Financial Data and Key Metrics Changes - Second quarter revenue reached $242 million, up 6% sequentially and 27% year-over-year, exceeding guidance due to strong demand for advanced packaging and software services [8][9] - Earnings per share (EPS) increased 12% sequentially to $1.32 and up 67% year-over-year [8] - Operating cash flow was a record $65 million, representing 27% of revenues, with a significant improvement in cash generation compared to the previous year [8][10] Business Line Data and Key Metrics Changes - Specialty device and advanced packaging revenue grew 3% sequentially to a record $164 million, accounting for 68% of total revenue [9] - Advanced nodes revenue increased 21% over Q1 to $32 million, representing 13% of total revenue [9] - Software and services revenue was $46 million, up 6% over Q1, making up 19% of total revenue [9] Market Data and Key Metrics Changes - The advanced packaging market, particularly driven by AI packaging, accounted for over half of the revenue in specialty device and advanced packaging markets [4] - Orders from logic customers represented nearly half of the revenue from advanced node customers, indicating strong demand in this segment [7] Company Strategy and Development Direction - The company is focusing on expanding capabilities in advanced packaging and advanced nodes, with expectations of continued growth in these areas [12][13] - New product introductions, such as a 3D bump metrology sensor, are aimed at addressing the evolving needs of the market [5] - The company anticipates further growth in advanced nodes driven by increasing orders for memory and gate-all-around logic applications [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2024, expecting revenue to be 5% to 10% stronger than the first half [13] - The company is encouraged by the demand for AI packaging and the expected increase in HBM content for AI processors [13] - Management noted that supply constraints are still impacting some customers, but overall demand remains strong [15] Other Important Information - The company ended the quarter with cash and short-term investments of $786 million and plans to reduce inventory levels further [10] - A volume purchasing agreement worth over $300 million was closed with two customers, covering AI packaging and gate-all-around investments through 2025 [13][42] Q&A Session Summary Question: What improved in the outlook for advanced packaging? - Management clarified that the previous pause in AI packaging was specific to a few customers, while overall advanced packaging is expected to grow sequentially [15] Question: How is the $300 million volume purchasing agreement split among customers? - The advanced packaging portion is larger, with most revenue recognition expected to occur in 2025 [16][18] Question: What impact do reduced CapEx plans from an IDM customer have? - Management remains optimistic, expecting that the focus will shift to leading-edge technologies, potentially benefiting the company [22] Question: What is driving the delta between AI packaging and overall advanced packaging growth? - Management noted that OSATs are starting to spend more, contributing to overall advanced packaging growth despite a pause in AI-specific spending [23] Question: What is the expected decline in AI packaging revenues? - Management estimated an aggregate decline of around 10% to 15% in AI packaging revenues from the first half to the second half of the year [24] Question: How is the gross margin improvement being driven? - Management indicated that improvements in manufacturing and supply chain efficiencies are contributing to the gross margin increase [25] Question: What is the company's strategy regarding China exposure? - Management expects second half revenue from China to be up over the first half, focusing on high-end applications despite local competition [40][41] Question: When will shipments related to the $300 million VPA begin? - Initial shipments are expected in the second half of the year, with the bulk occurring throughout 2025 [42] Question: Where has the company gained the most market share? - The company has maintained a high share in AI packaging and has seen increases in adoption of its Iris planar films for gate-all-around applications [45]

Onto Innovation (ONTO) came out with quarterly earnings of $1.32 per share, beating the Zacks Consensus Estimate of $1.19 per share. This compares to earnings of $0.79 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 10.92%. A quarter ago, it was expected that this maker of semiconductor manufacturing equipment would post earnings of $1.10 per share when it actually produced earnings of $1.18, delivering a surprise of 7.27%. O ...

Onto Innovation (ONTO) is set to report results for the second quarter of 2024 on Aug 8. The Zacks Consensus Estimate for second-quarter earnings per share (EPS) has been steady at $1.19 in the past 60 days, implying an increase of 50.6% from the year-ago quarter's figure. The company expects non-GAAP EPS in the range of $1.14-$1.26. Meanwhile, the consensus mark for revenues is pegged at $235.6 million, indicating a rise of 23.6% from the year-earlier quarter's actual. Management expects revenues in the ra ...

Shares of the maker of semiconductor manufacturing equipment witnessed a loss of 14.01% over the previous month, trailing the performance of the Computer and Technology sector with its loss of 4.62% and the S&P 500's loss of 0.21%. For the annual period, the Zacks Consensus Estimates anticipate earnings of $5.05 per share and a revenue of $941.16 million, signifying shifts of +35.39% and +15.36%, respectively, from the last year. Our research suggests that these changes in estimates have a direct relationsh ...

The maker of semiconductor manufacturing equipment's stock has dropped by 2.26% in the past month, falling short of the Computer and Technology sector's gain of 0.47% and the S&P 500's gain of 1.96%. Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Onto Innovation. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the comp ...

Prior to today's trading, shares of the maker of semiconductor manufacturing equipment had gained 4.48% over the past month. This has outpaced the Computer and Technology sector's gain of 4.22% and the S&P 500's gain of 3.78% in that time. Any recent changes to analyst estimates for Onto Innovation should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's bu ...

Core Viewpoint - The article discusses the importance of momentum investing and highlights Onto Innovation (ONTO) as a strong candidate for momentum-based investment due to its recent performance and positive earnings outlook. Group 1: Momentum Investing - Momentum investing focuses on following a stock's recent price trends, with the expectation that a stock will continue in the same direction once a trend is established [7] - The Zacks Momentum Style Score is a tool that helps identify stocks with strong momentum, incorporating metrics like price changes and earnings estimate revisions [12] Group 2: Onto Innovation Performance - Onto Innovation has shown significant price appreciation, with shares increasing by 35.36% over the past quarter and 105.12% over the last year, compared to the S&P 500's gains of 10% and 27.2% respectively [4] - The stock currently holds a Zacks Rank of 2 (Buy) and a Momentum Score of A, indicating strong potential for future performance [6] Group 3: Earnings Outlook - In the past two months, one earnings estimate for Onto Innovation has increased, raising the consensus estimate from $5.01 to $5.05 for the full year, with no downward revisions [5] - For the next fiscal year, one estimate has also moved upwards, reflecting positive sentiment regarding the company's earnings potential [5] Group 4: Trading Volume and Industry Comparison - Onto Innovation's shares have increased by 0.39% over the past week, while the Zacks Nanotechnology industry has remained flat during the same period [10] - The average 20-day trading volume for Onto Innovation is 849,238 shares, which is considered a bullish sign when combined with rising stock prices [11]

Industry Overview - The AICS market is rapidly evolving, with challenges in organic substrate redistribution layers (RDLs) using copper clad laminate (CCL) below 3µm, leading manufacturers to adopt glass as a more stable substrate [1] - The AICS market is projected to grow at a compound annual growth rate (CAGR) of 10% from 2023 to 2028 [7] Company Developments - Onto Innovation (ONTO) has launched a glass substrate suite that includes the JetStep X500 panel-level packaging lithography system and the Firefly G3 sub-micron automatic metrology and inspection system, aimed at meeting the demands of the advanced IC substrates market [7] - The Firefly G3 system utilizes Onto's patented Clearfield technology and unique 3D metrology sensors to address critical challenges such as cracks, chips, and TGV metrology for vias [5] - The company is experiencing strong demand across various end markets and has accelerated the adoption of its Dragonfly platforms, with a new sub-surface inspection capability launched in April 2024 [6] Financial Performance - Onto Innovation has a Zacks Rank 1 (Strong Buy) and its stock has increased by 119% over the past year, outperforming the industry growth of 103.6% [3] - The company has delivered a trailing four-quarter average earnings surprise of 7.54% and has a long-term growth expectation of 9.47% [4]

When it comes to the manufacturing of advanced semiconductors used in artificial intelligence (AI) systems, there is a little-known segment of the industry that acts as the gatekeeper: metrology equipment. A key to making more advanced chips Thus, think of metrology equipment as a type of final step in building AI systems, a type of gatekeeper to unlocking more powerful computing. Can the Onto party continue? Management is forecasting another step-up in revenue and profitability in Q2, with the high end of ...

Core Viewpoint - Onto Innovation (ONTO) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4][9] Earnings Estimate Revisions - The Zacks Rank upgrade reflects an improvement in Onto Innovation's underlying business, suggesting that investors may respond positively, leading to a potential increase in stock price [4][9] - Over the past three months, the Zacks Consensus Estimate for Onto Innovation has increased by 7.5% [12] - The expected earnings per share for the fiscal year ending December 2024 is projected to be $5.05, representing a year-over-year increase of 35.4% [13] Zacks Rating System - The Zacks rating system is based solely on a company's changing earnings picture, with the Zacks Consensus Estimate tracking EPS estimates from sell-side analysts [8] - Stocks rated Zacks Rank 1 are in the top 5% of Zacks-covered stocks in terms of estimate revisions, indicating a strong potential for price movement [7][14] - The Zacks Rank system has a proven track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [11]