Onto Innovation Reports Q1 Profit Decline Amid Strong Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy ONTO?
Source: NASDAQ.COM
Onto Innovation's stock fell 5.02% as it crossed below the 5-day SMA, reflecting investor concerns following the company's Q1 earnings report.
The company reported a Q1 profit of $33.75 million, a significant decline from last year's $64.09 million, despite a 9.5% increase in revenue to $291.95 million. The management provided a cautiously optimistic Q2 EPS guidance of $1.65 to $1.73, indicating potential recovery in profitability.
Despite the profit decline, Onto Innovation's revenue growth and strategic investments, including a $710 million acquisition of a stake in Rigaku, suggest a strong market demand and a positive outlook for future performance.
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Analyst Views on ONTO
Wall Street analysts forecast ONTO stock price to fall
6 Analyst Rating
4 Buy
2 Hold
0 Sell
Moderate Buy
Current: 287.520
Low
160.00
Averages
201.67
High
260.00
Current: 287.520
Low
160.00
Averages
201.67
High
260.00
About ONTO
Onto Innovation Inc. is engaged in the design, development, manufacture and support of metrology and inspection tools for the semiconductor industry. The Company’s products include Automated Metrology Systems; Integrated Metrology Systems; Silicon Wafer All-surface Inspection/Characterization; Macro Defect Inspection; Automated Defect Classification and Pattern Analysis; Yield Analysis; Opaque Film Metrology, and others. Its products are used by silicon wafer manufacturers, semiconductor integrated circuit fabricators, and advanced packaging manufacturers operating in the semiconductor market. Its products are also used for process control in several other specialty device manufacturing markets, including light-emitting diodes, vertical-cavity surface-emitting lasers, micro-electromechanical systems, CMOS image sensors, silicon and compound semiconductor power devices, analog devices, RF filters, and others. It also offers three advanced product lines, including FAaST, CnCV and MBIR.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Onto Innovation Reports Decline in Q1 Profit
- Profit Decline: Onto Innovation reported a Q1 profit of $33.75 million, or $0.67 per share, which is a significant drop from last year's $64.09 million and $1.30 per share, indicating pressure on profitability.
- Adjusted Earnings: Excluding items, the company reported adjusted earnings of $70.79 million, or $1.42 per share, reflecting efforts in cost control, yet failing to offset the overall profit decline.
- Revenue Growth: Despite the profit drop, the company's revenue rose by 9.5% year-over-year to $291.95 million from $266.61 million last year, indicating strong market demand.
- Future Guidance: The company provided Q2 EPS guidance of $1.65 to $1.73 and revenue expectations between $320 million and $330 million, reflecting a cautiously optimistic outlook from management regarding future performance.
See More
Onto Innovation Q1 2026 Earnings Call Highlights
- Performance Beat: Onto Innovation reported Q1 revenue of $292 million, exceeding the company's original guidance and reflecting nearly a 10% sequential growth, driven by strong market demand, with Q2 revenue expected to increase by 20% year-over-year.
- Strategic Investment: The company announced a $710 million acquisition of a 27% stake in Rigaku, significantly enhancing its capabilities in X-ray technology and providing strategic support for future process control and hybrid metrology solutions.
- Advanced Packaging Progress: The successful adoption of the Dragonfly G5 inspection system at a leading 2.5D logic customer has led to shipments exceeding plans, with expectations for over 15 distinct applications, further solidifying its market position.
- Optimistic Profit Outlook: The CFO projected Q2 gross margins between 56% and 56.5%, operating margins between 28% and 28.6%, and earnings per share around $1.69, reflecting the company's confidence in future profitability.
See More
Onto Innovation to Announce Q1 Earnings on May 5th
- Earnings Announcement: Onto Innovation is set to release its Q1 2023 earnings on May 5th after market close, with consensus EPS estimate at $1.42, reflecting a 6% year-over-year decline, while revenue is expected to reach $292 million, indicating a 9.4% year-over-year growth potential.
- Historical Performance: Over the past two years, Onto Innovation has exceeded EPS and revenue estimates 75% of the time, showcasing the company's financial stability and building market confidence.
- Estimate Revisions: In the last three months, EPS estimates have seen seven upward revisions with no downward adjustments, and revenue estimates have experienced six upward revisions, indicating analysts' optimistic outlook on the company's future performance, which could positively influence stock prices.
- Market Sentiment: Despite potential risks, analysts still consider Onto Innovation a buy, especially given its stock price has more than doubled over the past four years, reflecting market recognition of its long-term growth potential.
See More
Onto Innovation Forms Strategic Partnership with Rigaku
- Strategic Investment: Onto Innovation has announced the acquisition of a 27% stake in Japan's Rigaku for approximately $710 million, which not only deepens their partnership but also facilitates joint IP development and coordinated market efforts, enhancing competitiveness in semiconductor manufacturing.
- Technology Integration: This collaboration will combine Onto Innovation's optical metrology and AI-driven analytics, particularly its Ai Diffract software, with Rigaku's X-ray technologies, including CD-SAXS platforms, to deliver hybrid metrology solutions for advanced logic and memory devices.
- Market Positioning: The two companies are targeting increasingly complex semiconductor architectures such as advanced packaging, V-NAND, and DRAM, leveraging X-ray capabilities to provide deeper structural insights that traditional optical techniques cannot achieve, thereby enhancing product performance.
- Industry Outlook: Through this strategic partnership, Onto Innovation not only enhances its technological capabilities in the semiconductor market but also positions itself more favorably in the rapidly evolving semiconductor industry, driving future business growth.
See More
Onto and Rigaku Collaborate on X-ray Solutions for Semiconductor Manufacturing
- Significant Market Opportunity: Onto stated that external analysts estimate the market opportunity for its X-ray solutions in semiconductor manufacturing, developed in collaboration with Rigaku, could exceed $1 billion within five years, indicating strong growth potential.
- Record High Stock Price: Following the acquisition of a 27% stake in Rigaku for approximately $710 million, Onto's shares hit record highs in after-market trading, with the transaction expected to close in the second half of 2026, further solidifying its position in the semiconductor industry.
- Integration Advantage: Onto's integration of its Ai Diffract analysis software with Rigaku's CD-SAXS platforms has already been selected by two key customers, highlighting the importance and market demand for this solution in the semiconductor manufacturing process.
- Analyst Optimism: Following the launch of Onto's Dragonfly G5 platform, analysts from B.Riley, Evercore, and others raised their price targets by an average of 22%, reflecting a positive outlook on Onto's future performance, with expectations that it will exceed revenue forecasts in its earnings report on May 6.
See More
Onto Innovation Partners with Rigaku to Advance Semiconductor Technology
- Strategic Collaboration: Onto Innovation has announced a strategic partnership with X-ray technology leader Rigaku Holdings Corporation to develop next-generation process control solutions for semiconductor manufacturing, which is expected to unlock over $1 billion in market opportunities and enhance the company's competitiveness in the semiconductor sector.
- Innovative Technology Integration: The collaboration integrates Onto Innovation's Ai Diffract™ analysis software with Rigaku's CD-SAXS platforms, already selected by two key customers, showcasing the new technology's potential to meet the demands of complex logic and memory designs, thereby improving customer production efficiency.
- Equity Investment Plan: Onto Innovation plans to acquire 27% of Rigaku's shares for approximately $710 million, which will not only grant Onto Innovation a board nomination right but is also expected to positively impact the company's financials by December 31, 2026, further solidifying the strategic alignment between the two companies.
- Optimistic Market Outlook: As optical metrology technology advances towards the 1nm process node, demand for Onto Innovation's Atlas® OCD technology continues to grow, and the integration of X-ray technology is set to provide customers with deeper data analysis capabilities, driving future market growth.
See More
Onto Innovation Reports Decline in Q1 Profit
- Profit Decline: Onto Innovation reported a Q1 profit of $33.75 million, or $0.67 per share, which is a significant drop from last year's $64.09 million and $1.30 per share, indicating pressure on profitability.
- Adjusted Earnings: Excluding items, the company reported adjusted earnings of $70.79 million, or $1.42 per share, reflecting efforts in cost control, yet failing to offset the overall profit decline.
- Revenue Growth: Despite the profit drop, the company's revenue rose by 9.5% year-over-year to $291.95 million from $266.61 million last year, indicating strong market demand.
- Future Guidance: The company provided Q2 EPS guidance of $1.65 to $1.73 and revenue expectations between $320 million and $330 million, reflecting a cautiously optimistic outlook from management regarding future performance.
See More
Onto Innovation Q1 2026 Earnings Call Highlights
- Performance Beat: Onto Innovation reported Q1 revenue of $292 million, exceeding the company's original guidance and reflecting nearly a 10% sequential growth, driven by strong market demand, with Q2 revenue expected to increase by 20% year-over-year.
- Strategic Investment: The company announced a $710 million acquisition of a 27% stake in Rigaku, significantly enhancing its capabilities in X-ray technology and providing strategic support for future process control and hybrid metrology solutions.
- Advanced Packaging Progress: The successful adoption of the Dragonfly G5 inspection system at a leading 2.5D logic customer has led to shipments exceeding plans, with expectations for over 15 distinct applications, further solidifying its market position.
- Optimistic Profit Outlook: The CFO projected Q2 gross margins between 56% and 56.5%, operating margins between 28% and 28.6%, and earnings per share around $1.69, reflecting the company's confidence in future profitability.
See More
Onto Innovation to Announce Q1 Earnings on May 5th
- Earnings Announcement: Onto Innovation is set to release its Q1 2023 earnings on May 5th after market close, with consensus EPS estimate at $1.42, reflecting a 6% year-over-year decline, while revenue is expected to reach $292 million, indicating a 9.4% year-over-year growth potential.
- Historical Performance: Over the past two years, Onto Innovation has exceeded EPS and revenue estimates 75% of the time, showcasing the company's financial stability and building market confidence.
- Estimate Revisions: In the last three months, EPS estimates have seen seven upward revisions with no downward adjustments, and revenue estimates have experienced six upward revisions, indicating analysts' optimistic outlook on the company's future performance, which could positively influence stock prices.
- Market Sentiment: Despite potential risks, analysts still consider Onto Innovation a buy, especially given its stock price has more than doubled over the past four years, reflecting market recognition of its long-term growth potential.
See More
Onto Innovation Forms Strategic Partnership with Rigaku
- Strategic Investment: Onto Innovation has announced the acquisition of a 27% stake in Japan's Rigaku for approximately $710 million, which not only deepens their partnership but also facilitates joint IP development and coordinated market efforts, enhancing competitiveness in semiconductor manufacturing.
- Technology Integration: This collaboration will combine Onto Innovation's optical metrology and AI-driven analytics, particularly its Ai Diffract software, with Rigaku's X-ray technologies, including CD-SAXS platforms, to deliver hybrid metrology solutions for advanced logic and memory devices.
- Market Positioning: The two companies are targeting increasingly complex semiconductor architectures such as advanced packaging, V-NAND, and DRAM, leveraging X-ray capabilities to provide deeper structural insights that traditional optical techniques cannot achieve, thereby enhancing product performance.
- Industry Outlook: Through this strategic partnership, Onto Innovation not only enhances its technological capabilities in the semiconductor market but also positions itself more favorably in the rapidly evolving semiconductor industry, driving future business growth.
See More
Onto and Rigaku Collaborate on X-ray Solutions for Semiconductor Manufacturing
- Significant Market Opportunity: Onto stated that external analysts estimate the market opportunity for its X-ray solutions in semiconductor manufacturing, developed in collaboration with Rigaku, could exceed $1 billion within five years, indicating strong growth potential.
- Record High Stock Price: Following the acquisition of a 27% stake in Rigaku for approximately $710 million, Onto's shares hit record highs in after-market trading, with the transaction expected to close in the second half of 2026, further solidifying its position in the semiconductor industry.
- Integration Advantage: Onto's integration of its Ai Diffract analysis software with Rigaku's CD-SAXS platforms has already been selected by two key customers, highlighting the importance and market demand for this solution in the semiconductor manufacturing process.
- Analyst Optimism: Following the launch of Onto's Dragonfly G5 platform, analysts from B.Riley, Evercore, and others raised their price targets by an average of 22%, reflecting a positive outlook on Onto's future performance, with expectations that it will exceed revenue forecasts in its earnings report on May 6.
See More
Onto Innovation Partners with Rigaku to Advance Semiconductor Technology
- Strategic Collaboration: Onto Innovation has announced a strategic partnership with X-ray technology leader Rigaku Holdings Corporation to develop next-generation process control solutions for semiconductor manufacturing, which is expected to unlock over $1 billion in market opportunities and enhance the company's competitiveness in the semiconductor sector.
- Innovative Technology Integration: The collaboration integrates Onto Innovation's Ai Diffract™ analysis software with Rigaku's CD-SAXS platforms, already selected by two key customers, showcasing the new technology's potential to meet the demands of complex logic and memory designs, thereby improving customer production efficiency.
- Equity Investment Plan: Onto Innovation plans to acquire 27% of Rigaku's shares for approximately $710 million, which will not only grant Onto Innovation a board nomination right but is also expected to positively impact the company's financials by December 31, 2026, further solidifying the strategic alignment between the two companies.
- Optimistic Market Outlook: As optical metrology technology advances towards the 1nm process node, demand for Onto Innovation's Atlas® OCD technology continues to grow, and the integration of X-ray technology is set to provide customers with deeper data analysis capabilities, driving future market growth.
See More
