Onto Innovation (ONTO) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since ...

WILMINGTON, Mass.--(BUSINESS WIRE)--Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation”, “Onto”, or the “Company”) today announced Susan Lynch has joined its board of directors. With over 30 years of leadership experience in high technology companies, Susan Lynch brings a strong background in financial leadership to Onto Innovation’s board of directors. She recently served as senior vice president and chief financial officer of V2X (formerly Vectrus, Inc.). Prior to V2X, Susan was executive vice preside ...

WILMINGTON, Mass.--(BUSINESS WIRE)--Onto Innovation Inc. (NYSE: ONTO) and its Tucson subsidiary 4D Technology today announced they’ve been named winner of FANUC America’s prestigious 2024 Innovative System of the Year award for the 4Di InSpec automated metrology system (AMS). The system enables automated surface defect and feature metrology for aviation, aerospace and other applications in the industrial manufacturing market. The patented, vibration-immune technology enables the unique capability of using n ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-39110 ONTO INNOVATION INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of inco ...

Onto Innovation Inc (ONTO) reported fourth-quarter 2023 earnings of $1.06 per share, which beat the Zacks Consensus Estimate by 7.1%. The bottom line decreased 32.5% year over year.Revenues of $218.9 million beat the Zacks Consensus Estimate by 5.2%. The top line declined 13.6% year over year. The downtick can be mainly attributed to a decline in advanced nodes business and lower services parts revenues.However, revenues came in ahead of the company’s guided range of $200-$216 million owing to better-than-a ...

WILMINGTON, Mass.--(BUSINESS WIRE)--Onto Innovation Inc. (NYSE: ONTO) today announced the launch of the new Firefly® G3 inspection and metrology system for automated process control during high volume production of panel-level substrates. The Firefly G3 system was shipped to a tier one customer supporting a variety of AI chiplet based panel-level packages with several additional customers expected to take delivery in the first half of 2024. The Firefly G3 system’s inspection and metrology capabilities uniqu ...

WILMINGTON, Mass.--(BUSINESS WIRE)--Onto Innovation Inc. (NYSE: ONTO) will release its 2023 fourth quarter and full year results shortly after the market closes on February 8, 2024. Onto Innovation will host a conference call and audio webcast in connection with its release of the financial results. Michael P. Plisinski, chief executive officer, and Mark Slicer, chief financial officer, will host the call. The call will take place: Thursday, February 8, 2024 at 4:30 p.m. (ET) To participate in the call, p ...

The price trend for Onto Innovation (ONTO) has been bearish lately and the stock has lost 10.9% over the past week. However, the formation of a hammer chart pattern in its last trading session indicates that the stock could witness a trend reversal soon, as bulls might have gained significant control over the price to help it find support.While the formation of a hammer pattern is a technical indication of nearing a bottom with potential exhaustion of selling pressure, rising optimism among Wall Street anal ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Onto Innovation Inc.'s unaudited financial statements show a year-over-year decline in revenue and net income for Q3 and the first nine months of 2023, alongside increased assets and operating cash flow Condensed Consolidated Statements of Operations Highlights (In thousands, except per share data) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Oct 1, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Oct 1, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $207,185 | $254,253 | $597,012 | $751,913 | | **Gross Profit** | $106,852 | $138,849 | $312,288 | $401,999 | | **Operating Income** | $34,006 | $59,307 | $87,848 | $175,502 | | **Net Income** | $35,886 | $52,215 | $90,850 | $157,120 | | **Diluted EPS** | $0.73 | $1.05 | $1.84 | $3.15 | Condensed Consolidated Balance Sheets Highlights (In thousands) | Metric | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $206,585 | $175,872 | | Marketable securities | $423,079 | $371,912 | | Total current assets | $1,221,202 | $1,134,872 | | **Total assets** | **$1,862,188** | **$1,794,863** | | Total current liabilities | $135,758 | $160,558 | | **Total liabilities** | **$166,046** | **$198,437** | | **Total stockholders' equity** | **$1,696,142** | **$1,596,426** | Condensed Consolidated Statements of Cash Flows Highlights (In thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Oct 1, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $110,387 | $87,208 | | Net cash used in investing activities | ($66,259) | ($29,226) | | Net cash used in financing activities | ($9,082) | ($17,897) | | **Net increase in cash and cash equivalents** | **$30,713** | **$30,781** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail financial statement preparation, fair value measurements, and balance sheet specifics, highlighting a single operating segment, key customer revenue concentration, a 2023 restructuring, and an ongoing legal proceeding - The company operates in a **single reportable segment**: the design, development, manufacture, and support of high-performance process control systems for microelectronics device manufacturers[70](index=70&type=chunk) Revenue by Geographic Region (Nine Months Ended) | Region | Sep 30, 2023 Revenue (in thousands) | Oct 1, 2022 Revenue (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | South Korea | $122,205 | $171,055 | -28.6% | | China | $108,294 | $215,578 | -49.8% | | United States | $103,756 | $79,164 | +31.1% | | Taiwan | $85,802 | $151,460 | -43.4% | | Southeast Asia | $68,040 | $45,627 | +49.1% | | Japan | $60,832 | $33,423 | +82.0% | | Europe | $48,083 | $55,606 | -13.5% | | **Total** | **$597,012** | **$751,913** | **-20.6%** | - For the nine months ended September 30, 2023, Samsung Semiconductor and Taiwan Semiconductor Manufacturing Co. Ltd. accounted for **20%** and **11%** of total revenue, respectively[71](index=71&type=chunk) - The company initiated a restructuring plan in 2023, recording **$3.2 million** in employee severance costs and **$2.3 million** in inventory write-downs during the first nine months of the year[75](index=75&type=chunk) - In the legal case Optical Solutions Inc. v. Nanometrics Incorporated, the trial date is set for December 4, 2023, with the company believing the loss contingency is **remote** and does not anticipate a **material impact**[54](index=54&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **20.6%** year-over-year revenue decline for the first nine months of 2023 to decreased metrology product shipments and U.S. export regulations, while maintaining strong liquidity despite lower gross margin and net income - Revenue for the nine months ended September 30, 2023, decreased by **20.6%** year-over-year, primarily due to a decrease in shipments of metrology product lines to customers in advanced nodes applications[89](index=89&type=chunk) - U.S. government export controls have resulted in **lower net sales in China** for the first nine months of fiscal 2023 compared to the same period in the prior year[87](index=87&type=chunk) Gross Profit Margin Analysis | Period | Gross Profit (in thousands) | Gross Profit Margin | | :--- | :--- | :--- | | **Three Months Ended** | | | | Sep 30, 2023 | $106,852 | 51.6% | | Oct 1, 2022 | $138,849 | 54.6% | | **Nine Months Ended** | | | | Sep 30, 2023 | $312,288 | 52.3% | | Oct 1, 2022 | $401,999 | 53.5% | - General and administrative expenses for the nine months ended September 30, 2023, increased by **$4.5 million** compared to the prior year period, primarily due to **$3.2 million** in restructuring charges for employee severance[95](index=95&type=chunk) - As of September 30, 2023, the company had **$629.7 million** in cash, cash equivalents, and marketable securities, and **$1,085.4 million** in working capital, without utilizing its available **$100.0 million** line of credit[101](index=101&type=chunk)[106](index=106&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material changes in market risk compared to its 2022 Annual Report on Form 10-K - There have been **no material changes** in market risk from the information presented in the 2022 Form 10-K[108](index=108&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of September 30, 2023, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were **effective** at a reasonable assurance level[110](index=110&type=chunk) - **No changes** in internal control over financial reporting occurred during the fiscal quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[111](index=111&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 7 of the financial statements for details on material pending legal proceedings, including the case with Optical Solutions Inc - For a description of material pending legal proceedings, the report refers to the "Legal Matters" section of **Note 7** to the Condensed Consolidated Financial Statements[113](index=113&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company identifies key risks including international operations, U.S. export regulations impacting China business, the cyclical semiconductor industry, dependency on large customers, and potential supply chain disruptions from limited suppliers and geopolitical conflicts - The company is exposed to **supply chain risks** due to its dependence on a **limited group of suppliers** for some components and subassemblies, with the conflict in Israel noted as a potential risk due to sourcing from a supplier in the country[130](index=130&type=chunk)[131](index=131&type=chunk) - A substantial portion of revenue is derived from a **few large customers**, where the loss, delay, or cancellation of a large order could **significantly harm revenue and cash flows**[118](index=118&type=chunk)[147](index=147&type=chunk) - **U.S. export controls**, particularly the October 2022 regulations targeting China's semiconductor industry, have **adversely affected** the company's ability to compete and win business in China and may continue to **negatively impact results**[173](index=173&type=chunk)[174](index=174&type=chunk)[176](index=176&type=chunk) - The **cyclical nature of the semiconductor industry** **significantly impacts** the company's operating results, as its business depends on the capital expenditures of semiconductor device manufacturers[201](index=201&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details its Q3 2023 share repurchase activity, noting that shares purchased were primarily for tax obligations on vested employee equity awards, with **$31.6 million** remaining under the repurchase authorization - As of September 30, 2023, **$31.6 million** remained available for future repurchases under the company's share repurchase authorization[210](index=210&type=chunk) - During the three months ended September 30, 2023, the company repurchased **3 thousand shares**, which were shares withheld through net share settlements to cover tax withholding obligations on vested employee equity awards[211](index=211&type=chunk)[212](index=212&type=chunk)

Financial Data and Key Metrics Changes - The company reported third-quarter revenue of $207 million, a 19% decline year-over-year but a 10% increase compared to the second quarter [28] - Operating income was $50 million, representing 24% of revenue, up from 21% in the second quarter [35] - Net income for the third quarter was $48 million, or 23% of revenue, compared to 20% in the second quarter [35] Business Line Data and Key Metrics Changes - Advanced nodes revenue was $26 million, accounting for 13% of total revenue, reflecting a significant decline [28] - Specialty devices and advanced packaging achieved record revenue of $135 million, increasing 20% over the second quarter and representing 65% of total revenue [28] - Software and services revenue reached $46 million, a 13% increase over the second quarter, contributing 22% to total revenue [54] Market Data and Key Metrics Changes - The advanced nodes market is experiencing weakness, with a 30% decline in revenue for the third quarter [20] - Demand for high bandwidth memory (HBM) is surging, with expectations for a 50% growth in the dragonfly G3 product line in the fourth quarter [22] - The company noted that its exposure to the Chinese market is lower than peers, with only 15% of revenue coming from China compared to 40%-50% for others [75] Company Strategy and Development Direction - The company is focusing on the AI semiconductor market, which is expected to grow significantly, with AI-related semiconductors projected to reach $300 billion to $500 billion by 2030 [51] - Advanced packaging technologies are seen as critical for the AI era, with the company emphasizing the importance of 3D and 2.5D packaging [38] - The company is targeting a gross margin of 54% as a baseline goal, with ongoing cost reduction initiatives expected to yield $25 million in savings over the next two years [57] Management's Comments on Operating Environment and Future Outlook - Management expects fourth-quarter revenue to be flat compared to the third quarter, with improvements in gross and operating margins despite a less favorable product mix [22] - The company anticipates that AI device volumes will drive revenue growth in the first half of 2024, independent of a recovery in advanced nodes [43] - Management acknowledged challenges in production capacity and supply chain issues but expressed optimism about future demand and operational improvements [90] Other Important Information - The company added over $110 million in new orders in the last 2.5 months, primarily for high bandwidth memory and process control for 2.5D packaging [38] - Inventory levels decreased to $346 million, down $6 million from the previous quarter, as the company actively manages inventory [55] - The company has $32 million remaining under its existing share repurchase authorization [40] Q&A Session Summary Question: What is the outlook for panel lithography shipments? - Management indicated that $30 million of planned lithography shipments in 2023 will move into 2024 due to production issues [42] Question: How is the company addressing the production capacity challenges? - Management noted that they are working to improve internal capacity and expect to reach full capacity by mid-next year [90] Question: What is the company's exposure to the Chinese market? - The company stated that its exposure to China is lower than peers, with only 15% of revenue coming from that region [75] Question: What are the expectations for advanced nodes recovery? - Management does not anticipate a recovery in advanced nodes in the near term but expects growth in other areas, particularly related to AI [43] Question: Can you clarify the recent order sizes and delivery timelines? - Management confirmed that the company has received over $210 million in orders for delivery between the second half of 2023 and the first half of 2024 [81]