Onto Innovation (ONTO) Q2 2025 Earnings Call August 07, 2025 04:30 PM ET Speaker0Day, and welcome to the Onto Innovation Second Quarter Earnings Release Conference Call. Today's conference is being recorded.At this time, I'd like to turn the conference over to Sidney Ho. Please go ahead.Speaker1Thank you, Justin, and good afternoon, everyone. Onto Innovation issued its twenty twenty five second quarter financial results this afternoon after the market closed. Our service provider, Business Wire, has technic ...

Core Viewpoint - Onto Innovation (ONTO) has experienced a stock decline of 12.8% over the past month, which is less severe than the Nanotechnology industry's decline of 14.2%, amidst escalating trade tensions and tariff issues affecting overall market performance [1]. Company Performance - ONTO stock closed at $120.47, which is 50% below its 52-week high of $238.93 reached on July 16, 2024, indicating potential investment opportunities or risks of a value trap [4]. - The company has shown strong performance throughout 2024, achieving its sixth consecutive quarter of growth, particularly in the AI-driven semiconductor packaging market, which saw a 180% year-over-year revenue increase [8]. - Advanced nodes have been a significant driver of revenue growth, with expectations of continued momentum into 2025, particularly in logic and memory segments [9]. Growth Drivers - The transition to 3D NAND technology is expanding Onto's market opportunities, supported by the launch of innovative products in 2024 [7]. - Demand for Iris film metrology has risen, with annual revenues approaching $100 million, and continued demand is expected in 2025 [10]. - Power revenues increased by 10% in 2024, driven by the development of advanced gallium nitride-based power semiconductors, which are gaining traction due to their efficiency [11]. Financial Projections - Management anticipates total revenues for the first quarter of 2025 to be in the range of $260-$274 million, with non-GAAP earnings per share projected between $1.40 and $1.54 [13]. - A seasonal dip is expected in the first quarter, followed by growth in subsequent quarters, aligning with trends observed in 2024 [12]. Challenges - Non-GAAP operating expenses rose to $68.4 million, a 21.4% increase year-over-year, primarily due to higher R&D investments, which could impact profitability if revenue growth stalls [14]. - The uncertain macroeconomic environment, geopolitical tensions, and intense competition pose risks to the semiconductor industry and ONTO's performance [15]. - ONTO's stock is trading at a premium with a forward 12-month price/earnings multiple of 18.03X compared to the industry's 3.70X, indicating potential valuation concerns [17].