturally the market's gonna pivot that way. We're still waiting to see. That would be very good if that happened. We're still waiting to see. These are practical business folks, so they're gonna tilt at windmills if they can't execute. Right. That's gonna change buying habits. That's what we think. Right. Thank you for that. I think a lot of people agree they'll just take the wafer starts and move it to where they can get access to front-end equipment. They're not gonna stop making semiconductors. Great. All right. Perfect. No other questions. Thank you. Thank you, Christian. As a reminder, if you'd like to ask a question or make a comment, press star 1 at this time. We'll now hear from Blair Abernethy of Rosenblatt. Thanks very much. Nice quarter, guys. Adnan, I just wonder if you could just go back for a moment. Just before you were cut off in your prepared remarks, you started talking about the shadow backlog estimates versus your, I guess, your RPO is 185.4 this quarter. Can you just give us a little more insight into how you're looking at that and just any way you court load size it for us? Look, I mean, I'll tell you, explain a little bit more about what we think that goes into the shadow backlog and what it is. In terms of sizing, what we're doing today is frankly just starting to talk to you all about this. Hopefully, the future Analyst Day or something like that, we can talk a little bit more about the sizing. That would be our desire. In terms of how we measure backlog, it is, and reported in our filings, the contracted number that we have from customers, right? What is not included are the pieces that we alluded to, which is what we call shadow backlog, which is really the gainshare that would come in the future periods, which could also be the second piece of runtime licenses for some metrics, where we just get a customer order and fulfill it within the quarter. The third piece, of course, is the overages from Exensio. Even on the third piece, we're starting to get some of those pieces in. If you look at each one of those, let's strike at each one of those. I mean, on the gainshare side, there are customers with whom we have contracts all the way to the end of the decade. On the runtime licenses side, even if the world was to fall apart, there's an argument to be said, okay, there are certain number of customer shipments that would happen. It's not like they would be zero, so some estimates would be fair to think about. Similarly, on Exensio usage, as that platform is becoming more relevant, more present, and broadly adopted within the organizations, we have seen the usage go up, so we expect that we'll be able to charge more. Maybe I can provide a little bit of, like, a market depth to that answer. If you just look at gainshare, we put in our backlog estimate 0. As we said, the customer surprised us in Q3 with a substantial number. We know it's not going to 0 in Q4. As Adnan said, those contracts run out through, some of them run out through the end of the decade. In our own model, we started to just go through and say, okay, what would be a likely value per quarter over the next 7 years for that contract, and then layer that in for the other contracts. We used to do that in the old days. We had it for a while because we'd just gotten so, disappointed with the uptake on gainshare in China that we stopped looking at it. Similarly, with the runtime licenses, the way we work on Cimetrix is we sell a design kit, software design kit, development kit, that the customer then embeds our software with their equipment. We don't put in the backlog any estimate for them selling equipment, but they sold. our runtime licenses last quarter were obviously $ millions, and so the next quarter they're gonna sell something, right? Once it's designed into the equipment, they're not gonna take it out. Right? For that equipment's life, in all likelihood, every time they sell equipment, there will be a runtime license that will come our way. We've started to put some estimates on that, assuming a certain shelf life for a piece of equipment and, up and down markets, et cetera. Again, it's similar in magnitude to what we think about the gainshare number. Then lastly in our Exensio contracts if customers wanna use more storage or wanna be able to load data faster or connect more testers often there are overage charges in the contracts. Again since those are not committed those don't go into our backlog. Now we're starting to see customers go over and us bill them so we're starting to understand a little bit about the overage. That's one we're the newest in right? We've not been at the cloud business so long. We're just still learning that one the most. I would say that one we have the least understanding. The other two we we're starting to understand a little bit better. That's kind of the nature of the shadow backlog. It's not an insignificant number. We'll start to quantify it for you all into next year. That's really helpful. Thank you very much. One other just sort of question just on renewals. I guess if we were looking at Cimetrix customers as an example, in particular, what's the renewal profile look like? For next year, is it fairly evenly spread out or, is it kinda more back-end loaded? What kind of expansion or pricing opportunities do you have on some of your reneals? Let me try to answer that a little bit more broadly. I mean, there are renewals every year. I don't know that we've seen like a particular pattern to it yet on,, in terms of one year over the next or one quarter over the next. so I don't know that we could really give you an answer on the profile from that perspective. as far as so far on the Exensio renewal year,, the average,, the contract value per year has gone up pretty substantially. I talked about them on the call,, the last few quarters, but they're in the tens of% at least,, annual recurring run rate increases, usually pretty substantial. We are still quantifying that to get enough of a sample size that you can kind of draw an inference. for Cimetrix specifically, since you asked about that, Blair,, there's really two elements on backlog there. One is the software development kits used to be perpetual. More and more we're selling those on time-based licenses. So those are becoming TBLs too. That is a smaller part of the Cimetrix revenue. The larger part of the Cimetrix revenue is those runtime licenses, which are perpetual licenses we recognize upon the customers accepting the license to put on equipment to sell. There's been a growing backlog on that over these last few quarters, including in the Q3. We believe as customers, as I said in my prepared remarks, are not able to ship all the equipment they would've liked to ship in the quarter, probably due to the chip shortage. That backlog as a percentage of the total quarterly revenue is not like the Exensio business where backlog is much greater than quarterly revenue, because it represents, most contracts are 2 or 3 or 4 years or the like. backlog at any given time is a very substantial part of the Exensio, more than Exensio quarterly revenue many times over. Okay, great. Thanks very much, guys. At this time, there are no further questions. Ladies and gentlemen, this concludes the program. Thank you for joining us today.